earnings results for the three-month period (fy2009/q1) analyst … · 2009-07-31 · 1 earnings...

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


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>


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


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


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


<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


<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




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

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



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


33 .4 49 .0 56 .3 16 .4

0

100

200


204.6

84.813.0

150.0

0

100

200


Internet Culture

Mobile Communications BB Infrastructure


Yearly Trend

EBITDA – CAPEX (main segments)

<bn JPY>

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)


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)


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

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


10.416.3 18.013.9


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.


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


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


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

* The names of other companies, other logos, product names, service names, brands, etc., mentioned in this material are registered trademarks or trademarks of SOFTBANK CORP. or the applicable companies.

* Unauthorized copying of this material and use of the information or the data in this material in whole or in part are not permitted.

- Apple, the Apple logo and iPhone are trademarks of Apple. - The trademark ‘iPhone’ is used with a license from Aiphone K.K.- iPhone 3G may be configured to work only with the wireless services of a single wireless operator.

earnings results for the three-month period (fy2009/q1) analyst … · 2009-07-31 · 1 earnings...

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