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 six-month period ended September 30, 2016 (IFRS)Tokyo, November 7, 2016

1.

Financial Highlights(Millions of yen; amounts are rounded off 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
incomeAmountAmount%AmountSix-month period ended¥4,271,834 (0.2) ¥653,944 3.5 ¥665,625 (13.3) ¥800,948 57.5 ¥766,249
September 30, 2016

79.6

¥70,608 (85.3)

Net sales
AmountSix-month period ended
September 30, 2015%

¥4,281,198 -OperatingincomeIncomebefore incometax

AmountAmount¥631,917%-¥767,721%-

Basic earnings per
share (yen)Diluted earnings per
share (yen)Six-month period ended
September 30, 2016

¥679.74¥675.83

Six-month period ended
September 30, 2015¥359.56¥349.81%%¥508,625 (16.4) ¥426,683 (23.9) ¥481,723 (36.0)

Note:
Net sales, operating income, and income before income tax for the six-month period ended September 30, 2016 are presented basedon the amounts from continuing operations only. Year-on-year percentage changes in net sales, operating income, and income before
income tax for the six-month period ended September 30, 2015 are not presented because corresponding amounts for the six-month
period ended September 30, 2015 are revised and presented respectively.
Please refer to page 62 “Note 16. Discontinued operations” in “3. Condensed Interim Consolidated Financial Statements (6) Notes toCondensed Interim Consolidated Financial Statements” for details.

(2) Financial Position

Total assets

Total equity

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

As of September 30, 2016

¥22,896,077¥3,126,322¥2,292,082

10.0

As of March 31, 2016

¥20,707,192¥3,505,271¥2,613,613

12.6

2.

Dividends
Dividends per shareFirst quarter
Fiscal year ended
March 31, 2016
Fiscal year ending
March 31, 2017
Fiscal year ending
March 31, 2017
(Forecasted)

Second quarter

Third quarter

Fourth quarter

Total

(yen)

(yen)

(yen)

(yen)

(yen)

-

20.00

-

21.00

41.00

-

22.00
22.00

44.00

-

Note:
Revision of forecasts on the dividends: No

3. Forecasts on the Consolidated Results of Operations for the Fiscal Year Ending March 2017 (April 1, 2016 – March 31, 2017)
Currently it is difficult to provide forecasts on the results in figures due to a large number of uncertain factors affecting theearnings. The Company will announce its forecasts on the consolidated results of operations when it becomes possible to
make a rational projection.
* Notes(1) Significant changes in scope of consolidation (changes in scope of consolidation of specified subsidiaries): Yes
Newly consolidated: Four companies
West Raptor Holdings, LLC SB HP HoldCo ARM PIPD Holdings One, LLC ARM PIPD Holdings Two, LLC
Please refer to page 35 “(1) Significant Changes in Scope of Consolidation for the Six-month Period Ended September
30, 2016” in “2. Notes to Summary Information” for details.
(2) Changes in accounting policies and accounting estimates[1] Changes in accounting policies required by IFRSs: No[2] Changes in accounting policies other than those in [1]: No[3] Changes in accounting estimates: Yes
Please refer to page 35 “(2) Changes in Accounting Estimates” in “2. Notes to Summary Information” for details.
(3) Number of shares issued (common stock)[1] Number of shares issued (including treasury stock):
As of September 30, 2016:
1,200,660,365 shares
As of March 31, 2016:
1,200,660,365 shares[2] Number of treasury stock:
As of September 30, 2016:
111,699,664 shares
As of March 31, 2016:
53,760,198 shares[3] Number of average stocks during six-month period (April-September):
As of September 30, 2016:
1,127,267,175 shares
As of September 30, 2015:
1,186,678,615 shares* Implementation status of interim review proceduresThis interim consolidated financial report is not subject to interim review procedures based on the Financial Instruments
and Exchange Act, and the review procedures for the condensed interim consolidated financial statements were being
conducted when this report was disclosed.
* Note to forecasts on the consolidated results of operations and other items
The forecast figures are estimated based on the information that the Company is able to obtain at present and assumptions
which are deemed to be reasonable. However, actual results may be different due to various factors.
On November 7, 2016, the Company will hold an earnings results briefing for the media, institutional investors, andfinancial institutions. This earnings results briefing will be broadcast live on our website in both Japanese and English at
http://www.softbank.jp/en/corp/irinfo/. The Earnings Results Data Sheet will also be posted on our website around 4 p.m.
on the same day at http://www.softbank.jp/en/corp/irinfo/presentations/.

SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016

(Appendix)
Contents
1. Qualitative Information Regarding Six-month Period Results ................................................................................ P. 2
(1) Qualitative Information Regarding Consolidated Results of Operations .......................................................... P. 2
a. Consolidated Results of Operations ................................................................................................................ P. 2
b. Results by Segment ........................................................................................................................................ P. 8
(Reference: Definitions and Calculation Methods of Principal Operational Data) ......................................... P. 21(2) Qualitative Information Regarding Consolidated Financial Position ............................................................... P. 25
a. Assets, Liabilities and Equity ........................................................................................................................ P. 25
b. Cash Flows .................................................................................................................................................... P. 32(3) Qualitative Information Regarding Forecasts on Consolidated Results of Operations .................................... P. 34
2. Notes to Summary Information ............................................................................................................................... P. 35(1) Significant Changes in Scope of Consolidation for the Six-month Period Ended September 30, 2016 ............ P. 35(2) Changes in Accounting Estimates ..................................................................................................................... P. 35
3. Condensed Interim Consolidated Financial Statements ........................................................................................... P. 36(1) Condensed Interim Consolidated Statements of Financial Position .................................................................. P. 36(2) Condensed Interim Consolidated Statements of Income and Comprehensive Income ..................................... P. 38(3) Condensed Interim Consolidated Statements of Changes in Equity ................................................................. P. 42(4) Condensed Interim Consolidated Statements of Cash Flows ............................................................................ P. 44(5) Significant Doubt about Going-concern Assumption ........................................................................................ P. 45(6) Notes to Condensed Interim Consolidated Financial Statements ...................................................................... P. 45
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 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.
“Sprint”

Sprint Corporation“Brightstar”

Brightstar Global Group Inc.

“ARM”

ARM Holdings plc“Alibaba”

Alibaba Group Holding Limited“Supercell”

Supercell Oy“GungHo”

GungHo Online Entertainment, Inc.

Consolidation of ARM
The Company consolidated ARM on September 5, 2016 (GMT; similar for the acquisition date of ARM), following thecompletion of its acquisition. In conjunction with this, the Company established a new reportable segment, “ARM,” fromthe three-month period ended September 30, 2016 (the “second quarter”). See page 46 “3. Business combinations” under“3. Condensed Interim Consolidated Financial Statements (6) Notes to Condensed Interim Consolidated Financial
Statements” for details of the consolidation.

1

SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016

1. Qualitative Information Regarding Six-month Period Results(1) Qualitative Information Regarding Consolidated Results of Operations
a. Consolidated Results of Operations(Millions of yen)Six-month Period
Ended September 30,
2015

Six-month Period
Ended September 30,
2016

4,281,198

4,271,834(9,364)(0.2%)

Operating income

631,917653,944

22,027

3.5%

Income before income tax
Net income from continuing
operations

767,721665,625(102,096)(13.3%)

476,078

242,363(233,715)(49.1%)

Discontinued operations
Net income from discontinued
operations

32,547558,585

526,038-

508,625

800,948

292,32357.5%

426,683

766,249

339,566

79.6%

ChangeChange %Continuing operations
Net sales

Net income
Net income attributable toowners of the parent

Reference: Average exchange rates used for translation
Fiscal Year Ended March 2016

USD / JPY

Fiscal Year Ending March 2017

Three-month
Period Ended
June 30, 2015

Three-month
Period Ended
Sept. 30, 2015

Three-month
Period Ended
Dec. 31, 2015

Three-month
Period Ended
Mar. 31, 2016

Three-month
Period Ended
June 30, 2016

Three-month
Period Ended
Sept. 30, 2016

Q1

Q2

Q3

Q4

Q1

Q2

¥121.34¥121.91¥121.07¥109.07¥102.91¥116.95< Results Related to Supercell >The Company sold all of its shares in Supercell to an affiliate of Tencent Holdings Limited on July 29, 2016. Accordingly,
Supercell’s net income until July 29, 2016 is presented as discontinued operations separately from continuing operations.
Net income of Supercell for the six-month period ended September 30, 2015 has been revised retrospectively and presented
under discontinued operations. See page 63 “(2) Supercell” under “3. Condensed Interim Consolidated Financial
Statements (6) Notes to Condensed Interim Consolidated Financial Statements 16. Discontinued operations” for details.
Supercell did not qualify as the Company’s subsidiary and therefore was excluded from the scope of consolidation on
July 29, 2016 when the shares were transferred.

2SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016

Fiscal Year Ended March 2016

Fiscal Year Ending March 2017

Three-month Period Three-month Period Three-month Period
Ended June 30, 2015 Ended Sept. 30, 2015 Ended Dec. 31, 2015

Earnings for
the Fiscal Year
Ended March
2016

Q1

Q2

Three-month Period
Ended Mar. 31, 2016

Three-month Period
Ended June 30, 2016

Three-month Period
Ended Sept. 30, 2016

Q4

Q1

Q2

Q3

Continuing Operations(Supercell earnings were included as a subsidiary)

Earnings for
the Fiscal YearEnding March2017

July 29, 2016: Supercell was excluded from thescope of consolidation

Discontinued Operations

Supercell earnings are included in net income from discontinued operations

An overview of the consolidated results of operations for the six-month period ended September 30, 2016 (the “period”)
is as follows:(Continuing Operations)(a) Net Sales
Net sales totaled ¥4,271,834 million, a decrease of ¥9,364 million (0.2%) year on year. This resulted from erosion of
the net sales of the Sprint segment and the Distribution segment due to the yen’s appreciation year on year, despite
increases in net sales of the Domestic Telecommunications segment and the Yahoo Japan segment.
(b) Operating Income
Operating income totaled ¥653,944 million, an increase of ¥22,027 million (3.5%) year on year. This was due toincreases in income of ¥39,973 million in the Domestic Telecommunications segment, ¥23,180 million in the Sprint
segment, and ¥10,168 million in the Distribution segment, which outweighed a decline in income of ¥51,524 million in
the Yahoo Japan segment. The decline in operating income in the Yahoo Japan segment reflected the inclusion in thesame period of the previous fiscal year of gain from remeasurement relating to business combination of ¥59,441 million
related to the consolidation of ASKUL Corporation.
(c) Finance Cost
Finance cost totaled ¥222,022 million, an increase of ¥6,354 million (2.9%) year on year. This was mainly due to anincrease in interest expense of SoftBank Group Corp.
(Millions of yen)Six-month Period
Ended September 30, 2015

Six-month Period
Ended September 30, 2016

(215,668)(222,022)(6,354)(incl.) Sprint(138,460)(132,751)

5,709

Reference:
U.S. dollar-based

million USD

million USD

million USD(1,138)(1,252)(114)

Finance cost

3

ChangeSoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016(d) Income on Equity Method Investments
Income on equity method investments was ¥105,174 million, a decrease of ¥159,412 million (60.2%) year on year. Thiswas mainly due to a decline of ¥142,626 million in income on equity method investments related to Alibaba.
Alibaba continues to grow steadily; however, its IFRS-based adjusted net income for the six-month period ended June30, 20161 decreased by CNY18,425 million (46.6%) year on year to CNY21,097 million ((A) in the table below;“Reference: Net Income of Alibaba and the Company’s Related Income on Equity Method Investments”).
This primarily reflected a significant inflation of IFRS-based adjusted net income to CNY39,522 million ((C) in thetable) due to gain from remeasurement relating to business combination of CNY18,602 million ((B) in the table) arisingin July 2015 in relation to Alibaba Health Information Technology Limited being added to net income for the six-month
period ended June 30, 2015 as an out-of-period transaction.
(Millions of yen)

Income on equity method
investments(incl.) Alibaba

Six-month Period
Ended Sept. 30, 2015

Six-month Period
Ended Sept. 30, 2016

264,586
251,294

ChangeChange %105,174(159,412)(60.2%)

108,668(142,626)(56.8%)(Reference: Net Income of Alibaba and the Company’s Related Income on Equity Method Investments)
Six-month Period
Ended June 30, 2015

Six-month Period
Ended June 30, 2016

ChangeAlibaba
Net income（U.S. GAAP）
IFRSs adjustment
Net income（IFRSs）
Out-of-period transaction
adjustment
Adjusted net income（IFRSs）

Income on equity method
investments related to Alibaba(Reference)
Interest ratio as of June 30
Income on equity method
investments(Reference)
Effective exchange rate:
CNY/JPY
Income on equity method
investments

1

million CNY

million CNY

33,736

12,915

million CNY(20,821)

million CNY

million CNY

million CNY(12,816)

8,182

20,998million CNY

million CNY

million CNY

20,92021,097177

million CNY(B) 18,602

million CNY-(18,602)

million CNY

million CNY

million CNY(C) 39,522(A) 21,097(18,425)

Six-month Period
Ended Sep. 30, 2015

Six-month Period
Ended Sept. 30, 2016

Change32.20%

30.70%-

million CNY

million CNY

million CNY

12,782

6,879(5,903)

19.66

15.80

(3.86)

million JPY

million JPY

million JPY

251,294

108,668(142,626)

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, among others. However, the Company performs necessary adjustments for material transactions or
events arising during the lag period and publicly announced by Alibaba.

4SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016(e) Gain on Sales of Equity Method Associates
Gain on sales of equity method associates was ¥238,101 million compared to a gain of ¥3 million in the same period of
the previous fiscal year. This was mainly due to the sale of a portion of Alibaba shares held by subsidiary SB CHINAHOLDINGS PTE LTD2 (“SB China”) to Alibaba, two Singaporean sovereign wealth funds, and Alibaba Partnership3.

(f) Foreign Exchange Gain and Loss
Foreign exchange gain was ¥83,071 million compared to a loss of ¥3,641 million in the same period of the previous
fiscal year. This was due to foreign exchange gain recorded for the difference in the amount of borrowings made by
SoftBank Group Corp. from a foreign subsidiary due to a difference in the foreign exchange rate between the time ofborrowing and the time of repayment. The Company also recorded foreign exchange gain for the difference in theforeign exchange rate between the time of purchase of the British pounds and the time of acquisition of control of ARM
on September 5, 2016, related to British pound deposit portion of the approximately £24.0 billion consideration for theacquisition of ARM.

(g) Derivative Gain and Loss
Derivative loss was ¥170,058 million compared to a loss of ¥6,886 million in the same period of the previous fiscal year.
This was mainly attributable to loss on valuation of derivatives of ¥199,189 million recorded related to a collartransaction included in a variable prepaid forward contract for Alibaba shares. See page 55 “(2) Transaction for sale of
Alibaba shares by variable prepaid forward contract” under “3. Condensed Interim Consolidated Financial Statements(6) Notes to Condensed Interim Consolidated Financial Statements 8. Interest-bearing debt” for details.
The collar transaction is measured at the end of each quarter based on fair value (primarily linked to the share priceof Alibaba), and the fluctuation amount is recorded as derivative gain or loss. The cumulative derivative income andloss for the three years, from the conclusion of the variable prepaid forward contract on June 10, 2016 until the settlement
date, would be a loss of $900 million and this equals to the amount of derivative assets initially recognized.

(h) Other Non-operating Income and Loss
i. Other non-operating loss was ¥22,585 million compared to income of ¥97,410 million in the same period of theprevious fiscal year. The primary components of other non-operating income and loss were as follows: Dilution gainfrom changes in equity interest was ¥74,741 million compared to gain of ¥14,631 million in the same period of theprevious fiscal year, primarily due to a private placement of new shares by Alibaba.
ii. Impairment loss on assets classified as held for sale was ¥42,540 million (not recorded in the same period of theprevious fiscal year). This was due to the measurement of 248,300,000 shares of GungHo tendered by the Company,out of the 272,604,800 shares held, in the tender offer by GungHo for its own shares that was executed from June 23,
2016 to July 21, 2016. The Company recorded a loss in relation to the difference between the valuation of the tenderedshares at the tender offer price of ¥294 per share and their carrying amount on a consolidated basis.
iii. Loss from financial instruments at FVTPL was ¥58,140 million compared to a gain of ¥112,625 million in the same
period of the previous fiscal year. This was mainly due to a loss recorded as the amount of changes in the fair value

2
3

Currently SOFTBANK GROUP CAPITAL APAC PTE. LTD.
Alibaba Partnership is not an affiliate of Alibaba.

5SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016of the Company’s investments in India, from March 31, 2016 (the “previous fiscal year-end”) to September 30, 2016
(the “end of the second quarter”). Of this, ¥29,622 million was recorded as a loss arising from the yen’s year-on-year
appreciation.
See page 61 “15. Other non-operating income (loss)” under “3. Condensed Interim Consolidated Financial Statements(6) Notes to Condensed Interim Consolidated Financial Statements” for details.

(i) Income before Income Tax
As a result of (b) to (h), income before income tax was ¥665,625 million, a decrease of ¥102,096 million (13.3%)
year on year.

(j) Income Taxes
Income taxes were ¥423,262 million, an increase of ¥131,619 million (45.1%) year on year.
The effective income tax rate for the period was 63.6% compared to the statutory tax rate of 31.69%. This mainlyreflected an intragroup transaction involving the transfer of a portion of the Alibaba shares held by SB China, a wholly
owned subsidiary of SoftBank Group Corp., to SoftBank Group Corp. and its wholly owned subsidiary.
As a result of this transaction, deferred tax liabilities of ¥643,755 million were recorded as expenses for the period.
On the other hand, for the Alibaba shares that were transferred to SoftBank Group Corp., no deferred tax assets wererecorded for differences between their carrying amount for tax purposes and their carrying amount on a consolidated
basis (accounting perspective) as there are no plans to sell these shares in the near future. As a result, the effective
income tax rate in the condensed interim consolidated statements of income for the period increased.

(k) Net Income from Continuing Operations
As a result of (i) and (j), net income from continuing operations totaled ¥242,363 million, a decrease of ¥233,715 million(49.1%) year on year.

(Discontinued Operations)(l) Net Income from Discontinued Operations
Net income from discontinued operations was ¥558,585 million compared to ¥32,547 million in the same period of theprevious fiscal year. This was due to Supercell’s income after income tax of ¥28,246 million recorded for the period
from April 1 to July 29, 2016, compared to ¥39,515 million in the same period of the previous fiscal year, as well as
after-tax gain on sale of Supercell shares of ¥530,339 million (not recorded in the same period of the previous fiscal
year).

(m) Net Income
As a result of (k) and (l), net income amounted to ¥800,948 million, an increase of ¥292,323 million (57.5%) year on year.

6SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016(n) Net Income Attributable to Owners of the Parent
After deducting net income attributable to non-controlling interests such as Yahoo Japan Corporation and Sprint from(m), net income attributable to owners of the parent amounted to ¥766,249 million, an increase of ¥339,566 million(79.6%) year on year.

(o) Comprehensive Income
Comprehensive income totaled ¥70,608 million, a decrease of ¥411,115 million year on year. Of this, comprehensive
income attributable to owners of the parent was ¥67,987 million, a decrease of ¥330,098 million year on year.

7SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016b. 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 five reportable segments: “Domestic Telecommunications,”“Sprint,” “Yahoo Japan,” “Distribution,” and “ARM.”
The Company has newly established the ARM segment from the second quarter, as a result of ARM’s consolidation.

Reportable segments

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

Main Businesses

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, suchas data communications and fixed-line telephone services

SoftBank Corp.
Wireless City Planning Inc.

・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

SprintYahoo 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 inJapan

Brightstar Corp.
SoftBank Commerce & Service Corp.

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

ARM Holdings plc

ARM・Fukuoka SoftBank HAWKS-related businesses

Fukuoka SoftBank HAWKS Corp.

Other

Core Companies

Note:
1. The calculation methods of segment income and adjusted EBITDA of reportable segments are as follows:
Segment income =(net sales – operating expenses (cost of sales + selling, general and administrative expenses) ± gain from remeasurement relating
to business combination ± other operating income (loss)) in each segment
Adjusted EBITDA =(segment income (loss) + depreciation and amortization ± gain from remeasurement relating to business combination ± otheradjustments) in each segment“Other operating income (loss)” that was presented as an item to be excluded from segment income for calculation of adjusted
EBITDA of each segment until the first quarter is now presented as “Other adjustments.” “Other adjustments” are special items
such as acquisition-related costs and impairment loss mainly included in other operating income and loss.
See page 21 “(Reference: Definitions and Calculation Methods of Principal Operational Data)” for definitions and calculation
methods of terms used in “b. Results by Segment.”
See the Earnings Results Data Sheet posted on the Company’s website at http://www.softbank.jp/en/corp/irinfo/presentations/ forprincipal operational data of each segment.

8

SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016(a) Domestic Telecommunications Segment

1. (b)Increase net sales and income (net sales: +3.1% yoy; segment income: +9.4% yoy)
2. Brisk growth in smartphone and SoftBank Hikari fiber-optic service subscribers(Millions of yen)Six-month Period
Ended September 30, 2015

Six-month Period
Ended September 30, 2016

1,508,068

1,554,566

46,4983.1%

Segment income

425,960

465,933

39,973

9.4%

Depreciation andamortization

218,709

225,405

6,696

3.1%

Other adjustments

-

-

-

-

Adjusted EBITDA

644,669

691,338

46,6697.2%

Net sales

ChangeChange %< Overview >The Domestic Telecommunications segment comprises the subsidiaries that operate telecommunications businesses inJapan, such as SoftBank Corp. and Wireless City Planning Inc. SoftBank Corp. provides (i) mobile communications
services under the SoftBank and Y!mobile brands, (ii) broadband services for retail customers, such as SoftBank Hikari
and Yahoo! BB, and (iii) fixed-line telecommunications services for corporate customers, such as data communications
and fixed-line telephone services. Wireless City Planning Inc. provides broadband wireless access services using the 2.5
GHz band.
The segment’s net sales are categorized as telecom service revenue and product and other sales. Telecom service
revenue includes the communication revenues of each service (i)-(iii) above, as well as device warranty service revenue,
content-related revenues, and advertising revenues. Product and other sales include the sales of mobile devices formobile communications services and the sales of terminals for broadband services on customer premises.
Looking ahead, the market of domestic telecommunications, such as mobile communications services, is expected to
grow more slowly than in the past. In this environment, to ensure steady profit growth in the domestic
telecommunications business, SoftBank Corp. has identified users of smartphones, feature phones, tablets, and mobile
data communication devices, which are all sources of revenue and profit, as the “main subscribers” and concentrated its
efforts on acquiring and maintaining such subscribers. Particularly, SoftBank Corp. puts its strongest emphasis on theacquisition and the improvement of the churn rate of smartphone users by focusing on the promotion of the Home
Bundle Discount Hikari Set, which offers a discount on the communication charges of mobile communications services
to customers subscribing to both mobile communications services and broadband services such as SoftBank Hikari.
Moreover, SoftBank Corp. is working to develop new peripheral services such as video streaming, electricity
provision, and robotics, and to achieve further operational efficiency and cost reductions.

9SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016

(Breakdown of Net Sales)(Millions of yen)

Total net sales
Telecom service revenue
Mobilecommmunications
Telecom4
Service5

Six-month Period
Ended September 30,
2015

Six-month Period
Ended September 30,
2016

1,508,068

1,554,566

46,4983.1%

1,186,793

1,215,251

28,4582.4%

971,413958,158(13,255)(1.4%)

864,317842,117(22,200)(2.6%)

107,096

116,041

8,945

8.4%

ChangeChange %Broadband
Fixed-line
telecommunications

79,337

123,852

44,51556.1%

136,043

133,241(2,802)(2.1%)

Product and other sales

321,275

339,315

18,040

5.6%< Financials >The segment’s net sales totaled ¥1,554,566 million, an increase of ¥46,498 million (3.1%) year on year. Of this,telecom service revenue totaled ¥1,215,251 million, an increase of ¥28,458 million (2.4%) and product and other sales
was ¥339,315 million, an increase of ¥18,040 million (5.6%).
The increase in telecom service revenue was due to an increase of ¥44,515 million (56.1%) in broadband revenue
following steady growth in subscribers for the SoftBank Hikari fiber-optic service. On the other hand, mobile
communications revenue decreased by ¥13,255 million (1.4%) year on year to ¥958,158 million, mainly due to anincrease in the total amount of discounts (negative impact on revenue) associated with growth in the cumulative number
of applications of the Home Bundle Discount Hikari Set and a decrease in PHS subscribers.
The increase in product and other sales was mainly due to an increase in sales of terminals for broadband services oncustomer premises and smartphones.
Operating expenses (cost of sales and depreciation and amortization) increased by ¥6,525 million (0.6%) year
on year to ¥1,088,633 million. The main factors were as follows:・ Cost of products decreased by ¥3,285 million (1.3%) year on year, mainly due to fewer shipments of smartphones,
which generally have a higher purchase price per unit. The gross margin on product sales improved significantly,
mainly due to an increase in the sales price of mobile devices and an attendant increase in monthly installment
payment amounts.
・ Sales commission fees decreased by ¥21,969 million (12.6%) year on year, mainly due to a year-on-year decreasein the average cost of sales commission fees for smartphones.
・ Telecommunications network charges increased by ¥17,923 million (17.1%) year on year, primarily due to anincrease in fiber-optic connection charges for the SoftBank Hikari fiber-optic service.
・ Sales promotion expenses increased by ¥3,379 million (6.6%) year on year, mainly due to focused efforts on salesof the SoftBank Hikari fiber-optic service and Y!mobile smartphones.
4
5

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

10SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016

・ Depreciation and amortization increased by ¥6,696 million (3.1%) year on year to ¥225,405 million.
As a result of the above, segment income increased by ¥39,973 million (9.4%) year on year to ¥465,933 million.
Adjusted EBITDA increased by ¥46,669 million (7.2%) year on year to ¥691,338 million.

< Operations >i. Mobile Communications Service
・ Subscribers (Main Subscribers)
The cumulative number of main subscribers of mobile communications services at the end of the second quarterstood at 32,301,000 for 263,000 net additions from the previous fiscal year-end. Smartphones and tablets marked net
additions, which outweighed net losses for feature phones and mobile data communications devices. In particular,
the number of subscribers for Y!mobile smartphones grew briskly.
(Thousands)

As of March 31, 2016

As of September 30, 2016

32,038Cumulative subscribers

Change32,301

263

・Home Bundle Discount Hikari Set Applications
The cumulative number of applications of the Home Bundle Discount Hikari Set at the end of the second quarterstood at 4,419,000 for mobile communications services, up 1,450,000 from the previous fiscal year-end, and2,158,000 for broadband services, up 720,000.
(Thousands)

As of March 31, 2016

As of September 30, 2016

ChangeMobile communications
service

2,969

4,419

1,450

Broadband service

1,438

2,158

720

・ARPU (Main Subscribers)
Total ARPU for main subscribers of mobile communications services for the second quarter was ¥4,570, a decreaseof ¥150 year on year.
Of this, telecom ARPU declined by ¥170 to ¥4,020. This was mainly due to an increase in the amount of discountto telecom ARPU in conjunction with the increase in the cumulative number of applications of the Home Bundle
Discount Hikari Set and an increase in the compositional ratio of Y!mobile smartphones, which have a relatively low
service charge. This was partially offset by an increase in the cumulative number of smartphone subscribers withinmain subscribers. On the other hand, service ARPU increased by ¥20 year on year to ¥560.
(Yen / Month)Three-month Period
Ended September 30, 2015

Three-month Period
Ended September 30, 2016

4,720

4,570

(150)

Telecom ARPU

4,190

4,020

(170)

Service ARPU

540

560

20

Total ARPU

11

ChangeSoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016

・Number of Units Sold (Main Subscribers)
The number of units sold for mobile devices of main subscribers for the period increased by 236,000 year on year to
4,904,000. This was mainly due to increases in the number of units sold for smartphones, particularly for Y!mobile
smartphones. On the other hand, the number of units sold for mobile data communication devices declined.
(Thousands)

Six-month Period
Ended September 30, 2015

Six-month Period
Ended September 30, 2016

4,668

4,904

236

2,381

2,277

2,287

2,627

(104)
341

Units soldNew subscriptions
Device upgrades

Change・Churn Rate (Main Subscribers)
The churn rate for main subscribers of mobile communications services for the second quarter was 1.06%, an
improvement of 0.22 of a percentage point year on year. This mainly reflected a decline in the number of subscribers
switching to other operators under the Mobile Number Portability (MNP) system and a gradual improvement in thechurn rate for smartphones and feature phones associated with the expansion of the Home Bundle Discount Hikari
Set. These improvements were partially offset by a deterioration of the churn rate for mobile data communication
devices.
To further improve the churn rate over the medium term, SoftBank Corp. is now executing initiatives to improve
the quality of customer service at sales channels such as SoftBank Stores, as well as expanding the Home Bundle
Discount Hikari Set. SoftBank Corp. is also planning to launch a long-term continuation benefit program in
December 2016 for subscribers who continue their subscriptions after the two-year contract expiration. The program
includes awarding points that can be used for Yahoo! JAPAN services.
Three-month Period
Ended September 30, 2015

Three-month Period
Ended September 30, 2016

1.28%

1.06%

Churn rate

Change0.22 pp improvement

ii. Broadband Service
The cumulative number of subscribers for broadband services at the end of the second quarter stood at 5,600,000, a
521,000 increase from the previous fiscal year-end. This was mainly due to an increase of 982,000 subscribers for
SoftBank Hikari. On the other hand, Yahoo! BB hikari with FLET’S decreased by 367,000 and subscribers for Yahoo!
BB ADSL decreased by 94,000.
(Thousands)

As of March 31, 2016

As of September 30, 2016

ChangeCumulative subscribers

5,079

5,600

521

SoftBank Hikari

1,717

2,699

982

Yahoo! BB hikariwith FLET’S

2,008

1,641

(367)

Yahoo! BB ADSL

1,354

1,261

(94)

12

SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016(b) Sprint Segment

1.

U.S. dollar-based net sales and income grew (net sales: +1.6% yoy, segment income: +47.9% yoy)

2.

Quarterly net additions for postpaid phones increased by five times yoy, with a record low churnrate of 1.37%

3.

Successful cost reductions(Millions of yen)Six-month Period
Ended September 30, 2015

Six-month Period
Ended September 30, 2016

1,946,178

1,722,537(223,641)(11.5%)

Segment income

81,385

104,565

23,18028.5%

Depreciation andamortization

398,179

420,051

21,872

5.5%

Other adjustments

29,214(7,692)(36,906)-

Adjusted EBITDA

508,778

516,924

8,146

1.6%

Net sales

Reference: U.S. dollar-based results (IFRSs)

ChangeChange %(Millions of U.S. dollars)

16,002

16,259257

1.6%

Segment income

670

991

321

47.9%

Depreciation andamortization

3,273

3,964

691

21.1%

Other adjustments

240

(81)

(321)

-

Adjusted EBITDA

4,183

4,874

691

16.5%

Net sales< Overview >Sprint aims to return to a growth trajectory by increasing net sales while promoting large-scale cost reductions. With
regard to net sales, Sprint is focusing on increasing the number of postpaid phone subscribers, which are its largest
source of revenue and profit. Its postpaid phone net additions for the second quarter increased by five times over thesame period of the previous fiscal year. Meanwhile, in cost reductions, Sprint is making solid progress on achieving its
target run rate6 reduction of $2.0 billion or more exiting the fiscal year ending March 2017 and is targeting further cost
reductions for the fiscal year ending March 2018 onward.
< Financials >i. Results in U.S. dollar terms
Net sales increased by $257 million (1.6%) year on year to $16,259 million, offsetting a decrease in telecom
revenues due to an increase in device revenues. Telecom revenue declined due to customer shifts to lower rate plans

6

Estimated future figures based on the assumption at the time when the plans were made13

SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016

offered in conjunction with device financing programs and a decrease in prepaid subscribers, while device revenue
increased due to an increase in lease revenue related to leased devices.
Segment income is obtained by deducting operating expenses (i.e. cost of sales and selling, general and administrative
expenses) and adding or deducting other operating income and loss from net sales. Operating expenses increased by $26
million (0.2%) year on year to $15,118 million. Of this, depreciation and amortization increased by $691 million (21.1%)
year on year due to an increase in leased devices recorded as assets and cost of products increased by $464 million(17.2%) year on year due to an increase in rent expense related to leased devices. Other operating expenses decreased
by $1,129 million (12.4%) in total year on year due to the cost reduction initiatives particularly in areas such as networks,
advertisement, and personnel cost related to customer cares.
Other operating loss was $150 million, an improvement of $90 million year on year. See page 60 “11. Other operatingloss” under “3. Condensed Interim Consolidated Financial Statements (6) Notes to Condensed Interim Consolidated
Financial Statements” for details.
As a result of the above, segment income increased by $321 million (47.9%) year on year to $991 million andadjusted EBITDA increased by $691 million (16.5%) year on year to $4,874 million.

ii. Results in yen terms
The segment’s net sales in yen terms decreased by ¥223,641 million (11.5%) year on year to ¥1,722,537 million due tothe yen’s appreciation against the U.S. dollar year on year. Segment income increased by ¥23,180 million (28.5%) year
on year to ¥104,565 million and adjusted EBITDA increased by ¥8,146 million (1.6%) year on year to ¥516,924 million.
< Operations >・Number of Subscribers (Sprint Platform)
Sprint had 60,193,000 subscribers at the end of the second quarter, a net addition of 1,387,000 from the previous fiscal
year-end. The cumulative number of subscribers at the end of the second quarter includes the impact from the Shentel
Transaction.7
Excluding the impact from the Shentel Transaction, Sprint platform net additions during the period came to1,117,000 ((A) in the following table). This represented postpaid net additions of 524,000 and wholesale and affiliate
net additions of 1,351,000, outweighing prepaid net losses of 758,000.
The postpaid net additions were driven by phone (smartphone and feature phone) net additions of 520,000. This wasdue to an increase in subscriber acquisitions due to the introduction of attractive rate plans and effective advertising
activities, and an improvement in the churn rate driven by network improvements. On the other hand, prepaid marked
net losses due to continued intensified competition.

7

Shentel Transaction defines a series of transactions involving the acquisition of NTELOS Holdings Corp. (“NTELOS”), a then wholesale telecom
network provider to Sprint, by Sprint’s affiliate company Shenandoah Telecommunications Company (“Shentel”) in May 2016 and subsequentacquisition of NTELOS’s spectrum assets and termination of existing wholesale arrangement with the company, followed by an amendment of theexisting affiliate agreement with Shentel. An affiliate company refers to a local wireless operator that sells and provides Sprint-branded services andproducts with its own self-operated telecom network while paying Sprint for brand and spectrum usage. Upon completion of the Shentel Transaction,
the number of former NTELOS subscribers are now accounted for under “affiliate” of Sprint, resulting in an increase of 270,000 in the cumulative
number of subscribers. Furthermore, the number of Sprint subscribers who previously roamed on the NTELOS network and were accounted for as“postpaid” or “prepaid” are now accounted for under “affiliate” of Sprint (186,000 from postpaid and 92,000 from prepaid were reclassified as“affiliate”).

14SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016

(Thousands)

As of September 30,
2016

ChangeChange excl. impact
from the Shentel
Transaction (A)58,80660,193

1,387

1,117

30,951

31,289338

524

25,316

25,669353

520

Prepaid

14,397

13,547

(850)

(758)

Wholesale andaffiliate

13,45815,357

1,899

1,351

As of March 31,
2016
Cumulative subscribers
Postpaid(incl.) Phone

・ABPU (Sprint Platform Postpaid Phone)
Postpaid phone ABPU for the second quarter increased by $1.07 year on year to $71.69. This was mainly due to anincrease in the amount of average equipment billings per user outweighing a decrease in ARPU. ARPU declined by$3.68 year on year to $58.03. This was mainly due to an increase in the compositional ratio of customers on lower
rate plans offered in conjunction with device financing programs.
(U.S. dollars / month)Three-month Period
Ended September 30, 2015

Three-month Period
Ended September 30, 2016

Postpaid phone ABPU

70.62

71.69

1.07

ARPU
Average equipment
billings per user

61.71

58.03

(3.68)

8.91

13.66

4.75

Change・Churn Rate (Sprint Platform Postpaid)
The postpaid churn rate for the second quarter improved by 0.02 of a percentage point year on year to 1.52%. Thisis mainly due to improvement of the churn rate for phones. The churn rate for tablets deteriorated.
The churn rate for phones improved to 1.37%, the lowest level since Sprint was founded, contributed to the net
addition of phone subscribers. This mainly reflected network performance improvements, as well as a decrease in
involuntary deactivations due to payment delinquency following focused efforts to acquire prime customers.
Three-month Period
Ended September 30, 2015

Three-month Period
Ended September 30, 2016

Postpaid churn rate

1.54%

1.52%

0.02 pp improvement

Postpaid phone
churn rate

1.49%

1.37%

0.12 pp improvement

Change< Spectrum Financing >In October 2016, Sprint procured funds of $3.5 billion at an interest rate of 3.36%, less than half its current effective
interest rate, using its spectrum portfolio. The transaction was executed as part of a program enabling Sprint to procure
a maximum of $7.0 billion backed by a small portion (approximately 14% on a MHz-pops8 basis) of its total spectrum
holdings.

8

The amount of spectrum in a given license or set of frequencies multiplied by the population covered by the geographic area of the spectrum license

15

SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016(c) Yahoo Japan Segment(Millions of yen)Six-month Period
Ended September 30,
2015

Six-month Period
Ended September 30,
2016

ChangeChange %Net sales

248,768

409,497

160,72964.6%

Segment income

150,895

99,371(51,524)(34.1%)

Depreciation andamortization

12,933

19,154

6,221

48.1%

Gain from remeasurement
relating to businesscombination(59,441)(19)

59,422-Other adjustments

-

-

-

-

Adjusted EBITDA

104,387

118,506

14,11913.5%(d) Distribution Segment(Millions of yen)Six-month Period Ended
September 30, 2015

Six-month Period Ended
September 30, 2016

666,728

626,356(40,372)(6.1%)

Segment income

4,137

14,305

10,168245.8%

Depreciation andamortization

5,791

3,557

(2,234)(38.6%)

Other adjustments

-

-

-

-

Adjusted EBITDA

9,928

17,862

7,934

79.9%

Net sales

16

ChangeChange %SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016(e) ARM Segment
In the ARM segment, the earnings reflect the results of operation of ARM since September 6, 2016.
(Millions of yen)Six-month Period
Ended September 30, 2015

Six-month Period
Ended September 30, 2016

ChangeChange %Net sales

14,356

14,356-

Segment income

1,458

1,458

-

564

564

-

(18,168)(18,168)-

Other adjustments

23,382

23,382-Adjusted EBITDA

7,236

7,236

-

Depreciation andamortization
Gain fromremeasurement
relating to businesscombination

Segment was
newly establishedfrom the second
quarter

Notes:
1. Consideration transferred of ARM of ¥3,369,138 million is allocated to acquired assets and assumed liabilities based on the fair value
at the acquisition date; however, certain intangible assets related to technology, research development in process, and customer
relationships are under identification and measurement, and therefore are not allocated to intangible assets at present. The amounts ofsuch intangible assets are scheduled to be revised after the identification and measurement are completed. Those assets with definite
lives will be amortized on a regular basis. Amounts of assets and liabilities may also change within a year following the acquisition
date even after allocation of such intangible assets. See page 46 “3. Business combinations” under “3. Condensed Interim Consolidated
Financial Statements (6) Notes to Condensed Interim Consolidated Financial Statements” for details of consolidation of ARM.
2. Following the Company’s acquisition of ARM, ARM has changed its accounting policy for recognition of royalty revenues. Since thechange, ARM accrues the royalty revenue in the same quarter the chips are shipped by ARM’s licensees, based on estimates.

< Overview >ARM was consolidated into the Company on September 5, 2016, and now forms the ARM segment. ARM’s operations
are primarily related to the licensing of semiconductor intellectual property (IP) including the designs of energy-efficient
microprocessors and associated technologies. In addition, ARM sells software tools used to enhance the costeffectiveness and security of products that utilize chips containing ARM’s technology. ARM also provides support,
maintenance and training services. ARM designs technology that is suitable for a wide range of different chips that canbe deployed into markets such as smartphones, digital TVs, smart cards, microcontrollers, automotive electronics,
enterprise networking equipment and servers. ARM is also investing in creating new revenue streams from adjacentmarkets, especially in the Internet of Things.
The segment’s net sales are comprised of (i) licenses to ARM’s technology, (ii) royalties arising from the resulting
sale of licensees’ products based on ARM’s technology, and (iii) revenues from the sale of software tools.

17SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016

< Financials >In the ARM segment, earnings reflect the results of operation of ARM since September 6, 2016.
Net sales totaled ¥14,356 million.
Segment income is obtained by deducting operating expenses (i.e. cost of sales and selling, general and administrative
expenses) and adding or deducting gain from remeasurement relating to business combination and other operating
income and loss from net sales. The Company recorded ¥18,168 million of gain from remeasurement relating to businesscombination as a result of re-evaluation at fair value of the equity interests in ARM (1.4%) that the Company alreadyheld on the acquisition date on September 5, 2016. Acquisition-related cost of ¥23,382 million was also recorded asother operating loss, associated with the Company’s acquisition of ARM. As a result, segment income totaled ¥1,458
million.
Adjusted EBITDA was ¥7,236 million.

< Operations >This section is prepared solely for reference purposes to facilitate understanding of the business operations of ARM.
These include information prior to the the Company’s acquisition on September 5, 2016.
・Licensing
During the second quarter, ARM signed 20 processor licenses, reflecting the ongoing demand for ARM’s latest
technology. Six of the customers signing licenses were new customers taking their very first ARM processor license.
Most of these customers are developing new products and services for the Internet of Things and this demonstrates
how ARM’s technology is becoming a platform in this new market.
(Breakdown of Processor Licensing for the Period)
Three-month Period
Ended September 30, 2016
Number of processor licenses signed

20Classic

1

Cortex-A

2

Cortex-R

4

Cortex-M

10

Mali

3

Architecture-

Subscription-

Two of the licenses signed were for ARM’s Cortex-A series processors, mainly for use in smartphones and game
consoles. This included a lead license for a next-generation processor that will be announced at a later date. Four ofthe licenses were for Cortex-R series processors for use in deterministic real-time applications including a 5G modem
and disk-drive controllers. Ten of the licenses signed were for Cortex-M series processors for use in the key
components of smart connected devices: microcontrollers, smart sensors, and low-power wireless communication
chips. One of these was a license for the recently announced processor, Cortex-M33, for energy-efficient and secure
embedded applications. ARM signed three licenses for its Mali multimedia processors for use in smartphones and18

SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016

digital TVs, including a license for its Assertive Camera image signal processor, which is technology from ARM’sacquisition of Apical Limited in May 2016.
In addition to the above, ARM signed a physical IP platform license with a major foundry and two licenses for POP
IP, both developed for a future ARM processor, during the second quarter. ARM’s physical IP is used by fablesssemiconductor companies to implement their chip designs in a foundry’s manufacturing process. ARM has two typesof physical IP: royalty-bearing platform IP, which is licensed to foundries, and POP IP, which is licensed to
semiconductor companies.
・Royalty Units
The following analyses are based on the actual shipments of royalty units by ARM licensees for the three months from
April 1, 2016 to June 30, 2016 as reported by licensees in royalty reports.
(Millions of U.S. dollars)

Based on Shipments from
April 1 to June 30, 2015

Based on Shipments from
April 1 to June 30, 2016

203

228

Royalty payments
as reported by ARM’s licensees

Change25

The royalty payments related to shipments for the period of April 1, 2016 to June 30, 2016 were up 12% over thesame period of the previous fiscal year. This compares to the semiconductor industry9 as a whole, which saw sales
decline around 3% in the relevant period (April 1, 2016 to June 30, 2016) compared to the same period of the previous
fiscal year. This outperformance was driven by continued market share gains and the increasing deployment ofadvanced technologies from ARM.
Shipments from April 1
to June 30, 2015

Shipments from April 1
to June 30, 2016

3.6 billion

4.0 billion

Classic

33%

24%

Cortex-A

17%

19%

Cortex-R

7%

7%

Cortex-M

43%

50%

Mobile and connectivity

42%

40%

Consumer electronics

5%

5%Enterprise electronics

13%

15%

Embedded computing

40%

40%

Royalty units as reported by ARM’slicensees
Breakdown by processor family

Breakdown by end market

ARM’s licensees reported that for the three-month period ended June 30, 2016 they had shipped 4.0 billion ARMbased chips. This is an increase of 11% on the same period of the previous fiscal year.

9

World Semiconductor Trade Association Trade Statistics (WSTS), July 2016. Excludes memory and analog chips, which do not contain processor
technology.

19

SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016

ARM’s royalty revenue also increases as its licensees use more advanced technology that results in a higher royalty
percentage per chip. This advanced technology includes ARM’s latest architecture (ARMv8-A), ARM’s multimedia
technology (such as ARM’s Mali graphics processor), and higher core-count in some smartphone chips (somesmartphones can have ARM processors with 8 or 10 cores in the main chip).

・Employees
As of September 30, 2016, ARM had 4,438 employees,10 of which 3,602 were technical employees11 and 1,770 werebased in the U.K., compared with 3,852 at September 30, 2015, of which 3,048 were technical employees and 1,529
were based in the U.K.
The Company has undertaken that it will at least double the total number of ARM employees in the U.K., andincrease the total number of employees in the rest of the world, within five years from the effective date of theacquisition.

10
11

The numbers of employees at ARM include temporary employees.
Employees who work on the research, creation, maintenance, deployment and support of technology products and services of ARM. The numbers of“Technical Employees” in periods prior to September 30, 2016 have been restated to be consistent with the Post-Offer Undertakings as agreed with
the UK Takeover Panel, full details of which were set out in the letter from the ARM chairman in the scheme document dated August 3, 2016 andwhich is available on www.arm.com.

20

SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016

(Reference: Definitions and Calculation Methods of Principal Operational Data)(a) Domestic Telecommunications Segment
SoftBank Corp.
Mobile Communications Service
Subscribers
The following categories serve as cover-all terms for the service contracts described.
Main subscribers: smartphones,Note 1 feature phones, tablets, mobile data communication devices,Note 2 and others
Communication modules: communication modules, Note 3 Mimamori Phone, prepaid mobile phones, and others
PHS: PHS
Notes:
1. Smartphones to which the Smartphone Family Discount is applied are included under communication modules.
2. Mobile data communication devices to which the Data Card 2-Year Special Discount is applied are included undercommunication modules.
3. Communication modules that use PHS networks are included under PHS.
Home Bundle Discount Hikari Set
Home Bundle Discount Hikari Set:
A discount on the communication charges of mobile communications services to customers subscribing to both mobile
communications services (applicable for smartphones, feature phones, and tablets among main subscribers) and broadband services
such as SoftBank Hikari.
The cumulative number of applications of the Home Bundle Discount Hikari Set includes that of fiber-optic lines as long as thediscount is applied to the associated mobile communications services, even if physical connection of the fiber-optic line is notcomplete at the central office of NTT East or NTT West. It also includes subscribers of the Fiber-optic Discount applied to mobile
communications services under the Y!mobile brand.

Principal Operational Data for Main Subscribers
ARPU
ARPU: Average Revenue Per User per month
Total ARPU = (data-related revenue + basic monthly charge and voice-related revenues + device warranty services + contentrelated revenues + advertising revenues, etc.) / number of active subscribers (rounded to the nearest ¥10)
Telecom ARPU = (data-related revenue (packet communication and flat-rate charges, basic monthly Internet connection chargesetc.) + basic monthly charge and voice-related revenues (basic monthly usage charges, voice call charges,
revenues from incoming calls, etc.)) / number of active subscribers (rounded to the nearest ¥10)
Service ARPU = (device warranty services, content-related revenues, advertising revenues, etc.) / number of active subscribers(rounded to the nearest ¥10)
Number of active subscribers: the total of the monthly numbers of active subscribers for the relevant period((subscribers at the beginning of the month + subscribers at the end of the month) / 2)
Revenues from incoming calls: interconnection charges received from other operators for voice calls from their customers on their
network to SoftBank and Y!mobile phones as a charge for the services provided in the SoftBank
Corp. service area
Churn rate
Churn rate: average monthly churn rate
Churn rate = number of deactivations / number of active subscribers for the relevant period (rounded to the nearest 0.01%)
Number of deactivations:
The total number of subscribers that churned during the relevant period. The number of deactivations excludes the number ofsubscribers who switch between SoftBank and Y!mobile using the MNP system.
Number of active subscribers: the total of the monthly numbers of active subscribers for the relevant period((subscribers at the beginning of the month + subscribers at the end of the month) / 2)

21

SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016

Numbers of handsets shipped
The number of devices shipped (sold) to dealers. Includes the number of devices sold to customers at stores operated by SoftBank
Corp. and the SoftBank ONLINE SHOP.
Numbers of units sold
The total number of new subscriptions and device upgrades. New subscriptions where customers switch between SoftBank andY!mobile using the MNP system are included in the number of device upgrades.

Broadband Service
Services
SoftBank Hikari:
A fiber-optic service using the wholesale fiber-optic connection of NTT East and NTT West.
Yahoo! BB hikari with FLET’ S:
An ISP service offered as a package with NTT East or NTT West’s FLET’S Hikari Series fiber-optic connection.
Yahoo! BB ADSL:A service combining an ADSL connection and an ISP service.
Subscribers
SoftBank Hikari subscribers:
Number of users for which the physical connection of a fiber-optic line at the central office of NTT East or NTT West is complete.
Includes the number of subscribers to SoftBank Air.
Yahoo! BB hikari with FLET’ S subscribers:
Number of users of Yahoo! BB hikari with FLET’ S for which the physical connection of a fiber-optic line at the central office of NTT
East or NTT West is complete and services have been provided.
Yahoo! BB ADSL subscribers:
Number of users of Yahoo! BB ADSL for which the physical connection of an ADSL line at the central office of NTT East or NTT
West is complete.
ARPU
ARPU: Average Revenue Per User per month
ARPU = revenue of each broadband service / number of active subscribers (rounded to the nearest ¥10)
SoftBank Hikari ARPU =SoftBank Hikari revenue (basic monthly charge + provider charge + Hikari BB unit rental charge + White hikari Phone and BB
Phone voice call charge + optional service charges, etc.) / number of active SoftBank Hikari subscribers* Calculation of SoftBank Hikari ARPU includes revenues and subscribers of SoftBank Air.
Yahoo! BB hikari with FLET’ S ARPU =Yahoo! BB hikari with FLET’ S revenue (provider charge + Hikari BB unit rental charge + BB Phone voice call charge + optional
service charges, etc. (excluding usage charges for FLET’S hikari and FLET’S hikari LIGHT)) / number of active Yahoo! BB hikariwith FLET’S subscribers
Yahoo! BB ADSL ARPU =Yahoo! BB ADSL revenue (basic monthly charge + provider charge + modem rental charge + BB Phone voice call charge + optional
service charges, etc.) / number of active Yahoo! BB ADSL subscribers

22SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016

Number of active subscribers: the total of the monthly numbers of active subscribers for the relevant period((subscribers at the beginning of the month + subscribers at the end of the month) / 2)(b) Sprint Segment
Sprint Platform
Sprint platform indicates Sprint-operated CDMA and LTE networks.
ABPU/ARPU
ABPU: Average Billings Per User per month
ABPU = (telecom revenue + equipment billings) / number of active subscribers (rounded to the nearest $.01)
Equipment billings: the sum of lease fees under the leasing program and installment billings under the installment billing program
ARPU: Average Revenue Per User per month
ARPU = telecom revenue / number of active subscribers (rounded to the nearest $.01)
Number of active subscribers: the total of the monthly numbers of active subscribers for the relevant period((subscribers at the beginning of the month + subscribers at the end of the month) / 2)
*ABPU/ARPU for postpaid phones are calculated by dividing the relevant telecom revenue and equipment billings by its numberof active subscribers.
Churn rate
Churn rate: average monthly churn rate
Churn rate = number of deactivations / number of active subscribers (rounded to the nearest 0.01%)
Number of deactivations: the total number of subscribers that churned during the relevant period. The number of deactivations
excludes the number of subscribers who switch between prepaid and postpaid.
Number of active subscribers: the total of the monthly numbers of active subscribers for the relevant period((subscribers at the beginning of the month + subscribers at the end of the month) / 2)(c) ARM Segment
ARM Processor Products
Classic
Classic processors are ARM’s older products including the ARM7, ARM9 and ARM11 families of processor designs. The ARM7
family was ARM’s first ever product family and is highly suitable for cost-sensitive embedded control applications and has beenhighly successful in early digital cellular phones. The ARM9 family processors are higher performance, and were designed for specificend markets such as feature phones and for running WiFi protocol stacks. The ARM11 family processor were used in the firstsmartphones, and in some consumer electronics applications. These processors are occasionally still licensed today, but mostcustomers prefer the more advanced Cortex family of designs.

Cortex
ARM’s Cortex family comprise ARM’s latest processor cores. The family is split into three series:•

A-series targeting applications processors running complex operating systems;•

R-series targeting real-time deeply embedded markets;•

M-series addressing the needs of the low cost microcontroller markets.

By ensuring software compatibility across the three series, ARM has enabled the re-use of software, tools and engineering knowledge.

23

SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016

Architecture license
Architecture Licensees are provided with the flexibility to differentiate from standard ARM-based processor designs. They cancreate alternative processor designs whilst retaining instruction set compatibility with ARM’s standard processor designs. For
example, ARM’s Cortex-A53 and Cortex-A57 are both based on the ARMv8-A architecture. An ARMv8-A architecture licensee cancreate their own processor, optimized for a specific chip design, that would be software compatible with both the Cortex-A53 andCortex-A57.
Mali
The Mali family of multimedia processors delivers high-quality multimedia images without compromising performance, power
consumption or system cost. ARM develops industry-leading IP for 3D graphics, video processor and imaging technology thatprovides customers with an integrated multimedia platform, which can be embedded in their chip, and is becoming increasingly
important in devices such as mobile computers, portable media players and digital TVs.
Subscription license
Subscription Licenses allow a partner access to a selected set of ARM products, including unspecified future products, over a definedtime period for a set annual fee. Design rights are granted for the subscription period, and manufacturing rights are perpetual for
ARM-based products designed during that period.

Breakdown by Chip Purpose

Mobile and connectivity
Includes chips used in smartphones and tablets, and also radio chips used in other non-mobile products. This includes the main
application processor in smartphones and tablets; baseband modems; wireless connectivity chips such as Bluetooth, WiFi, and Zigbee;
and other peripheral chips often found in mobile devices.
Consumer electronics
Includes other non-mobile applications such as cameras, digital TVs and set-top boxes.
Enterprise electronics
Includes chips typically found in printers, PCs, networking infrastructure and servers. This includes hard-disk drive controllers, solidstate drive controllers, printer management, and chips for switches, routers and servers.
Embedded computing
Includes microcontrollers, smartcards and chips for applications such as automotive, robotic, medical, industrial and agriculturalelectronics.

24

SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016

(2) Qualitative Information Regarding Consolidated Financial Positiona. Assets, Liabilities and Equity
Assets, liabilities and equity at the end of the second quarter were as follows:(Millions of yen)

As of March 31, 2016

As of September 30, 2016

ChangeChange %Total assets

20,707,192

22,896,077

2,188,885

10.6%

Total liabilities

17,201,921

19,769,755

2,567,834

14.9%

Total equity

3,505,271

3,126,322(378,949)(10.8%)

Reference: Exchange rate at the end of the second quarter used for translation
USD/ JPY¥112.68¥101.12¥(11.56)(10.3%)

GBP/ JPY¥161.92¥131.00¥(30.92)(19.1%)(a) Current Assets(Millions of yen)

As of March 31, 2016

As of September 30, 2016

ChangeCash and cash equivalents

2,569,607

2,675,856

106,249

Trade and other receivables

1,914,789

2,226,354

311,565

Other financial assets

152,858

357,041

204,183

Inventories

359,464

356,078(3,386)

Other current assets

553,551

254,788(298,763)

Total current assets

5,550,269

5,870,117

319,848

Total current assets increased by ¥319,848 million (5.8%) from the previous fiscal year-end to ¥5,870,117 million. The
primary components of the change were as follows:i. Cash and cash equivalents increased by ¥106,249 million from the previous fiscal year-end. See page 32 “b. Cash
Flows” for the details on changes in cash and cash equivalents.
ii. Trade and other receivables increased by ¥311,565 million from the previous fiscal year-end. This was mainly due
to receivable for sale of ¥372,812 million recorded in conjunction with the entire sale of Supercell shares in July
2016. The sale price of $7.4 billion is to be received in three installments, the second of which was recorded asreceivable for sale of $3.7 billion as it is scheduled to be received in October 2016.
iii. Other financial assets increased by ¥204,183 million from the previous fiscal year-end. This was mainly due torecording term deposits and marketable securities at Sprint.
iv. Other current assets decreased by ¥298,763 million from the previous fiscal year-end. This was mainly due to the25SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016

refund of withholding income tax, to which ¥293,489 million was recorded as assets at the previous fiscal year-end
related to dividends within the group companies.

(b) Non-current Assets(Millions of yen)

As of March 31, 2016
Property, plant and equipment(incl.) Sprint

Goodwill

As of September 30, 2016

Change4,183,507

3,814,388(369,119)

2,055,371

1,754,813(300,558)

1,609,789

4,521,863

2,912,074(incl.) ARM-

3,050,218

3,050,218(incl.) Sprint

331,811297,770(34,041)

6,439,145

5,769,467(669,678)

5,468,665

4,878,300(590,365)

4,060,750

3,691,496(369,254)

4,060,750

3,691,496(369,254)

760,703684,663(76,040)

722,539

647,628(74,911)439,800

339,147(100,653)

324,269

236,942(87,327)

Software782,148735,472(46,676)

Game titles

59,844-(59,844)

Others335,900

318,689(17,211)

1,588,270

1,320,633(267,637)

Other financial assets

970,874

1,041,975

71,101

Deferred tax assets

172,864

370,088

197,224

Other non-current assets

192,474

187,546(4,928)

Total non-current assets

15,156,923

17,025,960

1,869,037

Intangible assets(incl.) Sprint

FCC licenses12(incl.) Sprint

Trademarks(incl.) Sprint

Customer relationships(incl.) Sprint

Investments accounted for using
the equity method

Total non-current assets increased by ¥1,869,037 million (12.3%) from the previous fiscal year-end to ¥17,025,960
million. The primary components of the change were as follows:i. Property, plant and equipment decreased by ¥369,119 million from the previous fiscal year-end, mainly due tocontinued depreciation at Sprint and SoftBank Corp. of network equipment and the impact of the yen’s year-on-year
appreciation against the U.S. dollar.

12

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

26SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016

ii. Goodwill increased by ¥2,912,074 million from the previous fiscal year-end, mainly due to ¥3,216,699 million of
goodwill recorded at the time of acquisition of control of ARM in September 2016. Consideration transferred of
ARM of ¥3,369,138 million is allocated to acquired assets and assumed liabilities based on the fair value at theacquisition date; however, certain intangible assets related to technology, research development in process, andcustomer relationships are under identification and measurement, and therefore are not allocated to intangible assets
at present. The fair values of assets and liabilities on the acquisition date are provisional and will be revised after theidentification and measurement are completed, and goodwill will be accordingly revised. Amounts of assets andliabilities may also change within a year following the acquisition date even after allocation of such intangible assets.
iii. Intangible assets decreased by ¥669,678 million from the previous fiscal year-end. The primary components were as
follows:
・ FCC licenses (non-amortized assets from an accounting perspective) decreased by ¥369,254 million mainly due tothe yen’s year-on-year appreciation against the U.S. dollar. Customer relationships also decreased by ¥100,653
million mainly due to regular amortization and the impact of the aforementioned yen’s appreciation.
・ Game titles decreased by ¥59,844 million from the previous fiscal year-end to a balance of zero, due to the sale ofall shares of Supercell in July 2016.
iv. Investments accounted for using the equity method decreased by ¥267,637 million from the previous fiscal year-end.
The primary components were as follows:
・ The carrying amount of Alibaba on a consolidated basis declined. This was mainly due to the impact of yen’s yearon-year appreciation against the Chinese yuan and a partial sale of Alibaba shares in conjunction with themonetization of Alibaba shares, despite the recording of income on equity method investments.
・ As a result of the sale of a majority of GungHo shares in response to a tender offer by GungHo for its own shares,
GungHo ceased to qualify as an affiliate of the Company and the remaining shares held by the Company after thesale have been recorded as investment securities.

27

SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016(c) Current Liabilities(Millions of yen)

As of March 31, 2016
Interest-bearing debt

As of September 30, 2016

Change2,646,609

3,579,280

932,671676,948

828,084

151,136

Short-term borrowings

515,408

1,065,772

550,364

Current portion of
long-term borrowings

743,225

959,331

216,106

82,032

180,620

98,588900,685

996,376

95,691

431,808

516,833

85,025Current portion oflease obligations

396,992

430,446

33,454

Others90,299127,355

37,056

1,621,195

1,452,850(168,345)

441,006

364,700(76,306)

Other financial liabilities

6,531

12,416

5,885

Income taxes payables

140,351

220,954

80,603

Provisions

56,12053,401(2,719)Other current liabilities

694,965

582,377(112,588)

Total current liabilities

5,165,771

5,901,278

735,507(incl.) Sprint(incl.) Sprint

Current portion of
corporate bonds(incl.) Sprint

Trade and other payables(incl.) Sprint

Total current liabilities increased by ¥735,507 million (14.2%) from the previous fiscal year-end to ¥5,901,278 million.
The primary components of the change were as follows:i. Interest-bearing debt increased by ¥932,671 million from the previous fiscal year-end. The primary components wereas follows:
・ SoftBank Group Corp.’s short-term borrowings increased by ¥619,267 million through financings to enhance cashon hand. Current portion of long-term borrowings also increased at SoftBank Group Corp. by ¥109,747 million,
mainly due to the transfer from non-current liabilities as the repayment due became within one year.
・ Sprint’s interest-bearing debt increased by ¥151,136 million. This was mainly due to an increase in current portionof long-term borrowings caused by its financings using leased devices and network equipment, as well as thetransfer from non-current liabilities as the redemption date became within one year.
ii. Trade and other payables decreased by ¥168,345 million from the previous fiscal year-end. This was mainly due toa decrease in accounts payable related to mobile devices and telecommunications equipment at SoftBank Corp. andSprint after making payments, as well as the yen’s appreciation against the U.S. dollar from the previous fiscal yearend.

28SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016(d) Non-current Liabilities(Millions of yen)

As of March 31, 2016
Interest-bearing debt

As of September 30, 2016

Change9,275,822

10,720,586

1,444,764

3,297,900

2,961,899(336,001)

1,785,500

2,729,964

944,464

80,082

224,467

144,385

6,611,947

6,454,371(157,576)

3,188,238

2,716,038(472,200)

815,194

854,499

39,305-

639,761

639,761

63,181

41,991(21,190)

Other financial liabilities

95,664274,109

178,445

Defined benefit liabilities

123,759

110,146(13,613)

Provisions

118,876

117,536(1,340)2,083,164

2,361,270

278,106

1,652,154

1,498,408(153,746)

Other non-current liabilities

338,865284,830(54,035)

Total non-current liabilities

12,036,150

13,868,477

1,832,327(incl.) Sprint

Long-term borrowings(incl.) Sprint

Corporate bonds(incl.) Sprint

Lease obligations
Financial liabilities relating tosale of shares by variable
prepaid forward contract
OthersDeferred tax liabilities(incl.) Sprint

Total non-current liabilities increased by ¥1,832,327 million (15.2%) from the previous fiscal year-end to ¥13,868,477
million. The primary components of the change were as follows:i. Interest-bearing debt increased by ¥1,444,764 million from the previous fiscal year-end. The primary components
were as follows:・ At SoftBank Group Corp., long-term borrowings increased by ¥777,812 million and corporate bonds increased by¥314,649 million. The increase in long-term borrowings was mainly due to the borrowing of ¥1 trillion (bridge loan)
made to finance a portion of the consideration payable in the acquisition of ARM, which was partially offset by thetransfer of borrowings to current liabilities as they became due within one year. The increase in corporate bonds wasdue to the issuance of straight corporate bonds and hybrid bonds totaling ¥521,000 million. Meanwhile, corporate
bonds of which redemption date became within one year were transferred to current liabilities and the balance ofU.S. dollar- and euro-denominated corporate bonds decreased due to the yen’s appreciation from the previous fiscal
year-end.
・ Interest-bearing debt at Sprint decreased by ¥336,001 million. This mainly reflected a decrease of ¥472,200 million
in corporate bonds due mainly to the yen’s appreciation against the U.S. dollar compared with the previous fiscal

29

SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016

year-end and the transfer into current liabilities with regards to bonds of which redemption date became within one
year. Meanwhile, long-term borrowings increased by ¥144,385 million due to financings using network equipment
and leased devices.
・ Financial liabilities relating to sale of shares by variable prepaid forward contract of ¥639,761 million was recorded.
See “Reference: Transaction for Sale of Alibaba Shares by Variable Prepaid Forward Contract” below for details.
ii. Other financial liabilities increased by ¥178,445 million. This was mainly due to derivative liabilities of ¥105,148
million in relation to the collar transaction included in the sale of Alibaba shares by variable prepaid forward contract.
See “(Reference: Transaction for Sale of Alibaba Shares by Variable Prepaid Forward Contract)” below for details.

(Reference: 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, enteredinto a variable prepaid forward contract to sell Alibaba shares with a newly formed trust, Mandatory Exchangeable
Trust (the “Trust”), and received the proceeds of ¥578,436 million ($5.4 billion) as advances received for 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 salereceived by WRH LLC from the Trust is $5.4 billion and this is after the deduction of the amounts from $6.6 billionof the total amount of Trust Securities issuance for the purchase of U.S. Treasury securities in order to fund
distributions on the Trust Securities and for the expenses in order to issue Trust Securities.
The settlement by Alibaba shares based on the variable prepaid forward contract is conducted concurrently withthe exchange of Trust Securities. At the exchange date, which is expected to be the first scheduled trading day afterJune 1, 2019, Trust Securities are exchanged for a certain number of ADSs, determined by reference to the trading
price of the ADSs at that time, and the number of Alibaba shares sold by the variable prepaid forward contract isdetermined by this number of ADSs. A cap and a floor are set for the number of shares settled and the variable prepaid
forward contract is classified as a hybrid financial instrument with embedded derivatives of collar trading.
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 sale of shares by variable prepaid forward contract and ¥95,587 million as derivative assets. Subsequent
to initial recognition, financial liabilities relating to sale of shares by variable prepaid forward contract are measured
at amortized cost and embedded derivatives are measured at fair value. ¥639,761 million is recognized as financial
liabilities relating to sale of shares by variable prepaid forward contract in interest-bearing debt (non-current
liabilities) and ¥105,148 million is recognized as derivative liabilities in other financial liabilities (non-current
liabilities) at the end of the second quarter.
See page 55 “(2) Transaction for sale of Alibaba shares by variable prepaid forward contract” under “3. Condensed
Interim Consolidated Financial Statements (6) Notes to Condensed Interim Consolidated Financial Statements 8.
Interest-bearing debt” for details.

30SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016(e) Equity(Millions of yen)

As of March 31, 2016

As of September 30, 2016

ChangeTotal equity attributable toowners of the parent

2,613,613

2,292,082(321,531)

Non-controlling interests

891,658

834,240(57,418)

3,505,271

3,126,322(378,949)

Total equity

Total equity decreased by ¥378,949 million (10.8%) from the previous fiscal year-end to ¥3,126,322 million. Of this,equity attributable to owners of the parent decreased by ¥321,531 million (12.3%) and non-controlling interests
decreased by ¥57,418 million (6.4%). The ratio of equity attributable to owners of the parent to total assets decreasedby 2.6 of a percentage point from the previous fiscal year-end to 10.0%.

(Equity Attributable to Owners of the Parent)(Millions of yen)

As of March 31, 2016

As of September 30, 2016

ChangeCommon stock

238,772

238,772-

Capital surplus

261,234

246,288(14,946)

Retained earnings

2,166,623

2,908,378

741,755

Treasury stock(314,752)(664,830)(350,078)

Accumulated othercomprehensive income

261,736(436,526)(698,262)

Available-for-sale financial
assets32,59425,336(7,258)Cash flow hedges(40,088)(45,813)(5,725)

Exchange differences ontranslating foreign operations

269,230(416,049)(685,279)

2,613,613

2,292,082(321,531)

Total equity attributable toowners of the parent

Total equity attributable to owners of the parent decreased by ¥321,531 million (12.3%) from the previous fiscal yearend to ¥2,292,082 million. The primary components of the change were as follows:i. Retained earnings increased by ¥741,755 million from the previous fiscal year-end, mainly due to net income
attributable to owners of the parent of ¥766,249 million.
ii. Treasury stock increased by ¥350,078 million from the previous fiscal year-end. This was due to acquisitions oftreasury stock with the aim of strengthening the return of profits to shareholders. Afterwards, the Company retired
100 million shares of treasury stock (8.33% of the total number of issued shares before the retirement) on October
31, 2016.

31

SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016

iii. Accumulated other comprehensive income declined by ¥698,262 million from the previous fiscal year-end. This
mainly reflected a decline of ¥685,279 million in exchange differences on translating foreign operations, primarily
due to the yen’s appreciation against the Chinese yuan and U.S. dollar from the previous fiscal year-end, as well as
the yen’s appreciation against the British pound compared to the acquisition date of ARM.

(Non-controlling Interests)
Non-controlling interests decreased by ¥57,418 million (6.4%) from the previous fiscal year-end to ¥834,240 million.

b. Cash Flows
Cash flows for the period were as follows:
Cash and cash equivalents at the end of the second quarter totaled ¥2,675,856 million, a ¥106,249 million increase
from the previous fiscal year-end.
(Millions of yen)Six-month Period
Ended September 30,
2015

Six-month Period
Ended September 30,
2016

ChangeCash flows from operating activities

176,584

1,017,684

841,100

Cash flows from investing activities(1,128,941)(3,165,480)(2,036,539)

Cash flows from financing activities(87,220)2,420,036

2,507,256(a) Cash Flows from Operating Activities
Net cash provided by operating activities totaled ¥1,017,684 million (compared with ¥176,584 million provided in thesame period of the previous fiscal year). The primary components of cash flows from operating activities were as
follows:
i. Net income totaled ¥800,948 million.
ii. The main items added to net income were depreciation and amortization of ¥681,372 million, income taxes of¥535,554 million, finance cost of ¥222,022 million, and derivative loss of ¥170,058 million.
iii. The main items subtracted from net income were gain on sales of discontinued operations of ¥636,216 million, gain on
sales of equity method associates of ¥238,101 million, and income on equity method investments of ¥105,174 million.
iv. Increase in inventories was ¥151,281 million (negative cash flow), mainly due to an increase in inventories (negative
cash flow) that accompanied an increase in leased devices at Sprint. While normally a decrease in inventories isrecognized as a cash inflow, the decrease in inventories following the reclassification of devices leased throughSprint’s direct channels to property, plant and equipment at lease inception is not recognized as a cash inflow since
it is a non-cash transaction.
v. Interest paid was ¥249,973 million.

(b) Cash Flows from Investing Activities
Net cash used in investing activities was ¥3,165,480 million (compared with ¥1,128,941 million used in the same period

32SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016of the previous fiscal year). The primary components of cash flows from investing activities were as follows:i. Payment for acquisition of control over subsidiaries amounted to ¥3,252,655 million, mainly due to the ARM
acquisition.
ii. Outlays for purchase of property, plant and equipment and intangible assets amounted to ¥441,471 million, mainly
due to the acquisition of telecommunications equipment by SoftBank Corp. and Sprint.
iii. Payments for acquisition of investments amounted to ¥130,193 million, mainly due to an additional investment in
Chinese taxi platform operator Xiaoju Kuazhi Inc., as well as the purchase of some of ARM shares ahead of theacquisition of control.
iv. Proceeds from sales/redemption of investments amounted to ¥451,484 million, primarily due to the sale of a portionof Alibaba shares and the sale of GungHo shares.
v. Proceeds from loss of control over subsidiaries amounted to ¥340,888 million. This mainly represents $3.5 billion
received in July 2016 as the first of three installments to be received as the sale price for the all shares of Supercell
on July 29, 2016, minus the amount of cash and cash equivalents held by Supercell at the time of sale.

(c) Cash Flows from Financing Activities
Net cash provided by financing activities was ¥2,420,036 million (compared with ¥87,220 million used in the same
period of the previous fiscal year). The primary components of cash flows from financing activities were as follows:(Items Increasing Cash Flows)i. Proceeds from long-term interest-bearing debt amounted to ¥2,966,588 million. The primary components were as
follows:
・ Proceeds from long-term borrowings of ¥1,570,087 million. This was mainly due to the borrowing of ¥1 trillion(bridge loan) to finance a portion of the consideration payable in the acquisition of ARM, as well as Sprint’s
borrowings using network equipment and leased mobile devices in addition to borrowings made throughsecuritization of installment sales receivables at SoftBank Corp.
・ Proceeds from advances received for sale of shares by variable prepaid forward contract of ¥578,436 million. This
represents advances received for sale by a subsidiary, WRH LLC, after concluding a variable prepaid forward
contract for the sale of Alibaba shares.
・ Proceeds from issuance of corporate bonds of ¥521,000 million. This consisted of SoftBank Group Corp.’s issuanceof straight corporate bonds and hybrid bonds.
・ Proceeds from sale and leaseback of newly acquired equipment of ¥297,065 million, mainly due to sale andleaseback at SoftBank Corp. conducted for a purchase of telecommunications equipment by finance lease.
ii. Proceeds from short-term interest-bearing debt amounted to ¥616,770 million, mainly due to financings carried out
by SoftBank Group Corp. to enhance its cash on hand.

(Items Decreasing Cash Flows)i. Repayment of long-term interest-bearing debt was ¥729,885 million. The primary components were as follows:33SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016

・ Repayment of long-term borrowings of ¥384,655 million. This was mainly due to SoftBank Corp.’s repaymentof borrowings made through securitization of installment sales receivables, as well as SoftBank Group Corp.’sand Sprint’s repayment of borrowings.
・ Repayment of lease obligations of ¥223,649 million, mainly due to SoftBank Corp.’s repayment of leaseobligations for telecommunications equipment.
・ Redemption of corporate bonds of ¥100,000 million, due to SoftBank Group Corp.’s redemption of straight
corporate bonds.
ii. Payment for purchase of treasury stock was ¥350,834 million.

(3) Qualitative Information Regarding Forecasts on Consolidated Results of Operations
Currently it is difficult to provide forecasts on the results in figures due to a large number of uncertain factors affecting theearnings. The Company will announce its forecasts on the consolidated results of operations when it becomes possible to
make a rational projection.

34

SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016

2. Notes to Summary Information(1) Significant Changes in Scope of Consolidation for the Six-month Period Ended September 30, 2016
(Specified subsidiary (four companies) newly consolidated)
West Raptor Holdings LLC was established on April 27, 2016, SB HP HoldCo was established on July 6, 2016, andbecame subsidiaries of the Company. In addition, ARM Holdings plc became a wholly-owned subsidiary of theCompany on September 5, 2016 and subsequently ARM PIPD Holdings One, LLC and ARM PIPD Holdings Two,
LLC, which are subsidiaries of ARM Holdings plc, became subsidiaries of the Company.

(2) Changes in Accounting Estimates(Assessment of recoverability of deferred tax assets)
The Company assessed the recoverability of unrecognized deferred tax assets and estimated, due to a sale of equity
method associate by the Company, that it was probable that taxable profits will be available against which net
operating loss carryforwards and deductible temporary differences can be utilized in SoftBank Group Corp.
Accordingly, ¥13,161 million of deferred tax assets was recorded. Due to this change in accounting estimate,income tax expenses decreased by ¥13,161 million and net income from continuing operations and net income
increased by ¥13,161 million respectively for the six-month period ended September 30, 2016.

35

SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016

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

As ofMarch 31, 2016

As of
September 30, 2016

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

2,569,607
1,914,789
152,858
359,464
553,551
5,550,269

2,675,856
2,226,354
357,041
356,078
254,788
5,870,117

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

4,183,507
1,609,789
6,439,145
1,588,270
970,874
172,864
192,474
15,156,923
20,707,192

3,814,388
4,521,863
5,769,467
1,320,633
1,041,975
370,088
187,546
17,025,960
22,896,077

36

SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016

(Millions of yen)

As ofMarch 31, 2016
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

As of
September 30, 2016

2,646,609
1,621,195
6,531
140,351
56,120694,965
5,165,771

3,579,280
1,452,850
12,416
220,954
53,401
582,377
5,901,278

Total liabilities

9,275,822
95,664
123,759
118,876
2,083,164
338,865
12,036,150
17,201,921

10,720,586
274,109110,146
117,5362,361,270
284,830
13,868,477
19,769,755

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
261,234
2,166,623(314,752)
261,736
2,613,613
891,658
3,505,271
20,707,192

238,772
246,2882,908,378(664,830)(436,526)
2,292,082
834,240
3,126,322
22,896,077

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

37SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016

(2) Condensed Interim Consolidated Statements of Income and Comprehensive Income
For the six-month period ended September 30
Condensed Interim Consolidated Statements of Income(Millions of yen)Six-month period ended
September 30, 2015*

Six-month period ended
September 30, 2016

4,281,198(2,549,948)
1,731,250

4,271,834(2,568,170)
1,703,664(1,123,474)(1,019,588)

Gain from remeasurement relating to business combination
Other operating loss
Operating income
Finance cost
Income on equity method investments
Gain on sales of equity method associates
Foreign exchange gain (loss)
Derivative loss
Other non-operating income (loss)
Income before income tax
Income taxes
Net income from continuing operations

59,441(35,300)
631,917(215,668)
264,586
3(3,641)(6,886)
97,410767,721(291,643)
476,078

18,187(48,319)
653,944(222,022)
105,174
238,101
83,071(170,058)(22,585)665,625(423,262)
242,363

Discontinued operations
Net income from discontinued operations
Net income

32,547
508,625

558,585
800,948426,683
81,942508,625766,249
34,699800,948346.3913.17
359.56189.89489.85679.74336.6413.17
349.81

186.23489.60675.83

Continuing operations
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses

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

Note:* Continuing operations and discontinued operations are revised and presented separately. The details are described in “Note
16. Discontinued operations.”

38SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016

Condensed Interim Consolidated Statements of Comprehensive Income(Millions of yen)Six-month period ended
September 30, 2015

Six-month period ended
September 30, 2016

508,625

800,948

(6)

-

(6)

-

14,428(15,109)

6,539(4,687)(25,467)(712,767)(748)(19,425)(26,896)(730,340)(26,902)481,723(730,340)
70,608398,085
83,638
481,723

67,9872,621
70,608Net income
Other comprehensive income (loss), 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 loss, net of tax
Total comprehensive income
Total comprehensive income attributable to
Owners of the parent
Non-controlling interests

39SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016

For the three-month period ended September 30
Condensed Interim Consolidated Statements of Income(Millions of yen)Three-month period ended Three-month period ended
September 30, 2015*
September 30, 2016
Continuing operations
Net sales
Cost of sales
Gross profit

2,214,680(1,339,477)
875,2032,145,313(1,300,897)
844,416(585,290)(511,747)

Gain from remeasurement relating to business combination
Other operating loss
Operating income
Finance cost
Income on equity method investments
Foreign exchange gain (loss)
Derivative loss
Other non-operating income
Income before income tax
Income taxes
Net income from continuing operations

59,441(35,994)
313,360(110,157)
183,984(4,096)(2,130)10,452
391,413(155,050)
236,363

18,187(16,148)
334,708(109,915)
69,708125,990(191,569)
80,342309,264(279,193)
30,071

Discontinued operations
Net income from discontinued operations
Net income

22,245
258,608

498,526
528,597

213,301
45,307
258,608

512,092
16,505528,597

165.7314.40
180.1313.58
444.58458.16158.9514.39
173.3410.79
444.36455.15

Selling, general and administrative expenses

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

Note:* Continuing operations and discontinued operations are revised and presented separately. The details are described in “Note
16. Discontinued operations.”

40

SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016

Condensed Interim Consolidated Statements of Comprehensive Income(Millions of yen)Three-month period ended
September 30, 2015

Three-month period ended
September 30, 2016

258,608

528,597

-

(9)

-

(9)

(10,285)(14,436)(8,370)13,869(98,494)(355,797)(5,508)(4,613)(128,723)(354,911)(128,723)
129,885(354,920)
173,677

95,247
34,638129,885

161,834
11,843
173,677

Net income
Other comprehensive income (loss), 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 loss, net of tax
Total comprehensive income
Total comprehensive income attributable to
Owners of the parent
Non-controlling interests

41SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016

(3) Condensed Interim Consolidated Statements of Changes in Equity
For the six-month period ended September 30, 2015
(Millions of yen)
Equity attributable to owners of the parent

As of April 1, 2015
Comprehensive income
Net income
Other comprehensive
loss
Total comprehensive
incomeTransactions with owners
and other transactions
Cash dividends
Transfer of accumulated
other comprehensive
income to retained
earnings
Purchase and disposal oftreasury stock
Changes from businesscombination
Changes from loss ofcontrolChanges in interests in
subsidiaries
Changes in associates’interests in theirsubsidiaries
Share-based paymenttransactions
Other
Total transactions withowners and othertransactions
As of September 30, 2015

Commonstock
238,772

Capitalsurplus374,845

Retainedearnings
1,740,686

Treasurystock(48,383)--

426,683---

Accumulated
othercomprehensive
incomeNoncontrollinginterests Total equity
1,006,871 3,853,177

540,386

Total
2,846,306--

426,683

81,942508,625--(28,598)(28,598)

1,696(26,902)-426,683-(28,598)

398,085

83,638

481,723--(23,784)--(23,784)(29,165)(52,949)

-

-

(6)

-

6

-

-

-

-

-

(899)

(117,918)-(118,817)-(118,817)

-

-

-

-

-

-

54,16354,163

-

-

-

-

-

-

(96,060)(96,060)-(120,090)---(120,090)(84,192)(204,282)-

13,640---13,640-13,640-(3,214)---(3,214)

7,937

4,723

-

3,022

-

-

-

3,022

(1,690)1,332-(106,642)(24,689) (117,918)

6(249,243)(149,007)(398,250)

238,772

268,203511,7942,995,148

941,5023,936,650

2,142,680(166,301)

42

SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016

For the six-month period ended September 30, 2016
(Millions of yen)
Equity attributable to owners of the parent

As of April 1, 2016
Comprehensive income
Net income
Other comprehensive
loss
Total comprehensive
incomeTransactions with owners
and other transactions
Cash dividends
Purchase and disposal oftreasury stock
Changes from businesscombination
Changes from loss ofcontrolChanges 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 September 30, 2016

Commonstock
238,772

Capitalsurplus261,234

Retainedearnings
2,166,623

Treasurystock(314,752)--

766,249---

Accumulated
othercomprehensive
incomeNoncontrollinginterests Total equity
891,658 3,505,271

261,736

Total
2,613,613--

766,249

34,699800,948--(698,262)(698,262)(32,078)(730,340)-

766,249-(698,262)

67,9872,621

70,608--(24,085)--(24,085)(42,623)(66,708)

-

-

(409)

(350,078)-(350,487)-(350,487)

-

-

-

-

-

-

2,218

2,218

-

-

-

-

-

-

(25,156)(25,156)

-

(356)

-

-

-

(356)

3,186

2,830

-

(475)

-

-

-

(475)

-

(475)

-

(15,189)---(15,189)-(15,189)

-

1,074

-

-

-

1,074

5,013

6,087

-

-

-

-

-

-

(2,677)(2,677)-(14,946)(24,494) (350,078)-(389,518)(60,039)(449,557)

238,772

246,288(436,526)

2,292,082

834,240

3,126,322

2,908,378(664,830)

43SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016

(4) Condensed Interim Consolidated Statements of Cash Flows(Millions of yen)

Cash flows from operating activities
Net income
Depreciation and amortization
Gain from remeasurement relating to businesscombination
Finance cost
Income on equity method investments
Gain on sales of equity method associates
Derivative loss
Foreign exchange (gain) loss and other non-operating(income) loss
Gain on sales of discontinued operations
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 refund
Net cash provided by operating activities
Cash flows from investing activities
Purchase of property, plant and equipment, andintangible assets
Payments for acquisition of investments
Proceeds from sales/redemption of investments
Increase (decrease) from acquisition of control oversubsidiaries(Decrease) increase from loss of control oversubsidiaries
Payments for acquisition of marketable securities for
short-term trading
Proceeds from sales/redemption of marketablesecurities for short-term trading
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
Payments for purchase of subsidiaries’ interests from
non-controlling interests
Purchase of treasury stock
Cash dividends paid
Cash dividends paid to non-controlling interests
Other
Net cash (used in) provided by financing activities
Effect of exchange rate changes on cash and cash
equivalents(Decrease) increase 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
44

Six-month period ended
September 30, 2015

Six-month period ended
September 30, 2016

508,625
659,151

800,948
681,372(59,441)
215,669(264,586)
(3)
6,886

(18,187)
222,022(105,174)(238,101)
170,058(90,949)
306,452
131,429(162,314)(8,144)(101,010)
1,141,765
4,744(229,396)(770,887)
30,358
176,584(62,578)(636,216)
535,554
13,224(151,281)(21,000)(9,476)
1,181,165
11,841(249,973)(241,237)
315,888
1,017,684(786,724)(441,471)(312,133)
16,442(130,193)
451,484

28,849(3,252,655)(63,070)

340,888(65,199)(126,087)

119,947

60,768(67,053)(1,128,941)(68,214)(3,165,480)(31,295)

616,770

1,152,321(824,952)

2,966,588(729,885)(239,706)(13,533)(120,031)(23,764)(29,265)
29,472(87,220)(350,834)(24,060)(41,819)(3,191)2,420,036(10,807)(165,991)(1,050,384)
3,258,653
2,208,269

106,249
2,569,607
2,675,856

SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016(5) Significant Doubt about Going-concern Assumption
For the six-month period ended September 30, 2016
There are no applicable items.
(6) Notes to Condensed Interim Consolidated Financial Statements
1. Definition of company name and abbreviation used in the notes
Company names and abbreviations used in the notes, except as otherwise stated or interpreted differently in thecontext, 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.
“ARM”

ARM Holdings plc“Sprint”

Sprint Corporation“Brightstar”

Brightstar Global Group Inc.

“Alibaba”

Alibaba Group Holding Limited“GungHo”

GungHo Online Entertainment, Inc.

“Supercell”

Supercell Oy

2. Significant accounting policies
The Company has newly adopted the following accounting policy due to the consolidation of ARM from September
2016.
Revenue
ARM segment
In the ARM segment, revenues are generated mainly from sales of licenses to ARM’s technology and royalties
arising from the resulting sale of licensees’ ARM’s technology-based products.
License revenue are recognized when the significant risks and rewards of ownership of the products are transferred tothe buyer, the Company retains neither continuing managerial involvement nor effective control over the products
sold, it is probable that the economic benefits associated with the transaction will flow to the Company, and the costs
incurred and the amount of revenue related to the transaction can be measured reliably.
Royalty revenues are earned on sales by the Company’s customers of products containing ARM’s technology.
Royalty revenues are recognized when it is probable that the economic benefits associated with the transaction willflow to the Company, and the amount of revenue can be reliably measured. Royalties are recognized on an accrualbasis in the quarter in which the customers ship products containing ARM’s technology, using an estimate based onsales trends and product information.

45

SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016

3. Business combinations
For the six-month period ended September 30, 2015
ASKUL Corporation(1) Overview of consolidation
ASKUL Corporation, the Company’s associate which primarily conducts mail order services for office supplies,
became the Company’s subsidiary on August 27, 2015 as a result of ASKUL Corporation’s acquisition of its
own treasury stock as resolved by its Board of Directors on May 19, 2015. As a result of ASKULCorporation’s acquisition of its own treasury stock, the ownership ratio of ASKUL Corporation’s voting rights
held by the Company rose from 41.7% (as of May 20, 2015) to 44.4% (as of August 27, 2015). The Company
did not yet hold the majority of the voting rights of ASKUL Corporation, however, considering the dispersion of
voting rights in ASKUL Corporation and the voting patterns exercised in ASKUL Corporation’s pastshareholders meetings, etc., the Company judged that it has substantial control of ASKUL Corporation and hasconverted it to a consolidated subsidiary.

(2) Summary of acquire
Name
Business description

ASKUL Corporation
Mail-order business for stationery, other products and services(3) Acquisition dateAugust 27, 2015

(4) Consideration transferred and the components(Millions of yen)

Acquisition date(August 27, 2015)
Fair value of equity interest in ASKUL Corporation
already held at the time of the acquisition
Total consideration transferred

93,611
A

93,611

As a result of the reevaluation of equity interest already held at the time of the acquisition of control by theCompany in ASKUL Corporation at fair value on the acquisition date, the Company recognized a gain on theacquisition of ¥59,441 million. This gain is presented as “Gain from remeasurement relating to businesscombination” in the condensed interim consolidated statements of income.

46SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016

(5) Fair values of assets and liabilities, non-controlling interests and goodwill on the acquisition date(Millions of yen)

Acquisition date(August 27, 2015)
45,36544,75132,315
69,124
8,394
199,949

Trade and other receivables
Other current assets
Tangible assets
Intangible assets
Other non-current assets
Total assets

71,49534,586
106,081

Current liabilities
Non-current liabilities
Total liabilities
Net assets

B

93,868Non-controlling interests1
Goodwill2

C

54,036
53,779A-(B-C)

Notes:
1. Non-controlling interests
Non-controlling interests in an acquiree that are present ownership interests and entitle their holders to a proportionate
share of the entity’s net assets in the event of liquidation are measured based on the proportionate interests at theacquisition date in the identifiable net assets of the acquiree at the acquisition date.
2. Goodwill
Goodwill reflects excess earning power expected from the future business development and the synergy between the
Company and the acquiree.

(6) Proceeds from acquisition of control over subsidiaries(Millions of yen)

Acquisition date(August 27, 2015)
Cash and cash equivalents held by the acquiree at the time ofacquisition of control
Proceeds in cash from the acquisition of control overthe subsidiary

31,291
31,291(7) Sales and net income of the acquiree
The amounts of the acquiree’s sales and net income before elimination of inter-company transactions after theacquisition date, which are recorded in the condensed interim consolidated statements of income for thesix-month period ended September 30, 2015, are ¥24,719 million and ¥456 million, respectively.
In addition, the above net income includes amortization expenses, which are related to intangible assets
recognized at the acquisition date, and other.

47

SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016

For the six-month period ended September 30, 2016
ARM
(1) Overview of consolidation
On July 18, 2016 (GMT), the Company and ARM of the United Kingdom entered into an agreement on theterms of a recommended all cash acquisition of the entire issued and to be issued share capital of ARM by theCompany for a total acquisition price amounting to approximately ￡24.0 billion (approximately ¥3.3 trillion)
by means of an English court-sanctioned scheme of arrangement (“Acquisition”). The Acquisition wasapproved at the ARM’s general meeting of shareholders held on August 30, 2016 and at the English court
hearing held on September 1, 2016 and came into effect on September 5, 2016.
As a result of the transaction, ARM became a wholly-owned subsidiary of the Company.
(2) Purpose of consolidation
The Company believes ARM is one of the world’s leading technology companies, with strong capabilities in
global semiconductor intellectual property and the “Internet of Things”, and a proven track record ofinnovation.
The board and management of the Company believe that the acquisition of ARM by the Company will deliver
the following benefits:
・Support and accelerate ARM’s position as the global leader in intellectual property licensing and R&D
outsourcing for semiconductor companies
The Company’s deep industry expertise and global network of relationships will accelerate adoption of
ARM’s intellectual property across existing and new markets.
・Maintain ARM’s dedication to innovation
The Company intends to sustain ARM’s long-term focus on generating more value per device, and driving
licensing wins and future royalty streams in new growth categories, specifically “Enterprise and Embedded
Intelligence.”
・Increased investment to drive the next wave of innovation
The Company intends to support ARM’s multiple growth initiatives by investing in engineering talent andcomplementary acquisitions with the aim of ensuring ARM maintains a R&D edge over existing andemerging competitors. The Company believes such an investment strategy in long-term growth will be easier
to execute as a non-listed company.
・Shared culture and long-term vision
The Company believes the two companies share the same technology-oriented culture, long-term vision,
focus on innovation and commitment to attracting, developing and retaining top talent. These common values
will be the foundation for the strong strategic partnership necessary to capture the significant opportunities
ahead.
・Maintain and grow the UK’s leadership in science and technology
The Company is investing in the UK as a world leader in science and technology development and innovation
and, as evidence of this, intends to invest in multiple ARM growth initiatives, at least doubling the number of
ARM employees in the UK over the next five years.

48

SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016(3) Summary of ARM(a) Name

ARM Holdings plc(b) Address

110 Fulbourn Road, Cambridge CB1 9NJ, United Kingdom(c) Name and title of representative

Simon Segars, Chief Executive Officer(d) Nature of business・Design of microprocessor intellectual property and related technology
・Sale of software tools(e) Share capital￡0.7 million (as of December 31, 2015)(f) Date of incorporation

October 16, 1990(g) Consolidated net sales￡968 million (for the fiscal year ended December 31, 2015 under IFRS)(4) Acquisition date
September 5, 2016

(5) Consideration transferred and the component(Millions of yen)

Acquisition date
(September 5, 2016)
3,321,271

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

3,369,138

Acquisition-related costs of ¥23,382 million arising from the business combination are recognized in “Other
operating loss.”
As a result of the reevaluation of 1.4% equity interest already held by the Company at the time of the acquisitionof control in ARM at fair value, the Company recognized a gain of ¥18,168 million through the step acquisition.
This gain is presented as “Gain from remeasurement relating to business combination” in the condensed interim
consolidated statements of income.

49SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016

(6) Fair value of assets and liabilities, and goodwill on the acquisition date(Millions of yen)

Acquisition date
(September 5, 2016)
16,98459,782
119,09031,312
227,168

Cash and cash equivalent
Trade and other receivables
Other current assets
Non-current assets
Total assets

66,9307,799
74,729Current liabilities
Non-current liabilities
Total liabilities
Net assets

B

152,439

Goodwill*

A-B

3,216,699

Consideration transferred is allocated to acquired assets and assumed liabilities based on the fair value on theacquisition date, however, certain intangible assets related to technology, research and development in process,customer relationships, and other are under identification and measurement, and therefore, not allocated to theintangible assets at present. The above amounts will be revised after the identification and measurement arecompleted. Moreover, the above amounts, which are provisional fair values based on the best estimate at present,
may change in a year from the acquisition date when additional information related to facts and circumstancesthat existed as of the acquisition date may be obtained.
The above amount is translated at the exchange rate (GBP = JPY138.15) as of the acquisition date.
Note:* Goodwill reflects excess earning power expected from the future business development, congregative human resource
related to research and development, and the synergy between the Company and the acquiree.

(7) Payment for acquisition of control over subsidiaries(Millions of yen)Six-month period ended
September 30, 2016
(3,321,271)

Payment for the acquisition by cash
Foreign exchange gain relating to settlement*
Cash and cash equivalents held by the acquiree at the time ofacquisition of control
Payment for the acquisition of control overthe subsidiary by cash

52,967
16,984(3,251,320)

Note:*Fluctuation in foreign exchange arising from the acquisition date to the settlement date (September 15, 2016).

(8) Sales and net income of the acquiree
The amounts of the acquiree’s sales and net income before elimination of inter-company transactions after theacquisition date, which are recorded in the condensed interim consolidated statements of income for thesix-month period ended September 30, 2016, are ¥14,356 million and ¥5,379 million, respectively. In addition,amortization expenses related to intangible assets, whose allocation of consideration transferred has not been
completed, are not recognized.
50

SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016

4. 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 in orderto make decisions about the allocation of the resources and assess its performance.
The Company has five reportable segments, the Domestic telecommunications segment, the Sprint segment, theYahoo Japan segment, the Distribution segment, and the ARM 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 communications 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, mainly through Brightstar, distribution of mobile devices overseas, andthrough SoftBank Commerce & Service Corp., sale of mobile device accessories, PC software and peripherals inJapan.
The ARM segment provides, mainly though ARM, designs of microprocessor intellectual property and related
technology, and the sale of software tools. The ARM segment was newly established from the three-month
period ended September 30, 2016, by the consolidation of ARM in September 2016. Operating result of ARM
after the acquisition date is included in the ARM segment.
Information on the 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 externalcustomers.
The following is the information about the Company’s net sales and income by reportable segment.
The Company also discloses EBITDA (i.e., segment income and loss after addition of depreciation andamortization) and Adjusted EBITDA (i.e., EBITDA after deduction of gain from remeasurement relating tobusiness combination, addition or deduction of other adjustments (gains are deducted)) by each reportablesegment. “Other adjustments” are special items such as acquisition-related costs and impairment loss mainly
included in other operating 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. The details are described in “Note 16. Discontinued operations.”

51

SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016

For the six-month period ended September 30, 2015
(Millions of yen)

Reportable segments
Domestic
Telecommunications

Sprint

Yahoo
Japan

Distribution

1,493,472 1,867,528

244,710628,587

-

ARM

Total

Other

Reconciliations

Consolidated

4,234,297

46,901-

4,281,198

Net sales
Customers
Intersegment
Total
Segment income(Operating income)78,6504,058

38,141-

135,445

9,199(144,644)-

1,508,068 1,946,178

248,768

666,728-

4,369,742

56,100(144,644)

4,281,198

150,895

4,137-

662,377(8,758)(21,702)631,917

14,596425,960

81,385Reconciliation from segment income to adjusted EBITDA
Segment income
Depreciation andamortization

425,960

81,385150,895

4,137-

662,377(8,758)(21,702)631,917

218,709398,179

12,933

5,791-

635,612

6,229

864

642,705

EBITDA
Gain from remeasurement
relating to businesscombination
Other adjustments

644,669

479,564

163,828

9,928-

1,297,989(2,529)(20,838)

1,274,622--(59,441)--(59,441)--(59,441)-

29,214---29,214

6,086-

35,300Adjusted EBITDA

644,669

508,778

104,387

9,928-

1,267,762

3,557(20,838)

1,250,481

For the six-month period ended September 30, 2016
(Millions of yen)

Reportable segments
Domestic
Telecommunications

Reconciliations*

Consolidated

52,897-

4,271,834

11,236(119,611)-

4,327,312

64,133(119,611)

4,271,834

1,458

685,632(2,789)(28,899)

653,9441,458

685,632(2,789)(28,899)

653,944

Sprint

Yahoo
Japan

Distribution

ARM

1,540,389 1,665,309

403,653595,230

57,228

5,844

31,126

1,554,566 1,722,537

409,497

Total

Other

14,356

4,218,937-

108,375

626,356

14,35699,371

14,30599,371

14,305Net sales
Customers
Intersegment
Total
Segment income(Operating income)

14,177465,933

104,565

Reconciliation from segment income to adjusted EBITDA
Segment income
Depreciation andamortization

465,933

104,565

225,405

420,051

19,154

3,557

564

668,731

4,778

803

674,312

EBITDA
Gain from remeasurement
relating to businesscombination
Other adjustments

691,338

524,616

118,525

17,862

2,022

1,354,363

1,989(28,096)

1,328,256

-

-

(19)

-

(18,168)(18,187)--(18,187)-(7,692)--

23,382

15,690-8,107

23,797

Adjusted EBITDA

691,338

516,924

118,506

17,862

7,236

1,351,866

1,989(19,989)

1,333,866

Note:* ¥8,107 million of expenses arising from resignation of Nikesh Arora from a director is included in “Reconciliations” for the six-month
period ended September 30, 2016. The details are described in “Note 11. Other operating loss.”52SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016

For the three-month period ended September 30, 2015
(Millions of yen)

Reportable segments
Domestic
Telecommunications

Sprint

Yahoo
Japan

Distribution

Customers

778,986

929,715

136,179

344,407

Intersegment

6,512

42,4692,134

18,578785,498

972,184

138,313362,985

210,911

11,797102,043
102,043

Reconciliations

Consolidated

25,393-2,214,680

4,947(74,640)-

2,258,980

30,340(74,640)

2,214,680-

328,477(5,255)(9,862)

313,360-

328,477(5,255)(9,862)

313,360

Total

Other

-

2,189,287-

69,693

-

3,726
3,726

ARM

Net sales

Total
Segment income(Operating income)Reconciliation from segment income to adjusted EBITDA
Segment income
Depreciation andamortization

210,911

11,797110,911

207,901

7,287

3,385

-

329,484

2,433

395

332,312

EBITDA
Gain from remeasurement
relating to businesscombination
Other adjustments

321,822219,698

109,330

7,111-

657,961(2,822)(9,467)645,672--(59,441)--(59,441)--(59,441)-

29,908---29,9086,086-

35,994

Adjusted EBITDA

321,822249,606

49,8897,111-

628,428

3,264(9,467)622,225

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

Reportable segments
Domestic
Telecommunications

Sprint

Yahoo
Japan

Distribution

ARM

Customers

785,727

817,211202,261

295,082

Intersegment

7,076

31,403

3,003

15,775Reconciliations

Consolidated

30,676-2,145,313

6,150(63,407)-2,171,894

36,826(63,407)2,145,313

Total

Other

14,356

2,114,637-

57,257

14,356

Net sales

Total
Segment income(Operating income)

792,803

848,614205,264

310,857

226,920

59,19749,063

7,625

1,458

344,2631,669(11,224)

334,708

49,063

7,625

1,458

344,2631,669(11,224)

334,708

Reconciliation from segment income to adjusted EBITDA
Segment income
Depreciation andamortization

226,920

59,197113,139

206,002

9,987

1,768

564

331,460

2,420

423

334,303

EBITDA
Gain from remeasurement
relating to businesscombination
Other adjustments

340,059

265,199

59,050

9,393

2,022

675,723

4,089(10,801)

669,011

-

-

(19)

-

(18,168)(18,187)--(18,187)-(19,969)

-

3,413

-

1,279

4,692

340,059245,230

59,031

9,393

23,382Adjusted EBITDA

7,236

660,949

4,089(9,522)655,51653

SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016

5. Other current assets
The components of other current assets are as follows:(Millions of yen)

As ofMarch 31, 2016
171,991
332,339
49,221
553,551

Prepaid expense
Tax receivable*
Other
Total

As of
September 30, 2016
138,692
82,04534,051
254,788

Note:* Tax receivable includes withholding income tax of ¥293,489 million related to dividend within the group companies as ofMarch 31, 2016.

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

As ofMarch 31, 2016
254,569
3,031,553
577,279
105,062
194,456
20,5884,183,507

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

As of
September 30, 2016
255,6122,713,693
542,733
102,644
168,899
30,807
3,814,388

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

As ofMarch 31, 2016
Intangible assets with indefinite useful lives
FCC licenses
Trademarks
Intangible assets with finite useful lives
Software
Customer relationships
Spectrum migration costs
Favorable lease contracts
Trademarks
Game titles*
Other
Total

As of
September 30, 2016

4,060,750
706,637

3,691,496
637,055

782,148439,800
110,472
119,24254,066
59,844
106,186
6,439,145

735,472
339,147
107,143
100,289
47,608111,257
5,769,467

Note:* Decrease resulting from exclusion of Supercell from the scope of consolidation of the Company. The details aredescribed in “(2) Supercell” in “Note 16. Discontinued operations” and “(6) (Decrease) increase from loss of control
over subsidiaries” in “Note 17. Supplemental information to the condensed interim consolidated statements of cash
flows.”

54

SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016

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

As ofMarch 31, 2016
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
September 30, 2016

515,408
42,000743,225
900,685
396,992
48,2992,646,609

1,065,772
84,000959,331996,376
430,446
43,355
3,579,280

1,785,500
6,611,947
815,194

2,729,964
6,454,371
854,499

63,1819,275,822

639,761
41,991
10,720,586

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 the proceeds of ¥578,436 million ($5.4 billion) as advances
received for 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 sale received by WRH LLC from the Trust is $5.4 billion and this is after the deduction of theamounts from $6.6 billion of the total amount of Trust Securities issuance for the purchase of U.S. Treasury
securities in order to fund distributions on the Trust Securities and for the expenses in order to issue Trust
Securities.
The settlement by Alibaba shares based on the variable prepaid forward contract is conducted concurrently withthe 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 to the
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

55

SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016

liabilities relating to sale of shares by variable prepaid forward contract and ¥95,587 million as derivative assets.
Subsequent to initial recognition, financial liabilities relating to sale of shares by variable prepaid forward
contract are measured at amortized cost and embedded derivatives are measured at fair value. ¥639,761 million isrecognized as financial liabilities relating to sale of shares by variable prepaid forward contract in interest-bearing
debt (non-current liabilities) and ¥105,148 million is recognized as derivative liabilities in other financial
liabilities (non-current liabilities) in the condensed interim consolidated statements of financial position as of
September 30, 2016. ¥199,189 million is recognized as a derivative loss in the condensed interim consolidated
statements of income for the six-month period ended September 30, 2016. Please refer to “Note 14. Derivativeloss.”
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, cash
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, which are equivalent to 3.4% of total voting rights of
Alibaba. The Company continuously applies the equity method to these shares and they are included in“Investments accounted for using the equity method” in the condensed interim consolidated statements offinancial position as of September 30, 2016. The carrying amount of Alibaba shares pledged as collateral by theCompany is ¥120,994 million as of September 30, 2016.
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)Six-month period ended
September 30, 2015
(31,295)(31,295)

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

56

Six-month period ended
September 30, 2016
574,770
42,000616,770

SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016

(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 bonds1,4
Proceeds from sale and leaseback of newly acquired
equipment
Proceeds from advances received for sale of shares by
variable prepaid forward contract9
Total

Six-month period ended
September 30, 2015
226,510
652,990

Six-month period ended
September 30, 2016
1,570,087
521,000

272,821297,065-

578,436

1,152,321

2,966,588

Notes:
1. Corporate bonds issued for the six-month period ended September 30, 2015 are as follows:

Date of issuanceTotal amountof issuanceInterest
rate

Date of maturity

47th Unsecured Straight
Corporate Bond

June 18, 2015

¥100,000 million

1.36%

June 18, 2020

USD-denominated Senior Notes
due 2022

July 28, 2015

$1,000 million¥124,120 million2

5.38%
2.98%3

July 30, 2022

USD-denominated Senior Notes
due 2025

July 28, 2015

$1,000 million¥124,120 million2

6.00%
3.44%3

July 30, 2025

Euro-denominated Senior Notes
due 2022

July 28, 2015

€500 million¥67,722 million2

4.00%
3.73%3

July 30, 2022

Euro-denominated Senior Notes
due 2025

July 28, 2015

€1,250 million¥169,306 million2

4.75%
4.25%3

July 30, 2025

Euro-denominated Senior Notes
due 2027

July 28, 2015

€500 million¥67,722 million2

5.25%
4.72%3

July 30, 2027

Company name / Name of bonds
SoftBank Group Corp.

Notes:
2. Stated amounts are cash outflows at the time of redemption, which are fixed by the currency swap contracts designatedas cash flow hedges.
3. Interest rates are after considering the effect of exchange from fixed interest rates denominated in foreign currencies to
fixed interest rates in Japanese yen by the currency swap contracts designated as cash flow hedges.

57

SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016

4. Corporate bonds issued for the six-month period ended September 30, 2016 are as follows:

Company name / Name of bonds
SoftBank Group Corp.
49th Unsecured Straight
Corporate Bond

Date of issuanceTotal amountof issuanceInterest
rate

Date of maturity

April 20, 2016

¥20,000 million

1.94%

April 20, 2023

¥30,000 million

2.48%

April 20, 2026

¥55,600 million

3.00%5September 13, 20416¥15,400 million

3.50%5September 16, 20437¥400,000 million

3.00%5September 30, 20418

50th Unsecured Straight
April 20, 2016
Corporate Bond
1st Unsecured Subordinated Bonds
with interest deferrable clause
September 16, 2016
and early redeemable option(with a subordination provision)
2nd Unsecured Subordinated Bonds
with interest deferrable clause
September 16, 2016
and early redeemable option(with a subordination provision)
3rd Unsecured Subordinated Bonds
with interest deferrable clause
September 30, 2016
and early redeemable option(with a subordination provision)

Notes:
5. The interest rate stated above is at the time of issuance. The bond has a step-up coupon provision and its interest rate
may increase in the future.
6. The bond has an early redeemable option at the Company’s discretion from September 16, 2021 and each interest dateafter September 16, 2021.
7. The bond has an early redeemable option at the Company’s discretion from September 16, 2023 and each interest dateafter September 16, 2023.
8. The bond has an early redeemable option at the Company’s discretion from September 30, 2021 and each interest dateafter September 30, 2021.
9. The amount was received as advances for sale of Alibaba shares by variable prepaid forward contract. The variable
prepaid forward contract is a hybrid financial instrument. Regarding the proceeds of ¥578,436 million, financial
liabilities relating to sale of shares by variable prepaid forward contract and derivative are accounted for and recorded
separately. The details are described in “(2) Transaction for sale of Alibaba shares by variable prepaid forward
contract.”(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)Six-month period ended
September 30, 2015
(315,957)(25,104)(259,242)(24,649)(200,000)(824,952)

Repayment of long-term borrowings
Redemption of corporate bonds1,2
Repayment of lease obligations
Payment of installment payables
Redemption of preferred securities
Total

58

Six-month period ended
September 30, 2016
(384,655)(100,000)(223,649)(21,581)(729,885)

SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016

Notes:
1. Major Corporate bonds redeemed for the six-month period ended September 30, 2015 are as follows:

Company name / Name of bonds

Date of issuance

Amount of redemption

Interest
rate

Date of redemption

June 2, 2010

¥25,000 million

1.67%

June 2, 2015

SoftBank Group Corp.
32nd Unsecured Straight
Corporate Bond

2. Major corporate bonds redeemed for the six-month period ended September 30, 2016 are as follows:

Company name / Name of bonds

Date of issuance

Amount of redemption

Interest
rate

Date of redemption

June 17, 2011

¥100,000 million

1.00%

June 17, 2016

SoftBank Group Corp.
36th Unsecured Straight
Corporate Bond

9. Foreign 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
September 30, 2016
101.12131.00As ofMarch 31, 2016112.68161.92USD
GBP(2) Average rate for the quarter
For the six-month period ended September 30, 2015

USD

Three-month period ended
June 30, 2015
121.34(yen)
Three-month period ended
September 30, 2015
121.91For the six-month period ended September 30, 2016

USD

Three-month period ended
June 30, 2016
109.07(yen)
Three-month period ended
September 30, 2016
102.91

10. Equity(1) Capital surplus
For the six-month period ended September 30, 2015
The Company acquired an additional 24.1% of shares of Supercell, a subsidiary of the Company, from existing
shareholders and the Company’s ownership in Supercell became 77.8%. In connection with this transaction,¥120,847 million is deducted from capital surplus as “Changes in interests in subsidiaries.”

59

SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016

(2) Accumulated other comprehensive income
The components of accumulated other comprehensive income are as follows:(Millions of yen)

As ofMarch 31, 2016

As of
September 30, 2016

Available-for-sale financial assets

32,59425,336

Cash flow hedges
Exchange differences on translating
foreign operations(40,088)(45,813)269,230(416,049)

261,736(436,526)

Six-month period ended
September 30, 2015

Six-month period ended
September 30, 2016-

36,420-(24,522)(19,140)(10,403)329(12,287)(10,600)(5,841)-(23,382)(6,086)(35,300)(8,107)(48,319)Total
11. Other operating loss
The components of other operating income and loss are as follows:(Millions of yen)

Sprint segment
Gain on spectrum license exchange1
Loss on disposal of property, plant andequipment2
Loss on contract termination3
U.S.state tax charge
Legal reserves
Impairment loss on non-current asset4
Other
ARM segment
Acquisition-related costs5
Company-wide
Expenses resulting from resignation of director6
Other
Total

Notes:
1. License exchange gain resulting from exchange of certain spectrum with other carriers (non-cash transaction).
The spectrum is recorded as FCC licenses in intangible assets.
2. Loss on disposal that resulted from the write-off of leased devices associated with lease cancellations prior to thescheduled customer lease terms where customers did not return the devices to Sprint.
3. Loss mainly resulting from termination of wholesale contracts with NTELOS Holdings Corp.
4. Impairments are primarily related to cell site construction costs that are no longer expected to be used as a resultof changes in Sprint’s network plans.
5. Expenses arising from business combination of ARM. The details are described in “Note 3. Businesscombinations.”
6. 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 will be settled in two
installments, scheduled on June 2017 and March 2018. Payment amount will be determined based on the shareprice of June 2017 and March 2018 respectively. The Company measured the expense based on SoftBank Group
Corp. share price as of June 30, 2016 and recorded the entire expense for the three-month period ended June 30,
2016. The expense will be remeasured every quarter end based on the stock price of SoftBank Group Corp. until
the determination of payment amount, and the changes will be recognized through profit or loss. The expense was¥3,090 million for the six-month period ended September 30, 2016.

60

SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016

In addition to the above resignation expense, the Company purchased the shares of associate companies fromNikesh Arora for ¥10,744 million, which were previously granted to him in December 2014. Purchase price by
the Company was determined based on negotiation with reference to the recent transaction price.

12. Finance cost
The components of finance cost are as follows:(Millions of yen)Six-month period ended
September 30, 2015
Interest expense(215,668)

Six-month period ended
September 30, 2016
(222,022)

13. Gain on sales of equity method associates
For the six-month period ended September 30, 2016
The Company sold a portion of its Alibaba shares to Alibaba, Gamlight Pte Ltd, a wholly-owned subsidiary of GIC
Private Limited, and Aranda Investments Pte. Ltd., a wholly-owned subsidiary of Temasek Holdings Private Limitedon June 13, 2016 and to Alibaba Partnership* on July 11, 2016. As a result of the transaction, ¥234,418 million wasrecorded as a gain on sales of equity method associates.
The total amount of sale price is ¥359,704 million ($3.4 billion), of which the sale price to Alibaba is ¥212,920
million ($2.0 billion). The sale price is determined by negotiation in reference to the market price.
As a result of the sale, the Company held 29.9% of the voting rights of Alibaba as of September 30, 2016.
Note:*Alibaba Partnership is not an associate of Alibaba.

14. Derivative loss
For the six-month period ended September 30, 2016
¥199,189 million of derivative loss related to collar transaction included in variable prepaid forward contract wasrecorded. The details are described in “(2) Transaction for sale of Alibaba shares by variable prepaid forward
contract” in “Note 8. Interest-bearing debt.”

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

Impairment loss on securities1
Dilution gain from changes in equity interest
Gain and loss from financial instruments at
FVTPL2
Impairment loss on assets classified as held
for sale3
Provision of allowance for doubtful accounts1
Other
Total

61

Six-month period ended
September 30, 2015
(18,944)
14,631

Six-month period ended
September 30, 2016
(3,174)74,741

112,625(58,140)-(42,540)(20,024)-

9,122
97,4106,528(22,585)

SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016

Notes:
1. Shares and debt interests related to investments of PT Trikomsel Oke Tbk. in Indonesia were impaired as theinvestment amount and the debt interests amount were not expected to be collected. As a result, impairment loss on
securities and provision of allowance for doubtful accounts totaling ¥38,185 million were recorded for thesix-month period ended September 30, 2015.
2. Gain or loss arising from financial instruments at FVTPL comprises mainly changes in fair value of preferred stock
investment including embedded derivatives, such as ANI Technologies Pvt. Ltd and Jasper Infotech Private Limitedin India, designated as financial assets at FVTPL.
3. The Company transferred a portion of its GungHo shares to assets classified as held for sale as the Company
tendered in the Tender Offer by GungHo for the three-month period ended June 30, 2016. Accordingly, the carrying
amounts of the shares were decreased to the fair values after deducting expenses (Tender Offer price) arising fromsale and ¥42,540 million was recorded as an impairment loss on assets classified as held for sale. As a result of thetransaction, GungHo is no longer qualified as an equity method associate for the three-month period ended
September 30, 2016. The details are described in “(1) GungHo” in “Note 16. Discontinued operations.”

16. Discontinued operations(1) GungHo
SoftBank Group Corp. entered into an agreement to tender in the Tender Offer for 188,235,200 shares, a portion of
the common shares of GungHo held by SoftBank Group Corp, on April 28, 2015. The Tender Offer wascompleted on June 1, 2015 and 188,235,200 common shares of GungHo held by Softbank Group Corp. weretransferred to GungHo for ¥80,000 million.
An agreement between Heartis G.K. (“Heartis”) and Son Holdings Inc. to extinguish the pledge on 100,000,000
shares, out of the common shares of GungHo held by Heartis, was executed and the Agreement on Exercise of
Voting Rights* for the 100,000,000 shares was terminated effective on June 1, 2015.
As a result of the transactions, GungHo was no longer qualified as a subsidiary and became an equity method
associate on June 1, 2015.
Operating results associated with GungHo from April 1, 2015 to June 1, 2015 are presented as discontinued
operations separately from continuing operations in the condensed interim consolidated statements of income.
Note:* Heartis (Taizo Son’s asset management company, the second largest shareholder of GungHo, and Taizo Son,chairman of GungHo is the representative director), and Masayoshi Son, chairman and CEO of SoftBank Group
Corp., entered into a Memorandum of Understanding on Exercise of Voting Rights for Deferment of Execution of
Pledges (the “MOU”), on April 1, 2013. Under the MOU, all of GungHo common shares held by Heartis were
pledged to Son Holdings, Masayoshi Son’s asset management company and in order to defer the execution ofpledges, Heartis agreed to act on behalf of Masayoshi Son at the shareholders’ meeting of GungHo, for the voting
rights related to 213,080,000 shares (ownership ratio: 18.50%) out of the common shares of GungHo held by Heartis.
In addition, the title of Taizo Son was changed from chairman of GungHo to director of GungHo, effective on March
22, 2016.

A portion of GungHo common shares held by the Company were tendered in the Tender Offer by GungHo from
June 23, 2016. The transaction was completed on July 21, 2016 and 245,592,400 shares of GungHo held by theCompany were tendered. As a result of the transaction, GungHo is no longer qualified as an equity method
associate of the Company from August 16, 2016.

62

SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016

The operating results and cash flows from discontinued operations are as follows:a. Operating results from discontinued operations(Millions of yen)

Revenue
ExpenseIncome before income tax from discontinued
operations
Income taxes
Income after income tax from discontinued operations
Loss associated with loss of control in discontinued
operations
Deferred tax expenses for temporary differences
associated with investment
Net loss from discontinued operations

Six-month period ended
September 30, 2015
26,604(17,404)

Six-month period ended
September 30, 2016-

9,200
(3,568)
5,632-(12,739)

-

139

-

(6,968)-In addition, the above net loss from discontinued operations includes amortization expenses, which are related
to intangible assets recognized at the acquisition date, and other.
b. Cash flows from discontinued operations(Millions of yen)Six-month period ended
September 30, 2015
16,051(735)(86)
15,230Net cash provided by operating activities
Net cash used in investing activities
Net cash used in financing activities
Total

Six-month period ended
September 30, 2016-(2) Supercell
The Company entered into a definitive agreement with Tencent Holdings Limited and its affiliate (“Tencent
affiliate”), Supercell and other parties on June 21, 2016 to sell all of its shares of Supercell, to Tencent affiliate.
The shares were transferred on July 29, 2016, and as of the date of transfer of the shares, Supercell was excluded
from the scope of consolidation of the Company.
Operating results related to Supercell for the six-month period ended September 30, 2015, and for the six-month
period ended September 30, 2016 are presented as discontinued operations separately from continuing operationsin the condensed interim consolidated statements of income.

63SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016

The operating results and cash flows from discontinued operations are as follows:a. Operating results from discontinued operations(Millions of yen)

Revenue
ExpenseIncome before income tax from discontinued
operations
Income taxes
Income after income tax from discontinued operations
Gain on sales of discontinued operations
Income taxes recognized from sales of discontinued
operations
Net income from discontinued operations

Six-month period ended
September 30, 2015
142,604(91,709)

Six-month period ended
September 30, 2016
80,735(46,075)

50,895(11,380)
39,515-34,660(6,414)28,246636,216

39,515(105,877)
558,585

In addition, the above net income from discontinued operations includes amortization expenses, which are
related to intangible assets recognized at the acquisition date, and other.
b. Cash flows from discontinued operations(Millions of yen)

Net cash provided by operating activities
Net cash used in investing activities
Net cash provided by (used in) financing activities
Total

Six-month period ended
September 30, 2015
59,023(29,221)
11
29,813Six-month period ended
September 30, 2016
44,065(166)(17,557)
26,342

17. Supplemental information to the condensed interim consolidated statements of cash flows(1) Scope of purchase of property, plant and equipment, and intangible assets“Purchase of property, plant and equipment, and intangible assets” includes a portion of cash outflows fromlong-term prepaid expenses that are included in “Other non-current assets” in the condensed interim consolidated
statements of financial position.
(2) Presentation of cash flow regarding finance leases
Once the Company purchases telecommunications equipment for the purpose of assembly, installation andinspection, the Company sells the equipment to lease companies for sale and leaseback purposes. The leased asset
and lease obligation are recorded in the condensed interim consolidated statements of financial position.
The cash outflows from the purchase of the equipment from vendors are included in “Purchase of property, plantand equipment, and intangible assets” under cash flows from investing activities, and the cash inflows from thesale of the equipment to lease companies are included in “Proceeds from long-term interest-bearing debt” undercash flows from financing activities.
(3) Gain on sales of discontinued operations
For the six-month period ended September 30, 2016
Gain on sales of subsidiaries arising from sale of Supercell shares. The details are described in “(2) Supercell” in“Note 16. Discontinued operations.”

64SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016(4) Income taxes paid and income taxes refund
For the six-month period ended September 30, 2015
Payment of withholding income tax related to dividends within the group companies of ¥551,241 million is
included in “Income taxes paid.”
For the six-month period ended September 30, 2016
Payment of withholding income tax related to dividends within the group companies of ¥85,048 million is
included in “Income taxes paid,” and refund of the withholding income tax of ¥293,489 million is included in“Income taxes refund,” respectively.
(5) Proceeds from sales and redemption of investments
For the six-month period ended September 30, 2016
Proceeds related to sales of Alibaba shares of ¥359,704 million ($3.4 billion) are included. The details aredescribed in “Note 13. Gain on sales of equity method associates.”(6) (Decrease) increase from loss of control over subsidiaries
For the six-month period ended September 30, 2015
“Decrease from loss of control over subsidiaries” is the amount of cash and cash equivalents held by GungHo atthe time of loss of control.
For the six-month period ended September 30, 2016
The relation between consideration received for sale of Supercell shares and “Increase from loss of control eversubsidiaries” and components of assets and liabilities at the date of loss of control over Supercell are as follows:a. The relation between consideration received for sale of Supercell shares and “Increase from loss of control
over subsidiaries”(Millions of yen)

Consideration received for sale
The amount of receivable for sale
Cash and cash equivalents held at the time of loss of control
Increase from loss of control over subsidiaries

At the date of loss ofcontrol(July 29, 2016)
769,844(404,672)(27,143)
338,029b. The components of assets and liabilities at the date of loss of control(Millions of yen)

At the date of loss ofcontrol(July 29, 2016)
The components of assets
Current assets
Game titles
Goodwill
Other non-current assets

125,523
47,63684,487
6,077

The components of liabilities
Deferred revenue (current)
Other current liabilities
Non-current liabilities

96,9195,593
23,77865

SoftBank Group Corp. Consolidated Financial Report
For the six-month period ended September 30, 2016(7) Significant non-cash transactions
Significant non-cash investing and financing activities are as follows:(Millions of yen)Six-month period ended
September 30, 2015

Six-month period ended
September 30, 2016

188,539

125,365-

95,587

Transfer of leased devices from inventories toproperty, plant and equipment
Embedded derivatives included in sale of shares by
variable prepaid forward contract*

Note:* The details are described in “(2) Transaction for sale of Alibaba shares by variable prepaid forward contract” in“Note 8. Interest-bearing debt.”

In addition to the above, ASKUL Corporation become a subsidiary of the Company for the six-month period
ended September 30, 2015 and the transaction related to this business combination is classified as a non-cash
transaction because it was conducted by ASKUL Corporation’s acquisition of its own treasury stock. The details
are described in “Note 3. Business combinations.”

18. Significant subsequent events(1) Retirement of treasury stock
The Company, at a meeting of board of directors held on October 7, 2016, resolved and conducted the retirementof treasury stock pursuant to Article 178 of the Companies Act of Japan.
a. Class of shares to be retired
Common stock of SoftBank Group Corp.
b. Number of shares to be retired
100,000,00 shares(8.33% of total number of shares issued prior to the retirement)c. Planned retirement date
October 31, 2016(2) Spectrum financing at Sprint
In October 2016, Sprint transferred certain directly held and third-party leased spectrum licenses, which
represent approximately 14 percent of Sprint’s total spectrum holdings on a MHz-pops1 basis, to wholly-ownedbankruptcy-remote Spectrum Financing SPEs. These spectrum licenses were used as collateral to raise $3.5
billion at 3.36%, with the opportunity to raise up to an additional $3.5 billion under the same program.
The $3.5 billion initial issuance will be repaid through September 2021, with interest only payments over the
first year and amortizing principal and interest payments thereafter.
As a result of this financing transaction, $2.5 billion bridge financing facility2, which Sprint entered into withfinancial institutions, has been terminated.
Notes:
1. The amount of spectrum in a given license or set of frequencies multiplied by the population covered by thegeographic area of the spectrum license.
2. A form of loan facility that allows borrowing within a specified period and maximum amount.

66