This English translation of the financial report was prepared for reference purposes only and is qualified in its entirety by the original
Japanese version. The financial information contained in this report is derived from our unaudited consolidated financial statements
appearing in item 3 of this report.

SoftBank Group Corp.
Consolidated Financial Report
For the three-month period ended June 30, 2016 (IFRS)Tokyo, July 28, 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
incomeAmount%Amount%AmountThree-month period ended¥2,126,521 2.9 ¥319,236 0.2 ¥356,361 (5.3) ¥272,351 8.9
June 30, 2016

¥254,157

19.1 ¥(103,069)

OperatingincomeNet sales
Amount% AmountThree-month period ended¥2,066,518 - ¥318,557
June 30, 2015%-

Incomebefore incometax
Amount¥376,308%-

Basic earnings per
share (yen)Diluted earnings per
share (yen)Three-month period ended
June 30, 2016

¥223.55¥222.22

Three-month period ended
June 30, 2015¥179.43¥176.70%-¥250,017 124.6 ¥213,382 175.1 ¥351,838 418.3

Note:
Net sales, operating income, and income before income tax for the three-month period ended June 30, 2016 are presented based on
the amounts from continuing operations only. Year-on-year percentage changes in net sales, operating income, and income before
income tax for the three-month period ended June 30, 2015 are not presented because corresponding amounts for the three-month
period ended June 30, 2015 are revised and presented respectively.
Please refer to page 59 “Note 14. Discontinued operations” under “3. Condensed Interim Consolidated Financial Statements (6)Notes to Condensed 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 June 30, 2016

¥20,622,229¥3,271,996¥2,414,068

11.7

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

44.00

22.00

-

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: One company West Raptor Holdings, LLC
Please refer to page 40 “(1) Significant Changes in Scope of Consolidation for the Three-month Period Ended June 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(3) Number of shares issued (common stock)[1] Number of shares issued (including treasury stock):
As of June 30, 2016:
1,200,660,365 shares
As of March 31, 2016:
1,200,660,365 shares[2] Number of treasury stock:
As of June 30, 2016:
68,359,541 shares
As of March 31, 2016:
53,760,198 shares[3] Number of average stocks during three-month period (April-June):
As of June 30, 2016:
1,136,931,899 shares
As of June 30, 2015:
1,189,244,141 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 July 28, 2016, the Company will hold an earnings results briefing for the media, institutional investors, and financial
institutions. This earnings results briefing will be broadcast live on our website in both Japanese and English at
http://www.softbank.jp/en/corp/irinfo/. The Earnings Results Data Sheet will also be posted on the Company’s website
around 4 p.m. on the same day at http://www.softbank.jp/en/corp/irinfo/presentations/.

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

(Appendix)
Contents
1. Qualitative Information Regarding Three-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 1: Principal Operational Data) ......................................................................................................... P. 24(Reference 2: Definitions and Calculation Methods of Principal Operational Data) ........................................ P. 26(Reference 3: Capital Expenditure and Depreciation and Amortization) .......................................................... P. 28(2) Qualitative Information Regarding Consolidated Financial Position ............................................................... P. 29
a. Assets, Liabilities and Equity ........................................................................................................................ P. 29
b. Cash Flows .................................................................................................................................................... P. 37(3) Recommended Acquisition of ARM Holdings plc ........................................................................................... P. 38(4) Qualitative Information Regarding Forecasts on Consolidated Results of Operations .................................... P. 39
2. Notes to Summary Information ............................................................................................................................... P. 40(1) Significant Changes in Scope of Consolidation for the Three-month Period Ended June 30, 2016 .................. P. 40(2) Changes in Accounting Estimates ..................................................................................................................... P. 40
3. Condensed Interim Consolidated Financial Statements ........................................................................................... P. 41(1) Condensed Interim Consolidated Statements of Financial Position .................................................................. P. 41(2) Condensed Interim Consolidated Statements of Income and Comprehensive Income ..................................... P. 43(3) Condensed Interim Consolidated Statements of Changes in Equity ................................................................. P. 45(4) Condensed Interim Consolidated Statements of Cash Flows ............................................................................ P. 47(5) Significant Doubt about Going-concern Assumption ........................................................................................ P. 48(6) Notes to Condensed Interim Consolidated Financial Statements ...................................................................... P. 48

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.

“Supercell”

Supercell Oy“Alibaba”

Alibaba Group Holding Limited“GungHo”

GungHo Online Entertainment, Inc.

1

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

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

Three-month Period
Ended June 30, 2016

2,066,518

2,126,521

60,003

2.9%

Operating income

318,557

319,236679

0.2%

Income before income tax
Net income from continuing
operations

376,308356,361(19,947)(5.3%)

239,715

212,292(27,423)(11.4%)

Discontinued operations
Net income from discontinued
operations

10,30260,05949,757482.9%

250,017272,351

22,334

8.9%

213,382

254,157

40,775

19.1%

ChangeChange %Continuing operations
Net sales

Net income
Net income attributable toowners of the parent

Reference: Average exchange rates used for translation
Fiscal Year Ending
March 2017

Fiscal Year Ended March 2016

USD
/ JPY

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

Q1

Q2

Q3

Q4

Q1

¥121.34¥121.91¥121.072¥116.95¥109.07

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

< Results Related to Supercell >The Company entered into a definitive agreement to sell all of its shares in Supercell to an affiliate of Tencent Holdings
Limited on June 21, 2016. Accordingly, Supercell’s net income until June 30, 2016 (the “end of the first quarter”) ispresented as discontinued operations separately from continuing operations. Net income of Supercell for the three-month
period ended June 30, 2015 (the “same period of the previous fiscal year”) has been revised retrospectively and presented
under discontinued operations.

Please refer to page 59 “14. Discontinued operations” under “3. Condensed Interim

Consolidated Financial Statements (6) Notes to Condensed Interim Consolidated Financial Statements” for details.
Upon transfer of the shares scheduled on August 5, 2016, Supercell will no longer qualify as a subsidiary of the Company
and will no longer be consolidated into the Company’s financial results.

Fiscal Year Ending

Earnings for the Fiscal
Year Ending March2017

Earnings for the Fiscal
Year Ended March2016

Fiscal Year Ended March 2016

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

Q1

Q2

Q3

Q4

Q1

Continuing Operations(Supercell earnings were included as a subsidiary)

Discontinued Operations

Supercell earnings are included in net income from discontinued operations

An overview of the consolidated results of operations for the three-month period ended June 30, 2016 (the “first quarter”)
is as follows:(Continuing Operations)(a) Net Sales
Net sales totaled ¥2,126,521 million, an increase of ¥60,003 million (2.9%) year on year. This resulted from increases
in net sales of the Domestic Telecommunications segment, the Yahoo Japan segment, and the Distribution segment,
which outweighed a decline in net sales of the Sprint segment.
The Domestic Telecommunications segment’s net sales (for customers) amounted to ¥754,662 million, an increase of¥40,176 million (5.6%) year on year. The main reason for the increase was increases in both telecom service revenue
and product and other sales.
The Sprint segment’s net sales (for customers) totaled ¥848,098 million, a decrease of ¥89,715 million (9.6%) year
on year. A year-on-year decrease in U.S. dollar-based net sales of $15 million (0.2%) was exacerbated in yen-termsby the yen’s appreciation against the U.S. dollar.

3SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2016

The Yahoo Japan segment’s net sales (for customers) was ¥201,392 million, an increase of ¥92,861 million (85.6%)
year on year.

The main reason for the increase was the consolidation of ASKUL Corporation by Yahoo Japan

Corporation in August 2015.
The Distribution segment’s net sales (for customers) amounted to ¥300,148 million, an increase of ¥15,968 million(5.6%) year on year.
(b) Operating Income
Operating income totaled ¥319,236 million, an increase of ¥679 million (0.2%) year on year.

The main reason for theincrease was increases in income of ¥23,964 million in the Domestic Telecommunications segment, ¥1,456 million in
the Yahoo Japan segment, and ¥6,269 million in the Distribution segment, which outweighed a decline in income of¥24,220 million in the Sprint segment.
(c) Finance Cost
Finance cost totaled ¥112,107 million, an increase of ¥6,596 million (6.3%) year on year. The increase was mainly
due to an increase in the interest expense of SoftBank Group Corp.
(Millions of yen)Three-month Period
Ended June 30, 2015
Finance costThree-month Period
Ended June 30, 2016

Change(105,511)(112,107)(6,596)(incl.) Sprint(68,989)(69,724)(735)

Reference:
U.S. dollar-based

USD (569) million

USD (639) million

USD (70) million(d) Income on Equity Method Investments
Income on equity method investments was ¥35,466 million, a decrease of ¥45,136 million (56.0%) year on year. Thiswas mainly due to a decline of ¥27,212 million in income on equity method investments related to Alibaba, as well asa deterioration of ¥17,284 million year on year in income and loss on equity method investments related to an investment
fund invested into by a subsidiary of SoftBank Group Corp.

In the same period of the previous fiscal year, income onequity method investments related to the investment fund was boosted due to the IPO of one of its investees in June2015.
Alibaba continues to grow steadily, and its net income for the three-month period ended March 31, 20161 (U.S.
GAAP basis) increased by CNY 2,472 million (85.4%) year on year to CNY 5,365 million ((A) in the table on thefollowing page; “Reference: Net Income of Alibaba and the Company’s Related Income on Equity Method
Investments.”) Despite this situation, the Company’s income on equity method investments related to Alibaba declined
year on year. The reason for this was that in the three-month period ended March 31, 2015, Alibaba’s net income under
IFRSs of CNY 10,070 million ((C) in the same table) was significantly higher than its net income under U.S. GAAP of
CNY 2,893 million ((B) in the same table), mainly due to recognizing the amount of changes in the fair value of its
financial assets at FVTPL (Fair Value Through Profit or Loss) as income.

1

The Company applies the equity method to the financial statements of Alibaba, an associate of the Company, on a three-month time lag, as it isimpracticable to conform the reporting period of Alibaba due to the contract with Alibaba.

4SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2016

(Millions of yen)Three-month Period
Ended June 30, 2015
Income on equity method
investments(incl.) Alibaba

Three-month Period
Ended June 30, 2016

ChangeChange %80,60235,466(45,136)(56.0%)

64,09436,882(27,212)(42.5%)

Reference: Net Income of Alibaba and the Company’s Related Income on Equity Method Investments
Three-month Period
Ended March 31, 2015

Three-month Period
Ended March 31, 2016

ChangeAlibaba
Net income（U.S. GAAP）

million CNY(B)

IFRSs adjustment
Net income（IFRSs）

2,893

million CNY

million CNY

5,365

2,472

million CNY

million CNY

million CNY

7,177

1,434

(5,743)

million CNY

million CNY

million CNY(C) 10,070

6,799(3,271)Three-month Period
Ended June 30, 2015

(A)

Three-month Period
Ended June 30, 2016

ChangeIncome on equity method
investments related to Alibaba
Interest ratio

32.54%

32.60%--

31.29%-

Income on equity method
investments
Average exchange rateused for translation:
CNY/JPY

million CNY

million CNY

million CNY

3,277

2,216

(1,061)¥19.56¥16.64(¥2.92)

Income on equity method
investments

million JPY

million JPY

million JPY

64,09436,882(27,212)Interest ratio after the sale ofa portion of shares2(e) Gain on Sales of Equity Method Associates
Gain on sales of equity method associates was ¥204,233 million (not recorded in the same period of the previous fiscal
year). This mainly reflected the sale of a portion of the shares of Alibaba held by subsidiary SB CHINA HOLDINGSPTE LTD (“SB China”) to Alibaba and two Singaporean sovereign wealth funds.
The Company also expects to record gain on sale of shares of equity method associates in the three-month period
ending September 30, 2016 (the “second quarter”), in conjunction with the sale of a portion of Alibaba shares to Alibaba
Partnership3 as it took place on July 11, 2016.

2

Interest ratio after the sale of a portion of Alibaba’s shares to Alibaba and two Singaporean sovereign wealth funds by SB CHINA HOLDINGS PTE
LTD.
3
Not an affiliate of Alibaba

5

SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2016(f) Other Non-operating Income and Loss
Other non-operating loss was ¥90,467 million, a deterioration of ¥173,127 million compared to income of ¥82,660
million in the same period of the previous fiscal year.

The primary components of other non-operating income andloss were as follows:i. 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 (the “Tender Offer”) that was
executed from June 23, 2016 to July 21, 2016. The Company recorded loss in relation to the difference between
the valuation of the tendered shares at the tender offer price of ¥294 per share and their carrying amount on aconsolidated basis.
ii. Loss from financial assets at FVTPL was ¥30,283 million (gain of ¥84,272 million was recorded in the same periodof the previous fiscal year).

This was due to recording a loss as the amount of changes in the fair value of theCompany’s financial assets at FVTPL, such as preferred shares of Jasper Infotech Private Limited, an operator of the
e-commerce website snapdeal.com in India, and ANI Technologies Private Limited, an operator of the taxi booking
platform Ola also in India, from March 31, 2016 (the “previous fiscal year-end”) to the end of the first quarter.
These decreases in the fair value mainly reflected the yen’s appreciation against the Indian rupee at the end of thefirst quarter compared to the previous fiscal year-end.
Financial assets at FVTPL is a class of financial instruments under IFRSs.

The fair value of financial assets at

FVTPL is required to be measured at the end of each quarter, with changes to be recognized as net income or loss.
Please refer to page 59 “13. Other non-operating income (loss)” under “3. Condensed Interim Consolidated Financial
Statements (6) Notes to Condensed Interim Consolidated Financial Statements” for details.

(g) Income before Income Tax
As a result of (b) to (f), income before income tax was ¥356,361 million, a decrease of ¥19,947 million (5.3%) year on
year.

(h) Income Taxes
Income taxes were ¥144,069 million, an increase of ¥7,476 million (5.5%) year on year. This mainly reflected therecording of deferred tax expenses for anticipated taxation on gain on the sale of Alibaba shares (including intercompanysale) that arose at SB China in conjunction with the monetization of a portion of Alibaba shares. Meanwhile, tax
effects were recognized in principle for income on equity method investments such as Alibaba and gain from financial
assets at FVTPL.

(i) Net Income from Continuing Operations
As a result of (g) and (h), net income from continuing operations totaled ¥212,292 million, a decrease of ¥27,423 million(11.4%) year on year.

6SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2016

(Discontinued Operations)(j) Net Income from Discontinued Operations
Net income from discontinued operations was ¥60,059 million (net income of ¥10,302 million was recorded in the same
period of the previous fiscal year).

This was due to recording Supercell’s income after income tax of ¥21,117 million(income of ¥17,270 million was recorded in the same period of the previous fiscal year) and deferred tax expenses forinvestment temporary differences of ¥38,942 million as a negative expense (not recorded in the same period of theprevious fiscal year). Deferred tax expenses for investment temporary differences was recorded due to the recordingof deferred tax assets in relation to the difference between the carrying amount of Supercell on a consolidated basis andits carrying amount on a tax basis. Previously, the tax effect for the difference in the amounts was not recognized;
however, having decided to sell Supercell’s shares, the Company recorded deferred tax assets.
(k) Net Income
As a result of (i) and (j), net income amounted to ¥272,351 million, an increase of ¥22,334 million (8.9%) year on year.

(l) 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(k), net income attributable to owners of the parent amounted to ¥254,157 million, an increase of ¥40,775 million(19.1%) year on year.

(m) Comprehensive Loss
Comprehensive loss totaled ¥103,069 million, a decrease of ¥454,907 million year on year. Of this, comprehensive
loss attributable to owners of the parent was ¥93,847 million, a decrease of ¥396,684 million year on year.

7SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 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 four reportable segments: “Domestic Telecommunications,”“Sprint,” “Yahoo Japan,” and “Distribution.”

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

Reportable segments

Segments

Main Businesses

Core Companies

SoftBank Corp.
・Provision of mobile communications services in Japan
Wireless City Planning Inc.
・Sale of mobile devices in Japan
Domestic
・Provision of broadband services to retail customers in Japan
Telecommunications ・Provision of telecom services to corporate customers inJapan, such as data communications and fixed-line telephoneservices
Sprint Corporation
・Provision of mobile communications services in the U.S.
・Sale and lease of mobile devices and sale of accessories in
the U.S.
Sprint・Provision of fixed-line telecommunications services in the
U.S.
・Internet advertising
Yahoo Japan Corporation
Yahoo Japan・e-commerce business
ASKUL Corporation
・Membership services
・Distribution of mobile devices overseas
Brightstar Corp.
Distribution
・Sale of PC software, peripherals, and mobile device
SoftBank Commerce & Service Corp.
accessories in Japan
Other・Fukuoka SoftBank HAWKS-related businesses

Fukuoka SoftBank HAWKS Corp.

Note:
1. The calculation methods of segment income and adjusted EBITDA of reportable segments are as follows:
Segment income =(net sales – cost of sales – selling, general and administrative expenses ± other operating income (loss)) in each segment
Adjusted EBITDA =(segment income (loss) + depreciation and amortization ± other operating income (loss)) in each segment(a) Domestic Telecommunications Segment(Millions of yen)Three-month Period
Ended June 30, 2015

Three-month Period
Ended June 30, 2016

ChangeChange %Net sales

722,570

761,763

39,193

5.4%

Segment income

215,049

239,013

23,964

11.1%

Depreciation andamortization

107,798

112,266

4,468

4.1%

Other operating(income) loss

-

-

-

-

322,847

351,279

28,4328.8%

Adjusted EBITDA

8

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

< Overview of the Segment >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 Hikari4
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 (BWA) 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 revenue. 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.

4

A fiber-optic service using the wholesale fiber-optic connection of NIPPON TELEGRAPH AND TELEPHONE EAST CORPORATION (“NTT East”)
and NIPPON TELEGRAPH AND TELEPHONE WEST CORPORATION (“NTT West”)

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

(Breakdown of Net Sales)(Millions of yen)Three-month Period
Ended June 30, 2015
Total net sales

Three-month Period
Ended June 30, 2016

ChangeChange %722,570

761,763

39,193

5.4%

Telecom service revenue

586,867

605,751

18,884

3.2%

Mobile communications

482,718

480,067(2,651)(0.5%)

Telecom5

429,607422,007(7,600)(1.8%)

Service6

53,11158,060

4,949

9.3%

Broadband

37,24759,23721,990

59.0%

Fixed-line
telecommunications

66,902

66,447(455)(0.7%)

Product and other sales

135,703

156,012

20,30915.0%< Overview of Operations >The segment’s net sales totaled ¥761,763 million, an increase of ¥39,193 million (5.4%) year on year. Of this,telecom service revenue totaled ¥605,751 million, an increase of ¥18,884 million (3.2%), while product and other sales
was ¥156,012 million, an increase of ¥20,309 million (15.0%).
The increase in telecom service revenue reflected an increase in broadband revenue following steady expansion of
the SoftBank Hikari fiber-optic service. On the other hand, mobile communications revenue decreased by ¥2,651
million (0.5%) year on year to ¥480,067 million, mainly reflecting an increase in the total amount of discounts (negative
impact on revenue) associated with growth in the cumulative number of applications of the Home Bundle DiscountHikari Set, which outweighed an increase in service revenue associated with an expansion in content services.
The increase in product and other sales mainly reflected an increase in sales of smartphones and terminals forbroadband services on customer premises.

Smartphone sales increased as the impact of a rise in the unit prices

outweighed a decline in the number of devices shipped.7

Operating expenses increased by ¥15,229 million (3.0%) year on year to ¥522,750 million.

The main factors

affecting operating expenses were as follows:・ Cost of products increased by ¥4,056 million (4.0%) year on year. This mainly reflected an increase in the numberof devices shipped for smartphones, which have a high purchase price per unit, and terminals for broadband
services on customer premises, despite a year-on-year improvement in valuation loss on mobile device inventories.
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.

5

Telecom revenues of mobile communications services, etc. under the SoftBank and Y!mobile brands
Device warranty service revenue, content-related revenues, advertising revenue, etc.
7
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.
6

10

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

・ Sales commission fees decreased by ¥707 million (0.9%) year on year. This mainly reflected a year-on-year
decrease in the average cost of sales commission fees for smartphones, despite increases in the number of units
sold8 for smartphones and the number of new subscriptions of broadband subscribers.
・ Telecommunications network charges increased by ¥8,781 million (17.2%) year on year. This mainly reflected
an increase in fiber-optic connection charges for the SoftBank Hikari fiber-optic service.
・ Sales promotion expenses increased by ¥2,743 million (11.5%) year on year. This mainly reflected stronger sales
expansion of the SoftBank Hikari fiber-optic service.
・ Depreciation and amortization increased by ¥4,468 million (4.1%) year on year to ¥112,266 million.
As a result of the above, segment income increased by ¥23,964 million (11.1%) year on year to ¥239,013 million.
Adjusted EBITDA, which was obtained by adding depreciation and amortization to segment income, increased by¥28,432 million (8.8%) year on year to ¥351,279 million.

< Overview of Business Operations >Among the segment’s businesses, the following is an overview of the business operations of the mobile communications
and broadband services of SoftBank Corp. For definitions and calculation methods of subscribers, ARPU, and churnrate at SoftBank Corp., please refer to page 26 “(a) SoftBank Corp.” under “(Reference 2: Definitions and Calculation
Methods of Principal Operational Data).”i. Mobile Communications Service
・ Subscribers (Main Subscribers)
The cumulative number of main subscribers of mobile communications services at the end of the first quarter stood
at 32,149,000 for 112,000 net additions from the previous fiscal year-end. Smartphones and tablets marked net
additions in the first quarter, which outweighed net losses for feature phones.

In particular, the number ofsubscribers for Y!mobile smartphones grew briskly.
(Thousands)
As of March 31, 2016

Cumulative subscribers

32,038

As of June 30, 2016

32,149Change112

・Home Bundle Discount Hikari Set Applications
The Home Bundle Discount Hikari Set offers a discount on the communication charges of mobile communications
services to customers subscribing to both mobile communications services (applicable for smartphones, featurephones, and tablets among main subscribers) and broadband services such as SoftBank Hikari. The cumulative
number of applications9 of the Home Bundle Discount Hikari Set at the end of the first quarter stood at 3,702,000
for mobile communications services, up 733,000 from the previous fiscal year-end, and 1,790,000 for broadband
services,10 up 352,000.
8

The total number of new subscriptions and device upgrades. New subscriptions where customers switch between SoftBank and Y!mobile under the
Mobile Number Portability (MNP) system are included in the number of device upgrades.
9
Includes the Fiber-optic Discount applied to mobile communications services under the Y!mobile brand10
Includes that of fiber-optic lines as long as the discount is applied to the associated mobile communications services, even if physical connection of
the fiber-optic line is not complete at the central office of NTT East or NTT West.

11

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

(Thousands)
As of March 31, 2016

As of June 30, 2016

ChangeMobile communications
service

2,969

3,702

733

Broadband service

1,438

1,790

352

・ARPU (Main Subscribers)
Total ARPU for main subscribers of mobile communications services for the first quarter was ¥4,610, a decrease of¥50 year on year.
Of this, telecom ARPU declined by ¥90 to ¥4,050. This mainly reflected an increase in the amount of discountapplied to 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 arelatively low service charge. This was partially offset by an increase in the compositional ratio of smartphone
subscribers within the cumulative number of main subscribers.
Service ARPU increased by ¥40 year on year to ¥560.

This mainly reflected the increase in the number ofsubscribers to content services.
(Yen / Month)Three-month Period
Ended June 30, 2015
Total ARPU

Three-month Period
Ended June 30, 2016

Change

4,660

4,610

(50)

Telecom ARPU

4,140

4,050

(90)

Service ARPU

520

560

40

12

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

・Number of Units Sold (Main Subscribers)
The number of units sold for mobile devices of main subscribers for the first quarter increased by 155,000 year on
year to 2,353,000. This mainly reflected increases in the number of units sold for both smartphones and featurephones, particularly for Y!mobile smartphones.

On the other hand, the number of units sold for mobile data

communication devices declined.
(Thousands)
Three-month Period
Ended June 30, 2015
Units soldThree-month Period
Ended June 30, 2016

Change

2,198

2,353

155

New subscriptions

1,169

1,154

(15)

Device upgrades

1,029

1,199

170

・Churn Rate (Main Subscribers)
The churn rate for main subscribers of mobile communications services for the first quarter was 1.13%, an
improvement of 0.11 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 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 for main subscribers of mobile communications services 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 tolaunch a benefit program in autumn 2016 for long-term subscribers who continue their subscriptions after the twoyear contract expiration.
Three-month Period
Ended June 30, 2015
Churn rate

Three-month Period
Ended June 30, 2016

1.24%

13

1.13%

Change0.11 pp improvement

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

ii. Broadband Service
The cumulative number of subscribers for broadband services at the end of the first quarter stood at 5,345,000, a 266,000
increase from the previous fiscal year-end. This mainly reflected an increase of 526,00011 subscribers for SoftBank
Hikari, while subscribers for Yahoo! BB hikari with FLET’S12 decreased by 211,000 and subscribers for Yahoo! BB
ADSL13 decreased by 49,000.
Since the launch of the SoftBank Hikari fiber-optic service in March 2015, SoftBank Corp. shifted its main focus ofbroadband services from Yahoo! BB hikari with FLET’S to SoftBank Hikari and is now actively working to acquire
SoftBank Hikari subscribers through sales channels nationwide such as electronics retail stores and SoftBank Stores.
Since SoftBank Hikari ARPU11 is higher than that of Yahoo! BB hikari with FLET’S and Yahoo! BB ADSL, SoftBank
Corp. expects a steady increase in telecom service revenue from broadband services in step with the increase insubscribers to SoftBank Hikari.

For the first quarter, SoftBank Hikari ARPU was ¥4,960, Yahoo! BB hikari with

FLET’S ARPU was ¥1,810, and Yahoo! BB ADSL ARPU was ¥2,560.
(Thousands)
As of March 31, 2016

As of June 30, 2016

ChangeCumulative subscribers

5,079

5,345

266

SoftBank Hikari11

1,717

2,243

526

Yahoo! BB hikariwith FLET’S

2,008

1,797

(211)

Yahoo! BB ADSL

1,354

1,305

(49)

11

Includes the number of subscribers and ARPU of SoftBank Air, the high-speed wireless Internet service provided through the Air terminal
An Internet service provider (ISP) service offered as a package with NTT East and NTT West’s FLET’S Hikari Series fiber-optic connection
13
A service combining an ADSL connection service and an ISP service
12

14

SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2016(b) Sprint Segment(Millions of yen)Three-month Period
Ended June 30, 2015

Three-month Period
Ended June 30, 2016

ChangeChange %Net sales

973,994

873,923(100,071)(10.3%)

Segment income

69,58845,368(24,220)(34.8%)

190,278

214,049

23,771

12.5%

(694)

12,277

12,971-

259,172

271,694

12,522

4.8%

Depreciation andamortization
Other operating(income) loss
Adjusted EBITDA
Reference: U.S. dollar-based results (IFRSs)

Net sales(Millions of U.S. dollars)

8,027

8,012

(15)

(0.2%)

Segment income

574

416

(158)

(27.5%)

Adjusted EBITDA

2,136

2,491

355

16.6%

<Overview of the Segment>
Sprint aims to return to a growth trajectory by increasing its net sales while promoting large-scale cost reductions andliquidity improvement.

To stabilize its net sales, Sprint is focusing on increasing the number of postpaid phone

subscribers, which are its largest source of revenue and profit, by advancing initiatives to improve its network. Sprint
has shown steady progress by recording postpaid phone net subscriber additions for four consecutive quarters from thethree-month period ended September 30, 2015. Meanwhile, in cost reductions and liquidity improvement, Sprint ismaking solid progress on multiple initiatives that it started in the fiscal year ended March 2016.
In cost reductions, Sprint reviewed its budget across all areas, and started implementing a plan to transform the way
it does business and significantly lower its cost structure (the “Transformation”) during the fiscal year ended March2016. Sprint is making steady progress with its cost reductions, aiming to achieve a target run rate14 operating expense
reduction of $2 billion or more exiting the fiscal year ending March 2017.
In addition to cash flow improvement through the aforementioned cost reduction initiatives, Sprint is working todiversify its financing sources to improve its financial flexibility.

As a result, Sprint’s liquidity at the end of the firstquarter totaled approximately $11 billion. For details, please refer to page 20 “< Measures to Improve Liquidity >.”14

Estimated future figures based on the assumption that current trends continue

15

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

< Overview of Operations >The segment’s net sales decreased by ¥100,071 million (10.3%) year on year to ¥873,923 million.

Although thedecrease in U.S. dollar net sales was subdued at $15 million (0.2%), the decline was exacerbated when net sales weretranslated into yen due to the yen’s appreciation against the U.S. dollar year on year.
Telecom revenue in U.S. dollar terms declined due to customer shifts to lower rate plans offered in conjunction with
device financing options such as leases and installment sales, as well as a decrease in prepaid subscribers. On the other
hand, device revenue in U.S. dollar terms increased significantly, mainly reflecting an increase in lease revenue
associated with an increase in subscribers under the leasing program.

Operating expenses decreased by ¥75,851 million (8.4%) year on year to ¥828,555 million. Although operating
expenses increased by $143 million (1.9%) year on year in U.S. dollar terms, they decreased in yen terms due to the
yen’s appreciation against the U.S. dollar year on year.
The increase in operating expenses in U.S. dollar terms reflected increases in depreciation and amortization as well
as deterioration of other operating income and loss.

Excluding these, operating expenses steadily decreased due to theTransformation that started in the fiscal year ended March 2016.
The main factors affecting operating expenses were as follows:・ Cost of services decreased. This was mainly due to a decline in network expenses following the termination of thehigh-speed wireless communication service WiMAX on March 31, 2016, as well as a decrease in roaming expenses
paid to other mobile telecommunications operators.
・ Cost of products increased. This was mainly due to recognition of handset rent expenses in conjunction with thefirst sale-leaseback transaction of leased devices conducted in November 2015, which outweighed a year-on-year
decline in the number of units sold following a decrease in Sprint platform15 postpaid unit upgrades (excluding
wholesale and affiliate) in the first quarter. For further details on the impact of the sale-leaseback transaction on thefinancial statements, please refer to page 18 “Reference 3: Impact on Financial Statements of Fund Procurement
Using Leased Devices.”・ Selling, general and administrative expenses (excluding depreciation and amortization) decreased.

This mainlyreflected reductions in advertising expenses, personnel expenses related to customer support and so forth, andoutsourcing expenses related to operations such as IT, which were associated with the Transformation that started
in the fiscal year ended March 2016.

Another contributing factor was a decrease in provision for doubtful

accounts accompanying an improvement in payment delinquency due to an increase in the compositional ratio ofprime customers.
Loss on disposal of property, plant and equipment of ¥13,066 million was recorded (not recorded in the same periodof the previous fiscal year). This was recognized for the write-off of leased devices associated with lease cancellations
prior to the scheduled customer lease terms where customers did not return the devices to Sprint.

This loss wasrecognized under “other operating loss” in the condensed interim consolidated statements of income and is included in
the calculation of the segment’s adjusted EBITDA.

15

Sprint-operated CDMA and LTE networks

16

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

Depreciation and amortization increased by ¥23,771 million (12.5%) year on year to ¥214,049 million.

This mainlyreflected the increase in leased devices recorded as assets. For a breakdown of depreciation and amortization, pleaserefer to “Reference 1: Sprint’s Depreciation and Amortization” below.
Other operating loss was ¥12,277 million, a deterioration of ¥12,971 million year on year (other operating income of¥694 million was recorded in the same period of the previous fiscal year.) Other operating loss for the first quarter
was mainly comprised of loss on contract termination of ¥12,287 million.

For details of the loss on contract

termination, please refer to “Reference 2: Loss on Contract Termination Related to the Shentel Transaction” below.
As a result of the above, segment income decreased by ¥24,220 million (34.8%) year on year to ¥45,368 million.
Segment income in U.S. dollar terms decreased by $158 million (27.5%) year on year. This was mainly due to therecording of one-off expenses including those resulting from contract termination and an increase in depreciation
associated with the increase in leased devices recorded as assets, outweighing the cost reduction efforts through theTransformation.
Adjusted EBITDA, which was obtained by adding depreciation and amortization and other operating loss to segment
income, increased by ¥12,522 million (4.8%) year on year to ¥271,694 million.

Reference 1: Sprint’s Depreciation and Amortization(Millions of U.S. dollars)

Fiscal year
Ending March2017

Fiscal Year Ended March 2016
Three-month Three-month Three-month Three-month
PeriodPeriodPeriodPeriodEnded June Ended Sept. Ended Dec. Ended Mar.
30, 2015
30, 2015
31, 2015
31, 2016

Three-month
Period Ended
June 30, 2016

Q1

Q2

Q3

Q4

Full Year

Q1

Depreciation and amortization(IFRSs)

1,568

1,705

1,851

1,880

7,004

1,962

Depreciation and amortization(U.S. GAAP)

1,588

1,743

1,865

1,892

7,088

1,967

Network equipment, etc.

965

992

1,014

1,042

4,013

1,036

Leased devices

276

420

535

550

1,781

644

Intangible assets

347

331

316

300

1,294

287

Reference 2: Loss on Contract Termination Related to the Shentel Transaction
In May 2016, one of Sprint’s affiliate companies,16 Shenandoah Telecommunications Company (“Shentel”) acquired
NTELOS Holding Corp. (“NTELOS”).

Prior to the acquisition, NTELOS had provided a telecommunications

network to Sprint on a wholesale basis. Furthermore, Sprint acquired spectrum assets covering parts of seven statesin the Eastern U.S., terminated the existing wholesale arrangement with NTELOS, and amended the existing affiliate
agreement with Shentel (the “Shentel Transaction”).
In conjunction with the Shentel Transaction, Sprint recognized a loss on contract termination as “other operating
16

An affiliate company refers to a local wireless operator that sells and provides Sprint-branded services and products with its own self-operated
telecommunications network, but does not own spectrum. Affiliate companies pay Sprint for brand usage (royalty fee) and spectrum usage.

17

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

loss.” A large portion of the loss on contract termination of ¥12,287 million for the first quarter is attributable to theShentel Transaction.
Reference 3: Impact on Financial Statements of Fund Procurement Using Leased Devices
For the conventional sales of mobile devices, including the installment billing method, sale of devices and the cost of
products are recognized at the point of sale.

However, under the leasing program, lease revenue is recognizedthroughout the period of the lease (generally 24 months), along with depreciation expenses for the leased devices
recorded as assets.
As part of its fund procurement initiatives, Sprint procured funds through Mobile Leasing Solutions, LLC (“MLS”) in
November 2015 and May 2016 using certain leased devices. In the first transaction, executed in November 2015 (the“First Transaction”), certain leased devices were sold to MLS, and MLS leased back each device to Sprint in exchange
for monthly rental payments to be made by Sprint to MLS. The leased devices sold under the First Transaction are
derecognized (off-balance sheet) and therefore are no longer depreciated, but rather recognized as rent expense withincost of products.
Conversely, the second transaction, executed in May 2016 (the “Second Transaction”), was a loan transaction
utilizing the associated leased devices recorded as assets. Therefore, the leased devices of the Second Transaction
continued to be recognized as property, plant and equipment and are subject to depreciation.

Ordinary Leased Devices and Leased
Devices under the Second Transaction

Leased Devices
under the First Transaction

On-balance sheet(property, plant and equipment)

Off-balance sheet(A) Customer lease revenues(A) Customer lease revenues-(C) Rental payments to MLS(B) Depreciation of leased devices
recognized as property,
plant and equipment-

Segment income(A) - (B)(A) - (C)

Adjusted EBITDA(A) - (B) + (B)(A) - (C)Consolidated statements offinancial position
Consolidated statements of income
Net sales
Cost of products
Depreciation< Overview of Business Operations >The following is an overview of the business operations related to the Sprint platform among the segment’s businesses.
For definitions and calculation methods of ABPU/ARPU and churn rate of the Sprint platform, see page 27 “(b) Sprint
Platform” under “(Reference 2: Definitions and Calculation Methods of Principal Operational Data).”18

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

・Number of Subscribers (Sprint Platform)
The Sprint platform had 59,453,000 subscribers at the end of the first quarter, a net addition of 647,000 from theprevious fiscal year-end.

The cumulative number of subscribers at the end of the first quarter includes the impact17

from the Shentel Transaction.
Excluding the impact from the Shentel Transaction, net additions on the Sprint platform during the first quartercame to 377,000 ((A) in the table below). This represented postpaid net additions of 180,000 and wholesale andaffiliate net additions of 528,000, outweighing prepaid net losses of 331,000.

The postpaid net additions were

driven by phone (smartphone and feature phone) net additions of 173,000, which outweighed net losses in tablets.
The wholesale and affiliate net additions mainly reflected growth in the number of communication modules. On
the other hand, prepaid marked net losses due to continued intensified competition in the prepaid market.
(Thousands)

Excl. Impact
from the Shentel
Transaction (A)As of March 31, 2016

As of June 30, 2016

58,80659,453647

377

30,95130,945(6)

180

25,31625,3226173

Prepaid

14,397

13,974

(423)

(331)

Wholesale andaffiliate

13,458

14,534

1,076

528

Cumulative subscribers
Postpaid(incl.) Phone

Change・ABPU (Sprint Platform Postpaid Phone)
Sprint platform postpaid phone ABPU for the first quarter increased by $2.26 year on year to $72.17.

This reflected

an increase in average equipment billings per user, which outweighed a decrease in ARPU.
ARPU declined by $3.59 year on year to $59.20. This mainly reflected an increase in the compositional ratio ofcustomers on lower rate plans offered in conjunction with the device leasing or device installment billing programs.
Although ARPU continued to decline year on year, the rate of decline is slowing down.
On the other hand, average equipment billings per user per month increased by $5.85 year on year to $12.97.
This reflected the wider adoption of the device leasing program.
(U.S. dollar / month)Three-month Period
Ended June 30, 201517

Three-month Period
Ended June 30, 2016

ChangePostpaid phone ABPU

69.91

72.17

2.26

ARPU
Average equipment
billings per user

62.79

59.20

(3.59)

7.12

12.97

5.85

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 and92,000 from prepaid now accounted as “affiliate”).

19SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2016

・Churn Rate (Sprint Platform)
The Sprint platform postpaid churn rate for the first quarter was level year on year at 1.56%. This is mainly due toimprovement of the churn rate for mobile phones and, on the other hand, deterioration of the churn rate for tablets.
The churn rate for phones improved to 1.39%, the lowest level since Sprint was founded, accompanied by a strong
contribution 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 acquireprime customers.
The churn rate for tablets deteriorated due to restraint in measures to retain customers amid an increase insubscribers approaching the end of their two-year contracts.
Three-month Period
Ended June 30, 2015
Postpaid churn rate

Three-month Period
Ended June 30, 2016

1.56%

1.56%

Change-< Measures to Improve Liquidity >During the fiscal year ending March 2017, Sprint plans to continue implementing various measures to improve its
liquidity that it started in the fiscal year ended March 2016.

Measures to be taken during the fiscal year and progress

as of the end of the first quarter are as follows:

・ Fund procurement using mobile devices: $2 - $4 billion in total
Procurement during the first quarter: $1.1 billion
・ Fund procurement using certain network assets: $2.2 billion
Procurement during the first quarter: $2.2 billion
・ Signing of the bridge financing facility18 : $2.5 billion
Undrawn availability as of the end of the first quarter: $2.5 billion

As a result, Sprint’s liquidity at the end of the first quarter totaled approximately $11 billion, including $5.1 billion
in cash and cash equivalents and short-term investments, available borrowing capacity under the revolving bankcredit facility18; and available borrowing capacity under the bridge financing facility.
In addition to the above, Sprint plans to carry out fund procurement using mobile devices during the second quarterand onward, and is seeking to raise funds utilizing a small portion of its spectrum portfolio.
Sprint also has an additional $1.1 billion of availability under vendor financing19 agreements that can be used
toward the purchase of 2.5 GHz network equipment.

These sources of liquidity are expected to provide theresources for Sprint to execute its business plan and to fully fund the repayment of the $3.3 billion of note maturities
that come due by the end of March 2017.

18
19

A form of loan that allows borrowing within a specified period and maximum amount
Secured equipment credit facilities to finance network-related purchases from vendors guaranteed by export credit agencies

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

Three-month Period
Ended June 30, 2016

ChangeChange %Net sales

110,455

204,233

93,77884.9%

Segment income

48,85250,308

1,456

3.0%

Depreciation andamortization

5,646

9,167

3,521

62.4%

-

-

-

-

54,49859,475

4,977

9.1%

The segment’s net sales increased by ¥93,778 million (84.9%) year on year to ¥204,233 million.

This mainly

Other operating (income)loss
Adjusted EBITDA< Overview of Operations >reflected the consolidation of ASKUL Corporation in August 2015, as well as revenue growth driven by an increasein sales related to display advertising and businesses related to e-commerce.
Segment income increased by ¥1,456 million (3.0%) year on year to ¥50,308 million.

The year-on-year increase

in segment income was at 3.0% due to an increase in operating expenses of ¥92,322 million (149.9%). The main
factors driving the increase in operating expenses were the impact of the consolidation of ASKUL Corporation, as wellas increases in outsourcing expenses associated with the expansion of the financial and payment service businesses,
such as Yahoo! JAPAN Card, and an increase in depreciation and amortization.

Depreciation and amortization

increased by ¥3,521 million (62.4%) year on year to ¥9,167 million, mainly reflecting the consolidation of ASKULCorporation and continuing capital expenditure related to big data and so forth.
Adjusted EBITDA, which was obtained by adding depreciation and amortization to segment income increased by¥4,977 million (9.1%) year on year to ¥59,475 million.

(d) Distribution Segment(Millions of yen)Three-month Period
Ended June 30, 2015
Net sales
Segment income
Depreciation andamortization
Other operating(income) loss
Adjusted EBITDA

Three-month Period
Ended June 30, 2016

ChangeChange %303,743

315,499

11,756

3.9%

411

6,680

6,269

-

2,406

1,789

(617)

(25.6%)

-

-

-

-

2,817

8,469

5,652

200.6%

21

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

< Overview of the Segment >The Distribution segment includes subsidiaries such as Brightstar and SoftBank Commerce & Service Corp.
Brightstar’s operations include a wholesaling business which purchases mobile devices from device manufacturers anddistributes them to telecommunications operators and retailers in various countries around the world. In the U.S.,
Brightstar provides Sprint with supply chain and inventory management services, which include Brightstar’s purchasing
mobile devices from device manufacturers or Sprint and selling them to Sprint’s dealers. SoftBank Commerce &Service Corp.’s operations include the sales of mobile device accessories and IT-related software and hardware in Japan.
< Overview of Operations >The segment’s net sales increased by ¥11,756 million (3.9%) year on year to ¥315,499 million.

This was primarily

driven by an increase in sales of mobile devices related to Sprint in the U.S., as well as an increase in the number ofrefurbished CPO (Certified Pre-Owned) smartphones sold in the U.S. and Japan.

These increases were partially offset

by the impact of the yen’s year-on-year appreciation against the U.S. dollar.
Segment income increased by ¥6,269 million to ¥6,680 million. This was primarily driven by growth in the numberof CPO smartphones sold as well as brisk performance in the mobile device accessories business of SoftBank Commerce& Service Corp.
Adjusted EBITDA, which was obtained by adding depreciation and amortization to segment income, increased by¥5,652 million (200.6%) year on year to ¥8,469 million.

(e) Other and Reconciliations(Millions of yen)Three-month Period
Ended June 30, 2015

Three-month Period
Ended June 30, 2016

Other

Other

Reconciliations

Reconciliations

ChangeOther

Reconciliation

Net sales

25,760(70,004)

27,307(56,204)

1,547

13,800

Segment income(3,503)(11,840)(4,458)(17,675)(955)(5,835)

Depreciation andamortization

3,796

469

2,358

380

(1,438)(89)

Other operating loss

-

-

-

6,828

-

6,828

Adjusted EBITDA

293(11,371)(2,100)(10,467)(2,393)904“Other” in segment information includes information of the businesses that are not included in the reportable segments
and it comprises mainly Fukuoka SoftBank HAWKS-related business.
“Reconciliations” in segment information includes an elimination of intersegment transactions and the corporate
general expenses unallocated to each reportable segment.

Corporate general expenses include expenses arising mainly

from SoftBank Group Corp. and SB Group US, Inc. which manages and supervises investment activities in the Internet,
communications, and media fields overseas.

22

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

For the first quarter, the corporate general expenses included ¥6,828 million (on a consolidated basis) of expenses
arising from resignation of Nikesh Arora, the former representative director, president & COO of SoftBank Group Corp.
Arora resigned from the position of representative director and director of SoftBank Group Corp. with the expiration of
the term of office at the conclusion of the 36th Annual General Meeting of Shareholders held on June 22, 2016. For
details of expenses resulting from resignation of director, please see page 58 “10. Other operating income (loss)” under“3. Condensed Interim Consolidated Financial Statements (6) Notes to Condensed Interim Consolidated Financial
Statements.”

23

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

(Reference 1: Principal Operational Data)(a) SoftBank Corp.
i. Mobile Communications Service
Fiscal Year Ending
March 2017

Fiscal Year Ended March 2016

Three-month
Period Ended

Three-month Period Ended
June 30, 2015

Sept. 30, 2015

Q1

Q2

Dec. 31, 2015

Mar. 31, 2016

Q3

June 30, 2016

Q4

Full Year

Q1

Main subscribers20
Cumulative subscribers,000

Net additions
Total ARPU20,000

31,57031,611

31,68632,03832,149

21

41

74

352

488

112

¥/ month

4,660

4,720

4,720

4,680

4,700

4,610

Telecom ARPU20¥/ month

4,140

4,190

4,170

4,110

4,150

4,050

Service ARPU20¥/ month

520

540

560

560

540

560

20

Churn rate%/ month

1.24

1.28

1.41

1.49

1.35

1.13

Units sold21

,000

2,198

2,470

3,015

2,979

10,662

2,353

,000

1,169
1,029

1,212
1,258

1,356
1,659

1,703
1,276

5,441
5,222

1,154
1,199

2,969
1,438

3,702
1,790

New subscriptions
Device upgrades,000

Cumulative applications for the Home Bundle Discount Hikari Set22
Mobilecommunications
service
Broadband service23

,000

,000

639
326

1,315
660

2,085
1,038

Overall mobile communications,000

44,417

44,11743,74843,60543,228Main subscribers20
Communication
modules20,000

31,57031,611

31,68632,03832,149

,000

8,317

8,149

7,891

7,570

7,237

PHS

,000

4,530

4,356

4,171

3,998

3,842

4,452

4,602

4,847

5,079

5,345

341

715

1,218

1,717

2,243

2,610

2,435

2,225

2,008

1,797

,000

1,501

1,452

1,404

1,354

1,305

¥/ month

4,270

4,980

5,060

4,940

4,930

4,960

¥/ month

1,830

1,860

1,830

1,820

1,840

1,810

¥/ month

2,680

2,660

2,630

2,590

2,640

2,560

Cumulative subscribers

ii. Broadband Service
Cumulative
subscribers20
SoftBank Hikari24
Yahoo! BB hikari with
FLET’S25
Yahoo! BB ADSL26
ARPU20
SoftBank Hikari24
Yahoo! BB hikari with
FLET’S25
Yahoo! BB ADSL26

,000

,000

,000

20

For definitions and calculation methods of subscribers, churn rate, and ARPU at SoftBank Corp., see page 26 “(a) SoftBank Corp.” under “(Reference
2: Definitions and Calculation Methods of Principal Operational Data).”
21
The total number of new subscriptions and device upgrades. New subscriptions where customers switch between SoftBank and Y!mobile using the
MNP system are included in the number of device upgrades.
22
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. Includes
subscribers of the Fiber-optic Discount applied to mobile communications services under the Y!mobile brand.
23
The cumulative number of applications of the Home Bundle Discount Hikari Set includes that of fiber-optic lines as long as the discount is applied tothe associated mobile communications services, even if physical connection of the fiber-optic line is not complete at the central office of NTT East or
NTT West.
24
A fiber-optic service using the wholesale fiber-optic connection of NTT East and NTT West. Includes the number of subscribers and ARPU of
SoftBank Air.
25
An ISP service offered as a package with NTT East and NTT West’s FLET’S Hikari Series fiber-optic connection
26
A service combining an ADSL connection and an ISP service

24SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2016(b) Sprint
Fiscal Year Ending
March 2017
Three-month
Period Ended
June 30, 2016
Q1

Fiscal Year Ended March 2016
Three-month Period Ended
June 30, 2015
Q1

Sept. 30, 2015
Q2

Dec. 31, 2015
Q3

,000

57,66858,57858,35958,80659,453,000

56,812

57,86858,35958,80659,453,000

30,01630,39430,89530,95130,945,000

24,86624,92825,29425,31625,322,000

15,34015,152

14,661

14,397

13,974,000

11,456

12,322

12,803

13,458

14,534

Clearwire30

,000

856

710

-

-

-

Net additions27

,000

675

1,056

491

447

2,669

377

,000

310

378

501

56

1,245

180

,000

(12)

62

366

22

438

173

,000

(366)

(188)

(491)

(264)

(1,309)

(331)

,000

731

866

481

655

2,733

528

$/ month

69.91

70.62

70.99

71.53

72.17

Postpaid$/ month

55.48

53.99

52.48

51.68

51.54

Prepaid$/ month

27.81

27.66

27.44

27.72

27.34

1.56

1.54

1.62

1.72

1.56

5.08

5.06

5.82

5.65

5.55

Cumulative subscribers27 28

Sprint total
Sprint platform
Postpaid(incl.) Phone29

Prepaid
Wholesale andaffiliate

Postpaid(incl.) Phone29

Sprint platform

Prepaid
Wholesale andaffiliate
Postpaid phone29
ABPU31Mar. 31, 2016
Q4

Full Year

ARPU31

Churn rate31%/

Postpaidmonth%/

Prepaidmonth27

Includes the number of communication module service subscribers
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 as “postpaid” or “prepaid,” are accounted for under “affiliate” of Sprint (186,000 from postpaid and 92,000
from prepaid now accounted as “affiliate”).
29
Smartphones and feature phones
30
Subscribers acquired through the acquisition of assets from Clearwire Corporation31
For definitions and calculation methods of ABPU/ARPU and churn rate of the Sprint platform, see page 27 “(b) Sprint Platform” under “(Reference
2: Definitions and Calculation Methods of Principal Operational Data).”28

25

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

(Reference 2: Definitions and Calculation Methods of Principal Operational Data)(a) SoftBank Corp.
i. Mobile Communications Service
・Subscribers
The following categories serve as cover-all terms for the service contracts described.
Main subscribers: smartphones,Note 2 feature phones, tablets, mobile data communication devices,Note 3 and others
Communication modules: communication modules, Note 4 Mimamori Phone, prepaid mobile phones, and others
PHS: PHS
Notes:
2. Smartphones to which the Smartphone Family Discount is applied are included under communication modules.
3. Mobile data communication devices to which the Data Card 2-Year Special Discount is applied are included undercommunication modules.
4. Communication modules that use PHS networks are included under PHS.

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 revenue + 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 revenue, 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)ii. Broadband 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

26

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

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
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 Platform
・ABPU/ARPUABPU: 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)27

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

(Reference 3: Capital Expenditure and Depreciation and Amortization)(a) Capital Expenditure (Acceptance Basis)(Millions of yen)
Fiscal YearEnding March2017

Fiscal Year Ended March 2016
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

Fiscal Year Ended
Mar. 31, 2016

Three-month
Period Ended
June 30, 2016

Q1

Q2

Q3

Q4

Full Year

Q1

Domestic
Telecommunications
segment

72,66488,51989,950161,447

412,580

50,752Sprintsegment

160,367

165,421

194,848

101,730

622,366

79,200Yahoo Japan segment

7,196

16,921

9,904

18,16552,186

12,078Distribution segment

1,896

2,086

2,354

2,822

9,158

1,148

939

2,285

6,699

4,261

14,184

5,851

243,062

275,232

303,755

288,425

1,110,474

149,029

Other

Consolidated total(b) Depreciation and Amortization(Millions of yen)
Fiscal YearEnding March2017

Fiscal Year Ended March 2016
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

Fiscal Year Ended
Mar. 31, 2016

Three-month
Period Ended
June 30, 2016

Q1

Q2

Q3

Q4

Full Year

Q1

Domestic
Telecommunications
segment

107,798

110,911113,157

143,082474,948

112,266

Sprintsegment

190,278

207,901

223,975

219,956

842,110214,049

Yahoo Japan segment

5,646

7,287

9,077

10,68532,695

9,167

Distribution segment

2,406

3,385

2,590

1,887

10,268

1,789

Other

4,265

2,828

2,770

3,583

13,446

2,738

310,393332,312351,569

379,193

1,373,467

340,009

Consolidated total

Note:
5. The amounts of capital expenditure and depreciation and amortization excludes those of discontinued operations.

28

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

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

As of March 31, 2016

As of June 30, 2016

ChangeChange %Total assets

20,707,192

20,622,229(84,963)(0.4%)

Total liabilities

17,201,921

17,350,233

148,3120.9%

Total equity

3,505,271

3,271,996(233,275)(6.7%)¥(9.77)(8.7%)

Reference: Exchange rate at the end of the first quarter used for translation¥112.68

USD/ JPY¥102.91(a) Current Assets(Millions of yen)

As of March 31, 2016
Cash and cash equivalents

As of June 30, 2016

Change2,569,607

3,231,299

661,692

297,552

389,01291,4601,914,789

1,781,492(133,297)

363,546

326,799(36,747)

Other financial assets

152,858

256,650

103,792

Inventories

359,464

344,028(15,436)

Other current assets

553,551

601,90948,3585,550,269

6,215,378

665,109-352,350

352,350

5,550,269

6,567,728

1,017,459(incl.) Sprint

Trade and other receivables(incl.) Sprint

Subtotal
Assets classified as held for sale
Total current assets

Current assets increased by ¥1,017,459 million (18.3%) from the previous fiscal year-end to ¥6,567,728 million.

The

primary components of the change were as follows:i. Cash and cash equivalents increased by ¥661,692 million from the previous fiscal year-end. For the details onchanges in cash and cash equivalents, please refer to page 37 “b. Cash Flows.”
ii. Assets classified as held for sale of ¥352,350 million were recorded.

This comprised ¥272,443 million for the total

assets of Supercell as the Company has agreed to sell all of its shares, ¥73,000 million for the shares of GungHo heldby the Company, which it has tendered in response to GungHo’s tender offer for repurchasing its own shares, and¥6,907 million for a portion of the shares of Alibaba held by the Company, which was sold to a Alibaba Partnership

29SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2016

in July 2016. For further details, please refer to page 51 “4. Assets or disposal groups classified as held for sale”
under “3. Condensed Interim Consolidated Financial Statements (6) Notes to Condensed Interim Consolidated
Financial Statements.”(b) Non-current Assets(Millions of yen)

As of March 31, 2016
Property, plant and equipment

As of June 30, 2016

Change4,183,507

3,907,520(275,987)

2,055,371

1,827,938(227,433)

1,609,789

1,476,119(133,670)

331,811303,041(28,770)6,439,145

5,858,460(580,685)

5,468,665

4,964,420(504,245)

4,060,750

3,719,181(341,569)

4,060,750

3,719,181(341,569)

760,703696,798(63,905)

722,539

659,492(63,047)

439,800

376,063(63,737)

324,269

267,849(56,420)

Software782,148

750,807(31,341)

Game titles

59,844-(59,844)

Others335,900

315,611(20,289)

1,588,270

1,231,297(356,973)

Other financial assets

970,874

1,082,433

111,559

Deferred tax assets

172,864

307,832

134,968

Other non-current assets

192,474

190,840(1,634)

Total non-current assets

15,156,923

14,054,501(1,102,422)(incl.) Sprint

Goodwill(incl.) Sprint

Intangible assets(incl.) Sprint
FCC licenses32(incl.) Sprint

Trademarks(incl.) Sprint

Customer relationships(incl.) Sprint

Investments accounted for using
the equity method

Non-current assets decreased by ¥1,102,422 million (7.3%) from the previous fiscal year-end to ¥14,054,501 million.
The primary components of the change were as follows:i. Property, plant and equipment decreased by ¥275,987 million from the previous fiscal year-end. This is mainly due
to continued depreciation at SoftBank Corp. and Sprint of network equipment and the impact of the yen’s appreciation
against the U.S. dollar at the end of the first quarter compared to the previous fiscal year-end.
ii. Goodwill decreased by ¥133,670 million from the previous fiscal year-end. This mainly reflected the transfer of32

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

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

the assets of Supercell into assets classified as held for sale following the Company’s agreement in the first quarterto sell all of its shares of Supercell.

For details, please refer to page 52 “(2) Disposal groups classified as held for sale”

under “3. Condensed Interim Consolidated Financial Statements (6) Notes to Condensed Interim Consolidated
Financial Statements 4. Assets or disposal groups classified as held for sale.”iii. Intangible assets decreased by ¥580,685 million from the previous fiscal year-end. The primary components wereas follows:
・ FCC licenses decreased by ¥341,569 million and trademarks decreased by ¥63,905 million (both non-amortized
assets from an accounting perspective) due to the yen’s appreciation against the U.S. dollar at the end of the firstquarter compared with the previous fiscal year-end.

Customer relationships decreased by ¥63,737 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 at the end of thefirst quarter. This reflected the transfer of the assets of Supercell into assets classified as held for sale following
the Company’s agreement in the first quarter to sell all of its shares of Supercell.

For details, please refer to page52 “(2) Disposal groups classified as held for sale” under “3. Condensed Interim Consolidated Financial Statements(6) Notes to Condensed Interim Consolidated Financial Statements 4. Assets or disposal groups classified as held
for sale.”iv. Investments accounted for using the equity method decreased by ¥356,973 million from the previous fiscal year-end.
・ The carrying amount of Alibaba on a consolidated basis declined, mainly reflecting the sale of a portion of theCompany’s shares of Alibaba to Alibaba and two Singaporean sovereign wealth funds and the impact of yen’s
appreciation against the Chinese yuan at the end of the first quarter compared to the previous fiscal year-end, as
well as the transfer of another portion of the Company’s shares of Alibaba that was sold to Alibaba Partnership in
July 2016 into assets classified as held for sale.
・ The carrying amount of GungHo on a consolidated basis declined due to the valuation, at the tender offer price of¥294 per share, of the shares of GungHo tendered by the Company in a tender offer by GungHo for its own shares
executed from June 23, 2016 to July 21, 2016 and the transfer of these shares into assets classified as held for sale.
For details, please refer to page 51 “b. GungHo” under “3. Condensed Interim Consolidated Financial Statements(6) Notes to Condensed Interim Consolidated Financial Statements 4. Assets or disposal groups classified as held
for sale (1) Assets classified as held for sale.”31

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

As of March 31, 2016
Interest-bearing debt

As of June 30, 2016

Change2,646,609

2,566,728(79,881)676,948

697,425

20,477515,408

486,162(29,246)

148,465

120,785(27,680)

743,225

833,035

89,81082,032

172,443

90,411

900,685

760,785(139,900)

431,808

391,439(40,369)

Current portion oflease obligations

396,992

413,626

16,634

Others90,29973,120(17,179)

1,621,195

1,362,585(258,610)

441,006

292,956(148,050)

Other financial liabilities

6,531

13,179

6,648

Income taxes payables

140,351

71,376(68,975)

Provisions

56,12056,437317

Other current liabilities

694,965

609,048(85,917)

5,165,771

4,679,353(486,418)-

126,529

126,529

5,165,771

4,805,882(359,889)(incl.) Sprint
Short-term borrowings(incl.) Sprint

Current portion of
long-term borrowings(incl.) Sprint

Current portion of
corporate bonds(incl.) Sprint

Trade and other payables(incl.) Sprint

Subtotal
Liabilities directly associatedwith assets classified as held forsale
Total current liabilities

Current liabilities decreased by ¥359,889 million (7.0%) from the previous fiscal year-end to ¥4,805,882 million.

The

primary components of the change were as follows:i. Interest-bearing debt decreased by ¥79,881 million from the previous fiscal year-end.

This mainly reflected

SoftBank Group Corp.’s redemption of ¥100,000 million of unsecured straight corporate bonds, which was partially
offset by an increase of ¥20,477 million in interest-bearing debt at Sprint mainly due to an increase in current portionof long-term borrowings caused by its inception of borrowings utilizing leased devices and telecommunications
network equipment.

The increase in interest-bearing debt at Sprint was partially offset by decreases in current

portion of corporate bonds and short-term borrowings primarily due to the yen’s appreciation against the U.S. dollar
at the end of the first quarter compared with the previous fiscal year-end.
ii. Trade and other payables decreased by ¥258,610 million from the previous fiscal year-end. This mainly reflecteda decrease in accounts payable-trade related to mobile devices and accounts payable-other related to32SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2016telecommunications equipment at Sprint and SoftBank Corp. after making payments.

A further factor was the yen’s

appreciation against the U.S. dollar at the end of the first quarter compared with the previous fiscal year-end.
iii. Liabilities directly associated with assets classified as held for sale of ¥126,529 million were recorded. These are
the liabilities of Supercell, of which the Company agreed in the first quarter to sell all of its shares. For details,
please refer to page 52 “(2) Disposal groups classified as held for sale” under “3. Condensed Interim Consolidated
Financial Statements (6) Notes to Condensed Interim Consolidated Financial Statements 4. Assets or disposal groups
classified as held for sale.”(d) Non-current Liabilities(Millions of yen)

As of March 31, 2016
Interest-bearing debt

As of June 30, 2016

Change9,275,822

9,805,287

529,465

3,297,900

3,200,904(96,996)

1,785,500

1,984,239

198,73980,082

269,930

189,848

6,611,947

6,301,178(310,769)

3,188,238

2,906,744(281,494)

815,194

825,316

10,122-648,510648,510

63,181

46,044(17,137)

Other financial liabilities

95,664

175,785

80,121

Defined benefit liabilities

123,759

111,786(11,973)

Provisions

118,876

105,475(13,401)

2,083,164

2,058,483(24,681)

1,652,154

1,513,508(138,646)

Other non-current liabilities

338,865

287,535(51,330)

Total non-current liabilities

12,036,150

12,544,351

508,201(incl.) Sprint
Long-term borrowings(incl.) Sprint

Corporate bonds(incl.) Sprint

Lease obligations
Advances received for sale of sharesby variable prepaid forward contract
OthersDeferred tax liabilities(incl.) Sprint

Non-current liabilities increased by ¥508,201 million (4.2%) from the previous fiscal year-end to ¥12,544,351 million,
mainly reflecting an increase of ¥529,465 million in interest-bearing debt. The primary components of the increase ininterest-bearing debt were as follows:・ Interest-bearing debt at Sprint decreased by ¥96,996 million from the previous fiscal year-end.

This mainlyreflected a decrease of ¥281,494 million in corporate bonds due mainly to the yen’s appreciation against the U.S.
dollar at the end of the first quarter compared with the previous fiscal year-end, despite an increase of ¥189,848

33

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

million in long-term borrowings due to Sprint’s drawing of loans against telecommunications network equipment
and leased mobile devices.
・ Advances received for sale of shares by variable prepaid forward contract of ¥648,510 million was recorded. For
details, please refer to “Reference: Transaction for Sale of Alibaba Shares by Variable Prepaid Forward Contract”
below.

Reference: Transaction for Sale of Alibaba Shares by Variable Prepaid Forward Contract
On June 10, 2016, as part of the Company’s fund procurement transaction for monetizing a portion of its shares of
Alibaba, West Raptor Holdings, LLC (“WRH LLC”), a wholly-owned subsidiary of the Company, entered into avariable prepaid forward contract to sell Alibaba shares with a newly formed trust, Mandatory Exchangeable Trust(“Trust”) and received the proceeds of ¥578,436 million ($5.4 billion) as advances received for sale.
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 fromsale received by WRH LLC from the Trust is $5.4 billion and this is after the deduction of the amounts 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 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 advances received andembedded derivatives.

The Company received ¥578,436 million and initially recognized ¥674,023 million as

advances received for sale of shares by variable prepaid forward contract and ¥95,587 million as derivative assets.
Subsequent to initial recognition, advances received for sale of shares by variable prepaid forward contract aremeasured at amortized cost and embedded derivatives are measured at fair value. ¥648,510 million is recognized
as advances received for sale of shares by variable prepaid forward contract in interest-bearing debt and ¥86,301
million is recognized as derivative assets in other financial assets in the condensed interim consolidated statementsof financial position as of June 30, 2016.
For details, please refer to page 54 “(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 7. Interest-bearing debt.”

34

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

As of March 31, 2016

As of June 30, 2016

ChangeTotal equity attributable toowners of the parent

2,613,613

2,414,068(199,545)

Non-controlling interests

891,658

857,928(33,730)

3,505,271

3,271,996(233,275)

Total equity

Total equity decreased by ¥233,275 million (6.7%) from the previous fiscal year-end to ¥3,271,996 million. Of this,equity attributable to owners of the parent decreased by ¥199,545 million (7.6%) and non-controlling interests decreasedby ¥33,730 million (3.8%). The ratio of equity attributable to owners of the parent to total assets decreased by 0.9 ofa percentage point from the previous fiscal year-end to 11.7%.

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

As of March 31, 2016

As of June 30, 2016

ChangeCommon stock

238,772

238,772-

Capital surplus

261,234

259,941(1,293)Retained earnings

2,166,623

2,396,474

229,851

Treasury stock(314,752)(394,842)(80,090)

Accumulated othercomprehensive income

261,736(53,300)(315,036)

Available-for-sale financial
assets32,59434,226

1,632

Cash flow hedges(40,088)(60,091)(20,003)

Exchange differences ontranslating foreign operations

269,230(27,435)(296,665)

2,613,613

2,447,045(166,568)-(32,977)(32,977)

2,613,613

2,414,068(199,545)

Subtotal
Accumulated othercomprehensive income directly
associated with assets classified
as held for sale
Total equity attributable toowners of the parent

Total equity attributable to owners of the parent decreased by ¥199,545 million (7.6%) from the previous fiscal yearend to ¥2,414,068 million. The primary components of the change were as follows:i. Retained earnings increased by ¥229,851 million from the previous fiscal year-end.
net income attributable to owners of the parent of ¥254,157 million.

35

This mainly reflected recording

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

ii. Treasury stock increased by ¥80,090 million from the previous fiscal year-end. This mainly reflected acquisitionsof 14,672,400 shares of treasury stock with the aim of strengthening the return of profits to shareholders.
iii. Accumulated other comprehensive income declined by ¥315,036 million from the previous fiscal year-end. This
mainly reflected a decline of ¥296,665 million in exchange differences on translating foreign operations, primarily
due to the yen’s appreciation against the Chinese yuan and U.S. dollar at the end of the first quarter compared to theprevious fiscal year-end.

(Non-controlling Interests)
Non-controlling interests decreased by ¥33,730 million (3.8%) from the previous fiscal year-end to ¥857,928 million.

36

SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2016b. Cash Flows
Cash flows for the first quarter were as follows.
Cash and cash equivalents at the end of the first quarter totaled ¥3,231,299 million, a ¥661,692 million increase fromthe previous fiscal year-end.
(Millions of yen)Three-month Period
Ended June 30, 2015

Three-month Period
Ended June 30, 2016

ChangeCash flows from operating activities

170,733

252,734

82,001

Cash flows from investing activities(688,278)(154,840)

533,438

Cash flows from financing activities(369,952)

679,598

1,049,550(a) Cash Flows from Operating Activities
Net cash provided by operating activities totaled ¥252,734 million (compared with ¥170,733 million provided in thesame period of the previous fiscal year). The primary components of cash flows were as follows:i. Net income totaled ¥272,351 million.
ii. The main items added to net income were depreciation and amortization of ¥345,392 million, finance cost of¥112,107 million, and income taxes of ¥111,057 million.
iii. The main items subtracted from net income were gain on sales of shares of associates of ¥204,233 million and incomeon equity method investments of ¥35,466 million.
iv. Increase in inventories was ¥67,016 million (negative cash flow). This mainly reflected an increase in inventories(negative cash flow) that accompanied an increase in leased devices at Sprint.

While normally a decrease ininventories is recognized as a cash inflow, the decrease in inventories following the reclassification of devices leased
through Sprint’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 ¥126,007 million.
vi. Income taxes paid was ¥137,322 million.

(b) Cash Flows from Investing Activities
Net cash used in investing activities was ¥154,840 million (compared with ¥688,278 million used in the same period of
the previous fiscal year). This primarily reflected outlays for purchase of property, plant and equipment and intangible
assets of ¥234,160 million, mainly for acquisition of telecommunications equipment at Sprint and SoftBank Corp., andpayments for acquisition of investments of ¥109,157 million.

These were partially offset by proceeds fromsales/redemption of investments of ¥322,788 million, mainly recognized in relation to the sale of a portion of theCompany’s shares in Alibaba.

37

SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2016(c) Cash Flows from Financing Activities
Net cash provided by financing activities was ¥679,598 million (compared with ¥369,952 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)
Proceeds from long-term interest-bearing debt amounted to ¥1,202,251 million.

The primary components were as

follows:
・ Proceeds from advances received for sale of shares by variable prepaid forward contract of ¥578,436 million. This
represents an advance received by subsidiary WRH LLC after concluding a variable forward purchase agreement
for the sale of Alibaba’s shares.
・ Proceeds from long-term borrowings of ¥438,163 million.

This mainly reflected Sprint’s procurement of funds

utilizing network equipment and leased mobile devices, in addition to borrowings made through securitization of
installment sales receivables at SoftBank Corp.
・ Proceeds from sale and leaseback of newly acquired equipment of ¥135,652 million. This mainly reflected saleand leaseback conducted when acquiring telecommunications equipment by finance lease at SoftBank Corp.

(Items Decreasing Cash Flows)i. Repayment of long-term interest-bearing debt was ¥360,155 million. The primary components were as follows:・ Repayment of long-term borrowings of ¥135,756 million. This mainly reflected SoftBank Corp.’s repaymentof borrowings made through securitization of installment sales receivables and Sprint’s repayment of borrowings.
・ Repayment of lease obligations of ¥106,181 million. This mainly reflected SoftBank Corp. repayment of leaseobligations for telecommunications-related equipment.
・ Redemption of corporate bonds of ¥100,000 million.

This mainly reflected SoftBank Group Corp.’s redemptionof straight corporate bonds.
ii. Payment for purchase of treasury stock was ¥80,515 million.

(3) Recommended Acquisition of ARM Holdings plc
On July 18, 2016, SoftBank Group Corp. and ARM Holdings plc (“ARM”) of the United Kingdom reached agreement on
the terms of a recommended all-cash acquisition of the entire issued and to be issued share capital of ARM by SoftBank
Group Corp., under which SoftBank Group Corp. will acquire 1,412 million shares of ARM with a total acquisition priceamounting to approximately £24.0 billion (approximately ¥3.3 trillion) by means of a court-sanctioned scheme ofarrangement (the “Acquisition”).
The Acquisition, which has been approved at a meeting of SoftBank Group Corp.’s Board of Directors, is subject to theapproval of ARM’s shareholders and of the English court. ARM’s Board of Directors has unanimously confirmed that it
intends to recommend the Acquisition to ARM’s shareholders.
As a result of the Acquisition, ARM will become a wholly-owned subsidiary of SoftBank Group Corp.
For details about the Acquisition, please refer to page 63 “16. Significant subsequent events” under “3. Condensed
Interim Consolidated Financial Statements (6) Notes to Condensed Interim Consolidated Financial Statements.”

38

SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2016(4) 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.

39

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

2. Notes to Summary Information(1) Significant Changes in Scope of Consolidation for the Three-month Period Ended June 30, 2016
(Specified subsidiary (one company) newly consolidated)
West Raptor Holdings LLC was established on April 27, 2016 and became a subsidiary of the Company.

(2) Changes in Accounting Estimates(Assessment of recoverability of deferred tax assets)
a. SoftBank Group Corp.
The Company assessed the recoverability of unrecognized deferred tax assets and estimated, due to a sale ofequity method associate by the Company, 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, ¥61,620 million of deferred tax assets was recorded. Due to this change in accounting estimate,income tax expenses decreased by ¥61,620 million and net income from continuing operations and net income
increased by ¥61,620 million respectively for the three-month period ended June 30, 2016.
b. Temporary difference associated with investment in Supercell
On June 21, 2016 the Company entered into an agreement to sell all of its shares of Supercell. Accordingly, theCompany estimated that it was probable that temporary difference associated with the investment in Supercell isrecoverable and ¥46,314 million of deferred tax assets was recorded. Due to this change in accounting estimate,net income from continuing operations and net income increased by ¥38,942 million respectively for thethree-month period ended June 30, 2016. The details are described in “Note 14. Discontinued operations (2)Supercell” in “3. Condensed Interim Consolidated Financial Statements (6) Notes to Condensed Interim
Consolidated Financial Statements.”

40

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

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

As ofMarch 31, 2016

As ofJune 30, 2016

AssetsCurrent assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Inventories
Other current assets
Subtotal
Assets classified as held for sale
Total current assets

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

3,231,299
1,781,492
256,650
344,028
601,9096,215,378
352,350
6,567,728

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

3,907,520
1,476,119
5,858,460
1,231,297
1,082,433
307,832
190,840
14,054,501
20,622,229

41

SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 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
Subtotal
Liabilities directly associated with assets classified asheld for sale
Total current liabilities
Non-current liabilities
Interest-bearing debt
Other financial liabilities
Defined benefit liabilities
Provisions
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities
Total liabilities
EquityEquity attributable to owners of the parent
Common stock
Capital surplus
Retained earnings
Treasury stock
Accumulated other comprehensive income
Subtotal
Accumulated other comprehensive income directly
associated with assets classified as held for sale
Total equity attributable to owners of the parent
Non-controlling interests
Total equity
Total liabilities and equity

42

As of
June 30, 2016

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

2,566,728
1,362,585
13,17971,37656,437
609,048
4,679,353

5,165,771

126,529
4,805,882

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

9,805,287
175,785
111,786
105,475
2,058,483
287,535
12,544,351
17,350,233

238,772
261,234
2,166,623(314,752)
261,736
2,613,613

238,772
259,941
2,396,474(394,842)(53,300)
2,447,045-(32,977)

2,613,613
891,658
3,505,271
20,707,192

2,414,068
857,928
3,271,996
20,622,229

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

(2) Condensed Interim Consolidated Statements of Income and Comprehensive Income
Condensed Interim Consolidated Statements of Income(Millions of yen)Three-month period ended Three-month period ended
June 30, 2015*
June 30, 2016
Continuing operations
Net sales
Cost of sales
Gross profit

2,066,518(1,210,471)
856,047

2,126,521(1,267,273)
859,248

Selling, general and administrative expenses
Other operating income (loss)
Operating income
Finance cost
Income on equity method investments
Gain on sales of equity method associates
Other non-operating income (loss)
Income before income tax
Income taxes
Net income from continuing operations(538,184)
694
318,557(105,511)
80,602
82,660376,308(136,593)
239,715(507,841)(32,171)319,236(112,107)
35,466204,233(90,467)
356,361(144,069)
212,292

Discontinued operations
Net income from discontinued operations
Net income

10,302250,01760,059272,351

213,382
36,635250,017254,157
18,194
272,351

180.62(1.19)
179.43174.9348.62
223.55177.89(1.19)
176.70173.61
48.61
222.22

Note:* Continuing operations and discontinued operations are revised and presented separately.
“Note 14. Discontinued operations.”

The details are described in

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

43

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

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

Three-month period ended
June 30, 2016

250,017272,351

(6)

9

(6)

9

24,713(673)

14,909(18,556)

73,027(356,970)

4,760(14,812)

101,827(375,429)

101,821351,838(375,420)(103,069)

302,837
49,001
351,838(93,847)(9,222)(103,069)

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

44SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2016

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

As of April 1, 2015
Comprehensive income
Net income
Other comprehensive
incomeTotal 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 loss ofcontrolChanges in interests in
subsidiaries
Share-based paymenttransactions
Other
Total transactions withowners and othertransactions
As of June 30, 2015

Commonstock
238,772

Capitalsurplus374,845

Retainedearnings
1,740,686

Treasurystock(48,383)--

213,382---

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

540,386

Total
2,846,306--

213,382

36,635250,017--89,45589,455

12,366

101,821-

213,382-

89,455

302,837

49,001

351,838--(23,784)--(23,784)(28,907)(52,691)

-

-

(6)

-

6

-

-

-

-

-

(136)

340

-

204

-

204

-

-

-

-

-

-

(96,060)(96,060)-(122,020)---(122,020)(33,338)(155,358)-(2,874)---(2,874)

2,137

(737)

-

-

-

-

-

-

286

286

-

(124,894)(23,926)340

6(148,474)(155,882)(304,356)

238,772

249,951

1,930,142(48,043)

629,847

3,000,669

899,990

3,900,659

45

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

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

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

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

Commonstock
238,772

Capitalsurplus261,234

Retainedearnings
2,166,623--

254,157---

Treasurystock(314,752)

Accumulated
othercomprehensive
incomeAccumulated
othercomprehensive
income directly
associated withassets classified
as held for sale

Total

-

2,613,613

261,736

Subtotal
2,613,613--

254,157-

254,157--(348,004)(348,004)-(348,004)-

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

-

-

9

-

(9)

-

-

-

-

-

(230)

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

-

(933)

-

-

-

(933)

-

(933)

-

(326)

-

-

-

(326)

-

(326)

-

(34)

-

-

-

(34)

-

(34)

-

-

-

-

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

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

238,772

259,941

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

2,447,045(32,977)

2,414,068

Noncontrollinginterests
891,658

Total equity
3,505,271

18,194

272,351(27,416)(375,420)(9,222)(103,069)(29,027)(53,112)---(80,320)

3,948

3,015

-

(326)

2,786

2,752

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

857,928

3,271,996

46

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

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

Cash flows from operating activities
Net income
Depreciation and amortization
Finance cost
Income on equity method investments
Gain on sales of equity method associates
Other non-operating (income) loss
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(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 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 in cash and cash equivalents arising fromtransfer to assets classified as held for sale
(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

47

Three-month period ended
June 30, 2015

Three-month period ended
June 30, 2016

250,017
320,926
105,512(80,602)(80,164)
145,117
107,923(70,932)(120,071)(88,681)
489,0452,450(115,810)(209,343)
4,391
170,733

272,351
345,392
112,107(35,466)(204,233)
88,854
111,057
62,083(67,016)(118,394)(56,867)
509,868
5,945(126,007)(137,322)
250
252,734(435,360)(234,160)(158,240)
6,734(109,157)
322,788(63,070)

2,725(50,154)(70,099)

52,636

5,866(40,824)(688,278)(72,803)(154,840)(82,597)
367,034(443,185)(21,413)1,202,251(360,155)(159,848)(7,344)(26)(22,985)(29,185)840(369,952)(80,515)(23,195)(28,982)(1,049)679,598

14,122(77,367)-(38,433)(873,375)
3,258,653
2,385,278

661,692
2,569,607
3,231,299

SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2016(5) Significant Doubt about Going-concern Assumption
For the three-month period ended June 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.
“Sprint”

Sprint Corporation“Brightstar”

Brightstar Global Group Inc.

“Alibaba”

Alibaba Group Holding Limited“GungHo”

GungHo Online Entertainment, Inc.

“Supercell”

Supercell Oy

48

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

2. 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 four segments, the Domestic telecommunications segment, the Sprint segment, the Yahoo
Japan segment, and the Distribution 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.

(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 other operating income and loss) by eachreportable segment.
Financial cost, income and loss on equity method investments, gain on sales of equity method associates, andother non-operating income and loss are not managed by each reportable segment and therefore these income andlosses are excluded from the segment performance.

49

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

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

Reportable segments
Domestic
Telecommunications

Sprint

Yahoo
Japan

Distribution

Total

Other1

Reconciliations2

Consolidated

Net sales
Customers

714,486

937,813

108,531

284,180

2,045,010

21,508-2,066,518

Intersegment

8,084

36,181

1,924

19,56365,752

4,252(70,004)-

Total
Segment income(Operating income)

722,570

973,994

110,455

303,743

2,110,762

25,760(70,004)

2,066,518

215,049

69,58848,852411

333,900(3,503)(11,840)

318,557

Reconciliation from segment income to adjusted EBITDA
Segment income
Depreciation andamortization

215,049

69,58848,852411

333,900(3,503)(11,840)

318,557

107,798

190,278

5,646

2,406

306,128

3,796

469

310,393

EBITDA

322,847

259,866

54,4982,817

640,028293(11,371)

628,950

-

(694)

-

-

(694)

-

-

(694)

322,847

259,172

54,4982,817

639,334

293(11,371)628,256

Other operating income
Adjusted EBITDA

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

Reportable segments
Domestic
Telecommunications

Sprint

Yahoo
Japan

Distribution

Total

Other1

Customers

754,662

848,098

201,392

300,148

2,104,300

Intersegment

7,101

25,8252,841

15,351

51,118

Total
Segment income(Operating income)

761,763

873,923

204,233

315,499

239,01345,36850,308Reconciliations2

Consolidated

22,221-2,126,521

5,086(56,204)-

2,155,418

27,307(56,204)

2,126,521

6,680

341,369(4,458)(17,675)

319,236

Net sales

Reconciliation from segment income to adjusted EBITDA
Segment income
Depreciation andamortization

239,01345,36850,3086,680

341,369(4,458)(17,675)

319,236

112,266

214,049

9,167

1,789

337,271

2,358

380

340,009

EBITDA

351,279

259,41759,475

8,469

678,640(2,100)(17,295)

659,245

Other operating loss3
Adjusted EBITDA-

12,277--

12,277-

6,828

19,105351,279

271,694

59,4758,469

690,917(2,100)(10,467)

678,350

Notes:
1. 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.
2. “Reconciliations” includes an elimination of intersegment transactions and the corporate general expenses unallocated to each reportablesegment. 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. For the three-month
period ended June 30, 2016, ¥6,828 million of expenses arising from resignation of Nikesh Arora from a director is included. The
details are described in “Note 10. Other operating income (loss).”
3. ¥13,066 million of “Loss on disposal of property, plant and equipment” recognized as “Other operating loss” in the condensed interim
consolidated statements of income for the three-month period ended June 30, 2016 is not included in “Other operating loss” in the Sprint
segment. The details are described in “Note 10. Other operating income (loss).”
4. Discontinued operations are not included. The details are described in “Note 14. Discontinued operations.”

50

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

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

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

Tax receivable*
Prepaid expense
Other
Total

As of
June 30, 2016
414,099
145,456
42,354
601,909

Note:* Tax receivable includes withholding income tax of ¥293,489 million and ¥378,536 million related to dividend within thegroup companies as of March 31, 2016 and as of June 30, 2016, respectively.

4. Assets or disposal groups classified as held for sale(1) Assets classified as held for salea. Alibaba
On June 1, 2016, the Company entered into an agreement to sell a portion of Alibaba shares to Alibaba
Partnership* in July 2016. Accordingly, Alibaba shares related to the transaction are transferred frominvestments accounted for using the equity method to assets classified as held for sale. The shares are measured
at their carrying amounts because the fair values after deducting expenses arising from sale (scheduled sale price)
are higher than their carrying amounts. The transaction was completed on July 11, 2016 and the shares for saleare equivalent to 0.2% of total voting rights of Alibaba.
Note:* Alibaba Partnership is not an associate of Alibaba.

The components of the investments transferred to assets classified as held for sale are as follows:(Millions of yen)

As ofMarch 31, 2016
Assets classified as held for sale
Investments accounted for using the equity method

As ofJune 30, 2016
-

6,907

b. GungHo
A portion of GungHo shares held by the Company are tendered for the acquisition of its own shares and executionof a tender offer (“Tender Offer”) by GungHo from June 23, 2016. Accordingly, GungHo shares related to thetransaction are transferred from investments accounted for using the equity method to assets classified as held forsale. The shares are measured at their fair values after deducting expenses arising from sale because the fairvalues after deducting expenses arising from sale (Tender Offer price) are below their carrying amounts. As aresult of the transaction, for the three-month period ended June 30, 2016, ¥42,540 million is recorded as an
impairment loss on assets classified as held for sale.
The Tender Offer was completed on July 21, 2016 and 245,592,400 shares were purchased, out of 248,300,000
shares that were tendered by the Company. As a result of the transaction, GungHo’s ownership ratio held by theCompany became 3.8%* and GungHo will be derecognized from an associate of the Company for the three-month
period ending September 30, 2016.
Note:* The percentage of the voting rights accounted for 7,111,528, which is obtained by subtracting 2,483,000 voting rights
related to 248,300,000 common shares of GungHo to be purchased by GungHo in the Tender Offer from 9,594,528 ofvoting rights as of December 31, 2015.

51

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

The components of the investments transferred to assets classified as held for sale are as follows:(Millions of yen)

As ofMarch 31, 2016
Assets classified as held for sale
Investments accounted for using the equity method

As ofJune 30, 2016-

73,000(2) Disposal groups classified as held for sale
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.
Accordingly, assets, liabilities, and accumulated other comprehensive income associated with Supercell areclassified as disposal groups classified as held for sale. They are measured at their carrying amounts because thefair values after deducting expenses arising from sale (scheduled sale price) are higher than their carrying amounts.
Operating results associated with Supercell are presented as discontinued operations separately from continuing
operations in the condensed interim consolidated statements of income. The details are described in “Note 14.
Discontinued operations.”
The transfer of shares is expected to occur on August 5, 2016 and Supercell will be excluded from a scope of
consolidation of the Company after the transfer.

The components of the amounts transferred to assets classified as held for sale, liabilities directly associated withthe assets classified as held for sale, and accumulated other comprehensive income directly associated with theassets classified as held for sale are as follows:(Millions of yen)

As ofMarch 31, 2016
Assets classified as held for sale
Cash and cash equivalents*
Trade and other receivables
Other financial assets
Other current assets
Goodwill
Intangible assets
Other non-current assets

As ofJune 30, 2016-

38,433
16,16946,31532,41883,552
48,8396,717
272,443-

99,951
26,578
126,529-913-(33,890)(32,977)-

Total
Liabilities directly associated with assets classified as held for
sale
Other current liabilities
Other non-current liabilities
Total
Accumulated other comprehensive income directly associatedwith assets classified as held for sale
Available-for-sale financial assets
Exchange differences on translating
foreign operations
Total

Note:
* The amount is cash and cash equivalents held by Supercell as of June 30, 2016 after deducting the resolved dividend
amount scheduled to be received from Supercell in July 2016.

52

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

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

As ofMarch 31, 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
June 30, 2016
248,0392,824,698
548,598
102,638
164,112
19,435
3,907,520

6. 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
June 30, 2016

4,060,750
706,637

3,719,181
647,950

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

750,807376,063
108,807
105,480
48,848101,324
5,858,460

Note:* Decrease resulting from transfer to disposal groups classified as held for sale. The details are described in “(2)Disposal groups classified as held for sale” in “Note 4. Assets or disposal groups classified as held for sale.”53SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2016

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

As ofMarch 31, 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
Advances received for sale of shares by variable prepaid
forward contract*
Installment payables
Total

As of
June 30, 2016

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

486,162
29,000833,035
760,785
413,626
44,1202,566,728

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

1,984,239
6,301,178
825,316

63,1819,275,822

648,51046,0449,805,287

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 (“Trust”) and received the proceeds of ¥578,436 million ($5.4 billion) as advances received
for sale.
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 andthe variable prepaid forward contract is classified as a hybrid financial instrument with embedded derivatives ofcollar trading.
The Company accounts for the variable prepaid forward contract by bifurcating the advances received andembedded derivatives. The Company received ¥578,436 million and initially recognized ¥674,023 million as
advances received for sale of shares by variable prepaid forward contract and ¥95,587 million as derivative assets.
Subsequent to initial recognition, advances received for sale of shares by variable prepaid forward contract are
54

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

measured at amortized cost and embedded derivatives are measured at fair value. ¥648,510 million isrecognized as advances received for sale of shares by variable prepaid forward contract in interest-bearing debt
and ¥86,301 million is recognized as derivative assets in other financial assets in the condensed interim
consolidated statements of financial position as of June 30, 2016.
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 thetransaction 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 June 30, 2016. The carrying amount of Alibaba shares pledged as collateral by theCompany is ¥109,971 million as of June 30, 2016.
Outline of the transaction
subsidiary
wholly owned subsidiary
third party to
SoftBank

West Raptor Holdings, LLC
Approximately $5.4billion
for advance received
for the sale of Alibaba sharesby variable prepaid forward contract

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 decrease in short-term interest-bearing debt
The components of “Decrease in short-term interest-bearing debt, net” in the condensed interim consolidated
statements of cash flows are as follows:(Millions of yen)Three-month period ended Three-month period ended
June 30, 2015
June 30, 2016
(82,597)(8,413)(13,000)(82,597)(21,413)Net decrease of short-term borrowings
Net decrease of commercial paper
Total

55

SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 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)Three-month period ended Three-month period ended
June 30, 2015
June 30, 2016
438,163
125,967
100,000
50,000

Proceeds from long-term borrowings
Proceeds from issuance of corporate bonds1,2
Proceeds from sale and leaseback of newly acquired
equipment
Proceeds from advances received for sale of shares by
variable prepaid forward contract3
Total

141,067

135,652-

578,436

367,034

1,202,251

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

Company name / Name of bonds
SoftBank Group Corp.
47th Unsecured Straight
Corporate Bond

Date of issuanceTotal amountof issuanceInterest
rate

Date of maturity

June 18, 2015

¥100,000 million

1.36%

June 18, 2020

2. Corporate bonds issued for the three-month period ended June 30, 2016 are as follows:

Date of issuanceTotal amountof issuanceInterest
rate

Date of maturity

49th Unsecured Straight
Corporate Bond

April 20, 2016

¥20,000 million

1.94%

April 20, 2023

50th Unsecured Straight
Corporate Bond

April 20, 2016

¥30,000 million

2.48%

April 20, 2026

Company name / Name of bonds
SoftBank Group Corp.

3. 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, advances received for sale ofshares by variable prepaid forward contract and derivative asset are accounted for and recorded separately. The details aredescribed in “(2) Transaction for sale of Alibaba shares by variable prepaid forward contract” in “Note 7. Interest-bearing
debt.”(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)

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

Three-month period ended Three-month period ended
June 30, 2015
June 30, 2016
(112,139)(135,756)(25,104)(100,000)(87,404)(106,181)(18,538)(18,218)(200,000)(443,185)(360,155)

56

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

Notes:
1. Major Corporate bonds redeemed for the three-month period ended June 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 three-month period ended June 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

8. 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
As ofMarch 31, 2016112.68(yen)
As ofJune 30, 2016
102.91Three-month period ended
June 30, 2015
121.34(yen)
Three-month period ended
June 30, 2016
109.07

U.S. dollars(2) Average rate for the quarter

U.S. dollars

9. Equity(1) Capital surplus
For the three-month period ended June 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.”

57

SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 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 ofJune 30, 2016

Available-for-sale financial assets

32,59434,226

Cash flow hedges
Exchange differences on translating
foreign operations(40,088)(60,091)

269,230(27,435)

261,736(53,300)

Three-month period ended
June 30, 2015

Three-month period ended
June 30, 2016-

(13,066)694(12,287)10694(6,828)(32,171)Total
10. Other operating income (loss)
The components of other operating loss are as follows:(Millions of yen)

Sprint segment
Loss on disposal of property, plant andequipment1
Loss on contract termination2
Other
Company-wide
Expenses resulting from resignation of director3
Total

Notes:
1. 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.
2. Loss mainly resulting from termination of wholesale contracts with NTELOS Holding Corp.
3. Expense resulting from resignation of Nikesh Arora from his position as a director. Resignation expense consists ofexpenses which payment amounts are defined and expense which payment amount is to be defined depending on 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 share priceof 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 of ¥1,811 million during 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.
In addition to the above resignation expense, the Company purchased the shares of associate companies from Nikesh
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.

11. Finance cost
The components of finance cost are as follows:(Millions of yen)Three-month period ended
June 30, 2015

Three-month period ended
June 30, 2016

(105,511)(112,107)Interest expense

58

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

12. Gain on sales of equity method associates
For the three-month period ended June 30, 2016
On June 13, 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 Limited and ¥202,886 million was recorded as a gain on sales of equity method associates.
The total amount of sale price is ¥319,380 million ($3.0 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 30.25% of the voting rights of Alibaba as of June 30, 2016.
In addition to the above, on June 1, 2016, the Company entered into an agreement to sell a portion of its Alibaba
shares for $400 million in July 2016 and the transaction was completed on July 11, 2016. The details aredescribed in “(1) Assets classified as held for sale a. Alibaba” in “Note 4. Assets or disposal groups classified asheld for sale.”

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

Foreign exchange gain and loss
Derivative gain and loss
Gain (loss) from financial assets at FVTPL1
Impairment loss on assets classified as held
for sale2
Other
Total

Three-month period ended Three-month period ended
June 30, 2015
June 30, 2016
455
(42,919)(4,756)
21,511
84,272(30,283)-(42,540)

2,689
82,6603,764(90,467)

Notes:
1. Gain or loss arising from financial assets 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 Limited in India,
designated as financial assets at FVTPL.
2. 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 theshares were decreased to the fair values after deducting expenses (Tender Offer price) arising from sale and ¥42,540
million was recorded as an impairment loss on assets classified as held for sale.

14. 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.

59

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

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 shares held by the Company were tendered in the Tender Offer by GungHo from June 23,
2016. Accordingly, GungHo shares tendered in the Tender Offer are transferred from investments accounted forusing the equity method to assets classified as held for sale. The details are described in “(1) Assets classified asheld for sale b. GungHo” in “Note 4. Assets or disposal groups classified as held for sale.”

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

Three-month period ended Three-month period ended
June 30, 2016
June 30, 2015
26,604(17,404)
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 tointangible assets recognized at the acquisition date, and other.

b. Cash flows from discontinued operations(Millions of yen)Three-month period ended Three-month period ended
June 30, 2015
June 30, 2016
16,051(735)(86)
15,230-Net cash provided by operating activities
Net cash used in investing activities
Net cash used in financing activities
Total

60

SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 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 transfer of shares is expected to occur on August 5, 2016, and on or after the date of transfer of the shares,
Supercell will no longer be a subsidiary of the Company.
Operating results related to Supercell for the three-month period ended June 30, 2015, and for the three-month
period ended June 30, 2016 are presented as discontinued operations separately from continuing operations in thecondensed interim consolidated statements of income.
The operating results and cash flows from discontinued operations are as follows:a. Operating results from discontinued operations(Millions of yen)

Revenue
Operating expense
Non-operating income and loss
Income before income tax from discontinued
operations
Income taxes
Income after income tax from discontinued operations
Deferred tax expenses for temporary differences
associated with investment
Net income from discontinued operations

Three-month period ended Three-month period ended
June 30, 2016
June 30, 2015
72,54061,150(47,545)(35,716)(2,630)1,613
22,365(5,095)
17,27027,047(5,930)21,117-38,942

17,27060,059In 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

61

Three-month period ended Three-month period ended
June 30, 2015
June 30, 2016
26,04338,505(22,741)
(117)
4
(48)
3,306
38,340SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 201615. 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) Proceeds from sales and redemption of investments
For the three-month period ended June 30, 2016
Proceeds related to sales of Alibaba shares of ¥319,380 million ($3.0 billion) are included. The details aredescribed in “Note 12. Gain on sales of equity method associates.”(4) (Decrease) increase from loss of control over subsidiaries
For the three-month period ended June 30, 2015“(Decrease) increase from loss of control over subsidiaries” is the amount of cash and cash equivalents held by
GungHo at the time of loss of control.
(5) Decrease in cash and cash equivalents arising from transfer to assets classified as held for sale
For the three-month period ended June 30, 2016
The amount is cash and cash equivalents held by Supercell as of June 30, 2016 after deducting the resolved
dividend amount scheduled to be received from Supercell in July 2016. The details are described in “(2)Disposal groups classified as held for sale” in “Note 4. Assets or disposal groups classified as held for sale.”(6) Significant non-cash transactions
Significant non-cash investing and financing activities are as follows:(Millions of yen)Three-month period ended Three-month period ended
June 30, 2016
June 30, 2015
Transfer of leased devices from inventories toproperty, plant and equipment
Embedded derivatives included in sale of shares by
variable prepaid forward contract*

98,05859,029-95,587Note:* The details are described in “(2) Transaction for sale of Alibaba shares by variable prepaid forward contract” in “Note 7.
Interest-bearing debt.”

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SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 201616. Significant subsequent events
Acquisition of ARM Holdings plc
On July 18, 2016 (GMT), the Company and ARM Holdings plc (“ARM”) of the United Kingdom entered into anagreement on the terms of a recommended all cash acquisition of the entire issued and to be issued share capital of
ARM by the Company, under which the Company will acquire 1,412 million shares of ARM for a total acquisition
price amounting to approximately ￡24.0 billion (approximately $31.0 billion or ¥3.3 trillion) by means of an English
court-sanctioned scheme of arrangement (“Acquisition”).
The Acquisition, which has been approved at a meeting of the Company’s board of directors, is subject to the approvalof ARM’s shareholders and of the English court. ARM’s board of directors has unanimously confirmed that it
intends to recommend the Acquisition to ARM’s shareholders.
As a result of the Acquisition, ARM will become a wholly-owned subsidiary of the Company.
(1) Acquisition background and rationale
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 of innovation.
The board and management of the Company believe that the acquisition of ARM by the Company will deliver thefollowing 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’sintellectual 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 and emerging
competitors. The Company believes such an investment strategy in long-term growth will be easier to executeas 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 thefoundation 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.

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

(2) Acquisition terms
Under the terms of the Acquisition, each ARM shareholder will be entitled to receive 1,700 pence in cash for each
ARM share.
The consideration values the entire existing issued and to be issued share capital of ARM at approximately￡24.3 billion.
In addition, ARM shareholders who are on the register of members of ARM as at the close of business on 8
September 2016, or at the close of business on the business day prior to the effective date of the scheme ofarrangement if earlier, will be entitled to receive and retain an interim dividend of 3.78 pence per ARM share,
which will be paid on 10 October 2016 or, if earlier, the effective date (“Dividend”), without any reduction of theoffer consideration payable under the Acquisition. In addition, ARM shareholders will also be entitled to receiveand retain any future dividends in the ordinary course with a record date prior to the effective date (“Ordinary
Course Dividends”), without any reduction of the offer consideration payable under the Acquisition. In
particular, those ARM shareholders who are on the register of members of ARM as at the close of business on 20
April 2017 (being the record date for the 2016 final dividend) will be entitled to receive and retain the 2016 final
dividend for the period to 31 December 2016 of up to 6.76 pence per ARM share that is expected to be paid on 11
May 2017. If the effective date occurs before the record date of any Ordinary Course Dividend, ARM
shareholders will not be entitled to receive such dividend.
If, after July 18, 2016, any dividend and/or other distribution and/or other return of capital (other than the
Dividend and any Ordinary Course Dividends) is announced, declared or paid in respect of the ARM shares, theCompany reserves the right to reduce the offer consideration by an amount up to the amount of such dividend
and/or distribution and/or return of capital so announced, declared or paid.
The price of 1,700 pence per ARM share represents a premium of:- approximately 43.0% to the closing price of 1,189 pence per ARM share, and approximately 42.9% to theclosing price per ARM ADR of $47.08, on 15 July 2016;- approximately 69.3% to the volume weighted average closing price of approximately 1,004 pence per ARM
share, and approximately 58.7% to the volume weighted average closing price per ARM ADR of $42.39, over
the three months prior to and including 15 July 2016; and- approximately 41.1% to the all-time high closing price of 1,205 pence per ARM share on 16 March 2015
(3) Acquisition procedure
The Company and ARM intend to implement the Acquisition through a “scheme of arrangement” pursuant toEnglish law. A scheme of arrangement is an acquisition method under which the Acquisition becomes effective
upon the approval of ARM’s shareholders (as further detailed below) as well as the English court. However, theCompany shall be entitled to implement the Acquisition by way of a takeover offer rather than the scheme: (i)while the Co-operation Agreement continues, with the consent of the Takeover Panel (an independent regulatory
body that regulates takeovers) and with the prior written consent of ARM; or (ii) after the termination of the
Co-operation Agreement, with the consent of the Takeover Panel only.
The terms of the Acquisition will be submitted to ARM’s shareholders. In order to become effective, the schemeof arrangement must be approved by a majority in number, representing at least 75% in nominal value, of therelevant shares held by the shareholders present and voting in person or by proxy at the ARM shareholders
meeting to be convened by the English court. Any ARM shares owned by the Company or any subsidiary
undertaking of the Company will be excluded from the voting.
(4) Recommendation
The board of ARM, which has been so advised by Goldman Sachs International and Lazard & Co., Limited as tothe financial terms of the Acquisition, considers the terms of the Acquisition to be fair and reasonable.
Accordingly, the ARM directors have confirmed that they intend unanimously to recommend that ARM
shareholders vote to approve the Acquisition.

64

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

(5) Directors’ irrevocable undertakings
The Company has received irrevocable undertakings to vote in favour of the Acquisition from those ARM
directors who hold ARM shares in respect of their own ARM shares (amounting, in aggregate, to 1,976,897 ARM
shares). Such ARM directors have also each undertaken that, if the Acquisition is implemented by means of atakeover offer instead of by way of the scheme of arrangement, they shall accept such takeover offer in respect of
their ARM shares.
(6) Financing
Part of the consideration payable under the Acquisition is being financed by debt to be provided under an up to¥1.0 trillion facility arranged by Mizuho Bank, Ltd. pursuant to a term loan agreement entered into between the
Company and Mizuho Bank, Ltd. dated July 15, 2016. The balance of the consideration will be funded from theCompany’s existing cash resources.
Summary of the bridge loan(a) Borrower

SoftBank Group Corp.

(b) Lender

Mizuho Bank, Ltd.

(c) Date of execution

July 15, 2016(d) Maximum total amount of borrowing¥1.0 trillion(e) Use of loan proceeds

Acquisition of ARM(f) Maturity

July 13, 2018(g) Collateral

None(h) Guarantor

SoftBank Corp.

(7) 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 microprocessors, physical intellectual
property and related technology and software,sale of development tools(e) Share capital￡0.7 million(f) Founded

October 16, 1990(g) ARM’s consolidated operating results and financial position as of December 31, 2015
(IFRS)*(Unit: millions of GBP)

Fiscal year ended December 2015

Net sales

968

Operating income

406

Net income

340

Equity1,798

Total assets

2,120

Note:
* Based on ARM’s disclosure information.

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SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2016(8) Number of shares to be acquired, acquisition price and state of share ownership before and after the acquisition(a) Number of shares held before
the Acquisition(b) Number of shares to be acquired(c) Acquisition price(d) Number of shares held after
the Acquisition

20,381,355 shares(number of voting rights: 20,381,355)(voting ratio: 1.42%)*
1,411,740,071 shares*(number of voting rights: 1,411,740,071)
Total amount invested: approx. ￡24.0 billion(approx. $31.0 billion or ¥3.3 trillion)
Advisory fees, etc.: TBD
1,432,121,426 shares*(number of voting rights: 1,432,121,426)(voting ratio: 100%)*

Note:* Based on ARM’s fully-diluted shares as of July 18, 2016.

66