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From Nov 2019 to Nov 2024
TIDM56ID
RNS Number : 6128A
Softbank Corp
03 February 2011
This English translation of the financial report was prepared for reference purposes only and is qualified in its entirety by the original Japanese version. The financial information contained in this report is derived from our unaudited consolidated financial statements appearing in item 3 of this report.
SOFTBANK CORP.
CONSOLIDATED FINANCIAL REPORT
For the nine-month period ended December 31, 2010
Tokyo, February 3, 2011
1. FINANCIAL HIGHLIGHTS
(Percentages are shown as year-on-year changes)
(1) Results of Operations
Hot Features
Premium
(Millions of yen; amounts less than one million yen are omitted.)
------------------------------------------------------------------------------------
Operating
Net sales income Ordinary income Net income
------------ ----------------- ---------------- ---------------- ---------------
Amount % Amount % Amount % Amount %
------------ ---------- ----- --------- ----- -------- ------ -------- -----
Nine-month
period
ended
December
31, 2010 2,249,901 10.0 482,159 31.6 399,917 42.2 142,299 50.0
------------ ---------- ----- --------- ----- -------- ------ -------- -----
Nine-month
period
ended
December
31, 2009 2,045,304 3.2 366,319 33.4 281,187 61.1 94,861 63.0
------------ ---------- ----- --------- ----- -------- ------ -------- -----
Net income
per share Net income
basic per share
(yen) diluted (yen)
------------ ----------------- ----------------
Nine-month
period
ended
December
31, 2010 131.47 126.32
------------ ----------------- ----------------
Nine-month
period
ended
December
31, 2009 87.68 84.55
------------ ----------------- ----------------
(2) Financial Condition
(Millions of yen; amounts less than one million yen are omitted.)
------------------------------------------------------------------------------
Shareholders'
Total Equity ratio equity
Total assets equity (%) per share (yen)
-------------- ------------- ------------- ------------- -----------------
As of
December 31,
2010 4,375,058 814,842 13.0 527.23
------------- -----------------
As of March
31, 2010 4,462,875 963,971 10.5 434.74
-------------- ------------- ------------- ------------- -----------------
Note: Shareholders'equity (consolidated)
As of December 31, 2010: JPY 570,644 million
As of March 31, 2010: JPY 470,531 million
2. Dividends
Dividends per share
---------------- ------------------------------------------------------------
First Second Third Fourth
(Record date) quarter quarter quarter quarter Total
---------------- ------------- ----------- ----------- ----------- ------
(yen) (yen) (yen) (yen) (yen)
Fiscal year
ended March
31, 2010 - 0.00 - 5.00 5.00
---------------- ------------- ----------- ----------- ----------- ------
Fiscal year
ending March
31, 2011 - 0.00 -
---------------- ------------- ----------- ----------- ----------- ------
Fiscal year ending March 31,
2011 (Forecasted) 5.00 5.00
------------------------------- ----------- ----------- ----------- ------
Revision of forecasts on the dividends: No
3. Forecasts on the consolidated operation results for the fiscal year ending in March 2011 (April 1, 2010 - March 31, 2011)
(Percentages are shown as year-on-year changes)
(Millions of yen)
Operating income
--------------------- ----------------------------------------------
Full financial year 600,000 28.8(%)
--------------------- ----------------------- ---------------------
Revision of forecasts on the consolidated operation results: Yes
4. Others (Please refer to page 19 "2. Others" for details)
(1) Significant Changes in Scope of Consolidation: No
Note: Existence or non existence of significant changes in scope of consolidation of specified subsidiaries
(2) Application of simple accounting methods or special accounting methods for preparation for the consolidated financial statements: No
Note: Existence or non existence of application of simple accounting methods or special accounting methods for the consolidated financial statements
(3) Changes in accounting principles, procedures, disclosure methods, etc., used in the presentation of the consolidated financial statements
[1] Changes due to revisions in accounting standards: Yes
[2] Changes other than those in [1]: No
Note: Existence or non existence of changes in accounting principles, procedures, disclosure methods, etc., used in the presentation of the consolidated financial statements
(4) Number of shares issued (Common stock)
[1] Number of shares issued (including treasury stock):
As of December 31, 2010: 1,082,526,378 shares
As of March 31, 2010: 1,082,503,878 shares
[2] Number of treasury stock:
As of December 31, 2010: 179,491 shares
As of March 31, 2010: 174,775 shares
[3] Weighted average number of common stock:
As of December 31, 2010: 1,082,344,678shares
As of December 31, 2009: 1,081,880,972 shares
* Implementation status of quarterly review procedures
This quarterly consolidated financial report is not subject to quarterly review procedures based on Financial Instruments and Exchange Act and the review procedures for the quarterly consolidated financial statements were being conducted when this report was disclosed.
* Note to forecasts on the consolidated operating results and other items
The forecast figures are estimated based on the information which SOFTBANK CORP. is able to obtain at the present point and assumptions which are deemed to be reasonable. However, actual results may be different due to various factors. Please refer to page 17 "1. Qualitative Information Regarding Nine-month Period Results (3) Earnings Forecasts" for details of notes to precondition and usage for forecasts.
(Appendix)
Content
1. Qualitative Information Regarding the Nine-month Period p.2
Results
=============================================================== =====
(1) Qualitative Information Regarding Consolidated Results p.2
of Operations
============================================================= =====
1. Consolidated Results of Operations p.2
============================================================= =====
2. Results by Business Segment p.5
============================================================= =====
Reference 1: Principal Operational Data p.9
============================================================= =====
Reference 2: Capital Expenditure and Depreciation p.11
============================================================= =====
(2) Qualitative Information Regarding Consolidated Financial p.12
Position
============================================================= =====
3. Assets, Liabilities and Equity p.12
============================================================= =====
4. Cash Flows p.14
============================================================= =====
Reference: Major Financing Activities p.16
============================================================= =====
(3) Earnings Forecasts p.17
============================================================= =====
(4) The SOFTBANK Group p.18
============================================================= =====
2. Others p.19
=============================================================== =====
(1) Significant Changes in Scope of Consolidation p.19
============================================================= =====
(2) Application of Simple Accounting Methods or Special p.19
Accounting Methods for Preparation for the Consolidated
Financial Statements
============================================================= =====
(3) Changes in Accounting Principles, Procedures, Disclosure p.19
Methods, etc., Used in the Presentation of the Consolidated
Financial Statements
============================================================= =====
3. Consolidated Financial Statements p.20
=============================================================== =====
(1) Consolidated Balance Sheets p.20
============================================================= =====
(2) Consolidated Statements of Income p.22
============================================================= =====
(3) Consolidated Statements of Cash Flows p.24
============================================================= =====
(4) Significant Doubt About Going Concern Assumption p.26
============================================================= =====
(5) Significant Changes in Shareholders` Equity p.26
============================================================= =====
(6) Basis of Presentation of Consolidated Financial p.26
Statements
============================================================= =====
(7) Notes p.27
============================================================= =====
1. Qualitative Information Regarding the Nine-month Period Results
(1) Qualitative Information regarding Consolidated Results of Operations
1. Consolidated Results of Operations
<Overview of results for the nine-month period from April 1 to December 31, 2010>
For the nine-month period from April 1 to December 31, 2010 (hereafter "the period"), the SOFTBANK Group (hereafter "the Group") achieved JPY 2 249,901 million of consolidated net sales, a JPY 204,596 million (10.0%) increase compared with the same period of the previous fiscal year (April 1 to December 31, 2009, hereafter "year-on-year"), with a JPY 115 839 million (31.6%) increase in operating income to JPY 482,159 million. This consolidated revenue and profit growth was driven by strong performance at the Mobile Communications segment. Ordinary income grew JPY 118,730 million (42.2%) to JPY 399,917 million. Net income rose JPY 47,438 million (50.0%) to JPY 142,299 million.
The Company owns 100% shares issued by WILLCOM, Inc. However, WILLCOM, Inc. is in the process of reorganization under the Corporate Reorganization Act and the Company does not have effective control over WILLCOM, Inc. Therefore, WILLCOM, Inc. is not treated as a subsidiary.
Note:
Definition of terms: as used in this consolidated financial report for the nine-month period ended December 31, 2010, references to "the Company," "the Group" and "the SOFTBANK Group" are to SOFTBANK CORP. and its consolidated subsidiaries except as the context otherwise requires or indicates.
The main factors affecting earnings for the period were as follows:
(a) Net Sales
Net sales totaled JPY 2,249,901 million, for a JPY 204,596 million (10.0%) year-on-year increase. This was mainly the result of strong growth in the number of mobile phone subscribers, combined with a rise in ARPU1 and the number of mobile handsets shipped2, at the Mobile Communications segment.
Notes:
1. Average Revenue Per User.
2. Handsets shipped: handsets shipped (sold) to agents.
(b) Cost of Sales
The cost of sales rose JPY 46,780 million (4.8%) year-on-year to JPY 1 027,735 million. The increase primarily reflected a higher cost of goods at the Mobile Communications segment on the increase in the number of mobile handsets shipped, while depreciation and amortization expenses related to the 2G mobile phone service decreased as a result of the termination of this service in March 2010.
(c) Selling, General and Administrative Expenses
Selling, general and administrative expenses grew JPY 41,976 million (6.0%) year-on-year to JPY 740,006 million. This was mainly because of increased sales commissions3 associated with the increase in the number of mobile handsets sold4 at the Mobile Communications segment.
Notes:
3. Sales commissions paid to sales agents per new subscription and upgrade purchase.
4. Handsets sold: handsets sold to customers upon new subscription and handset upgrade.
(d) Operating Income
As a result, operating income totaled JPY 482,159 million, for a JPY 115 839 million (31.6%) year-on-year increase. The operating margin rose 3.5 percentage points year-on-year, to 21.4%.
(e) Non-operating Income / Expenses
Non-operating income totaled JPY 15,044 million, a JPY 5,059 million year-on-year increase. Non-operating expenses stood at JPY 97,285 million, a JPY 2,168 million year-on-year increase. The primary item of non-operating expenses was interest expense, which totaled JPY 80,610 million.
(f) Ordinary Income
Ordinary income therefore totaled JPY 399,917 million, for a JPY 118,730 million (42.2%) year-on-year increase.
(g) Special Income
Special income totaled JPY 11,686 million, the main components of which were a JPY 4,907 million gain on sale of investment securities and a JPY 4,187 million gain on repurchase of minority interests and long-term debt. Gain on repurchase of minority interests and long-term debt was the result of the Company's acquisition, which was carried out on December 10, 2010. This acquisition, amounting to a total of JPY 412,500 million, contains all class 1 preferred stock series 1 and stock acquisition rights issued by BB Mobile Corp. (hereafter "BB Mobile") to Vodafone International Holdings B.V., and the entire amount of the principal and accrued interest of a long-term loan receivable, which was recorded as long-term debt in the Company's consolidated balance sheets, from SOFTBANK MOBILE Corp. (hereafter "SOFTBANK MOBILE") to Vodafone Overseas Finance Limited.
(h) Special Loss
The special loss was JPY 26,997 million, which included a JPY 7,841 million valuation loss on option and a JPY 7,099 million loss on adjustment for changes of the accounting standard for asset retirement obligations. The Company has entered into agreements containing a put option5 and a call option6 for shares of Wireless City Planning Inc. (hereafter "WCP"), which is the Company's affiliate under equity method, with its shareholders other than the Company. These options are measured at fair value and the valuation loss is recorded as described above.
Notes:
5. Put option: the right of the other shareholders of WCP to sell the WCP shares to the Company.
6. Call option: the Company's right to buy the WCP shares from the other shareholders of WCP.
(i) Income Taxes
Provisions for current income taxes were JPY 125,137 million, provisions for deferred income taxes were JPY 47,450 million, and additional tax expenses of JPY 26,450 million were recorded as income taxes - correction. Current income taxes increased by JPY 35,588 million year-on-year, mainly as a result of loss carryforwards under the BB Mobile income taxes under consolidated tax return7 having been fully utilized in the previous fiscal year. The income taxes - correction were recorded in response to a correction and ruling notice received by Yahoo Japan Corporation (hereafter "Yahoo Japan") from the Tokyo Regional Taxation Bureau on June 30, 2010, regarding Yahoo Japan's tax accounting treatment. Refer to page 31, "3. Consolidated Financial Statements - Notes Consolidated Statements of Income - 5. Income taxes - corrections (For the nine-month period ended December 31, 2010)" for details. Yahoo Japan paid the relevant additional income taxes on July 1, 2010.
Note:
7. BB Mobile and its wholly owned subsidiaries including SOFTBANK MOBILE adopt the consolidation taxation system.
(j) Minority Interests in Net Income
Minority interests in net income totaled JPY 43,268 million, primarily from profit recorded at Yahoo Japan and at SB Asia Infrastructure Fund L.P., which became a consolidated subsidiary of the Company during the three-month period from April 1 to June 30, 2010 (hereafter "the first quarter").
(k) Net Income
As a result of the above, net income totaled JPY 142,299 million, for a JPY 47,438 million (50.0%) year-on-year increase.
The Group is strengthening its cash-flow-oriented management, and aims to reduce its JPY 1,939,520 million of net interest-bearing debt8 as of the end of March 2009 by half over three years (by the end of March 2012) and to zero over six years (by the end of March 2015). To achieve this, the Group plans to generate an aggregate total of at least JPY 1 trillion in free cash flow9 over the three years from fiscal 2009 (period from April 1, 2009, to March 31, 2012). As a result of the strong performance of the Mobile Communications segment, free cash flow totaling JPY 364,264 million was recorded during the period. Net interest-bearing debt at the end of the period was JPY 1,429,929 million.
Notes:
8. Net interest-bearing debt: interest-bearing debt - cash position.
Interest-bearing debt: short-term borrowings + commercial paper + current portion of corporate bonds + corporate bonds + long-term borrowings. Lease obligations are excluded. This also excludes the corporate bonds (WBS Class B2 Funding Notes, issued by J-WBS Funding K.K.) with a face value of JPY 27,000 million acquired by the Company during the previous fiscal year that were issued under the whole business securitization financing scheme associated with the acquisition of Vodafone K.K.
Cash position: cash and cash deposits + marketable securities recorded as current assets (excludes Yahoo! Inc. shares held by a subsidiary of the Company in the United States of America).
9. Free cash flow: cash flows from operating activities + cash flows from investing activities.
2. Results by Business Segment
The "Accounting Standard for Disclosures about Segments of an Enterprise and Related Information" (ASBJ Statement No.17, March 27, 2009) and the "Guidance on the Accounting Standard for Disclosures about Segments of an Enterprise and Related Information" (ASBJ Guidance No.20, May 21, 2008) are being applied from the first quarter. Hereafter the accounting standard and the guidance on the accounting standard applied in the same period of the previous fiscal year are referred to as the "former standard", while those applied from the first quarter are referred to as the "new standard."
Net sales and operating income for the period are compared on a year-on-year basis, based on the new standard.
Note:
Principal operational data is shown on pages 9-10 "(Reference 1: Principal Operational Data)."
(a) Mobile Communications
(Millions of yen)
Nine-month (Reference)
Period Ended (Reference) Change
Nine-month Period Ended December 31, Change %
December 31, 2009 2010 (d)=(c)-(b) (d)/(b)
----------- ----------------------------------- --------------- ------------ ------------
(Former standard) (New standard) (New standard)
(a) (b) (c)
----------- ------------------ --------------- --------------- ------------ ------------
Net sales 1,264,254 1,264,257 1,458,620 194,363 15.4%
----------- ------------------ --------------- --------------- ------------ ------------
Operating
income 215,112 215,109 314,486 99,377 46.2%
----------- ------------------ --------------- --------------- ------------ ------------
2,523,300 cumulative net subscriber additions10 for the period
ARPU11 for the third quarter12 was JPY 4,310, a JPY 110 year-on-year13 increase. Out of this data ARPU amounted to JPY 2,330, a JPY 270 year-on-year increase
Notes:
10. The number of net subscriber additions includes prepaid mobile phones and communication module service subscribers. Net subscriber additions for communication modules for the period totaled 553,600, which included an increase of 189,600 in the third quarter.
11. Average Revenue Per User (rounded to the nearest JPY 10). Revenue and number of mobile phone subscribers include prepaid mobile phones and communication module service subscribers. For the Mobile Communications segment, the term "ARPU" used alone indicates the total of the basic monthly charge plus voice ARPU plus data ARPU.
12. The three-monthperiod ended December 31, 2010 (from October 1 to December 31, 2010).
13. Compared to the three-month period ended December 31, 2009 (from October 1 to December 31, 2009).
<Analysis of Results>
The segment's net sales increased by JPY 194,363 million (15.4%) year-on-year to JPY 1,458,620 million. The revenue growth was driven by continued strong upward trend of mobile phone subscribers combined with increases in ARPU and the number of mobile handsets shipped. Operating income increased by JPY 99,377 million (46.2%) year-on-year to JPY 314 486 million.
<Number of Mobile Phone Subscribers>
Net subscriber additions (new subscribers minus cancellations) for the period totaled 2,523,300, of which 925,700 net subscribers were added in the third quarter. This increase was primarily the result of strong sales of iPhone14. As a result, the cumulative number of subscribers at the end of the period stood at 24,399,90015, raising SOFTBANK MOBILE's cumulative subscriber share by 1.2 of a percentage point year-on-year, to 20.8%16.
Notes:
14. iPhone is a trademark of Apple Inc. The iPhone trademark is used under license from Aiphone K.K.
15. The number of cumulative subscribers includes prepaid mobile phones and communication module service subscribers. The cumulative number of communication module service subscribers at the end of the period was 1 091,100.
16. Calculated by the Company based on Telecommunications Carriers Association statistical data.
<ARPU>
ARPU for the third quarter rose JPY 110 year-on-year to JPY 4,310. Out of this the sum of the basic monthly charge and voice ARPU declined JPY 170 year-on-year to JPY 1,980, reflecting an increase in devices like PhotoVision that do not have voice communication functionality, and revised access charges between carriers. On the other hand, data ARPU rose JPY 270 year-on-year to JPY 2,330. This was mainly the result of an increase in the number of data-intensive iPhone subscribers, combined with the termination of the non-data-intensive 2G service in March 2010.
<Churn Rate and Upgrade Rate>
The churn rate17 for the third quarter was 0.91%, which was 0.25 of a percentage point lower year-on-year. This was primarily because the termination of the 2G service ceased to be a factor causing an increase in the churn rate, combined with a decline in the churn rate of customers who have completed their installment handset payments.
The upgrade rate17 for the third quarter was 1.43%, which was 0.1 of a percentage point lower year-on-year. The number of upgrades to iPhone 4 increased but this impact was outweighed by the fact that the termination of the 2G service no longer had an increasing impact.
Note:
17. Calculation includes prepaid mobile phones and communication module service subscribers in the number of subscribers, churn and upgrades respectively.
<Average Acquisition Cost per Subscriber>
The average acquisition cost per subscriber18 for the third quarter rose JPY 400 year-on-year to JPY 37,800.
Note:
18. Average commission paid to sales agents per new subscription. New subscriptions include prepaid mobile phones and communication modules.
(b) Broadband Infrastructure
(Millions of yen)
Nine-month (Reference)
Period Ended (Reference) Change
Nine-month Period Ended December 31, Change %
December 31, 2009 2010 (d)=(c)-(b) (d)/(b)
----------- ----------------------------------- --------------- ------------ ------------
(Former standard) (New standard) (New standard)
(a) (b) (c)
----------- ------------------ --------------- --------------- ------------ ------------
Net sales 155,328 154,353 144,485 (9,867) (6.4%)
----------- ------------------ --------------- --------------- ------------ ------------
Operating
income 39,409 39,115 33,525 (5,590) (14.3%)
----------- ------------------ --------------- --------------- ------------ ------------
<Overview of Operations>
The segment's net sales decreased by JPY 9,867 million (6.4%) year-on-year to JPY 144,485 million. This was mainly because of the continued decreasing trend in revenue, on a decline in the number of charged lines19 for the ADSL service. Operating income decreased by JPY 5,590 million (14.3%) year-on-year to JPY 33,525 million. In addition to the decrease in net sales, customer acquisition for Yahoo! BB hikari with FLET'S20 led to an increase in sales-related expenses.
Net subscriber additions for Yahoo! BB hikari with FLET'S for the period totaled 546,000, which included an increase of 208,000 in the third quarter, bringing the cumulative number of contracts at the end of the period to 783,000. Combined with installed lines21 for the ADSL service, this brought the total number of users to 4,074,000.
Notes:
19. Number of installed lines excluding customers whose basic monthly charge is free under promotion campaigns or other promotional initiatives.
20. A broadband connection service that combines the Internet connection service Yahoo! BB and the FLET'S HIKARI fiber-optic connection provided by NIPPON TELEGRAPH AND TELEPHONE EAST CORPORATION ("NTT East") and NIPPON TELEGRAPH AND TELEPHONE WEST CORPORATION ("NTT West"). FLET'S and FLET'S HIKARI are registered trademarks of NTT East and NTT West.
21. Number of lines for which connection construction for ADSL line at central office of NTT East or NTT West is complete.
(c) Fixed-line Telecommunications
(Millions of yen)
Nine-month (Reference)
Period Ended (Reference) Change
Nine-month Period Ended December 31, Change %
December 31, 2009 2010 (d)=(c)-(b) (d)/(b)
----------- ----------------------------------- --------------- ------------ ------------
(Former standard) (New standard) (New standard)
(a) (b) (c)
----------- ------------------ --------------- --------------- ------------ ------------
Net sales 258,687 258,687 263,273 4,586 1.8%
----------- ------------------ --------------- --------------- ------------ ------------
Operating
income 14,344 14,400 23,889 9,488 65.9%
----------- ------------------ --------------- --------------- ------------ ------------
<Overview of Operations>
The segment's net sales increased by JPY 4,586 million (1.8%) year-on-year to JPY 263,273 million. Net sales to third-parties decreased, primarily as a result of the continued decrease in revenue from relay connection voice services such as MYLINE, despite the increase in revenue from the OTOKU Line, a direct connection voice service. On the other hand, inter-segment sales increased, due to a growth in telecom service revenue from network provision to the Group telecommunication companies such as SOFTBANK MOBILE, and contributed to the overall segment's revenue growth. Operating income increased by JPY 9,488 million (65.9%) to JPY 23,889 million. This was mainly due to an increase in net sales, combined with a decrease in lease expenses on equipment for the OTOKU Line service.
(d) Internet Culture
(Millions of yen)
Nine-month (Reference)
Period Ended (Reference) Change
Nine-month Period Ended December 31, Change %
December 31, 2009 2010 (d)=(c)-(b) (d)/(b)
----------- ----------------------------------- --------------- ------------ ------------
(Former standard) (New standard) (New standard)
(a) (b) (c)
----------- ------------------ --------------- --------------- ------------ ------------
Net sales 199,862 199,791 210,166 10,374 5.2%
----------- ------------------ --------------- --------------- ------------ ------------
Operating
income 98,526 99,665 110,669 11,003 11.0%
----------- ------------------ --------------- --------------- ------------ ------------
<Overview of Operations>
The segment's net sales increased by JPY 10,374 million (5.2%) year-on-year to JPY 210,166 million. Net sales at Yahoo Japan grew mainly on an increase in listing and display advertising. Operating income increased by JPY 11,003 million (11.0%) year-on-year to JPY 110 669 million. This was primarily a result of the growth in net sales, in addition to a decrease in communications expenses in connection with the reduction in data center related expenses.
(Reference 1: Principal Operational Data
(a) Mobile Communications
SoftBank mobile phones
------------------------------------------------- ----------------------------------------------------
Fiscal Year
Ending March
Fiscal Year Ended March 31, 2010 31, 2011
---------------- ---------------------------------------------------- -------------------------------
Full
Q1 Q2 Q3 Q4 Year Q1 Q2 Q3
---------------- ========= ========= ========= ======== ========= ========= ========= =========
(Thousands)
-------------------------------------------------------------------------------------------------------
Net additions 323.3 360.7 350.3 209.4 1,243.7 696.6 901.0 925.7
---------------- --------- --------- --------- -------- --------- --------- --------- ---------
(Postpaid) 359.5 394.9 383.3 506.8 1,644.5 645.3 833.6 865.4
(Prepaid) (36.2) (34.2) (33.0) (297.4) (400.8) 51.3 67.4 60.3
---------------- --------- --------- --------- -------- --------- --------- --------- ---------
Market share
(%) 32.3 31.5 35.6 13.4 26.5 45.4 53.5 55.8
---------------- --------- --------- --------- -------- --------- --------- --------- ---------
Cumulative
subscribers 20,956.2 21,316.9 21,667.2 21,876.6 22,573.2 23,474.2 24,399.9
---------------- --------- --------- --------- -------- --------- --------- --------- ---------
3G 19,455.0 20,237.7 20,885.4 21,876.6 22,573.2 23,474.2 24,399.9
2G 1,501.2 1,079.2 781.8 - - - -
---------------- --------- --------- --------- -------- --------- --------- --------- ---------
Market share
(%) 19.3 19.4 19.6 19.5 19.9 20.3 20.8
---------------- --------- --------- --------- -------- --------- --------- --------- ---------
(Yen per month)
-------------------------------------------------------------------------------------------------------
ARPU 4,030 4,150 4,200 3,890 4,070 4,290 4,300 4,310
---------------- --------- --------- --------- -------- --------- --------- --------- ---------
(Basic monthly
charge +
voice) 2,150 2,160 2,150 1,750 2,050 2,030 2,020 1,980
(Data) 1,880 1,990 2,060 2,140 2,020 2,250 2,290 2,330
---------------- --------- --------- --------- -------- --------- --------- --------- ---------
(Yen)
-------------------------------------------------------------------------------------------------------
Average
acquisition
cost per
subscriber 50,100 35,900 37,400 40,200 40,500 37,200 37,500 37,800
---------------- --------- --------- --------- -------- --------- --------- --------- ---------
(% per month)
-------------------------------------------------------------------------------------------------------
Churn rate 1.05 1.24 1.16 2.01 1.37 1.02 0.96 0.91
---------------- --------- --------- --------- -------- --------- --------- --------- ---------
(3G postpaid) 0.87 1.07 0.99 1.28 1.06 0.99 0.92 0.86
---------------- --------- --------- --------- -------- --------- --------- --------- ---------
Upgrade rate 1.73 1.81 1.53 1.78 1.71 1.18 1.67 1.43
---------------- --------- --------- --------- -------- --------- --------- --------- ---------
Notes:
1. Includes the number of prepaid mobile phones and communication module service subscribers.
2. Calculated by the Company based on Telecommunications Carriers Association statistical data.
3. Average Revenue Per User (rounded to the nearest JPY 10).
Revenue and number of mobile phone subscribers include prepaid mobile phones and communication modules.
For the Mobile Communications segment, the term "ARPU" used alone indicates the total of the basic monthly charge plus voice ARPU plus data ARPU.
4. Average commissions paid to sales agents per new subscription.
New subscriptions include prepaid mobile phones and communication modules.
5. Calculation includes prepaid mobile phones and communication module service subscribers in the number of subscribers,
churn and upgrades respectively.
(b) Broadband Infrastructure
Yahoo! BB ADSL (Thousands)
---------------------------- -----------------------------------------------------
Fiscal
Year
Ending
March 31,
Fiscal Year Ended March 31, 2010 2011
=========== --------------------------------------- -----------------------------
Full
Q1 Q2 Q3 Q4 Year Q1 Q2 Q3
=========== ====== ======= ====== ====== ====== ======= ====== ============
Installed
lines 4,158 4,040 3,908 3,769 3,609 3,457 3,291
----------- ------ ------- ------ ------ ------ ------- ------ ------------
Charged
lines 3,769 3,657 3,533 3,389 3,221 3,066 2,903
----------- ------ ------- ------ ------ ------ ------- ------ ------------
(Yen per month)
-----------------------------------------------------------------------------------
Average
user
payment
per
charged
line 4,260 4,260 4,250 4,210 4,200 4,200 4,160
----------- ------ ------- ------ ------ ------ ------- ------ ------------
(% per month)
-----------------------------------------------------------------------------------
Churn rate 2.12 1.80 1.96 2.20 2.02 2.26 2.32 2.47
----------- ------ ------- ------ ------ ------ ------- ------ ------------
Notes:
6. Number of lines for which connection construction for ADSL line at central office of NTT East or NTT West is complete.
7. Number of installed lines excluding customers whose basic monthly charge is free under campaigns or other promotional initiatives.
8. Rounded to the nearest JPY 10.
9. Average ratio of customer lines with a history of payment, for which a cancellation application has been filed during the relevant period.
(c) Fixed-line Telecommunications
OTOKU
Line (Thousands)
------- ---------------------------------------------------------------------
Fiscal
Year
Ending
March 31,
Fiscal Year Ended March 31, 2010 2011
======= -------------------------------------- -----------------------------
Full
Q1 Q2 Q3 Q4 Year Q1 Q2 Q3
======= ====== ====== ====== ====== ====== ======= ====== ============
Lines 1,631 1,652 1,657 1,669 1,668 1,667 1,662
------- ------ ------ ------ ------ ------ ------- ------ ------------
(Yen per month)
------------------------------------------------------------------------------
ARPU 6,390 6,280 6,450 6,830 6,610 6,570 6,610
------- ------ ------ ------ ------ ------ ------- ------ ------------
Note:
10. Average Revenue Per User: average revenue per line (rounded to the nearest JPY 10).
(d) Internet Culture
(Millions)
---------- -------------------------------------------------------------------------
Fiscal
Year
Ending
March 31,
Fiscal Year Ended March 31, 2010 2011
========== ------------------------------------------ -----------------------------
Full
Q1 Q2 Q3 Q4 Year Q1 Q2 Q3
========== ======= ======= ======= ======= ====== ======= ======= ===========
Yahoo! JAPAN
Total
monthly
page
views 46,445 46,378 42,779 46,882 48,722 49,671 46,756
------- ------- ------- ------- ------ ------- ------- -----------
Unique
browsers 229 189 197 209 224 226 222
---------- ------- ------- ------- ------- ------ ------- ------- -----------
Yahoo! Auctions
Average
number
of total
listed
items 20 20 23 23 22 22 22
---------- ------- ------- ------- ------- ------ ------- ------- -----------
Notes:
11. Number of accesses to Yahoo! JAPAN Group websites during the last month of each quarter.
12. Number of browsers accessing a Yahoo! JAPAN service during the last month of each quarter.
13. Daily average number of items posted during the last month of each quarter.
(Reference 2: Capital Expenditure and Depreciation)14
(a) Capital Expenditure (acceptance basis)
Millions of yen
----------------------------------------------------------------------------------------------
Fiscal Year Ending
Fiscal Year Ended March 31, 2010 March 31, 2011
==================== -------------------------------------------- --------------------------
Full
Q1 Q2 Q3 Q4 Year Q1 Q2 Q3
==================== ======= ======= ======= ======= ======== ======= ======= ========
Mobile
Communications 32,408 39,148 47,921 65,291 184,770 25,987 65,387 116,324
-------------------- ------- ------- ------- ------- -------- ------- ------- --------
Broadband
Infrastructure 1,588 1,590 2,095 4,068 9,343 3,319 3,294 5,076
-------------------- ------- ------- ------- ------- -------- ------- ------- --------
Fixed-line
Telecommunications 3,710 3,939 3,436 6,893 17,979 5,112 6,362 9,095
-------------------- ------- ------- ------- ------- -------- ------- ------- --------
Internet Culture 1,085 1,264 1,450 2,327 6,128 1,906 1,908 2,783
-------------------- ------- ------- ------- ------- -------- ------- ------- --------
Others 1,571 915 678 1,528 4,693 1,216 1,559 1,148
-------------------- ------- ------- ------- ------- ======== ======= ------- --------
Consolidated
total 40,364 46,858 55,582 80,109 222,915 37,542 78,513 134,428
-------------------- ------- ------- ------- ------- -------- ------- ------- --------
(b) Depreciation (excluding amortization of goodwill)
Millions of yen
---------------------------------------------------------------------------------------------
Fiscal Year Ending
Fiscal Year Ended March 31, 2010 March 31, 2011
==================== -------------------------------------------- -------------------------
Full
Q1 Q2 Q3 Q4 Year Q1 Q2 Q3
==================== ======= ======= ======= ======= ======== ======= ======= =======
Mobile
Communications 42,732 43,377 44,656 45,569 176,337 36,636 37,636 40,051
-------------------- ------- ------- ------- ------- -------- ------- ------- -------
Broadband
Infrastructure 4,373 4,366 4,095 4,188 17,023 4,234 3,968 3,965
-------------------- ------- ------- ------- ------- -------- ------- ------- -------
Fixed-line
Telecommunications 8,982 8,837 8,669 8,803 35,292 9,104 9,242 9,290
-------------------- ------- ------- ------- ------- -------- ------- ------- -------
Internet Culture 2,366 2,441 2,492 2,563 9,864 2,169 2,307 2,412
-------------------- ------- ------- ------- ------- -------- ------- ------- -------
Others 1,353 1,243 1,401 1,427 5,426 1,445 1,482 1,608
-------------------- ------- ------- ------- ------- -------- ======= ======= -------
Consolidated
total 59,809 60,266 61,314 62,553 243,944 53,590 54,637 57,329
-------------------- ------- ------- ------- ------- -------- ------- ------- -------
Note:
14. Capital expenditure and Depreciation for the fiscal year ended March 31, 2010 are calculated based on the new standard.
Capital expenditure and Depreciation for the e-Commerce segment for the fiscal year ended March 31, 2010 are included in "Others."
(2) Qualitative Information regarding Consolidated Financial Position
1. Assets, Liabilities and Equity
Assets, liabilities and equity at the end of the period were as follows:
(Millions of yen)
As of
December 31, As of
2010 March 31, 2010 YoY YoY %
------------------- ------------- --------------- ---------- --------
Total assets 4,375,058 4,462,875 (87,816) (2.0%)
------------------- ------------- --------------- ---------- --------
Total liabilities 3,560,215 3,498,903 61,312 1.8%
------------------- ------------- --------------- ---------- --------
Total equity 814,842 963,971 (149,129) (15.5%)
------------------- ------------- --------------- ---------- --------
(a) Current Assets
Current assets at the end of the period totaled JPY 1,684,518 million, for a JPY 9,922 million (0.6%) decline from the previous fiscal year-end. The primary components of the change were as follows:
Notes and accounts receivable-trade decreased by JPY 138,762 million. This was mainly because of sales of installment sales receivables at SOFTBANK MOBILE.
Marketable securities increased by JPY 72,087 million from the previous fiscal year-end. This was mainly from the transfer of shares of Yahoo! Inc. that were previously recorded as investment securities under fixed assets, to current assets at the end of the three-month period from July 1 to September 30, 2010 (hereafter "the second quarter"). In February 2004, one of the Company's U.S. subsidiaries entered into a loan involving a portion of the proceeds from a forward contract under which its Yahoo! Inc. shares are expected to be delivered in August 2011. Because the subsidiary intends to deliver these shares in accordance with the settlement of the forward contract beginning August 2011 or within one year, the corresponding shares of Yahoo! Inc. were transferred to current assets.
Other current assets increased by JPY 51,443 million from the previous fiscal year-end, primarily from increases in derivative assets and accrued revenue included in other current assets. A derivative contract ("collar transaction") was concluded with regard to the aforementioned shares of Yahoo! Inc. to limit the risk from market price fluctuations of those shares for the period until the repayment, but with the remaining period until the repayment having become less than one year, the corresponding derivative assets were transferred to current assets at the end of the second quarter.
(b) Fixed Assets
Fixed assets totaled JPY 2,689,152 million at the end of the period, for a JPY 77,331 million (2.8%) decrease from the previous fiscal year-end. The primary components of the change were as follows:
Investments and other assets decreased by JPY 124,297 million from the previous fiscal year-end. This was mainly because of a JPY 62,155 million decrease in investment securities from the aforementioned transfer of shares of Yahoo! Inc. to marketable securities under current assets. In addition, derivative assets related to those shares of Yahoo! Inc., included in other assets under investment and other assets, were transferred to other current assets.
Total property and equipment increased JPY 77,670 million from the previous fiscal year-end, primarily on a JPY 181,990 million increase from new acquisitions of telecommunications equipment. The increase, reflecting the adjustment for changes of accounting standard for asset retirement obligations as of April 1, 2010, amounted to JPY 10,595 million.
Total intangible assets decreased JPY 30,704 million from the previous fiscal year-end. This was mainly because of a JPY 46,026 million of decrease in goodwill, which occurred when SOFTBANK MOBILE and SOFTBANK TELECOM Corp. (hereafter "SOFTBANK TELECOM") were acquired, resulting from regular amortization. On the other hand, software increased by JPY 28,676 million as a result of new acquisitions of telecommunications equipment.
(c) Current Liabilities
Current liabilities at the end of the period totaled JPY 1,533,002 million, for a JPY 154,123 million (11.2%) increase from the previous fiscal year-end. The primary components of the change were as follows:
Short-term borrowings increased by JPY 104,587 million from the previous fiscal year-end. This was mainly because of an increase in the Company's short-term borrowings, and the transfer to current liabilities of the aforementioned borrowings at one of the Company's U.S. subsidiaries as the redemption dates came to be within one year. On the other hand, SOFTBANK MOBILE continued to repay borrowings procured via the securitization of installment sales receivables.
The current portion of corporate bonds increased by JPY 74,100 million from the previous fiscal year-end. Transfers were made from corporate bonds under long-term liabilities in the amounts of JPY 53,500 million for the 25th Unsecured Straight Corporate Bond, JPY 60,000 million for the 27th Unsecured Straight Corporate Bond, and JPY 15,000 million for SOFTBANK TELECOM's 2nd series Unsecured Straight Corporate Bond, as the redemption dates came to be within one year. On the other hand, payments of JPY 54,400 million in total were made for the redemptions of the 22nd Unsecured Straight Corporate Bond and the 24th Unsecured Straight Corporate Bond.
Accounts payable-other and accrued expenses declined by JPY 35,349 million from the previous fiscal year-end. This was mainly the result of a JPY 75,000 million decline from the payment of additional entrustment for debt assumption, while equipment-related payables increased, at SOFTBANK MOBILE.
(d) Long-term Liabilities
Long-term liabilities totaled JPY 2,027,213 million at the end of the period, for a JPY 92,811 million (4.4%) decline from the previous fiscal year-end. The primary components of the change were as follows:
Long-term borrowings decreased by JPY 259,312 million. This was mainly because SOFTBANK MOBILE's ongoing repayment of its SBM loan1, and the elimination in consolidation of the long-term loan receivable acquired by the Company from Vodafone Overseas Finance Limited, which was long-term debt owed by SOFTBANK MOBILE to Vodafone Overseas Finance Limited, and the long-term debt of SOFTBANK MOBILE (refer to page 3, "1. Qualitative Information Regarding Nine-month Period Results - 1. Consolidated Results of Operations - (g) Special Income"). In addition, long-term borrowings at the Company's U.S. subsidiaries and SOFTBANK MOBILE that came to be payable within one year were transferred to current liabilities. On the other hand, there was an increase in the Company's long-term borrowings.
Other liabilities under long-term liabilities increased JPY 227,499 million from the previous fiscal year-end, mainly from an increase in long-term accounts payable included in other liabilities under long-term liabilities. The increase in long-term accounts payable represents the JPY 200,000 million that is scheduled to be paid to Vodafone International Holdings B.V. and Vodafone Overseas Finance Limited (hereafter "the Vodafone Group") in April 2012, in relation to the transaction with the Vodafone Group which was carried out in December 2010 (refer to page 3, "1. Qualitative Information Regarding Nine-month Period Results - 1. Consolidated Results of Operations - (g) Special Income").
Lease obligations decreased by JPY 41,918 million from the previous fiscal year-end, mostly from transfers to current liabilities as leases became payable within one year, which outweighed the amount of new capital expenditure via leases.
Note:
1. The funds procured for the acquisition of Vodafone K.K. were refinanced in November 2006 via a whole business securitization program.
(e) Equity
Equity totaled JPY 814,842 million at the end of the period, for a JPY 149,129 million (15.5%) decline from the previous fiscal year-end. While retained earnings increased JPY 131,791 million, totaling JPY 174,863 million at the end of the period, minority interests came to JPY 243,469 million, for a decrease of JPY 249,493 million. This was primarily due to the elimination in consolidation of JPY 300,000 million of minority interests caused by the Company's acquisition of class 1 preferred stock series 1 issued by BB Mobile to Vodafone International Holdings B.V (refer to page 3, "1. Qualitative Information Regarding Nine-month Period Results - 1. Consolidated Results of Operations - (g) Special Income"). On the other hand, there was a JPY 22,851 million increase of minority interests from the change in the scope of consolidation of SB Asia Infrastructure Fund L.P. from an affiliate under equity method to a consolidated subsidiary2.
Note:
2. This change reflects the adoption of Accounting Standards Codification Topic (ASC) 810, Consolidations formerly SFAS No.167, Amendments to FASB Interpretation No. 46 (R) (SFAS 167) applied at certain overseas subsidiaries of the Company in the United States of America.
2. Cash Flows
Cash flow activities during the period were as follows.
Cash and cash equivalents at the end of the period totaled JPY 706,489 million, for a JPY 18,808 million increase from the previous fiscal year-end.
(Millions of yen)
Nine-month period Nine-month period
ended ended
December 31, 2009 December 31, 2010 YoY
------------------------ ------------------- ------------------- ----------
Cash flows from
operating activities 469,178 525,908 56,730
------------------------ ------------------- ------------------- ----------
Cash flows from
investing activities (185,596) (161,644) 23,951
------------------------ ------------------- ------------------- ----------
(Reference) Free cash
flow 283,581 364,264 80,682
------------------------ ------------------- ------------------- ----------
Cash flows from
financing activities (136,457) (340,716) (204,259)
------------------------ ------------------- ------------------- ----------
(a) Cash Flows from Operating Activities
Net cash provided by operating activities totaled JPY 525,908 million (compared with JPY 469,178 million provided in the same period of the previous fiscal year).
Income before income taxes and minority interests totaled JPY 384,607 million, while JPY 165,557 million in depreciation and amortization and JPY 46,980 million in amortization of goodwill were recorded as positive non-cash items. Receivables-trade decreased (increase in cash flow) by JPY 147,443 million mainly on sales of installment sales receivables at SOFTBANK MOBILE.
In addition, income taxes paid of JPY 185,288 million were recorded, for a JPY 146,404 million year-on-year increase. This was mainly because of increased income tax payments for BB Mobile's income tax under consolidated tax return and at Yahoo Japan, and includes JPY 26,450 million of additional income taxes paid by Yahoo Japan on July 1, 2010, related to the correction and ruling notice it received.
(b) Cash Flows from Investing Activities
Net cash used in investing activities was JPY 161,644 million (compared with JPY 185,596 million used in the same period of the previous fiscal year).
Capital expenditures, mainly at telecommunications-related businesses, resulted in outlays of JPY 149,043 million for property and equipment and intangibles. Purchases of marketable and investment securities resulted in JPY 39,401 million in cash outlays.
As a result, free cash flow (the combined net cash flows from operating activities and investing activities) was a positive JPY 364,264 million (compared with a positive JPY 283,581 million in the same period of the previous fiscal year), for a year-on-year increase of JPY 80,682 million.
(c) Cash Flows from Financing Activities
Net cash used in financing activities was JPY 340,716 million (compared with JPY 136,457 million used in the same period of the previous fiscal year).
Outlays were recorded in the amounts of JPY 348,550 million for repayments of long-term borrowings, JPY 212,563 million for the repurchase of minority interests and long-term borrowings, JPY 113,321 million for the repayment of lease obligations, and JPY 105,508 million for the redemption of corporate bonds, JPY 75,000 million for the payment relating to the additional entrustment for debt assumption. The aforementioned outlay for repurchase of minority interests and long-term debt represents the portion of the transaction with the Vodafone Group (refer to page 3, "1. Qualitative Information Regarding Nine-month Period Results - 1. Consolidated Results of Operations - (g) Special Income"), carried out in December 2010, which was paid to the Vodafone Group in the third quarter in addition to acquisition-related expenses. On the other hand, long-term borrowings raised JPY 197,900 million and corporate bond issues generated JPY 179,182 million, in addition to a positive JPY 90,275 million recorded as a net increase in short-term borrowings.
(Reference: Major Financing Activities)
The major financing activities in the period were as follows:
Item Company Details Summary
Name
------------------------- ------------ ------------------ -----------------------------------
Bond issuances SOFTBANK 31st Unsecured Issue date: June 2,
CORP. Straight 2010 Redemption date:
Corporate Bond May 31, 2013 Procured
amount: JPY 25,000
million Interest rate:
1.17%/year Use:
redemption of bonds
which will mature by
the end of June 2011
------------------------- ------------ ------------------ -----------------------------------
32nd Unsecured Issue date: June 2,
Straight 2010 Redemption date:
Corporate Bond June 2, 2015 Procured
amount: JPY 25,000
million Interest rate:
1.67%/year Use:
redemption of bonds
which will mature by
the end of June 2011
------------------------- ------------ ------------------ -----------------------------------
33rd Unsecured Issue date: September
Straight 17, 2010 Redemption
Corporate Bond date: September 17,
(Fukuoka SoftBank 2013 Procured amount:
HAWKS Bond) JPY 130,000 million
Interest rate:
1.24%/year Use:
redemption of bonds
which will mature by
the end of June 2011
------------------------- ------------ ------------------ -----------------------------------
Bond redemption SOFTBANK 24th Unsecured Redemption date: April 26, 2010
CORP. Straight Redeemed amount: JPY 20,000
Corporate Bond million
(Fukuoka SoftBank
HAWKS Bond)
------------------------- ------------ ------------------ -----------------------------------
22 Unsecured Redemption date: September 14,
Straight 2010 Redeemed amount: JPY 34,400
Corporate Bond million
------------------------- ------------ ------------------ -----------------------------------
Euro-denominated Redemption date: October 15, 2010
Senior Notes Due Redeemed amount: JPY 47,269
2013 (redeemed million (EUR 352 million)
before maturity)
------------------------- ------------ ------------------ -----------------------------------
Securitization of SOFTBANK Procurement of Procurement date: June
receivables (recorded as MOBILE funds totaling 29, 2010 Redemption
borrowings) Corp. JPY 10,000 method: monthly
million pass-through repayment
accompanying Use: capital
securitization of expenditure and
mobile handsets repayment of funds
installment sales procured via the whole
receivables business
securitization
program
------------------------- ------------ ------------------ -----------------------------------
Repayment of SOFTBANK Repayment of JPY Repayment of funds procured via
securitization of MOBILE 147,227 million securitization of mobile handsets
receivables Corp. installment sales receivables
------------------ -----------------------------------
Increase or SOFTBANK Increase of JPY Mainly increase of
decrease in debt CORP. 273,300 million long-term borrowings
(excluding
securitization of
receivables)
------------------------- ------------ ------------------ -----------------------------------
SOFTBANK Decrease of JPY Repayment of funds
MOBILE 179,542 million raised via the whole
Corp. business
securitization
financing scheme
------------------------- ------------ ------------------ -----------------------------------
Yahoo Japan Decrease of JPY
Corporation 10,000 million
------------------------- ------------ ------------------ -----------------------------------
Capital expenditure by SOFTBANK New capital Funds procured during
financial lease MOBILE expenditure via the nine-month period
Corp. etc. leases ended December 31,
2010: JPY 54,667
million
------------------------- ------------ ------------------ -----------------------------------
Additional entrustment SOFTBANK Payment of JPY Bonds in scope: Former
for debt assumption MOBILE 75,000 million Vodafone K.K.
Corp. corporate bonds 3
Unsecured Straight
Corporate Bond JPY
25,000 million
(redeemed on August
19, 2010) 5 Unsecured
Straight Corporate
Bond JPY 25,000
million (redeemed on
August 25, 2010) 7
Unsecured Straight
Corporate Bond JPY
25,000 million
(redeemed on September
22, 2010)
------------------------- ------------ ------------------ -----------------------------------
Acquisition of preferred SOFTBANK Payment of JPY Acquisition cost: JPY 412,500
stock etc., issued by CORP. 212,500 million million in total Payment date:
the Company's (refer to page 3, December 10, 2010 JPY 212,500
consolidated subsidiary "1. Qualitative million April 2012 (tentative) JPY
and held by the Vodafone Information 200,000 million
Group Regarding
Nine-month Period
Results - 1.
Consolidated
Results of
Operations - (g)
Special Income")
------------------------- ------------ ------------------ -----------------------------------
(3) Earnings Forecasts
The Group had previously forecasted consolidated operating income of JPY 500,000 million for the fiscal year ending March 31, 2011. The Group has upwardly revised the forecast of consolidated operating income for the fiscal year ending March 31, 2011 to JPY 600,000 million as of the Consolidated Financial Report for the nine-month period ended December 31, 2010 (issued on February 3, 2011), mainly reflecting the strong earnings momentum at the Mobile Communications segment.
Consolidated net sales are subject to, among others, rapid changes in the Group's main markets, the Internet and the telecommunications industry. There is, therefore, a possibility that new sales initiatives will be introduced in the future in order to flexibly respond to changes in the market situation, making it difficult to publicly disclose a forecast for consolidated net sales.
Forecasts for consolidated ordinary income and consolidated net income are also difficult to publicly disclose because the performance of the Company's various holdings of investment securities and investments via funds is subject to changes in the market environment and other factors, making equity in earnings under equity method and valuation gain and loss on investment securities difficult to project.
Refer to the Company's press release "Upward Revision of Earnings Forecast" announced on February 3, 2011 for details.
(4) The SOFTBANK Group
As of December 31, 2010, the Group's business segments were comprised of the following consolidated subsidiaries and equity method companies. The segments' main businesses were as follows.
Equity Method
Non-consolidated Main Business of
Consolidated Subsidiaries and Segment and Name
Business Segments Subsidiaries Affiliates of Business
================================== ============= ================= ===================
Provision of
mobile
communication
services and sale
of mobile phones
accompanying the
services etc.
(Core company:
Reportable Mobile SOFTBANK MOBILE
segments Communications 3 1 Corp.)
------------ -------------------- ------------- ----------------- -------------------
Provision of
high-speed
Internet
connection
service, IP
telephony service,
and provision of
content etc. (Core
Broadband company: SOFTBANK
Infrastructure 3 BB Corp. )
------------ -------------------- ------------- ----------------- -------------------
Provision of
fixed-line
telecommunications
etc. (Core
Fixed-line company: SOFTBANK
Telecommunications 2 TELECOM Corp.)
-------------------- ------------- ----------------- -------------------
Internet-based
advertising
operations,
e-commerce site
operations such as
Yahoo! Auctions
and Yahoo!
Shopping,
membership
services, etc.
(Core company:
Yahoo Japan
Internet Culture 13 10 Corporation)
--------------------------------- ------------- ----------------- -------------------
Distribution of PC
software and
peripherals,
Fukuoka SOFTBANK
HAWKS related
Others 95 69 businesses, etc.
Total 116 80
---------------------------------- ------------- ----------------- -------------------
Note:
1. Although SOFTBANK BB Corp., SOFTBANK TELECOM Corp. and Yahoo Japan Corporation are included as consolidated subsidiaries in the Broadband Infrastructure, Fixed-line Telecommunications and Internet Culture segments, respectively, SOFTBANK BB Corp., SOFTBANK TELECOM Corp. and Yahoo Japan Corporation operate multiple businesses and therefore their operating results are allocated to multiple business segments.
Listed Companies
The Company's five following subsidiaries were listed on domestic stock exchanges as of December 31, 2010:
Company Name Listed Exchange
======================== ======================
Yahoo Japan Corporation Tokyo Stock Exchange
1st section
Osaka Stock Exchange
JASDAQ (Standard)
------------------------ ----------------------
SOFTBANK TECHNOLOGY Tokyo Stock Exchange
CORP. 1st section
------------------------ ----------------------
Vector Inc. Osaka Stock Exchange
JASDAQ (Standard)
------------------------ ----------------------
ITmedia Inc. Tokyo Stock Exchange
Mothers
------------------------ ----------------------
Carview Corporation Tokyo Stock Exchange
Mothers
------------------------ ----------------------
2. Others
(1) Significant Changes in Scope of Consolidation (Changes in Scope of Consolidation of Specified Subsidiaries)
There are no significant changes in scope of consolidation.
(2) Application of simple accounting methods or special accounting methods for preparation for the consolidated financial statements
There are no applicable items.
(3) Changes in accounting principles, procedures, disclosure methods, etc., used in the presentation of the consolidated financial statements
[1] Application of accounting standard for equity method of accounting for investments
"Accounting Standard for Equity Method of Accounting for Investments" (Accounting Standards Board of Japan (ASBJ) Statement No. 16, March 10, 2008) and "Practical Solution on Unification of Accounting Policies Applied to Associates Accounted for Using the Equity Method" (Practical Issues Task Force (PITF) No. 24, March 10, 2008) were applied and necessary adjustments for the consolidated accounting were made for the period ended December 31, 2010. The effect of this change is not material for the period ended December 31, 2010.
[2] Application of accounting standard for asset retirement obligations
"Accounting Standard for Asset Retirement Obligations" (ASBJ Statement No. 18, March 31, 2008) and "Guidance on Accounting Standard for Asset Retirement Obligations" (ASBJ Guidance No. 21, March 31, 2008) were applied as of April 1, 2010. The effect of this change in operating income and ordinary income is not material and income before income taxes and minority interests decreased by JPY 8,242 million for the period ended December 31, 2010.
1. Asset retirement obligations which are recorded in the consolidated balance sheets
The Group reasonably estimated removal costs and recorded the asset retirement obligations mainly for the corporate head quarter building, certain data and network centers located in the rental properties under the rental contracts. Useful periods of 2 years to 33 years and discount rates from 0.1% to 2.3% are applied for the estimation of asset retirement obligations.
2. Asset retirement obligations which are not recorded in the consolidated balance sheets
The Group has obligations to restore mobile phone base stations and telephone line facilities for transmission to their original conditions under the rental contracts. However, considering business continuity, the removal of these facilities is difficult and the possibility of executing the obligation to restore these facilities to their original conditions is extremely low, and therefore, the asset retirement obligations are not recorded at the period ended December 31, 2010.
3. Consolidated Financial Statements
(1) Consolidated Balance Sheets
(Millions of yen)
As of As of
December 31, 2010 March 31, 2010
------------------- -------------------
Amount Amount
------------------------------------ ------------------- -------------------
ASSETS
Current assets:
Cash and deposits 708,768 690,053
Notes and accounts
receivable - trade 677,787 816,550
Marketable securities 76,430 4,342
Merchandise and finished
products 41,421 37,030
Deferred tax assets 57,106 74,290
Other current assets 158,176 106,733
Less: Allowance for
doubtful accounts (35,173) (34,559)
------------------------------------ ------------------- -------------------
Total current assets 1,684,518 1,694,440
------------------------------------ ------------------- -------------------
Fixed assets:
Property and equipment, net:
Buildings and structures 73,322 68,182
Telecommunications equipment 770,660 706,283
Telecommunications service
lines 69,950 72,983
Land 22,438 22,401
Construction in progress 43,257 34,634
Other property and equipment 48,744 46,218
------------------------------------ ------------------- -------------------
Total property and
equipment 1,028,373 950,703
------------------------------------ ------------------- -------------------
Intangible assets, net:
Goodwill 854,741 900,768
Software 237,591 208,915
Other intangibles 29,348 42,702
------------------------------------ ------------------- -------------------
Total intangible assets 1,121,681 1,152,386
------------------------------------ ------------------- -------------------
Investments and other assets:
Investment securities and
investments in
unconsolidated
subsidiaries and
affiliated companies 307,871 370,027
Deferred tax assets 120,673 152,654
Other assets 127,484 164,950
Less: Allowance for doubtful
accounts (16,932) (24,238)
------------------------------------ ------------------- -------------------
Total investments and other
assets 539,097 663,394
------------------------------------ ------------------- -------------------
Total fixed assets 2,689,152 2,766,483
------------------------------------ ------------------- -------------------
Deferred charges 1,388 1,951
Total assets 4,375,058 4,462,875
------------------------------------ ------------------- -------------------
Consolidated Balance Sheets
(Millions of yen)
As of As of
December 31, 2010 March 31, 2010
------------------- -------------------
Amount Amount
------------------------------------ ------------------- -------------------
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable - trade 161,507 158,942
Short-term borrowings 542,548 437,960
Commercial paper 24,500 -
Current portion of corporate bonds
128,500 54,400
Accounts payable - other
and accrued expenses 416,059 451,408
Income taxes payable 67,390 100,483
Deferred tax liabilities 13,329 -
Current portion of lease
obligations 122,203 109,768
Other current liabilities 56,963 65,914
------------------------------------ ------------------- -------------------
Total current liabilities 1,533,002 1,378,878
------------------------------------ ------------------- -------------------
Long-term liabilities:
Corporate bonds 452,398 448,523
Long-term debt 1,022,273 1,281,586
Deferred tax liabilities 13,147 30,482
Liability for retirement
benefits 15,172 15,557
Allowance for point
mileage 41,980 47,215
Lease obligations 182,565 224,484
Other liabilities 299,675 72,175
------------------------------------ ------------------- -------------------
Total long-term liabilities 2,027,213 2,120,024
------------------------------------ ------------------- -------------------
Total liabilities 3,560,215 3,498,903
------------------------------------ ------------------- -------------------
Equity:
Common stock 188,771 188,750
Additional paid-in capital 212,639 213,068
Retained earnings 174,863 43,071
Less: Treasury stock (237) (225)
------------------------------------ ------------------- -------------------
Total shareholders' equity 576,036 444,665
------------------------------------ ------------------- -------------------
Unrealized gain on
available-for-sale
securities 34,446 43,864
Deferred gain on derivatives
under hedge accounting 11,575 14,528
Foreign currency
translation adjustments (51,414) (32,525)
Total valuation and
translation adjustments (5,392) 25,866
------------------------------------ ------------------- -------------------
Stock acquisition rights 729 476
------------------------------------ ------------------- -------------------
Minority interests 243,469 492,963
------------------------------------ ------------------- -------------------
Total equity 814,842 963,971
------------------------------------ ------------------- -------------------
Total liabilities and equity 4,375,058 4,462,875
------------------------------------ ------------------- -------------------
(2) Consolidated Statements of Income
For the nine-month period ended December 31, 2009 and 2010 (Millions of yen)
Nine-month period Nine-month period
ended ended
December 31, 2009 December 31, 2010
------------------- --------------------
April 1, 2009 to April 1, 2010 to
December 31, 2009 December 31, 2010
------------------- --------------------
Amount Amount
----------------------------------- ------------------- --------------------
Net sales 2,045,304 2,249,901
Cost of sales 980,954 1,027,735
Gross Profit 1,064,349 1,222,165
Selling, general and
administrative expenses 698,030 740,006
----------------------------------- ------------------- --------------------
Operating income 366,319 482,159
----------------------------------- ------------------- --------------------
Interest income 472 1,668
Foreign exchange gain, net 1,188 1,846
Equity in earnings of affiliated
companies 3,763 4,818
Other non-operating income 4,560 6,710
----------------------------------- ------------------- --------------------
Non-operating income 9,985 15,044
----------------------------------- ------------------- --------------------
Interest expense 83,810 80,610
Other non-operating expenses 11,306 16,674
----------------------------------- ------------------- --------------------
Non-operating expenses 95,116 97,285
----------------------------------- ------------------- --------------------
Ordinary income 281,187 399,917
----------------------------------- ------------------- --------------------
Gain on sale of investment
securities 4,149 4,907
Dilution gain from changes
in equity interest 1,403 2,349
Gain on repurchase of
minority interests and
long-term debt - 4,187
Other special income 451 241
----------------------------------- ------------------- --------------------
Special income 6,004 11,686
----------------------------------- ------------------- --------------------
Valuation loss on investment
securities 2,940 3,927
Unrealized appreciation on
valuation of investments
and loss on sale of
investments at subsidiaries
in the U.S., net 551 371
Loss on retirement of non
current assets 47,630 1,784
Valuation loss on option - 7,841
Loss on adjustment for
changes of accounting
standard for asset
retirement obligations - 7,099
Other special losses 1,514 5,973
Special loss 52,637 26,997
----------------------------------- ------------------- --------------------
Income before income taxes
and minority interests 234,554 384,607
----------------------------------- ------------------- --------------------
Income taxes:
Current 89,548 125,137
Correction - 26,450
Deferred 15,671 47,450
----------------------------------- ------------------- --------------------
Total income taxes 105,220 199,039
----------------------------------- ------------------- --------------------
Income before minority interests - 185,567
----------------------------------- ------------------- --------------------
Minority interests in net income 34,473 43,268
Net income 94,861 142,299
----------------------------------- ------------------- --------------------
For the three-month period ended December 31, 2009 and 2010 (Millions of yen)
Three-month period Three-month period
ended ended
December 31, 2009 December 31, 2010
------------------- --------------------
October 1, 2010
October 1, 2009 to to
December 31, 2009 December 31, 2010
------------------- --------------------
Amount Amount
----------------------------------- ------------------- --------------------
Net sales 696,028 784,879
Cost of sales 331,603 362,239
Gross Profit 364,425 422,640
Selling, general and
administrative expenses 228,728 256,002
----------------------------------- ------------------- --------------------
Operating income 135,697 166,637
----------------------------------- ------------------- --------------------
Interest income 165 534
Foreign exchange gain, net 422 1,588
Equity in earnings of affiliated
companies 1,479 5,902
Other non-operating income 1,549 1,768
----------------------------------- ------------------- --------------------
Non-operating income 3,617 9,794
----------------------------------- ------------------- --------------------
Interest expense 28,464 25,827
Other non-operating expenses 3,200 4,529
----------------------------------- ------------------- --------------------
Non-operating expenses 31,665 30,356
----------------------------------- ------------------- --------------------
Ordinary income 107,649 146,074
----------------------------------- ------------------- --------------------
Gain on sale of investment
securities 121 95
Dilution gain from changes
in equity interest 242 913
Unrealized loss on valuation
of investments and gain on
sale of investments at
subsidiaries in the U.S.,
net - 374
Gain on repurchase of
minority interests and
ong-term debt - 4,187
Other special income 3 -
----------------------------------- ------------------- --------------------
Special income 367 5,570
----------------------------------- ------------------- --------------------
Valuation loss on investment
securities 1,652 1,241
Unrealized loss on valuation
of investments and loss on
sale of investments at
subsidiaries in the U.S.,
net 896 -
Loss on retirement of non
current assets 47,192 738
Valuation loss on option - 7,841
Other special losses 537 3,723
Special loss 50,278 13,544
----------------------------------- ------------------- --------------------
Income before income taxes
and minority interests 57,739 138,100
----------------------------------- ------------------- --------------------
Income taxes:
Current 40,725 29,436
Deferred (19,064) 28,947
----------------------------------- ------------------- --------------------
Total income taxes 21,661 58,384
----------------------------------- ------------------- --------------------
Income before minority interests - 79,716
----------------------------------- ------------------- --------------------
Minority interests in net income 11,967 14,255
Net income 24,110 65,460
----------------------------------- ------------------- --------------------
(3) Consolidated Statements of Cash Flows
(Millions of yen)
--------------------------------------------------------------------------------------------------------------------------
Nine-month period Nine-month period
ended ended
December 31, 2009 December 31, 2010
--------------------------------- -----------------------------------
April 1, 2009 to April 1, 2010 to
December 31, 2009 December 31, 2010
-------------------------------------------------- --------------------------------- -----------------------------------
Cash flows from operating activities:
Income before income taxes and
minority interests 234,554 384,607
Adjustments for:
Depreciation and amortization 181,390 165,557
Amortization of goodwill 45,804 46,980
Loss on retirement of non current
assets 47,630 1,784
Equity in earnings of affiliated
companies (3,763) (4,818)
Dilution gain from changes in
equity interest, net (1,334) (2,074)
Valuation loss on investment
securities 2,940 3,927
Unrealized appreciation on valuation
of investments and loss on sale
of investments at subsidiaries
in the U.S., net 551 371
Gain on sale of marketable and
investment securities, net (4,051) (4,439)
Foreign exchange gain, net (1,293) (1,604)
Interest and dividend income (714) (2,076)
Interest expense 83,810 80,610
Changes in operating assets,
and liabilities
Decrease in receivables - trade 79,942 147,443
(Decrease) increase in payables
- trade (18,353) 918
Other, net (65,083) (36,176)
-------------------------------------------------- --------------------------------- -----------------------------------
Sub-total 582,029 781,011
Interest and dividends received 710 2,103
Interest paid (74,677) (71,918)
Income taxes paid (38,883) (185,288)
Net cash provided by operating
activities 469,178 525,908
-------------------------------------------------- --------------------------------- -----------------------------------
- Continued -
Consolidated Statements of Cash Flows (Continued)
(Millions of yen)
---------------------------------------------------- ----------------------
Nine-month period Nine-month period
ended ended December 31,
December 31, 2009 2010
------------------- ----------------------
April 1, 2009 to April 1, 2010 to
December 31, 2009 December 31, 2010
------------------------------- ------------------- ----------------------
Cash flows from investing
activities:
Purchase of property and
equipment, and
intangibles (183,048) (149,043)
Purchase of marketable
and investment
securities (24,827) (39,401)
Proceeds from sale of
marketable and
investment securities 17,380 25,123
Acquisition of interests
in subsidiaries newly
consolidated, net of
cash acquired (40) (701)
Other, net 4,939 2,378
------------------------------- ------------------- ----------------------
Net cash used in investing
activities (185,596) (161,644)
------------------------------- ------------------- ----------------------
Cash flows from financing
activities:
(Decrease) increase in
short-term borrowings,
net (121,645) 90,275
Increase in commercial
paper, net - 24,500
Proceeds from long-term
debt 261,808 197,900
Repayment of long-term
debt (352,398) (348,550)
Proceeds from issuance of
bonds 153,603 179,182
Redemption of bonds (51,673) (105,508)
Exercise of warrants 2,105 41
Proceeds from issuance
of shares to minority
shareholders 1,095 1,430
Cash dividends paid (2,673) (5,371)
Cash dividends paid to
minority shareholders (4,615) (14,917)
Proceeds from sale and
lease back of
equipment newly
acquired 55,441 54,667
Repayment of lease
obligations (69,589) (113,321)
Payments for additional
entrustment for debt
assumption - (75,000)
Payments for repurchase
of minority interests
and long-tem debt - (212,563)
Other, net (7,915) (13,481)
------------------------------- ------------------- ----------------------
Net cash used in financing
activities (136,457) (340,716)
------------------------------- ------------------- ----------------------
Effect of exchange
rate changes n cash
and cash equivalents (808) (4,756)
------------------------------- ------------------- ----------------------
Net increase in cash
and cash
equivalents 146,316 18,791
------------------------------- ------------------- ----------------------
Increase in cash and
cash equivalents due
to newly consolidated
subsidiaries 126 1,919
Decrease in
cash and cash
equivalents
due to
exclusion of
previously
consolidated
subsidiaries (807) (64)
Decrease in
cash and cash
equivalents
resulting from
corporate
separation - (1,837)
Cash and cash equivalents,
beginning of the period 457,644 687,681
------------------- ----------------------
Cash and cash equivalents, end
of the period 603,279 706,489
------------------------------- ------------------- ----------------------
(4) Significant Doubt about Going Concern Assumption
There are no applicable items for the nine-month period ended December 31, 2010.
(5) Significant Changes in Shareholder's Equity
There are no applicable items for the nine-month period ended December 31, 2010.
(6) Basis of Presentation of Consolidated Financial Statements
(Items described in "2. Others (3) Changes in accounting principles, procedures, disclosure methods, etc., used in the presentation of the consolidated financial statements" on page 19 are excluded.)
1. Changes in scope of consolidation
(1) Changes in scope of consolidation for the nine-month period ended December 31, 2010 are as follows:
<Increase>
11 companies Significant changes: SB Asia Infrastructure Fund L.P. and its 6 consolidated subsidiaries
<Decrease>
4 companies
(2) The number of consolidated subsidiaries after the changes:
116 companies
The Company owns 100% shares issued by WILLCOM, Inc. However, WILLCOM, Inc. is in the process of reorganization under the Corporate Reorganization Act and the Company does not have effective control over WILLCOM, Inc. Therefore, WILLCOM, Inc. is not treated as a subsidiary.
2. Changes in scope of equity method
(1) Changes in scope of equity method are as follows:
<Increase>
22 companies Significant changes: SB Asia Infrastructure Fund L.P.'s 12 affiliates under equity method USTREAM, Inc. Wireless City Planning Inc.
<Decrease>
6 companies Significant changes: SB Asia Infrastructure Fund L.P.
(2) The number of non-consolidated subsidiaries and affiliated companies under the equity method after the changes:
Non-consolidated subsidiaries under the equity method: 5 companies
Affiliated companies under the equity method: 75 companies
(Changes in accounting principles and procedures)
Effective April 1, 2010, certain subsidiaries of the Company that apply generally accepted accounting principles in the United States of America adopted Accounting Standards Codification (ASC) 810, Consolidations, formerly SFAS No. 167, Amendments to FASB Interpretation No. 46(R) (SFAS 167).
As a result of the application of the accounting standard, the scope of SB Asia Infrastructure Fund L.P. changed from an affiliate under equity method to a consolidated subsidiary.
The effect of this change is not material for the period ended December 31, 2010.
(7) Notes
(Consolidated Balance Sheets)
1. Accumulated depreciation of property and equipment
As of December 31, As of March 31,
2010 2010
million million
1,129,953 yen 1,048,584 yen
2. Additional entrustment for debt assumption of bonds (As of March 31, 2010)
SOFTBANK MOBILE has entrusted cash for the repayment of the straight bonds listed in the following table based on debt assumption agreements with a financial institution. The bonds are derecognized in the Company's consolidated balance sheets.
The trust had collateralized debt obligations ("CDO") issued by a Cayman Islands based Special-Purpose Company ("SPC"). The SPC contracted a credit default swap agreement secured by debt securities (corporate bonds), which referred to a certain portion of the portfolio consisting of 160 referenced entities. Since defaults (credit events under the agreement) of more than a certain number of referenced entities occurred JPY 75,000 million in total was reduced from the redemption amount of the CDO in April 2009 and an additional entrustment was required for the reduced amount.
As a result, for the amount required as the additional entrustment of JPY 75,000 million, a long term accounts payable was recognized as a recognized subsequent event (Type I subsequent event) and included in "Other liabilities" of long-term liabilities in the consolidated balance sheets, and it was recorded as special loss in the consolidated statements of income for the year ended March 31, 2009.
As of March 31, 2010, since the maturity for the additional entrustment was within one year, the accounts payable was included in "Accounts payable-other and accrued expenses" of current liabilities in the consolidated balance sheets.
Mizuho Corporate Bank, Ltd and the Company set up a credit line facility contract in order to support the repayments of the bonds issued by SOFTBANK MOBILE.
As of March 31, 2010
Subject Maturity Amount of transferred
Bonds Issue date date bond
---------------------- ---------------- ------------ ----------------------
Third Series August 19, August 19,
Unsecured Bond 1998 2010 25,000
Fifth Series August 25, August 25,
Unsecured Bond 2000 2010 25,000
Seventh Series September September
Unsecured Bond 22, 2000 22, 2010 25,000
---------------------- ---------------- ------------ ----------------------
Total 75,000 million yen
3. Secured loans
(1) Assets pledged as collateral for secured liabilities
[1] For short-term borrowings and long-term debt
Assets pledged as collateral and secured liabilities by consolidated subsidiaries are as follows:
As of December 31, As of March 31,
2010 2010
Assets pledged as collateral:
Cash and deposits 188,806 213,098
Notes and accounts receivable
- trade 284,639 273,231
Marketable securities 71,907 -
Buildings and structures 11,718 12,133
Telecommunications equipment 243,035 182,945
Telecommunications service
lines 76 86
Land 10,690 10,633
Investment securities and
investments in unconsolidated
subsidiaries
and affiliated companies - 81,701
Investments and other assets
- other assets 9,649 17,225
million million
Total 820,522 yen 791,054 yen
As of December 31, As of March 31,
2010 2010
Secured liabilities:
Accounts payable - trade 817 1,674
Short-term borrowings 91,176 1,928
Long - term debt 807,160 1,086,707
million million
Total 899,153 yen 1,090,310 yen
Notes:
1. Shares of Yahoo! Inc. placed as collateral for a loan procured by a subsidiary of the Company in the United States of America were transferred to "Marketable securities" since the maturity for the loan was within one year. These shares were recorded as "Investment securities and investments in unconsolidated subsidiaries and affiliated companies" as of March 30, 2010.
2. Consolidated subsidiaries shares owned by SOFTBANK MOBILE, SOFTBANK MOBILE shares owned by BB Mobile Corp. and BB Mobile Corp. shares owned by Mobiletech Corporation are pledged as collateral for long-term debt (totaled to JPY 986,702 million and JPY 807,160 million, as of March 31, 2010 and December 31, 2010, respectively) resulting from the acquisition of SOFTBANK MOBILE, in addition to the assets pledged as collateral above.
[2] For borrowings of investee
Assets pledged as collateral for third party's liability are as follows:
As of December 31, As of March 31,
2010 2010
Assets pledged as collateral:
Investment securities and - million 2,000 million
investments in unconsolidated yen yen
subsidiaries and affiliated
companies
(2) Borrowings by securitization of receivables
[1] The securitization of installment sales receivable of SOFTBANK MOBILE
Cash proceeds through the securitization of installment sales receivables of SOFTBANK MOBILE, excluding that qualify for derecognition criteria of a financial asset, were included in "Short-term borrowings" (JPY 175,359 million and JPY 80,905 million, as of March 31, 2010 and December31, 2010, respectively) and "Long-term debt" (JPY 44,454 million and JPY 1,681 million, as of March 31, 2010 and December 31, 2010, respectively). The amounts of the senior portion of the securitized installment sales receivables (JPY 219,813 million and JPY 82,586 million, as of March 31, 2010 and December 31, 2010, respectively) were included in "Notes and account receivable-trade", along with the subordinated portion held by the SOFTBANK MOBILE. The trustee raised the funds through asset backed loans based on the receivables.
[2] The securitization of receivables for ADSL services of SOFTBANK BB
SOFTBANK BB transferred its senior portion of the securitized present and future receivables for ADSL services* to a SPC (a consolidated subsidiary), and the SPC raised the funds through asset backed loans based on the receivables (JPY 10,504 million and JPY 4,585 million, as of March 31, 2010 and December 31, 2010, respectively) from a financial institution. Cash proceeds through the asset backed loans are included in the "Short-term borrowings" (JPY 6,660 million and JPY 4,585 million, as of March 31, 2010 and December 31, 2010, respectively) and "Long-term debt" (JPY 3,844 million, as of March 31, 2010).
Note:* A certain portion of present and future (through March 2012) receivables realized through the ADSL services provided by SOFTBANK BB.
(3) Borrowings by security lending agreements
Cash receipts as collateral from financial institutions, to whom the Company lent a portion of shares in its subsidiary under security lending agreements are presented as follows:
As of December 31,
2010 As of March 31, 2010
million million
Short-term borrowings 114,000 yen 114,000 yen
(4) Others
A consolidated subsidiary purchased assets by installments, and the assets of which ownership was not transferred to the consolidated subsidiary and its installment payables are as follows:
As of December 31, As of March 31,
2010 2010
Assets of which ownership
is not transferred:
Buildings and
structures 60 35
Telecommunications
equipment 44,640 16,710
Construction in
progress 1,082 1,538
Software 10,917 4,755
Other intangibles 150 12
Investments and other
assets - other
assets 348 240
million million
Total 57,201 yen 23,292 yen
As of December 31, As of March 31,
2010 2010
Installment payables:
Accounts payable - other
and accrued expenses 8,671 4,148
Long term liability - other
liabilities 53,652 20,741
million million
Total 62,324 yen 24,889 yen
4. Guarantee obligation (As of December 31, 2010)
The Company has entered into a sponsor agreement with WILLCOM, Inc. Under the sponsor agreement, the Company provides necessary financial support to WILLCOM, Inc. for business operation and execution of the rehabilitation plan. The agreement is effective until WILLCOM, Inc. completes the payment of its reorganization clams and reorganization security interests amounting to JPY 41,000 million.
(Consolidated Statements of Income)
For the nine-month period ended December 31, 2009 and 2010 (From April 1 to December 31, 2009 and 2010)
1. Selling, general and administrative expenses
Nine-month period Nine-month period
ended ended December
December 31, 2009 31, 2010
Sales commission and
sales promotion million million
expense 330,509 yen 377,679 yen
Provision for
allowance for
doubtful accounts 11,390 9,994
2. Unrealized appreciation on valuation of investments and loss on sale of investments at subsidiaries in the United States of America, net
Certain subsidiaries of the Company in the United States of America qualify as investment companies under the provisions set forth in Financial Services - Investment Companies of the FASB Accounting Standards Codification Topic 946(ASC 946) and account for investment securities in accordance with ASC 946.
The net changes in the fair value of the investments are recorded as unrealized appreciation on valuation of investments and loss on sale of investments at subsidiaries in the U.S., net and loss on sale of investments, computed based on the acquisition cost, is also included in this account. The unrealized appreciation on valuation of investments and loss on sale of investments included in unrealized appreciation on valuation of investments and loss on sale of investments at subsidiaries in the U.S., net in the consolidated statements of income are as follows:
Nine-month period Nine-month period
ended ended
December 31, 2009 December 31, 2010
Unrealized
appreciation on
valuation of
investment at
subsidiaries in the
U.S.,net 1,074 124
Loss on sale of
investments at
subsidiaries in the
U.S.,net (1,625) (495)
------------ ----------- --------------
million million
Total (551) yen (371) yen
3. Loss on retirement of non current assets (For the nine-month period ended December 31, 2009)
(1) Loss on retirement of non current assets related to the termination of second-generation mobile phone services
Certain pieces of telecommunications equipment being used exclusively for second-generation (2G) mobile phone services in the Mobile communications business are scheduled to be removed upon termination of 2G mobile phone services in March, 2010. These pieces of telecommunications equipment are being depreciated under the straight-line method over the period commencing from the acquisition of Vodafone K.K. (currently SOFTBANK MOBILE) in April 2006 to the scheduled termination of 2G services in March, 2010.
In June 2009, a new frequency for the next generation mobile phone services was assigned to SOFTBANK MOBILE. The telecommunications equipment being used for 2G mobile phone services except for the aforementioned equipment was reviewed to determine which pieces would be used for the next generation mobile phone services and which pieces will be removed. For the nine-month period ended December 31, 2009, loss on retirement of non current assets was recorded for the assets to be additionally removed. As the assets to be removed upon termination of 2G services were specified, it became possible to reasonably estimate the removal costs. These removal costs were included in loss on retirement of non current assets in the consolidated statements of income for the nine-month period ended December 31, 2009.
The loss on retirement of non current assts of JPY 24,338 million consists of JPY 17,884 million for equipment removal cost and JPY 6,453 million for loss on retirement of telecommunications equipment.
(2) Loss on retirement of non current assets related to the telecommunications equipment for third-generation mobile phone
SOFTBANK MOBILE replaced certain pieces of existing wireless network equipment in order to increase efficiency of the future capital expenditures and reduce maintenance costs. As a result, the previously used wireless network equipment for third-generation mobile phone services was retired, and the total carrying amounts of the retired assets and the related removal costs were recorded as loss on retirement of non current assets in the consolidated statements of income for the nine-month period ended December 31, 2009. The loss on retirement of non current assets of JPY 22,555 million consists of JPY 13,719 million for telecommunications equipment, JPY 8,726 million for software, and JPY 110 million for removal costs.
4. Valuation loss on option (For the nine-month period ended December 31 2010)
The Company has entered into agreements containing a put option and a call option for shares of Wireless City Planning Inc., which is the Company's affiliate under equity method, with its shareholders other than the Company. The put option is the other shareholders' right to sell the shares to the Company and the call option is the Company's right to buy the shares from the other shareholders. These options are measured at fair value and the valuation loss is recorded.
5. Income taxes - corrections (For the nine-month period ended December 31, 2010)
Yahoo Japan received a correction notice from Tokyo Regional Taxation Bureau on June 30, 2010. Yahoo Japan acquired all the shares of SOFTBANK IDC Solutions Corp. from the Company in February 2009 and merged it in March 2009. At the merger, loss carryforwards held by SOFTBANK IDC Solutions Corp. were carried and utilized by Yahoo Japan. The notice corrects this tax treatment insisting that the treatment was to reduce Yahoo Japan's income taxes inappropriately. Additional income taxes of JPY 26,450 million were recorded as income taxes - correction and paid for the period ended December 31, 2010. Yahoo Japan submitted a request for reconsideration to the national tax tribunal, will separately bring legal suit depending on the situation, and thoroughly argue its position on this matter.
For the three-month period ended December 31, 2009 and 2010 (From October 1 to December 31, 2009 and 2010)
1. Selling, general and administrative expenses
Three-month period Three-month period
ended ended
December 31, 2009 December 31, 2010
Sales commission
and sales
promotion million million
expense 106,602 yen 135,932 yen
Provision for
allowance for
doubtful
accounts 2,523 2,547
2. Unrealized loss on valuation of investments and gain (loss) on sale of investments at subsidiaries in the United States of America, net
Certain subsidiaries of the Company in the United States of America qualify as investment companies under the provisions set forth in Financial Services - Investment Companies of the FASB Accounting Standards Codification Topic 946(ASC 946) and account for investment securities in accordance with ASC 946.
The net changes in the fair value of the investments are recorded as unrealized loss on valuation of investments and gain (loss) on sale of investments at subsidiaries in the U.S., net and gain (loss) on sale of investments, computed based on the acquisition cost, is also included in this account. The unrealized loss on valuation of investments and gain (loss) on sale of investments included in unrealized loss on valuation of investments and gain (loss) on sale of investments at subsidiaries in the U.S., net in the consolidated statements of income are as follows:
Three-month period Three-month period
ended ended December
December 31, 2009 31, 2010
Unrealized loss on
valuation of
investment at
subsidiaries in the
U.S.,net (264) (213)
Gain (loss) on sale
of investments at
subsidiaries in the
U.S.,net (631) 587
---------- ---------- ------------
million million
Total (896) yen 374 yen
3. Loss on retirement of non current assets (For the three-month period ended December 31, 2009)
(1) Loss on retirement of non current assets related to the termination of second-generation mobile phone services
Certain pieces of telecommunications equipment being used exclusively for second-generation (2G) mobile phone services in the Mobile communications business are scheduled to be removed upon termination of 2G mobile phone services in March, 2010. These pieces of telecommunications equipment are being depreciated under the straight-line method over the period commencing from the acquisition of Vodafone K.K. (currently SOFTBANK MOBILE) in April 2006 to the scheduled termination of 2G services in March, 2010.
In June 2009, a new frequency for the next generation mobile phone services was assigned to SOFTBANK MOBILE. The telecommunications equipment being used for 2G mobile phone services except for the aforementioned equipment was reviewed to determine which pieces would be used for the next generation mobile phone services and which pieces will be removed. For the three-month period ended December 31, 2009, loss on retirement of non current assets was recorded for the assets to be additionally removed. As the assets to be removed upon termination of 2G services were specified, it became possible to reasonably estimate the removal costs. These removal costs were included in loss on retirement of non current assets in the consolidated statements of income for the three-month period ended December 31, 2009.
The loss on retirement of non current assts of JPY 24,338 million consists of JPY 17,884 million for equipment removal cost and JPY 6,453 million for loss on retirement of telecommunications equipment.
(2) Loss on retirement of non current assets related to the telecommunications equipment for third-generation mobile phone
SOFTBANK MOBILE replaced certain pieces of existing wireless network equipment in order to increase efficiency of the future capital expenditures and reduce maintenance costs. As a result, the previously used wireless network equipment for third-generation mobile phone services was retired, and the total carrying amounts of the retired assets and the related removal costs were recorded as loss on retirement of non current assets in the consolidated statements of income for the three-month period ended December 31, 2009. The loss on retirement of non current assets of JPY 22,555 million consists of JPY 13,719 million for telecommunications equipment, JPY 8,726 million for software, and JPY 110 million for removal costs.
4. Valuation loss on option (For the three-month period ended December 31, 2010)
The Company has entered into agreements containing a put option and a call option for shares of Wireless City Planning Inc., which is the Company's affiliate under equity method, with its shareholders other than the Company. The put option is the other shareholders' right to sell the shares to the Company and the call option is the Company's right to buy the shares from the other shareholders. These options are measured at fair value and the valuation loss is recorded.
(Consolidated Statements of Cash Flows)
1. Reconciliation of cash and cash equivalents to the amounts presented in the accompanying consolidated balance sheets
As of December 31, As of December 31,
2009 2010
million million
Cash and deposits 605,749 yen 708,768 yen
Marketable securities 4,149 76,430
Time deposits with original
maturity over three months (2,800) (2,608)
Stocks and bonds with original
maturity over three months (3,818) (76,099)
--------- ---------
million million
Cash and cash equivalents 603,279 yen 706,489 yen
2. Income taxes paid
Payment for income taxes-corrections of JPY 26,450 million based on the receipt of the correction notice described in "(7) Notes (Consolidated Statements of Income) 5. Income taxes-corrections" are included in "Income taxes paid" in the consolidated statements of cash flows for the period ended December 31, 2010.
3. Scope of Purchase of property and equipment, and intangibles in the consolidated statements of cash flows
"Purchase of property and equipment, and intangibles" are comprised of cash outflows from purchasing property and equipment, and intangible assets (excluding goodwill) and long-term prepaid expenses.
4. Proceeds from sale and lease back of equipment newly acquired
Once SOFTBANK MOBILE and others purchase telecommunications equipment for the purpose of assembly, installation and inspection, SOFTBANK MOBILE and others sell the equipment to lease companies for sale and lease back purposes. The leased asset and lease obligation are recorded in the consolidated balance sheets.
The cash outflows from the purchase of the equipment from vendors are included in "Purchase of property and equipment, and intangibles" and the cash inflows from the sale of the equipment to lease companies are included in "Proceeds from sale and lease back of equipment newly acquired."
5. Payments for additional entrustment for debt assumption
Additional entrustment of JPY 75,000 million recorded as special loss in the consolidated statements of income for the year ended March 31, 2009 reached its maturity date for the period ended December 31, 2010. The amount of payment was recorded as "Payments for additional entrustment for debt assumption" in the consolidated statements of cash flows.
6. Payments for repurchase of minority interests and long-tem debt
The Company acquired all class 1 preferred stock-series 1, stock acquisition rights issued by BB Mobile Corp. to Vodafone International Holdings B.V. and all principal and accrued interest of a long-term loan receivable, which was recorded as "Long-term debt" in the Company's consolidated balance sheets, from SOFTBANK MOBILE Corp. to Vodafone Overseas Finance Limited for the total amount of JPY 412,500 million during the period ended December 31, 2010. Of the total amount of the acquisition, the amount paid during the period ended December 31, 2010 amounting to JPY 212,500 million, together with related expenses associated with the acquisition were recorded as "Payments for repurchase of minority interest and long-tem debt." The remaining amount of JPY 200,000 million is scheduled to be paid in April 2012.
(Segment Information)
1. Business segment information
For the nine-month period ended December 31, 2009 (From April 1, 2009 to December 31, 2009)
(Millions of yen)
Elimination
Mobile Broadband Fixed-line Internet or
Communications Infrastructure Telecommunications Culture e-Commerce Others Total Corporate Consolidated
---------------- --------------- --------------- ------------------- --------- ----------- -------- ---------- ------------ -------------
Net sales
(1) Customers 1,256,766 152,154 225,912 196,419 165,976 48,074 2,045,304 - 2,045,304
(2)
Inter-segment 7,487 3,174 32,774 3,442 8,573 13,352 68,806 (68,806) -
---------------- --------------- --------------- ------------------- --------- ----------- -------- ---------- ------------ -------------
Total 1,264,254 155,328 258,687 199,862 174,550 61,426 2,114,110 (68,806) 2,045,304
---------------- --------------- --------------- ------------------- --------- ----------- -------- ---------- ------------ -------------
Operating
income (loss) 215,112 39,409 14,344 98,526 3,790 (1,341) 369,841 (3,522) 366,319
---------------- --------------- --------------- ------------------- --------- ----------- -------- ---------- ------------ -------------
For the three-month period ended December 31, 2009 (From October 1, 2009 to December 31, 2009)
(Millions of yen)
Elimination
Mobile Broadband Fixed-line Internet or
Communications Infrastructure Telecommunications Culture e-Commerce Others Total Corporate Consolidated
---------------- --------------- --------------- ------------------- --------- ----------- -------- -------- ------------ -------------
Net sales
(1) Customers 429,353 48,808 74,345 67,467 61,474 14,578 696,028 - 696,028
(2)
Inter-segment 2,708 982 11,732 1,264 2,909 4,215 23,812 (23,812) -
---------------- --------------- --------------- ------------------- --------- ----------- -------- -------- ------------ -------------
Total 432,061 49,791 86,077 68,732 64,384 18,793 719,841 (23,812) 696,028
---------------- --------------- --------------- ------------------- --------- ----------- -------- -------- ------------ -------------
Operating
income (loss) 83,336 12,178 6,514 34,372 1,628 (1,180) 136,849 (1,152) 135,697
---------------- --------------- --------------- ------------------- --------- ----------- -------- -------- ------------ -------------
Notes:
1. Business segments are categorized primarily based on the nature of business operations, type of services, and similarity of sales channels which the SOFTBANK Group uses for its internal management purposes.
2. The main business segments are as follows:
Mobile Communications: Provision of mobile communication services and sale of mobile phones accompanying the services etc.
Broadband Infrastructure: Provision of ADSL and fiber-optic high-speed Internet connection service, IP telephony service, and provision of contents etc.
Fixed-line Telecommunications: Provision of fixed-line telecommunications service etc.
Internet Culture: Internet-based advertising operations, portal business, and auction business etc.
e-Commerce: Distribution of PC software and such hardware as PCs and peripherals, enterprise solutions, and e-commerce businesses, including business transaction platform (B2B) and consumer-related e-commerce (B2C) etc.
Others: Technology Services, Media & Marketing, Overseas Funds, and other businesses
2. Geographic segment information
For the nine-month period ended December 31, 2009 (From April 1, 2009 to December 31, 2009)
(Millions of yen)
Elimination
North or
Japan America Others Total Corporate Consolidated
----------------- --------- ------- ------ --------- ----------- ------------
Net sales
(1) Customers 2,038,725 762 5,816 2,045,304 - 2,045,304
(2)
Inter-segment 855 - - 855 (855) -
---------------- --------- ------- ------ --------- ----------- ------------
Total 2,039,580 762 5,816 2,046,159 (855) 2,045,304
---------------- --------- ------- ------ --------- ----------- ------------
Operating income
(loss) 371,928 (749) (407) 370,772 (4,452) 366,319
----------------- --------- ------- ------ --------- ----------- ------------
For the three-month period ended December 31, 2009 (From October 1, 2009 to December 31, 2009)
(Millions of yen)
Elimination
North or
Japan America Others Total Corporate Consolidated
----------------- ------- ------- ------ ------- ----------- ------------
Net sales
(1) Customers 693,823 237 1,968 696,028 - 696,028
(2)
Inter-segment 629 - - 629 (629) -
---------------- ------- ------- ------ ------- ----------- ------------
Total 694,452 237 1,968 696,657 (629) 696,028
---------------- ------- ------- ------ ------- ----------- ------------
Operating income
(loss) 137,717 (278) (135) 137,304 (1,606) 135,697
----------------- ------- ------- ------ ------- ----------- ------------
Notes:
1. Net sales by geographic region are recognized based on geographic location of the operation.
2. Significant countries in each region are as follows:
North America: United States of America and Canada
Others: Europe, Korea, China, Singapore, and others
3. Overseas sales
Disclosure of overseas sales for the three-month and nine-month period ended December 31, 2009 was omitted because the total overseas sales were less than 10% of total consolidated sales.
4. Reportable segment information
(Additional Information)
"Accounting Standard for Disclosures about Segments of an Enterprise and Related information" (ASBJStatement No. 17, March 27, 2009) and "Guidance on Accounting Standard for Disclosures about Segments of an Enterprise and Related information" (ASBJ Guidance No. 20, March 21, 2008) were applied for the period ended December 31, 2010.
(1) Over view of reportable segments
Reportable segments of the Company are components of an entity about which separate financial information is available and such information is evaluated regularly by the board of directors in deciding how to allocate resources and in assessing performance.
The Company as a pure holding company assigns core operating companies to primary businesses. The core operating companies develop comprehensive business strategies for the products and services and perform business activities.
Accordingly, the Company's segments are separated based on the products and services provided by the core operating companies, and 4 segments, "Mobile Communications," "Broadband Infrastructure," "Fixed-line Telecommunications," and "Internet Culture" are treated as reportable segments.
"Mobile Communications" business provides mobile communication services and sale of mobile phones accompanying the services. "Broadband Infrastructure" business provides high-speed Internet connection service IP telephony service, and contents. "Fixed-line Telecommunications" business provides fixed-line telecommunication services. "Internet Culture" business provides Internet-based advertising operations, e-commerce site operations such as Yahoo! Auctions and Yahoo! Shopping.
(2) Net sales and segment income or loss of reportable segments
For the nine-month period ended December 31, 2010 (From April 1, 2010 to December 31, 2010) (Millions of yen)
Reconciliations Amounts in
to consolidated consolidated
statement of statement of
Reportable segments Other Total income income
---------------------------------------------------------------------------- -------- ---------- ---------------- -------------
Mobile Broadband Fixed-line Internet
Communications Infrastructure Telecommunications Culture Subtotal
--------------- --------------- --------------- ------------------- --------- ---------- -------- ---------- ---------------- -------------
Net sales
Customers 1,451,042 139,739 221,872 206,934 2,019,590 230,311 2,249,901 - 2,249,901
Inter-segment 7,578 4,746 41,400 3,231 56,956 24,878 81,835 (81,835) -
---------------- --------------- --------------- ------------------- --------- ---------- -------- ---------- ---------------- -------------
Total 1,458,620 144,485 263,273 210,166 2,076,547 255,189 2,331,737 (81,835) 2,249,901
---------------- --------------- --------------- ------------------- --------- ---------- -------- ---------- ---------------- -------------
Segment
income 314,486 33,525 23,889 110,669 482,571 8,048 490,619 (8,459) 482,159
---------------- --------------- --------------- ------------------- --------- ---------- -------- ---------- ---------------- -------------
Notes:
1. The PC software and peripherals distribution business and Fukuoka SOFTBANK HAWKS related business are included in "Other."
2. Amounts in the column "Reconciliations to consolidated statement of income" of JPY (8,459) million represents elimination of intersegment transactions and expenses of the corporate division of the Company, which totaled JPY 758 million and JPY (9,218) million, respectively.
3. Segment income is adjusted with operating income in the consolidated statements of income.
For the three-month period ended December 31, 2010 (From October 1, 2010 to December 31, 2010) (Millions of yen)
Reconciliations Amounts in
to consolidated consolidated
statement of statement of
Reportable segments Other Total income income
--------------------------------------------------------------------------- ------- -------- ---------------- -------------
Mobile Broadband Fixed-line Internet
Communications Infrastructure Telecommunications Culture Subtotal
--------------- --------------- --------------- ------------------- --------- --------- ------- -------- ---------------- -------------
Net sales
Customers 515,997 44,906 75,034 71,677 707,617 77,262 784,879 - 784,879
Inter-segment 2,578 2,209 15,351 1,023 21,162 7,825 28,988 (28,988) -
---------------- --------------- --------------- ------------------- --------- --------- ------- -------- ---------------- -------------
Total 518,576 47,115 90,386 72,701 728,780 85,087 813,867 (28,988) 784,879
---------------- --------------- --------------- ------------------- --------- --------- ------- -------- ---------------- -------------
Segment
income 107,283 10,825 10,285 39,029 167,422 2,134 169,557 (2,919) 166,637
---------------- --------------- --------------- ------------------- --------- --------- ------- -------- ---------------- -------------
Notes:
1. The PC software and peripherals distribution business and Fukuoka SOFTBANK HAWKS related business are included in "Other."
2. Amounts in the column "Reconciliations to consolidated statement of income" of JPY (2,919) million represents elimination of intersegment transactions and expenses of the corporate division of the Company, which totaled JPY 119 million and JPY (3,039) million, respectively.
3. Segment income is adjusted with operating income in the consolidated statements of income.
(Leases)
Finance lease transactions
(As a lessee)
(1) Finance leases in which the ownership of leased assets is transferred to lessees at the end of lease periods
[1] Details of lease assets are as follows:
Tangible assets, mainly telecommunications equipment in the Mobile Communications segment.
[2] Depreciation method for lease assets
The depreciation method is the same as the method used for fixed assets possessed by each subsidiary and the Company.
(2) Finance leases in which the ownership of leased assets is not transferred to lessees at the end of lease periods
[1] Details of lease assets are as follows:
Tangible assets, mainly telecommunications equipment in the Fixed-line Telecommunications segment.
[2] Depreciation method for lease assets
The straight-line method is adopted over the period of the finance leases, assuming no residual value.
Lease transactions contracted before April 1, 2008 are continuously permitted to be accounted for as operating lease transactions, and as if capitalized information is as follows:
(1) Amounts equivalent to acquisition costs, accumulated depreciation, and accumulated impairment loss of leased property for each period:
As of December 31, As of March 31,
2010 2010
Telecommunications equipment
and
telecommunications service
lines
Acquisition cost 136,743 141,093
Accumulated depreciation (77,735) (67,776)
Accumulated impairment
loss (29,882) (33,232)
million million
Net leased property 29,126 yen 40,084 yen
Buildings and structures
Acquisition cost 46,715 46,730
Accumulated depreciation (13,654) (11,909)
Accumulated impairment
loss - -
----------------------------- ----------- ------- -------- -------
million million
Net leased property 33,061 yen 34,820 yen
Property and equipment -
others
Acquisition cost 14,511 16,113
Accumulated depreciation (10,683) (10,223)
Accumulated impairment
loss (1,078) (1,242)
----------------------------- ----------- ------- -------- -------
million million
Net leased property 2,750 yen 4,647 yen
Intangible assets
Acquisition cost 8,602 9,070
Accumulated depreciation (7,586) (6,669)
Accumulated impairment
loss (171) (290)
----------------------------- ----------- ------- -------- -------
million million
Net leased property 845 yen 2,110 yen
Total
Acquisition cost 206,574 213,007
Accumulated depreciation (109,659) (96,579)
Accumulated impairment
loss (31,131) (34,765)
----------------------------- ----------- ------- -------- -------
million million
Net leased property 65,783 yen 81,662 yen
Current portion of long-term prepaid expenses related to a lease contract, in which the contract term and payment term are different, in the amount of JPY 670 million and JPY 613 million as of March 31, 2010 and December 31, 2010 are included in "Other current assets" in the consolidated balance sheets. Long-term prepaid expenses relating to the lease contract as of March 31, 2010 and December 31, 2010 were JPY 25 157 million and JPY 26,135 million, respectively and are included in "Other assets" of investments and other assets in the consolidated balance sheets.
(2) Obligations under finance lease at the end of each period:
As of December 31, As of March 31,
2010 2010
Due within one year 19,314 26,191
Due after one year 65,011 79,431
--------------------------- --------- --------- -------- -------
million million
Total 84,326 yen 105,623 yen
Balance of allowance for
impairment loss on leased million million
property 5,384 yen 10,776 yen
(3) Lease payments, payment of the lease obligation for impaired leased property, amounts equivalent to depreciation, and interest expense for each period:
From April 1 to December 31, 2009 and 2010
Nine-month period Nine-month period
ended ended
December 31, 2009 December 31, 2010
million million
Lease payments 28,345 yen 22,722 yen
Payment of the
lease
obligation for
impaired leased
property 6,600 5,391
Depreciation
expense 18,376 14,946
Interest expense 6,669 5,264
From October 1 to December 31, 2009 and 2010
Three-month period Three-month period
ended ended
December 31, 2009 December 31, 2010
million million
Lease payments 9,299 yen 7,431 yen
Payment of the
lease
obligation
for impaired
leased
property 2,200 1,594
Depreciation
expense 6,118 4,857
Interest
expense 2,117 1,639
(4) Calculation method used to determine the amount equivalent to depreciation and interest expense:
The amount equivalent to depreciation is computed using the straight-line method over the period of the finance leases, assuming no residual value.
The amount equivalent to interest expense is calculated by subtracting acquisition costs from the total lease payments and allocated over the lease periods based on the interest method.
(Investment in Debt and Equity Securities)
As of March 31, 2010
1. Held-to-maturity debt securities
(Millions of yen)
Classification As of March 31, 2010
------------------------------
Carrying Amount Fair Value Differences
----------------------------- --------------- ---------- -----------
Corporate bonds 1,499 1,344 (155)
Total 1,499 1,344 (155)
----------------------------- --------------- ---------- -----------
2. Marketable and investment securities at fair value
(Millions of yen)
Classification As of March 31, 2010
------------------------------
Investment
Carrying Amount Cost Differences
--- ---------------------------- --------------- ---------- -----------
(1) Equity securities 101,095 30,351 70,743
(2) Debt securities 28,957 26,673 2,283
(3) Others 3,408 3,064 344
------------------------------
Total 133,460 60,089 73,371
--- ---------------------------- --------------- ---------- -----------
Note: Investment securities held by certain subsidiaries in the United States of America which apply ASC 946 are described in below "3. Investment securities evaluated at fair value under the provisions set forth in Financial Services- Investment Companies of the FASB Accounting Standards Codification."
3. Investment securities evaluated at fair value under the provisions set forth in Financial Services - Investment Companies of the FASB Accounting Standards Codification
Certain subsidiaries of the Company in the United States of America qualify as investment companies under the provisions set forth in Financial Services - Investment Companies of the FASB Accounting Standards Codification Topic 946(ASC 946) and account for investment securities in accordance with ASC946.
The carrying amounts of the investment securities at fair value recorded in the consolidated balance sheets as of March 31, 2010 were as follows:
As of March 31, 2010
Carrying amounts of investment securities at fair value: 15,316 million yen
As of December 31, 2010
1. Held-to-maturity debt securities
(Millions of yen)
Classification As of December 31, 2010
------------------------------
Carrying Amount Fair Value Differences
----------------------------- --------------- ---------- -----------
Corporate bonds 1,795 1,601 (194)
Total 1,795 1,601 (194)
----------------------------- --------------- ---------- -----------
2. Marketable and investment securities at fair value
(Millions of yen)
Classification As of December 31, 2010
------------------------------
Investment
Carrying Amount Cost Differences
--- ---------------------------- --------------- ---------- -----------
(1) Equity securities 108,569 45,325 63,243
(2) Debt securities 31,618 27,174 4,444
(3) Others 3,024 2,957 66
------------------------------
Total 143,212 75,457 67,754
--- ---------------------------- --------------- ---------- -----------
Note: Investment securities held by certain subsidiaries in the United States of America which apply ASC 946 are described in below "3. Investment securities evaluated at fair value under the provisions set forth in Financial Services- Investment Companies of the FASB Accounting Standards Codification."
3. Investment securities evaluated at fair value under the provisions set forth in Financial Services - Investment Companies of the FASB Accounting Standards Codification
Certain subsidiaries of the Company in the United States of America qualify as investment companies under the provisions set forth in Financial Services - Investment Companies of the FASB Accounting Standards Codification Topic 946(ASC 946) and account for investment securities in accordance with ASC946.
The carrying amounts of the investment securities at fair value recorded in the consolidated balance sheets as of December 31, 2010 were as follows:
As of December 31, 2010
Carrying amounts of investment securities at fair value: 11,800 million yen
(Per Share Data)
1. Shareholders' equity per share
As of
December 31, As of
2010 March 31, 2010
-------------------------------------- ------------ ---------------
Shareholders' equity per share (yen) 527.23 434.74
-------------------------------------- ------------ ---------------
2. Net income per share and basic data for computation of the per share data
For the nine-month period ended December 31, 2009 and 2010
April 1, 2009 April 1, 2010
to to
December 31, December 31,
2009 2010
------------------------------------------------ ------------- -------------
Net income per share - primary (yen) 87.68 131.47
------------------------------------------------ ------------- -------------
Net income per share - diluted (yen) 84.55 126.32
------------------------------------------------ ------------- -------------
April 1, 2009 April 1, 2010
to to
Basic data for computation of the per December 31, December 31,
share data 2009 2010
------------------------------------------------ ------------- -------------
1. Net income (in millions of yen) 94,861 142,299
------------------------------------------------ ------------- -------------
2. Amounts not allocated to shareholders
(in millions of yen) - -
-------------
3. Net income allocated to common stock
outstanding
(in millions of yen) 94,861 142,299
------------------------------------------------ ------------- -------------
4. Weighted average number of common
stock outstanding
during each period (unit: thousand of
shares) 1,081,880 1,082,344
------------------------------------------------ ------------- -------------
5. Adjustment for net income used to
calculate net income per share - diluted
(in millions of yen)
- Interest expense (net of tax) 722 722
- Adjustments for net income used to
calculate diluted net income
per share in consolidated subsidiaries
and affiliated companies (22) (197)
------------- -------------
-Total 700 525
------------------------------------------------ -------------
6. Increase of common stock used to
calculate net income per share- diluted
(unit: thousand of shares) 48,394 48,297
------------- -------------
7. Significant changes in residual - -
securities which do not dilute net income
per share
------------------------------------------------ ------------- -------------
For the three-month period ended December 31, 2009 and 2010
October 1, 2009 October 1, 2010
to to
December 31, December 31,
2009 2010
-------------------------------------------- --------------- ---------------
Net income per share - primary (yen) 22.28 60.48
-------------------------------------------- --------------- ---------------
Net income per share - diluted (yen) 21.53 58.04
-------------------------------------------- --------------- ---------------
October 1, 2009 October 1, 2010
to to
Basic data for computation of the per December 31, December 31,
share data 2009 2010
-------------------------------------------- --------------- ---------------
1. Net income (in millions of yen) 24,110 65,460
-------------------------------------------- --------------- ---------------
2. Amounts not allocated to shareholders
(in millions of yen) - -
---------------
3. Net income allocated to common stock
outstanding
(in millions of yen) 24,110 65,460
-------------------------------------------- --------------- ---------------
4. Weighted average number of common
stock outstanding
during each period (unit: thousand of
shares) 1,082,313 1,082,348
-------------------------------------------- --------------- ---------------
5. Adjustment for net income used to
calculate net income per share - diluted
(in millions of yen)
- Interest expense (net of tax) 240 240
- Adjustments for net income used
to calculate diluted net income
per share in consolidated
subsidiaries and affiliated
companies (6) (80)
--------------- ---------------
-Total 233 160
-------------------------------------------- ---------------
6. Increase of common stock used to
calculate net income per share-
diluted (unit: thousand of shares) 48,303 48,296
--------------- ---------------
7. Significant changes in residual - -
securities which do not dilute net
income per share
-------------------------------------------- --------------- ---------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
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