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 4 of this report.

SoftBank Corp.
Consolidated Financial Report
For the fiscal year ended March 31, 2014 (IFRS)Tokyo, May 7, 2014

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)

OperatingincomeNet sales
Amount%Amount%Incomebefore incometax
Amount%

Net income

Net income
attributable toowners of theparentTotal
comprehensive
incomeAmountAmountAmount%%%Fiscal year ended
March 31, 2014

¥6,666,651 108.2 ¥1,085,362 35.8 ¥932,367 30.3 ¥586,149 33.9 ¥527,035 41.5 ¥525,570 (18.2)

Fiscal year ended
March 31, 2013

¥3,202,536-¥799,399-¥715,504-¥437,837-¥372,481-¥642,187

Ratio of net income
Ratio of income Ratio of operating
to equity,
before income tax income to net sales
attributable to
to total assets (%)(%)
owners of theparent (%)

Basic earnings
per share (yen)Diluted earnings
per share (yen)Fiscal year ended
March 31, 2014¥442.64¥440.37

29.5

7.8

16.3

Fiscal year ended
March 31, 2013¥332.51¥328.08

29.7

11.5

25.0

Note: Equity in income (loss) of associates
Fiscal year ended March 31, 2014:
Fiscal year ended March 31, 2013:-¥ 74,402 million¥ (3,663) million(2) Financial Position

Total assets

Total equity

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

Equity per share
attributable toowners of theparent (yen)As of March 31, 2014¥16,684,997¥2,858,670¥1,955,374

11.7

1,645.31

As of March 31, 2013

¥7,218,172¥1,930,440¥1,612,756

22.3

1,353.55(3) Cash Flows

Operating activities

Investing activities

Financing activities

Cash and cash
equivalents
at the end of the year

Fiscal year ended
March 31, 2014

¥860,245¥(2,718,188)¥2,359,375¥1,963,490

Fiscal year ended
March 31, 2013

¥813,025¥(874,144)¥471,477¥1,439,057

2.

Dividends
Dividends per shareFirst quarter

Second quarter

Third quarter

Fourth quarter

Total

(yen)

(yen)

(yen)

(yen)

(yen)

-

20.00

-

20.00

40.00

-

20.00

-

20.00

40.00

-

20.00

-

20.00

40.00

Total amount ofdividends(Annual)Payout ratio(Consolidated)

Ratio of dividend
to equity
attributable toowners of theparent(Consolidated)(Millions of yen)%%

45,93412.0

3.7

47,6089.0

2.7

Fiscal year ended
March 31, 2013
Fiscal year ending
March 31, 2014
Fiscal year ending
March 31, 2015
(Forecasted)

Fiscal year ended
March 31, 2013
Fiscal year ending
March 31, 2014
Fiscal year ending
March 31, 2015
(Forecasted)-

3. Forecasts on the Consolidated Results of Operations for the Fiscal Year Ending March 2015 (April 1, 2014 – March 31, 2015)
The Company projects net sales of ¥8 trillion and operating income of ¥1 trillion under IFRSs in the fiscal year ending
March 31, 2015. The Company has upwardly revised its previous net sales forecast, announced in the Consolidated
Financial Report for the six-month period ended September 30, 2013, by an additional ¥1 trillion mainly related to theacquisition and consolidation of Brightstar Corp. in January 2014. The operating income of the fiscal year ended March
31, 2014 of ¥1,085.4 billion includes income from remeasurement relating to business combination of ¥253.9 billion.
The forecasted operating income of the fiscal year ending March 31, 2015 of ¥1 trillion does not include any temporary
gains.
* Notes(1) Significant changes in scope of consolidation (changes in scope of consolidation of specified subsidiaries): Yes
Newly consolidated: One company Sprint Communications, Inc.
Please refer to page 29 “(1) Significant Changes in Scope of Consolidation for the Fiscal Year ended March 31, 2014” under“3. Notes to Summary Information” for details.
(2) Changes in accounting policies and accounting estimate[1] Changes in accounting policies required by IFRSs: No[2] Changes in accounting policies other than those in [1]: No[3] Changes in accounting estimates: Yes
Please refer to page 29 “(2) Changes in Accounting Policies and Accounting Estimates” under “3. Notes to Summary
Information” for details.
(2) Number of shares issued (common stock)[1] Number of shares issued (including treasury stock):
As of March 31, 2014:
1,200,660,365 shares
As of March 31, 2013:
1,200,660,365 shares[2] Number of treasury stock:
As of March 31, 2014:12,204,526 shares
As of March 31, 2013:
9,160,493 shares[3] Number of average stocks during twelve-month period (April-March):
Fiscal year ended March 31, 2014:
1,190,650,355 sharesFiscal year ended March 31, 2013:
1,120,200,622 shares

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

[For Reference]
Financial Highlights (Non-Consolidated)(1) Non-Consolidated Results of Operations(Percentages are shown as year-on-year changes)

Net sales

Operating income

Ordinary income

Net income

Amount%Amount%Amount%Amount%Fiscal year ended
March 31, 2014

¥49,586

7.7¥34,4029.0¥245,941 115.9¥243,049

219.8

Fiscal year ended
March 31, 2013

¥46,020

5.3¥31,553

5.1¥113,897 210.9¥75,999199.9

Net income pershare-basic (yen)Net income pershare-diluted (yen)Fiscal year ended
March 31, 2014

¥204.13¥203.85

Fiscal year ended
March 31, 2013¥67.84¥66.86(2) Non-Consolidated Financial Position
Total assets

Net Assets

Equity ratio (%)

Shareholders’ equity
per share (yen)As of March 31, 2014

¥5,709,742¥936,019

16.4¥787.26

As of March 31, 2013

¥3,873,731¥885,635

22.9¥743.21

Note: Shareholders’ equity (Non-consolidated)
As of March 31, 2014:¥935,629 million
As of March 31, 2013:¥885,540 million
Financial Highlights (Non-Consolidated) are prepared under Japanese Generally Accepted Accounting Principles (“JGAAP”).
* Implementation status of audit proceduresThis consolidated financial report is not subject to audit procedures based on the Financial Instruments and Exchange Act, andthe audit procedures for the consolidated financial statements were being conducted when this report was disclosed.

* Note to forecasts on the consolidated results of operations and other items
The Company has adopted IFRSs from the three-month period ended June 30, 2013. For the differences between IFRSs and
JGAAP in respect of the Company’s financial data, please refer to page 82 “17. First-time adoption of IFRSs” in “(6) Notes toConsolidated Financial Statements” under “4. Consolidated Financial Statements” for details.
The forecast figures are estimated based on the information that the Company is able to obtain at the present point andassumptions which are deemed to be reasonable. However, actual results may be different due to various factors.
On May 7, 2014, the Company will hold an earnings results briefing for financial institutions, institutional investors, and the
media.
This earnings results briefing will be broadcast live on our website in both Japanese and English(http://www.softbank.jp/en/corp/irinfo/). The Earnings Results Data Sheets will also be posted on the Company’s web sitearound 4 p.m. on the day of the announcement: (http://www.softbank.jp/en/corp/irinfo/presentations/)

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

(Appendix)

Contents
1. Results of Operations .........................................................................................................................................

P. 2(1) Analysis of Consolidated Results of Operations ..........................................................................................

P. 3

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

P. 3

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

P. 6(Reference 1: Principal Operational Data) ............................................................................................. P. 10(Reference 2: Definition and Calculation Method of Principal Operational Data) ................................ P. 12(Reference 3: Capital Expenditure and Depreciation) ........................................................................... P. 14
c. Forecasts on the Consolidated Results of Operations for the Fiscal Year Ending March 31, 2015 ........ P. 15(2) Analysis of Consolidated Financial Position ............................................................................................... P. 16
a. Assets, Liabilities, and Equity ................................................................................................................. P. 16
b. Cash Flows ............................................................................................................................................. P. 23(3) Fundamental Policy for Distribution of Profit, and Dividend for the Fiscal Year ....................................... P. 26

2. Management Policies ......................................................................................................................................... P. 27(1) Basic Management Approach ...................................................................................................................... P. 27(2) Medium- to Long-term Strategies ................................................................................................................ P. 27(3) Important Management Issues for the Company ......................................................................................... P. 28

3. Notes to Summary Information ........................................................................................................................... P. 29(1) Significant Changes in Scope of Consolidation for the Fiscal Year ended March 31, 2014 ........................ P. 29(2) Changes in Accounting Policies and Accounting Estimates ........................................................................ P. 29

4. Consolidated Financial Statements .................................................................................................................... P. 30(1) Consolidated Statements of Financial Position ............................................................................................ P. 30(2) Consolidated Statements of Income and Other Comprehensive Income ..................................................... P. 32(3) Consolidated Statements of Changes in Equity ........................................................................................... P. 34(4) Consolidated Statements of Cash Flows ...................................................................................................... P. 36(5) Significant Doubt About Going-Concern Assumption ................................................................................ P. 37(6) Notes to Consolidated Financial Statements .................................................................................................. P. 37

1

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

1. Results of Operations
Adoption of IFRSsSoftBank Corp. has prepared the consolidated financial statements in accordance with the International Financial
Reporting Standards (IFRSs) from the three-month period ended June 30, 2013, the first quarter of the fiscal year ended
March 31, 2014 (the “fiscal year”). The date of transition to IFRSs is April 1, 2012. The financial data for the year
ended March 31, 2013 (the “previous fiscal year”) is also presented based on IFRSs.
The main items adjusted from JGAAP in accordance with the adoption of IFRSs are as follows:
・Change in scope of consolidation- eAccess Ltd. and Wireless City Planning Inc., which were associates under JGAAP, are subsidiaries under IFRSs.
・Items related to consolidated statements of financial position- Regarding certain securitization transactions that previously qualified for extinguishment of financial assets
under JGAAP, securitized receivables are recognized retrospectively and accompanying liabilities are recognized
as interest-bearing debt under IFRSs when they are not qualified for derecognition of financial assets under
IFRSs.
- Preferred securities issued by a subsidiary are accounted for as equity transactions and recorded as minority
interests under JGAAP.

Under IFRSs, they are accounted for as interest-bearing debt in the consolidated

statements of financial position.
・Items related to the consolidated statements of income- Goodwill is amortized regularly under JGAAP. Under IFRSs, goodwill is not amortized regularly but tested
for impairment at least once a year.
- Commission fees paid related to sales of mobile handsets are accounted for as costs when they occur under
JGAAP.

Under IFRSs, the amount of commission fees expected to occur in the future is deducted fromrevenues.
Please refer to page 82 “17. First-time adoption of IFRSs” under “4. Consolidated Financial Statements (6) Notes toConsolidated Financial Statements” for details of these adjustments.

Consolidation of Sprint
As of July 10, 2013 the Company (SoftBank Corp. and its subsidiaries) closed the acquisition of Sprint Corporation(previously Sprint Nextel Corporation, “Sprint”) and started its consolidation.

In conjunction with this, a newreportable segment, “Sprint,” has been established from the three-month period ended September 30, 2013 (the “second
quarter”).
For details about the consolidation of Sprint, please refer to page 57 “(3) Sprint” under “4. Consolidated Financial
Statements (6) Notes to Consolidated Financial Statements 5. Business combinations.”

2

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

(1) Analysis of Consolidated Results of Operations
a. Consolidated Results of Operations(Millions of yen)

Fiscal Year Ended
March 31, 2013

Fiscal Year Ended
March 31, 2014

3,202,536

Operating income

ChangeChange %6,666,651

3,464,115

108.2%

799,399

1,085,362

285,963

35.8%

Income before income tax

715,504

932,367

216,86330.3%

Net income

437,837

586,149

148,31233.9%

Net income attributable toowners of the parent

372,481

527,035

154,554

41.5%

Net sales

The main factors affecting earnings for the fiscal year were as follows:(a) Net Sales
Net sales totaled ¥6,666,651 million, for a ¥3,464,115 million (108.2%) year-on-year increase. This was mainly
due to recording sales of ¥2,601,031 million in the newly added Sprint segment from the second quarter. Apartfrom this, the Mobile Communications segment also recorded a ¥819,888 million year-on-year increase in net
sales. The increase in the Mobile Communications segment was due to the impact of consolidating GungHo
Online Entertainment, Inc.1 (“GungHo”) from April 2013, WILLCOM, Inc.2 from July 2013, Supercell Oy3(“Supercell”) from October 31, 2013, and Brightstar Corp.4 from January 30, 2014, as well as increases in thenumber of subscribers and units sold5 at SoftBank Mobile Corp., which led to increases in both service revenue(mainly former telecom service revenue) and product sales (mainly former sales of handsets). In addition, thefull-year sales of eAccess Ltd., which was consolidated from January 2013, were recorded and also contributed
to the overall increase.

(b) Cost of Sales
Cost of sales increased ¥2,342,328 million (145.4%) year on year to ¥3,953,170 million. This was primarily due
to the newly added Sprint segment from the second quarter.

Apart from this, the impact of consolidating

GungHo, WILLCOM, Inc., Supercell, and Brightstar Corp., and the rise in cost of goods in line with an increasein the number of smartphones, especially iPhone,6 sold at SoftBank Mobile Corp. caused part of the overall
1

Please refer to page 55 “(2) GungHo Online Entertainment, Inc.” under “4. Consolidated Financial Statements (6) Notes to Consolidated Financial
Statements 5. Business combinations” for details of consolidation of GungHo.
2
Please refer to page 61 “(4) WILLCOM, Inc.” under “4. Consolidated Financial Statements (6) Notes to Consolidated Financial Statements 5.
Business combinations” for details of consolidation of WILLCOM, Inc.
3
Please refer to page 63 “(5) Supercell” under “4. Consolidated Financial Statements (6) Notes to Consolidated Financial Statements 5. Businesscombinations” for details of consolidation of Supercell.
4
Please refer to page 65 “(6) Brightstar Corp.” under “4. Consolidated Financial Statements (6) Notes to Consolidated Financial Statements 5.
Business combinations” for details of consolidation of Brightstar Corp.
5
Units sold: the total number of new subscriptions and handset upgrades
6
iPhone is a trademark of Apple Inc. The iPhone trademark is used under license from Aiphone K.K.

3

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

increase. The full-year cost of sales of eAccess Ltd., which was consolidated from January 2013, was recorded
and also caused part of this increase.

(c) Selling, General and Administrative Expenses
Selling, general and administrative expenses increased by ¥1,032,502 million (130.0%) year on year to ¥1,826,575
million.

This was primarily due to the newly added Sprint segment from the second quarter. Apart from this,the impact of consolidating GungHo, WILLCOM, Inc., and Supercell caused part of the overall increase.

Thefull-year expenses of eAccess Ltd., which was consolidated from January 2013, were recorded and also causedpart of this increase.

(d) Income from Remeasurement Relating to Business Combination
Income from remeasurement relating to business combination was ¥253,886 million, an increase of ¥252,108
million year on year.

This corresponds to income of ¥150,120 million and ¥103,766 million recognizedfollowing reevaluation at fair value of the Company’s respective equity interests in GungHo and WILLCOM, Inc.
that it already held on the dates when the Company acquired control of the respective companies. Please referto page 55 “(2) GungHo Online Entertainment, Inc. b. Consideration transferred and the components” and page
61 “(4) WILLCOM, Inc. b. Consideration transferred and the components” under “4. Consolidated Financial
Statements (6) Notes to Consolidated Financial Statements 5. Business combinations” for details.

(e) Other Operating Income and Loss
Other operating loss was ¥55,430 million (not recorded in the previous fiscal year). This primarily reflected therecording of impairment loss of ¥32,090 million, as well as severance costs associated with reduction in theworkforce of Sprint of ¥18,307 million.

Please refer to page 79 “12. Other operating income and loss” under “4.

Consolidated Financial Statements (6) Notes to Consolidated Financial Statements” for details.

(f) Operating Income
As a result of (a) to (e), operating income totaled ¥1,085,362 million, for a ¥285,963 million (35.8%) year-onyear increase.

(g) Finance Cost
Finance cost rose ¥206,181 million (315.8%) year on year to ¥271,478 million. The increase was mainly due tothe impact of adding the interest expense of Sprint, as well as an increase in interest expenses for bonds andborrowings at SoftBank Corp.

(h) Equity in Income and Loss of Associates
Equity in income of associates was ¥74,402 million, an improvement of ¥78,065 million year on year (equity inloss of associates of ¥3,663 million was recorded for the previous fiscal year). The increase was mainly due torecording equity in income of associates of ¥66,780 million related to Alibaba Group Holding Limited.

4SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014(i) Other Non-operating Income and Loss
Other non-operating income was ¥44,081 million, an improvement of ¥59,016 million year on year (other nonoperating loss of ¥14,935 million was recorded for the previous fiscal year).
i. Gain on sales of associates’ stocks increased ¥32,221 million year on year to ¥33,058 million. This was
mainly due to the sale of shares of PPLive Corporation in December 2013.
ii. Interest income increased ¥17,906 million year on year to ¥21,015 million.
iii. Derivative loss was ¥19,588 million, deteriorated by ¥31,465 million year on year.
Please refer to page 80 “14. Other non-operating income and loss” under “4. Consolidated Financial Statements(6) Notes to Consolidate Financial Statements” for details about interest income and derivative loss.

(j) Income before Income Tax
As a result of (f) to (i), income before income tax was ¥932,367 million, an increase of ¥216,863 million (30.3%)
year on year.

(k) Income Taxes
Provisions for current income taxes were ¥346,218 million, an increase of ¥68,551 million (24.7%) year on year.

(l) Net Income
As a result of (j) to (k), net income totaled ¥586,149 million, for a ¥148,312 million (33.9%) year-on-year increase.

(m) Net Income Attributable to Owners of the Parent
After deducting net income and loss attributable to non-controlling interests in subsidiaries such as Yahoo Japan
Corporation, Sprint, and GungHo from (l), net income attributable to owners of the parent was ¥527,035 million,
for a ¥154,554 million (41.5%) increase year on year.

(n) Comprehensive Income
Comprehensive income totaled ¥525,393 million, for a ¥116,794 million (18.2%) year-on-year decrease.

Of this,comprehensive income attributable to owners of the parent was ¥450,990 million, for a ¥124,152 million (21.6%)
year-on-year decrease.

5SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014b. Results by Segment
The Company’s reportable segments (Note 1) are components of business activities for which decisions on resource
allocation and assessment of performance are made. The Company has four reportable segments: “Mobile
Communications,” “Sprint,” “Fixed-line Telecommunications,” and “Internet.”
From the second quarter, the former “Domestic Mobile Communications” and “Domestic Fixed-line
Telecommunications” segments were renamed as “Mobile Communications” and “Fixed-line Telecommunications,”
respectively. The Sprint segment was newly established from the second quarter in conjunction with Sprint’s
consolidation.
In the Mobile Communications segment, SoftBank Mobile Corp. and other companies provide mobile
communications services and sales of mobile handsets and accessories, etc.
In the Sprint segment, Sprint provides mobile communications services in the U.S. and sales of mobile handsets
and accessories accompanying the services, as well as fixed-line telecommunications services.
In the Fixed-line Telecommunications segment, SoftBank Telecom Corp. provides telecommunication services
such as fixed-line telephone and data communications services to corporate customers, while SoftBank BB Corp.
and other companies provide broadband services for individual customers.
In the Internet segment, Yahoo Japan Corporation provides Internet-based advertising operations and other services.
Main businesses and core companies of each reportable segment are as follows.
Segments

MobileCommunications

Reportable Sprint
Segments

Main Businesses

Core Companies

・Provision of mobile communications services inJapan・Sales of mobile handsets and accessories
・Sales of PC software and peripherals
・Production and distribution of online games for
smartphones and other devices

SoftBank Mobile Corp.
eAccess Ltd.
WILLCOM, Inc.
Wireless City Planning Inc.
Brightstar Corp.
SoftBank BB Corp.
SoftBank Telecom Corp.
GungHo Online Entertainment, Inc.
Supercell Oy

・Provision of mobile communications services by Sprint Corporation
Sprint in the U.S.
・Sales of mobile handsets and accessories
accompanying the above services
・Provision of fixed-line telecommunications
services by Sprint

Fixed-line
Telecommunications

・Provision of telecom services such as fixed-line
telephone and data communications services todomestic corporate customers
・Provision of broadband services to domestic
individual customers
・Services accompanying the above services

SoftBank Telecom Corp.
SoftBank BB Corp.
eAccess Ltd.
Yahoo Japan Corporation

・Internet advertising・e-commerce business・Membership services

Yahoo Japan Corporation

Internet・Fukuoka SoftBank HAWKS related businesses

Fukuoka SoftBank HAWKS Corp.

Others

Notes:
1. The results for the previous fiscal year are presented in accordance with the above reportable segments.
2. Income of reportable segments is based on income from operating income, excluding “Income from remeasurement relating
to business combination” and “Other operating income (loss),” as follows:
Segment income = (net sales – cost of sales – selling, general and administrative expenses) in each segment

6SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014(a) Mobile Communications Segment(Millions of yen)

Fiscal Year Ended
March 31, 2013

Fiscal Year Ended
March 31, 2014

Net sales

2,345,630

3,165,518

819,888

35.0%

Segment income

517,120

608,950

91,83017.8%

ChangeChange %< Overview of Operations >The segment’s net sales increased by ¥819,888 million (35.0%) year on year to ¥3,165,518 million.

The mainfactor behind the increase was the impact of consolidating GungHo, WILLCOM, Inc., Supercell, and Brightstar
Corp. in addition to increases in the number of mobile phone subscribers and units sold at SoftBank Mobile Corp.,
which led to increases in both service revenue (mainly former telecom service revenue) and product sales (mainly
former sales of mobile handsets). In addition, the full-year net sales of eAccess Ltd., which was consolidated
from January 2013, were recorded and also contributed to the overall increase.
The segment’s operating expenses increased by ¥728,058 million (39.8%) year on year to ¥2,556,568 million.
The principal cause of this increase was the impact of consolidating GungHo, WILLCOM, Inc., Supercell, andBrightstar Corp. and higher operating expenses at SoftBank Mobile Corp. The higher expenses at SoftBank Mobile
Corp. reflected increases in the cost of goods and sales commissions in line with strong sales of smartphones,
especially iPhone. Another factor behind the increase in sales commissions of SoftBank Mobile Corp. was further
competition to win customers under Mobile Number Portability (MNP).

In addition, the full-year operating

expenses of eAccess Ltd., which was consolidated from January 2013, also caused part of the overall increase.
As a result, segment income increased by ¥91,830 million (17.8%) year on year to ¥608,950 million.
< Overview of Business Operations >・Number of Subscribers
Net subscriber additions (new subscribers minus cancellations) for the fiscal year at SoftBank Mobile Corp.
totaled 3,445,000. This was primarily the result of solid sales of smartphones, especially iPhone, as well as
communication modules and other items, mainly due to conducting various sales promotions.7 As a result, thecumulative number of subscribers at SoftBank Mobile Corp. as of March 31, 2014 (the “end of the fiscal year”)
stood at 35,925,000.
・ARPU
ARPU (excluding communication modules)8 at SoftBank Mobile Corp. for the fiscal year, decreased by ¥100 year
on year to ¥4,450. Out of this, data ARPU rose ¥150 year on year to ¥2,930. The decline in ARPU mainly reflects
an increase in low-ARPU handsets and a decline in the voice calls using voice devices. Meanwhile, the continuous
growth in the number of high-data ARPU smartphone subscribers contributed to the increase in data ARPU.

7

Directed at potential smartphone customers, including a promotion offering discounts to new and upgrading customers and a promotion offering
discounts to upgrading existing customers that allows their family members to use their old handsets (if they make a new subscription).
8
For definitions and calculations of ARPU, churn rate, and upgrade rate at SoftBank Mobile Corp., see page 12 “(Reference 2: Definition andCalculation Method of Principal Operational Data) (a) SoftBank Mobile Corp.”

7

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

・Number of Units Sold
The number of units sold at SoftBank Mobile Corp. for the fiscal year increased by 1,062,000 year on year to
14,175,000. The increase was primarily due to various sales promotions and the resulting continuous steadysales of smartphones, especially iPhone. In addition, further competition to win customers under MNP and a
resulting increase in the number of customers who switched from other operators contributed to the growth.
・Churn Rate and Upgrade Rate
The churn rate8 at SoftBank Mobile Corp. for the fiscal year was 1.27%, up 0.18 of a percentage point year on
year. This was mainly due to an increase in cancellations for non-voice devices reaching the end of their twoyear subscriptions. In addition, further competition to win customers under MNP and a resulting increase in thenumber of customers who switched to other operators led to the higher churn rate.
The upgrade rate8 was 1.36%, down 0.17 of a percentage point year on year.
(b) Sprint Segment(Millions of yen)

Fiscal Year Ended
March 31, 2013
Net sales
Segment income(loss)

Fiscal Year Ended
March 31, 2014

Segment was newly
established from thesecond quarter of the
fiscal year ended
March 31, 2014

ChangeChange %2,601,031

2,601,031-%(1,216)(1,216)-%Note:
3. In the Sprint segment, the earnings reflect the results of operation of Sprint since July 11, 2013.

< Overview of Operations >This mainly includes Sprint platform9 service revenue and

The segment’s net sales totaled ¥2,601,031 million.

product sales. Nextel platform10 service revenue is not recorded in the fiscal year as a result of its shutdown on
June 30, 2013.
The segment’s operating expenses totaled ¥2,602,247 million. Operating expenses included ¥129,863 millionof amortization of customer relationships (amortized based on the sum-of-the-digits method) recorded at Sprint’s
consolidation.
As a result, segment loss was ¥1,216 million. Segment income for the three-month period ended March 31,
2014 (the “fourth quarter”) was ¥56,962 million.
< Overview of Business Operations >Subscribers at Sprint for the period from July 1, 2013 to March 31, 2014 decreased by 303,000,11 and the cumulative
number of subscribers as of March 31, 2014 stood at 54,887,000. Of these, on the Sprint platform there was a net

9Sprint-operated CDMA and LTE networks. This excludes the Nextel/ iDEN network (see note 10) and the subscribers / network acquired
through transactions with U.S. Cellular Corporation (“U.S. Cellular”) and Clearwire Corporation (“Clearwire”).
10
Sprint acquired the wireless service operated on Integrated Digital Enhanced Network (iDEN) in conjunction with its acquisition of Nextel
Corporation in 2005.
11
Excludes 1,602,000 subscribers acquired in conjunction with the Sprint’s acquisition of Clearwire on July 9, 2013 (see note 21).

8

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

increase of 204,000,12 bringing its cumulative number of subscribers to 53,551,000 as of March 31, 2014.
Sprint platform ARPU13 for the fourth quarter was $63.52 for postpaid and $26.45 for prepaid, and its churnrate13 was 2.11% for postpaid and 4.33% for prepaid.
(c) Fixed-line Telecommunications Segment(Millions of yen)

Fiscal Year Ended
March 31, 2013

Fiscal Year Ended
March 31, 2014

Net sales

531,028

548,090

17,062

3.2%

Segment income

114,232

108,612(5,620)(4.9%)

ChangeChange %< Overview of Operations >The segment’s net sales increased by ¥17,062 million (3.2%) year on year to ¥548,090 million.

The full-year

net sales of the fixed-line telecommunications business of eAccess Ltd., which was consolidated from January
2013, contributed to this increase. On the other hand, revenues from the broadband business at SoftBank BB
Corp. decreased due to a decline in its number of ADSL service subscribers.
Segment income decreased by ¥5,620 million (4.9%) year on year to ¥108,612 million.

This was mainly due

to the decrease in net sales in the broadband business at SoftBank BB Corp.
(d) Internet Segment(Millions of yen)

Fiscal Year Ended
March 31, 2013

Fiscal Year Ended
March 31, 2014

Net sales

356,609399,869

43,26012.1%

Segment income

180,720

188,949

8,229

4.6%

ChangeChange %<Overview of Operations>
The segment’s net sales increased by ¥43,260 million (12.1%) year on year to ¥399,869 million.

The increase14

was the result of growth in revenue at Yahoo Japan Corporation mainly from display advertising and sponsoredsearch advertising especially through smartphones.

This was despite the fact that Yahoo Japan Corporation

eliminated store tenant and other fees from October 2013 as part of a new strategy in its e-commerce business.
Operating expenses increased by ¥35,031 million (19.9%) year on year to ¥210,920 million. This was mainly
due to an increase in sales promotion expenses at Yahoo Japan Corporation for vigorous promotion activities
conducted in relation to the e-commerce business, as well as increases in personnel expenses and outsourcing fees.
As a result, segment income increased by ¥8,229 million (4.6%) year on year to ¥188,949 million.
12

Excludes 29,000 subscribers relating to a Clearwire MVNO arrangement (see note 21).
For definitions and calculations of ARPU and churn rate of Sprint platform, see page 13 “(Reference 2: Definition and Calculation Method of
Principal Operational Data) (b) Sprint Platform.”
14
Graphical, Flash®, and video advertising that appears on a certain defined area. Includes premium advertisements such as Brand Panel shown
on Yahoo! JAPAN’s top page, and Yahoo! Display Ad Network (YDN) which shows advertisements most suitable to the user based on the content
the user is viewing and their interests, attributes, and geographical location.
13

9

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

(Reference 1: Principal Operational Data）(a) Mobile Communications Segment
Fiscal Year Ended March 31, 2013
Threemonth
PeriodEnded
June 30,
2012

ThreeThreemonth
month
PeriodPeriodEnded
Ended
Sept. 30, Dec. 31,
2012
2012

Fiscal Year Ended March 31, 2014

ThreeFiscal
month
Year
Period
Ended
Ended
March
March 31, 201331, 2013

ThreeThreeThreemonth
month
month
PeriodPeriodPeriod
Ended
Ended
Ended
June 30, Sept. 30, Dec. 31,
2013
2013
2013

ThreeFiscal
month
Year
Period
Ended
Ended
March
March 31, 201431, 2014

Full Year

Q1

Q2

Q3

31,322

32,48033,29034,06834,76035,925

4,259

4,292

4,319

4,343

4,415

4,497

4,465

4,696

4,814

4,943

5,086

5,199

5,310

5,403

5,546

Net additions15

753

759

861

1,158

3,531

810

778

692

1,165

3,445

Postpaid

772

771

872

1,170

3,585

818

790

716

1,202

3,526

-19

-12

-11

-12

-55

-8

-12

-24

-36

-81

4,510

4,650

4,640

4,400

4,550

4,460

4,520

4,490

4,340

4,450

2,710

2,760

2,800

2,840

2,780

2,870

2,930

2,960

2,970

2,930

2,359

2,631

3,486

3,082

11,558

2,575

2,734

3,347

3,377

12,033

2,586

2,997

3,843

3,686

13,113

3,023

3,150

3,713

4,289

14,175

New subscriptions

1,663

1,718

1,894

2,243

7,519

1,790

1,904

2,015

2,921

8,629

Handset upgrades

923

1,279

1,949

1,443

5,594

1,233

1,246

1,698

1,368

5,546

Churn rate16

1.03

1.06

1.12

1.14

1.09

0.99

1.12

1.28

1.66

1.27

Postpaid

0.96

1.00

1.06

1.09

1.03

0.94

1.06

1.24

1.63

1.22

1.05

1.42

2.10

1.51

1.53

1.25

1.23

1.64

1.30

1.36

4,210

4,340

4,300

4,060

4,220

4,090

4,120

4,090

3,930

4,060

2,540

2,580

2,610

2,630

2,590

2,640

2,690

2,700

2,700

2,680

Q1

Q2

Q3

SoftBank Mobile Corp.

29,702

30,461eAccess Ltd.

4,138

WILLCOM, Inc. (PHS)Q4

Q4

Full Year

Cumulative
subscribers15(Thousands)(Thousands)

Prepaid(¥ / month)

ARPU16,17(excl. communication
modules)

SoftBank Mobile Corp.

Data(Thousands)

Handsets shipped18(Thousands)

Units sold19(% / month)(% / month)

Upgrade rate16(Ref.)(¥ / month)

ARPU

16,17

(incl. communication
modules)Data

15

Includes the number of prepaid mobile phones and communication module service subscribers. The communication module service
subscriber’s net additions for the fiscal year were 934,000 and the cumulative number at the end of the fiscal year totaled 3,834,000.
16
For definition and calculation method of ARPU, churn, and upgrade rates at SoftBank Mobile Corp., see page 12 “(Reference 2: Definition andCalculation Method of Principal Operational Data) (a) SoftBank Mobile Corp.”
17
ARPU in the fourth quarter of each fiscal year includes impact from revision of interconnection charges.
18
Handsets shipped: the number of handsets shipped (sold) to handset dealers
19
Units sold: the total number of new subscriptions and handset upgrades

10SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014(b) Sprint Segment
Fiscal Year Ended March 31, 2013
Threemonth
PeriodEnded
June 30,
2012

Threemonth
PeriodEnded
Sept. 30,
2012

Q1

Q2

Fiscal Year Ended March 31, 2014

ThreeThreeFiscal
Threemonth
month
Year
month
PeriodPeriodEnded
PeriodEnded
Ended March 31, Ended
Dec. 31, March 31,
2013
June 30,
2012
2013
2013
Q3

Full Year

Q4

Q1

Threemonth
PeriodEnded
Sept. 30,
2013

Threemonth
PeriodEnded
Dec. 31,2013

Threemonth
PeriodEndedMarch31, 2014

Fiscal
Year
Ended
March
31, 2014

Q2

Q3

Q4

Full Year

Cumulative Subscribers20(Thousands)

Sprint total

56,386 55,963 55,626

55,211 53,588 54,877 55,354

54,887

Sprint platform

51,974 52,857 53,540

53,896 53,376 53,252 53,934

53,551

Postpaid

29,43429,84430,24530,25730,45130,09130,14929,918Prepaid

14,14914,60815,13315,701

15,215

15,29915,621

15,257Wholesale &affiliate

8,391

8,405

8,162

7,938

7,710

7,862

8,164

8,376

Nextel platform

4,412

3,106

2,086

1,315

-

-

-

-

U.S. Cellular &Clearwire21

-

-

-

-

212

1,625

1,420

1,336

Net additions20

1,281

883

683

356

-520

-95

682

-383

Postpaid

442

410

401

12

194

-360

58

-231

Prepaid

451

459

525

568

-486

84

322

-364

Wholesale &affiliate

388

14

-243

-224

-228

181

302

212

Postpaid

63.38

63.21

63.04

63.67

64.20

64.28

64.11

63.52

Prepaid

25.49

26.19

26.30

25.95

26.96

25.33

26.78

26.45

Postpaid

1.69

1.88

1.98

1.84

1.83

1.99

2.07

2.11

Prepaid

3.16

2.93

3.02

3.05

5.22

3.57

3.01

4.33

Sprint platform(Thousands)($ / month)

ARPU22(% / month)

Churn rate22

20

Includes the number of prepaid mobile phones and communication module service subscribers.
Sprint acquired 411,000 subscribers (352,000 postpaid subscribers and 59,000 prepaid subscribers) through the acquisition of assets from U.S.
Cellular in conjunction with its acquisition of U.S. Cellular when the transaction closed on May 17, 2013. Sprint also acquired 1,602,000
subscribers (788,000 postpaid subscribers, 721,000 prepaid subscribers, and 93,000 wholesale subscribers), in conjunction with its acquisition ofClearwire when the transaction closed on July 9, 2013, and transferred 29,000 Sprint wholesale subscribers relating to a Clearwire MVNO
arrangement that were originally recognized on the Sprint platform, to this category.
22
For definition and calculation of ARPU and churn rate of Sprint platform, see page 13 “(Reference 2: Definition and Calculation Method of
Principal Operational Data) (b) Sprint Platform.”
21

11

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

(Reference 2: Definition and Calculation Method of Principal Operational Data)(a) SoftBank Mobile Corp.
i. ARPU
ARPU: Average Revenue Per User per month (rounded to the nearest ¥10)
ARPU (excluding communication modules)= (data-related revenue (excluding communication modules) + basic monthly charge, voice-related revenues, etc.
(excluding communication modules)) / number of active subscribers (excluding communication modules)
Data ARPU (excluding communication modules)= data-related revenue (excluding communication modules) / number of active subscribers (excluding communication
modules)
ARPU (including communication modules)= (data-related revenue + basic monthly charge, voice-related revenues, etc.) / number of active subscribers
Data ARPU (including communication modules)= data-related revenue / number of active subscribers
Number of active subscribers: the total of the monthly number of active subscribers for the relevant period((subscribers at the beginning of the month + subscribers at the end of the month) / 2).
The number of active subscribers is based on SoftBank Mobile Corp.’s cumulative
subscribers including prepaid mobile phones and devices that do not have voicecommunication functionalities (excluding communication modules). The number ofactive subscribers used in the calculation of ARPU (including communication modules)
includes communication modules.
Data-related revenue: packet communication and flat-rate charges, basic monthly Internet connection charges,
content-related revenues, etc.
Basic monthly charge and voice-related revenues: basic monthly usage charges, voice call charges, revenues fromincoming calls, device warrantee services, advertising revenue, etc.
Revenues from incoming calls: interconnection charges received from other operators for voice calls from theircustomers on their network to SoftBank mobile phones as a charge for the services
provided in the SoftBank Mobile Corp. service area.

ii. Churn rate
Churn rate = number of churn / number of active subscribers (rounded to the nearest 0.01%)
Number of churn: total number of subscribers that churned during the relevant period
Number of active subscribers: the total of the monthly number of active subscribers for the relevant period((subscribers at the beginning of the month + subscribers at the end of the month) / 2).
The number of active subscribers is based on SoftBank Mobile Corp.’s cumulative
subscribers including prepaid mobile phones, communication modules, and devices that do
not have voice communication functionalities. The number of active subscribers used in
the calculation of churn rate of postpaid subscribers excludes prepaid mobile phones.

iii. Upgrade rate
Upgrade rate = number of upgrades / number of active subscribers (rounded to the nearest 0.01%)
Number of upgrades: total number of upgrades during the relevant period
Number of active subscribers: the total of the monthly numbers of active subscribers for the relevant period((subscribers at the beginning of the month + subscribers at the end of the month) / 2).
The number of active subscribers is based on SoftBank Mobile Corp.’s cumulative
subscribers including prepaid mobile phones, communication modules, and devices that do
not have voice communication functionalities.

12SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014(b) Sprint Platform
i. ARPU
ARPU: Average Revenue Per User per month (rounded to the nearest $.01)
ARPU = service revenue / number of active subscribers
Number of active subscribers: the total of the monthly number of active subscribers for the relevant period((subscribers at the beginning of the month + subscribers at the end of the month) / 2).
The number of active subscribers is based on cumulative subscribers including
communication modules and devices that do not have voice communication functionalities.

ii. Churn rate
Churn rate = number of deactivations / number of active subscribers (rounded to the nearest 0.01%)
Deactivations: total number of subscribers that churned during the relevant period. The number of active postpaid
subscribers is based on cumulative subscribers including communication modules and devices that do nothave voice communication functionalities. The number of deactivations excludes the number ofsubscribers who switch between prepaid and postpaid on the same date.
Number of active subscribers: the total of the monthly number of active subscribers for the relevant period((subscribers at the beginning of the month + subscribers at the end of the month) / 2).

13

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

(Reference 3: Capital Expenditure and Depreciation)(Note 4)(a) Capital Expenditure (acceptance basis)（Millions of yen）

Fiscal Year Ended March 31, 2013

Fiscal Year Ended March 31,2014
Fiscal Year
Ended
March 31,2014

ThreeThree-month Three-month Three-month Three-month Fiscal Year Three-month Three-month Three-month
Ended
PeriodPeriodPeriodmonth
PeriodPeriodPeriodPeriodMarch 31, Ended June Ended Sept. Ended Dec.
PeriodEnded June Ended Sept. Ended Dec.
Ended
2013
30, 2013
30, 2013
31, 2013
Ended
30, 2012
30, 2012
31, 2012
March 31,
March 31,
2013
2014

MobileCommunications
segment

Q1

Q2

Q3

Q4

Full Year

Q1

Q2

Q3

Q4

Full Year

92,500141,927

176,705

238,751

649,883

163,581

164,563

170,469

180,347

678,960

Sprintsegment (Note 5)
Fixed-line
Telecommunications segment

Segment was newly established from the second quarter ofthe fiscal year ended March 31, 2014

163,574

208,733

91,969464,276

10,292

12,708

16,216

26,466

65,682

9,903

16,74313,091

20,73160,468Internet segment

4,942

3,195

6,310

8,538

22,985

4,393

2,746

9,194

9,706

26,039Others

7,163

1,866

2,126

3,456

14,611

2,835

4,694

3,082

4,896

15,507

Consolidated total

114,897

159,696

201,357

277,211753,161

180,712352,320

404,569

307,649

1,245,250(b) Depreciation and Amortization（Millions of yen）

Fiscal Year Ended March 31, 2013

Fiscal Year Ended March 31,2014

Three-month Three-month Three-month Three-month Fiscal Year Three-month Three-month Three-monthThreePeriod
PeriodPeriodPeriodEnded
PeriodPeriodPeriodmonth
Ended June Ended Sept. Ended Dec.
March 31, Ended June Ended Sept. Ended Dec.
PeriodEnded
30, 2012
30, 2012
31, 2012
March 31,2013
30, 2013
30, 2013
31, 2013
Ended
2013
March 31,2014

MobileCommunications
segment
Sprintsegment (Note 5)
Fixed-line
Telecommunications segment

Fiscal Year
Ended
March 31,
2014

Q1

Q2

Q3

Q4

Full Year

Q1

Q2

Q3

Q4

Full Year59,69363,54867,77889,204

280,223

83,367

92,228100,205

119, 184

394,984

134,191

152,411

131,859

418,461

Segment was newly established from the second quarter ofthe fiscal year ended March 31, 2014

12,603

12,642

12,79815,78653,82914,80914,91815,402

16,94862,077

Internet segment

3,171

2,917

2,992

3,490

12,570

3,221

3,218

3,700

5,230

15,369Others

1,956

2,114

2,127

2,301

8,498

1,902

2,085

2,329

2,697

9,013

246,640
Consolidated total
77,423
81,221
85,695
110,781355,120
103,299
274,047
275,918
899,904
Notes:
4. The results for the previous fiscal year and each quarter of the previous fiscal year are presented in accordance with the reportablesegments adopted since the second quarter of the fiscal year ended March 31, 2014.
5. Capital expenditure and depreciation and amortization of the Sprint segment are reflected from July 11, 2013.

14

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

c. Forecasts on the Consolidated Results of Operations for the Fiscal Year Ending March 31, 2015
The Company projects net sales of ¥8 trillion, EBITDA(Note 6) of ¥2 trillion, and operating income of ¥1 trillion
under IFRSs in the fiscal year ending March 31, 2015 (“FY2014”). The Company has upwardly revised its
previous net sales forecast, announced in the Consolidated Financial Report for the six-month period ended
September 30, 2013, by an additional ¥1 trillion mainly related to the acquisition and consolidation of Brightstar
Corp. in January 2014.
The operating income of the fiscal year ended March 31, 2014 of ¥1,085.4 billion includes income fromremeasurement relating to business combination of ¥253.9 billion.

The forecasted FY2014 operating incomeof ¥1 trillion does not include any temporary gains.
Note:
6. EBITDA= net sales - cost of sales - selling, general and administrative expenses + depreciation and amortization

15

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

(2) Analysis of Consolidated Financial Positiona. Assets, Liabilities, and Equity
Assets, liabilities, and equity at the end of the fiscal year were as follows:(Millions of yen)

As of March 31, 2013

As of March 31, 2014

ChangeTotal assets

7,218,172

16,684,997

9,466,825

131.2%

Total liabilities

5,287,732

13,826,327

8,538,595

161.5%

Total equity

1,930,440

2,858,670

928,230

48.1%

Change %(a) Current Assets(Millions of yen)

Opening balanceof Sprint on
acquisition date23(July 10, 2013)
B

Other changes

As ofMarch 31, 2014

ChangeC

D=A+B+C

E=B+C

1,439,057

447,873

76,5601,963,490

524,433

936,307322,957

410,281

1,669,545

733,238

Other financial assets

229,239

111,764(176,276)

164,727(64,512)Inventories

54,268105,318

92,091

251,677

197,409

Other current assets

127,148

42,655

123,418

293,221

166,073

Total current assets

2,786,019

1,030,567

526,074

4,342,660

1,556,641

Item

As of
March 31, 2013
A

Cash andcash equivalents
Trade andother receivables

Current assets totaled ¥4,342,660 million, for a ¥1,556,641 million (55.9%) increase from March 31, 2013 (the“previous fiscal year-end”). The primary components of the change were as follows:i. Cash and cash equivalents
Cash and cash equivalents totaled ¥1,963,490 million, for a ¥524,433 million increase from the previous fiscal
year-end. The Company recognized ¥447,873 million for the consolidation of Sprint on the acquisition date.
ii. Trade and other receivables
Trade and other receivables totaled ¥1,669,545 million, an increase of ¥733,238 million from the previous
fiscal year-end. This increase was primarily due to recording ¥322,957 million and ¥190,802 million for the
consolidation of Sprint and Brightstar Corp. on their acquisition dates, respectively.
iii. Other financial assets
Other financial assets totaled ¥164,727 million, a decrease of ¥64,512 million from the previous fiscal yearend. Items such as derivative financial assets, fixed-term deposits, and marketable securities are included inother financial assets.

23

The figures for the opening balance of Sprint on the acquisition date have been retroactively restated since new information was obtained during the
fiscal year. For details please refer to page 59 “f. Fair values of assets and liabilities, non-controlling interests and goodwill on the acquisition date”
under “4. Consolidated Financial Statements (6) Notes to Consolidated Financial Statements 5. Business combinations (3) Sprint.”

16

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

・ The Company recognized ¥111,764 million for the consolidation of Sprint on the acquisition date.
・ The Company had concluded a foreign currency forward contract for $17.0 billion in relation to funding forthe acquisition of Sprint and recorded the fair value of this contract of ¥189,357 million in derivative
financial assets at the previous fiscal year-end. However, this derivative financial asset was derecognized
and no value was ascribed to it due to the settlement of the foreign exchange transaction upon the completionof the acquisition of Sprint. Please refer to page 80 “14. Other non-operating income and loss” under “4.
Consolidated Financial Statements (6) Notes to Consolidated Financial Statements” for details.
(b) Non-current Assets(Millions of yen)

Opening balanceof Sprint on
As ofMarch 31, 2013 acquisition date23(July 10, 2013)
A
B

Item

Property, plant andequipment

Other changes

As ofMarch 31, 2014

ChangeC

D=A+B+C

E=B+C

1,830,615

1,291,364

464,348

3,586,327

1,755,712

924,972

275,201

332,132

1,532,305

607,333

528,683

5,301,283

347,735

6,177,701

5,649,018

Goodwill
Intangible assets
24-

3,612,994

96,532

3,709,526

3,709,526

Customer relationships

83,876700,192(106,574)

677,494593,618

Trademarks

3,968

652,859

18,623

675,450

671,482

Software411,285

138,330

97,771

647,386

236,101--

166,522

166,522

166,522

FCC Licenses

Game titles

29,554

196,908

74,861

301,323

271,769

Investments accounted
for using the equity
method208,664-

95,654

304,318

95,654

Other financial assets

634,647

23,938(256,892)

401,693(232,954)

Deferred tax assets

175,390-(2,658)

172,732(2,658)Other non-current assets

129,182

12,39425,685167,261

38,079Total non-current assets

4,432,153

6,904,180

1,006,004

12,342,337

7,910,184

OthersNon-current assets totaled ¥12,342,337 million, for a ¥7,910,184 million (178.5%) increase from the previous
fiscal year-end.

The components of the change of primary items were as follows:i. Property, plant and equipment
Property, plant and equipment totaled ¥3,586,327 million, for a ¥1,755,712 million increase from the previous
fiscal year-end.

24This was mainly due to ¥1,291,364 million recognized for the consolidation of Sprint on the

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

17

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

acquisition date. In addition, property, plant and equipment increased by ¥464,348 million, mainly due tocapital expenditure in the Mobile Communications and Sprint segments.
ii. Goodwill
Goodwill totaled ¥1,532,305 million, for a ¥607,333 million increase from the previous fiscal year-end.
・ The Company recorded ¥275,201 million in goodwill for the consolidation of Sprint on the acquisition date.

In

relation to the acquisition of Sprint, the Company entered into a foreign currency forward contract, out of which$17.0 billion was accounted for under hedge accounting. The fair value on the acquisition date of ¥311,659
million of this hedging instrument was deducted from the amount of goodwill initially recognized from theacquisition of Sprint. Please refer to page 60 “(Note 6) Basis adjustment” under “4. Consolidated Financial
Statements (6) Notes to Consolidated Financial Statements 5. Business combinations (3) Sprint f. Fair values ofassets and liabilities, non-controlling interests, and goodwill on the acquisition date” for details.
・ The Company recorded goodwill of ¥146,032 million in relation to GungHo; ¥19,143 million in relation to

WILLCOM, Inc.; ¥98,803 million in relation to Supercell; and ¥59,857 million in relation to Brightstar Corp.
in conjunction with their consolidation on their acquisition dates.
iii. Intangible assets
Intangible assets totaled ¥6,177,701 million, for a ¥5,649,018 million increase from the previous fiscal year-end.
・ FCC Licenses totaled ¥3,709,526 million (not recorded at the previous fiscal year-end).

This was mainly

because the Company recognized ¥3,612,994 million for the consolidation of Sprint on the acquisition date,and because the yen had weakened against the U.S. dollar at the end of the fiscal year compared to the timeof acquisition of Sprint. From an accounting perspective FCC Licenses are non-amortized assets.
・ Customer relationships totaled ¥677,494 million, for a ¥593,618 million increase from the previous fiscal

year-end. This was mainly due to recognizing Sprint’s customer relationships of ¥700,192 million for the
consolidation of Sprint on the acquisition date.

Customer relationships, mainly in relation to Sprint,

eAccess Ltd., and WILLCOM, Inc., were amortized by a total of ¥155,016 million in the fiscal year.
・ Trademarks totaled ¥675,450 million, for an increase of ¥671,482 million from the previous fiscal year-end.

This

was due to recognizing ¥652,859 million for trademarks held by Sprint for the consolidation on the acquisitiondate.
・ Software totaled ¥647,386 million, for a ¥236,101 million increase from the previous fiscal year-end.

This wasdue to ¥138,330 million recognized for the consolidation of Sprint on the acquisition date and an increase of¥97,771 million mainly in relation to capital expenditures in the Mobile Communications and Sprint segments.
・ Game titles totaled ¥166,522 million (not recorded at the previous fiscal year-end).

This was mainly due torecognizing ¥77,796 million for the consolidation of GungHo in April 2013 and ¥119,099 million for the
consolidation of Supercell on October 31, 2013, and amortizing them by a total of ¥35,880 million in the fiscal year.
iv. Other financial assets
Other financial assets totaled ¥401,693 million, for a ¥232,954 million decrease from the previous fiscal yearend. At the previous fiscal year-end the convertible bonds issued by Sprint and shares of WILLCOM, Inc.
were recorded as investment securities. However, the ending amount of both investment securities becamezero as a result of their consolidation in the second quarter.

18

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014(c) Current Liabilities(Millions of yen)

Item

As of
March 31, 2013
A

Opening balanceof Sprint on
acquisition date23(July 10, 2013)
B

Other changes

As ofMarch 31, 2014

ChangeC

D=A+B+C

E=B+C

Interest-bearing debt

1,534,128

86,961(473,190)

1,147,899(386,229)

Short-term borrowings

458,313-(187,784)

270,529(187,784)

631,232

13,380(251,046)

393,566(237,666)

204,837

63,317(128,854)

139,300(65,537)

obligations

192,658

10,264

61,373

264,295

71,637

OthersCurrent portion of longterm borrowings
Current portion of
corporate bonds
Current portion of lease

47,088-33,12180,20933,121

Trade andother payables

972,669

632,348

100,939

1,705,956

733,287

Other financial
liabilities

4,833

-

1,014

5,847

1,014

Income taxes
payables

182,050

4,553

59,410246,01363,963

Provisions

1,602

106,630(15,117)

93,11591,513

Other current
liabilities

142,634

282,501

109,813534,948

392,314

Total current
liabilities

2,837,916

1,112,993(217,131)

3,733,778

895,862

Current liabilities totaled ¥3,733,778 million, for a ¥895,862 million (31.6%) increase from the previous fiscal
year-end. The components of the change of primary items were as follows:i. Interest-bearing debt
Interest-bearing debt totaled ¥1,147,899 million, for a ¥386,229 million decrease from the previous fiscal yearend.

This was mainly due to decreases of ¥237,666 million in the current portion of long-term borrowingsand ¥187,784 million in short-term borrowings. These decreases were due to the Company repaying part ofexisting borrowings in September 2013 in accordance with the refinancing of the Sprint acquisition bridge loan
and other existing borrowings and debts.
ii. Trade and other payables
Trade and other payables totaled ¥1,705,956 million for a ¥733,287 million increase from the previous fiscal
year-end.

This was mainly due to ¥632,348 million recognized for the consolidation of Sprint on theacquisition date as well as the consolidation of Brightstar Corp.
iii. Other current liabilities
Other current liabilities totaled ¥534,948 million for a ¥392,314 million increase from the previous fiscal yearend. This was mainly due to ¥282,501 million recognized for the consolidation of Sprint on the acquisition date.

19

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014(d) Non-current Liabilities(Millions of yen)

Opening balanceof Sprint on
acquisition date23(July 10, 2013)
B

Other changes

As ofMarch 31, 2014

ChangeC

D=A+B+C

E=B+C

2,173,725

2,668,163

3,180,266

8,022,154

5,848,429

borrowings

510,856

34,854

1,698,145

2,243,855

1,732,999

Corporate bonds

791,919

2,590,208

1,360,946

4,743,073

3,951,154

Lease obligations

564,077

43,101

123,737

730,915

166,838

Others306,873-(2,562)

304,311(2,562)Other financial
liabilities

38,654

5,662(3,165)

41,151

2,497

Defined benefit
liabilities

14,506

65,763(3,228)77,04162,535

Provisions

21,765

143,739(28,584)

136,920

115,155

120,979

1,409,387

2,655

1,533,021

1,412,042

80,187

184,106

17,969282,262

202,075

2,449,816

4,476,820

3,165,913

10,092,549

7,642,733

As ofMarch 31, 2013

Item

A

Interest-bearingdebt
Long-term

Deferred tax
liabilities
Other noncurrent liabilities
Total non-current
liabilities

Non-current liabilities totaled ¥10,092,549 million, for a ¥7,642,733 million (312.0%) increase from the previous
fiscal year-end.

The components of the change of primary items were as follows:i. Interest-bearing debt
Interest-bearing debt totaled ¥8,022,154 million, for an increase of ¥5,848,429 million from the previous fiscal
year-end.
・ Corporate bonds totaled ¥4,743,073 million, for a ¥3,951,154 million increase from the previous fiscal year-

end. This increase mainly reflects ¥2,590,208 million recognized for the consolidation of Sprint on theacquisition date, totaling $9.0 billion (¥890,850 million) of straight corporate bonds issued by Sprint, and¥450,000 million of unsecured straight corporate bonds and ¥324,382 million of foreign currency
denominated straight corporate bonds issued by SoftBank Corp.

Meanwhile, Clearwire redeemed $3,263

million (¥328,507 million) of its bonds before maturity.
・ Long-term borrowings totaled ¥2,243,855 million, for an increase of ¥1,732,999 million from the previous

fiscal year-end.

This was mainly due to the Company borrowing ¥1.98 trillion in September 2013 torefinance its bridge loan for the acquisition of Sprint and other existing borrowings and debts, while
concurrently repaying part of existing borrowings.
Please refer to page 73 “9. Interest-bearing debt” under “4. Consolidated Financial Statements (6) Notes toConsolidated Financial Statements” for details.

20SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

ii. Deferred tax liabilities
Deferred tax liabilities totaled ¥1,533,021 million, for an increase of ¥1,412,042 million from the previous
fiscal year-end. This was mainly due to recognition of a temporary difference relating to FCC Licenses,
customer relationships, and trademarks in conjunction with the consolidation of Sprint.

(e) Equity(Millions of yen)

Equity attributable toowners of the parent
Non-controlling interests
Total equity

As of March 31, 2013

As of March 31, 2014

Change1,612,756

1,955,374

342,618

317,684

903,296585,6121,930,440

2,858,670

928,230

Equity totaled ¥2,858,670 million, for a ¥928,230 million (48.1%) increase from the previous fiscal year-end.
Of this amount, equity attributable to owners of the parent and non-controlling interests increased by ¥342,618
million (21.2%) and ¥585,612 million (184.3%), respectively.

The ratio of equity attributable to owners of theparent to total assets decreased by 10.6 percentage points from the previous fiscal year-end to 11.7%.

The lower

ratio of equity attributable to owners of the parent to total assets primarily reflected an increase in the amount ofassets and liabilities mainly in conjunction with the consolidation of Sprint, while equity attributable to ownersof the parent increased.

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

Item

As of March 31, 2013

As of March 31, 2014

ChangeCommon stock

238,772

238,772-

Additional paid-in capital

436,704

405,111(31,593)

Retained earnings

712,088

1,193,366

481,278

Treasury stock
Accumulated othercomprehensive income(22,834)(51,492)(28,658)

248,026

196,617(78,409)

Available-for-sale financial
assets

50,70014,122(36,578)

Cash flow hedges

114,158(19,942)(134,100)

Exchange differences ontranslating foreign operations

83,168

175,437

92,269Total equity attributable toowners of the parent

1,612,756

1,955,374

342,618

21

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

Equity attributable to owners of the parent totaled ¥1,955,374 million, for a ¥342,618 million (21.2%) increase
from the previous fiscal year-end.

The components of the change of primary items were as follows:i. Retained earnings totaled ¥1,193,366 million, for a ¥481,278 million increase from the previous fiscal yearend.

This mainly reflected the recording of net income attributable to owners of the parent of ¥527,035

million, despite a decrease totaling ¥47,669 million due to the payment of the year-end dividend for the fiscal
year ended March 31, 2013 and the interim dividend for the fiscal year ended March 31, 2014.
ii. Accumulated other comprehensive income totaled ¥169,617 million, for a ¥78,409 million decrease from theprevious fiscal year-end.
・ Available-for-sale financial assets were ¥14,122 million, for a ¥36,578 million decrease from the previous fiscal

year-end. At the previous fiscal year-end, the Company measured the fair value of its shares of WILLCOM,
Inc., which were classified as available-for-sale financial assets, and recognized the difference between the fairvalue and the acquisition cost as accumulated other comprehensive income, net of tax. In conjunction with theconsolidation of WILLCOM, Inc. in the second quarter, the entire amount of the accumulated othercomprehensive income recognized relating to these shares was derecognized and recognized as income fromremeasurement relating to business combination in the consolidated statements of income.
・ Cash flow hedges were negative ¥19,942 million, for a ¥134,100 million decrease from the previous fiscal

year-end.

An amount of $17.0 billion was previously accounted for under hedge accounting out of a foreign

currency forward contract concluded in relation to the acquisition of Sprint.

Then, accumulated othercomprehensive income from this $17.0 billion foreign currency forward contract was derecognized in thesecond quarter and deducted from goodwill initially recognized from the consolidation of Sprint. Pleaserefer to page 60 “(Note 6) Basis adjustment” under “4. Consolidated Financial Statements (6) Notes toConsolidated Financial Statements 5. Business combinations (3) Sprint f. Fair values of assets and liabilities,
non-controlling interests, and goodwill on the acquisition date” for details.
・ Exchange differences on translating foreign operations were ¥175,437 million, for a ¥92,269 million increase

from the previous fiscal year-end.

This was mainly because the yen had weakened against the U.S. dollar at

the end of the fiscal year compared to the time of acquisition of Sprint.
(Non-controlling Interests)
Non-controlling interests totaled ¥903,296 million, for a ¥585,612 million (184.3%) increase from the previous
fiscal year-end, mainly in conjunction with consolidating Sprint, GungHo, and Supercell.

22SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014b. Cash Flows
Cash flows for the fiscal year were as follows:
Cash and cash equivalents at the end of the fiscal year totaled ¥1,963,490 million, for a ¥524,433 million increase
from the previous fiscal year-end.
(Millions of yen)

Fiscal Year Ended
March 31, 2013

Fiscal Year Ended
March 31, 2014

ChangeCash flows from operating activities

813,025

860,245

47,220Cash flows from investing activities(874,144)(2,718,188)(1,844,044)

Cash flows from financing activities

471,477

2,359,375

1,887,898

223,704(511,155)(734,859)(Reference)
Cash flows from operating activities- capital expenditure(Note 7)Note:
7. Outlays for purchase of property, plant and equipment and intangible assets(a) Cash Flows from Operating Activities
Net cash provided by operating activities totaled ¥860,245 million (compared with ¥813,025 million provided in
the previous fiscal year). Out of this, Sprint’s net cash provided by operating activities (for the period from July11, 2013 to March 31, 2014) totaled ¥24,999 million. The primary components of cash flows were as follows:i. Net income totaled ¥586,149 million.
ii. The main items added to net income were ¥899,904 million in depreciation and amortization, ¥346,218
million in income taxes, and ¥271,478 million in finance cost.
iii. The main items deducted from net income were income from remeasurement relating to business combinationof ¥253,886 million, equity in income of associates of ¥74,402 million, and other non-operating income of¥44,081 million.

Equity in income of associates mainly reflected the recording of equity in income ofassociates of ¥66,780 million related to Alibaba Group Holding Limited.

Please refer to page 55 “(2)GungHo Online Entertainment, Inc. b. Consideration transferred and the components” and page 61 “(4)WILLCOM, Inc. b. Consideration transferred and the components” under “4. Consolidated Financial
Statements (6) Notes to Consolidated Financial Statements 5. Business combinations” for details on income
from remeasurement relating to business combination, and page 80 “14. Other non-operating income andloss” under “4. Consolidated Financial Statements (6) Notes to Consolidated Financial Statements” for details
on other operating income and loss.
iv. Interest paid was ¥306,697 million.

The year-on-year increase of ¥234,401 million compared with theprevious fiscal year was mainly due to the impact of adding the interest expense of Sprint, as well as anincrease in interest expenses for bonds and borrowings at SoftBank Corp.
v. Income taxes paid was ¥315,377 million.

23

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014(b) Cash Flows from Investing Activities
Net cash used in investing activities was ¥2,718,188 million (compared with ¥874,144 million used in the previous
fiscal year). The primary components of cash flows were as follows:i. Decrease from acquisition of control over subsidiaries of ¥1,663,539 million was recorded, mainly due to theconsolidation of Sprint, GungHo, Supercell, and Brightstar Corp.
ii. Outlays for purchase of property, plant and equipment and intangible assets amounted to ¥1,371,400 million.
Out of this, Sprint’s outlays for purchase of property, plant and equipment and intangible assets (for the period
from July 11, 2013 to March 31, 2014) amounted to ¥563,849 million.
iii. Proceeds from settlement of foreign currency forward contract for acquisition of control of subsidiaries of¥310,104 million were recorded, due to the settlement of the foreign currency forward contract of $18.5
billion concluded in relation to the acquisition of Sprint.

(Reference: Total Invested Amount for Acquisition of Sprint)
The invested amount for the Sprint acquisition and the timing of payments was as follows:
Invested amount
U.S. dollars

Timing ofpayment

Millions of yen

Purchase of convertible
bonds(Note 8) A

$3.1 billion

249,333

Oct. 2012

Cash investment$18.5 billion

1,875,149

July 2013

B

Proceeds from settlement offoreign currency forward
contract for acquisition ofcontrol of subsidiaries(Note 9) C
Additional purchases ofDshares(Note 10)-

310,104-$500 million

49,535

Aug. - Sept. 2013

Total E=A+B-C+D$22.1 billion

1,863,913

Cash and cash equivalents
held by Sprint at the time ofacquisition of control
F$4.4 billion

447,873

Notes:
8. Converted to Sprint shares on July 10, 2013.
9. Proceeds from the settlement of the foreign currency forward contract of $18.5 billion concluded in relation to theacquisition of Sprint.
10. From August 1 to September 16, 2013 the Company acquired approximately 2% of additional shares of Sprint after
its consolidation on July 10, 2013. Since this was executed after acquiring control of Sprint the relevant invested
amount is recorded under cash flows from financing activities.
11. Of the amount recorded for decrease from acquisition of control over subsidiaries for the fiscal year, outlays for theacquisition of Sprint amounted to ¥1,427,276 million. This is calculated by subtracting cash and cash equivalents
held by Sprint at the time of acquisition of control (F) from the $18.5 billion in cash investment (B).

24

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014(c) Cash Flows from Financing Activities
Net cash provided by financing activities was ¥2,359,375 million (compared with ¥471,477 million provided in
the previous fiscal year). The primary components of cash flows were as follows:(Items Increasing Cash Flows)
Proceeds from long-term interest-bearing debt amounted to ¥4,698,294 million.

The primary components wereas follows:
・ Proceeds from long-term borrowings of ¥2,587,755 million, mainly from borrowings of ¥1.98 trillion

executed by SoftBank Corp. in September 2013 in conjunction with the refinancing of the Sprint acquisition
bridge loan and other existing borrowings and debts.
・ Proceeds from issuance of corporate bonds of ¥1,665,232 million.

This mainly consisted of a total of $9.0

billion (¥890,850 million) of straight corporate bonds issued by Sprint, and ¥450,000 million of unsecured
straight corporate bonds and ¥324,382 million of foreign currency denominated straight corporate bonds
issued by SoftBank Corp.
・ Proceeds from sale and leaseback of newly acquired equipment of ¥445,307 million.

(Items Decreasing Cash Flows)i. Repayment of long-term interest-bearing debt was ¥1,971,594 million. The primary components were as follows:・ Repayment of long-term borrowings of ¥1,133,313 million.

This was mainly due to the Company repaying

part of existing borrowings in September 2013 in accordance with the refinancing of the Sprint acquisition
bridge loan and other existing borrowings and debts.
・ Redemption of corporate bonds of ¥533,538 million, mainly from Clearwire’s early redemption of $3,263

million (¥328,507 million) of its corporate bonds and SoftBank Corp.’s redemption of its unsecured straightbonds totaling ¥205,000 million.
ii. Decrease in short-term interest-bearing debt, net resulted in an outlay of ¥201,794 million.
iii. Payment from purchase of subsidiaries' equity from non-controlling interests was ¥83,232 million.

This

mainly included the Company’s additional purchase of approximately 2% of Sprint shares from August 1 to
September 16, 2013, after its consolidation on July 10, 2013, which resulted in an outlay of ¥49,535 million,
as well as an outlay of ¥30,000 million for Yahoo Japan Corporation’s repurchase of its own shares.

25SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014(d) Trends in Cash Flow-related Indicators
A summary of trends in cash flow-related indicators is as follows:
Fiscal year ended
March 31, 2013
Ratio of equity attributable to owners of the parent
to total assets
Ratio of equity attributable to owners of the parent
to market capitalization

Fiscal year ended
March 31, 201422.3 %

11.7 %

71.6 %

55.5 %Net interest-bearing debt / EBITDA ratio

2.0 times

3.6 times

Interest coverage ratio

17.7 times

6.6 times

Ratio of equity attributable to owners of the parent to total assets: equity attributable to owners of the parent / total assets
Ratio of equity attributable to owners of the parent to market capitalization:
equity attributable to owners of the parent / market capitalization
Net interest-bearing debt / EBITDA ratio: net interest-bearing debt / EBITDA
Interest coverage ratio: EBITDA / finance cost
Notes:
12. The above indicators are calculated based on consolidated figures excluding EBITDA for the fiscal year ended March
31, 2014.
13. Market capitalization: market value of shares at the end of the fiscal year multiplied by number of shares outstanding,
net of treasury stock.
14. Net interest-bearing debt: interest-bearing debt - cash position
Cash position: cash and cash equivalents + short-term investments recorded as current assets
15. EBITDA: net sales - cost of sales - selling, general and administrative expenses + depreciation and amortization
The Company’s EBITDA for the fiscal year ended March 31, 2014 is calculated by adding the annualized Sprint
segment’s EBITDA (aggregated amount from July 11, 2013 to March 31, 2014) to the remaining segments’ EBITDA.

(3) Fundamental Policy for Distribution of Profit, and Dividend for the Fiscal Year
SoftBank Corp.’s basic policy is to maintain a sound financial status while both investing aggressively to ensuresustained growth and returning profits to shareholders. Returns to shareholders include cash dividends, paid
twice per year in principle as an interim dividend and a year-end dividend.
The Board of Directors’ meeting resolved to propose a year-end dividend for the fiscal year of ¥20.00 per share.
Together with the interim dividend of ¥20.00 per share paid in December 2013, this brings the annual dividend
for the fiscal year to ¥40.00 per share, the same as the previous fiscal year.

26

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

2. Management Policies(1) Basic Management Approach
The Company is guided by a corporate philosophy of “Information Revolution – Happiness for everyone.” The
Company aims to be a provider of the most essential technologies and services to people around the world throughits endeavors in various businesses in the information industry, while maximizing its enterprise value.
(2) Medium- to Long-term Strategies
a. Focus on Mobile Internet
In the ICT market the rapid penetration of smartphones and tablets25 are causing a shift from PCs to mobile devices
as the preferred means of accessing the Internet.

One of the Company’s strategies is to concentrate on businessdevelopment in the field of mobile Internet, which is growing in line with these changes.
According to this strategy, the Company is currently working to strengthen its network and provide high-speed
data communication services, enhance its lineup of smartphones and tablets, expand its mobile content, optimize
services such as e-commerce for mobile devices, and enhance its cloud services, among other initiatives. By
promoting mobile Internet usage, the entire Company can increase revenues from the use of data communication
services and other services and content.
b. Forming and Expanding a Strategic Synergy GroupThe information industry is characterized by rapid changes in technology, business models, and market needs.
To become a provider of the most essential technologies and services to people around the world, it is imperativethat the Company be flexible regarding any specific technologies or business models, and continue transforming
itself repeatedly in line with the changes in the times, expanding and changing its lines of businesses.
The Company launches new services and businesses from within the Company, and also invests in companies
possessing outstanding technologies or business models, or establishes joint ventures with them to form andexpand a “strategic synergy group” on a global scale.
Each company in the strategic synergy group conducts business and makes decisions autonomously, organicallycombining their respective strengths to create synergies. In this way, the entire group will realize sustainable growth.
c. Expand Business Scale through Entry into the U.S.
The U.S. market holds great potential for rapid expansion in the mobile Internet field. It has approximately 350
million cumulative mobile phone subscribers26 –more than twice the number in Japan. The Company completed
its acquisition of major U.S. mobile operator Sprint on July 10, 2013. Through this acquisition the Company
aims to establish an operating base in the U.S. market, thereby expanding its business scale and allowing it tocapture the growth of this market going forward.
Having completed the above acquisition, the Company has become a mobile operator with one of the largest
subscriber bases26 in the combined Japanese and U.S. markets. This will enable the Company to leverage benefitsof scale to the fullest extent in developing its business, including procurement of mobile handsets and network
equipment, as well as the provision of content and services such as games and video by Group companies.

25
26

Yano Research Institute Ltd., “Global Market of Smart Phones/Tablets/Wearables/Smart Devices 2013-2014”
GSMA Intelligence (as of December 31, 2013)27

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014(3) Important Management Issues for the Company
a. Countermeasures for Network Traffic in Mobile Communications Services in Japan
In Japan, the connectivity of the Company’s mobile communications services27 has been dramatically improved
as a result of its continued installation of base stations compatible with the 900 MHz band, which can efficiently
cover wide areas, throughout the two fiscal years ended March 31, 2013 and 2014.

Looking ahead, the Company

will now focus on dealing with the expected increase in network traffic that accompanies the increase in penetrationand capabilities of smartphones.
Specifically, the Company plans to increase the overall usage efficiency of its frequency bands by introducing
LTE28 to the 900 MHz band, while continuing to reduce the size of cells (the size of the range covered by a single
base station) in urban areas, where network traffic volume is especially large, and to further improve thecommunication quality of Wi-Fi spots. Through these initiatives, the Company plans to increase its ability tocope not only with constant traffic, but also with so-called “burst traffic,” where network traffic spikes momentarily,
causing congestion (a stall in signal processing).

b. Strengthen the Operating Base in the Japanese and U.S. Markets
Following the completion of the acquisition of Sprint, the Company has become a mobile operator with one of thelargest subscriber bases26 in the combined Japanese and U.S. markets.

Looking ahead, the Company must moveswiftly to strengthen its operating base across both markets and consolidate its position as one of the world’s largest
mobile Internet companies.
In the Japanese market, SoftBank Mobile Corp. and other Group companies will collectively build a solid
foundation for the operating base through measures such as strengthening the network, bolstering sales activities,
improving customer satisfaction, and enhancing content.
Meanwhile, in the U.S. market the Company will enhance Sprint’s competitive capabilities and establish astrong operating base.

To this end, it will leverage the expertise it has cultivated in Japan with regard tosmartphones and communications networks, and its experience in executing measures boldly and swiftly in a way
unheard of among its Japanese competitors.
c. Reduce Net Interest-bearing Debt
The Company’s net interest-bearing debt as of March 31, 2014 stood at ¥7,059,286 million, an increase of¥4,801,479 million from the previous fiscal year-end.

The change is mainly due to procurement of funds inrelation to the acquisition of Sprint, and incorporation of Sprint’s net interest-bearing debt in conjunction with its
consolidation.
The Company will work to reduce net interest-bearing debt by leveraging the abundant cash flows generated byits steady business in Japan, particularly in the Mobile Communications segment.

27
28

900 MHz compatible smartphones’ call and data connection rates
An advanced wireless communication standard that builds on the third-generation (3G) mobile phone standard. LTE achieves higher
communication speeds and makes more efficient use of the frequency band than 3G.

28

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

3. Notes to Summary Information(1) Significant Changes in Scope of Consolidation for the Fiscal Year ended March 31, 2014
Specified subsidiary (one company) newly consolidated in the fiscal year ended March 31, 2014
Sprint Communications, Inc.
On July 10, 2013, the Company capitalized Sprint Corporation (hereinafter “Sprint”) with $21.6 billion. In the above
process, Sprint Nextel Corporation merged with Starburst III, Inc., which used to be a subsidiary of the Company, withSprint Nextel Corporation being the surviving entity, and changed its name to Sprint Communications, Inc.
Consequently, Sprint Communications, Inc., the surviving entity, was newly included in the scope of consolidation.
Starburst II, Inc., which used to own all the shares of Starburst III, Inc., succeeded Sprint’s business and changed its
name to Sprint Corporation.
As the amount of common stock of Sprint Communications, Inc. which was included in the scope of consolidation ismore than ten-hundreds of the common stock of SoftBank Corp., this is a change of a specified subsidiary with thechange in the scope of consolidation.
(2) Changes in Accounting Policies and Accounting Estimates(Changes in accounting estimates)
For the three-month period ended June 30, 2013, the Company changed its assumptions and estimates related to theacquisition of Sprint, which are used as a material basis for the carrying amount of the convertible bonds issued by
Sprint Nextel Corporation and held by a subsidiary, Starburst II, Inc. The corporate bond was converted to the sharesof Sprint shares in July 2013.
The details are described in “Note 14. Other non-operating income and loss, (6) Notes to Consolidated Financial
Statements, 4. Consolidated Financial Statements.”

29

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

4. Consolidated Financial Statements(1) Consolidated Statements of Financial Position(Millions of yen)

As ofApril 1, 2012
AssetsCurrent assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Inventories
Other current assets
Total current assets
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

30

As of
March 31, 2013

As ofMarch 31, 2014

1,021,113
786,902
10,39955,68385,014
1,959,111

1,439,057
936,307229,239
54,268127,148
2,786,019

1,963,490
1,669,545
164,727
251,677
293,221
4,342,660

1,377,185
777,911340,323

1,830,615
924,972
528,683

3,586,327
1,532,305
6,177,701

208,526

208,664

304,318

318,599
183,40985,4903,291,443
5,250,554

634,647
175,390
129,182
4,432,153
7,218,172

401,693
172,732
167,261
12,342,337
16,684,997

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

(Millions of yen)

As ofApril 1, 2012
Liabilities and equity
Current liabilities
Interest-bearing debt
Trade and other payables
Other financial liabilities
Income taxes payables
Provisions
Other current liabilities
Total current liabilities
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
Additional paid-in capital
Retained earnings
Treasury stock
Accumulated other comprehensive income
Total equity attributable to owners of theparentNon-controlling interests
Total equity
Total liabilities and equity

31

As of
March 31, 2013

As ofMarch 31, 2014

926,671975,832
1,206
123,213
1,456
94,155
2,122,533

1,534,128
972,669
4,833
182,050
1,602
142,634
2,837,916

1,147,899
1,705,956
5,847
246,013
93,115534,948
3,733,778

1,763,273
37,17014,953
20,64345,351
79,585
1,960,975
4,083,508

2,173,725
38,654
14,506
21,765
120,979
80,1872,449,816
5,287,732

8,022,154
41,151
77,041
136,920
1,533,021
282,262
10,092,549
13,826,327

213,798
250,767
405,584(22,947)
45,433

238,772
436,704
712,088(22,834)
248,026

238,772
405,111
1,193,366(51,492)
169,617892,635

1,612,756

1,955,374

274,411
1,167,046
5,250,554

317,684
1,930,440
7,218,172

903,2962,858,670
16,684,997

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

(2) Consolidated Statements of Income and Other Comprehensive Income

Consolidated Statements of Income(Millions of yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Income from remeasurement relating to businesscombination
Other operating loss
Operating income
Finance cost
Equity in income (loss) of associates
Other non-operating income (loss)
Income before income tax
Income taxes
Net income
Net income attributable to
Owners of the parent
Non-controlling interests

Earnings per share attributable to owners of the parent
Basic (yen)Diluted (yen)32

Fiscal year ended
March 31, 2013
3,202,536(1,610,842)
1,591,694(794,073)

Fiscal year ended
March 31, 2014
6,666,651(3,953,170)
2,713,481(1,826,575)

1,778

253,886

799,399(65,297)(3,663)(14,935)
715,504(277,667)
437,837(55,430)
1,085,362(271,478)
74,40244,081
932,367(346,218)
586,149

372,481
65,356437,837

527,035
59,114
586,149

332.51
328.08442.64440.37

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

Consolidated Statements of Comprehensive Income(Millions of yen)

Fiscal year ended
March 31, 2013
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
Total comprehensive income attributable to
Owners of the parent
Non-controlling interests

33

Fiscal year ended
March 31, 2014

437,837

586,149

68

3,214

68

3,214

4,489
115,136(38,767)(134,002)

65,856

90,38818,801

18,588204,282(63,793)

204,350
642,187(60,579)
525,570

575,142
67,045642,187

451,167
74,403
525,570

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

(3) Consolidated Statements of Changes in Equity
For the fiscal year ended March 31, 2013
(Millions of yen)
Equity attributable to owners of the parent

As of April 1, 2012
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
Issuance of new shares
Purchase and disposal oftreasury stock
Changes from businesscombination
Changes in interests in
subsidiaries
Changes in associates’interests in theirsubsidiaries
Decrease by exercise ofstock acquisition right
Share-based paymenttransactions
Other
Total transactions withowners and othertransactions
As of March 31, 2013

Commonstock
213,798

Additional
paid-in
capital250,767

Retainedearnings
405,584

Treasurystock(22,947)--

372,481---

Accumulated
othercomprehensive
income45,433

Total
892,635

Noncontrollinginterests
274,411

Total equity
1,167,046--

372,481

65,356437,837--

202,661

202,661

1,689

204,350-

372,481-202,661

575,142

67,045642,187--(66,045)--(66,045)(12,840)(78,885)

-

-

68

-

(68)

-

-

-

24,974257,432---

282,406-

282,406

-

13

-

113

-

126

-

126

-

-

-

-

-

-

2,667

2,667

-

(6,821)---(6,821)(14,217)(21,038)-(51,223)---(51,223)-(51,223)-(13,539)---(13,539)-(13,539)

-

75

-

-

-

75

-

75

-

-

-

-

-

-

618

618

24,974

185,937(65,977)

113

(68)

144,979(23,772)

121,207

238,772

436,704

712,088(22,834)

248,026

1,612,756

317,684

1,930,44034

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

For the fiscal year ended March 31, 2014
(Millions of yen)
Equity attributable to owners of the parent

As of April 1, 2013
Comprehensive income
Net income
Other comprehensive
income (loss)
Total comprehensive
incomeTransactions withowners and othertransactions
Cash dividends
Transfer of accumulated
other comprehensive
loss to retained
earnings
Purchase and disposalof treasury stock
Changes from businesscombination
Acquisition of options
to convert tosubsidiaries’common stocks
Changes in interestsin subsidiaries
Share-based paymenttransactions
Other
Total transactions
with owners andother transactions
As of March 31, 2014

Accumulated
other
Treasury comprehensivestock
income(22,834)
248,026

Commonstock
238,772

Additional
paid-in
capital436,704

Retainedearnings
712,088--527,035

-

-

-

-

-

-

-

Total
1,612,756

Noncontrollinginterests
317,684

Total equity
1,930,440-

527,035

59,114

586,149-(75,868)(75,868)

15,289(60,579)

527,035-(75,868)

451,167

74,403

525,570-(47,669)--(47,669)(15,365)(63,034)

-

-

2,541

-

(2,541)

-

-

-

-

(13)

(629)

(28,658)-(29,300)-(29,300)

-

-

-

-

-

-

573,447

573,447-(10,323)---(10,323)-(10,323)-(21,553)---(21,553)(57,250)(78,803)

-

296

-

-

-

296

11,21911,515

-

-

-

-

-

-

(842)

(842)

-

(31,593)(45,757)(28,658)(2,541)(108,549)

511,209402,660

405,111 1,193,366(51,492)

169,617

1,955,374

903,2962,858,670

238,77235

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

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

Fiscal year ended
March 31, 2013
Cash flows from operating activities
Net income
Depreciation and amortization
Income from remeasurement relating to businesscombination
Finance cost
Equity in loss (income) of associates
Other non-operating loss (income)
Income taxes
Increase in trade and other receivables
Increase in trade and other payables

Fiscal year ended
March 31, 2014

437,837
355,120

586,149
899,904(1,778)(253,886)

65,297
3,663
14,935
277,667(58,444)
39,365

271,478(74,402)(44,081)346,218(106,055)
21,375

Other(35,007)(171,927)

Subtotal

1,098,655

1,474,773

Interest and dividends received
Interest paid
Income taxes paid
Net cash provided by operating activities

2,886(72,296)(216,220)813,0257,546(306,697)(315,377)
860,245(589,321)(318,306)
20,676(1,371,400)(208,322)
260,789

12,227(1,663,539)-

310,104580(874,144)(45,820)(2,718,188)345,572(201,794)

1,324,585(898,867)

4,698,294(1,971,594)(20,549)(83,232)(66,527)(12,798)(47,600)(14,747)(200,444)-

505
471,477(19,952)
2,359,375

7,586
417,944
1,021,113
1,439,057

23,001
524,433
1,439,057
1,963,490

Cash flows from investing activities
Purchase of property, plant and equipment, andintangible assets
Payments for acquisition of investments
Proceeds from sales/redemption of investments
Increase (decrease) from acquisition of control oversubsidiaries
Proceeds from settlement of foreign currency forward
contract for acquisition of control of subsidiaries
Other
Net cash used in investing activities
Cash flows from financing activities
Increase (decrease) in short-term interest-bearing
debt, net
Proceeds from long-term interest-bearing debt
Repayment of long-term interest-bearing debt
Payment from purchase of subsidiaries’ equity from
non-controlling interests
Cash dividends paid
Cash dividends paid to non-controlling interests
Payments for preferred stocks, stock acquisition rights,
and long-term debt of subsidiaries
Other
Net cash provided by financing activities
Effect of exchange rate changes on cash and cash
equivalents
Increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year

36SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014(5) Significant Doubt about Going-Concern Assumption
There are no applicable items for the fiscal year ended March 31, 2014.
(6) Notes to Consolidated Financial Statements
1. Reporting entity
SoftBank Corp. is a corporation domiciled in Japan. These consolidated financial statements are composed of
SoftBank Corp. and its subsidiaries (the “Company”). The Company engages in various businesses in theinformation industry, with its base in the Mobile Communications segment, the Sprint segment, the Fixed-Line
Telecommunications segment, and the Internet segment. The Sprint segment was added to our business as aresult of the following acquisition during the three-month period ended September 30, 2013.
On July 10, 2013, the Company acquired approximately 78% of the shares of Sprint Corporation (previously
Sprint Nextel Corporation) (hereinafter (“Sprint”)), and Sprint became a subsidiary of SoftBank Corp. In
addition, the Company additionally acquired approximately 2% of Sprint shares from August 1 to September 16,
2013. As a result, the Company’s ownership in the outstanding Sprint common stock became approximately
80% as of March 31, 2014.
The details are described in “(3) Sprint” in “Note 5. Business combinations” and in “(1) Description of reportablesegment” in “Note 6. Segment information.”

2. Basis of preparation of consolidated financial statements(1) Compliance with IFRSs and first-time adoption
The Company meets the criteria of a “Specified Company” defined under Article 1-2 of the Regulations
Concerning Terminology, Forms, and Preparation Methods of Consolidated Financial Statements (“theRegulations of Consolidated Statements”) (Ministry of Finance Regulation No.28, 1976), and accordingly the
consolidated financial statements of the Company have been prepared in compliance with International Financial
Reporting Standards (“IFRSs”) pursuant to Article 93 of the Regulations of Consolidated Statements.
The Company has prepared the consolidated financial statements in accordance with IFRSs from the three-month
period ended June 30, 2013, the first quarter of the fiscal year ended March 31, 2014. The date of transition to
IFRSs is April 1, 2012. The Company applied IFRS 1 First-time Adoption of International Financial ReportingStandards (“IFRS 1”) for the transition to IFRSs. The effect of the transition to IFRSs on the Company’s
financial position, result of operations, and cash flows is provided in “Note 17. First-time adoption of IFRSs.”
The Company’s accounting policies comply with IFRSs effective at March 31, 2014, excluding the standards
which have not been early adopted and the exemptions permitted by IFRS 1.
(2) Basis of measurement
These consolidated financial statements have been prepared on the historical cost basis, except for certain items,
such as financial instruments, that are measured at fair value as described in “Note 3. Significant accounting
policies.”(3) Presentation currency and unit of currency
These consolidated financial statements have been presented in Japanese yen, which is the currency of the primaryeconomic environment of SoftBank Corp. (hereinafter “functional currency”), and are rounded off to the nearest
million yen.
(4) New standards, interpretations, and revisions early adopted by the Company
The Company has early adopted IAS 36 “Impairment of Assets” (amended in May, 2013), which revises thedisclosure of the recoverable amount of non-financial assets regarding impairment.

37

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

(5) New standards and interpretations not yet adopted by the Company
New standards and interpretations which are newly established or amended before the approval date of theconsolidated financial statements, not yet adopted by the Company and will have potential impacts are as follows.
The Company is currently evaluating potential impacts and it is not possible to estimate the amount of these
impacts.

Mandatory adoption
Standard/interpretation
IAS 32Financial(From the year

To be adopted

beginning)by the Group

January 1, 201431, 2015

Presentation
IFRS 9Financial

Fiscal year
ending March(Amendments) Instruments:

Not determined

Not determined

IFRS 9 replaces a part of the previous IAS 39. The main
revisions are:to revise classification of measurement categories offinancial assets (amortized costs and fair values) andmeasurement;
to revise the treatment of changes in fair values offinancial liabilities measured at fair values; and,to revise the eligibility requirement of hedged items andhedging instruments, and requirements related to theeffectiveness of the hedge.

January 1, 2014

Fiscal year

To clarify the timing of recognition of liabilities related tothe payment of levies

Instruments

IFRIC 21

LeviesOutline of the new/revised standards
To clarify the requirements of net presentation offinancial assets and liabilities

ending March
31, 2015(6) Abbreviation of the notes
Abbreviations used in the notes are as follows:Abbreviation

Company name /Group name“the Company”

SoftBank Corp. and its subsidiaries“Sprint”

Sprint Corporation (previously Sprint Nextel Corporation)“Clearwire”

Clearwire Corporation“GungHo”

GunHo Online Entertainment, inc.

“Supercell”

Supercell Oy“Kahon 3”

Kahon 3 Oy

“SoftBank C&S”

SoftBank Commerce & Service Corp.

“WCP”

Wireless City Planning Inc.

38

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

3. Significant accounting policies
Accounting policies the Company has adopted have been applied consistently to all periods presented in these
consolidated financial statements (including the consolidated statement of financial position at the date of transition
to IFRSs).
(1) Basis of consolidationa. Subsidiaries
A subsidiary is an entity that is controlled by SoftBank Corp.
The Company controls an entity when the Company is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those returns through its power over the entity.
The subsidiaries’ financial statements are consolidated from the date when control is acquired (“acquisitiondate”) until the date when the control is lost.
When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting
policies in line with those used by the Company.
Non-controlling interests consist of those interests at the acquisition date and any adjustments for subsequentchanges in those interests.
Total comprehensive income of subsidiaries is generally attributed to the owners of the parent and to thenon-controlling interests, even if this results in the non-controlling interests having a deficit balance.
All intragroup balances and transactions and unrealized gain or loss arising from intragroup transactions are
eliminated on consolidation.
Changes in the Company’s ownership interests in subsidiaries that do not result in the Company’s losing
control over the subsidiaries are accounted for as equity transactions. The carrying amounts of theCompany’s interests and the non-controlling interests are adjusted to reflect the changes in their interests in thesubsidiaries.
Any difference between the amount by which the non-controlling interests are adjusted and the fair value of theconsideration paid or received is recognized directly in equity and attributed to owners of the parent.
When SoftBank Corp. loses control of a subsidiary, a gain or loss is calculated as the difference between:
・the aggregate of the fair value of the consideration received and the fair value of any retained interest, and:・the net carrying amount of the assets (including goodwill), liabilities, and non-controlling interests of thesubsidiary when a control is lost.
Any amounts previously recognized in accumulated other comprehensive income in relation to the former
subsidiaries are reclassified to profit or loss.
b. Associates
An associate is an entity over which SoftBank Corp. has significant influence in the financial and operating
policy decisions but does not have control or joint control.
Investments in associates are accounted for using the equity method and initially recognized at cost. The
investment is adjusted thereafter to recognize the Company’s share of the profit or loss and othercomprehensive income from the date of acquisition to the date of loss of significant influence.
When the loss of an associate exceeds the Company’s interest in that associate, long-term interests that, in
substance, form a part of the net investment in the company are decreased to zero, and no additional loss isrecognized except when the Company incurs legal or constructive obligations to or makes payments on behalfof the associate.

39SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

Unrealized gains or losses on intercompany transactions with associates are added to or deducted from thecarrying amount of the investments only to the extent of the Company’s interests in the associates.
Any excess in the cost of acquisition of an associate over the Company’s share of the net fair value of theidentifiable assets and liabilities recognized at the date of acquisition is recognized as goodwill and included
within the carrying amount of the investments in associates.
Because goodwill is not separately recognized, it is not tested for impairment separately. Instead, the entire
carrying amount of the investment in associates, including goodwill, is tested for impairment as a single asset
whenever objective evidence indicates that the investment may be impaired.
The Company applies the equity method to the financial statements of Alibaba Group Holding Limited, anassociate of the Company, on a three-month time lag, as it is impracticable to conform the reporting period of
Alibaba Group Holding Limited due to the contract with Alibaba Group Holding Limited. Adjustments are
made for significant transactions or events which occurred during the intervening period and which were
publicly announced by Alibaba Group Holding Limited.
(2) Business combinations
Business combinations are accounted for using the acquisition method at the acquisition date.
The consideration transferred in a business combination is measured as the sum of the assets transferred by theCompany, liabilities assumed by the Company from the former owners of the acquiree, and the fair value at theacquisition date of the equity interests issued by the Company. Acquisition-related costs are recognized in profit
or loss as incurred.
At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognized at their fairvalue, except that:・deferred tax assets or liabilities and assets or liabilities related to employee benefits are recognized andmeasured in accordance with IAS 12 “Income Taxes” and IAS 19 “Employee Benefits,” respectively;
・liabilities or equity instruments related to share-based payment arrangements of the acquiree or share-based
payment arrangements of the Company entered into to replace share-based payment arrangements of theacquiree are measured in accordance with IFRS 2 “Share-based Payment” at the acquisition date; and・assets or disposal groups that are classified as held for sale are measured in accordance with IFRS 5“Non-current Assets Held for Sale and Discontinued Operations.”
The excess of the consideration transferred and the amount of any non-controlling interest in the acquiree overthe fair value of the identifiable net assets acquired at the acquisition date is recorded as goodwill. If theconsideration transferred and the amount of any non-controlling interest in the acquiree is less than the fair valueof the identifiable net assets of the acquired subsidiary, the difference is recognized immediately in profit or loss.
On an acquisition-by-acquisition basis, the Company chooses a measurement basis of non-controlling interests ateither fair value or by the proportionate share of the non-controlling interests in the recognized amounts of theacquiree’s identifiable net assets. When a business combination is achieved in stages, the Company’s
previously held interest in the acquiree is remeasured to fair value at the acquisition date and the resulting gain or
loss, if any, is recognized in profit or loss.
Amounts arising from changes in the value of interests in the acquiree prior to the acquisition date that havepreviously been recognized in other comprehensive income are recognized in profit or loss.
If the initial accounting for a business combination is incomplete by the end of the fiscal year, the Company
reports in its consolidated financial statements provisional amounts for the items for which the accounting is
incomplete. The Company retrospectively adjusts the provisional amounts recognized at the acquisition date as
an adjustment during the measurement period when new information about facts and circumstances that existed
as of the acquisition date and, if known, would have affected the recognized amounts for the businesscombination. The measurement period shall not exceed one year from the acquisition date.

40

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

The Company has used the exemption in IFRS 1 and elected not to apply IFRS 3 “Business Combinations”
retrospectively to business combinations that occurred before April 1, 2012 (the date of transition to IFRSs).
Goodwill arising in business combinations that occurred before the date of transition to IFRSs is carried over at
the carrying amount under the previous accounting standard (JGAAP) as of the date of transition to IFRSs, andrecorded by that amount after impairment test.
(3) Foreign currency translationa. Transactions denominated in foreign currencies
The financial statements of each Group company are prepared in the functional currency. Transactions incurrencies other than the entity’s functional currency (foreign currencies) are translated at the rates of
exchange prevailing at the dates of the transactions.
Monetary items denominated in foreign currencies are translated into the functional currency at the rates
prevailing at the end of the fiscal year. Non-monetary items carried at fair value that are denominated inforeign currencies are translated into the functional currency at the rates prevailing at the date when the fairvalue was measured.
Exchange differences arising from translation are recognized in profit or loss, except for exchange differences
arising from non-monetary available-for-sale financial assets measured through other comprehensive income
and cash flow hedges are recognized in other comprehensive income.
b. Foreign operations
For the purposes of presenting consolidated financial statements, the assets and liabilities of the Company’s
foreign operations (including goodwill arising from acquisitions and the adjustments of fair value) aretranslated into Japanese yen using exchange rates prevailing at the end of the fiscal year.
Income, expenses and cash flows are translated into Japanese yen by using the average exchange rates for thequarter. When the translated amounts do not approximate the amounts translated by the exchange rates at thedates of the transactions, the exchange rates at the transaction dates are used for the translation.
The exchange rates used in the translation are described in “Note 10. Exchange rate.”
Exchange differences arising from translating the financial statements of foreign operations are recognized inother comprehensive income and cumulative differences are included in accumulated other comprehensive
income.
These cumulative differences are reclassified from equity to profit or loss when the Company loses control orsignificant influence over the foreign operation.
With the adoption of the exemption in IFRS 1, the Company transferred all of the accumulated exchange
differences to retained earnings at the date of transition to IFRSs.
(4) Financial instruments
a. Financial instruments
Financial assets and financial liabilities are recognized when the Company becomes a party to the contract
provision of the instrument.
Financial assets and financial liabilities are measured at fair value at initial recognition. Transaction costs thatare directly attributable to the acquisition of financial assets and issuance of financial liabilities other thanfinancial assets at fair value through profit or loss (“financial assets at FVTPL”) and financial liabilities at fairvalue through profit or loss (“financial liabilities at FVTPL”) are added to the fair value of the financial assets
or deducted from the fair value of financial liabilities at initial recognition. Transaction costs directly
attributable to the acquisition of financial assets at FVTPL and financial liabilities at FVTPL are recognized in
profit or loss.

41

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014b. Non-derivative financial assets
Non-derivative financial assets are classified into “financial assets at FVTPL”, “held-to-maturity investments”,“loans and receivables,” and “available-for-sale financial assets.”
The classification depends on the natureand purpose of the financial assets and is determined at initial recognition.
All purchase and sales of financial assets in a regular way are recognized and derecognized on a trade datebasis. The purchase and sales in a regular way refer to acquiring or disposing financial assets under a contractthat requires the delivery of assets within a time frame established by regulation or convention in themarketplace.
(a) Financial assets at FVTPL
The Company designates a financial asset as a financial asset at FVTPL upon initial recognition, if:・the financial assets are managed in accordance with the Company’s documented risk management policy
or investment strategy, and:・its performance is reviewed on the fair value basis by the Company’s management to make decisions
about the investment plan.
Subsequent to initial recognition, financial assets at FVTPL are measured at fair value, with any gains orloss arising from changes in fair value, dividend income and interest income recognized in profit or loss.
(b) Held-to-maturity investments
Non-derivative financial assets with fixed or determinable payments and fixed maturity dates that theCompany has the positive intent and ability to hold to maturity are classified as “held-to-maturity
investments.”
Subsequent to initial recognition, held-to-maturity investments are measured at amortized cost using theeffective interest method less any impairment. Interest income based on the effective interest rate isrecognized in profit or loss.
(c) Loans and receivables
Non-derivative financial assets with fixed or determinable payments that are not quoted in an active market
are classified as “loans and receivables.”Subsequent to initial recognition, loans and receivables are measured at amortized cost using the effective
interest method, less any impairment. Interest income based on the effective interest rate is recognized in
profit or loss.
(d) Available-for-sale financial assets
Non-derivative financial assets are classified as “available-for-sale financial assets,” if:・they are designated as “available-for-sale financial assets”; or・they are classified neither as “financial assets at FVTPL,” “held-to-maturity investments,” nor as “loans
and receivables.”Subsequent to initial recognition, available-for-sale financial assets are measured at fair value and gains orlosses arising from changes in fair value are recognized in other comprehensive income. Exchange
differences arising on monetary financial assets classified as available-for-sale financial assets, interest
income calculated using the effective interest method relating to available-for-sale financial assets anddividends received are recognized in profit or loss.
(e) Impairment of financial assets
Among financial assets other than those at FVTPL, available-for-sale equity instruments are assessed forany objective evidence of impairment at the end of the fiscal year and at the end of each quarter, and theother assets are assessed for any objective evidence of impairment at the end of the fiscal year. Financial
assets are impaired when there is objective evidence that loss events occurred subsequent to initialrecognition of the financial assets and when estimated negative future cash flows of the financial assets fromthose events can be reasonably estimated.

42SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

For available-for-sale equity instruments, a significant or prolonged decline in the fair value below the cost
is considered to be objective evidence of impairment. In addition, objective evidence of impairment of all
financial assets could include:・significant financial difficulty of the issuer or borrower;・breach of contract, such as a default or delinquency in interest or principal payments;
・high possibilities of borrowers’ bankruptcy or entering financial reorganization; or・disappearance of an active market for the financial assets.
The Company assesses the existence of objective evidence of impairment individually for separately
significant assets or collectively for assets with no individual significance.
When there is objective evidence of impairment on loans and receivables or held-to-maturity investments,
the difference between the asset’s carrying amount and the present value of estimated future cash flows,
discounted at the original effective interest rate, is recognized in profit or loss as an impairment loss. The
impairment loss is recognized through the use of an allowance account, and the carrying amount of a loan
and receivable is written off against the allowance account when it is considered uncollectible.
The carrying amount of held-to-maturity investments is reduced by the impairment loss directly. If, in a
subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively
to an event occurring after the impairment was recognized, the previously recognized impairment loss isreversed through profit or loss to the extent that the carrying amount of the financial asset does not exceed
what the amortized cost would have been had the impairment not been recognized.
When there is objective evidence that an available-for-sale financial asset is impaired, previously
recognized accumulated other comprehensive income is transferred to profit or loss. Impairment losses on
equity instruments classified as available-for-sale financial assets are not reversed.
(f) Derecognition of financial assets
The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial
asset expire or when it transfers the financial asset and substantially all the risks and rewards of ownershipof the financial asset.
c. Non-derivative financial liabilities
The Company’s non-derivative financial liabilities include interest-bearing debt and trade and other payables.
These financial liabilities are measured at amortized cost using the effective interest method, subsequent toinitial recognition.
The Company derecognizes financial liabilities when the Company’s obligations are discharged, canceled or
expired.
d. Derivatives and hedge accounting(a) Derivatives
The Company is engaged in derivative transactions, including foreign currency forward contract andinterest rate swaps in order to manage its exposure to foreign exchange rate and interest rate risks.
Derivatives are initially recognized at fair value at the date the derivative contracts are entered into and aresubsequently measured at their fair values at the end of fiscal year. Changes in the fair value of derivative
are recognized in profit or loss immediately unless the derivative is designated and effective as a hedging
instrument. Derivative financial assets not designated as hedging instruments are classified into “financial
assets at FVTPL” and derivative financial liabilities not designated as hedging instruments are classified
into “financial liabilities at FVTPL.”

43

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014(b) Hedge accounting
The Company designates certain derivative transactions as hedging instruments and accounts for them ascash flow hedges.
At the inception of the hedge, the Company formally designates and documents the hedge relationshipqualifying for hedge accounting, along with its risk management objectives and its strategy for undertaking
various hedge transactions. At the inception of the hedge and on an ongoing basis, the Company evaluates
whether the hedging instrument is highly effective in offsetting changes in fair values or cash flows of therelevant hedged item during the underlying period.
The effective portion of changes in the fair value of derivatives that are designated and qualifying as cash
flow hedges is recognized in other comprehensive income and accumulated in equity. Accumulated othercomprehensive income is transferred to profit or loss through a line item relating to the hedged item in the
consolidated statement of income, in the periods when the cash flows from the hedged item affect profit orloss. Any ineffective portion of changes in fair value of derivatives is recognized immediately in profit orloss.
When the hedged forecasted transaction subsequently results in the recognition of a non-financial asset or a
non-financial liability, the Company removes the associated gains or losses previously recognized inaccumulated other comprehensive income and includes them in the initial amount of the cost of thenon-financial asset or non-financial liability (basis adjustment).

Hedge accounting is discontinued when the Company revokes the hedging relationship, when the hedging
instrument expires or is sold, terminated or exercised or when hedge no longer meets the criteria for hedge
accounting.
When hedge accounting is discontinued, any gains or losses recognized in accumulated othercomprehensive income remains in equity and is reclassified to profit or loss when the forecasted transaction
is ultimately recognized in profit or loss. When a forecasted transaction is no longer expected to occur,
the gains or losses recognized in accumulated other comprehensive income is reclassified immediately to
profit or loss.
(c) Embedded derivatives
Derivatives embedded in non-derivative host contracts (“embedded derivatives”) are separated from thehost contracts and accounted for as separate derivatives when their economic characteristics and risks are
not closely related to those of the host contracts and the whole financial instruments, including embedded
derivatives, are not measured at FVTPL.
e. Compound instruments
Compound instruments issued by the Company (corporate bonds with stock acquisition rights) are classified asliability and equity components in accordance with their contractual arrangements. Upon initial recognitionof compound instruments, the liability component is measured based on the fair value of similar liabilities withno equity conversion option, and the equity component is measured as the difference between the fair value ofthe compound instrument as a whole and the fair value of the liability component.
Transaction costs are allocated to the liability and equity components in proportion to the initial carrying
amounts. Transaction costs related to the equity component are deducted from equity.
Subsequent to initial recognition, the liability component is measured on an amortized cost basis using theeffective interest method. The equity component is not remeasured after initial recognition.

44

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

f. Offsetting financial assets and financial liabilities
Financial assets and financial liabilities are offset, and the net amounts are presented in the consolidated
statement of financial position when, and only when, the Company currently has a legally enforceable right to
set off the recognized amounts, and intends either to settle on a net basis or to realize the assets and settle theliabilities simultaneously.
(5) Cash and cash equivalents
Cash and cash equivalents consist of cash, demand deposits and short-term investments with maturities ofthree-month or less that are readily convertible to cash and subject to insignificant risk of change in value.
(6) Inventories
Inventories are stated at the lower of cost or net realizable value. Inventories mainly consist of mobile handsets
and accessories. Their costs comprise all costs of purchase and other costs incurred in bringing the inventories
to their present location and condition. The costs are mainly calculated on the moving-average method.
Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs
necessary to make the sale.
(7) Property, plant and equipment
Property, plant and equipment are measured on a historical cost basis, less accumulated depreciation andaccumulated impairment losses. Historical cost includes costs directly attributable to the acquisition of the asset
and the initial estimated costs related to disassembly, retirement and site restoration.
Property, plant and equipment are depreciated mainly using the straight-line method over the estimated useful
lives of each component. The depreciable amount is calculated as the cost of an asset, less its residual value.
Land and construction in progress are not depreciated.

The estimated useful lives of major components of property, plant and equipment are as follows:
Buildings and structures
Buildings

30 - 50 years

Other

5 - 15 years

Telecommunications equipment
Wireless equipment, switching equipment,
and other network equipment

3 - 15 years

Towers15 - 42 years

Other

5 - 40 years

Other

2 - 10 years

The depreciation methods, useful lives, and residual values of assets are reviewed at the end of each fiscal year,
and any changes are applied prospectively as a change in an accounting estimate.
Assets held under finance leases are depreciated over their estimated useful lives when there is certainty thatownership will be obtained by the end of the lease term. However, when there is no certainty that ownershipwill be obtained by the end of the lease term, assets are depreciated over the shorter of the lease term or theirestimated useful lives.

45

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014(8) Goodwill
Please refer to “(2) Business combinations” in “Note 3. Significant accounting policies” for the measurement of
goodwill at initial recognition. Goodwill is measured at cost less accumulated impairment losses.
Goodwill is not amortized, and is tested for impairment when there is an indication of impairment incash-generating units to which goodwill has been allocated, and annually regardless of any indication of
impairment. Impairment is described in “(11) Impairment of tangible assets, intangible assets and goodwill” in“Note 3. Significant accounting policies.”
The Company’s policy for goodwill arising on the acquisition of an associate is described in “(1) Basis of
consolidation” in “Note 3. Significant accounting policies.”(9) Intangible assets
Intangible assets are measured on a historical cost basis at cost, less accumulated amortization and accumulated
impairment losses.
Intangible assets acquired separately are measured at cost at initial recognition. Intangible assets acquired in abusiness combination are recognized separately from goodwill at initial recognition and are measured at fair value
at the acquisition date. Any internally generated research and development expenditure is recognized as an
expense in the period in which it is incurred, except for expenditures on development activities eligible forcapitalization (internally generated intangible assets). The amount initially recognized for internally generated
intangible assets is the sum of the expenditure incurred from the date when the intangible asset first meets all of
the capitalization criteria to the date the development is completed.
There are intangible assets with finite useful lives and intangible assets with indefinite useful lives.
The intangible assets with finite useful lives are amortized over the estimated useful lives. Amortization of thecustomer relationships is calculated by the sum-of-the-digits method and intangible assets with finite useful lives
other than customer relationships are amortized by the straight-line method.

The estimated useful lives of major categories of intangible assets with finite useful lives are as follows:
Software
Software related to wireless equipment

5 - 10 years

Other

3 - 5 years

Customer relationships

4 - 16 years

Favorable lease contracts

3 - 23 years

Game titles

3 - 5 years

Trademarks (with finite useful lives)
Other

34 years3 - 20 years

Amortization methods, useful lives and residual values of assets are reviewed at the end of each fiscal year, andany changes are applied prospectively as a change in an accounting estimate.
Favorable lease contracts are recognized as intangible assets based on the estimated fair value of the favorable
portion of future cash flows if, at the time of business combinations, the terms of operating lease contracts inwhich the acquiree is the lessee are favorable compared to market terms.
Intangible assets with indefinite useful lives are as follows:・Licenses using specific frequency spectrum granted by Federal Communications Commission (“FCC Licenses”)
・Trademarks (with indefinite useful lives)46

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

As long as the Company acts within the requirements of the regulatory authorities, the renewal and extension of
FCC Licenses are reasonably certain at minimal cost. Since the development of any technology that would
render this spectrum obsolete is not known, it is determined that FCC Licenses have indefinite useful lives. The
Company determined that “Sprint”, “Boost Mobile” and other trademarks have indefinite useful lives as they canbe legally used continuously as long as the business continues.
The intangible assets with indefinite useful lives and the intangible assets that are not yet available for use are notamortized. The impairment of these assets is described in “(11) Impairment of tangible assets, intangible assets
and goodwill” in “Note 3. Significant accounting policies.”(10) Leases
The assessment of whether an arrangement is a lease or contains a lease is made on a basis of all the facts andcircumstances at the inception of the arrangement.
Leases are classified as finance leases whenever all the risks and rewards of ownership of assets are substantiallytransferred to the lessee. All other leases are classified as operating leases. It is determined that all the risks
and rewards of ownership of assets are transferred to the lessee when the lease terms account for most of theeconomic useful lives of the assets, or the present values of the total minimum lease payments are almost equal to
the fair values of the assets. The lease terms are the total of the non-cancelable period and the period which isdeemed to be reasonably certain that the renewal option will be exercised at the inception of the leases.
a. Finance leases(The Company as lessee)
At inception, the Company initially recognizes finance leases as assets and the lease obligation at the amountequal to the fair value of the leased property or, if lower, at the present value of the minimum lease payments.
Subsequent to initial recognition, the accounting policy for assets held under finance leases is consistent withthat of assets that are owned. Lease payments are apportioned between finance cost and reduction of the leaseobligation so as to achieve a constant rate of interest on the remaining balance of the liability.
b. Operating leases(The Company as lessee)
Gross operating lease payments are recognized as expenses on a straight-line basis over the relevant lease terms.
(11) Impairment of property, plant and equipment, intangible assets and goodwill
a. Impairment of property, plant and equipment and intangible assets
At the end of the fiscal year, the Company determines whether there is any indication that property, plant andequipment and intangible assets may be impaired.
If any such indication exists, the recoverable amount of the asset is estimated. When it is not possible toestimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the
cash-generating unit to which the asset belongs. A cash-generating unit is the smallest identifiable group ofassets that generates cash inflows that are largely independent of the cash inflows from other assets or groups ofassets.
The intangible assets with indefinite useful lives and the intangible assets that are not yet available for use aretested for impairment annually regardless of whether there is any indication of impairment.
The recoverable amount is the higher of fair value less costs to sell or value in use. In assessing value in use,
the estimated future cash flows are discounted to their present value using a pretax discount rate that reflects thetime value of money and the risks specific to the asset.
If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, thecarrying amount of the asset or cash-generating unit is reduced to its recoverable amount, and an impairment
loss is recognized in profit or loss.

47

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

At the end of the fiscal year, the Company evaluates whether there is any indication that an impairment loss
recognized in prior years for assets other than goodwill has decreased or extinguished. If such indication of areversal of an impairment loss exists, the recoverable amount of the asset or cash-generating unit is estimated.
If the recoverable amount of an asset or cash-generating unit is estimated to be higher than its carrying amount,a reversal of an impairment loss is recognized, to the extent that the increased carrying amount does not exceed
the lower of the recoverable amount or the carrying amount (less depreciation and amortization) that would
have been recognized, had no impairment loss been recognized.
b. Impairment of goodwill
At the end of the fiscal year and at the end of each quarter, the Company determines whether there is any
indication that goodwill may be impaired.
Goodwill is allocated to each of the cash-generating units or groups of cash-generating units that are expected
to benefit from the synergies arising from the combination, and it is tested for impairment annually regardlessof any indication of impairment, and when there is an indication that the cash-generating unit may be impaired.
If, at the time of the impairment test, the recoverable amount of the cash-generating unit is less than its carrying
amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the
cash-generating unit or groups of cash-generating units and then to the other assets pro rata based on the
carrying amount of each asset in the unit or groups of cash-generating units.
Any impairment loss for goodwill is recognized directly in profit or loss and is not reversed in subsequent
periods.
(12) Retirement benefits
Defined contribution plans are post-employment benefit plans under which an employer pays fixed contributions
into a separate fund and will have no legal or constructive obligations to pay further contributions. Defined benefit
plans are post-employment benefit plans other than defined contribution plans.
The Company primarily adopts defined contribution pension plans.
SoftBank Mobile Corp. and SoftBank Telecom Corp. have frozen their defined benefit lump-sum plans as ofMarch 2006 and 2007, respectively. Liabilities for the frozen defined benefit lump-sum plans are recognized as
defined benefit liabilities until they are paid in the form of a lump sum at the time of future retirement of
employees.
Sprint has frozen its defined benefit pension plans as of December 2005. Liabilities for the defined benefit
pension plans are recognized as defined benefit liabilities until they are paid as pension after the time of retirementof employees.
a. Defined contribution plans
Contributions paid for defined contribution plans are recognized as expenses in the period in which theemployees render the related service. Contributions payable are recognized as liabilities.
b. Defined benefit plans
The liability recognized in respect of the defined benefit plans (the defined benefit liability) is the present valueof the defined benefit obligation less the fair value of plan assets at the end of the fiscal year.
The defined benefit obligation is determined by independent actuaries using the projected unit credit method,and its present value is determined applying a discount rate based on the yield curve of high-quality corporate
bonds over the approximate period of the benefit payments.
Defined benefit cost includes service cost, net interest on the net defined benefit liability (asset), andre-measurements of the net defined benefit liability (asset). Service cost and net interest are recognized in net
profit or loss. Net interest is determined using the discount rate described above.

48

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

The liabilities for defined benefit plans frozen due to the transition to defined contribution plans are calculatedon the basis of retirement benefits vested at the time of the transition of the plans. Therefore, service cost is
not incurred for those defined benefit plans.
The Company’s remeasurements, which comprise actuarial gains and losses and the return on plan assets(excluding amounts included in net interest), are recognized in other comprehensive income and transferred toretained earnings immediately from accumulated other comprehensive income.
(13) Provisions
Provisions are recognized when the Company has a present legal or constructive obligation as a result of a past
event, it is probable that the Company will be required to settle the obligation, and a reliable estimate can be madeof the amount of the obligation.
Provisions are measured using the estimated future cash flows, discounted using a pretax rate reflecting the timevalue of money and the specific risks of the liability, after taking into account the risks and uncertainties
surrounding the obligation at the end of the fiscal year.
The Company recognizes asset retirement obligations and restructuring provision as provisions.
Restructuring provisions are recognized when the Company has a detailed formal plan for the restructuring andhas raised a valid expectation to those who will be affected that the Company will carry out the restructuring bystarting to implement the plan or announcing the main features of the plan.
(14) Treasury stock
When the Company reacquires its own equity share capital (“treasury stock”), the consideration paid, including
any directly attributable increments costs (net of income taxes), is deducted from equity. No gain or loss isrecognized on the purchase, sale, or cancellation of the treasury stock. The difference between the carrying
amount and the consideration on sale is recognized as additional paid-in capital.
(15) Share-based payments
The Company grants stock options and restricted stock unit awards as equity-settled share-based compensation.
Stock options are measured at fair value at the grant date. The fair value of stock options is calculated using theBlack-Scholes model and the Monte Carlo simulation, and the fair value of restricted stock units is calculatedusing the share price at the date of grant.
The fair value determined at the grant date is expensed over the vesting period, based on the estimate of stock
options or restricted stock units that will eventually vest, with a corresponding increase in equity.
The Company regularly reviews the assumptions made and revises estimates of the number of stock options or
restricted stock units that are expected to vest, when necessary.
The Company has used the exemption in IFRS 1 and elected not to apply IFRS 2 “Share-based Payment” for apart of share-based payments vested prior to April 1, 2012 (the date of transition to IFRSs).
(16) Revenue
The Company’s accounting policy for revenue recognition by major categories is as follows:a. Mobile Communications service and sales of mobile handsets
The Company provides mobile telecommunications services, which consist of voice communications and datatransmission, and also sells mobile handsets and accessories to customers
In the Mobile Communications service, revenues are mainly generated from basic monthly charges, telecom
service (“revenues from the mobile telecommunications service”) and other fees. Also, revenues from the saleof mobile handsets (“revenues from the sale of mobile handsets”) are generated from the sale of mobile
handsets and accessories to customers or dealers.

49

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

The business flow of the above transactions consists of “Indirect transaction” where the Company sells mobile
handsets to dealers and enters into telecommunications services contract with customers through dealers, and“Direct sales” where the Company sells mobile handsets to customers and enters into telecommunications
services contract directly with customers. The revenues are recognized respectively as follows.
(a) Indirect transaction
Revenues from the sale of mobile handsets are recognized when mobile handsets are delivered to dealers,
which is when risk and economic value are deemed to be transferred. Commission fees paid to dealers
related to the sales of mobile handsets are deducted from revenues.
The mobile telecommunications services are recognized as revenue when services are provided to customers.
Discounts are deducted from revenues from monthly mobile telecommunications services as a discount ofmobile telecommunications charges.
Activation fees are deferred upon entering into the contract and recognized as revenues over the estimatedaverage contract period. Upgrade fees are recognized as revenues over the estimated average usage periodof handsets with the customers. Direct costs related to activation are deferred to the extent of the activation
fees and upgrade fees and are amortized over the respective same period.
(b) Direct sales
In direct transaction, as the revenue from the sales of mobile handsets and the mobile telecommunication
services, including the fees, are considered to be one transaction, the total amount of revenues are allocatedto mobile handsets and telecommunication service on the basis of fair value ratio.
When handsets are sold in installments, revenue from the sales of mobile handsets is recognized based on thefair value ratio when handsets are delivered to the customers. When handsets are sold in lump-sum
payment, the maximum amount of revenues to be recognized by the sale of mobile handsets are set by theamounts to be received from customers at the sales of mobile handsets. The amount of revenue allocated tothe mobile telecommunication services is recognized, when the service is provided to the customers.
Points granted to customers through the customer royalty program are deferred at their fair values of benefits
to be exchanged based on the estimated point utilization rate and recognized as revenues upon customers’
utilizing those points, in both direct and indirect sales.
b. Sales of game items
In games that the Company provide for mobile devices, the Company sells items that are usable in games.
The revenue from the sales of those items are deferred at the time of sales, and recognized as revenue when
they are actually used by the customers or over the estimated usage period, based on the characteristics of theitems.
c. Fixed-line Telecommunications service
In the Fixed-line Telecommunications service, revenues are generated mainly from voice communications anddigital data transmission services, internet provider charges, ADSL service fees, IP telephony service fees, andthe usage of the network (“revenues from fixed-line telecommunications service”).
Revenues from fixed-line telecommunications services are recognized as revenues when services are provided
to customers, based upon fixed monthly charges plus the usage of the network.
d. Internet service
In Internet service, revenues are generated mainly from premium advertising, promotion advertising,information listing service, commission from e-commerce transactions, and revenues from membership.
Revenues from premium advertising are recognized over the period in which advertisements are shown on a
website. Revenue from promotion advertising is recognized when a user clicks on a promotion advertisement.
Revenues from information listing service are recognized over the period in which these services are shown on a50

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

website. Revenues from commissions of e-commerce transactions are recognized when the transactions occur.
Membership revenues are recognized over the period in which the memberships are valid.
(17) Sales commission fees
The Company pays sales commission fees when dealers sell the Company’s mobile handsets to customers or
acquire and retain engagement of telecommunications service between the Company and customers.
Commission fees related to the sales of mobile handsets are deducted from the revenues from the sales of mobile
handsets. Commission fees related to the acquisition and retention of engagement of telecommunications
service are recognized as selling, general and administrative expenses.
(18) Income tax
Income tax expense is composed of current and deferred taxes, and recognized in profit or loss, except for taxes
related to business combinations and taxes related to items that are recognized in other comprehensive income or
directly in equity.
Current tax is measured at the amount expected to be paid to or recovered from the taxation authorities, using the
tax rates and tax laws that have been enacted or substantively enacted by the end of the fiscal year.
Deferred tax assets are recognized to the extent that it is probable that taxable profits will be available against
which deductible temporary differences, net operating loss carryforwards and tax credit carryforwards can beutilized. The recoverability of deferred tax assets is reassessed at the end of the fiscal year.
Deferred tax assets are not recognized for temporary differences from initial recognition of assets and liabilities
that do not arise from business combinations and that do not impact accounting profit or taxable income.
Deferred tax assets are recognized for deductible temporary differences associated with investments in
subsidiaries and associates when it is probable that the temporary difference will reverse in the foreseeable future
and when there will be sufficient taxable profits against which the temporary differences can be utilized.
Deferred tax liabilities are basically recognized for taxable temporary differences, except for:・temporary differences arising from the initial recognition of assets and liabilities, related transactions other thanbusiness combination, that affects neither the accounting profit nor the taxable profit;・taxable temporary differences arising from the initial recognition of goodwill;・taxable temporary differences associated with investments in subsidiaries and associates, where the Company isable to control the reversal of the temporary difference and it is probable that the temporary difference will notreverse in the foreseeable future.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when theasset is realized or the liability is settled, based on tax laws that have been enacted or substantively enacted by theend of the fiscal year.
Deferred tax assets and liabilities are offset if the Company has a legally enforceable right to set off current tax
assets against current tax liabilities, and income taxes are levied by the same taxation authority on the same
taxable entity.
(19) Earnings per share
Basic earnings per share are calculated by dividing net income attributable to owners of the parent by theweighted-average number of common stocks outstanding for the period.
Diluted earnings per share assume full conversion of the issued potential stocks having a dilutive effect, with an
adjustment for net income attributable to owners of the parent and the weighted-average number of common
stocks (after adjusting for treasury stocks) outstanding for the period.

51

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

4. Significant judgments and estimates
In preparing consolidated financial statements under IFRSs, management makes judgments, estimates, andassumptions that affect the application of accounting policies and carrying amounts of assets, liabilities, revenue, andexpenses. These estimates and underlying assumptions are based on the management’s best judgments, throughtheir evaluation of various factors that were considered reasonable as of the period-end, based on historical experienceand by collecting available information. By the nature of its estimates or assumptions, however, actual results in the
future may differ from those estimates or assumptions.
Estimates and underlying assumptions are continuously reviewed. Revisions to accounting estimates are recognizedin the period in which the estimate is revised as well as in the future periods. Significant judgments, estimates andassumptions that affect the amounts recognized in the Company’s consolidated financial statements are as follows:・judgments if an entity is controlled by the Company in the decision making on the scope of consolidation ((1) in“Note 3. Significant accounting policies”);
・estimates of fair value of assets acquired and the liabilities assumed in a business combination ((2) in Note 3 and“Note 5. Business combinations”);
・fair value measurement of available-for-sale financial assets ((4) in Note 3) ;・estimates of forecasted transactions related to hedge accounting ((4) in Note 3) ;・estimates for amortization period and impairment of financial assets measured at amortized cost ((4) in “Note 14.
Other non-operating income and loss”);
・fair value measurement of derivatives (including embedded derivatives) ((4) in “Note 3. Significant accounting
policies” and “Note 14. Other non-operating income and loss”);
・estimates of useful life of property, plant and equipment and intangible assets ((7) and (9) in Note 3) ;・estimates for impairment of property, plant and equipment, intangible assets and goodwill ((11) in Note 3) ;・judgments and estimates for recognition and measurement on provisions ((13) in Note 3); and・assessment of recoverability of deferred tax assets ((18) in Note 3).
During the three-month period ended June 30, 2013, in conjunction with measurement of carrying amount of thebonds with stock acquisition rights issued by Sprint Nextel Corporation and held by a subsidiary, Starburst II, Inc.,
underlying assumptions and related estimates for acquisition of Sprint were changed. These bonds with stockacquisition rights were converted into the shares of Sprint in July 2013.
The details are described in “Note 14. Other non-operating income and loss.”

5. Business combinations
For the fiscal year ended March 31, 2013(1) eAccess Ltd.
a. Overview of consolidation
SoftBank Corp. and eAccess Ltd. executed stock exchange transaction in which SoftBank Corp. became theparent and eAccess Ltd. became its wholly owned subsidiary as of January 1, 2013 (effective date of stock
exchange), pursuant to the stock exchange agreement between two companies entered into on October 1, 2012,
and to the amended stock exchange agreement entered into on November 2, 2012. Further, on January 17,
2013, eAccess Ltd. acquired and then canceled all its common stocks owned by SoftBank Corp., and newly
issued Class A shares (without voting rights) and Class B shares (with voting rights) to SoftBank Corp. On
the same day, a part of eAccess Ltd.’s Class B shares owned by SoftBank Corp. were transferred to 11
companies outside of the Group.
As a result, SoftBank Corp.’s voting rights in eAccess Ltd. decreased to 33.3%, less than the majority.
However, SoftBank Corp.’s economic ownership ratio is 99.5%, which is significantly higher than thepercentage of voting rights (33.3%). Also, considering the fact that the proportion of voting rights is relatively
large compared to other holders of voting rights due to the dispersion of voting rights, and considering the factthat SoftBank Corp. can practically appoint and dismiss directors of eAccess Ltd. pursuant to the stock transfer

52SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014agreement executed between SoftBank Corp. and the companies outside the Group, SoftBank Corp. determinedthat it has substantial control over eAccess Ltd. and included it into the scope of consolidation as a subsidiary.
eAccess Ltd. is scheduled to conduct an absorption type merger with WILLCOM, Inc., eAccess Ltd. being thesurviving company and WILLCOM, Inc being the dissolving company, effective on June 1, 2014. After themerger, SoftBank Corp. is scheduled to transfer all shares of eAccess Ltd. owned by SoftBank Corp. to Yahoo
Japan Corporation on June 2, 2014.
Note: Other than voting rights, the holders of Class A shares and the holders of Class B shares are granted the same rights.

(Business Description of eAccess Ltd.)(a) Providing mobile broadband communication services under the EMOBILE brand(b) Providing ADSL communication services mainly through wholesale channels(Acquisition date)
January 1, 2013b. Consideration transferred and the components(Millions of yen)
Acquisition date
(January 1, 2013)
Fair value of SoftBank Corp.’s common stocks delivered at thetime of acquisition of control
Fair value of Class B shares of eAccess Ltd. transferred at thetime of acquisition of control
Total consideration transferred

219,396
1,100)
A

218,296¥1,028 million of acquisition-related costs arising from the business combination are recognized in “Selling,
general and administrative expenses.”c. Exchange ratio for each class of shares, calculation method for exchange ratio, and the number and estimatedvalue of shares delivered(a) Exchange ratio for each class of shares
20.09 shares of the Company’s common stocks for one common stock of eAccess Ltd.
(b) Calculation method for exchange ratio
Stock prices (closing price) of common stock of eAccess Ltd. were ¥15,070 on September 28, 2012 and¥45,500 on November 2, 2012, respectively. SoftBank Corp. and eAccess Ltd. determined estimated valueof common stocks of eAccess Ltd. through mutual consultation, taking into consideration the above stock
prices, as well as (1) mobile communication services network of eAccess Ltd., (2) its customer base, and (3)synergies to be created between eAccess Ltd. and SoftBank Corp.
To ensure that exchange ratio is determined in a fair and reasonable manner, SoftBank Corp. and eAccessLtd. respectively used independent financial advisor to conduct financial analysis of exchange ratio, whenentering into the amended stock exchange agreement. SoftBank Corp. used Mizuho Securities Co., Ltd
and Plutus Consulting Co., Ltd., while eAccess Ltd. used Goldman Sachs Japan Co., Ltd.
(c) The number and estimated value of shares delivered
The number of shares
Estimated value (million yen)

69,871,312
219,39653

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

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

Acquisition date
(January 1, 2013)
84,069147,886
113,10738,311
383,373

Current assets
Property, plant and equipment
Intangible assets
Other non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities

108,073
191,926
299,999

Net assets
Non-controlling interests1
Goodwill2

B83,374C
A-(B-C)

417
135,339

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

e. Estimation of fair values of acquired receivables, contractual amounts receivables and amounts not expected to becollected
As for fair value of ¥30,882 million of acquired receivables and other receivables (mainly sales receivables), thetotal amount of contracts is ¥33,754 million and the estimate of the contractual cash flows not expected to becollected at the acquisition date is ¥2,872 million.

f. Increase from acquisition of control over subsidiaries(Millions of yen)

Acquisition date
(January 1, 2013)
Cash and cash equivalents held by the acquiree at the time of acquisition ofcontrol
Proceeds from transfer of Class B shares of eAccess Ltd.
Increase in cash from the acquisition of control over the subsidiary

29,796
1,100
30,896

g. Sales and net income of the acquiree
The amount of the acquiree’s sales and net income before elimination of inter-company transactions and after
the acquisition date are ¥53,013 million and ¥5,382 million respectively, which are recorded in the consolidated
statements of income for the fiscal year ended March 31, 2013.

54

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

For the fiscal year ended March 31, 2014
(2) GungHo Online Entertainment, Inc.
a. Overview of consolidation
Masayoshi Son, chairman and CEO of the SoftBank Corp., has entered into a Memorandum of Understanding
on Exercise of Voting Rights for Deferment of Execution of Pledges (the “MOU”) with respect to the shares of
GungHo on April 1, 2013, with Heartis G.K. (the “Heartis”; percentage of voting interest: 18.5%), which is thesecond largest shareholder of GungHo and Taizo Son’s asset management company and of which Taizo Son,chairman of GungHo, is the representative director. Under the MOU, in order to have Son Holdings Inc., ofwhich Masayoshi Son is a director and which is a Masayoshi Son’s asset management company, defer the
execution of pledges over the shares of GungHo held by Heartis, Heartis has agreed, effective as of April 1,
2013, to the effect that at the shareholders meeting of GungHo, Heartis will exercise the voting rights for all of
the shares of GungHo it holds in accordance with Masayoshi Son’s directions. Also, a subsidiary of theCompany, SoftBank Mobile Corp., undertook the Tender Offer from April 1, 2013 to April 26, 2013 andacquired 6.37% of GungHo shares (purchase price: ¥24,976 million). The Company and Heartis together
came to represent the majority of the voting rights in GungHo’s shares (percentage of voting interest: 58.50%)
and GungHo Online Entertainment changed from an equity method associate to a subsidiary of the Company.
With this transaction, the Company expects that it will be able to enhance mobile content, and to improve theefficiency in operation of the mobile communications business and profitability competitiveness by combining
smartphone-focused development capability and infrastructure held by the Company, and planning and creating
capabilities in the smartphone game industry held by GungHo.
(Business Description of GungHo)(a) Planning, development, operation and distribution of online games(b) Planning, development and sales of mobile content(c) Planning, development and sales of character goods(d) Planning, development and distribution of other entertainment content(Acquisition date)
April 1, 2013b. Consideration transferred and the components(Millions of yen)

Payment by cash
Fair value of equity interest in GungHo already held at
the time of the acquisition
Total consideration transferred

Acquisition date
(April 1, 2013)
24,976
153,620A

178,596

Acquisition-related costs of ¥109 million arising from the business combinations are recognized in “Selling,
general and administrative expenses.”
As a result of the reevaluation of 33.63% in equity interest already held at the time of the acquisition of control
by the Company in GungHo at fair value on the acquisition date, the Company recognized a gain on the step
acquisition of ¥150,120 million. This gain is presented as “Income from remeasurement relating to businesscombination” in the consolidated statements of income.

55

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014c. Fair values of assets and liabilities, non-controlling interests and goodwill on the acquisition date(Millions of yen)

Acquisition date
(April 1, 2013)
36,90380,814
4,511
122,228

Current assets
Intangible assets
Other non-current assets
Total assets

10,89729,94940,846

Current liabilities
Non-current liabilities
Total liabilities
Net assets

B

81,382

Non-controlling interests1
Goodwill2

C48,818146,032

A-(B-C)

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

d. Decrease from acquisition of control over subsidiaries(Millions of yen)

Payment for the acquisition by cash
Cash and cash equivalents held by the acquiree at the time ofacquisition of control
Decrease in cash from the acquisition of control over thesubsidiary

Acquisition date
(April 1, 2013)(24,976)
11,025(13,951)e. Sales and net income of the acquiree
The amount of the acquiree’s sales and net income before elimination of inter-company transactions and after
the acquisition date are ¥181,056 million and ¥42,857 million respectively, which are recorded in the
consolidated statements of income for the fiscal year ended March 31, 2014.
In addition, the above net income includes amortization expenses, which are related to intangible assets recognizedat the acquisition date, and others.

56SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014(3) Sprint
a. Overview of consolidation
On October 15, 2012, the Company and Sprint entered into a series of definitive agreements under which theCompany will invest in Sprint. After the completion of negotiations, the Company and Sprint agreed to amend a
portion of the transaction on June 11, 2013.
On July 10, 2013, SoftBank Corp. capitalized, through a wholly owned subsidiary, Starburst I, Inc., Sprint withan additional $18.5 billion and the total investment of SoftBank Corp. amounted to $21.6 billion, including $3.1
billion of corporate bonds with stock acquisition rights issued by Sprint Nextel Corporation (the “Bond”)
invested by Starburst II, Inc. on October 22, 2012. Of the invested amounts of $21.6 billion, $16.6 billion was
distributed to existing individual Sprint’s shareholders and $5 billion is used to strengthen Sprint. The Bond
held by Starburst II, Inc. was converted into shares.
Through the transaction, approximately 72% of Sprint Nextel Corporation shares were acquired for $7.65 pershare in cash, and the remaining shares were converted into Sprint shares on a one-to-one basis, which
succeeded Sprint Nextel Corporation and became listed on the New York Stock Exchange.
As a result of the transaction, Starburst I, Inc., owns approximately 78% of the shares of Sprint and Sprint
became a subsidiary of SoftBank Corp.
Prior to the transaction, Clearwire, a company providing high-speed wireless communication services in the
U.S., became a wholly owned subsidiary of Sprint on July 9, 2013.
From August 1, 2013 to September 16, 2013, SoftBank Corp., through Galaxy Investment Holdings, Inc., awholly-owned subsidiary in the U.S., additionally purchased approximately 2% of the shares of Sprint(purchase price: $500 million). As a result, the Company’s ownership in the outstanding Sprint common
stock became approximately 80% as of March 31, 2014.

(Structure after completion of the transaction)

57

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014b. Purpose of consolidation(a) Enables the Company to establish an operating base as one of the largest mobile Internet companies in theworld. The combined subscriber base will be one of the largest between the U.S. and Japan*.
(b) Enables the Company to leverage its deep expertise in smartphones and next-generation mobile networks,
and its track record of success in competing in mature markets with large incumbents, to enhancecompetitiveness of Sprint in the U.S.
(c) Provides Sprint $5 billion of new capital for its mobile network, strategic investments, and balance sheet aspart of its continued efforts to fortify its operating base towards future growth.
Note:
Based on Telecommunications Carriers Association (“TCA”) data and disclosed material by relevant companies as ofthe end of June 2013.

c. Summary of Sprint

Name

Sprint Corporation

Address

6200 Sprint Parkway, Overland Park, Kansas

Name and title of representative

Dan Hesse, Chief Executive Officer and Director

Business description

Holding company
Provision of telecommunications services through its operating subsidiaries

Note

The Chairman of the Board and the Vice Chairman of the Board wereassumed by Masayoshi Son, the Chairman & CEO of SoftBank Corp. andRonald Fisher, Director of SoftBank Corp., respectively. Adm. Mike Mullen,
former Chairman of the Joint Chiefs of Staff, has been appointed as the
Director in charge of security.

Consolidated sales$35,493 million (Fiscal year ended December 2013, US GAAP)

d. Acquisition dateJuly 10, 2013

e. Consideration transferred and the component(Millions of yen)

Payment by cash
Conversion of corporate bonds with stock acquisition rights
held at the time of acquisition
Total consideration transferredA

Acquisition date(July 10, 2013)
1,875,149
313,534
2,188,683

Acquisition-related costs of ¥12,106 million arising from the business combination are recognized in “Selling,
general and administrative expenses,” with ¥3,751 million for the year ended March 31, 2013, and ¥8,355
million for the fiscal year ended March 31, 2014.

58

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

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

Acquisition date(July 10, 2013)
Current assets
Cash and cash equivalents
Trade and other receivables1
Other financial assets
Inventories
Other current assets
Total current assets

447,873
322,957
111,764
105,318
42,6551,030,567

Non-current assets
Property, plant and equipment2
Intangible assets2
Other financial assets
Other non-current assets
Total non-current assets
Total assets

1,291,364
5,301,283
23,93812,394
6,628,979
7,659,546

Current liabilities
Interest-bearing debt2
Trade and other payables
Income taxes payables
Provisions3
Other current liabilities
Total current liabilities

86,961
632,348
4,553
106,630
282,501
1,112,993

Non-current liabilities
Interest-bearing debt2
Other financial liabilities
Defined benefit liabilities
Provisions3Deferred tax liabilities4
Other non-current liabilities
Total non-current liabilities
Total liabilities

2,668,163
5,662
65,763
143,739
1,409,387
184,106
4,476,820
5,589,813

Net assets

B

2,069,733

Non-controlling interests5

C

467,910Basis adjustment6
Goodwill7

D

311,659
275,201

A-(B-C)-D

Consideration transferred is allocated to acquired assets and assumed liabilities based on the fair value on theacquisition date. The above amounts, which are provisional fair values based on the best estimate at present, maychange for a year from the acquisition date when additional information related to facts and circumstances thatexisted as of the acquisition date, may be obtained.
From the acquisition date, provisional amounts of assets, liabilities and non-controlling interests on the acquisition
date have been adjusted. Major adjustments are as follows: Intangible assets increased by ¥25,660 million due toadditional analysis performed by Sprint management related to the value assigned to certain FCC Licenses8.
Deferred tax liabilities decreased by ¥13,699 million primarily due to adjustments related to FCC Licenses.
Non-controlling interest increased by ¥30,204 million. Accordingly, goodwill decreased by ¥19,217 million.
The above amount is translated at the exchange rate (USD = JPY101.14) as of the acquisition date.
59

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

Notes:
1. Estimation of fair values of acquired receivables, contractual amounts receivables and amounts not expected to be collected
As for the fair value of ¥322,957 million of acquired receivables and other receivables (mainly sales receivables), the total
amount of contracts is ¥343,792 million and the estimate of the contractual cash flows not expected to be collected at theacquisition date is ¥20,835 million.
2. Property, plant and equipment, Intangible assets and Interest-bearing debt
The components are described in “Note 7. Property, plant and equipment”, “Note 8. Intangible assets” and “(1) Components
of interest-bearing debt” in “Note 9. Interest-bearing debt.”
3. Provisions
Provisions recognized by the business combination are mainly asset retirement obligations, lease exit costs related to the
shutdown of the Nextel Platform, and exit costs related to payments that will continue to be made under Sprint’s backhaul
access contracts for which it will no longer be receiving any economic benefit. Backhaul is an intermediary network whichconnects the cell towers to the local switching center.
4. Deferred tax liabilities
Deferred tax liabilities recognized by this business combination are mainly temporary differences related to FCC Licenses,
and trademarks with indefinite useful lives.
5. Non-controlling interests
Non-controlling interests in an acquiree that are present ownership interests and entitle their holders to a proportionate shareof the entity’s net assets in the event of liquidation are measured based on the proportionate interests at acquisition date in
the identifiable net assets of the acquiree at acquisition date
6. Basis adjustment
The Company entered into a foreign currency forward contract to hedge exchange risks resulting from the investment in
Sprint.

This scheduled transaction was designated as a cash flow hedge.

¥311,659 million, the fair value of the hedging

instruments at the acquisition date was deducted from initial amount of goodwill which was recognized from the acquisition.
7. Goodwill
Goodwill reflects excess earning power expected from the future business development and the synergy with existing
businesses.
8. FCC Licenses
Licenses issued by the U.S. Federal Communications Commission for use of specified frequently bands.

g. Decrease from acquisition of control over subsidiaries(Millions of yen)

Payment for the acquisition by cash
Cash and cash equivalents held by the acquiree at the time ofacquisition of control
Decrease in cash from the acquisition of control over the subsidiary
Proceeds from settlement of foreign currency forward contract for
acquisition of control of subsidiaries
Decrease in cash from the acquisition of control over the subsidiary,net

60

Acquisition date(July 10, 2013)(1,875,149)
447,873(1,427,276)
310,104(1,117,172)

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014h. Sales and net loss of the acquiree
The amounts of the acquiree’s sales and net loss before elimination of inter-company transactions after theacquisition date, which are recorded in the consolidated statements of income for the fiscal year ended March 31,
2014, are ¥2,601,031 million and ¥188,396 million, respectively.
In addition, the above net loss includes amortization expenses, which are related to intangible assets recognized at
the acquisition date, and others.

(4) WILLCOM, Inc.
a. Overview of consolidation
SoftBank Corp. owns 100% of shares issued by WILLCOM, Inc. However, WILLCOM, Inc. was in the processof rehabilitation under the Corporate Reorganization Act and SoftBank Corp. did not have effective control over
WILLCOM, Inc. Therefore, WILLCOM, Inc. was not treated as a subsidiary.
WILLCOM, Inc. made prepayments of rehabilitation claims and rehabilitation security interests in June 2013,
and filed a petition with the Tokyo District Court for the termination of its rehabilitation proceedings.
WILLCOM, Inc. received an order of termination of rehabilitation proceedings from the Tokyo District Court on
July 1, 2013. Consequently, WILLCOM, Inc. became a subsidiary of SoftBank Corp.
WILLCOM, Inc. is scheduled to conduct an absorption type merger with eAccess Ltd., eAccess Ltd. being thesurviving company and WILLCOM, Inc. being the dissolving company, effective on June 1, 2014. After themerger, SoftBank Corp. is scheduled to transfer all shares of eAccess Ltd. owned by SoftBank Corp. to Yahoo
Japan Corporation on June 2, 2014.

(Business description of WILLCOM, Inc.)
Telecommunications business(Acquisition date）
July 1, 2013b. Consideration transferred and the components(Millions of yen)

Acquisition date(July 1, 2013)
Fair value of equity interest in WILLCOM, Inc. alreadyheld at the time of the acquisition

104,070
A

Total consideration transferred

104,070

As a result of the reevaluation of 100% equity interest already held by the Company at the time of the acquisitionof control in WILLCOM, Inc. at fair value, the Company recognized a gain of ¥103,766 million. This gain ispresented as “Income from remeasurement relating to business combination” in the consolidated statements ofincome.

61

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014c. Fair value of assets and liabilities, non-controlling interests and goodwill on the acquisition date(Millions of yen)

Acquisition date(July 1, 2013)
80,84346,026
43,63914,883
185,391

Current assets
Property, plant and equipment
Intangible assets
Other non-current assets
Total assets

83,95816,284
100,242

Current liabilities
Non-current liabilities
Total liabilities
Net assets

B

85,149Non-controlling interests1

C

222

A-(B-C)

19,143

2

Goodwill
Notes:

1. Non-controlling interests is from WILLCOM OKINAWA, Inc. (proportionate interest held by the Company is 80%), a
subsidiary of WILLCOM Inc., and it is measured based on the proportionate interests after the acquisition in theidentifiable net assets of the acquiree at the acquisition date.
2. Goodwill reflects excess earning power expected from the future business development, assembled workforce and thesynergy with existing business.

d. Estimation of fair values of acquired receivables, contractual amounts receivables and amounts not expected to becollected
The main components of acquired trade and other receivables are installment receivables and the fair value is¥31,039 million. The total amount of contractual receivables is ¥31,328 million and the best estimate of thecontractual cash flows not expected to be collected as of the acquisition date is ¥289 million.
e. Increase from acquisition of control over subsidiaries(Millions of yen)

Acquisition date(July 1, 2013)
Cash and cash equivalents held by the acquiree at the time ofacquisition of control
Increase in cash from the acquisition of control over thesubsidiary

14,043
14,043f. Sales and net loss of the acquiree
The amounts of the acquiree’s sales and net loss before elimination of inter-company transactions after theacquisition date, which are recorded in the consolidated statements of income for the fiscal year ended March 31,
2014, are ¥ 124,068 million and ¥ 4,823 million, respectively.
In addition, the above net loss includes amortization expenses, which are related to intangible assets recognized at
the acquisition date, and others.

62SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014(5) Supercell
a. Overview of consolidation
SoftBank Corp. and GungHo, a subsidiary of SoftBank Corp., communally established Kahon 3, a special
purpose company in Finland, SoftBank Corp. indirectly investing $1,224 million (investing ratio of
approximately 80%) and GungHo indirectly investing approximately $306 million (investing ratio of
approximately 20%). Through Kahon 3, the special purpose company, SoftBank Corp. and GungHo acquired
approximately 51% (diluted) of voting stock of Supercell, with a total of $1.53 billion (¥150,720 million) on
October 31, 2013. Accordingly, Supercell, a mobile game company headquartered in Finland, became asubsidiary of SoftBank Corp.

b. Purpose of consolidation
Supercell is a mobile game company headquartered in Finland. This new strategic partnership with SoftBank
Corp. and GungHo will help accelerate Supercell’s goal of becoming “the first truly global games company.”
GungHo started its online game business in 2002, and it has since accumulated significant expertise andproduced notable results in the development and operation of online games. Through the transaction,
GungHo will leverage Supercell’s position among the apps in the Games category of the App Store andmarketing power abroad to enhance its global expansion.
c. Summary of Supercell
Name

Supercell Oy

Address

Itämerenkatu 11-13 00180 Helsinki Finland

Name and title of representative

Ilkka Paananen, CEOBusiness description

Mobile/Social interactive entertainment

Common stock€2,500Date of foundation

May 14, 2010

Consolidated sales€519,093 thousands (the year ended December 2013, Finnish GAAP)

63

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

d. Acquisition date
October 31, 2013
e. Consideration transferred and the component(Millions of yen)

Acquisition date
(October 31, 2013)
140,397

Payment by cashA

Total consideration transferred

140,397

Acquisition-related costs of ¥3,114 million arising from the business combination are recognized in “Selling,
general and administrative expenses.”

Kahon 3 acquired common and preferred stocks of Supercell and options, which can convert the preferredstocks to common stocks (“conversion options”), with a total of ¥150,720 million. The considerationtransferred for the business combination is ¥140,397 million, deducting the fair value of ¥10,323 million forthe preferred stocks and the conversion options from the total amount of ¥150,720 million to acquire Supercell.

The fair value of ¥10,323 million for the preferred stocks and the conversion option is deducted fromadditional paid-in capital as “Acquisition of options to convert to subsidiaries’ common stocks” in the
consolidated statements of changes in equity.

f. Fair value of assets and liabilities, non-controlling interests and goodwill on the acquisition date(Millions of yen)

Acquisition date
(October 31, 2013)22,123
119,20473
141,400

Current assets
Intangible assets
Other non-current assets
Total assets

22,51823,99346,511

Current liabilities
Non-current liabilities
Total liabilities
Net assets
Non-controlling interests1
Goodwill2

B

94,889C

53,29598,803A-(B-C)

Consideration transferred is allocated to acquired assets and assumed liabilities based on a fair value on theacquisition date. The above amounts, which are provisional fair values based on the best estimate at present,
may change for a year from the acquisition date when additional information related to facts and circumstancesthat existed as of the acquisition date may be obtained.

64SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

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

g. Decrease from acquisition of control over subsidiaries(Millions of yen)

Acquisition date
(October 31,2013)
Payment for the acquisition by cash
Cash and cash equivalents held by the acquiree at the time ofacquisition of control(140,397)

Decrease in cash from the acquisition of control over the subsidiary(137,902)

2,495

h. Sales and net income of the acquiree
The amounts of the acquiree’s sales and net income before elimination of inter-company transactions after theacquisition date, which are recorded in the consolidated statements of income for the fiscal year ended March 31,
2014, are ¥54,841 million and ¥3,799 million, respectively.
In addition, the above net income includes amortization expenses, which are related to intangible assets
recognized at the acquisition date, and others.

(6) Brightstar Corp.
a. Overview of consolidation
The Company completed the acquisition of all common and preferred stocks of Brightstar Corp., a mobile device
distributor in the United States, and the establishment of the organizational structure related to the transaction on
January 30, 2014. Accordingly, Brightstar Corp. became a subsidiary of the Company. At the completion of
the transaction, the Company owns approximately 57% of the voting rights of Brightstar Global Group Inc. thatowns 100% of Brightstar Corp.
In the transaction, SoftBank Corp. invested a total of $1.26 billion (¥128.4 billion1) into Brightstar Global Group
Inc., of which SoftBank Corp. owns all the interests. SoftBank Corp. received newly-issued common stocks of
Brightstar Global Group Inc., newly-issued non-voting preferred stocks of Brightstar Global Group Inc. thathave an aggregate liquidation preference of $860 million, and warrant (the “Warrant”) that provides SoftBank
Corp. with the rights to acquire a number of common stocks of Brightstar Global Group Inc. for de minumis
value. The Warrant entitles SoftBank Corp. to raise its ownership of the common stocks of Brightstar Global
Group Inc. to approximately 70% over five years. Brightstar Global Group Inc. acquired all common andpreferred stocks (including payment of accrued dividends) of Brightstar Corp. from existing shareholders forconsideration of $1.11 billion and newly issued common stocks Brightstar Global Group Inc. representing
approximate 43% of the common shares issued.
As a result of the transaction, SoftBank Corp. owns approximately 57% of the voting rights and common sharesof the Brightstar Global Group Inc. that owns 100% of Brightstar Corp., and Mr. Marcelo Claure, Chairman and
CEO of Brightstar Corp., owns approximately 43%. Accordingly, Brightstar Corp. became a subsidiary of
SoftBank Corp. The Company accounts for Brightstar Global Group Inc. as a acquiree.
The Company uses $1.11 billion out of the total investment of $1.26 billion to complete the Brightstar Corp.
share purchases, and the remaining $0.15 billion of SoftBank Corp.'s investment will be contributed to Brightstar
Corp. in order to fund, among others, ongoing corporate activities.
65

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

The Company plans to ratably exercise the Warrant to increase its ownership in Brightstar Global Group Inc. toobtain approximately 70% of the voting power, and common stock, over the five year vest period.
SoftBank BB Corp., a subsidiary of SoftBank Corp., divided its commerce and service business and newly
established SoftBank C&S on April 1, 2014. All shares of SoftBank C&S held by SoftBank Corp. weretransferred to SB C&S Holdings G.K., a wholly-owned subsidiary of Brightstar Corp., and SoftBank Corp.
acquired additional common stocks of Brightstar Global Group Inc. As a result, the Company’s ownershipshare of the voting rights and common stocks of Brightstar Global Group Inc. became approximately 62%(approximately 73% after the exercise of the Warrant) on April 1, 2014.

(a) Structure as of March 31,2014(b) Structure as of April 1,201466

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014b. Purpose of consolidation
Brightstar Corp. is one of the world’s largest specialized wireless distributors and a leading provider of diversified
services focused on enhancing the performance and results of the key participants in the wireless device value
chain: manufacturers, operators and retailers. Its services include Supply Chain Solutions, Handset Protection &Insurance, Buyback and Trade-in Solutions, Multi-Channel Retail Solutions, and Financial Services. Today,
Brightstar Corp. provides services in over 125 countries and has a local presence in over 50 countries.
The Comapny acquired Sprint in July 2013, expanding its business operations from Japan to the U.S. With
Brightstar Corp. becoming a subsidiary, the Comapny aims to strengthen its purchasing scale for mobile devices
and further increase competitiveness both in Japan and the U.S.

c. Summary of Brightstar Corp.

Name

Brightstar Corp.

Address

9725 NW 117th Ave, #300 Miami, Florida, U.S.A.

Name and title of representative

Marcelo Claure, Chairman and Chief Executive Officer

Business description

Mobile device distribution

Common stock$2,000Date of foundation

September 23, 1997

Consolidated sales$7,227,879 thousands (the year ended December 2013, US GAAP)

d. Acquisition date
January 30, 2014e. Consideration transferred and the component(Millions of yen)

Payment by cash
Total consideration transferredA

Acquisition date
(January 30, 2014)
128,378
128,378

Acquisition-related costs of ¥1,190 million arising from the business combination are recognized in “Selling,
general and administrative expenses.”67

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

f. Fair value of assets and liabilities, non-controlling interests and goodwill on the acquisition date(Millions of yen)

Acquisition date
(January 30, 2014)
340,644
74,991
415,635

Current assets
Intangible assets
Total assets

260,518
82,835343,353

Current liabilities
Non-current liabilities
Total liabilities
Net assets

B

72,282

Non-controlling interests1
Goodwill2

C

3,761
59,857A-(B-C)

Consideration transferred is allocated to acquired assets and assumed liabilities based on a fair value on theacquisition date. The above amounts, which are provisional fair values based on the best estimate at present,
may change for a year from the acquisition date when additional information related to facts and circumstancesthat existed as of the acquisition date may be obtained.
Notes:
1. Non-controlling interests
Non-controlling interests in an acquiree that are present ownership interests and entitle their holders to a proportionate
share of the entity’s net assets in the event of liquidation are measured based on the proportionate interests at
acquisition date in the identifiable net assets of the acquiree at acquisition date.
2. Goodwill
Goodwill reflects excess earning power expected from the future business development and the synergy with existing
businesses.

g. Estimation of fair values of acquired receivables, contractual amounts receivables and amounts not expected tobe collected
As for fair value of ¥190,802 million of acquired receivables and other receivables (mainly sales receivables), thetotal amount of contracts is ¥192,194 million and the estimate of the contractual cash flows not expected to becollected at the acquisition date is ¥1,392 million.

h. Decrease from acquisition of control over subsidiaries(Millions of yen)

Acquisition date
(January 30,2014)
Payment for the acquisition by cash
Cash and cash equivalents held by the acquiree at the time ofacquisition of control(128,378)

Decrease in cash from the acquisition of control over the subsidiary(86,950)68

41,428

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

i. Sales and net loss of the acquiree
The amounts of the acquiree’s sales and net loss before elimination of inter-company transactions after theacquisition date, which are recorded in the consolidated statements of income for the fiscal year ended March 31,
2014, are ¥137,534 million and ¥1,704 million, respectively.
In addition, the above net loss includes amortization expenses, which are related to intangible assets recognized at
the acquisition date, and others.

6. 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 Mobile Communications segment, the Sprint segment, the Fixed-line
Telecommunications segment, and the Internet segment.
The Mobile Communications segment provides, mainly through SoftBank Mobile Corp., mobile communication
services, and sales of mobile handsets and accessories.
The Sprint segment provides, through Sprint, mobile communication services, sales of mobile handsets andaccessories accompanying the mobile communication services, and the fixed-line telecommunication services in
the U.S.
The Fixed-line Telecommunications segment provides, mainly through SoftBank Telecom Corp.,
telecommunication services such as data communication and fixed-line telephone services for corporate
customers. It also provides, mainly through SoftBank BB Corp., broadband services for individual customers.
The Internet segment provides, mainly through Yahoo Japan Corporation, Internet-based advertising operations.
The Sprint segment was newly established from the three-month period ended September 30, 2013, by the
consolidation of Sprint in July 2013.
The Company previously had four segments, the Mobile Communications segment, the Broadband Infrastructure
segment, the Fixed-line Telecommunications segment, and the Internet Culture segment until the year ended
March 31, 2013. However, with the consolidation of eAccess Ltd. in January 2013, GungHo in April 2013, andSprint in July 2013, the Company changed its reportable segments from the three-month period ended June 30,
2013 as the business size and region of the Company changed significantly.
For the three-month period ended June 30, 2013, the previous Fixed-line Telecommunications segment and theBroadband Infrastructure segment were integrated and included in the Domestic Fixed-line Telecommunications
segment. Also the previous Mobile Communications segment was presented as the Domestic Mobile
Communications segment and the previous Internet Culture segment was presented as the Internet Segment.
Distribution business of SoftBank BB Corp. was previously included in “Others.” However, it is included in
the Domestic Mobile Communications segment, considering its stronger connection with mobile
communications.
For the three-month period ended September 30, 2013, the Company changed the names of certain segments.
The previous Domestic Mobile Communications was changed to the Mobile Communications. Also, theprevious Domestic Fixed-line Telecommunications was changed to the Fixed-line Telecommunications. Only
the names of the segments were changed; the definition of the segments remained the same.

69

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

Segment information for the fiscal year ended March 31, 2013, is presented in accordance with the reportablesegment after the change.
(2) Net sales and income of reportable segments
Accounting policies for reportable segments are the same as the policies described in “Note 3. Accounting
policies.”
Income of reportable segments is based on income from operating income, excluding “Income fromremeasurement relating to business combination” and “Other operating income (loss),” as follows:
Segment income = (net sales – cost of sales – selling, general and administrative expenses) in each segment
Intersegment transactions are conducted under the same general business conditions as applied for externalcustomers.
The following is information about the Company’s net sales and income by reportable segments. The
Company also discloses “EBITDA (segment income before depreciation and amortization)” by reportablesegments.
For the fiscal year ended March 31, 2013
(Millions of yen)
Reportable segments
MobileFixed-line

Communications

TelecommSprint

unications

Internet

Total

Others1

Reconcili-

Consoli-ations2

dated

Net sales
Customers

2,330,871-

437,873353,481

3,122,225

80,311-3,202,536

Intersegment

14,759-93,155

3,128

111,042

36,754(147,796)-

2,345,630-

531,028

356,609

3,233,267

117,065(147,796)

3,202,536

797,343-

168,061

193,290

1,158,694

13,158(19,111)

1,152,741(53,829)(12,570)(346,622)(6,758)(1,740)(355,120)

114,232

180,720

812,072

6,400(20,851)

797,621

Total
EBITDA
Depreciation andamortization
Segment income
Income from remeasurement relating to businesscombination
Other operating income(loss)(280,223)
517,120

-

1,778
-

Operating income

799,399

Finance cost

(65,297)

Equity in loss of associates(3,663)

Other non-operating loss

(14,935)

Income before income tax

715,50470

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

For the fiscal year ended March 31, 2014
(Millions of yen)
Reportable segments
MobileCommunications

Sprint3

Customers

3,142,663

Intersegment

22,855Total
EBITDA
Depreciation andamortization

Fixed-line
Telecommunications

Internet

Total

2,600,743

442,152

396,554

6,582,112

288

105,938

3,315

132,396

3,165,518

2,601,031

548,090399,869

6,714,508

1,003,934

417,245

170,689

204,318

1,796,186(394,984)(418,461)(62,077)(15,369)

608,950(1,216)108,612

188,949

Reconciliations 2

Consolidated

84,539-6,666,651

39,914(172,310)-

124,453(172,310)

6,666,651

13,592(22,968)

1,786,810(890,891)(7,551)(1,462)(899,904)

905,295

6,041(24,430)

886,906

Others 1

Net sales

Segment income (loss)
Income from remeasurement relating to businesscombination

253,886

Other operating loss

(55,430)

Operating income

1,085,362

Finance cost(271,478)

Equity in income ofassociates
Other non-operating
income44,081

Income before income tax

932,367

74,402

Notes:
1.“Others” includes Fukuoka SoftBank HAWKS-related business.
2.“Reconciliations” includes an elimination of intersegment transactions and the corporate general expenses unallocated to eachreportable segment.
3. The Sprint segment includes the results of Sprint after the acquisition date.

71SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

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

Buildings and structures
Telecommunications equipment
Land
Construction in progress
Other
Total

As of
April 1, 2012
110,811
1,039,699
72,53691,94562,194
1,377,185

As ofMarch 31, 2013
118,284
1,412,580
73,930153,266
72,555
1,830,615

As ofMarch 31, 2014
258,637
2,827,064
92,545
266,136
141,9453,586,327

The components of the carrying amounts of property, plant and equipment recognized as a result of the consolidationof Sprint in July 2013 are as follows. The details of the acquisition are described in “(3) Sprint” in “Note 5.
Business combinations.”(Millions of yen)

Buildings and structures
Telecommunications equipment
Land
Construction in progress
Other
Total

Acquisition date(July 10, 2013)
140,270794,524
18,362298,928
39,2801,291,364

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

As ofApril 1, 2012
Intangible assets with indefinite useful lives
FCC Licenses
Trademarks
Intangible assets with finite useful lives
Software
Customer relationships
Favorable lease contracts
Game titles
Trademarks
Other
Total

As of
March 31, 2013

As ofMarch 31, 2014

-

3,790

3,709,526
622,975

310,755
201
29,367340,323

411,285
83,876
178
29,554
528,683

647,386
677,494140,217
166,52252,475
161,106
6,177,701

As a result of consolidation of eAccess Ltd. in January 2013, the Company recognized customer relationships
amounting to ¥84,684 million. The details of the acquisition are described in “(1) eAccess Ltd.” in “Note 5.
Business combinations.”
As a result of consolidation of GungHo in April 2013, the Company recognized game titles amounting to ¥77,796
million. The details of the acquisition are described in “(2) GungHo Online Entertainment, Inc.” in “Note 5.
Business combinations.”

72SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

The components of the carrying amounts of intangible assets recognized as a result of the consolidation of Sprint inJuly 2013 are as follows. The details of the acquisition are described in “(3) Sprint” in “Note 5. Businesscombinations.”(Millions of yen)

Acquisition date(July 10, 2013)
Intangible assets with indefinite useful lives
FCC Licenses
Trademarks
Intangible assets with finite useful lives
Software
Customer relationships
Favorable lease contracts
Trademarks
Other
Total

3,612,994
600,266
138,330
700,192
148,979
52,59347,9295,301,283

As a result of the consolidation of WILLCOM, Inc. in July 2013, the Company recognized customer relationships
amounting to ¥25,004 million. The details of the acquisition are described in “(4) WILLCOM, Inc.” in “Note 5.
Business combinations.”
As a result of consolidation of Supercell Oy in October 2013, the Company recognized game titles amounting to¥119,099 million. The details of the acquisition are described in “(5) Supercell” in “Note 5. Businesscombinations.”
As a result of consolidation of Brightstar Corp. in January 2014, the Company recognized customer relationships of¥22,493 million and trademarks (intangible assets with indefinite useful lives) of ¥12,120 million. The details of theacquisition are described in “(6) Brightstar Corp.” in “Note 5. Business combinations.”
9. Interest-bearing debt
(1) Components of interest-bearing debt
The components of “Interest-bearing debt” in the consolidated statements of financial position are as follows:(Millions of yen)

As ofApril 1, 2012
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
Preferred securities
Installment payables
Total

As of
March 31, 2013

As ofMarch 31, 2014

114,625
496,073
142,686
157,302
15,985926,671458,313631,232
204,837
192,658
47,0881,534,128

270,529
32,000393,566
139,300
264,295
48,209
1,147,899

619,517458,520431,722
195,920
57,594
1,763,273

510,856
791,919564,077
197,468
109,405
2,173,725

2,243,855
4,743,073
730,915
199,156
105,155
8,022,15473

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

Notes:
1. SoftBank Corp. has entered into a loan agreement (the “permanent loan”) with a maximum total amount of borrowing at¥1,980 billion with the financial institutions on September 13, 2013 to refinance the bridge loan for the consolidation of
Sprint, executing borrowing on September 27, 2013 and on September 30, 2013.
The summary of the permanent loan is as follows.
Summary of the permanent loan
Borrower

SoftBank Corp.

Lenders

Mizuho Bank, Ltd.
Sumitomo Mitsui Banking Corporation
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Deutsche Bank AG
Crédit Agricole CIB
and others in total 19 institutions

Date of contract

September 13, 2013

Maximum total amount ofborrowing and maturity

Total amount of borrowing limit :¥1.98 trillion(Breakdown)
Facility A： ¥1.1 trillion (Maturity: September 13, 2018)
Facility B： ¥880 billion (Maturity: September 14, 2020)

Loan drawdown amount anddate¥1.85 trillion on September 27, 2013¥130 billion on September 30, 2013

Primary use of loan proceeds

Repayment of bridge loan for Sprint consolidation
Repayment of some existing borrowings at SoftBank Corp.
Repayment of some existing debts at eAccess Ltd.

Collateral

Not applicable

Guarantors

SoftBank Mobile Corp. and SoftBank Telecom Corp.

Financial covenants

Following are the financial covenants for the permanent loan:(a) The amount of SoftBank Corp.’s net assets at the end of the year must not fall
below 75% of SoftBank Corp.’s net assets at the end of the previous year.
(b) The consolidated statements of financial position of SoftBank Corp. andconsolidated balance sheets of BB Mobile Corp. at the end of the year must
not show a net capital deficiency. At the end of the year, balance sheets of
SoftBank Mobile Corp., SoftBank BB Corp. and SoftBank Telecom Corp.
must not show a net capital deficiency.
(c) In the SoftBank Corp.’s consolidated statements of income, operating income(loss) or net income (loss) attributable to the owner of the parent company
must not result in losses for two consecutive years.
(d) Adjusted net interest-bearing debts1 or leverage ratios2 designated in the loan
agreement must not exceed respective certain amounts or numbers at the endof each annual reporting period and at the end of the second quarter.
1. Adjusted net interest-bearing debts:
Amounts deducting cash and cash equivalents from interest-bearing debts inthe consolidated statement of financial position. Certain adjustments are
made such as excluding certain listed subsidiaries such as Sprint from thesubject.
2. Leverage ratio:
Adjusted net interest-bearing debt / adjusted EBITDA3
3 Adjusted EBITDA:
Certain adjustments are made to EBITDA such as excluding listed
subsidiaries such as Sprint.

74

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

Notes:
2. The components of interest-bearing debt recognized as a result of the consolidation of Sprint in July 2013 are as follows.
The details of the acquisition are described in “(3) Sprint” in “Note 5. Business combinations.”(Millions of yen)
Acquisition date(July 10, 2013)

Current
Current portion of long-term borrowings
Current portion of corporate bonds
Current portion of lease obligations
Total

13,38063,317
10,26486,961

Non-current
Long-term borrowings
Corporate bonds
Lease obligations
Total

34,8542,590,208
43,1012,668,163

Notes:
3. Covenants on interest-bearing debts of Sprint
Major covenants on the interest-bearing debt issued by Sprint are as follows:a. Holders of a portion ($20.1 billion) of notes issued by Sprint are provided with the right to require Sprint to repurchase thenotes if there is a change of control and if there is a decline, to a certain extent, in ratings of the applicable notes by the
Rating Services. Also, holders of a portion ($481 million) of notes issued by Clearwire and other subsidiary of Sprint areprovided with the right to require the repurchase of the notes if a change of control triggering event occurs.
b. It is required that as of the last day of each quarter, Sprint’s ratio of total indebtedness* to EBITDA (as defined) should notexceed a threshold level. Exceeding the ratio could result in the maturities being accelerated. The limit for the ratio was
6.25 as of March 31, 2014.
*Total indebtedness: the sum of Sprint’s outstanding debt (excluding trade payable) and guarantee of indebtedness, withcertain adjustments such as excluding amounts agreed based on contracts with lenders.

(2) Components of increase (decrease) in short-term interest-bearing debt
The components of “Increase (decrease) in short-term interest-bearing debt, net” in the consolidated statements ofcash flows are as follows:(Millions of yen)

Fiscal year ended
March 31, 2013
345,572
345,572

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

Fiscal year ended
March 31, 2014
(233,794)
32,000(201,794)

Note :The Company borrowed a permanent loan in September 2013 and refinanced the bridge loan which was made for the consolidationof Sprint. The increase and the decrease in short-term borrowings for the fiscal year ended March 31, 2014 include the increase ofborrowings of ¥1,034.9 billion on July 10, 2013, from the bridge loan and the decrease of borrowings by the repayment of thebridge loan in the amount of ¥1,284.9 billion (including the amount of repayment of ¥250 billion on December 21, 2012).

75

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

(3) Components of proceeds from long-term interest-bearing debt
The components of “Proceeds from long-term interest-bearing debt” in the consolidated statements of cash flows
are as follows:(Millions of yen)

Proceeds from long-term borrowings
Proceeds from issuance of corporate bonds1
Proceeds from sale and leaseback of newly acquired equipment
Total

Fiscal year ended
March 31, 2013
474,703
480,000
369,882
1,324,585

Fiscal year ended
March 31, 2014
2,587,755
1,665,232
445,307
4,698,294

Notes:
1. Corporate bonds issued for the fiscal year ended March 31, 2014 are as follows:

Company name / Name of bonds
SoftBank Corp.

Date of issuanceTotal amountof issuanceInterest
rate

Date of maturity

USD-denominated Senior Notes
due year 2020

April 23, 2013

$2,485 million¥244,176 million2

4.50%
3.29%3

April 15, 2020

Euro-denominated Senior Notes
due year 2020

April 23, 2013€625 million¥80,206 million2

4.63%
4.05%3

April 15, 2020

43rd Unsecured Straight Corporate
Bond

June 20, 2013

¥400,000 million

1.74%

June 20, 2018

44th Unsecured Straight Corporate
Bond

Nov. 29, 2013

¥50,000 million

1.69%

Nov. 27, 2020

7.25% Notes due 2021

Sept. 11, 2013

$2,250 million¥220,950 million

7.25%

Sept. 15, 2021

7.875% Notes due 2023

Sept. 11, 2013

$4,250 million¥417,350 million

7.88%

Sept. 15, 2023

7.125% Notes due 2024

Dec. 12, 2013

$2,500 million¥ 252,550 million

7.13%

June 15, 2024

Sprint Corporation4

Notes:
2. The cash outflow amount, fixed by the currency swap contract designated as a cash flow hedge, at the time of redemption, is
described in JPY.
3. The interest rate, after considering the impact of converting the fixed interest rate in foreign currency into a fixed interest rate in
JPY by the currency swap contract, designated as a cash flow hedge, is described.
4. These corporate bonds were issued after the acquisition of Sprint.

76

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

(4) Components of repayment of long-term interest-bearing debt
The components of “Repayment of long-term interest-bearing debt” in the consolidated statements of cash flows
are as follows:(Millions of yen)

Fiscal year ended
March 31, 2013
(574,753)(95,826)(207,509)(20,779)(898,867)

Repayment of long-term borrowings
Redemption of corporate bonds1
Payment of lease obligations
Payment of installment payables
Total

Fiscal year ended
March 31, 2014
(1,133,313)(533,538)(253,283)(51,460)(1,971,594)

Notes:
1. Major corporate bonds redeemed for the fiscal year ended March 31, 2014 are as follows:

Date of issuance

Amount of redemption

Interest
rate

Date of redemption

June 2, 2010

¥25,000 million

1.17%

May 31, 2013

Sept.17, 2010

¥130,000 million

1.24%

Sept. 17, 2013

Jan. 27, 2012

¥50,000 million

0.42%

Jan. 27, 2014

12% Senior Secured Notes due
2015

Nov.24, 2009

$2,763 million¥277,997 million

12.00%

Sept. 11, 2013 toDec. 1, 2013

12% Second-Priority Secured
Notes due 2017

Dec. 9, 2010

$500 million¥50,510 million

12.00%

Oct. 30, 2013
Dec. 1, 2013

Company name /Name of bonds
SoftBank Corp.
31st Unsecured Straight Corporate
Bond
33rd Unsecured Straight Corporate
Bond
38th Unsecured Straight Corporate
Bond
Clearwire Communications LLC2

Notes:
2. These corporate bonds were redeemed after the acquisition of Sprint.
Sprint.

Clearwire Communications LLC is a subsidiary of

10. Foreign exchange rate
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

U.S. dollars

As ofApril 1, 2012
82.19

As of
March 31, 2013
94.05

77

(yen)
As of
March 31, 2014102.92

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

(2) Average rate for the quarter
For the fiscal year ended March31, 2013

U.S. dollars

Three-month period
endedJune 30, 2012
80.40

Three-month period
ended
September 30, 2012
78.42

Three-month period
ended
December 31, 2012
81.49

(yen)
Three-month period
ended
March 31, 2013
91.07

Three-month period
ended
December 31, 2013
101.02(yen)
Three-month period
ended
March 31, 2014103.28For the fiscal year ended March31, 2014

U.S. dollars

Three-month period
endedJune 30, 2013
97.94

Three-month period
ended
September 30, 2013
98.20

11. Equity(1) Additional paid-in capital
For the fiscal year ended March 31, 2013
Alibaba Group Holding Limited, an associate accounted for using the equity method, acquired the shares of
Alibaba.com Limited, a subsidiary of Alibaba Group Holding Limited, through its takeover bid in June 2012,and privatized Alibaba.com Limited. The Company’s additional paid-in capital decreased by ¥51,208 million
as Alibaba Group Holding Limited treated this as a change in the interests in a controlled subsidiary, decreasing
its additional paid-in capital.

For the fiscal year ended March 31, 2014
In connection with the consolidation of Supercell, the Company acquired preferred stocks of Supercell andoptions (“conversion options”) to convert the preferred stocks to common stocks. The fair value of ¥10,323
million for the preferred stocks and the conversion options is deducted from Additional paid-in capital as“Acquisition of options to convert to subsidiaries’ common stocks.” The details are described in “(5) Supercell”
in “Note 5. Business combinations.”(2) Accumulated other comprehensive income
The components of accumulated other comprehensive income are as follows:(Millions of yen)

As ofApril 1, 2012

As ofMarch 31, 2013

As ofMarch 31, 2014

Available-for-sale financial assets

46,42750,70014,122

Cash flow hedges*
Exchange differences on translating
foreign operations(994)

114,158(19,942)-

83,168

175,437

45,433

248,026

169,617

Total

Note:
In connection with the consolidation of Sprint, during the fiscal year ended March 31, 2014, accumulated othercomprehensive income, generated from the hedging instrument designated as a cash flow hedge, is derecognized in order todeduct the amount from the initial amount of goodwill which was recognized by the consolidation. The details are describedin “(3) Sprint” in “Note 5. Business combinations.”

78SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

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

Fiscal year ended
March 31, 2013
Impairment loss
Assets related to ADSL services1
Assets related to Sprint2
Trademarks3
Goodwill
Severance costs associated with reduction in workforce of Sprint
Other
Total

Fiscal year ended
March 31, 2014-

(11,210)(7,654)(7,404)(5,822)(18,307)(5,033)(55,430)

Notes:
1. As a result of reviewing the business plan for ADSL services at eAccess Ltd. in the Fixed-line Telecommunications
segment, the recoverable amount of assets related to ADSL services became lower than their carrying amount, andtherefore the carrying amounts was reduced to their value in use. Impairment loss on customer relationships was ¥8,655
million and impairment loss on telecommunications equipment and software was ¥2,555 million.
2. In the Sprint segment, certain telecommunications equipment inventories which will not be used in the future are impaired.
3. eAccess Ltd. and WILLCOM, Inc., are scheduled to conduct an absorption type merger, with eAccess Ltd. being thesurviving company and WILLCOM, Inc being the company absorbed, effective on June 1, 2014. After the merger,
SoftBank Corp. is scheduled to transfer all shares of eAccess Ltd. owned by SoftBank Corp. to Yahoo Japan Corporation on
June 2, 2014. After the transfer, eAccess Ltd. will change its name to Ymobile Corporation and plans to provide services
under the “Y!mobile” brand.
Along with this, in the Mobile Communications segment, trademarks such as “EM,” “EMOBILE,” “WILLCOM,” andothers which eAccess Ltd. and WILLCOM, Inc. used as service names, will not be used in the future, the trademarks are all
impaired.

13. Finance cost
The components of finance cost are as follows:(Millions of yen)

Fiscal year ended
March 31, 2013
(65,297)

Interest expense

79

Fiscal year ended
March 31, 2014
(271,478)

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

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

Fiscal year ended
March 31, 2013
3,109
11,877
2,288(10,541)837(22,474)(31)(14,935)

Interest income1
Derivative gain (loss) 1,2,3
Gain on sales of securities
Impairment loss on securities
Gain on sales of associates’ stocks
Impairment loss on equity method associates4
Other
Total

Fiscal year ended
March 31, 2014
21,015(19,588)
12,325(9,168)33,0586,439
44,081

Notes:
1. Stock acquisition rights in the convertible bonds issued by Sprint Nextel Corporation and undertaken by Starburst II on
October 22, 2012, were reported at fair value as a derivative, being bifurcated from the host contracts as it is classified asembedded derivatives and were recorded in “Other financial assets” in the consolidated statements of financial position.
As the Company exercised the relevant stock acquisition right and the Company derecognized the derivatives, a derivativeloss of ¥16,356 million was recorded during the fiscal year ended March 31, 2014.
With regard to the host contract (the bonds), the amount of payment less the fair value of the embedded derivative at
inception of the bond was recorded in the consolidated statement of financial position at inception. This deduction
amount is accreted using the effective interest method with corresponding adjustments to interest income. Initially, theexpected remaining accretion period for the bond discount was seven years based on the contract term of the bond.
However, based on the approval for the acquisition at the shareholders’ meeting of Sprint on June 25, 2013, the Company
changed the estimate of the expected remaining term to the completion of the acquisition. During the fiscal year ended
March 31, 2014, the Company recognized interest income of ¥16,219 million. There was an increase of interest incomeof ¥15,568 million from the reflection of this change in the expected remaining term of the bond.
2. Of the foreign currency forward contract totaling $22.0 billion which was related to the acquisition of Sprint, with regard to$5.0 billion that did not meet the criteria for hedge accounting, a derivative loss of ¥13,186 million was recorded for the
fiscal year ended March 31, 2014. Hedge accounting was applied to $17.0 billion as cash flow hedge. Fair value of¥311,659 million of hedge instruments on the acquisition date was deducted from the initial amount of goodwill which wasrecognized upon the acquisition.
3. Derivatives associated with the transactions for the acquisition of Sprint are as follows.
included in “Other financial assets” in consolidated statements of financial position.

Derivative financial assets are

Derivative to which hedge accounting is applied(Millions of yen)
As of

As of

As of

April 1, 2012
Contract amounts(More than one
year)
Fair value

March 31, 2013
Contract amounts(More than one
year)
Fair value

March 31, 2014
Contract amounts(More than one
year)
Fair value

Foreign exchange contracts
To buyU.S. dollars--

1,411,990

189,357(-)--

1,411,990

Total

(-)

80

189,357--

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

Derivatives to which hedge accounting is not applied(Millions of yen)
As of

As of

April 1, 2012
Contract amounts(More than one
year)

As of

March 31, 2013

Fair value

Contract amounts(More than one
year)

March 31, 2014

Fair value

Contract amounts(More than one
year)
Fair value

Embedded derivatives
Stock acquisition rights--

291,555(291,555)--

291,555

Total(291,555)

15,706--

15,706--

4. The Company recorded impairment loss of ¥22,474 million with regard to the equity method associate for the fiscal year
ended March 31, 2013 as the expected future cash flow from the existing business plan was not expected and the carrying
amount was reduced to the recoverable amount.

15. Earnings per share(1) Basic earnings per share
Fiscal year ended
March 31, 2013

Fiscal year ended
March 31, 2014

372,481

527,035

1,120,201332.51

1,190,650
442.64

Fiscal year ended
March 31, 2013

Fiscal year ended
March 31, 2014

Net income attributable to owners of the parent (Millions of yen)
Adjustments:
Interest expense on bonds (net of tax) (Millions of yen)
Effect of dilutive securities issued by subsidiaries andassociates (Millions of yen)
Net income used in the calculation of diluted earnings per share(Millions of yen)

372,481

527,035

1,339

-

ሺ63)

(1,993)

373,757

525,042

Weighted-average number of ordinary shares (Thousands of shares)
Adjustments:
Warrants and corporate bonds with stock acquisition rights(Thousands of shares)
Weighted-average number of ordinary shares used in thecalculation of diluted earnings per share (Thousands of shares)
Diluted earnings per share (yen)1,120,201

1,190,650

19,0301,622

1,139,231
328.08

1,192,272
440.37

Net income attributable to owners of the parent (Millions of yen)
Weighted-average number of ordinary shares(Thousands of shares)
Basic earnings per share (yen)(2) Diluted earnings per share

81SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 201416. Supplemental information to the 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 cash outflows from purchasing
long-term prepaid expenses that are included in “Other non-current assets” in the consolidated statements offinancial 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 consolidated statements of financial position.
The cash outflows from the purchase of the equipment from vendors are included in “Purchase of property,
plant and equipment and intangible assets" under cash flows from investing activities, and the cash inflows
from the sale of the equipment to lease companies are included in “Proceeds from long-term interest-bearingdebt" under cash flows from financing activities.
(3) Proceeds from the settlement of foreign currency forward contracts for consolidation of control of subsidiaries
For the fiscal year ended March 31, 2014
The proceeds are from the settlement of a foreign currency forward contract of $18.5 billion with regard toconsolidation of Sprint.
(4) Payments for preferred stocks, stock acquisition rights, and long-term debt of subsidiaries
For the fiscal year ended March 31, 2013
In April 2006, BB Mobile Corp. issued Class 1 preferred stock-series 1 and stock acquisition rights to
Vodafone International Holdings B.V. and obtained a subordinated loan from Vodafone Overseas Finance
Limited as a series of financing transactions for the Company’s acquisition of Vodafone K.K. (currently
SoftBank Mobile Corp.). In November 2006, refinancing of the funds for the acquisition was conducted, and
SoftBank Mobile Corp. assumed BB Mobile Corp’s subordinated loan.
In December 2010, the Company acquired all aforementioned Class 1 preferred stock-series 1 and stockacquisition rights issued by BB Mobile Corp. to Vodafone International Holdings B.V., and all principal
amounts and accrued interest of a long-term loan receivable from SoftBank Mobile Corp. held by Vodafone
Overseas Finance Limited for a total amount of ¥412,500 million. Of the total amount, ¥212,500 million andthe remaining amount of ¥200,000 million with expenses associated with the acquisition were paid in
December 2010 and April 2012, respectively.

17. First-time adoption of IFRSs(1) Transition to IFRSs financial reporting
The Company first prepared consolidated financial statements in accordance with IFRSs from the fiscal year
ended March 31, 2014.
The latest consolidated financial statements prepared in accordance with JGAAP are for the year ended March
31, 2013. The date of transition to IFRSs is April 1, 2012.
IFRS 1, in principle, requires first-time adopters to apply IFRSs retrospectively. However, as exceptions, theretrospective application of some aspects of IFRSs is prohibited, and they shall be applied prospectively fromthe date of transition to IFRSs. The following exceptions are applicable to the Company:

82

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014a. Accounting estimates
With regard to accounting estimates used for consolidated financial statements in accordance with IFRSs,
new information received afterward is not reflected, for the estimates used under IFRSs to be consistent
with estimates used when the financial statements under JGAAP were prepared.
b. Non-controlling interests
The Company applies the following requirements of IFRS 10 “Consolidated Financial Statements”
prospectively from the date of transition to IFRSs:
・ the requirement that total comprehensive income is attributed to the owners of the parent and to thenon-controlling interests even if this results in the non-controlling interests having a deficit balance; and・ the requirements for accounting for changes in a subsidiary that do not result in a loss of control.
IFRSs also grant first-time adopters to voluntarily elect to use exemptions from some requirements of IFRSs.
The Company applied the following exemptions:a. Business combinations
The Company has elected not to apply IFRS 3 “Business Combinations,” retrospectively to businesscombinations that occurred before the date of transition to IFRSs.
b. Translation differences for foreign operations
The Company has transferred all cumulative translation differences from other comprehensive income toretained earnings on the date of transition to IFRSs.
c. Share-based payments
The Company does not apply IFRS 2 “Share-based Payment” to a portion of stock options that were vested
before the date of transition to IFRSs.
d. Compound instruments
The Company does not apply IAS 32 “Financial Instruments: Presentation” to the compound instrumentswith no outstanding liability balance at the date of transition to IFRSs.
The Company has made necessary adjustments to the consolidated financial statements prepared in accordancewith JGAAP that had already been disclosed, in the course of the preparation of the consolidated financial
statements in accordance with IFRSs.
The table below presents reconciliations required to be disclosed under the first-time adoption of IFRSs.
Items that do not affect retained earnings and comprehensive income are included in “Reclassification” of thereconciliation. Differences in the scope of consolidation under IFRSs from JGAAP are included in“Differences in the scope of consolidation.” Items that affect retained earnings or comprehensive income areincluded in “Differences in recognition and measurement.”
The amounts presented in the consolidated financial statements prepared in accordance with JGAAP for theyears ended on or before March 31, 2013, were rounded down to the nearest million yen. As the amounts
presented in the consolidated financial statements prepared in accordance with IFRSs from the fiscal year ended
March 31, 2014, are rounded off to the nearest million yen, the amounts under JGAAP presented in thereconciliations are also rounded off to the nearest million yen.

83

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

(2) Reconciliation of equity as of April 1, 2012
(Items related to consolidated statement of financial position)(Millions of yen)
Presentation
under JGAAP

JGAAPReclassification

Differences in Differences inthe scope of recognition andconsolidation
measurement

Notes

Presentation
under IFRSs

IFRSs

AssetsAssetsCurrent assets

Current assets
Cash and cash
equivalents
Trade and otherreceivables

Cash and deposits
Notes and accounts
receivable - tradeMarketable securities

Merchandise andfinished products
Deferred tax assets
Other current assets
Less: Allowance for
doubtfulaccounts
Total current assets

1,016,252(1,693)

6,554-

661,288(35,571)(2,560)163,745

4,575(4,575)---

10,399--10,399Other financial
assets

13,065--55,683Inventories

42,6181,021,113
E

786,90256,469(56,469)--

168,265(93,391)

2,690

7,450

-

(39,015)

39,015---

1,910,452(129,220)6,684

171,195

1,959,111

D

85,014

Fixed assets
Property andequipment, net

Other current assets

Total current assets
Non-current assets

1,296,393-

22,07658,716B, I

1,377,185

A

777,911

Property, plant andequipment

Intangible assets, net:
Goodwill

780,243-

1,211(3,543)

Software310,151(310,151)---

Other intangibles

36,121

310,151641(6,590)340,323

338,198(338,198)---

Goodwill
Intangible assets

Investments and otherassetsInvestment securities

201,465

7,292

(231)

G

208,526

185,040(22,081)

155,640E

318,599

Deferred tax assets

104,327

56,469-22,613

Other assets

134,077(64,264)

77

15,600(15,957)

15,957---

Total fixed assets

2,983,553

56,4699,216

242,205

3,291,443

Deferred charges

5,700

-

21

(5,721)-

4,899,705(72,751)

15,921

407,679

5,250,554

Less: Allowance for
doubtfulaccounts

Total assets

Note: Described in “(7) Notes to the differences in recognition and measurement” on page 93.

84

183,409
D, I

85,490Investments
accounted forusing the equity
methodOther financial
assetsDeferred tax assets
Other non-current
assetsTotal non-current
assetsTotal assets

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

(Millions of yen)
Presentation
under JGAAP

JGAAPReclassification

Differences inthe scope of
consolidation

Differences inrecognition andmeasurement

Notes

Presentation
under IFRSs

IFRSs

Liabilities
Current liabilities
716,824-

209,847

E, I

926,671D

975,832

Accounts payable -trade190,533

747,461

22,65015,188

Short-term borrowings
Current portion of
corporate bonds
Accounts payableother and accrued
expenses

403,168(403,168)---

144,988(144,988)---

835,053(835,053)

-

-

-

1,206

-

-

1,206

Income taxes payables

125,116(2,614)

5

706

123,213

Current portion of leaseobligations

152,683(152,683)

-

-

-

1,456

-

-

1,456

72,184(1,191)

174

22,9881,923,725(72,750)

22,829248,729

1,425,264-

338,009

Other current liabilities
Total current liabilities

D, F

94,155
2,122,533

Long-term liabilities
E, I

1,763,273

Liabilities and equity
Current liabilities
Interest-bearing
debt
Trade and otherpayablesOther financial
liabilities
Income taxes
payablesProvisions
Other current
liabilities
Total current
liabilities
Non-current
liabilities
Interest-bearing
debt

Corporate bonds

459,900(459,900)---

Long-term debt

560,070(560,070)

-

-

-

9,711

26,0691,390

37,170

Other financial
liabilities

-

-

-

14,953

Defined benefit
liabilities

20,60340-

20,643

Provisions

20,370-(313)

25,29445,351

Deferred tax
liabilities

Liability for
retirement benefits

Deferred tax liabilities

14,953

Allowance for point
mileage
Lease obligations

32,074(32,074)---

347,700(347,700)---

Other liabilities

105,273(55,835)(9,999)40,146

Total long-term liabilities

1,540,340(1)

15,797

404,839

1,960,975

Total liabilities

3,464,065(72,751)

38,626

653,568

4,083,508

Note: Described in “(7) Notes to the differences in recognition and measurement” on page 93.

85

D, F

79,585

Other non-current
liabilities
Total non-current
liabilities
Total liabilities

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

(Millions of yen)
Presentation
under JGAAP

JGAAPReclassification

Differences inthe scope of
consolidation

Differences inrecognition andmeasurement

Notes

Presentation
under IFRSs

IFRSs

EquityEquityEquity attributableto owners of theparentShareholders’ equity
Common stock
Additional paid-in
capitalRetained earnings

213,798---

236,563898-

13,306

E

250,767

530,534-(3,335)(121,615)(7)

405,584

Common stock
Additional paid-in
capitalRetained earnings

Less: Treasury stock(22,947)---(22,947)

Treasury stock(21,253)-

66,68645,433

Accumulated othercomprehensive
income10,567(10,567)

-

-

-

(993)

993

-

-

-

(30,827)

30,827---

Accumulated othercomprehensive loss
Unrealized gain on
available-for-salesecurities
Deferred loss onderivatives underhedge accounting
Foreign currencytranslation
adjustments

213,798

C, E

892,635

Stock acquisition rights
Minority interests
Total equity
Total liabilities andequityTotal equity
attributable toowners of theparent

898

(898)

-

-

498,047-(19,370)(204,266)

1,435,640-(22,705)(245,889)

1,167,046

Total equity

4,899,705(72,751)

15,921

407,679

5,250,554

Total liabilities andequityNote: Described in “(7) Notes to the differences in recognition and measurement” on page 93.

86

A, B,
E, F

274,411

Non-controllinginterests

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

(3) Reconciliation of equity as of March 31, 2013
(Items related to consolidated statement of financial position)(Millions of yen)
Presentation
under JGAAP

JGAAPReclassification

Differences inthe scope of
consolidation

Differences inrecognition andmeasurement

Notes

Presentation
under IFRSs

IFRSs

AssetsCurrent assets

AssetsCurrent assets
Cash and cash
equivalents
Trade and otherreceivables

Cash and deposits

1,369,135(4,505)74,427-

Notes and accounts
receivable - trade662,187

26,174

26,516

221,430

Marketable securities

4,704(4,704)---

227,235

2,004-

229,239

Other financial
assetsInventories

1,439,057
D,E

936,307

Merchandise andfinished products
Deferred tax assets

43,846

8,021

2,401

-

54,26850,580(50,580)---

Other current assets

490,964(370,795)

747

6,232

Less:
Allowance for
doubtful accounts(30,219)

30,219---2,591,197(138,935)

106,095

227,6622,786,019

Total current assets

D

127,148

Fixed assets
Property andequipment, net

Other current assets

Total current assets

Non-current assets
1,657,640-

208,596(35,621)B, I

1,830,615

Goodwill

734,407-

136,551

54,014

A

924,972

Software383,733(383,733)---

Other intangibles

36,805

383,733

113,634(5,489)528,683

Investments and otherassetsInvestment securities

870,608(870,608)---

Property, plantand equipment

Intangible assets, net:

458,823(259,022)

8,863

G

208,644464,151(2,197)

172,693E

634,647

Deferred tax assets

99,96750,580(21)

24,864

Other assets

158,558(69,274)

13,90225,996Less:
Allowance for
doubtful accounts(16,909)

16,909---Total fixed assets

3,924,809

50,581

211,443

245,320

4,432,153

Deferred charges

8,880

-

9

(8,889)-6,524,886(88,354)

317,547

464,093

7,218,172

Total assets

Note: Described in “(7) Notes to the differences in recognition and measurement” on page 93.

87

175,390
D,H,I

129,182

Goodwill

Intangible assets

Investments
accounted forusing the equity
methodOther financial
assetsDeferred tax assets
Other non-current
assetsTotal non-current
assetsTotal assets

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

(Millions of yen)
Presentation
under JGAAP

JGAAPReclassification

Differences inthe scope of
consolidation

Differences inrecognition andmeasurement

Notes

Presentation
under IFRSs

IFRSs

Liabilities

Liabilities and equity

Current liabilities

Current liabilities
Interest-bearing
debt
Trade and otherpayablesAccounts payabletrade
Short-term borrowings
Current portion of
corporate bonds
Accounts payableother and accrued
expenses

1,243,412

52,424

238,292

E, I

1,534,128

194,654696,218

63,70518,092

D

972,669

813,491(813,491)---

205,000(205,000)---

751,690(751,690)

-

-

-

4,833

-

-

4,833

Income taxes payables

179,559(3,096)

4,653

934

182,050

Deferred tax liability

71,975(71,975)---

Current portion of leaseobligations

192,603(192,603)

-

-

-

1,252

350

-

1,602

181,212(68,189)

4,299

25,3122,590,184(160,329)

125,431282,630

Other current liabilities
Total current liabilities

D, F

142,634
2,837,916

Long-term liabilities

Corporate bonds
Long-term debt

Liability for
retirement benefits

E, I

Non-current
liabilities
Interest-bearing
debt

264,128

734,900(734,900)---

354,291(354,291)---

12,981

25,673-38,654

Other financial
liabilities

-

-

-

14,506

Defined benefit
liabilities

20,847918-

21,765

Provisions
Deferred tax
liabilities

17,94071,975

7,230

23,834

120,979

Allowance for point
mileage

22,548(22,548)---526,739(526,739)---

157,319(116,716)(8,552)

48,136

Total long-term liabilities

1,828,243

71,975

213,500

336,098

2,449,816

Total liabilities

4,418,427(88,354)

338,931

618,7285,287,732

Other liabilities

Other current
liabilities
Total current
liabilities

188,231

Deferred tax liabilities

Lease obligations

Provisions

1,721,366

14,5062,173,725

Other financial
liabilities
Income taxes
payablesNote: Described in “(7) Notes to the differences in recognition and measurement” on page 93.

88

D, F

80,187

Other noncurrent liabilities
Total non-current
liabilities
Total liabilities

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

(Millions of yen)
Presentation
under JGAAP

JGAAPReclassification

Differences inthe scope of
consolidation

Differences inrecognition andmeasurement

Notes

IFRSs

Presentation
under IFRSs

238,772

EquityEquity attributableto owners of theparentCommon stock

EquityShareholders’equityCommon stock
Additional paid-in
capitalRetained earnings

238,772---

429,689

736

(125)

6,404

E

436,704

Additional paid-in
capital753,616-(6,037)(35,491)(7)712,088

Retained earnings

Less: Treasury stock(22,834)---(22,834)

Treasury stock

169,842(1)

78,185

248,026

Accumulated othercomprehensive
income4,164(4,164)---

114,158(114,158)---

51,520(51,520)---

Accumulated othercomprehensive income
Unrealized gain on
available-for- salesecurities
Deferred gain onderivatives
under hedge
accounting
Foreign currencytranslation
adjustments

C,E,G

1,612,756

Stock acquisition rights

736

(736)

-

-

A, B,
E, F

Minority interests

536,638-(15,221)(203,733)

Total equity
Total liabilities andequity2,106,459-(21,384)(154,635)

1,930,440

6,524,886(88,354)

317,547

464,093

7,218,172

Note: Described in “(7) Notes to the differences in recognition and measurement” on page 93.

89

Total equity
attributable toowners of theparent317,684

Non-controllinginterests
Total equity
Total liabilities andequitySoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

(4) Adjustment to comprehensive income for the fiscal year ended March 31, 2013
(Items related to consolidated statement of income)(Millions of yen)
Presentation
under JGAAP

JGAAPReclassification

Differences in Differences inthe scope of recognition andconsolidation measurement

Notes

IFRSs

Presentation
under IFRSs

Net sales

3,378,365

10,191

38,823(224,843)

D

3,202,536

Cost of sales(1,590,740)(9,522)(22,918)

12,338

B,D,F,I(1,610,842)

Gross profit

1,787,625

669

15,905(212,505)

Selling, general andadministrative
expenses(1,042,625)

2,574(24,757)

270,735

Operating income

745,000

1,591,694

A,B,D,
E,F,H,
I(794,073)

Net sales
Cost of sales
Gross profit

Selling, general andadministrative
expenses

1,778

-

-

1,778

-

-

-

-

Income fromremeasurement
relating tobusiness
combination
Other operating
income799,399

Operating income
Finance cost

(70,298)(3,731)

8,732

E,I

(65,297)(11,050)

(908)

8,295

G

(3,663)(18,179)

5,117(1,873)E,G(14,935)

Non-operating income

19,779(19,779)---

Non-operating expenses(111,565)

111,565---

Ordinary income

653,214

Special income

11,383(11,383)---

Special loss

(14,103)

14,103---

Income before income
taxes and minority
interests

650,494-(8,374)73,384

Income taxes(287,174)

-

1,543

Income before
minority interests

363,320-(6,831)

715,504

Income before
income tax

7,964(277,667)

Income taxes

81,348437,837

Note: Described in “(7) Notes to the differences in recognition and measurement” on page 93.

90

Equity in loss of
associates
Other non-operating
loss

(7)

Net income

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

(Items related to consolidated statement of comprehensive income)(Millions of yen)
Presentation
under JGAAP

Income before minority
interests

JGAAP
363,320

Reclassification

Differences inthe scope of
consolidation

Differences inrecognition andmeasurement-(6,831)

81,348

Notes

IFRSs
437,837

Presentation
under IFRSs

Net income
Other
comprehensive
income (loss),
net of tax

Other comprehensive
income (loss)

Items that will not
be reclassified
to profit or loss

-

-

68

68

Remeasurementsof defined
benefit plan68

Total items thatwill not bereclassified to
profit or loss
Items that may bereclassified
subsequently to
profit or loss

Unrealized loss onavailable-forsale securities(8,121)-

1

12,609Deferred gain onderivatives underhedge accounting

117,859-(2,723)

-

E

4,489

Availablefor-salefinancial assets

115,136

Cash flow hedges

Foreign currencytranslation adjustment

65,906--(50)

65,856

Exchangedifferences ontranslating
foreign
operations

Share of othercomprehensive
income of affiliatedcompanies accounted
for using equity
method15,270

-

2,710

821

18,801

Share of othercomprehensive
income ofassociates

204,282

Total items that
may bereclassified
subsequently to
profit or loss

Total othercomprehensive
income190,914-(12)

13,448204,350

Total othercomprehensive
income, net of tax

Comprehensive
income554,234-(6,843)

94,796642,187

Total comprehensive
incomeNote: Described in “(7) Notes to the differences in recognition and measurement” on page 93.

91SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

(5) Notes to the reclassification
The following reclassifications are made for the transition to IFRSs and do not affect retained earnings andcomprehensive income.
a. Under JGAAP, investments in associates were included in investment securities. Under IFRSs, they areseparately presented as investments accounted for using the equity method.
b. Under JGAAP, short-term borrowings, current portion of corporate bonds and current portion of lease obligations
are presented as separate components and installment payables were included in accounts payable-other andaccrued expenses. Under IFRSs, they are all included in interest-bearing debt (current). In addition, under
JGAAP, corporate bonds, long-term debt and lease obligations (non-current) are presented as separate
components and long-term installment payables were included in other liabilities (long term). Under IFRSs,
they are all included in interest-bearing debt (non-current).
c. Under JGAAP, accounts payable - trade were presented separately. Accounts payable - other (except for
installment payables) were included in accounts payable - other and accrued expenses. Deposits and otherpayables were included in other current liabilities. Under IFRSs, they are all included in trade and otherpayables.
d. All deferred tax assets and liabilities that were classified as current items under JGAAP are classified as
non-current items under IFRSs.
e. Upon transition to IFRSs, sales and cost of sales arising from transactions where the Company acts as a principal
are presented on a gross basis. Sales and cost of sales arising from transactions where the Company acts as anagent are presented on a net basis.
f. Finance income and cost, such as interest expense, among the amount that was presented as non-operating income,non-operating expenses, special income and special loss under JGAAP, are presented under finance income (cost),
net under IFRSs.
g. Other reclassifications have been made by aggregating or separating presentation under JGAAP to be consistent
with the presentation under IFRSs.
(6) Notes to the differences in the scope of consolidation
The effect of the review of the scope of consolidation under IFRSs from JGAAP is separately presented in thesereconciliations.
Under JGAAP, WCP, which operates a wireless communications network using AXGP technology, was accounted
for using the equity method, as the Company owns 33.3% of its voting rights. Upon transition to IFRSs, theCompany determined that it has substantial control over WCP and included it into the scope of consolidationconsidering the fact that the Company constitutes the majority of members of WCP’s board of directors and that
WCP’s business activities significantly depend on the Company.
eAccess Ltd. became Softbank Corp.’s wholly owned subsidiary effective on January 1, 2013. On January 17,
2013, SoftBank Corp. transferred certain stocks of eAccess Ltd. to 11 companies outside the Group.
Under JGAAP, SoftBank Corp.’s voting rights in eAccess Ltd. decreased to 33.3% after the transfer of stocks andeAccess Ltd. was accounted for using the equity method. Under IFRSs, SoftBank Corp. determined that it has
substantial control over eAccess Ltd. and included it into the scope of consolidation, considering the fact that theeconomic ownership ratio of 99.5% is significantly higher than the percentage of voting rights, the proportion of
voting rights is relatively large compared to other holders of voting rights due to the dispersion of voting rights, andthe fact that SoftBank Corp. can practically appoint and dismiss directors of eAccess Ltd. pursuant to the stocktransfer agreement executed between SoftBank Corp. and the companies outside the Group.

92SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

(7) Notes to the differences in recognition and measurement
Major adjustments to the retained earnings are as follows:(Millions of yen)

Retained earnings under JGAAP
Differences in the scope of consolidation
Differences in recognition and measurement
A. Goodwill
B. Property, plant and equipment
C. Cumulative translation differences for foreign
operations at the date of transition to IFRSs
D. Revenue recognition
E. Financial instruments
F. Employee benefits
G. Investments in associates
H. Acquisition-related costs arising from businesscombinations
I. Leases
Other
Tax effect on adjustments above and other tax effects
Total differences
Retained earnings under IFRSs

As ofApril 1, 2012
530,534(3,335)

As ofMarch 31, 2013
753,616(6,037)(2,750)(49,256)

60,798(50,914)(30,827)(19,919)(20,370)(14,404)(231)(30,827)(17,048)(14,517)(14,338)
8,042(4,203)(6,590)26,935(121,615)
405,584(3,801)(2,850)(5,094)35,058(35,491)
712,088*A to I and “Other” in the table above are presented before net of tax effects.

Major adjustments to income before income tax are as follows:(Millions of yen)

Fiscal year ended
March 31, 2013
Income before income taxes and minority interests under
JGAAP
Differences in the scope of consolidation
Differences in recognition and measurement
A. Goodwill
B. Property, plant and equipment
C. Cumulative translation differences for foreign
operations at the date of transition to IFRSs
D. Revenue recognition
E. Financial instruments
F. Employee benefits
G. Investments in associates
H. Acquisition-related costs arising from businesscombinations
I. Leases
Other
Total differences
Income before income tax under IFRSs

650,494(8,374)64,022(1,307)
2,871
1,093
(90)
8,273
(3,801)
1,353
970
73,384
715,50493SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

Details of major differences are as follows:
A. Goodwill
Under JGAAP, goodwill was amortized regularly over the periods in which economic benefits were reasonably
expected to be realized. Under IFRSs, it is not amortized regularly and this resulted in an increase of theremaining amount of goodwill and a decrease of selling, general and administrative expenses for the year ended
March 31, 2013.
An impairment test on goodwill was performed on April 1, 2012 and an impairment loss of ¥3,543 million on
goodwill was recognized on April 1, 2012. The amount of the impairment loss on goodwill attributable to ownersof the parent was deducted from retained earnings. The impaired goodwill is mainly related to the Fixed-line
Telecommunications segment and Internet segment.
The effect arising from the differences is summarized as follows:(Millions of yen)(Consolidated statements of financial position)

As ofApril 1, 2012

As ofMarch 31, 2013

Increase (decrease) in goodwill
Decrease in non-controlling interests(3,543)793

60,751
47

Increase (decrease) in retained earnings(2,750)60,798(Consolidated statements of income)Fiscal year ended
March 31, 2013

Decrease in selling, general and administrative
expenses

64,022

Increase in income before income tax

64,022

B. Property, plant and equipment
Upon transition to IFRSs, residual values and depreciation method of property, plant and equipment have beenreviewed.
The effect arising from the differences is summarized as follows:(Millions of yen)(Consolidated statements of financial position)

As ofApril 1, 2012

As ofMarch 31, 2013

Decrease in property, plant and equipment
Increase in non-controlling interests(46,257)(2,999)(47,564)(3,350)Decrease in retained earnings(49,256)(50,914)(Consolidated statements of income)
Increase in cost of sales
Decrease in selling, general and administrative
expenses
Decrease in income before income tax

Fiscal year ended
March 31, 2013
(1,917)610(1,307)

94

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

C. Cumulative translation differences for foreign operations at the date of transition to IFRSs
By applying the exemption as an IFRSs first-time adopter as described above, the Company has transferred all
cumulative translation differences for foreign operations to retained earnings on the date of transition to IFRSs(April 1, 2012), which has resulted in a decrease in retained earnings by ¥30,827 million.
D. Revenue recognition
a. Under JGAAP, commission fees related to sales of mobile handsets that the Company pays to dealers of mobile
handsets were expensed as incurred. Under IFRSs, the amount of commission fees expected to occur in the
future is deducted from the related revenues.
b. Under JGAAP, activation fees and upgrade fees were recognized as revenues upon receipt. Under IFRSs, they
are deferred upon entering into the contract and recognized as revenues over the estimated average contract
period and estimated average usage period of handsets. Direct costs related to activation are deferred to theextent that the activation fees and upgrade fees are amortized over the same periods.
c. Under JGAAP, an allowance for point mileage was accrued based on the estimated future obligation arisingfrom point service to customers and provisions for the allowance were expensed as selling, general andadministrative expenses. Under IFRSs, point services are recognized individually as goods to be transferred orservices to be provided in the future. The fair value of benefits exchanged with points is deducted fromrevenues and revenues are recognized when customers use those points.
The effect arising from the differences is summarized as follows:(Millions of yen)(Consolidated statements of financial position)

As ofApril 1, 2012

As ofMarch 31, 2013

Increase in trade and other receivables
Increase in other current assets
Increase in other non-current assets
Increase in trade and other payables
Increase in other current liabilities
Increase in other non-current liabilities

10,00938,942(19,919)(10,009)(38,942)

1,226
14,46245,990(18,274)(14,462)(45,990)

Decrease in retained earnings(19,919)(17,048)(Consolidated statements of income)Fiscal year ended
March 31, 2013

Decrease in net sales
Decrease in cost of sales
Decrease in selling, general and administrative
expenses(224,843)
11,501
216,213

Increase in income before income tax

2,871

E. Financial instruments
a. Under JGAAP, convertible bonds with stock acquisition rights were recognized as a whole and presented as aliability. Under IFRSs, stock acquisition rights embedded in convertible bonds are recognized separately andpresented as additional paid-in capital. They are measured as the difference between the entire fair value of theconvertible bonds with stock acquisition rights and the fair value of similar bonds with no stock acquisition rights.
Also, under JGAAP, transaction costs related to the issuance of bonds are recognized as an asset and amortizedover the redemption period. Under IFRSs, they are allocated to the liability and equity components in proportion
to the carrying amounts. The costs related to liability are reflected in the measurement of amortized cost of thebond and recognized as expenses over the redemption period. The cost related to stock acquisition rights isdeducted from equity.

95

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014b. Under JGAAP, commission fees related to borrowing were expensed as incurred. Under IFRSs, they areincluded in measuring the liability at amortized cost and recognized as an expense over the redemption period.
c. Under JGAAP, financial assets related to securitization transactions were derecognized when control over financial
components of the financial assets is transferred to a third party. Under IFRSs, financial assets are derecognizedwhen the contractual rights to the cash flows from the financial asset expire or when it transfers the financial asset
and substantially all the risks and rewards of ownership of the financial asset. Therefore, for certain securitizationtransactions that previously qualified for extinguishment of financial assets under JGAAP, securitized receivables
are recognized retrospectively and accompanying liabilities are recognized as borrowings under IFRSs since they
are not qualified for derecognition of financial assets under IFRSs.
d. Under JGAAP, unlisted shares were measured based on their historical costs and impaired as necessary. Under
IFRSs, they are classified as available-for-sale financial assets and measured at their fair values.
e. Under JGAAP, advances to dealers for installment sales receivables of mobile handsets were recognized as
account-trade receivables by the amount under the installment contract, less allowance for doubtful accounts.
Under IFRSs, the receivables arising from advances to dealers are recognized as trade and other receivables orother financial assets (non-current), while commission is expensed. Commission consists of credit risk,collecting costs and interest due to the passage of time.
f. Under JGAAP, preferred securities issued by a subsidiary were accounted for as equity transactions. Under
IFRSs, they are accounted for as interest-bearing debt and measured at amortized cost using the effective interest
method as it is necessary to deliver cash to owners of preferred securities in the future.

The effect arising from the differences is summarized as follows:(Millions of yen)(Consolidated statements of financial position)

As ofApril 1, 2012

As ofMarch 31, 2013

Increase in trade and other receivables
Increase in other financial assets (non-current)
Increase in interest-bearing debt (current)
Increase in interest-bearing debt (non-current)
Increase in additional paid-in capital (before tax)
Increase in accumulated other comprehensive
income (before tax)
Decrease in non-controlling interests
Other

163,745
155,640(205,229)(253,987)(22,366)

220,204
172,693(238,245)(264,087)(22,035)(56,170)(71,529)

204,413(6,416)204,135(15,653)

Decrease in retained earnings(20,370)(14,517)(Consolidated statements of income)Fiscal year ended
March 31, 2013

Increase in selling, general and administrative
expenses
Decrease in finance cost

(5,463)
8,457

Increase in other non-operating loss

(1,901)

Increase in income before income tax

1,093(Consolidated statements of comprehensive
income)Fiscal year ended
March 31, 2013

Increase in available-for-sale financial assets

12,609

Increase in other comprehensive income(net of tax)

12,60996

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

F. Employee benefitsa. Upon transition to IFRSs, unused paid absences and long-term employee benefits are recognized as liabilities.
b. Under JGAAP, unrecognized actuarial gains and losses of retirement benefit obligations in the defined benefit
plans were expensed as incurred in principle. Under IFRSs, they are recognized as other comprehensive
income and transferred to retained earnings as incurred.
The effect arising from the differences is summarized as follows:(Millions of yen)(Consolidated statements of financial position)

As ofApril 1, 2012

As ofMarch 31, 2013

Increase in other current liabilities
Increase in other non-current liabilities
Decrease in non-controlling interests(12,002)(3,783)
1,381(11,817)(3,952)
1,431

Decrease in retained earnings(14,404)(14,338)(Consolidated statements of income)Fiscal year ended
March 31, 2013

Increase in cost of sales
Increase in selling, general and administrative
expenses

(9)
(81)
(90)

Decrease in income before income tax

G. Investments in associates
Under JGAAP, goodwill related to investments accounted for using the equity method was amortized equally overthe periods in which economic benefits were reasonably expected to be realized. Under IFRSs, it is notamortized regularly, and resulting in an increase in investments accounted for using the equity method for the year
ended March 31, 2013. As of April 1, 2012, the entire investment over associates, including goodwill, is tested
for impairment. As a result, as of April 1, 2012, the Company recognized an impairment loss of ¥231 million
and deducted it from retained earnings.

The effect arising from the differences is summarized as follows:(Millions of yen)(Consolidated statements of financial position)

As ofApril 1, 2012

Increase (decrease) in investments accounted
for using the equity method
Increase in accumulated other comprehensive
income (before tax)
Increase (decrease) in retained earnings(Consolidated statements of income)

As ofMarch 31, 2013

(231)

8,863

-

(821)

(231)

8,042

Fiscal year ended
March 31, 2013

Increase in other non-operating loss
Increase in equity in income of associates

(22)
8,295

Increase in income before income tax

8,273

97

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014

H. Acquisition-related costs arising from business combinations
Under JGAAP, acquisition-related costs arising from business combinations are recognized as an asset when they
are regarded as consideration for the acquisitions. Under IFRSs, they are expensed as incurred or when services
are rendered as transaction costs, directly attributable to business combinations, which have resulted in a decreasein other non-current assets.
The effect arising from the differences is summarized as follows:(Millions of yen)(Consolidated statements of financial position)

As ofApril 1, 2012

As ofMarch 31, 2013

Decrease in other non-current assets-(3,801)

Decrease in retained earnings-(3,801)(Consolidated statements of income)Fiscal year ended
March 31, 2013

Increase in selling, general and administrative
expenses
Decrease in income before income tax(3,801)(3,801)

I. Leases
Under JGAAP, finance lease transactions in which the ownership of leased assets was not transferred to lessees andthat are contracted before April 1, 2008, are accounted for as operating lease transactions as permitted
exceptionally. Under IFRSs, leased assets and lease obligations are recognized. Accordingly, provisions for
impairment of leased assets which were previously included in other liabilities (non-current) under JGAAP areoffset by property, plant and equipment. Long-term prepaid lease expenses are offset by lease obligations.
The effect arising from the difference is summarized as follows:(Millions of yen)(Consolidated statements of financial position)

As ofApril 1, 2012

As ofMarch 31, 2013

Increase in property, plant and equipment
Decrease in other non-current assets
Increase in interest-bearing debt (current)
Increase in interest-bearing debt (non-current)
Other

104,973(22,676)(4,619)(84,023)
2,142

11,943(16,059)
(47)
(41)
1,354

Decrease in retained earnings(4,203)(2,850)(Consolidated statements of income)Decrease in cost of sales
Decrease in selling, general and administrative
expenses
Decrease in finance cost

Fiscal year ended
March 31, 2013
1,066
12
275

Increase in income before income tax

1,353

98

SoftBank Corp. Consolidated Financial Report
For the fiscal year ended March 31, 2014(8) Notes to reconciliation of cash flows
The adjustment of cash flows for the year ended March 31, 2013
(Millions of yen)

Cash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities

894,460(919,770)

365,494

Differences in the scope of consolidation

5,687

41,725

20,667

Differences in recognition and measurement
a. Securitization transactions(51,081)-

51,081(23,571)-

23,571(12,470)

3,901

10,664(87,122)
813,0253,901(874,144)

85,316
471,477(Consolidated statements of cash flows)
JGAAP

b. Measuring financial liabilities atamortized costs
Other
Total differences
IFRSs

Major differences in recognition and measurement are as follows:a. Securitization transactions
Under JGAAP, securitization transactions qualifying for extinguishment of financial assets were included in cash
flows from operating activities. Under IFRSs, certain securitized receivables are recognized for securitizationtransactions that are not qualified for derecognition of financial assets and accompanying liabilities are accounted for
as borrowings. Accordingly, an increase or decrease in borrowings is included in cash flows from financing activities.
As a result, cash flows from operating activities decreased with a corresponding increase in cash flows from financing
activities.
b. Measuring financial liabilities at amortized costs
Under JGAAP, commission fees related to borrowings and corporate bonds were included in cash flows fromfinancing activities. Under IFRSs, due to measuring borrowings and corporate bonds at amortized costs, commission
fees are included in cash flows from operating activities. As a result, cash flows from operating activities decreased
with a corresponding increase in cash flows from financial activities.

99