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1
Earnings Results for the Three-month Period
Ended June 30, 2009(FY2009/Q1)
Analyst Meeting
July 31, 2009SOFTBANK CORP.
Aug 21, 2009 Version
2
DisclaimerThis material is made based on information available at the time of writing. Statements in this material that are not historical facts including, without limitation, our plans, forecasts and strategies are Forward-looking Statements.
Forward-looking Statements are subject to various risks and uncertainties, including, without limitation, continuing decline in the general economic conditions, general market conditions, customer demand for products and services, increased competition, inherent risk in international operations and other important factors, which may cause actual results to differ materially from those expressed or implied in any Forward-looking Statement.
Information contained herein regarding companies other than SOFTBANK CORP. and other companies of the SOFTBANK Group is quoted from public sources and others, and we have not verified and we are not responsible for the accuracy of the information.
SOFTBANK CORP. expressly disclaims any obligation or responsibility to update or revise or supplement any Forward-looking Statement in any presentation material or generally to any extent. Use of or reliance on the information in this material is at your own risk.
3
Accounting
24Consolidated CF Analysis14Consolidated B/S Analysis
5Consolidated P/L Analysis
67Mobile Communications Segment63Fixed-line Telecommunications Segment59Broadband Infrastructure Segment
Operating
Finance
4
57
29
4
Kazuko Kimiwada
General Manager
Accounting, Internal Control
SOFTBANK CORP.
Accounting
5
Consolidated P/L Analysis
Accounting
6
647.2 666.3
681.7
653.2
690.7
0
1,000
2,000
3,000
FY08/Q1 FY09/Q1
85.0108.2
94.9
94.6
84.4
0
100
200
300
400
FY08/Q1 FY09/Q1
54.278.7
63.0
57.1
51.1
FY08/Q1 FY09/Q1
19.3 27.321.717.0
-15.0
Consolidated P/L Summary
2,673.0
+2.9%+27.3%
+45.2%
+41.4%
<bn JPY>
Q1
Q2
Q3
Net Sales Operating Income Ordinary Income Net Income
359.1
225.6
43.1
FY09/Q1FY08/Q1
Q1Q2
Q3
Q4
Q4
<P/L-1>
7
Elimination-21.5-20.520.621.854.262.4
65.162.3
86.788.4
53.860.1
407.3372.5
647.2 666.3
FY08/Q1 FY09/Q1
<bn JPY>
+19.0(+2.9%)
Mobile Communications +34.7bn
Broadband Infrastructure -6.3bn
Fixed-line Telecommunications -1.6bn
Internet Culture +2.8bn
Mobile Communications
Broadband Infrastructure
Fixed-line Telecommunications
Internet Culture
e-Commerce
Consolidated Net Sales
Others
- Increase in telecommunications service revenue +15.7bnIncrease in subscribers +24.2bnDecrease in ARPU -9.5bn
- Increase in sales of mobile handsets and accessories +19.0bn
- Decrease in the number of ADSL charged users -4.4bn- Decrease in ADSL ARPU -0.1bn- Decrease in ODN -0.7bn
- Increase in OTOKU Line +3.2bn- Increase in solution sales +3.0bn- Decrease in MYLINE -2.7bn- Decrease in international traffic -2.3bn- Impact of transfer of former SOFTBANK IDC segment -2.4bn
- Decrease in advertising business -0.4bn- Business service increase +1.7bn- Personal service increase +1.7bn
<P/L-2>
8
Broadband Infrastructure
44.2
0.91.0
30.5 31.7
3.40.710.4
13.9
60.2
85.0
108.2
FY08/Q1 FY09/Q1
<bn JPY>
Mobile Communications
Fixed-line TelecommunicationsInternet Culture
e-Commerce
Mobile Communications +15.9bn
Broadband Infrastructure +3.4bn
Fixed-line Telecommunications +2.6bn
Internet Culture +1.1bn-Increase in net sales +2.8bn-Yahoo Japan increase in cost of goods sold -0.9bn-Yahoo Japan decrease in selling, general and administrative expensesconsignment fees +0.2bn
+23.2(+27.3%)
Consolidated Operating Income
- Increase in net sales +34.7bn- Costs of goods sold:
Decrease in valuation loss on handsets +10.4bnIncrease in number of handsets sold -10.0bn
- Selling, general and administrative expenses:Increase in sales commissions -25.9bnDecrease in provision for allowance for doubtful accounts, and bad debt loss on doubtful accounts +7.6bn
- Decrease in net sales -6.3bn- Decrease in depreciation and amortization of cost of goods sold and lease fees, etc. +4.2bn
- Decrease in selling, general and administrative expensesDecrease in sales commission and sales promotion expense +5.0bn
- Decrease in net sales -1.6bn- Decrease in access charge and usage fees of telecommunication equipment +1.4bn
- Decrease in OTOKU Line related sales costs +1.7bn
EliminationOthers
<P/L-3>
9
78.7
54.2
+1.3
+23.2-0.6-1.61.5 1.7
-28.4 -27.4
-3.5-2.8
-29.4-30.8
FY08/Q1 FY09/Q1
Other non-operating expenseInterest expenseOther non-operating incomeEquity in earnings (loss) of affiliated companiesForeign exchange gainInterest incomeNon-operating income/loss (net)
+24.5(+45.2%)+1.3
Non-operating Income/Loss and Ordinary Income<bn JPY>
Increase in operating income
Net of increase in non-operating income/loss
FY08/Q1Ordinaryincome
FY09/Q1Ordinary income
Non-operating Income/Loss Ordinary Income
<P/L-4>
10
-1.3
2.40.5
0.7
2.2
0.2
0.6
-0.9
-0.8
0.8
-0.2
3.0
0.3
FY08/Q1 FY09/Q1
Other special lossImpairment loss
Unrealized appreciation (loss) on v aluation of inv estments at subsidiaries in the U.S., net*Valuation loss on inv estment securities
Other special incomeDilution gain from changes in equity interestGain on sale of inv estment securities
Special income/loss(NET)
57.3
79.1
+24.5
-2.6
+21.8(+38.1%)
*Unrealized appreciation (loss) on valuation of investments and gain (loss) on sale of investments at subsidiaries in the U.S, net.
FY08/Q1Income before income taxes &
minority interests
FY09/Q1 Income before income taxes &
minority interests
Increase in ordinary income
Net of decrease in
special income/loss
Special Income/Loss and Income Before Income Taxes and Minority Interests
< bn JPY>Special Income/Loss Income Before Income Taxes and Minority Interests
-2.6
-0.7
<P/L-5>
11
Tax and Other Adjustments, Difference in Tax Rate<bn JPY>
BBM:BB Mobile SBM: SOFTBANK MOBILE SBB: SOFTBANK BB
(main breakdown)
B
(main breakdown)
A 19.8
1.76. SBM depreciation and amortization adjustments (occurred at time of SBM acquisition)
5.25. SBB utilization of loss carryforwards etc.
7.14. BBM utilization of loss carryforwards under consolidated tax return etc.
21.1
8.13. SBM decrease in temporary difference (allowance for inventory written-off, allowances for doubtful accounts etc.)
5.42. SBM local taxes(out of scope for BBM consolidated tax return)
13.41. Yahoo Japan
Income taxes; current
Income taxes; deferred
Total income taxes (A+B) 41.0
Breakdown of Tax Expenses
<P/L-6>
12
Difference in Tax Rate
41.0
1.7
1.0
6.0
32.2
79.1
Amount (bn JPY)Rate (%)
Income before taxes and minority interests
Statutory income tax rate 40.7%
(Main factors of permanent difference)
・Amortization of goodwill (mainly SBM) 7.7%
・Change in valuation allowance 1.3%
・Others 2.1%
Effective income tax rate 51.8%
Reconciliation Between Statutory Tax Rate and Effective Tax Rate
SBM: SOFTBANK MOBILE
<P/L-7>
13
-1.3
-1.3
-
-
-
Other Variances
303.9
144.2
13.4
91.6
54.6
FY09/Q1Balance (tax
income based)
122.9
56.7
5.4
38.5
22.2
Deferred Tax Assets(Tax based)
24.6
18.5
-
6.1
-
Occurred During
FY2009/Q1 (tax income
based)
315.3
129.1
23.4
85.5
77.1
FY08/Q4Balance
(tax income based)
Company Name
Utilized During FY2009/Q1 (tax income
based)
Expiry Date
BB Mobile -22.5 Mar 2016-Mar 2017
SOFTBANK TELECOM - Mar 2013-Mar 2017
SOFTBANK BB -10.0 Mar 2013
Others -2.1 Mar 2010-Mar 2017
Total -34.7
Deferred tax assets relating to loss carryforwards on B/S (total amount)
< bn JPY>
Loss Carryforwards (e/o June 2009)
Valuation allowance -95.3
27.5
<P/L-8>
14
Consolidated B/S Analysis
Accounting
15
503.5
983.7
484.9
1,035.3
1,520.3 1,487.2
08/Q4 09/Q1
912.8
1,925.2
911.0
1,953.9
2,865.0 2,838.0
08/Q4 09/Q1
567.1
1,634.4
540.0
1,672.2
2,212.2 2,201.5
08/Q4 09/Q1
648.3
608.2
674.7
674.8
1,349.5 1,256.6
08/Q4 09/Q1
Fixed Assets
Current Assets Current Liabilities
Long-term Liabilities
Consolidated B/S Summary
<bn JPY>
<B/S-1>
SBM Others
16
Consolidated B/S (1) Current Assets
1.6-6.0-7.7Others2.9-38.1-41.1SBM
4.6-44.2-48.8Allowance for doubtful accounts
2.467.965.4Others0.452.852.3SBM2.9120.7117.7Other
BBM: utilization of loss carryforwards etc. (-6.7)SBB: utilization of loss carryforwards etc. (-4.7)-10.839.650.5Others
-7.235.242.5SBM-18.074.993.0Deferred tax assets
0.410.410.0Other
Mobile handsets etc. 0.132.432.3SBM0.642.942.3Merchandise and finished products
SBB: e/o Mar 09 (68.8) >> e/o Jun 09 (58.1)SBTM: >> e/o Mar 09 (54.5) >> e/o Jun 09 (47.5)-19.5155.8175.3Others
Mobile handset installment sales receivables e/o Mar 09 (487.8) >> e/o Jun 09 (479.1)Telecom revenue receivables etc. e/o Mar 09 (123.5) >> e/o Jun 09 (122.8)Mobile handsets sales receivables (agencies) e/o Mar 09 (66.4) >> e/o Jun 09 (48.2)
-28.4654.2682.7SBM
-48.0810.0858.0Notes and accounts receivable-trade
SB stand-alone: e/o Mar 09 (93.9) >> e/o Jun 09 (126.3)Breakdown: 27th Unsecured Straight Corporate Bond issue (+60.0), exercise of stock acquisition
rights ( +2.1), borrowings paid (-30.2), interest paid (-6.3),dividend paid (-1.9)Yahoo Japan: e/o Mar 09 (16.4) >> e/o Jun 09 (32.5)Breakdown: Increase provided by operating activities (+37.1), repayment of borrowings (-10.0),
dividend paid (-7.5)
44.2235.6191.3Others
Increase provided by operating activities (+79.9)Securitization of installment sales receivables (procured +70.2, paid -60.1)Sale and lease back of equipment newly acquired (received +2.5, paid -21.4)Purchase of fixed assets (-60.0),repayment of SBM loan ( -30.7)
-19.4247.1266.6SBM
24.8482.7457.9Cash and deposits18.5503.5484.9Others
-51.5983.71,035.3SBM-33.01,487.21,520.3Current assets
OutlineVariancee/o Jun 2009e/o Mar 2009Assets
<bn JPY>
SBM: SOFTBANK MOBILE SBB: SOFTBANK BB SBTM: SOFTBANK TELECOM BBM: BB Mobile
<B/S-2>
17
Consolidated B/S (2) Tangible Assets
Others
-022.522.5Land
010.810.8SBM
-011.711.7Others
-6.530.937.4Construction-in-progress
-2.015.217.3SBMSBTM: e/o Mar 09 (14.0) >> e/o Jun 09 (12.5)-4.415.620.1Others
Property and equipment, net
OthersSBM
Other
Telecommunications service lines
Telecommunications equipment
Building and structures
SBM
0.925.224.2Others-1.025.426.4SBM
-050.650.7
SBTM: e/o Mar 09 (70.6) >> e/o Jun 09 (68.8)-1.768.870.6Others-0.18.78.9SBM
-1.977.679.6
SBTM: e/o Mar 09 (102.4) >> e/o Jun 09 (100.0)SBB: e/o Mar 09 (27.7) >> e/o Jun 09 (26.1)-3.0131.8134.8Others
Acquisition of equipment (+19.2), acquisition of antenna equipment (+1.4),depreciation etc. (-26.9)-6.2597.8604.0SBM
-9.3729.6738.9
1.343.442.1Others
Network center etc. -0.628.729.4SBM
0.672.271.5
-7.0296.8303.8-10.2686.8697.1
-17.2983.61,000.9
1.8912.8911.0-28.71,925.21,953.9-26.92,838.02,865.0Fixed assets
OutlineVariancee/o Jun 2009e/o Mar 2009Assets
SBM: SOFTBANK MOBILE SBB: SOFTBANK BB SBTM: SOFTBANK TELECOM
<bn JPY>
<B/S-3>
18
OthersSBM
SBH: derivative assets (-11.8)-9.6110.0119.7-4.476.681.0
-14.1186.6200.7Other
0.61.91.3Deferred charges
---SBM
-0.928.729.6Others
2.6-29.2-31.9SBM
2.1-34.9-37.1Allowance for doubtful accounts (long-term)
-3.3154.9158.2Deferred tax assets
9.7651.7641.9Investments and other assets
1.710.89.1SBM
-2.028.030.0Others
Investment securities and inv. inunconsolidated sub & affiliates
OthersSBM
Other
Software
GoodwillOthersSBM
0.61.91.3Others
-0.5-5.6-5.1Others
-2.4126.1128.5SBM
Increase in share price of Yahoo! Inc. (+13.0)24.6342.9318.3Others0.32.11.7SBM
24.9345.0320.1
13.5476.1462.6-3.7175.5179.3
-0.338.939.20.236.536.3Others
-3.5186.2189.7SBM-3.3222.7226.1
Decrease due to amortization-2.975.278.1OthersDecrease due to amortization-12.8865.6878.5SBM
-15.7940.9956.7-4.7139.9144.6
-14.61,062.71,077.4-19.41,202.61,222.1Intangible assets, net
OutlineVariancee/o Jun 2009e/o Mar 2009Assets
Consolidated B/S (3) Intangible Assets
SBM: SOFTBANK MOBILE SBB: SOFTBANK BB SBTM: SOFTBANK TELECOM SBH: SOFTBANK Holdings Inc.
<bn JPY>
<B/S-4>
19
4.480.676.1Others-11.321.733.1SBM-6.8102.4109.2Others
Decrease in payables to sales agencies (-34.8), decrease in payablesfor equipment (-31.2)
-59.4209.3268.8SBM
1.289.488.2Current portion of lease obligations
Transfer from long-term (+22.6), lease fees paid (-21.4)1.187.986.7SBM
01.51.5Others
Accounts payable-other
Current portion of corporate bonds
Short-term borrowings
Accounts payable-tradeOthersSBM
-1.381.983.3Others
-60.7291.3352.1
SB stand-alone: transfer from long-term account of 24th Unsecuredstraight corporate bond (+20.0)20.084.064.0Others
---SBM
20.084.064.0
SB stand-alone: e/o Mar 09 (336.0) >> e/o Jun 09 (300.8)SBTM: e/o Mar 09 (20.9) >> e/o Jun 09 (20.9)Yahoo Japan: e/o Mar 09 (20.0) >> e/o Jun 09 (20.0)
-38.1351.6389.7Others
Mainly securitization of installment sales receivables3.5189.2185.7SBM-34.6540.8575.5
SBB: e/o Mar 09 (38.3) >> e/o Jun 09 (28.2)SBTM: e/o Mar 09 (5.5) >> e/o Jun 09 (4.5)
-11.248.559.8Others
Payment for merchandise (mobile handsets accessories etc.)-0.599.9100.5SBM-11.8148.5160.3-26.3648.3674.7-66.5608.2674.8-92.91,256.61,349.5Current liabilities
OutlineVariancee/o Jun 2009e/o Mar 2009Liabilities
Consolidated B/S (4) Current Liabilities
SBM: SOFTBANK MOBILE SBB: SOFTBANK BB SBTM: SOFTBANK TELECOM
<bn JPY>
<B/S-5>
20
Newly procured (+2.5), transferred to short-term (-22.6)-20.1207.5227.6SBM
1.1148.6147.5OtherAdditional entrustment for debt assumption of bonds (long-term payables 75.0) 3.8100.897.0SBM
-2.747.750.4Others
Lease obligations
Allowance for point mileage
Deferred tax liabilities
Long-term debt
Corporate bonds
OthersSBM
05.75.6Others
-20.0213.2233.3
---Others
Point service for customers2.644.441.8SBM2.644.441.81.230.028.7Others---SBM
1.230.028.7
SB stand-alone: e/o Mar 09 (5.0) >> e/o Jun 09 (10.0)Yahoo: e/o Mar 09 (10.0) >> e/o Jun 09 (-)
-8.8121.7130.5Others
SBM loan related e/o Mar 09 (1,184.8) >> e/o Jun 09 (1,154.1)Vodafone subordinated loan e/o Mar 09 (84.5) >> e/o Jun 09 (84.5)Installment sales receivables securitization borrowings e/o Mar 09(36.2) >> e/o Jun 09 (42.8)
-24.11,281.51,305.7SBM
-33.01,403.21,436.2
SB stand-alone: Issue 27th Unsecured Straight Corporate Bond (+60.0)Transfer to current account of 24th series unsecured bond (-20.0)
37.3361.9324.5Others
---SBM37.3361.9324.5
27.1567.1540.0-37.81,634.41,672.2-10.72,201.52,212.2Long-term liabilities
OutlineVariancee/o Jun 2009e/o Mar 2009Liabilities
Consolidated B/S (5) Long-term Liabilities
SBM: SOFTBANK MOBILE SBB: SOFTBANK BB SBTM: SOFTBANK TELECOM
<bn JPY>
<B/S-6>
21
Foreign currencytranslation adjustments
Deferred gain on derivatives under hedgeaccounting
Unrealized gain on available-for-sale securities Increase in share price of Yahoo! Inc. etc9.440.831.3
-7.317.725.1
8.7-21.8-30.5
Minority interests
Shareholders’ equity
BBM e/o Jun 09 (300.0)*Issued preferred stock to Vodafone International Holdings B.V.Yahoo Japan e/o Mar 09 (132.2) >> e/o Jun (138.4)
6.7457.1450.4
00.30.2Stock acquisition rights
10.836.725.8Valuation and translation adjustments
-0-0.2-0. 2Treasury stock
FY2009/Q1 net income (+27.3), dividend (-2.7)24.5-26.6-51.2Accumulated deficit
Exercise of stock acquisition rights1.0213.0211.9Additional paid-in capital
Exercise of stock acquisition rights1.0188.7187.6Common stock
26.6374.8348.1
44.3869.1824.7Equity
OutlineVariancee/o Jun 2009e/o Mar 2009Net Assets
Consolidated B/S (6) Equity
BBM: BB Mobile
<B/S-7><bn JPY>
22
(JPY) <Ref> exchange rate trend
(Equity) Foreign Currency Translation Adjustments<bn JPY>
25.64.4 3.4
-30.5-21.8
30.628.8
35.9
-25.7
7.4
-40
-20
0
20
40
60
06/Q4 07/Q1 Q2 Q3 Q4 08/Q1 Q2 Q3 Q4 09/Q1
Foreign currency translation adjustments account
6080
100120140160180200220240
06/Q4 07/Q1 Q2 Q3 Q4 08/Q1 Q2 Q3 Q4 09/Q1
Pound/Yen (TTM)
Euro/Yen (TTM)$/Yen (TTM)
<B/S-8>
23
(Equity) Shareholders’ Equity
<bn JPY>
* Including cash receipts for new stock subscriptions
-51.2
80.9
399.1350.9
401.7399.6
-26.6
-192.2-91.7
31.3 40.8122.6
-11.8
-26.9
25.1 17.77.428.8
-21.8-30.5
383.7
282.9
411.6374.0
-300
-200
-100
0
100
200
300
400
500
600
06/Q4 07/Q1 Q2 Q3 Q4 08/Q1 Q2 Q3 Q4 09/Q1
Common stock & additional paid-in capital* Accumulated deficitTreasury stock Unrealized gain on available-for-sale securitiesDeferred gain (loss) on derivatives under hedge accounting Foreign currency translation adjustmentsShareholders' equity
Equity ratio 9.5%
*Including cash receipts for new stock subscriptions
<B/S-9>
24
Consolidated CF Analysis
Accounting
25
481.8
-21.8-4.4
59.2
-123.5
3.8-11.6
40.010.215.3
59.8
457.6
79.1
-4.1
80.2
-76.6
-23.1-19.3
Consolidated Cash Flow Main Breakdown
Note: significant items from the consolidated CF statement are shown here.
Purchase of property &equipm
ent & intangibles
Purchase of marketable
and investment securities
Proceeds from sale of
marketable and
investment securities
Income before incom
e taxesand m
inority interests
Depreciation &
amortization
Am
ortization of goodwill
Decrease in notes &
accounts receivable trade (non-installm
ent)
Decrease in payables-trade
Income taxes paid
Proceeds from long-
term debt
Repaym
ent of lease obligations
Repaym
ent of long-term
debt
Decrease in m
obile handsetinstallm
ent receivables
Decrease in short-term
borrow
ings
Cash and cash equivalents at
the beginning of the period
Cash and cash equivalents
at the end of the period<bn JPY>
Operating CF+132.0
Investing CF-75.5
Financing CF-31.3
Bonds issued
08/Q4 09/Q1
Payment of dividend to
minority
shareholders
26
Earnings Forecast
<bn JPY>
0
100
200
300
400
500
FY2008 FY2009
Operating Income Free Cash Flow
420.0
0
100
200
300
400
500
FY2008 FY2009
250.0
181.5
359.1
(actual) (forecast) (actual) (forecast)
+17%
+38%
Definition: Free Cash Flow = cash flows from operating activities + cash flows from investing activities
27
Scope of Consolidation/Scope of Equity Method
* SOFTBANK BB Corp. SOFTBANK TELECOM Corp., and Yahoo Japan Corporation are included in the consolidated subsidiaries of the Broadband Infrastructure, Fixed-line Telecommunications, and Internet Culture segments respectively, while SOFTBANK BB Corp., SOFTBANK TELECOM Corp., and Yahoo Japan Corporation operate multiple business and their operating results are allocated to multiple business segments.
11Entities no longer accounted under the equity method
Insignificant companies62Non-consolidated subsidiaries not under the equity method (2)
Entities newly accounted under the equity method
Entities newly accounted under the equity method
Subsidiaries excluded from consolidation
Newly consolidated subsidiaries
Gung Ho Online Entertainment, MySpace Japan, Alibaba Group Holding Limited, etc. 59Affiliated companies under the equity method
-
5
SOFTBANK MOBILE, SOFTBANK BB, SOFTBANK TELECOM, Yahoo Japan, SOFTBANK TECHNOLOGY, ITmedia, etc.110Consolidated subsidiaries
Insignificant companies67Non-consolidated subsidiaries (=1+2)
3
Insignificant companies26Affiliated companies not under the equity method
1
5Non-consolidated subsidiaries under the equity method (1)
Core CompaniesNo. of Comp.
SOFTBANK TECHNOLOGY, ITmedia
SOFTBANK BB, Vector, Carview
Yahoo Japan
SOFTBANK TELECOM (SBTM)
SOFTBANK BB (SBB)
SOFTBANK MOBILE (SBM)
Core group companies
Total
Others
e-Commerce
Internet Culture
Fixed-line Telecommunications
Broadband Infrastructure
Mobile Communications
110
69
7
19
3
6
6
Consolidated subsidiaries
64
- ADSL and fiber-optic high-speed Internet connection services1
- Mobile phone service- Sales of mobile phone handsets2
- Online advertisement12
- Fixed-line telecommunications service-
-Technology service business- Media marketing business- Overseas fund business
45
- Distribution of PC, software, and PC accessories- e-Commerce towards businesses and consumers4
Main business activitiesCompanies under equity method
28
29
Finance
Yoshimitsu Goto
General Manager Finance
SOFTBANK CORP.
*Group Management was abolished and combined with Finance on May 1, 2009
30
30.0Issue 28th Unsecured Straight Corporate Bond July 2009
Date Content Amount (JPY bn)
June 2009Issue 27th Unsecured Straight Corporate Bond (Fukuoka SoftBank HAWKS Bond)
60.0
June 2009 Securitization of installment sales receivables (ninth) 70.2
Main Financial Activities of FY2009
31
-164.2
181.5
-200
-150
-100
-50
0
50
100
150
200
250
300
FY07 FY08 FY09
Definition: FCF = cash flows from operating activities + cash flows from investing activities
Consolidated FCF: Yearly Trend
250.0 (forecast)
68.4bn (37.7%)
increase
FCF Actual - Forecast<bn JPY>
JPY 345.7bn increase
FY09/Q1 actual
56.5bn JPY
32Definition: FCF = cash flows from operating activities + cash flows from investing activities
<bn JPY>
Consolidated FCF: Yearly Trend
Cash Flow Trend
56.5
-37.8
52.1
10.4
-138.9
-87.8
49.9
133.9
35.5
-200
-150
-100
-50
0
50
100
150
200
250
07/Q1 Q2 Q3 Q4 08/Q1 Q2 Q3 Q4 09/Q1
Operating CF Investing CF Financing CF FCF
33
21%
28%
25%
24%
34%
27%
12%14%
17%
53%53%
56%
24%
29%
27%
0%
10%
20%
30%
40%
50%
60%
07/Q1 08/Q1 09/Q1
Consolidated EBITDA EBITDA Margin
Mobile Communications
Broadband Infrastructure
Fixed-line Communications
Internet Culture
EBITDA growing steadily in each segment.
<bn JPY>
EBITDA and EBITDA Margin (by segment)
29.6 33.0 34.6
1.4 1.3 1.215.9 16.3 18.011.1 12.2
14.6
92.499.5
117.2
149.7161.4
184.8
-10
40
90
140
190
07/Q1 08/Q1 09/Q1
Elimination Other
Internet Culture e-Commerce
BB Infra Fixed-line TelecommunicationsMobile Communications
Consolidated
34
-389.8-293.7 -259.0
525.4
626.6
184.8
678.6
419.5
332.9
135.6
-400
0
400
800
FY06 FY07 FY08 FY09
EBITDA
CAPEX
EBITDA - CAPEX
Steady increase due to expansion of EBITDA.
EBITDA - CAPEX
(* )CAPEX on acquisition basis
-220.0(yearly plan)
EBITDA - CAPEX
<bn JPY>
-40.3
Q1 actual
35
4.934.7
10.926.10
100
200
FY06 FY07 FY08 FY09/Q1
91.1 115.8 127.5
33.50
100
200
FY06 FY07 FY08 FY09/Q1
33 .4 49 .0 56 .3 16 .4
0
100
200
FY06 FY07 FY08 FY09/Q1
204.6
84.813.0
150.0
0
100
200
FY06 FY07 FY08 FY09/Q1
Internet Culture
Mobile Communications BB Infrastructure
Fixed-line Telecommunications
Yearly Trend
EBITDA – CAPEX (main segments)
<bn JPY>
FY Quarterly FY Quarterly
FY Quarterly FY Quarterly
36
Interest-bearing Debt
SOFTBANK credit line 150.0
SOFTBANK (stock lending) 117.0Major overseas subsidiaries’loans from financial institutions
102.9
Others 83.5
Total 453.4
<bn JPY>Breakdown of borrowings from other financial institutions, etc.
Interest-bearing Debt (by procurement method)
<bn JPY>
* Lease obligations are not included in interest-bearing debt. Please refer to the next page for details on lease obligations.
485.7 464.3 439.6 388.5 447.9
449.9 435.8 451.4 490.4 453.4
40.0 40.0 30.0 30.0 20.0
1,261.9 1,239.2 1,207.7 1,184.8 1,154.1
223.1 230.9 218.8 221.9
84.584.584.584.584.5
231.9
2,545.3 2,494.9 2,432.2 2,400.3 2,392.0
0
1,000
2,000
3,000
08/Q1 Q2 Q3 Q4 09/Q1
Securitization of installmentsales receivables obligationsSBM loan
Vodafone subordinate loan
Yahoo Japan CorporationborrowingsBorrowings from otherinstitutions, etc.Bonds & CP
37
315.3 336.9 319.2 321.5 302.7
166.0 157.5 149.5 141.3 133.4
481.4 468.7 436.1462.9494.5
0
1,000
2,000
3,000
08/Q1 Q2 Q3 Q4 09/Q1
Finance leases (off balance)
Finance leases (on balance)
Lease Obligations
Balance of Lease Obligations
<bn JPY>
38
Net Interest-bearing Debt
Definition: net interest-bearing debt= interest-bearing debt – cash position
Net Interest-bearing Debt Balance
<bn JPY>
* Lease obligations are not included in interest-bearing debt.
1,896.2 1,840.0 1,826.1 1,717.5 1,673.1
223.1 230.9 218.8221.9 231.9
2,119.3 2,070.9 2,044.91,939.5 1,905.1
0
1,000
2,000
3,000
08/Q1 Q2 Q3 Q4 09/Q1
Securitization of installment sales receivables obligationsExcl. securitization of installments
39
Cash Position
Cash Position
<bn JPY>
Definition: cash position = cash&cash deposits, marketable securitiesunused portion of credit line facility = credit line facility size - credit line borrowings
425.9 424.0 387.3460.8 486.8
100.0 101.0
36.0
21.051.0
525.9 525.0
423.3
481.8
537.8
0
200
400
600
08/Q1 Q2 Q3 Q4 FY09/Q1
Unused portion of credit line facility
Cash & cash equivalents
40
15%
85%
26%
74%
<bn JPY><bn JPY>
Short-term debt
Long-term debt
626.8
1,765.1
Variable rate
Fixed interest procurement
2,037.7
354.2
Interest-bearing DebtLong/short Ratio
Interest-bearing DebtFixed/Variable Ratio
Interest-bearing Debt Long/short and Fixed/Variable Ratio (e/o June 2009)
41
Interest-bearing Debt Long/short and Fixed/Variable Ratio
Interest-bearing DebtLong/short Ratio
Interest-bearing DebtFixed/Variable Ratio
<bn JPY> <bn JPY>
1,765.11,760.8
626.8639.5
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
08/Q4 09/Q1
Short-termLong-term
1,990.3 2,037.7
354.2410.0
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
08/Q4 09/Q1
Fixed Variable
42
45.0Straight bonds (SBTM)
86.0Current Portion of Corporate Bonds
150.0Credit line facility (SB)
626.8
2.0
39.0
8.5
5.0
20.0
20.0
189.1
242.7
2.3
28.8
117.0
298.1
CP
Straight bonds (SB)
Bank loans (SBTM)
Cash receipts as collateral relating to marketable security lending transactions
Others
Bank loans (Yahoo Japan Corporation)
Bank loans (SB)
Securitization of installment sales receivables (SBM)
Current portion of Long-term Borrowings
Others
Total
Bank loans (SB)
Short-term Borrowings
(*) Concerning the CB with stock options due in 2013, early redemption of these bonds due to the holders' requesting becomes possible during FY2009/Q4.
Current Portion of Liabilities Details (e/o June 2009)<bn JPY>
43
June 27th Unsecured Straight Corporate Bond(Fukuoka SoftBank HAWKS Bond)
JPY 60.0bn(for individual investors)
JPY 30.0bn(for institutional investors)
First Corporate Bond in 2 Years
July 28th Unsecured Straight Corporate Bond
• Secure long and stable financing•Resume access to corporate bond market•No change in terms of policy of reducing net interest-bearing debt
44
300
350
400
450
500
550
(bp)
26th series (5yrs remaining)
25th series (2yrs remaining)
JulJan Feb
27th series conditions fixed
28th series conditions fixed
FY09FY08Mar Apr May Jun Aug
Corporate Bond Spread Shrinking
Source: Japan Securities Dealers Association
SOFTBANK’s Existing CB Spread
45
19.020.0<50.0>
45.0 <50.0>36.4
09/Q1 Q2 Q3 Q4 10/Q1 Q2 Q3 Q4
SB straight bonds SBTM straight bonds
SB convertible bonds (*)
21.051.0
460.8 486.8
481.8537.8
0
200
400
600
800
08/Q4 09/Q1
Unused portion of credit line facilityCash position
Sustain sufficient cash position.
Repayment Resources Bond Redemption Schedule
CB
Bond Redemption Schedule
<bn JPY>
* Concerning CB due 2013, 2014, under certain conditions early redemption of these bonds due to the holders' or companies’ request is possible respectively in March 2010, and March 2011. The above chart assumes the case where bond holders exercise their put options.
46
(*1) Concerning CB due 2013, 2014, under certain conditions early redemption of these bonds due to the holders' or companies’ request is possible respectively in March 2010, March 2011.(*2) The above table does not include straight bonds issued by SOFTBANK MOBILE, on which an in-substance defeasance was executed. Funds for redemption have been secured by credit enhancement through Mizuho Corporate Bank, Ltd.
Corporate Bond Details
<mil JPY>
Company name Bond Issue date Maturity dateInterest
rate(%/year)
Collateral Mar 09balance
Jun 09balance Change
19th series Unsecured Straight Bond 2005/1/31 2010/1/29 1.97 None 19,000 19,000 -
24th series Unsecured Straight Bond(3rd Fukuoka SoftBank HAWKS bond) 2007/4/26 2010/4/26 2.72 None 20,000 20,000 -
22nd series Unsecured Straight Bond 2005/9/14 2010/9/14 1.98 None 36,400 36,400 -
27th series Unsecured Straight Bond(4th Fukuoka SoftBank HAWKS bond) 2009/6/11 2011/6/10 5.10 None ― 60,000 60,000
25th series Unsecured Straight Bond 2007/6/19 2011/6/17 3.39 None 53,900 53,500 -400Convertible Bond due 2013 (*1) 2003/12/30 2013/3/31 1.50 None 50,000 50,000 -
Euro-denominated Senior Notes due 2013 2006/10/12 2013/10/15 7.75 None 51,766(Eur 388Mil)
49,616(Eur 371Mil) -2,149
Convertible Bond due 2014 (*1) 2003/12/30 2014/3/31 1.75 None 50,000 50,000 -
26th series Unsecured Straight Bond 2007/6/19 2014/6/19 4.36 None 15,000 14,900 -1001st series Unsecured Straight Bond 2004/12/7 2009/12/7 2.00 None 45,000 45,000 -
2nd series Unsecured Straight Bond 2004/12/7 2011/12/7 2.88 None 15,000 15,000 -
Phoenix JT Subordinated Notes Due 2016 2004/12/24 2016/12/15 5.95 None 32,400 32,400 -
Other corporate bonds - - - - - 100 100 -
Total - - 388,566 445,916 57,350
SOFTBANK TELECOM Corp.
SOFTBANK CORP.
47
247.0
211.8
181.1
158.2
126.7
104.1
3.9
3.1
0
50
100
150
200
250
08/Q1 Q2 Q3 Q4 09/Q1 Jul 092.5
3.0
3.5
4.0
4.5
SBM loan repayment exceeds forecast
SBM Loan Cumulative Repayment Amount
Mobile Communications leverage ratio*
X3.1(FY09/Q1)
SBM Loan
*Leverage ratio = Mobile Communications debt/ Mobile Communications EBITDA
<bn JPY>
Net interest-bearing debt basis
X2.6
48
0
200
400
600
800
1,000
1,200
1,400
Begi
nnin
g ba
lanc
eFY
2008
FY20
09FY
2010
FY20
11FY
2012
FY20
13FY
2014
FY20
15FY
2016
FY20
17FY
2018
Forecast
Steadily repaying
* Loan started: Nov 2006* WBS balance borrowed by SBM
Debt Balance After Mobile Business Acquisition
Minimum
<bn JPY>
49
Securitization of Installment Receivables
Continue securitization of installment receivables going forwards.
Securitization of Installment Receivables
<bn JPY>
<bn JPY>
65.144.0 43.5
10.025.7
23.0
20.8 28.0
46.145.3
47.245.6
46.444.5
15.010.0
-41.2-30.5
-20.2-10.8
-49.5-57.7 -58.3 -60.1
57.245.3
56.1
71.564.8
88.1
45.6
61.470.2
-60
-40
-20
0
20
40
60
80
100
07/Q1 Q2 Q3 Q4 08/Q1 Q2 Q3 Q4 09/Q1
Repaid
Procurement (individualinvestors)Procurement (institutionalinvestors)
231.9221.9218.8230.9223.1219.0
193.4
88.1
142.1
0
50
100
150
200
250
Balance
50
Interest-bearing Debt/EBITDA Multiple (Ref.) Net Interest-bearing Debt/EBITDA Multiple
4.8
4.03.5
3.2
0.0
2.0
4.0
6.0
8.0
FY06 FY07 FY08 09/Q1
4.1
3.32.9
2.6
0.0
2.0
4.0
6.0
8.0
FY06 FY07 FY08 09/Q1
Combine reduction of interest-bearing debt and expansion of EBITDA.
Improve Indexes: (1) Interest-bearing Debt/EBITDA Multiple
*1 Interest-bearing debt and net interest-bearing debt before FY2006 is calculated with retroactive adjustments by adding the cash receipts as collateral relating to marketable security lending transactions.*2 Lease obligations are not included in interest-bearing debt. *3 EBITDA at annualized rate (Q1 actual X4)
(times) (times)
FY Quarterly FY Quarterly
51
3.9
6.6 6.45.8
9.0
2.22.5 2.4
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
FY06 FY07 FY08 09/Q1
D/E ratio
D/E ratio (excl. Mobile)
(times)
2.9
5.3 5.24.6
7.6
1.71.8 1.9
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
FY06 FY07 FY08 09/Q1
Net D/E ratio
Net D/E ratio (excl. Mobile)
Ratio improving steadily.
Improve Indexes: (2) Debt/Equity Ratio
*1 Interest-bearing debt and net interest-bearing debt before FY2006 are calculated with retroactive adjustments by adding the cash receipts as collateral relating to marketable security lending transactions.
*2 Lease obligations are not included in interest-bearing debt. *3 Excluding Mobile: SOFTBANK MOBILE and BB Mobile’s balance has been deducted from consolidated interest-bearing debt and net interest-bearing debt balance respectively. *4 EBITDA at annualized rate (Q1 actual X4)
(times)
FY Quarterly FY Quarterly
Debt Equity Ratio Net Debt Equity Ratio
52
Quarterly Interest Coverage Ratio* (Quarterly)
Maintain stable trend.
Improve Indexes: (3) Interest Coverage Ratio
* Interest coverage ratio = EBITDA/interest expenses * Interest expense in or before FY2007 include retroactively adjusted stock bailment fees relating to marketable security lending transactions.
Quarterly Interest Coverage Ratio* (Yearly)
6.76.36.16.15.7
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
08/Q1 Q2 Q3 Q4 09/Q1
Interest coverage ratio
6.3
5.4
6.76.0
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
FY06 FY07 FY08 09/Q1
Interest coverage ratio
(times) (times)
FY Quarterly
53
1,876.9
1,237.7
1,425.5
914.7
1,026.0
20.8%18.6%
23.5%
25.5%
0
500
1,000
1,500
2,000
FY05 FY06 FY07 FY08 09/Q10%
10%
20%
30%
Shareholders' equity (considering unrealizedgain)Equity ratio (considering unrealized gain)
Equity Ratio (Ref.) Considering Unrealized Gain
Improve equity ratio through steady build up of profit.
54.5%
Improve Indexes: (4) Equity Ratio
<bn JPY>
*Refer to the page 8 of the supplemental data for calculation basis.
411.6374.0383.7282.9242.7
9.5%8.5%8.4%
6.6%
13.4%
0
500
1,000
1,500
2,000
FY05 FY06 FY07 FY08 09/Q10%
10%
20%
30%Shareholders' equity
Equity ratio
<bn JPY>
FY QuarterlyFY Quarterly
54
Towards Towards ‘‘ZERO netZERO net--interest bearing debtinterest bearing debt’’Maximize FCF, through maximum operating CF and appropriate investing CFContinued improvement of various financial indexes through steady reduction of debtsImprove credit rating as a result of strengthening of balance sheet
Conservative financial management according to market Conservative financial management according to market Utilize diverse, appropriate procurement methods according to market conditionsSecure stable long-term procurement, improve long-term debt ratioSustain abundant cash position
High quality IR activitiesHigh quality IR activitiesApproach all layers of investors in both the debt & equity marketsDisclose earnings forecast, clarify growth scenarioFurther expansion of disclosure content
FY2009 Financial Strategies
55
56
57
Operation
Kazuhiko FujiharaSenior Vice President, CFO, Director of the Board
SOFTBANK MOBILE Corp.
Senior Vice President & CFO, DirectorSOFTBANK BB Corp.
DirectorSOFTBANK TELECOM Corp.
58
14.612.2
0.73.4
Operating income EBITDA
99.5
44.2
60.2
117.2
Operating income EBITDA
10.416.3 18.013.9
Operating income EBITDA
Overview of 3 Telecommunications Businesses
BB Infrastructure Fixed-line Telecommunications
<bn JPY>
08/Q1 09/Q1
Significant increase in profit in all 3 telecommunications businesses.
Mobile Communications
08/Q1 09/Q1 08/Q1 09/Q1 08/Q1 09/Q1 08/Q1 09/Q1 08/Q1 09/Q1
59
Operation
Broadband Infrastructure Business
60
11.815.9 18.0
12.6
17.5
15.4
18.5
15.7
18.2
16.3
17.5
20.1
16.855.6
70.3 70.9
0
40
80
FY06 FY07 FY08 FY09
5.4 8.6 10.4 13.96.1
10.311.7
14.3
10.6
11.3
7.7
9.4
7.3
26.8
39.7
47.2
0
40
80
FY06 FY07 FY08 FY09
Operating Income EBITDA
Operating Income, EBITDA (BB Business)Maintain trend of revenue increase through cost reductions. <bn JPY>
<BB-1>
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
61
4,259
0
1,000
2,000
3,000
4,000
5,000
06/Q
1 Q2 Q3 Q407
/Q1 Q2 Q3 Q4
08/Q
1 Q2 Q3 Q409
/Q1
Yahoo! BB ADSL Lines and ARPU
(k lines)
<BB-2>
Number of Lines and Full Charged Users
ARPU(JPY)
Number of ADSL lines are decreasing. ARPU on same level.
*ARPU is based on user’s payment. The impact of the modem rental business sale is not reflected.
From F07/Q1 part of Yahoo! ISP revenue recorded as basic charge (no impact on user’s charge).
6.Yahoo! ISP
5.BB Security
4.BB Phone
3.WLAN
2.Modem rental revenue
1.Basic charge
1
2
3
4
56
4,160
4,650
5,1305,090
4,450
4,1304,470
3,770
0
1,000
2,000
3,000
4,000
5,000
6,000
06/Q1 Q3 07/Q1 Q3 08/Q1 Q3 09/Q1
Cumulative lines installed
Full charged users
62
CAPEX [actual] (BB Business) <BB-3>
3.0 3.1 3.71.6
4.75.0 4.8 5.8 5.4
6.9 6.7 6.4 6.45.3 5.3 5.5
4.45.6
0
5
10
15
20
25
07/Q1 Q2 Q3 Q4 08/Q1 Q2 Q3 Q4 09/Q1
CAPEX
Depreciation & amortization
1.6
14.5
21.222.1
0
10
20
30
40
50
FY2006 FY2007 FY2008 FY2009
CAPEX stabilized within range of depreciation. <bn JPY>
CAPEX(yearly trend)CAPEX and Depreciation & Amortization (quarterly trend)
(forecast amount)14.4
63
Operation
Fixed-line Telecommunications
64
12.6 11.1 14.6
10.2 11.3
12.4
10.7
13.0
12.2
16.1
8.9
17.1
18.7
64.3
42.5
47.9
0
25
50
75
FY06 FY07 FY08 FY09
3.44.7
5.7
0.71.2
-0.1-0.90.41.3
-2.6
1.6
-0.6
7.6
18.9
3.3
-2.9
-5
0
5
10
15
20
FY06 FY07 FY08 FY09
Operating Income/Loss EBITDA
Operating Income, EBITDA (Fixed-line Telecommunications Business)Trend of revenue increase through enhancement of corporate linesand efficient management (increase in revenue and profit).
<bn JPY>
<Fixed-1>
*1 Net sales was -1.6 bn JPY, including impact of former SOFTBANK IDC segment of JPY -2.4bn (actual figure JPY +0.8bn).
*2 FY06/Q1: including reversal of JPY 2.5bn for retirement benefits.
Q1
Q2
Q3
Q4
*2Q1Q2
Q3
Q4
*1
(yearly)
65
1,440
1,630
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
05/Q1Q2 Q3 Q406/Q1Q2 Q3 Q4 07/Q1Q2 Q3 Q408/Q1Q2 Q3 Q409/Q1
Heisei DendenLarge Corp.SME (SBTP)SME (excl. SBTP)Consumer
0
2,000
4,000
6,000
8,000
10,000
12,000
05/Q1 Q3 06/Q1 Q3 07/Q1 Q3 08/Q1 Q3 09/Q1
Large Corp. Total
Number of Lines and ARPU for OTOKU LineNumber of lines and ARPU improving due to enhancement of corporate lines.
<Fixed-2>
(JPY)Number of Lines ARPU(k lines)
*SBTP:SOFTBANK TELECOM PARTNERS
Corporate lines: 1,290 Corporate lines ratio: 79%
66
CAPEX [actual] (Fixed-line Telecommunications Business) <Fixed-3>
<bn JPY>
CAPEX (yearly trend)CAPEX and Depreciation & Amortization (quarterly trend)
(forecast amount)
18.0
CAPEX stabilized within range of depreciation.
5.5 5.6 4.8 5.78.1 9.5
6.63.75.1
9.6 9.4 9.4 9.4 9.2 9.1 9.1 8.99.2
0
10
20
30
40
07/Q1 Q2 Q3 Q4 08/Q1 Q2 Q3 Q4 09/Q1
CAPEX Depreciation & amortization
3.7
21.837.6
82.6
29.5
0
50
100
150
FY2005 FY2006 FY2007 FY2008 FY2009
67
Operation
Mobile Communications
68
258.0 254.8 270.5
257.8 262.2
261.5250.6
250.5252.4
1,031.11,017.1
0
200
400
600
800
1,000
FY07 FY08 FY09
SBM Consolidated Net SalesBoth telecom service revenue and handset sales revenue increased YoY.
SBM Consolidated Net SalesYearly Comparison
SBM Consolidated Net SalesQuarterly Comparison
<Mobile-1>
<bn JPY>
Telecom service income Sales of mobile handsets and accessories
119.8
270.5254.8
141.1
0
100
200
300
400
500
FY08/Q1 FY09/Q1
+15.6
374.7
411.7
Q1
Q2
Q3
Q4+1.8
Telecom service income
+21.3
Total+37.0
+10.8
+4.4
Total+14.0
(YoY)
-3.1
+15.6
(6.2%)
(YoY)
69
Operating Income (SB consolidated, SBM consolidated)
SB ConsolidatedMobile Communications Segment
SBM Consolidated
<Mobile-2>
Significant increase in revenue by increase of sales and efficient management. Led the consolidated results.
27.243.5 44.2
60.2
29.3
50.6 43.8
56.9
53.746.7
36.426.5
42.2
155.7
174.5 171.3
0
100
200
FY06 FY07 FY08 FY09
31.1 38.8 47.367.9
18.3
46.647.250.6
50.952.2
42.5
25.9
34.4
189.3
162.4
134.6
0
100
200
FY06 FY07 FY08 FY09
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
2 months(May-Jun)
(bn JPY) (bn JPY)
+15.9
(36.1%)
+20.6
(43.6%)
(YoY) (YoY)
70
EBITDA (SB consolidated, SBM consolidated) <Mobile-3>
SB Consolidated Mobile Communications Segment SBM Consolidated
<bn JPY>
55.892.4 99.5 117.2
73.6
104.0 101.1
104.0
108.3 103.0
100.080.6
87.9
321.4
385.4 403.8
0
100
200
300
400
FY06 FY07 FY08 FY09
83.8 90.3 98.2 115.7
74.3102.1 99.0
103.1
106.2 101.4
88.6
78.298.5
350.0376.9
397.2
0
100
200
300
400
FY06 FY07 FY08 FY09
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
2 months(May-Jun)
Favorable trend sustained by sales increase and efficient management.
+17.7
(17.8%)
+17.5
(17.8%)
(YoY) (YoY)
71
2567
190
323
-74
125
367
526 521
973
9330
531 561612
412
633
-200
0
200
400
600
800
1,000
05/Q
1 Q2 Q3 Q406
/Q1 Q2 Q3 Q4
07/Q
1 Q2 Q3 Q408
/Q1 Q2 Q3 Q4
09/1Q
FY09/Q1 net additions
323k
Vodafone
<k lines>
[FY]
Quarterly Net Additions <Mobile-4>
<Breakdown>Postpaid +359kPrepaid -36k
No.1 in net additions for 26 consecutive months.
FY09/Q1 net addition share
32%Others
72
13.67
7.22
4.00
1.50
1.303.72
9.22 15.11
11.52
19.46
19.11
16.44
15.2414.97
0.00
5.00
10.00
15.00
20.00
Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Dec Mar June
2G 3G
Total Subscribers, 3G Subscribers
2005 2006 2007 2008 2009
<Mobile-5>
<mil lines>Number of total subscribers growing steadily. 3G subscribers exceeded 93%.
Vodafone
20.96
2009/6 93%2006/6 24%
In 3 years +69%
3G Ratio
2009/6 20.96 mil2006/6 15.24 mil
In 3 years +5.72 mil
Cumulative
73
Churn Rate & Upgrade Rate <Mobile-6>
1.99%
1.98%
1.27%
2.25%
1.73%
0.0%
1.0%
2.0%
3.0%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Upgrade Rate
Churn rate improved since FY08/Q4. In FY08/Q1 increased due to first cycle of installments ended. Steady trend in upgrade rate with the introduction of new summer model HS and iPhone 3G.
1.73%
1.05%1.13%0.98%
1.46%
1.50%
0.90%0.87%
0.72%
1.07%
0.0%
1.0%
2.0%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Total 3G postpaid
Churn Rate
FY06 FY07 FY09FY08 FY06 FY07 FY09FY08
TM
74
77.2121.9
173.7
70.2
247.1
17.1
162.8 160.5177.8 161.7173.2
88.1
61.445.6
64.8
71.5
56.1 45.3 57.2
18.7496.2
506.5495.3479.5
253.0
177.2
0
100
200
300
400
500
600
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Long-term balance
Balance of installment sales receivables securitization
<Mobile-7>New Super Bonus Ratio and Installment Sales Receivables
231.9
84%
90%
13%
25%
36%
48%
56%
63%68%
72% 73%
84%87%
10%
71%
77%
86% 87% 86% 86%82%
74%75%
1%
0%
20%
40%
60%
80%
100%
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Acquisitions installment ratio (*1)
Cumulative installment user ratio (*2)
FY06 FY07
Maintain high subscription ratio. Installment balance over peak.Favorable trend in securitization of installment sales receivables.
*1 Acquisitions installment ratio: ratio of New Super Bonus subscribers to postpaid subscribers (new/upgrade)*2 Cumulative installment ratio: ratio of New Super Bonus subscribers to total subscribers (excluding subscribers whose Monthly Discounts ended)
New Super Bonus Subscription Ratio Installment Sales Receivables Balance
First securitization
2nd
3rd
4th 5th 6th 7th 8th
(bn JPY)
9th
FY08 FY08FY07FY08FY09 FY09
(include Super Bonus)
75
<Mobile-8>Cash Flow Impact from Installment Sales Receivables
First cycle of increase in installment receivables ended. Improved impact on operating cash flow.
10.2
-15.7
-75.7
-100
-90
-80
-70
-60
-50
-40
-30
-20
-10
0
10
20
07/Q1 08/Q1 09/Q1
Decline in growth of installment sales receivables (decrease of Operating CF’s minus impact)
(2)
(1)
Installment Sales Receivables Balance(Yearly)
Reason for improvement in operating cash flow
479.5
506.5
Installment Sales Receivables Balance(Beginning of the period)
495.3
496.2
Installment Sales Receivables Balance
(end of the period)
+26.0-26.0Variance
-15.7+15.7FY08/Q1
+10.2-10.2FY09/Q1
Impact on Operating
CF
Increase in Installment Sales
Receivables
(1)
(2)
(bn JPY)
(bn JPY)
56.5
FY09/Q1
+94.4-37.8SB Consolidated FCF
DifferenceFY08/Q1
(bn JPY)<Reference>
+26.0
76
<Mobile-9>ARPU (telecom service revenue per subscription)Total ARPU improved 200 JPY compared to FY08/Q4 back to be 4,000 JPY level. Data ARPU growth trend continued.
1,350 1,410 1,650 1,820 1,880
4,2303,590
2,530 2,020 2,150
5,590
5,000
4,1803,830
4,030
0
1,000
2,000
3,000
4,000
5,000
6,000
06/Q1 Q2 Q3 Q4 07/Q1 Q2 Q3 Q4 08/Q1 Q2 Q3 Q4 09/Q1
Data Voice
(JPY)
*The name of New Super Bonus Special Discount was changed to Monthly Discounts on Nov 1, 2008
Basic charge & voice
+130 JPY
Data +60 JPY
Total+200 JPY
FY08/Q4Comparison
77
(JPY)
Comp. FY08/Q4: data ARPU increased, voice ARPU increased due absence of seasonal factors, installment balance peaked out.Comp. to FY08/Q1: data ARPU increased, voice ARPU continued to decrease, Monthly Discounts expanding.
ARPU (telecom service revenue per subscription)
1,820 1,880
-350-920 -1,090 -1,020
1,350 1,410 1,650
3,1703,1004,230 3,940 3,450
5,590
4,180
5,000
3,830 4,030
-1,500
-500
500
1,500
2,500
3,500
4,500
5,500
6,500
06/Q1 Q2 Q3 Q4 07/Q1 Q2 Q3 Q4 08/Q1 Q2 Q3 Q4 09/Q1
Monthly Discounts
Basic charge + voice(before Monthly Discounts)
Data
Telecom service revenue per subscription
*Telecom revenue per subscription (average)= data + basic charge + voice – telecom discounts (Monthly Discounts)
<Mobile-10>
78
-4.9%
-3.6%
-11.1%
-9.5%
-13.1%
-16.4%-17.2%-18.7%
-25%
-15%
-5%
5%
06/Q1 Q2 Q3 Q4 07/Q1 Q2 Q3 Q4 08/Q1 Q2 Q3 Q4 09/Q1
(%)
*Telecom revenue per subscription (average)= data + basic charge + voice – telecom discounts (Monthly Discounts)
ARPU is improving trend in the yearly comparison.
Revenue Per Subscription YoY Comaprison
<Seasonal factors> -access charge-leap year
<Mobile-11>
79
<Mobile-12>Revenue Per Subscription (average)Favorable trend in cash income per subscriber (incl. HS installment payments). Reason for improvement in operating CF.
leap year
*The access service charge impact is not included in cash income per subscriber and HS installment payment.
*
(JPY)
1,6501,3501,820 1,880
1,410
3,5904,230
2,0202,530 2,150
200
210
270280
280
4801,400 1,580
1,640
5,760 5,8905,8505,6905,790
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
06/Q1 Q2 Q3 Q4 07/Q1 Q2 Q3 Q4 08/Q1 Q2 Q3 Q4 09/Q1
Impact from access chargeHS installment paymentBackup Service Package, etc. VoiceData
ARPU
80
<Mobile-13>
32.4
308.4
37.4
38.7
52.9
70.0
0
100
200
300
400
FY2006 FY2007 FY2008 FY2009
175.2
Q1
Q2
Q3
Q4
235.3
199.1
Continue effective CAPEX
CAPEX [actual] (Mobile Communications Business)
<bn JPY>
CAPEX (yearly trend)CAPEX and Depreciation & Amortization (quarterly trend)
11 months(May 06- Mar 07)
(forecast amount)
1 month(Apr 06)
70.0
32.4
52.9
38.7
72.1
50.9 52.0
60.3
37.4
45.9
42.742.340.939.6
33.5 34.8 36.0 37.3 38.6
45.845.746.047.147.348.5 48.7 47.9
0
50
100
07/Q1 Q2 Q3 Q4 08/Q1 Q2 Q3 Q4 09/Q1
CAPEX (Mobile Communications segment)
Depreciation & amortization(MobileCommunications Business)Referrence: Amortization (SBM consolidated)
Q1
Q2
Q3
Q4
81
46.2 45.9 44.9
34.932.3 32.4
66.0
38.641.6
0
10
20
30
40
50
60
70
07/Q1 Q2 Q3 Q4 08/Q1 Q2 Q3 Q4 09/Q1
<Mobile-14>
<bn JPY> SBM Inventory (on B/S)
32.4
2.06
FY09/Q1
+14.7%1.79Total sales (mil. units)
-29.4%45.9Inventory(bn JPY)
YoYFY08/
Q1
<SBM Inventory Data (handset sales, inventory)>
*Annual handset sales amount is the total of HS sold for new subscriptions and upgrades.
Improved in Inventory
5.4 7.1
1.3
6.2 4.6
8.7
10.1
3.8
0.2
30.4
16.0
0
5
10
15
20
25
30
35
FY2007 FY2008 FY2009
Big reduction in inventory
<bn JPY>Allowance for Doubtful Accounts of
Installment Receivables and Bad Debt Loss
Big improvement of allowances
09/Q1Occurred in this period: 2.1bnReverse of past allowance: - 0.7bnTotal: 1.3bn
Q1
Q2
Q3
Q4
82
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