Earnings Results for the Fiscal Year Ended March 31, 2007 Analyst Meeting. May 9, 2007 SOFTBANK CORP.

Transcription

1 Earnings Results for the Fiscal Year Ended March 31, 27 Analyst Meeting May 9, 27 SOFTBANK CORP. 1

2 Content Items Page Consolidated P/L Analysis 4 Accounting Consolidated B/S Analysis 17 Consolidated CF Analysis 24 CAPEX Analysis 28 Financial Activities 33 Finance Interest-bearing Debt Status 35 Overview of Mobile Business Acquisition Financing 54 Investment Results 61 Broadband Infrastructure Segment 66 Operations Fixed-line Telecommunications Segment 78 Mobile Communications Segment 91 Appendices 115 2

3 Accounting Kazuko Kimiwada General Manager Accounting, Internal Control SOFTBANK CORP. 3

4 - Consolidated P/L Analysis - Consolidated B/S Analysis - Consolidated CF Analysis - CAPEX Analysis 4

5 Consolidated P/L Summary Key factors for P/L fluctuation <PL-1> 1: Net sales increase Mobile: SOFTBANK Mobile Corp.(SBM) included for 11 months from May 26 and amounted to JPY 1,442 bn. With steady net additions, customer base expanded. Broadband: Dropped JPY 4.2 bn, or 2% yoy due to a one-off factor of sale of modem rental business, still ADSL business P/L was solid due to the increase of the number of billed users and ARPU of Yahoo! BB ADSL. (Refer to P117 for details) Fixed-line: Increased corporate customers. Grew by JPY 19.8 bn, or 6% yoy with increase of corporate Otoku Line and business transfer from Heisei Denden. Internet Culture: Increased by JPY 38 bn, or 24% yoy as advertisement sales on sponsor site and commission of Yahoo! Auctions for consumers grew. 2: Operating income increase Mobile: JPY bn for 11 months. Customer acquisition cost dropped significantly due to full-fledged installment sales started in the 2 nd half. Broadband: Increased a mere JPY 6.1 bn, or 3% due to a one-off factor of sale of modem rental business, still recurring profitability improved due to the increase of the number of billed users of Yahoo! BB ADSL in addition to cost cut of FTTH business (Hikari Home) and of BBTV business. (Refer to P117 for details) Fixed-line: Profitability improved with sales strategy change of Otoku Line direct voice service business run by SOFTBANK TELECOM Corp. Up by JPY 22.1 bn yoy. Internet Culture: Sales overall were robust. Advertisement business was especially good. Up by JPY 22.3 bn, 3% yoy. 3: Non-operating income fluctuation Financing related to SBM acquisition pushed interest expense by JPY 52.5 bn yoy. Recorded additional borrowing related commission of JPY 28.7 bn. Equity in earnings under equity method decreased by JPY 7.3 bn yoy associated with sale of all the shares held in SBI Holdings, Inc. in Aug 26. 4: Breakdown for special income/loss Special income: Gain on sale of investment securities of JPY 84.1 bn through sale of all shares held in SBI Holdings and sale of partial shares in cyber communications inc. Special loss: Bond redemption of JPY 1.4 bn for repurchase and redemption of Euro Notes due 211 of SOFTBANK and execution of trust-based debt assumption of straight corporate bond of SBM FY26 FY27 variance Net Sales 1,18,665 2,544,219 1,435,553 Operating income 62, ,65 28,766 (Operating margin) 5.6% 1.7% - EBITDA 149, , ,515 (EBITDA margin) 13.5% 2.7% - Non-operating income 15,756 13,531 (2,225) Non-operating expenses 5, ,173 8,69 Ordinary income 27, , ,931 Special income 198,524 96,282 (12,241) Special loss 96,532 41,132 (55,399) Net income 57,55 28,815 (28,735) (Net margin) 5.2% 1.1% - 5

6 Scope of consolidation/scope of equity method <PL-2> FY26 FY27 Core companies Consolidated subsidiaries SOFTBANK MOBILE, SOFTBANK BB, SOFTBANK TELECOM, Yahoo Japan, SOFTBANK TECHNOLOGY, SOFTBANK Broadmedia, Itmedia, etc. Newly consolidated companies SOFTBANK MOBILE etc. Subsidiaries excluded from consolidation subsidiaries ex cluded from consolidation in FY7/Q1due to their immateriality in terms of consolidated financial statements. Non-consolidated subsidiaries 7 63 Insignificant companies Subsidiaries not under the equity method 3 Affiliated companies under equity method GungHo Online Entertainment etc. Entities newly accounted for under the equity method Entities now longer accounted for under the equity method Consolidated subsidiaries not under the equity method 4 63 Insignificant companies Affiliated companies not under equity method 5 26 Insignificant companies SBI Holdings etc. 18 companies excluded from equity method application in FY7/Q1due to their immateriality in terms of consolidated financial statements. Consolidated subsidiaries Companies under equity method Core group companies Main business activities Mobile Communications 5 1 SOFTBANK MOBILE (SBM) - provide mobile phone service - sales of mobile phones etc. Broadband Infrastructure 6 2 SOFTBANK BB (SBB) (*) - ADSL, optic fiber and other high speed internet connection services - IP phone service - provide content Fixed-line Telecommunications 5 SOFTBANK TELECOM (SBTM) - voice transmission services - data transmission services - leased circuit - fixed-line telecom business, such as data centre business etc. Internet Culture Yahoo Japan - internet advertisements - broadband portal business - auction business etc. e-commerce 7 3 SOFTBANK BB (SBB) (*) - distribution of Software for PC's and peripheral equipment - e-commerce towards businesses and consumers Others 78 - broadcast media business Club it - technology service business 44 SOFTBANK TECHNOLOGY Itmedia - media marketing business - overseas fund business Total *After the merger on March 31 27, where BB Technology (BBT) and SOFTBANK BB were merged with BBT the surviving company, BBT s company name was changed to SOFTBANK BB. 6

7 Consolidated net sales (Annual) Exceeded JPY 2.5 tn, the highest ever since the foundation thanks to newly consolidated SBM (Quarterly) 3 telecom businesses flat QoQ. Sales growth maintained as YE sales of e-commerce robust. 2,4, Annual 2,544,219 7, Quarterly 625,941 72, ,85 <PL-3> Mobile Communications BB Infrastruture 1,9, 5, 494,231 Fixed-line Telecommunicatio ns Internet Culture 1,4, 1,18,665 3, 258, , ,46 264,149 e-commerce 9, 837,18 e-finance 4, 1, Others Eliminarion or (1,) (1,) corporate FY5 FY6 FY7 6/Q1 Q2 Q3 Q4 7/Q1 Q2 Q3 Q4 FY25 FY26 FY27 Total Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total Consolidated net sales 837,18 258, , , ,46 1,18, , ,941 72, ,85 2,544,219 Mobile Communications , ,991 43, ,252 1,442,4 Broadband Infrastructure 25,36 61,25 64,439 71,543 71, ,451 63,322 65,728 67,266 67,91 264,227 Fixed-line Telecommunications 166,878 88,64 83,3 9,256 92,71 354,233 88,673 93,276 93,712 98, ,129 Internet Culture 12,448 34,635 36,896 42,214 42, ,12 44,642 46,676 5,49 52, ,212 e-commerce 254,921 6,469 67,688 71,456 83, ,275 59,142 65,37 65,369 82,21 271,57 e-finance 78, Others 64,175 2,26 2,633 2,371 21,89 83,73 2,289 23,785 21,628 25,82 9,785 Elimination (35,51) (6,537) (8,87) (8,371) (12,773) (36,489) (14,37) (2,554) (26,159) (31,725) (92,746) 7

8 Consolidated operating income/loss <PL-4> (Annual) Exceeded JPY 27 bn, the highest ever since the foundation thanks to newly consolidated SBM (Quarterly) Decreased QoQ due to the increase of customer acquisition cost and free campaign, etc. in mobile business Annual Quarterly 3, 271,65 1, 84,733 Mobile Communications 8, 73,78 BB Infrastruture 2, 6, 54,357 58,194 Fixed-line Telecommunications Internet Culture 1, 62,299 4, 23,512 34,386 e-commerce e-finance 2, 7,59 Others Eliminarion or (1,) (25,359) corporate (3,19) Consolidated (2,) FY5 FY6 FY7 6/Q1 Q2 Q3 Q4 7/Q1 Q2 Q3 Q4 FY25 FY26 FY27 Total Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total Consolidated operating (loss) income (25,359) (3,19) 7,59 23,512 34,386 62,299 54,357 58,194 84,733 73,78 271,65 Operating margin % 8.2% 11.5% 5.6% 11.% 9.3% 12.1% 1.2% 1.7% Mobile Communications ,293 29,341 56,96 42,22 155,743 Broadband Infrastructure (53,747) (4,494) 3,483 9,361 12,321 2,672 5,479 6,189 7,747 7,393 26,89 Fixed-line Telecommunications (36,65) (14,89) (12,29) (1,787) 2,928 (25,158) 1,212 (916) (2,63) (656) (2,965) Internet Culture 5,79 16,469 17,167 19,256 21,297 74,19 21,63 22,712 25,11 27,189 96,544 e-commerce 5, ,473 1,843 4,86 1,461 1,399 2,1 1,89 6,68 e-finance 19, Others (5,885) (6) (398) (3,77) 9 (4,759) (717) 547 (4,2) (557) (4,73) Elimination or Corporate (4,695) (1,21) (1,269) (1,2) (4,13) (7,54) (2,2) (1,78) (335) (3,599) (7,17) 8

9 Consolidated EBITDA (Annual) Exceeded JPY 5 bn, an all-time record, thanks to the contribution of SBM (Quarterly) Maintained a healthy trend in consolidated base, whereas decreased in SBM QoQ <PL-5> Annual 6, 5, 4, 3, 2, 1, 44,94 149, ,428 16, 14, 12, 1, 8, 6, 4, 2, 19,54 3,74 44,712 54,954 Quarterly 14,39 124,9 154, 143,26 Mobile Communications BB Infrastruture Fixed-line Telecommunication s Internet Culture e-commerce e-finance Eliminarion or corporate (1,) (2,) FY5 FY6 FY7 6/Q1 Q2 Q3 Q4 7/Q1 Q2 Q3 Q4 FY25 FY26 FY27 Total Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total Consolidated EBITDA 44,94 19,54 3,74 44,712 54, ,913 14,39 124,9 154, 143,26 525,428 EBITDA margin 5.3% 7.5% 11.6% 15.6% 18.4% 13.5% 21.1% 19.8% 21.9% 19.8% 2.7% Mobile Communications ,82 73,615 14,82 87, ,484 Broadband Infrastructure (26,96) 3,23 11,42 16,345 18,122 48,91 11,85 12,6 15,48 15,743 55,61 Fixed-line Telecommunications (6,551) (1,898) 16 9,177 14,21 21,496 12,643 1,248 8,939 1,758 42,588 Internet Culture 54,786 17,965 18,815 21,278 23,579 81,637 23,929 25,243 27,67 29,427 16,26 e-commerce 6,355 1,1 1,87 1,789 2,1 5,977 1,995 1,978 1,535 2,256 7,764 e-finance 25, Others (2,18) (2,871) 1,19 (57) (5) 1,188 (3,52) 225 (1,646) Elimination or Corporate (6,749) (1,21) (1,269) (1,3) (4,66) (7,539) (1,95) (781) (517) (3,367) (6,57) Others 9

10 2, (2,) (4,) (6,) (8,) (1,) (12,) (14,) Non-operating income/loss Interest expense increased by JPY 52.5bn in relation to the Vodafone K.K. acquisition financing Financing-related expenses JPY 28.7bn is a one-off expense due to the acquisition financing of SBM Annual FY5 FY6 FY7 2, 1, (1,) (2,) (3,) (4,) (5,) Financing fee related to the Vodafone K.K. acquisition etc. Quarterly Expenses related to refinancing of acquisition funds, etc. 6/Q1 Q2 Q3 Q4 7/Q1 Q2 Q3 Q4 FY25 Total Q1 Q2 FY26 Q3 Q4 Total Q1 Q2 FY27 Q3 Q4 Total Consolidated operating (loss) income (25,359) (3,19) 7,59 23,512 34,386 62,299 54,357 58,194 84,733 73,78 271,65 Non-operating income 16,466 3,122 4,442 2,784 6,227 15,756 12,96 4,54 1,829 4,259 13,531 Interest income 2, ,136 1,88 1, ,394 Foreign exchange gain ,18 - Equity in earnings under the equity method 5,425 1,61 2,767 1,836 3,36 9,521 9, ,13 Income from investments in partnerships, net 3, , ,726 Others 4,931 1, ,91 3,321 1,956 1, ,831 6,28 Non-operating expenses (36,356) (12,95) (12,499) (15,68) (1,867) (5,564) (4,459) (26,39) (37,637) (36,231) (131,173) Interest expense (22,971) (6,86) (6,993) (6,71) (6,495) (27,5) (14,61) (17,943) (2,994) (25,981) (79,521) Foreign exchange loss (4,4) (2,874) (1,63) (3,188) - (6,32) (154) (1,686) (1,12) - (834) Equity in loss under the equity method (1,5) (2,763) (3,151) - Expenses from investments in partnerships, net - (14) - (1) (164) - Financing related expenses (19,954) - (8,441) (318) (28,715) Others (9,343) (3,255) (4,442) (5,167) (4,372) (17,237) (5,747) (5,43) (4,336) (6,613) (22,11) Non-operating loss (NET) (19,89) (9,827) (8,56) (12,284) (4,639) (34,88) (28,362) (21,498) (35,88) (31,972) (117,642) Consolidated ordinary (loss) income (45,248) (13,17) (466) 11,228 29,747 27,492 25,994 36,696 48,924 41,88 153,423 *Foreign exchange gain (loss), equity in earnings (loss) under the equity method, income and expenses from investments in partnerships, net are set off quarterly and shown on a net base <PL-6> Interest income Income (loss) from investments in partnerships Other non-operating income/ex pense (net) Interest income/ex pense Equity in earnings (loss) under equity method Financing related ex pense Interest expense N on-operating income/ex pense (net) 1

11 Consolidated ordinary income/loss <PL-7> Maintained upward trend, along with the increase in consolidated operating income 2, Annual 5, Quarterly 4, 1, (45,248) 27, ,423 3, 2, 1, (1,) (13,17) (466) 11,228 29,747 25,994 36,696 48,924 41,88 (1,) FY5 FY6 FY7 Annual - Fluctuation factors YoY: Increase by 125,931 m JPY (2,) 6/Q1 Q2 Q3 Q4 7/Q1 Q2 Q3 Q4 Quarterly - Fluctuation factors QoQ: Decrease by 7,115 m JPY Increase of Operating Income 28,766 SBM new consolidation 155,743 Decrease of Non-Operating Income (2,225) Decrease of equity in earnings under equity method (7,39) Due to sale of all shares held in SBI Holdings Increase of Non-Operating expense (8,69) Increase of interest expense: (52,516) Financing related expense: (28,715) Decrease of Operating Income: (1,952) Decrease of income of mobile communications business: (14,74) Improvement of foreign exchange gain (loss): 3,211 Decrease of Non-Operating Expense: 1,46 Increase of interest expense: (4,987) Decrease of financing related expense: 8,122 11

12 Special income/loss <PL-8> 25, 2, Annual 1, 8, Quarterly Sale of 4 Yahoo group companies and Tao Bao s shares Sale of SBI Holdings shares 15, 6, Special income 1, 5, 4, 2, Special loss (2,) Special income/loss (NET) (5,) (1,) (4,) Restructuring charge related to BBTV business Loss on contract revision relating to sales operation change of Otoku Line (6,) FY5 FY6 FY7 6/Q1 Q2 Q3 Q4 7/Q1 Q2 Q3 Q4 FY25 FY26 FY27 Total Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total Consolidated ordinary (loss) income (45,248) (13,17) (466) 11,228 29,747 27,492 25,994 36,696 48,924 41,88 153,423 Special income 89,36 22,914 35,916 98,934 4, ,524 4,672 66,795 15,788 9,24 96,282 Gain on sale of investment securities 59,121 21,827 3,648 93,64 26, ,36 3,971 65,234 11,52 3,397 84,16 Other special income 3,239 1,87 5,268 5,33 14,532 26, ,56 4,286 5,627 12,175 Special loss (53,66) (9,136) (1,39) (5,475) (26,61) (96,532) (1,365) (13,895) (6,688) (19,182) (41,132) Loss on sales of investment securities - (184) (14) (232) (522) - (13) (193) (4,47) (4,254) Valuation loss on investment securities (7,161) (1,682) (45) (2,611) (4,18) (8,717) (143) (1,948) (1,356) (1,92) (5,351) Loss on redemption of bonds (7,386) (3,42) - (1,429) Loss on contract revision relating to sales operation change - - (7,68) (18,82) 933 (25,495) Impairment loss in fixed-line telecommunication business (18,52) (18,52) Loss on disposal of fixed assets - (143) (258) (8,152) 1 (8,542) - (453) (1,355) (5,886) (7,695) Restructuring charge (14,749) - (14,749) Penalty for unfulfilled contract commitment (6,147) (2,34) (1,2) (346) 88 (3,565) Refinance arrangement fee - (3,153) (3,153) Other special loss (4,351) (1,667) (1,33) (5,691) (5,34) (13,732) (1,221) (4,93) (74) (7,345) (13,42) Special income/loss (NET) 35,7 13,778 25,67 48,458 14,147 11,992 3,37 52,9 9,99 (1,157) 55,15 (Loss) income before income taxes and minority interest (9,548) 76 25,141 59,687 43, ,484 29,32 89,596 58,24 31,65 28,573 12

13 Consolidated net income/loss <PL-9> 1, Annual 5, Quarterly 5, 57,55 28,815 4, 3, 22,2 39,73 2, 1, 6,971 13,21 7,494 6,881 (5,) 1,418 (1,) -59,871 FY5 FY6 FY7 (1,) (2,) -11,153 6/Q1 Q2 Q3 Q4 7/Q1 Q2 Q3 Q4 FY25 FY26 FY27 Total Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total Income before income taxes and minority (9,548) 76 25,141 59,687 43, ,484 29,32 89,596 58,24 31,65 28,573 Income taxes: Current 34,74 8,23 11,623 9,695 11,24 4,753 1,146 7,826 12,552 (44,798) 48,726 Refunded 2, Deferred (21,963) (2,779) (187) 2,171 (15,366) 1,837 9,224 (3,182) 27,211 6,423 93,676 Minority interest 4,444 6,463 6,734 7,817 8,326 29,342 8,514 8,93 1,765 9,145 37,355 Consolidated net (loss) income (59,871) (11,153) 6,971 22,2 39,73 57,55 1,418 13,21 7,494 6,881 28,815 Net margin % 7.7% 13.3% 5.2%.3% 2.1% 1.1% 1.% 1.1% 13

14 FY27 Tax and other adjustments <PL-1> 25, 2, Income taxes; current 48,726 15, 1, Income before income taxes & minority interest 28,573 Income taxes; deferred 93,676 Mainly Yahoo Japan Corporation 36,462 5, Minority interest 37,355 Net income 28,815 14

15 Effect of tax adjustments <PL-11> Breakdown of tax expense for FY27 Item Amount % Outline 1 Income before income taxes and minority interest 28,573 1% 2 Income taxes; Current 48,726 Yahoo Japan 44,264 3 Income taxes; Deferred 93,676 Deferred provision in this period SBM use of deferred tax assets (loss carry-forwards), etc 36,424 SBM depreciation, amortization adjustments, etc. 34,872 SB use of deferred tax assets, etc. 24,934 4 Total tax expense (=2+3) 142,42 68% (=4/1) Reconciliation between the statutory income tax rate (4%) and effective income tax rate(68%): 1 Amortization of goodwill (mainly SBM) 1% 2 Using deferred tax assets, etc, for SB stand-alone 19% 3 Unrecognized deferred tax assets in consolidated subsidiaries, which recorded net loss (BBM, SBTM) 11% 4 Non-tax provision for gain on sale of investment securities in SBI Holdings (use of loss carry-forwards in SBTM) (13%) NET 27% 15

16 Status of loss carry-forwards Breakdown of loss carry-forward at this FYE <PL-12> Company Name Balance (end of March 27) Expiry date SOFTBANK MOBILE 185, /3 SOFTBANK BB 95,57 211/3-214/3 SOFTBANK IDC 67,688 29/3-213/3 SOFTBANK TELECOM 63, /3-214/3 Others 125,4 29/3-214/3 Total 538,55 *Amounts are based on taxable income 16

17 - Consolidated P/L Analysis - Consolidated B/S Analysis - Consolidated CF Analysis - CAPEX Analysis 17

18 Summary consolidated B/S Current assets Current liabilities Current assets Current liabilities Fixed assets Long-term liabilities Net assets SBM 1,5, 1,, 5, (Ref.) Vodafone 38, ,13 52,33 1,247, , ,616 1,5, 1,, 5, (Ref.) Vodafone 454,85 586,92 556, 1,142,93 48, ,45 4,, March 26 March 27 Fixed assets March 26 March 27 Long-term liabilities 3,, 3,, 1,996,966 3,59,24 Goodwill 981,41 2,, 1,577,48 2,451,712 Subordinate loan 84,596 2,, 1,, (Ref.) Vodafone 1,47,425 1,19,16 1,, (Ref.) Vodafone 143,969 WBS Loan 1,355,91 123,255 1,62,274 1,58, , ,77 March 26 March 27 March 26 March 27 The (Ref.) Vodafone are figures quoted from the former Vodafone K.K. March 26 financial statements 18

19 Consolidated B/S analysis (1) Current assets Current assets Fixed assets Current liabilities Long-term liabilities Net assets e/o March 26 e/o March 27 variance Current assets 745,13 1,247,433 52,33 SBM ー 677, ,817 Others 745,13 569,616 (175,514) Cash and deposits 446,36 377,666 (68,64) SBM ー 17,928 17,928 Reference: e/o March 6 33,42 Outline Others 446,36 269,737 (176,569) SB stand-alone: e/o March 6/3 22,965 >>e/o March 7 85,18 Details/borrowed +131,933, redemption of Euro bonds expiring in 211 (56,513) Investment in Mobiletech due to Vodafone K.K. acquisition (2,8) Yahoo Japan: e/o March 6/3 92,91>>e/o March 7 67,486 Details/borrowed +7,, investment in BB Mobile due to Vodafone K.K. acquisition (12,) Notes and accounts receivable-trade 188, , ,51 SBM ー 38,674 38,674 Handsets installment receivables 177,276 Reference: e/o March 6 notes and accounts receivable-trade 163,348 Others 188,921 23,298 14,377 SBTM: Reference: e/o March 6 63,171 >> Reference: e/o March 7 69,331 SBB: e/o March 6 96,25 >> e/o March 7 94,275 Inventories 5,597 76,898 26,3 SBM ー 39,187 39,187 Mobile handsets etc. (Reference: e/o March 6 marketable products 31,49) Others 5,597 37,71 (12,887) SBB(*): e/o March 6 27,879 >> e/o March 7 13,113 SBTM: e/o March 6 17,686 >> e/o March 7 18,743 Deferred tax assets 14,17 18,994 94,887 SBM ー 95,26 95,26 Reference: e/o March 6 53,374 Others 14,17 13,733 (374) Others 45,198 99,92 54,73 SBM ー 54,765 54,765 Accrued revenue 61,578 of which leased assets sales 29,791 Allowance for doubtful account (19,279) *Ref: e/o March 6 (8,28) Others 45,198 45,136 (62) (*) The balance at e/o March 26 includes BBT 19

20 Consolidated B/S analysis (2) Tangible assets Current assets Fixed assets Current liabilities Long-term liabilities Net assets e/o March 26 e/o March 27 variance Outline Non-current assets 1,62,274 3,59,24 1,996,966 SBM ー 2,,516 2,,516 Others 1,62,274 1,58,724 (3,55) Property and equipment, net 418,65 1,29, ,246 SBM ー 641, ,662 Others 418,65 388,19 (3,415) Buildings and structures 57,34 89,444 32,14 SBM ー 32,543 32,543 Network center etc. 32,279 Others 57,34 56,9 (44) SBTM: e/o March 6 43,55 >> e/o March 7 4,762 Telecommunication equipment 194,97 694, ,814 SBM ー 52,582 52,582 Others 194,97 174,22 (2,768) SBTM: e/o March 6 134,156 >>SBTM: e/o March 6 118,121 SBB(*): e/o March 6 59,154>>SBTM: e/o March 7 52,722 Telecommunication service lines 91,724 92, SBM ー 8,325 8,325 Others 91,724 83,91 (7,814) SBTM: e/o March 6 9,885 >> SBTM: e/o March 7 83,198 Land 19,44 27,747 8,343 SBM ー 1,752 1,752 Land for Base stations, Telecommunication centers Others 19,44 16,995 (2,49) SBTM 11,499, SBIDC 5,1 Construction-in-progress 27,875 71,777 43,91 SBM ー 42,456 42,456 Telecommunications equipment, antenna equipment etc. Others 27,875 29,321 1,446 SBTM: SBTM: e/o March 6 18,354>>SBTM: e/o March 7 14,67 SBB(*): e/o March 6 7,753 >> SBTM: e/o March 7 14,457 Others 27,325 53,861 26,536 SBM ー 27,2 27,2 Equipment and fixtures (servers, meters) etc. Others 27,325 26,859 (466) (*) The balance at e/o March 26 includes BBT 2

21 Consolidated B/S analysis (3) intangible assets Current assets Fixed assets Current liabilities Long-term liabilities Net assets e/o March 26 e/o March 27 variance Outline Intangible assets, net 12,286 1,279,71 1,177,424 SBM ー 1,155,239 1,155,239 Goodwill ー 981,41 981,41 Others 12, ,471 22,185 Goodwill 45,578 1,32, ,348 Refer to P31 for details SBM ー 981,41 981,41 At time of acquisition recorded at 1,28,552 >> e/o March 7 981,41 Amortized 47,142 Others 45,578 51,516 5,938 SBTM: Goodwill: e/o March 6 33,18 >> e/o March 7 29,134 Software 33,671 2, ,943 SBM ー 16,981 16,981 Switch software, service platform etc. Others 33,671 39,633 5,962 SBTM: e/o March 6 17,71 >> e/o March 7 18,333 SBB(*) : e/o March 6 7,964 >> e/o March 6 8,316 Others 23,36 46,168 23,131 SBM ー 12,846 12,846 construction in progress (Software), etc. Others 23,36 33,321 1,285 Investments and other assets 541, ,677 28,294 SBM ー 23,615 23,615 Others 541, ,62 4,68 Investment securities and investment in partnerships 464,65 487,421 22,77 SBM ー 3,81 3,81 Others 464,65 484,34 19,69 Shares of Yahoo! Inc. etc. Deferred tax assets 25,39 157, ,744 SBM ー 154, ,244 Others 25,39 3,538 (21,51) Others 51,693 14,472 52,779 SBM ー 46,289 46,289 Long-term prepaid expense 36,52, guarantee money paid 1,36 Others 51,693 58,183 6,49 SBTM: Long-term prepaid expense e/o March 6 1,686>>e/o March 7 13,43 Deferred charges 993 4,178 3,184 SBM ー ー ー Others 993 4,178 3,184 (*) The balance at e/o March 26 includes BBT 21

22 Consolidated B/S analysis (4) current liabilities Current assets Fixed assets Current liabilities Long-term liabilities Net assets e/o March 26 e/o March 27 variance Outline Current liabilities 586,92 1,142,93 556, SBM ー 48,452 48,452 Others 586,92 662,45 75,548 Accounts payable - trade 6, , ,734 SBM ー 132, ,583 Mobile handsets costs payable etc. (Ref. e/o March 6 26,97) Others 6,432 62,584 2,152 SBB: e/o March 6 48,143 >> e/o March 7 47,54 Short-term borrowings 218,3 193,656 (24,644) SBM ー Others 218,3 193,58 (24,792) SB stand-alone: e/o March 6 183,444 >>e/o March 7 138,112 SBTM: e/o March 6 23,2 >>e/o March 7 23,2 Yahoo Japan: e/o March 6 >>e/o March 7 2, Commercial paper 1,4 5, (5,4) SBM ー ー ー Others 1,4 5, (5,4) SB stand-alone Current portion of corporate bonds 11,94 43,964 32,87 SBM ー ー ー Others 11,94 43,964 32,87 SB stand-alone: Transfer to short-term according to the redemption schedule e/o March 6 11, >> e/o March 7 43,9 Accounts payable - other 114, ,561 31,438 and accrued expenses SBM ー 293, ,287 Mainly payable for capital equipment, agencies, operation expenses etc. Reference: e/o March 6 191,791 Others 114, ,274 8,152 SBTM: e/o March 6 44,111>>e/o March 7 54,895 SBB(*): e/o March 6 42,17>>e/o March 6 34,82 Current-portion of lease obligations ー 18,49 18,49 SBM ー 18,49 18,49 Investment in leased capital equipment Others ー ー ー Cash receipts as collateral 1, 15, 5, SBM ー ー ー Others 1, 15, 5, SB stand-alone: cash receipts as collateral under security deposit agreement Others 72, ,53 48,951 SBM ー 36,384 36,384 Advanced payments and advanced income 3,247 Others 72,551 85,118 12,567 Income tax payable 33,7 (*) The balance at e/o March 26 includes BBT 22

23 Consolidated B/S analysis (5) long-term liabilities e/o March 26 e/o March 27 variance Long-term liabilities 874,232 2,451,712 1,577,48 SBM ー 1,562,942 1,562,942 Others 874, ,77 14,538 Corporate bonds 456, ,599 (33,528) SBM ー ー ー Current assets Fixed assets Outline Current liabilities Long-term liabilities Net assets Others 456, ,599 (33,528) SB stand-alone straight bonds: e/o March 6 213,524 >> e/o March 7 18,59 *Euro-denominated senior notes due 211 (56,451), Euro-denominated senior notes due ,888, conversion to current liabilities (43,9) SB stand-alone convertible bonds: e/o March 6 15, >> e/o March 7 15, SBTM: e/o March 6 6,24 >> e/o March 7 6,14 Long-term debt 29,37 1,729,183 1,519,812 SBM ー 1,439,687 1,439,687 WBS loan 1,355,91, Vodafone subordinate loan 84,596 Others 29,37 289,495 8,125 SB stand-alone: e/o March 6 14,112 >> e/o March 7 68, SBTM: e/o March 6 75,2 >>e/o March 7 52, Yahoo Japan: e/o March 6 >> e/o March 7 5, Deferred tax liabilities 48,642 5,136 1,494 SBM ー ー ー Others 48,642 5,136 1,494 Allowance for point mileage ー 43,787 43,787 SBM ー 43,787 43,787 Allowance for point mileage Others ー ー ー Lease obligations ー 74,964 74,964 SBM ー 74,964 74,964 Investment in leased capital equipment Others ー ー ー Others 16,89 131,4 (29,49) SBM ー 4,51 4,51 Others 16,89 126,537 (33,552) SBH: Derivative liabilities e/o March 6 57,332 >> e/o March 7 41,874 SBB (*): deferred revenue (mainly modem rental business securitization advanced royalty balance), etc e/o March 6 41,84 >>e/o March 7 26,392 (*) The balance at e/o March 26 includes BBT 23

24 - Consolidated P/L Analysis - Consolidated B/S Analysis - Consolidated CF Analysis - CAPEX Analysis 24

25 Cash flows from operating activities <CF-1> (Annual) Remarkably increased due to consolidation of SBM (Quarterly) Decrease in QoQ due to the receivable from installment sales and free campaign from last autumn 5, Annual 2, Quarterly 4, 3, Increase of receivable along with the introduction of handset installment sales 177,276 15, 1, Increase of receivable along with the introduction of handset installment sales 6,291 81,261 89,724 2, 1, (45,989) 57,86 311,21 5, (18,213) ,949 13,837 64, ,464 71,193 52,868 (1,) FY5 FY6 FY7 (5,) 6/Q1 Q2 Q3 Q4 7/Q1 Q2 Q3 Q4 Overview of FY7 Operating CF Income before income taxes and minority interest: 28,573 m JPY Non-cash item Depreciation and amortization (excl. amortization of goodwill) 189,92 m JPY Amortization of goodwill 53,595 m JPY Adjustment item Deduct gain on sale of marketable and investment securities included in income before income taxes and minority interest: (79,885) m JPY Add interest expense: +79,521 m JPY Increase in receivables-trade: (225,489) m JPY Increase in payables-trade: +91,184 m JPY Interest paid: (62,81) m JPY, Income taxes paid: (45,964) m JPY (mainly Yahoo Japan Corporation) Overview of Q4FY7 Operating CF Income before income taxes and minority interest: 31,65 m JPY Non-cash item Depreciation and amortization (excl. amortization of goodwill) 53,972 m JPY Amortization of goodwill 11,29 m JPY Adjustment item Add interest expense included in income before income taxes and minority interest +25,981 m JPY Increase in receivables-trade: (112,729) m JPY Increase in payables-trade: +35,899 m JPY Interest paid: (24,721) m JPY 25

26 Cash flows from investing activities <CF-2> Temporary negative increase of investment cashflow due to acquisition of Vodafone K.K. share Annual 2, 1, 27,852 (1,) (2,) (3,) (4,) (5,) (242,944) April, 26 Acquisition of Vodafone K.K. share (6,) (7,) (2,97,937) (8,) Overview of FY7 Investment CF FY5 FY6 FY7 1,844,849 m JPY used in acquisition of interests in subsidiaries newly consolidated, net of cash acquired, mainly along with Vodafone K.K. share acquisition 297,764 m JPY used in purchase of property and equipment and intangibles, mainly as a result of investment in telecom businesses 114,22 m JPY used in purchase of marketable and investment securities 168,354 m JPY proceeds from sale of marketable and investment securities along with sale of all shares held in SBI Holdings and partial shares in cyber communications inc. 26

27 Cash flows from financing activities <CF-3> Vodafone K.K. acquisition cost refinanced under WBS scheme 1,, 9, 8, 7, Annual 1,718,384 6, 5, 4, 3, 2, 277,77 26 Vodafone K.K. acquisition financing, etc. 1, 3,78 FY5 FY6 FY7 Overview of FY7 Finance CF 1,586,97 m JPY proceeds from long-term debt mainly for Vodafone K.K. acquisition finance 3,378 m JPY proceeds from issuance of shares to minority shareholders along with BB Mobile Corp. preferred share issuance to Vodafone International Holdings B.V. as allottee 72,558 m JPY proceeds from issuance of bonds, 25,334 m JPY used in redemption of bonds, 98,151 m JPY used in repayment of long-term debt 65,818 m JPY proceeds from lease financing of equipment newly acquired 27

28 - Consolidated P/L Analysis - Consolidated B/S Analysis - Consolidated CF Analysis - CAPEX Analysis 28

29 CAPEX fixed asset addition CAPEX spent mainly for 3G Base stations and network expansion in SBM CAPEX for existing business is in downward trend 389,81 4, <CAPEX-1> 3, Ref. Vodafone 239,784 Mobile Communications BB Infrastruture 2, 1, 148,946 Fixed-line Telecommunications Internet Culture e-commerce Others FY6 FY7 FY26 FY27 Consolidated 148, ,81 Mobile Communications - 38,46 BB Infrastructure 47,652 22,16 Fixed-line Telecommunications 82,652 37,686 Internet Culture 12,834 15,17 e-commerce 2,618 2,858 Others 3,188 3,728 *Includes capital leases in which the ownership of leased assets is transferred to lessees, and those in which the ownership of leased assets is not transferred to lessees, at the end of each lease periods. *Above Figure of (Ref) Vodafone is the execution base of Vodafone K.K. for FYE March 26, before acquisition. 29

30 Depreciation and amortization <CAPEX-2> 8, Depreciation and amortization (excl. amortization of goodwill) 6, 46,494 5,578 53,972 Mobile Communications 4, 38,48 BB Infrastruture Fixed-line Telecommunications Internet Culture 2, e-commerce FY7/Q1 Q2 Q3 Q4 Others FY27 Q1 Q2 Q3 Q4 Total Consolidated 38,48 46,494 5,578 53, ,92 Mobile Communications 18,563 27,48 3,415 32,991 19,17 BB Infrastructure 6,51 6,143 7,445 7,582 27,222 Fixed-line Telecommunications 1,334 9,987 1,337 1,168 4,826 Internet Culture 1,821 2,42 2,223 1,921 8,7 e-commerce ,27 Others ,99 3

31 Amortization of goodwill <CAPEX-3> 2, Amortization of goodwill Incl. depreciation of trade rights 15,847 15,693 Revaluated the collectability of SBM deferred tax assets at FYE, and reduced amount of goodwill recorded at the acquisition retroactively. >>Recognized the revised amount of annual amortization amount in Q4, FY7 11,24 11,29 SOFTBANK MOBILE 1, SOFTBANK TELECOM Others Major Goodwill Company 7/Q1 Q2 Q3 Q4 FY27 Q1 Q2 Q3 Q4 Total Consolidated 11,24 15,847 15,693 11,29 53,595 SOFTBANK MOBILE 9,365 14,158 14,114 9,55 47,142 SOFTBANK TELECOM ,883 Others ,57 Acquisition Date Total Amount at acquisition period Amortized period Amortized Amount (full-year) Amortized amount (Qtr) End of Mar 6 End of Mar 7 Remarks SOFTBANK MOBILE Apr 26 1,28,552 2years 51,427 12, ,41 Amortized in FY27(11 month) JPY 47,142m SOFTBANK TELECOM Sep 24 38,836 1years 3, ,18 29,134 Fukuoka Softbank Hawks Mar 25 4,13 2years ,924 3,717 Total amount at acquisition period includes additional acquisition JPY 75m (98% 1%) at Aug

32 Finance Yoshimitsu Goto General Manager Finance, Group Management SOFTBANK CORP. 32

33 - Financial activities - Interest-bearing debt status - Mobile acquisition financing summary - Investment results 33

34 Financial activities for this fiscal year Month Content 26/3 Announced Vodafone K.K. acquisition Implementation of Legal Defeasance with respect to Euro-denominated Senior Notes due 211, amounting to 4 million euro in relation to the Vodafone K.K. acquisition 26/4 Financing of Vodafone acquisition: completed through bridge loan (facility size of 1.28 tn JPY) Completion of Vodafone K.K. acquisition: BB Mobile completed TOB process 26/8 Sale of shares held in SBI Holdings (proceeds from sale of approx. 136 bn JPY) 26/9 Vodafone K.K. acquisition refinance: Announced 1.45 tn JPY financing through whole business securitization (WBS) of mobile communications business Repurchase and redemption of approximately 99% of outstanding "Euro Senior Notes due 211" amounting to EUR 396m (63.3 bn JPY )* 26/1 Issue "Euro-denominated Senior Notes due 213" amounting to EUR 5m (8bn JPY)* Vodafone K.K. acquisition refinance: Received commitments from financial institutions for financing through WBS Vodafone K.K. acquisition refinance: Completed financing through WBS (1) Borrowings by SBM totaled to 1,366. bn JPY (SBM loan) 26/11 (2) Repayment of the borrowings (1,173.8 bn JPY) based on Bridge Facility Agreement contracted by BBM (3) Trust debt assumption for straight bonds amounting to 1 bn JPY, issued by SBM (4) SBM assumption of the debt liability on a non-recourse basis of 84.5 bn JPY for BB Mobile subordinated loan of 1 bn JPY 27/3 Resolution made to issue SOFTBANK 24th straight corporate bond (3rd Fukuoka SoftBank HAWKS bond); issue date April 26, 27, amount issued 2bn JPY. *1 Euro converted to 16 JPY for reference purpose 34

35 - Financial activities - Interest-bearing debt status - Mobile acquisition financing summary - Investment results 35

36 Interest-bearing debt status* By item-1 <Interest-bearing debt-1> 3,, Nov. 26 WBS refinance JPY 1,366.bn 2,5, 2,529,595 2,39,57 2,47,83 2,394,43 CP 2,, 1,5, April 26 Vodafone K.K. acquisition bridge facility JPY 1,166.bn Short-term borrowings 1,, 876,145 85,743 81,775 95,293 Long-term borrowings 5, Corporate Bonds 6/Q1 Q2 Q3 Q4 7/Q1 Q2 Q3 Q4 6/Q1 6/Q2 6/Q3 6/Q4 7/Q1 7/Q2 7/Q3 7/Q4 Interest-bearing debt 876,145 85,743 81,775 95,293 2,529,595 2,39,57 2,47,83 2,394,43 Corporate bonds (incl. bonds with maturity date within one year) 431, , ,62 467, , , , ,563 SBM bonds , 1, - - Long-term borrowings 226,92 28, ,73 29,37 388, ,918 1,72,95 1,729,183 SBM Loan (WBS) ,365,62 1,355,91 Others 226,92 28, ,73 29,37 388, , , ,92 Short-term borrowings (incl. long-term loans with maturity date within one year) 29, ,7 112, ,3 1,534,529 1,422, ,66 193,656 Vodafone acquisition bridge loan ,166, 1,173, Others 29, ,7 112, ,3 368, , ,66 193,656 CP 8,5 12,5 16,5 1,4 14,6 1, 19,8 5, *Interest-bearing debt liabilities do not include lease obligations 36

37 Interest-bearing debt status By item-2 <Interest-bearing debt-2> 3,, CP 2,5, 2,, 2,529,595 2,39,57 2,47,83 2,394,43 Short-term borrowings (others) Bridge loan 1,5, 1,, 5, 876,145 85,743 81,775 95,293 Bridge loan Bridge loan Non-recourse WBS loan WBS loan Non-recourse Long-term borrowings (others) WBS SBM bonds 6/Q1 6/Q2 6/Q3 6/Q4 7/Q1 7/Q2 7/Q3 7/Q4 *Trust debt assumptions executed on SBM corporate bonds on Nov 3,26 Corporate Bonds 6/Q1 6/Q2 6/Q3 6/Q4 7/Q1 7/Q2 7/Q3 7/Q4 Interest-bearing debt 876,145 85,743 81,775 95,293 2,529,595 2,39,57 2,47,83 2,394,43 Corporate bonds (incl. bonds with maturity date within one year) 431, , ,62 467, , , , ,563 SBM bonds , 1, - - Long-term borrowings 226,92 28, ,73 29,37 388, ,918 1,72,95 1,729,183 SBM Loan (WBS) ,365,62 1,355,91 Others 226,92 28, ,73 29,37 388, , , ,92 Short-term borrowings (incl. long-term loans with maturity date within one year) 29, ,7 112, ,3 1,534,529 1,422, ,66 193,656 Vodafone acquisition bridge loan ,166, 1,173, Others 29, ,7 112, ,3 368, , ,66 193,656 CP 8,5 12,5 16,5 1,4 14,6 1, 19,8 5, 37

38 Interest-bearing debt and net interest-bearing debt <Interest-bearing debt-3> Interest-bearing debt increased in relation to the Vodafone K.K. acquisition financing. Repayment of acquisition debts started in FY7/Q4 (m yen) 3,, 2,5, Interest-bearing debt Cash and cash equivalents Net interest-bearing debt 2,, 1,5, 1,, 5, 6/Q1 Q2 Q3 Q4 7/Q1 Q2 Q3 Q4 6/Q1 6/Q2 6/Q3 6/Q4 7/Q1 7/Q2 7/Q3 7/Q4 Interest-bearing debt 876,145 85,743 81,775 95,293 2,529,595 2,39,57 2,47,83 2,394,43 Net interest-bearing debt 586, , , ,614 2,237,71 2,19,98 2,69,8 2,8,148 Cash and cash equivalents 289,94 235,55 341,637 45, ,524 28,958 41, ,254 38

39 Interest-bearing debt and net interest-bearing debt (excluding mobile*)<interest-bearing debt-4> Excluding the Vodafone K.K. acquisition funds (non-recourse), the consolidated net interest-bearing debt maintains a downward trend 3,, 2,5, (excl. mobile)interest-bearing debt (excl. mobile)cash & cash equivalents (excl. mobile)net interest-bearing debt 2,, 1,5, 1,, 5, 6/Q1 6/Q2 65/Q3 6/Q4 7/Q1 7/Q2 7/Q3 7/Q4 6/Q1 6/Q2 6/Q3 6/Q4 7/Q1 7/Q2 7/Q3 7/Q4 Interest-bearing debt (excl. mobile) 876,145 85,743 81,775 95,293 1,13,543 1,8,6 1,2, ,568 Net interest-bearing debt (excl. mobile) 586, , , , , ,52 717, ,753 Cash and cash equivalents (excl. mobile) 289,94 235,55 341,637 45, , ,558 33,22 276,815 *The debt balance of SOFTBANK MOBILE and BB Mobile have been respectively deducted from interest-bearing debt and net interest bearing debt balance 39

40 Cash position Maintained ample cash position <Interest-bearing debt-5> 7, Cash&cash equivalents Unused portion of credit line facility 6, 5, 52, ,679 44, ,254 4, 319,94 322,524 31,958 3, 265,55 2, 1, 6/Q1 Q2 Q3 Q4 7/Q1 Q2 Q3 Q4 6/Q1 6/Q2 6/Q3 6/Q4 7/Q1 7/Q2 7/Q3 7/Q4 Cash and cash equivalents 289,94 235,55 341,637 45, ,524 28,958 41, ,254 Unused portion of credit line facility 3, 3, 161, 61, 3, 3, 39, 69, Total 319,94 265,55 52, , ,524 31,958 44, ,254 Credit line facility total 15, 161, 179, 4

41 Shareholders equity - equity ratio <Interest-bearing debt-6> The equity ratio deteriorated due to the fund-raising for the Vodafone K.K. acquisition, this will be improved through an accumulation of profit 3,, Shareholders' equity Equity ratio 15% 2,, 1% 1,, 5% 1.3% 1.8% 12.5% 13.4% 5.8% 6.2% 6.4% 6.6% 6/Q1 Q2 Q3 Q4 7/Q1 Q2 Q3 Q4 % Total assets Shareholders' equity Equity ratio 6/Q1 6/Q2 6/Q3 6/Q4 7/Q1 7/Q2 7/Q3 7/Q4 1,62,882 1,578,924 1,748,65 1,88,398 4,31,3 3,986,991 4,191,853 4,31, ,345 17, ,11 242, , , ,8 282, % 1.8% 12.5% 13.4% 5.8% 6.2% 6.4% 6.6% 41

42 (Reference) Pro-Forma base shareholders equity and equity ratio (including SB s shareholdings) Pro-Forma equity ratio including unrealized gain of SB held listed shares 3,, 129.1% Shareholders' equity Equity ratio <Interest-bearing debt-7> Assumption 15% 2,, 96.4% 19.2% 13.8% 1% 1,, 4.5% 31.6% 31.% 28.7% 5% 6/Q1 Q2 Q3 Q4 7/Q1 Q2 Q3 Q4 6/Q1 6/Q2 6/Q3 6/Q4 7/Q1 7/Q2 7/Q3 7/Q4 8-May-7 Total assets 1,62,882 1,578,924 1,748,65 1,88,398 4,31,3 3,986,991 4,191,853 4,31,852 4,31,852 Shareholders' equity (A) 167,345 17, ,11 242, , , ,8 282, ,949 SB unrealized capital gain (B) 1,966,729 2,23,387 3,37,242 2,364,93 1,969,358 1,326,262 1,364,9 1,232,65 1,35,717 Loss carry-forwards 538,55 538,55 538,55 538,55 538,55 538,55 538,55 538,55 538,55 taxable unrealized capital gain (D=B-C) 1,428,674 1,692,332 2,499,187 1,826,875 1,431,33 788,27 825, , ,662 tax (E D 4 ) 571,47 676, ,675 73,75 572, ,283 33, , ,65 unrealized capital gain after tax(f B E) 1,395,259 1,553,454 2,37,567 1,634,18 1,396,837 1,1,979 1,33, ,812 1,25,652 Shareholders' Equity (incl. unrealized gain of SB held listed shares) (A+F) Equity ratio (incl. amount of unrealized gain of SB held listed shares) 1,562,64 1,723,796 2,256,677 1,876,947 1,632,36 1,26,141 1,31,427 1,237,761 1,38, % 19.2% 129.1% 13.8% 4.5% 31.6% 31.% 28.7% 3.4% % *SB unrealized capital gain is based on the share price of investment in securities (listed & public companies only), at the end of each quarter, held by SOFTBANK Group s holding companies domestic and overseas. Loss carry-forwards was assumed to be equal to the balance at the end of March 27 42

43 Interest expense <Interest-bearing debt-8> Interest expense on Vodafone K.K. acquisition bridge loan was approx. JPY 2.bn (April 27,6-Nov. 6) Interest expense on SBM loan (WBS) was approx. JPY 21.bn (Nov 6-March 7) Annual Quarterly 8, 3, 7, 25, 6, 2, 5, 4, 15, 3, 1, 2, 5, 1, FY6 FY7 6/Q1 Q2 Q3 Q4 7/Q1 Q2 Q3 Q4 FY25 Total Q1 Q2 FY26 Q3 Q4 Total Q1 Q2 FY27 Q3 Q4 Total Interest expense (22,971) (6,86) (6,993) (6,71) (6,495) (27,5) (14,61) (17,943) (2,994) (25,981) (79,521) 43

44 Interest coverage ratio <Interest-bearing debt-9> Maintained firm trend (both in consolidated/ mobile excluded basis (times) 5. Interest coverage ratio Interest coverage ratio (excl. Mobile) FY5 FY6 FY7 *Interest coverage ratio=operating cash flow divided by interest payment 44

45 Debt/Equity ratio - Net Debt/Equity ratio <Interest-bearing debt-1> Gradually improving, after deterioration due to Vodafone K.K. acquisition (times) Debt/Equity ratio (times) Net Debt/Equity ratio D/E ratio D/E ratio (excl. mobile) Net D/E ratio Net D/E ratio (excl. mobile) /Q1 6/Q2 6/Q3 6/Q4 7/Q1 7/Q2 7/Q3 7/Q4. 6/Q1 6/Q2 6/Q3 6/Q4 7/Q1 7/Q2 7/Q3 7/Q4 45

46 EBITDA margin - Operating margin <Interest-bearing debt-11> Margins significantly improved EBITDA margin Operating margin Ordinary margin (bn JPY) (bn JPY) (bn JPY) 6 25% 6 25% 6 25% 5 EBITDA EBITDA margin 2.7% 2% 5 Operating income(loss) Operating margin 2% 5 Ordinary income (loss) Ordinary margin 2% % 15% 3 15% 3 15% 1.7% 2 1% 2 1% 2 1% 1 5.3% 5% 1 5.6% 5% 1 2.5% 6.% 5% (1) FY3 FY4 FY5 FY6 FY7 % (1) FY3 FY4 FY5 FY6 FY7 % (1) FY3 FY4 FY5 FY6 FY7 % (2) -5% (2) -5% (2) -5% 46

47 Corporate bonds details <Interest-bearing debt-12> Company name Bond Issue date Maturity Date Interest rate (%/year) Collateral March 6 balance March 7 balance change SOFTBANK 2nd series Unsecured Straight Bond 1995/9/27 27/9/ None 23,9 23,9 18th series Unsecured Straight Bond 25/1/31 28/1/ None 2, 2, 19th series Unsecured Straight Bond 25/1/31 21/1/ None 2, 2, 2th series Unsecured Straight Bond (1st SoftBank HAWKS bonds) 25/6/1 28/6/ None 12,5 12,5 21st series Unsecured Straight Bond 25/9/14 28/9/ None 2, 2, 22nd series Unsecured Straight Bond 25/9/14 21/9/ None 4, 38, (2,) 23rd series Unsecured Straight Bond (2nd SoftBank HAWKSbonds) 25/11/29 28/11/ None 2, 2, Convertible Bond due 213 (*1) 23/12/3 213/3/ None 5, 5, Convertible Bond due 214 (*1) 23/12/3 214/3/ None 5, 5, Convertible Bond due 215 (*1) 23/12/3 215/3/31 2. None 5, 5, Euro-denominated Senior Notes due 211 (*2) 24/3/8 211/3/ None 57,124 (4 m Euro) Euro-denominated Senior Notes due year /1/12 213/1/ None - 68,887 (5 m Euro) 672 (56,452) SOFTBANK TELECOM 1st series Unsecured Straight Bond 24/12/7 29/12/7 2. None 45, 45, 2nd series Unsecured Straight Bond 24/12/7 211/12/ None 15, 15, Phoenix JT Subordinated Notes Due /12/24 216/12/ None 32,4 32,4 Other corporate bonds (94) Total , ,563 68,887 (*1) Concerning CB due 213, 214, 215, under certain conditions early redemption of these bonds due to the holders' or companies request is possible respectively after 27, 28, and 29. (*2) Concerning Euro-denominated Senior Notes Due 211, 99% (396 m EUR) of the outstanding notes was redeemed in Oct 26. (*3) In addition to the above, SOFTBANK CORP. issued 24th series Unsecured Straight Bond (3rd SoftBank HAWKS bonds) on April 26, 27, amounting to 2.bn JPY (*4)The above table does not include straight bonds issued by SOFTBANK MOBILE, on which a debt assumption was executed. 47

48 Bond redemption schedule <Interest-bearing debt-13> 15, Phoenix JT Subordinated Notes SOFTBANK CB SOFTBANK TELECOM Straight Bond SOFTBANK Straight Bond 118,887 1, 65, 5, 43,9 52,5 38,672 5, 5, 32,4 15, FY8 FY9 FY1 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY8 FY9 FY1 FY11 FY12 FY13 FY14 FY15 FY16 FY17 Others SOFTBANK Straight Bond 43,9 52,5 2, 38,672 68,887 SOFTBANK TELECOM Straight Bond 45, 15, SOFTBANK CB *1 5, 5, 5, Phoenix JT Subordinated Notes 32,4 Other corporate bonds 24 Total 43,9 52,5 65, 38,672 15, 5, 118,887 5, 32,4 24 (*1) Concerning CB due 213, 214, 215, under certain conditions early redemption of these bonds due to the holders' or companies request is possible respectively after 27, 28, and

49 Consolidated interest-bearing debt details <Interest-bearing debt-14> Bonds and CP Borrowings from other financial institutions Yahoo Japan bank loan Mar , ,671 Total, 95,293 Subordinate loan from Vodafone SBM loan Mar , ,15 1,355,91 Total, 2,394,43 Vodafone K.K. acquisition related 1,59,687 5, 1,, 1,5, 2,, 2,5, <Borrowings from other financial institutions> (Mar-7) SOFTBANK credit line 11, SOFTBANK other bank loans 96,112 SOFTBANK TELECOM syndicated loan 75,2 Major overseas subsidiaries bank loans 123,691 Others 8,147 Total 413,15 <Interest-bearing debt related to Vodafone K.K. acquisition> (Mar-7) SBM loan (WBS) 1,355,91 Subordinate loan from Vodafone 84,596 Yahoo Japan Corporation bank loan 7, Total 1,59,687 49

50 Consolidated interest-bearing debt Short/long ratio <Interest-bearing debt-15> Long-term interest-bearing debt ratio is approx 9%, 75% if SBM excluded Take sufficient measures for mid/long term interest rate rise risks <Short/long ratio in interest-bearing debt balance at e/o March 27> 1% 1% 9% 9% 8% 8% 7% 6% 5% 4% 89.9% Short-term ratio Long-term ratio 7% 6% 5% 4% 74.6% Short-term ratio Long-term ratio 3% 3% 2% 2% 1% 1% % Interest-bearing debt % Interest-bearing debt (excl. SBM) 5

51 Bond Rating <Interest-bearing debt-16> AA /AA3 A+/A1 A/A2 A /A3 BBB+/Baa1 BBB/Baa2 BBB /Baa3 BB+/Ba1 BB/Ba2 BB /Ba3 B+/B1 WBS (senior) S&P (BB-) JCR (AA-) S&P (A) Moody s s (A3) JCR (BBB) Moody s s (Ba2) Acquisition of JAPAN TELECOM Acquisition of Vodafone K.K. 51

52 Rating : WBS (senior) <Interest-bearing debt-17> AA /AA3 A+/A1 A/A2 A /A3 BBB+/Baa1 BBB/Baa2 BBB /Baa3 BB+/Ba1 BB/Ba2 BB /Ba3 B+/B1 S&P (SOFTBANK MOBILE Corp. issuer rating) Moody s (SOFTBANK MOBILE Corp. Senior debt rating) JCR (AA-) S&P (A) Moody s (A3) withdrawn WBS Whole Business Securitization 52

53 Reference: Lease financing status <Interest-bearing debt-18> e/o March 27 Capital leases in which the ownership of leased assets is transferred to lessees at the end of lease period (on balance) Lease obligation balance Due within one year JPY 18,49m Due after one year Total JPY 74,964m JPY 93,13m Capital leases in which the ownership of leased assets is not transferred to lessees at the end of lease period (off balance) The future lease payments for capital lease Due within one year Due after one year Total JPY 33,88m JPY165,966m JPY 199,55m 53

54 - Financial activities - Interest-bearing debt status - Mobile acquisition financing summary - Investment results 54

55 Vodafone K.K. acquisition bridge facility <Mobile acquisition financing-1> Yahoo Yahoo Japan Japan Corporation Corporation Preferred stock JPY 12.bn stock acquisition rights SOFTBANK 1% equity Mobiletech Mobiletech Bridge Bridge loan loan lenders lenders financial financial institutions institutions Bridge loan JPY 1,166.bn 1% equity Common stock JPY 2.bn Preferred stock JPY 3.bn Subordinate loan JPY 1.bn stock acquisition rights JPY 1,661.2bn JPY 32.2bn Vodafone Vodafone Vodafone K.K. K.K. (current) (current) SOFTBANK SOFTBANK MOBILE MOBILE *Scheme at completion of the acquisition 55

56 WBS Scheme Yahoo Yahoo Japan Japan Corporation Corporation SOFTBANK 1% Equity <Mobile acquisition financing-2> WBS WBS Funding Funding financial financial institutions institutions * * (at the completion of WBS financing) (at the completion of WBS financing) 4.Class1 preferred stock 5.Stock acquisition rights Mobiletech Mobiletech Tokutei Kingai Trust Trust Beneficial Interest Existing Existing Senior Senior Lender Lender on Nov JPY1,173.8bn Repayment of existing bridge 1% Equity Class 2 Preferred Stocks (Classified stocks with veto rights) Vodafone 4.Class1 preferred stock 5.Stock acquisition rights Partial repayment of existing subordinate loan 3.Subordinated loan 1% Equity BBM Loan 1. SBM Loan JPY1,366.bn Tokutei Tokutei Kingai Kingai Trust Trust trustee trustee (Mizuho Trust & Banking) (Mizuho Trust & Banking) Existing Existing Bond Bond Holder Holder Trust Trust Bank Bank 2. Trust debt assumption SOFTBANK SOFTBANK MOBILE MOBILE Revolving cash trust Finance flow Trust Trust Bank Bank Capital ties 56

57 1. WBS refinancing (SBM loan) <Outline of the loan> <Mobile acquisition financing-3> <Funds flow of SBM loan> Contract amount Amount borrowed Interest rate* Longest maturity Collateral JPY 1,45. bn JPY 1,441.9 bn Class A JPY 1,143.6 bn Class B JPY bn 3.8% (total weighted average) Class A 3.3% Class B 6.% Class A 1 years Class B 13 years Assets owned by Mobiletech,BBM, SBM and the SBM's wholly-owned subsidiaries (4 companies in total) Total Total amount amount of of WBS WBS facility facility JPY JPY 1,45.bn 1,45.bn (Amount (Amount borrowed borrowed 1,441.9bn) 1,441.9bn) Interest Interest Expense Expense Reserve Reserve Structure Structure handling handling fee fee and and hedging hedging cost, cost, etc. etc. Total Total amount amount of of SBM SBMfacility JPY JPY 1,374.1bn 1,374.1bn Amount Amount borrowed: borrowed: JPY1,366.bn JPY1,366.bn Note: Interest rate at Nov. 3, 26 <SBM Loan repayment status> Amount borrowed e/o Nov. 26: JPY1,366.bn Outstanding balance e/o March 27: JPY1,355.1bn Amount repaid: JPY 1.9bn Cash Cash trust trust to to revolving revolving facility facility 57

58 Merit of WBS (1) <Mobile acquisition financing-4> 1. High ratings >>Reduction of interest expenses Issuer Class A (Tranche 1) WBS Class B (Tranche 2,3) (reference) SOFTBANK JCR AA- A- BBB Rating Moody's A3 Baa3 Ba2 S&P A BBB BB- 58

59 Merit of WBS (2) <Mobile acquisition financing-5> 2. Flexible covenants >>Operational flexibility is secured Financial target Operational target Cumulative debt reduction amount Quarterly debt reduction amount Adjusted EBITDA (*1) Leverage ratio (*2) Number of subscribers As long as above targets are achieved, a certain flexibility of business operation is granted, such as new service launch, capital expenditure and others. (*1) Adjusted EBITDA: lease expenses included in operating expenses are added back to EBITDA (*2) Total debt / adjusted EBITDA. Total debt does not include the amount of equipment finance, subordinate loan from The SOFTBANK Group, and Vodafone and outstanding corporate bonds 59

60 2.Trust debt assumption of SBM 1bn JPY straight bonds <Mobile acquisition financing-6> Maintained interests of outstanding bond holders by WBS loan structure Ensured stability of the structure <Overview of straight bond on which debt assumption was executed > Bond Issue amount Outstanding amount Issue date Maturity date Coupon 1st Series Unsecured Bond 25. bn JPY same as on the left 28-Apr Apr % 3rd Series Unsecured Bond 25. bn JPY same as on the left 19-Aug Aug-1 2.5% 5th Series Unsecured Bond 25. bn JPY same as on the left 25-Aug- 25-Aug-1 2.% 7th Series Unsecured Bond 25. bn JPY same as on the left 22-Sep- 22-Sep % Trust setting with AA rating securities Moody s rating Baa2 >> Raised to Baa1 Recorded loss from bond redemption of 3b JPY in this period due to accelerated redemption process Off-balancing 6

61 - Financial activities - Interest-bearing debt status - Mobile acquisition financing summary - Investment results 61

62 Investment results Maintain performance in return on investment <Results of sale of capital holdings> Company name Initial investment amount Amount Date Period (bn JPY) 41.7 Tao Bao 2.3 Oct 25 US$ 36m Yahoo! Europe 58.8 Yahoo! Korea 2.3 Nov 25 US$ 5 m FY6 FY6 SBI Holdings Aug 26 FY7 cyber communications Dec 26 FY7 <New listings (IPO) of SB Group held shares> Company Name Market capital SB portion of market cap Unrealized (loss) gain Date of listing (bn JPY) ITmedia Apr-7 As of May 1st 27 62

63 Future financial strategies Completion of mobile business acquisition related financing Completion of equipment finance (lease finance) Start financing through securitization of mobile handset sales installment receivables Accelerate repayment of debt funding Enhance financial stability - credit improvement Improve Equity ratio and Debt/Equity ratio Take sufficient measures towards interest rate rise risk Improve credit rating Further dedication to IR activities (Debt and Equity) Regularize domestic and overseas quarterly meetings (in cooperation with IR) Number of debt investors have increased rapidly as a result of WBS financing: plan sufficient follow-up Emphasize communication with investors from each market (retail, corporate, domestic, overseas) 63

64 Operation CFO, Telecom Businesses (SBM, SBB, SBTM) Kazuhiko Fujihara 64

65 Actual overview of major 3 telecom business <Broadband Infrastructure Business> From Sep. 21 FY25 FY26 FY27 Variance Net Sales 25,36 268, ,227 (4,224) Operating (loss) income (53,747) 2,672 26,89 6,137 EBIT DA (26,96) 48,91 55,61 6,691 <Fixed-line Telecommunications Business> From Oct. 24: 6 months portion is reflected in FY24) FY25 FY26 FY27 Variance Net Sales 166, , ,129 19,896 Operating (loss) income (36,65) (25,158) (2,965) 22,193 EBITDA (6,551) 21,496 42,588 21,92 <Mobile Communications Business> From May 26: 11months portion is reflected for FY7) FY25 FY26 FY27 Variance Net Sales 1,442,4 Operating income 155,743 EBITDA 321,484 *Net sales is the total sum of external sales and internal sales between segments. 65

66 - Broadband Infrastructure Business - Fixed-line Telecommunications Business - Mobile Communications Business 66

67 Summary - Broadband Infrastructure Business - <BB-1> Maintained net increasing trend of Yahoo! BB ADSL FY25 FY26 FY27 YoY variance YoY variance rate Yahoo! BB ADSL Cumulative lines installed (k lines) 4,776 5,49 5, % Maintained upward trend in operating income/loss FY25 FY26 FY27 YoY variance YoY variance rate Broadband Infrastructure Business Operating (loss) income (53,747) 2,672 26,89 6, % 67

68 Operating income/loss and EBITDA (Broadband Infrastructure Business) <BB-2> Maintained upward trend 8, Operating income (loss) EBITDA 6, 48,91 55,61 4, 2, 2,672 26,89 (2,) (26,96) (4,) (6,) (53,747) FY5 FY6 FY7 68

69 Operating income/loss (Broadband Infrastructure Business) Steady trend <BB-3> Impact of modem rental business sell-off ( m JPY) Operating income (loss) excl. impact of modem rental business sell-off 2, Operating income (loss)(sb consolidated Broad band Infrastructure Segment) 12,321 9,361 1, +7,14 5,479 6,189 7,747 7, ,649 3,483 5,36 6,363 6,35 8,171 7,245 1,712 (6,594) (4,494) (884) (16) (424) (12,474) (1,) (2,775) (17,981) (19,95) (18,337)(16,34) (28,89) (2,) (3,) (4,) 4/Q1 Q2 Q3 Q4 5/Q1 Q2 Q3 Q4 6/Q1 Q2 Q3 Q4 7/Q1 Q2 Q3 Q4 69

70 EBITDA (Broadband Infrastructure Business) Maintained upward trend m JPY) 2, 1, (1,) (23,676) Impact of modem rental business sell-off EBITDA excl. impact of modem rental business sell-off EBITDA (SB consolidated Broadband Infrastructure segment) 16,345 18,122 15,743 11,42 +5,828 +4,856 12,6 15,48 11,85 (5,851) (11,8) (11,451) (15,21) (1,54) (14,2) <BB-4> 18,57 14,955 17,743 11,42 13,265 14, ,23 1,516 (2,363) (2,) (3,15) (2,649) (2,) (3,) 4/Q1 Q2 Q3 Q4 5/Q1 Q2 Q3 Q4 6/Q1 Q2 Q3 Q4 7/Q1 Q2 Q3 Q4 7

71 Operating expenses and revenues (Broadband Infrastructure Business) <BB-5> Operating income increased as operating expenses reduced m JPY) 3, Operating expenses (impact of modem rental buniness sell-off) Operating expenses Operating revenue (excl. impact of modem rental business sell-off) Operating revenue 268,451 25, 264,227 25,36 2, 15, 1, 259,54 247, ,418 5, FY5 FY6 FY7 71

72 CAPEX and depreciation (Broadband Infrastructure business) BB 6 CAPEX largely reduced - CF largely improved as well 1, 83,91 8, Lease 6, 47,652 4, 2, Lease 22,16 Lease FY25 FY26 FY27 Ref. Depreciation 27,222 m JPY FY25 FY26 FY27 CAPEX (fixed asset addition) 83,91 47,652 22,16 Leases 14,493 23,135 2,523 Others 69,48 24,517 19,583 *Leases: Capital leases in which the ownership of leased assets is not transferred to lessees at the end of lease period 72

73 Number of lines and full charged users - ADSL - Maintained net gain of number of lines <BB-7> m lines) Cummulative lines installed Charged users 2 1 5/Q1 Q2 Q3 Q4 6/Q1 Q2 Q3 Q4 7/Q1 Q2 Q3 Q4 73

74 Product MIX - ADSL - Increase of high speed service and wireless LAN ratio BB Phone only YBB 8M (ADSL only) YBB 8M YBB 8M+WLAN YBB 12M YBB 12M+WLAN YBB 26M YBB 26M+WLAN YBB 5M YBB 5M+WLAN YBB 5MR YBB 5MR+WLAN 1% 9% 8% 1% 9% 8% <BB-8> 5M ratio 26.9% 7% 7% 6% 6% 5% 4% 3% 5% 4% 3% Wireless LAN ratio 29.1% 2% 2% 1% 1% % Q3 Q4 4/Q1 Q2 Q3 Q4 5/Q1 Q2 Q3 Q4 6/Q1 Q2 Q3 Q4 7/Q1 Q2 Q3 Q4 % 74

75 ARPU (User payment base*) - ADSL - <BB-9> Slight decrease of ARPU in Q4/7 compared to Q3 (JPY) 5, 4,5 4, 3,5 3, 2,5 JPY 4,359 Yahoo! ISP BB security BB phone call Wireless LAN Modem rental revenue 2, 1,5 1, Basic fee 5 2/Q3 Q4 3/Q1 Q2 Q3 Q4 4/Q1 Q2 Q3 Q4 5/Q1 Q2 Q3 Q4 6/Q1 Q2 Q3 Q4 7/Q1 Q2 Q3 Q4 *The above graph is based on user s payment. The impact of the modem rental business sale is not reflected. 75

76 ARPU (Based on sales after modem rental business sell-off) -ADSL- <BB-1> (JPY) 5, 4,5 4, 3,5 Receiving servicing fee, while modem rental revenue decrease ARPU trend on user payment basis Recognition of deferred gain on sale Receipt of servicing Fee,etc. from modem operator Yahoo! ISP 3, 2,5 2, BB security BB phone call Wireless LAN Modem rental revenue 1,5 Basic fee 1, 5 2/Q3 Q4 3/Q1 Q2 Q3 Q4 4/Q1 Q2 Q3 Q4 5/Q1 Q2 Q3 Q4 6/Q1 Q2 Q3 Q4 7/Q1 Q2 Q3 Q4 76

77 Churn rate - ADSL - <BB-11> Maintained low and stable level of churn rate regardless of seasonal factors 1.% 9.% 8.% 7.% 6.% Caused by one-off seasonal factors (moving, etc.) 5.% 4.% 3.% 2.% 1.%.% Dec-4 Mar-5 Jun-5 Sep-5 Dec-5 Mar-6 Jun-6 Sep-6 Dec-6 Mar-7 77

78 - Broadband Infrastructure Business - Fixed-line Telecommunications Business - Mobile Communications Business 78

79 Summary - Fixed-line Telecommunications Business - <Fixed-1> Expansion of Corporate business base FY25 FY26 FY27 YoY variance YoY variance rate Corporate voice lines (k lines) Otoku Line + MYLINE 1,56 1,363 1, % Big improvement in operating income/loss Consolidated Operating income/loss of SOFTBANK TELECOM (SBTM) turned to positive Fixed-line Telecommunications Business Operating (loss) income SBTM Consolidated base Operating (loss) income FY25 FY26 FY27 YoY variance YoY variance rate (36,65) (25,158) (2,965) 22,193 - (52,11) (2,988) 1,288 22,276 - Operating (loss) income of Fixed-line Telecommunications Business in FY25 is reflected from the second half 79

80 Operating income/loss and EBITDA (SB consolidated/fixed-line Business) <Fixed-2> Steady improvement of operating income/loss 6, 4, 2, 6 months (Oct-Mar) Operating (loss) income 21,496 EBITDA 42,588 (2,) (6,551) (25,158) (2,965) After amortization of SBTM goodwill (approx. 4 bn JPY/year) (4,) (36,65) (6,) FY5 FY6 FY7 8

81 Operating income/loss and EBITDA (SBTM consolidated) <Fixed-3> SBTM consolidated Operating loss turned positive 6, Operating (loss) income 4, EBITDA 41,29 2, 19,581 5,698 1,288 (2,) (2,988) (4,) (6,) (52,11) FY5 FY6 FY7 81

82 Operating revenue and Operating expense (STBM consolidated) Operating income improved as operating revenue increased and operating expense reduced 5, SGA Cost of sales Operating revenue <Fixed-4> 4, 335,83 353, ,522 3, 2, 267,99 285, ,859 1, 119,923 88,718 84,374 FY5 FY6 FY7 82

83 CAPEX and Depreciation (Fixed-line Business) Reduced CAPEX largely (CF largely improved as well) 2, 15, 186,873 Lease 6 months (Oct-Mar) <Fixed-5> 1, 5, 82,652 Lease 37,686 Lease FY25 FY26 FY27 Ref: Depreciation 4,826 m JPY CAPEX (fixed asset addition) FY25 FY26 FY27 186,873 82,652 37,686 Leases 119,422 22,692 7,681 Others 67,451 59,96 3,5 *Leases: Capital leases in which the ownership of leased assets is not transferred to lessees at the end of lease period 83

84 Strategy of SOFTBANK TELECOM <Fixed-6> Enhance corporate business in 3 focused areas Otoku Line Data/Service Mobile Enhancement of Corporate business Lean management Turn to positive 84

85 Corporate sales (SBTM Consolidated) Steady enhancement of corporate business base <Fixed-7> 4, 3, Corporate Sales Consumer Sales Corporate Sales Ratio 75.6% 75.7% 82.1% 1% 8% 6% 2, 4% 1, 2% FY5 FY6 FY7 * Mobile phone sales business of former Telecom Service Co., Ltd. in FY5, FY6 is deducted % 85

86 Number of Otoku-line/MYLINE users Expanded corporate business base mainly with Otoku-line (k lines) 2, <Fixed-8> 1,8 1,6 1,4 1,2 Corporate MYLINE 1, 8 6 Corporate Otoku Line 4 2 Jun-5 Sep-5 Dec-5 Mar-6 Jun-6 Sep-6 Dec-6 Mar-7 86

87 Number of lines - Otoku Line - Steady growth of Otoku Line number of lines <Fixed-9> (k lines) 1,4 1,2 Consumer SME(excl.JTI) Heisei Denden SME(JTI) Large company 1,221 1, Sales agent administration work was transferred to JTI SBTM focuses on direct sales to large companies Corporate end March 7) 733k lines Corporate ratio: 6 (k lines) Mar-6 Mar-7 variance Consumer (44) Corporate Total 848 1, /Q46/Q1 Q2 Q3 Q4 7/Q1 Q2 Q3 Q4 87

88 ARPU - Otoku Line - <Fixed-1> SOFTBANK TELECOM focuses on Otoku Line for large accounts, where higher revenue is expected. ARPU of corporate customers is increasing. (JPY) 12, consumer SME(excl JTI) large company 1, 8, 6, 4, 2, 6/Q1 Q2 Q3 Q4 7/Q1 Q2 Q3 Q4 88

89 Promote expansion of corporate mobile sales 4 commitments of mobile business are also important in the corporate market Expansion of of network Enrichment of of corporate handset <Fixed-11> X1HT X1NK/ Nokia E61 813SH for Biz C1SI Enhancement of of corporate sales structure Enhancement of of content/ solutions 89

90 - Broadband Infrastructure Business - Fixed-line Telecommunications Business - Mobile Communications Business 9

91 Summary - Mobile Communications Business - <Mobile-1> Expansion of net addition FY25 FY26 FY27 YoY variance YoY variance rate Cumulative subscriber (k) 15,41 15,21 15, % Reference Subscriber situation at the end of Apr. 27 Net addition 163,6 MNP NET) + 4,7 First positive since MNP start) Steady operating income FY25 FY26 FY27 YoY variance YoY variance rate Mobile Communications Operating income Newly established in FY27 155, SBM Consolidated Operating income 158,26 76,35 134,67 58, % The financial results of SBM were consolidated for 11 months, from May 26 on. SBM: SOFTBANK MOBILE Corp. *The figures of "SBM Consolidated" in FY25,FY26 are results of former Vodafone K.K., before acquisition. 91

92 Operating income/loss and EBITDA Maintained upward trend after acquisition 5, 4, SBM (former Vodafone K.K.) consolidated base Operating income EBITDA 42,84 35,64 Operating income EBITDA <Mobile-2> SB consolidated (Mobile Communications segment) (Unit: m JPY) 3, 3, ,484 2, 158,26 134,67 155,743 1, 76,35 FY5 FY6 FY7 Vodafone FY7 11 months from May 92

93 Operating income/loss and EBITDA (SB consolidated/mobile communications segment) Smooth recovery for various management challenges for initial year after acquisition 12, 1, Operating income EBITDA 14,82 <Mobile-3> 87,985 8, Newly established in Q1 73,615 6, of FY27 ended in March 27 55,82 56,96 4, 27,293 29,341 42,22 2, 2 months (May, June) 6/Q1 Q2 Q3 Q4 7/Q1 Q2 Q3 Q4 93

94 Operating income/loss and EBITDA (SBM consolidated) Firm trend compared to the performance under Vodafone K.K. <Mobile-4> 12, Operating income EBITDA 13,187 1, 8, 91,314 63,868 68,796 76,884 83,866 74,338 88,673 6, 5,667 4, 35,188 31,162 34,474 2, 8,332 13,734 19,48 18,31 6/Q1 Q2 Q3 Q4 7/Q1 Q2 Q3 Q4 94

95 3G Network enhancement: base stations <Mobile-5> (BS) 46, 29,44 End April 7: + approx. 31, BS achieved Property secured Construction In service Q1 Q2 Q3 Q4 FY7 Scheduled to reach 46, BS in 1st half of FY 8 FY27 CAPEX(*) JPY 38,46m SB consolidation/ mobile communications segment (11 months) *Including capital leases in which the ownership of leased assets is transferred to lessees, and those in which the ownership of leased assets is not transferred to lessees, at the end of each lease periods. 95

96 Net addition - Monthly Rapid growth of net addition after brand change in Oct (k) <Mobile-6> (5) (1) 5 Apr-4 May Jun (4) (4) 18 Jul Aug Sep Oct Nov Vodafone Dec Jan-6 Feb Mar Apr 1 27-Apr Acquisition May Jun Jul Aug Sep Oct Nov Dec Jan-7 Feb Mar Apr 1-Oct Brand change 24-Oct MNP Start Net addition in Apr ,6 Out of which MNP NET) +4,7 First positive figure since MNP start 96

97 Net addition - Quarterly <Mobile-7> 45 (k) Net addition share in Q4/FY (5) (15) (74) (119) 5/Q1 Q2 Q3 Q4 6/Q1 Vodafone Q2 Q3 Q4 7/Q1 Q2 Q3 Q4 [FY] 23% Net addition in Q4/FY7 412, 97

98 Net addition - Annual <Mobile-8> 1, (k) Net addition share of FY % 4 Net addition in FY ,6 FY5 FY6 FY7 Vodafone 98

99 Cumulative subscribers - Annual <Mobile-9> (k) 2, 16,72 15, 1, 15,2 15,4115,2115,99 13,963 12,232 9,978 8,166 Exceeded 16 million 6,179 5, 4,123 FY98 FY99 FY FY1 FY2 FY3 FY4 FY5 FY6 FY7 FY8 Apr J-phone Vodafone 99

100 Oct Nov Dec 7-Jan Feb Mar (1) 1 Aug Sep Jun Jul Apr May Net addition - Monthly (k) <Mobile-1> KDDI NTT DoCoMo *Source: Disclosed information by each company 5-Apr May Jun Jul Aug Sep Oct Nov Dec 6-Jan Feb Mar

101 Net addition - Quarterly <Mobile-11> (k) 1,5 1, KDDI NTT DoCoMo (3) 5/Q1 Q2 Q3 Q4 6/Q1 Q2 Q3 Q4 7/Q1 Q2 Q3 Q4 [FY] *Source: Disclosed information by each company 11

102 Net addition - Annual <Mobile-12> (k) 3, KDDI 2,5 2, 1,5 NTT DoCoMo 1, 5 [FY] FY5 FY6 FY7 *Source: Disclosed information by each company 12

103 Cumulative subscriber number - Annual <Mobile-13> (k) 6, 5, NTT DoCoMo 4, 3, KDDI 2, 1, FY98 FY99 FY FY1 FY2 FY3 FY4 FY5 FY6 FY7 *Source: Disclosed information by each company 13

104 3G Subscribers 3G ratio exceeded 5%, while prepaid subscribers decreased <Mobile-14> (k) 18, 16, 14, 3G 2G prepaid 15,99 15,19 15,174 15,211 15,41 14,967 14,992 15,117 15,21 15,24 15,37 15,497 1,622 1,57 1,614 1,668 1,653 1,644 1,632 1,631 1,69 1,561 1,566 1,646 16,72 1,586 12, 1, 8, 6, 4, 2, [FY] 13,42 13,298 13,177 12,47 12,24 11,66 11, ,3 1,754 2,318 1,564 5/Q1 Q2 Q3 Q4 6/Q1 Q2 Q3 Q4 7/Q1 Q2 Q3 Q4 Apr Vodafone End Mar 26 3G customer: 3,38K 3G ratio 2.% 3,38 9,964 3,716 9,179 4,563 7,89 End Apr 27 3G customer: 8,22K 3G ratio 51.1% (vs. end Mar % 5,961 6,626 7,66 6,266 8,22 14

105 3G ratio Enhancing efforts with the objective to further increase the 3G ratio <Mobile-15> 1 (%) SoftBank NTT DoCoMo KDDI % (Apr-27) (Mar-27) 38.4% (Dec-26) % (Dec-25) 2.4% (Dec-24) [FY] *Source: Disclosed information by each company *SOFTBANK MOBILE launched 3G service from Dec. 22, and KDDI launched in Apr

106 Impact from business model change <Summary> <Mobile-16> Penetration of installment sales method/ Reduce incentive/ Lower churn rate FY7/Q2 FY7/Q3 FY7/Q4 Medium/long term trend Handset sales model Acquisition incentive per gross addition Special discount (New super bonus) Promotion for new subscription Large amount of sales incentive to be paid to agents Installment sales to customers (lump-sum payment also possible) 43,8 JPY 22,4 JPY 29, JPY To decrease Discount certain amount from monthly NA basic charge, packet and communication - charge every month Monthly basic charge, packet flat-rate NA - charge 2 months free, etc. - ARPU 5,7 JPY 5,56 JPY 5,21 JPY To decrease by special discount Data ARPU increase Installment contract period 26 months* (24 time payments) - Churn rate Total 1.27% 1.6% 1.63% 3G 1.5% 1.66% 1.37% Lowered by acquiring longtenure users *26 payment cycle starts 3 months after subscription 16

107 Installment receivables and New Super Bonus ratio New handset sales model settling in *New Super Bonus ratio: Apr-7 approx. 87% (preliminary figures) <Mobile-17> 2, Installment receivables New Super Bonus ratio 177,276 1% 9% 15, 7.9% 77.2% 8% 7% 6% 1, 87,552 5% 4% 5, 9.7% 6,291 7/Q1 Q2 Q3 Q4 3% 2% 1% % *The rate of new acquisition & upgrades for postpaid subscriptions with installment sales to the total 17

108 ARPU Data ARPU increase is the key for total ARPU improvement <Mobile-18> (JPY) 7, Data Voice Monthly charge 2 months free Packet flat rate fee 2 months free Super Bonus Special Discount 6, and other promotions 5,21 5, 4, 3, 3,83 2, 1, 1,38 5/Q1 Q2 Q3 Q4 6/Q1 Q2 Q3 Q4 7/Q1 Q2 Q3 Q4 5/Q1 Q2 Q3 Q4 6/Q1 Q2 Q3 Q4 7/Q1 Q2 Q3 Q4 ARPU (JPY/month) Voice 4,82 4,94 4,78 4,49 4,54 4,54 4,51 4,26 4,23 4,32 4,3 3,83 Data 1,32 1,35 1,3 1,32 1,33 1,39 1,33 1,34 1,35 1,38 1,38 1,38 Total 6,14 6,29 6,8 5,81 5,87 5,93 5,84 5,6 5,59 5,7 5,68 5,21 18

109 Acquisition cost per gross addition <Mobile-19> Overall downward trend after introduction of installment sales method. Rose in 7/Q3-Q4 due to high season and decrease in handset gross margin (JPY) 8, 7, 6, 5, 43,8 4, 3, 2, 22,4 29, 1, 6/Q1 Q2 Q3 Q4 7/Q1 Q2 Q3 Q4 19

110 Churn rate <Mobile-2> Downward trend in mid/long term due to introduction of installment sales method 4.% SBM NTT Docomo au 3.% 2.% 1.63% 1.%.% 5/Q1 Q2 Q3 Q4 6/Q1 Q2 Q3 Q4 7/Q1 Q2 Q3 Q4 5/Q1 Q2 Q3 Q4 6/Q1 Q2 Q3 Q4 7/Q1 Q2 Q3 Q4 Churn rate % 1.85% 2.% 1.82% 1.9% 1.69% 1.59% 1.47% 1.61% 1.5% 1.27% 1.6% 1.63% 11

111 Churn rate Downward trend <Mobile-21> 4.% SBM Total 3G 3.% 2.% 1.63% 1.65% 1.% 1.37% 1.22%.% 5/Q1 Q2 Q3 Q4 6/Q1 Q2 Q3 Q4 7/Q1 Q2 Q3 Q4 Apr (preliminary figures) 5/Q1 Q2 Q3 Q4 6/Q1 Q2 Q3 Q4 7/Q1 Q2 Q3 Q4 Churn rate % 1.85% 2.% 1.82% 1.9% 1.69% 1.59% 1.47% 1.61% 1.5% 1.27% 1.6% 1.63% 3G Churn rate % 3.2% 3.4% 2.4% 2.39% 2.43% 2.52% 2.27% 3.28% 1.73% 1.5% 1.66% 1.37% 111

112 Upgrade rate Downward trend <Mobile-22> 5.% 4.% 3.% 2.89% 2.53% 2.% 1.%.% 5/Q1 Q2 Q3 Q4 6/Q1 Q2 Q3 Q4 7/Q1 Q2 Q3 Q4 Apr (preliminary figures) 5/Q1 Q2 Q3 Q4 6/Q1 Q2 Q3 Q4 7/Q1 Q2 Q3 Q4 Upgrade % 1.89% 2.46% 2.6% 2.55% 2.5% 2.81% 2.61% 2.34% 1.99% 2.53% 3.2% 2.89% 112

113 MOU <Mobile-23> Maintained upward trend (min.) /Q1 Q2 Q3 Q4 6/Q1 Q2 Q3 Q4 7/Q1 Q2 Q3 Q4 5/Q1 Q2 Q3 Q4 6/Q1 Q2 Q3 Q4 7/Q1 Q2 Q3 Q4 MOU (minutes)

114 SOFTBANK s Fundamental Management Policy Endeavoring to benefit society and the economy and maximize enterprise value by fostering the sharing of wisdom and knowledge gained through the IT revolution. 114