ANNUAL REPORT 2013 Softbank Corp

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ANNUAL REPORT 2013 Softbank Corp ANNUAL REPORT 2013 SoftBank Corp. ANNUAL REPORT 2013 Contents 001 User Guide CEO Interview P. 0 16 Segment Information P. 0 36 Identity P. 0 02 036 Mobile Communications Segment An interview with chairman and CEO Masayoshi Son, 002 Corporate Philosophy 038 Broadband Infrastructure Segment 003 Vision in which he talks about the Group’s performance in 039 Fixed-line Telecommunications Segment 004 Business and Investments fiscal 2012, growth forecasts, and strategies for the 040 Internet Culture Segment 005 Group Structure medium and 041 Major Consolidated Subsidiaries 006 Earnings Forecast long term. and Affiliates 007 CEO Message 044 Market Data for Mobile Communications 008 Masayoshi Son—A Brief History 046 Macro and Semi-macro Data 047 SoftBank Group in Figures Snapshot P. 0 10 Management Organization P. 0 50 010 Five-year Summary 011 Graphs I 050 Directors and Audit & Supervisory Board Members 012 Graphs II 052 External Audit & Supervisory 013 Graphs III Board Member Interview 014 At a Glance Masayoshi Son 054 Corporate Governance Chairman & CEO 066 Compliance 068 Risk Management 069 Information Security Feature P. 0 25 070 Corporate Social Responsibility (CSR) Great Expectations Financial Section P. 0 73 074 Eleven-year Summary 075 Management’s Discussion and Analysis of Operating Results and Financial Condition 100 Consolidated Financial Statements 107 Notes to Consolidated Financial Statements 145 Independent Auditor’s Report Corporate Information P. 1 46 Telecommunications Investment Financial and 146 The SoftBank Group’s History Business Strategy Strategy Capital Strategy 148 Corporate Data P. 0 26 P. 0 30 P. 0 34 149 Stock Information 150 Glossary SoftBank Corp. ANNUAL REPORT 2013 001 User Guide Disclaimer This PDF has various features to make it easy to use and to search for • This annual report is made based on information available at the time of writing. Plans, forecasts, strategies, and other forward-looking statements in this report are not historical facts, and include elements of risk and information. It also contains links to external web sites to allow you to uncertainty. Actual results may therefore differ materially from these forward-looking statements due to refer to external information easily. changes in the business environment and other factors. • Information in this report regarding companies other than SoftBank Corp. and other companies of the SoftBank Group is quoted from public sources and others. We do not guarantee the accuracy of this information. Identity Snapshot CEO Interview Feature: Great Expectations • SoftBank Corp. expressly disclaims any obligation or responsibility to update or revise or supplement any forward-looking statement in any presentation material or generally to any extent. Use of or reliance on the Click to go to the first page of each category. information in this annual report is at your own risk. Company Names Return to last • Except where specifically noted otherwise, “SoftBank” and “the Company” in this annual report refer to page opened SoftBank Corp., and “the SoftBank Group” and “the Group” indicate the Company, its consolidated subsid- iaries, and affiliates. In principle, “Co. Ltd.,” “Corporation,” etc., are omitted from the names of companies Go to contents page and organizations in this annual report. Move back to previous page Definition of Terms Move forward • “Fiscal 2012” refers to our fiscal year ended March 31, 2013, and other fiscal years are referred to in a to next page corresponding manner in this annual report. FYE denotes the fiscal year-end. For example, FYE2012 denotes March 31, 2013, the last day of fiscal 2012. • Please refer to the Glossary on pages 150–151 for meanings and definitions of the terms used in this Click on these links to move to different sections of annual report. the report. Other Icons Go to Related Pages 007 CEO Message 016 CEO Interview related page Regarding Trademarks Link to external • iPhone and iPad are trademarks of Apple Inc. Web site • The iPhone trademark is used under license from Aiphone K.K. • Google and Android are trademarks or registered trademarks of Google Inc. • Other names of companies, products, and services and such that appear in this annual report are trademarks or registered trademarks of their respective companies. SoftBank Corp. ANNUAL REPORT 2013 002 Identity Corporate Philosophy Corporate Philosophy Information Revolution – Happiness for everyone Related Pages SoftBank Corp. ANNUAL REPORT 2013 003 Identity Vision Vision The corporate group needed most by people around the world Related Pages SoftBank Corp. ANNUAL REPORT 2013 004 Identity Business and Investments Business and Investments Entry into the U.S. telecom- 2013 munications market through Strategic the acquisition of Sprint Investments Entry into the mobile communications business 2006 through the acquisition of Vodafone K.K. Entry into the fixed-line telecommunications business 2004 through the acquisition of JAPAN TELECOM 2001 Launch of broadband infrastructure business Identification of Yahoo! Inc. in the U.S. as a potential 1996 Business Intelligence investment and rapid growth of Yahoo Japan 1994 Strategic investment in Internet-related companies in the U.S. 1990 1995 2000 2005 2010 Seamless Interaction Between Business Operations and Investments Creates a Virtuous Cycle The SoftBank Group contains a unique combination of business operations and strategic investments. Through investing in information industry-related businesses we gather intelligence about transformative opportunities and new future trends. We use this to inform many of our core operating decisions. This seamless interaction between operations and investments creates a virtuous cycle that keeps reinforcing itself. Related Pages SoftBank Corp. ANNUAL REPORT 2013 005 Identity Group Structure Group Structure The SoftBank Group comprises the pure holding company SoftBank, 235 subsidiaries and 108 affiliates (As of March 31, 2013) (including 150 consolidated subsidiaries and 83 equity method companies). The Group possesses both advanced infrastructure and diverse services and content, and invests in promising companies working in the Internet field. SoftBank Corp. (a pure holding company) Major Consolidated Subsidiaries SoftBank Mobile Corp. SoftBank BB Corp. SoftBank Telecom Corp. Yahoo Japan Corporation Voting rights: 100% Voting rights: 100% Voting rights: 100% Voting rights: 42.5% Major Equity Method Affiliates GungHo Online Wireless City Planning Inc. eAccess Ltd. Entertainment, Inc. Alibaba Group Holding Limited Renren Inc. Voting rights: 33.3% Voting rights: 33.3% Voting rights: 33.6% Voting rights: 36.7% Voting rights: 34.1% Others (Notes) 1. Shares of voting rights held are as of the most recent fiscal year-end for each company. 2. ‌Following the application of the International Financial Reporting Standards (IFRS) at SoftBank, Wireless City Planning and eAccess will be treated as consolidated subsidiaries, whereas they had previously been treated as equity method affiliates under Japanese-GAAP. 3. ‌GungHo Online Entertainment became a consolidated subsidiary of the Company from April 1, 2013. Please see p.141 for details. WILLCOM, Inc. 4. ‌The Company owns 100% of shares issued by WILLCOM. However, as of March 31, 2013 WILLCOM was in the process of rehabilitation under the Corporate Reorganization Act and the Company does not have Shares owned: % effective control over WILLCOM. Therefore, WILLCOM was not treated as a subsidiary. WILLCOM became a 100 consolidated subsidiary on July 1, 2013, following an order by the Tokyo District Court to terminate the rehabilitation proceedings. Related Pages SoftBank Corp. ANNUAL REPORT 2013 006 Identity Earnings Forecast Earnings Forecast Related Pages SoftBank Corp. ANNUAL REPORT 2013 007 Identity CEO Message CEO Message Global No. 1 is the Starting Point One day we will become the global No. 1 company in every aspect-profit, cash flow, stock value. These figures prove our strength, and pursuing them fulfills our responsibility to our shareholders, who support us in our dreams and our aspirations. But global No. 1 is just the starting point, not the goal. As a corporate group, we aim to continue growing for the next 300 years and beyond. But this too is just the process, not the goal. The important thing is what we can do for humanity after we become No. 1. Gaining people’s gratitude and respect by realizing lifestyle innovation through IT is the only way we can achieve our purpose. Information Revolution – Happiness for everyone. This is our one and only aspiration. July 2013 Masayoshi Son Chairman & CEO Related Pages SoftBank Corp. ANNUAL REPORT 2013 008 Identity Masayoshi Son—A Brief History Masayoshi Son—A Brief History SoftBank’s founder, chairman and CEO, Masayoshi Son is an 20s: After graduating from university in 30s: After SoftBank’s initial public offering extraordinary entrepreneur who in a single generation built a 1980, Mr. Son returned to Japan and in 1994, Mr. Son closed one big M&A deal corporate group with sales topping ¥3 trillion. established SoftBank Corp. Japan (currently after another in the U.S., including the In August 1957, Mr. Son was born in Japan’s Saga Prefecture SoftBank) in Tokyo the following year. acquisition of Ziff-Davis Publishing as the second son of four children. In 1974, he ventured to the Inspired by a photograph of an Intel micro- Company, publisher of the computer U.S. at the age of 16. He entered the University of California, processor that he saw in a science magazine magazine PC Week. He became well- Berkeley in the Department of Economics. When he was a while studying in the U.S., Mr. Son predicted versed in the M&A process through the cut 19-year-old university student, Mr. Son resolved to become an that computers would rapidly evolve and and thrust of negotiations. In 1996, entrepreneur and created a 50-year life plan. The plan was to become part of everyday life. His starting SoftBank became the primary shareholder get acknowledged in his 20s, build up a war chest in his 30s, point in business was PC software of U.S. Yahoo! Inc. and together they take on a major challenge in his 40s, complete business in his distribution.
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