SKY Perfectv! All Japanese Digital Tvs Have Built-In Tuners Preset for SKY Perfectv! Enabling Any Viewer to Easily Receive and Enjoy Program Broadcasts

For the year ended March 31, 2014 For the year Annual Report 2014 Annual NEW ERA SKY Perfect JSAT Holdings Inc. Holdings JSAT Perfect SKY TO BRIDGE

SKY Perfect JSAT Holdings Inc. Annual Report 2014 Who we are

Fiscal 2013 Revenues Total ¥171.7 billion

*The percentages are calculated on the basis of the figures of sales to external customers (including internal transactions)

Multichannel Pay TV Space & Satellite Business Business 66.1% 33.9%

SKY Perfect JSAT is the largest satellite-based multichannel pay TV in Japan and is the largest satellite communications operator in Asia. 01 Annual Report 2014 Multichannel Pay TV Business

Media Center Customer Center The media center digitalizes program The Customer Center operators pro- content received from broadcasters for vide customer services in all business satellite transmission. The center also areas from processing subscription produces original programs for its applications, programming requests, broadcast channels. and contract modifications to subscription billing and payments. SKY PerfecTV! All Japanese digital TVs have built-in tuners preset for SKY PerfecTV! enabling any viewer to easily receive and enjoy program broadcasts.

We provide SKY PerfecTV!, Japan’s Largest satellite based multichannel pay TV broadcast service.

We provide a wide variety of content ranging from sports, movies and music to TV dramas and anime.

SKY Perfect JSAT Holdings Inc. 02 Space & Satellite Business

Mobile Station Mobile stations enable satellite communications from any location using transportable broadcast and Satellite Control Center transmission equipment, such as Mobile Satellite The Satellite Control Center car- antennas that can be mounted on Communications ries out operations to monitor vehicles. Mobile stations are often satellite connection conditions used for on-site gathering of data Mobile satellite communi- and quality and oversees the by TV news broadcasters and for cations enable Internet communications and other ser- communication connections in connections on seagoing vices utilizing the satellites as emergency situations. vessels and airplanes. well as monitors satellite conditions and controls orbital slots. Earth Station A terrestrial satellite communications facility.

The coverage of our 16 communications satellites spans all of Asia, Oceania and North America.

We are the largest satellite communications provider in Asia and Oceania. We provide satellite communications services to companies and government agencies in Asia and are actively developing global operations.

03 Annual Report 2014 MARKET & POSITION

Multichannel Pay TV Business Largest subscriber base in the Japanese satellite pay TV market The Japanese multichannel pay TV market is slowly but steadily growing as a strong offering of a wide variety of specialty channel needs is appealing to diverse viewer interests and preferences.

Multichannel Pay TV Market in Japan

(Unit: Thousands of subscribers) CATV IPTVs 3.7 million subscribers 15,000

1,090 980 970 12,000 900 462 695 3,814 3,829 3,717 9,000 3,666 3,688 3,725

6,000

7,429 7,940 7,950 8,000 3,000 7,142 7,243

0 2009 2010 2011 2012 2013 2014 Years ended as of March 31 Sources: Materials from the Ministry of Internal Affairs and Communications, HOSO JOURNAL, and our own research. A Market with substantially more room to grow The Japanese Pay TV market still has substantial room to grow as the household penetration rate for multichannel pay TV broadcasts is still lower in Japan than in Europe and the United States.

Penetration Rate of Multichannel Pay TV Major Pay TV Services in Japan (%) 100 J:COM TV 90 80 Type DTH DTH Cable TV IPTV (and FTTH) (and FTTH) (FTTH)

2.05 1.57 60 Subscribers* 3.11 n/a millions millions millions 50 40 channels 80ch 70ch 170ch 77ch (Basic)

20 24* STB Not required Required Required Required

0 JAPAN UK USA VOD SKY PerfecTV! J:COM Video Service * Multichannel pay TV subscribers for Japan as above refers to the sum total of On-Demand On-Demand Service multichannel cable TV subscribers, SKY PerfecTV! subscribers, IPTV subscribers (except for NHK BS subscribers). *The number of subscribers is as of March 31, 2014. See a November 2011 report from Goldman Sachs on household penetration rates for pay TV in the UK and US.

SKY Perfect JSAT Holdings Inc. 04 Space & Satellite Business The No.1 satellite operator in Asia, No.5 in the world Our 16 satellites make us the largest satellite operator in Asia and ﬁ fth in the world.

Satellite Operators Ranking*1 in the Global Satellite Market

Luxembourg Luxembourg France Canada Japan

Fiscal 2013 Revenues*2 2,640 2,560 1,790 839 608*3 (US$ in millions)

Satellites in orbit 55 55 37 10 16

*1 Companies listed here are ﬁ xed satellite services (FSS) operators (exluding MSS operators) *2 The above revenues are in millions of U.S. dollars for the year ended Dec. 31, 2013, exluding SKY Perfect JSAT. Figure for the company is only for the year ended Mar. 31, 2014. *3 The revenue ﬁ gure for SKY Perfect JSAT represents sales of its Space and Satellite Business only. The translations of yen amounts into U.S. dollar amounts are for the convenience of readers outside Japan and have been made at the rate of JPY102.92 to $1, the approximate rate of exchange at March 31, 2014. Source: Spacenews dated July 7th, 2014 Global market growth led by Asia and Oceania Satellite communications business is expected to continue growing, with Asia at the forefront of the growth. We will expand operations by leveraging our strong position as the largest satellite operator in Asia and enter into collaborations and partnerships with other operators to promote our global development.

Demand Forecast in Global Satellite Market (2012–2019E) Satellite Transponders Demand Forecast in the world: Ku/C-band in TPEs*

Western Europe Russia CIS North America 675 to 664 393 to 647 905 to 866 CAGR:(0.2)% Eastern Europe CAGR:7.4% CAGR:(0.6)% 334 to 420 CAGR:3.3%

South East Asia ME & North Africa 419 to 618 545 to 585 CAGR:5.7% Sub Saharan Africa Australia & Pacific Latin America CAGR:1.0% 696 to 857 225 to 250 838 to 1,176 CAGR:3.0% CAGR:1.5% CAGR:5.0%

* Equivalent to 36MHz Transponder Sources: Euroconsult – Satellite Communications and Broadcasting Market * : Service areas of SKY Perfect JSAT Corporation. Survey by way of Goldman Sachs’s discussion materials

05 Annual Report 2014 BUSINESS MODEL & STRENGTHS

Multichannel Pay TV Business

SKY PerfecTV! is a multichannel pay TV platform linking broadcasters and subscribers and with comprehensive operations in the multichannel pay TV business, from TV channel broadcasting to customer management and sales promotion operations.

Business Framework

Broadcasters/Program Providers Subscribers

0LATFORM3ERVICE Program/ Program Packages

Offering various content from s4RANSMISSIONDELIVERYOFPROGRAMS Programs/packages that fit their entertainment such as music, movies, s-ANAGEMENTOFSUBSCRIBERS lifestyle and tastes. sports and documentaries to s0ROVISIONOFPROGRAMINFORMATION information, shopping and education s0ROMOTIONSTOATTRACTSUBSCRIBERS

Service Portfolio SKY PerfecTV! offers three service menus based on reception environment and channel lineups and differentiates its products from cable TV and other providers by specially priced basic subscription packages as well as subscription contracts for as few as a single channel.

Number of Subscribers*1 (Thousands) 2,055 1,570 90

Channels (HD) 70 (35) 170 (120) 150 (120)

STB Not Required Required Required

*1. The number of Subscribers is as of March 31, 2014.

Content catering to myriad devices Users of our SKY PerfecTV! On-Demand (video-on-demand) service are steadily growing as we develop content, led by live broadcasts of J-League games (professional Japanese soccer) in particular, and other sports, catering to myriad devices such as smart phones and tablets.

SKY Perfect JSAT Holdings Inc. 06 SKY PerfecTV! available to Unparalleled number of virtually every household HD channels All Japanese digital TVs have built-in tuners, enabling any The SKY PerfecTV! Premium Service offers some 120 viewer to easily receive SKY PerfecTV! broadcasts via a high-deﬁ nition channels that meet the highest image qual- satellite antenna. This is a formidable advantage over cable ity expectations of viewers in a wide range of genres from TV and other operators where reception requires purchase sports, including 900 Japanese professional soccer league or rental of an external set-top box. games each year, to movies, music, and foreign TV dramas.

Cumulative Subscriber Growth* for the Basic Number of HD Channels SKY PerfecTV! Service for TVs with a Built-in Tuner (ch) (*this figure does not include SKY PerfecTV! premium service subscribers) 150 (Subscribers) 2,500,000 121ch 120ch

2,000,000 100 CAGR: 23.2% 88ch (2008.4-2014.3) 1,500,000 72ch

1,000,000 50

500,000 15ch

0 0 Apr. 2008 Mar. 2014 Aug. 08 Oct. 09 Feb. 11 Sep. 12 Mar. 14

Viewership boosted by Advantages of satellites to seniors next-generation Ultra HD In Japan, free-to-air TV programming largely focus on creating Satellite broadcasting is considered the best choice for Ultra programs for the trend-setting younger viewers but Japan’s HD (4K/8K) since it is able to transmit a large volume of high aging demographic is boosting our subscriber numbers as resolution pictures at very high speed across the country. active seniors are attracted to our diversity of specialty channels providing entertaining viewing in their various areas of interest.

Percentage of Subscribers by Age Distribution

1% 10S

12% 20S 60S 18%

23% 30S 50S 20%

40S 26% 4K broadcast with breathtaking high-resolution images

07 Annual Report 2014 BUSINESS MODEL & STRENGTHS

Space & Satellite Business

Our satellite communication system employs the Business Frameworkmework optimal method for communicating large volumes Data, Video, Audio of real time data to a multitude of reception sites, uplinking data from the ground to communications satellites in geostationary orbit 36,000 kilometers Signals above the equator then downlinking to reception sites back on earth. The satellite communication services we provide to corporations and government agencies take full advantage of the beneﬁ ts of our satellite systems, including the wide coverage, multi-destination distribution, and disaster resistance. Satellite Control Center Corporate Customers/ (SKY Perfect JSAT) Government Agencies In-orbit resources

JCSAT-110R 110˚E

N-SAT-110 110˚E

Superbird-3 JCSAT-1B 93˚E 150˚E

JCSAT-85 JCSAT-2A 85˚E 154˚E

JCSAT-6 Superbird-B2 82˚E 162˚E

Horizons-2 Superbird-C2 85˚E 144˚E JCSAT-4B N-STARc 124˚E 136˚E JCSAT-RA in-orbit back up JCSAT-3A JCSAT-5A Horizons-1 128˚E 132˚E 127˚W

Our Satellite Fleet

Used primarily for Multichannel Pay TV Business

N-SAT-110 JCSAT-110R JCSAT-4B JCSAT-RA JCSAT-3A JCSAT-1B JCSAT-2A

Orbital position 110ºE 110ºE 124°E (In-orbit back-up) 128ºE 150ºE (inclined) 154ºE

Launch date (Japan time) Oct. 7, 2000 Aug. 7, 2011 May 16, 2012 Aug. 22, 2009 Aug. 12, 2006 Dec. 3, 1997 Mar. 29, 2002

Launch vehicle Ariane 4 Ariane 5 Ariane 5 Ariane 5 Ariane 5 Ariane 4 Ariane 4

Satellite bus A2100AX A2100A A2100AX A2100AX A2100AX Boeing 601 Boeing 601

Design life 15 years 15 years 15 years 15 years 15 years 12 years 11 years

Ku band Ku band Ku band Frequency band Ku band Ku band Ku band Ku band C band C band C band

SKY Perfect JSAT Holdings Inc. 08 “Satellite communications strength” conﬁ rmed after the Great East Japan Earthquake Small and lightweight portable equipment allows satellite connections in any location, including mountainous areas outside terrestrial network ranges and when terrestrial lines are damaged by an earthquake or other causes. Satellite communications were used in place of landline and mobile phones for rescue and relief activities after the 2011 Great East Japan Earthquake. Satellite communications were also key to Internet connections for government agencies and evacuation centers and as a backhaul connection for mobile phones. Satellite communications are now revaluated as effective back up communications in a time of disasters.

Strengthening the foundation for full-fl edged expansion in Asia Satellite communication demand is increasing in Asia and Oceania, which encompasses innumerable islands and is seeing increasing mining activity for natural resources. We are fortifying our operating foundation for full-fl edged expansion in the Asian region, including the May 2012 successful launch of the JCSAT-4B satellite equipped with a South- east Asian beam and the opening of a representative offi ce in Jakarta, Indonesia. JCSAT-4B Coverage Area of JCSAT-4B

As of June 31, 2014

Used primarily for Space & Satellite Business

JCSAT-6 JCSAT-5A JCSAT-85 Horizons-1 Horizons-2 Superbird-B2 Superbird-3 Superbird-C2 N-STAR c

82ºE 132ºE 85ºE 127ºW 85ºE 162ºE 93ºE (inclined) 144ºE 136ºE

Feb. 16, 1999 Apr. 13, 2006 Dec. 1, 2009 Oct. 1, 2003 Dec. 22, 2007 Feb. 18, 2000 Jul. 28, 1997 Aug. 15, 2008 Jul. 6, 2002

Atlas 2AS Zenit-3SL Zenit-3SLB Zenit-3SL Ariane 5 Ariane 4 Atlas 2AS Ariane 5 Ariane 5

Boeing 601 A2100AX STAR-2 Boeing 601HP STAR-2 Boeing 601HP Boeing 601 DS2000 STAR-2

14.5 years 12 years 15 years 15 years 15 years Over 13 years Over 10 years 15 years 10 years

Ku band Ku band S band Ku band C band Ku band Ku band Ku band Ku band Ku band Ka band C band S band

09 Annual Report 2014 HISTORY

SKY Perfect Communications Inc., and JSAT Corporation were consistent leaders in multichannel pay TV broadcasting and satellite communications, respectively. In April 2007, SKY Perfect JSAT Corporation was established as a holding company of those two companies, now SKY Perfect JSAT Holdings Inc. Furthermore,

Broadcasting: Milestones 1997 1998 2000 1986 The Ministry of Posts and Five commercial broadcasters, BS digital broadcasts began NHK commenced trial Telecommunications (now the plus WOWOW INC. and STAR BS broadcasts Ministry of Internal Affairs and CHANNEL, INC., received approval Communications) decided to to deliver BS digital broadcasts 1990 digitalize BS broadcasts from 2000 under contract WOWOW INC. began Japan’s ﬁ rst private-sector satellite DirecTV started broadcasts in Japan Terrestrial digital broadcasts began broadcast service using Superbird-C on a trial basis

Multichannel Pay TV Business

1994 March 2000 DMC Planning Inc. Announcement of intention to established cooperate in migration of (In 1995, name changed DIRECTV Japan subscribers to to Japan Digital SKY PerfecTV! Broadcast Service after the termination of DIRECTV Co., Ltd.) 1998 Japan’s services Merged and renamed its service SKY PerfecTV! June 2000 1996 Company name changed to SKY Perfect Communications Inc. Japan Sky Broadcasting October 2000 Co., Ltd. (JSkyB) SKY Perfect Communications Inc., established listed on Mothers of Tokyo Stock Exchange 1996 PerfecTV! started 1985 1990 1995 2000

1985 Satellite Japan April 2000 Corporation established Company name changed to JSAT 1993 Corporation Name changed to 1985 Japan Satellite Systems August 2000 Japan Communications Inc. upon the merger JSAT listed on the ﬁ rst section of Satellite Company, Inc. Tokyo Stock Exchange established

1985 Space Communications Corporation established

Space & Satellite Business

Telecommunication: Milestones 1995 1991 NTT launched N-STAR a, the ﬁrst of 1985 The Internet services commercially its own satellites Nippon Telegraph and Telephone started in the United States 2001 Corporation (NTT) formed through 1993 Intelsat became a private the privatization of Nippon company—Intelsat, Ltd. Denshin Denwa Kosha “The Informative Superhighway” concept was declared in the United States 1989 Japan Communications Satellite Company, Inc. launched “JCSAT-1,” the ﬁ rst commercial communications satellite in Japan, at the 150 degrees east longitude

SKY Perfect JSAT Holdings Inc. 10 Space Communications Corporation joined SKY Perfect Communications and JSAT in a three-way merger in October 2008, marking a new start for the SKY Perfect JSAT Group, with SKY Perfect JSAT Corporation represent- ing the business core.

2011 2003 End of terrestrial analog and BS Terrestrial digital 2009 analog broadcasts. Start of Special broadcast began Satellite broadcasts separated into two parts— Satellite Broadcasting “Special Satellite Broadcasting” (integration of BS and 110˚E CS broadcasts) and “General 2006 Broadcasting”—in advance of the next-stage “One-Seg” terrestrial digital launch of BS digital broadcastingNine companies broadcasts began received approval as “Special Satellite Broadcasting” contracted providers

2004 April 1, 2007 The 110-degree CS broadcasting SKY Perfect Communications Inc. company Plat One Corp., Ltd. was and JSAT Corporation announced merged into the company integration of their businesses as wholly owned subsidiaries of the holding company formed by joint stock transfer Establishment of SKY Perfect JSAT Corporation and 2004 listed on the 1st section of Tokyo Company was changed to Stock Exchange the ﬁ rst section of Tokyo Stock Exchange

SKY Perfect Tokyo Media Center

2004 2007 2012

March 31, 2008 Making Space Communications Corporation a subsidiary

June 27, 2008 The group holding company SKY Perfect JSAT Corporation changed its name to SKY Perfect JSAT Holdings Inc.

October 1, 2008 SKY Perfect Communications Inc., JSAT Corporation, and Space Communications Corporation merged and began operation as a new company, SKY Perfect JSAT Corporation

2007 Multifunctional cellular phone (smart phone), “iPhone” started sale

2006 Intelsat, Ltd. announced acquisition of the U.S. company PanAmSat Corporation to become the world’s largest satellite operator

11 Annual Report 2014 How we’re

Broadcasting

SKY Perfect JSAT Holdings Inc. 12 doing Communications 13 Annual Report 2014 we’re doing How we are Who Management Our planning we’re What Glossary Satellite Basics 71 Corporate Data 42 Financial Section 40 Corporate Social 34 Corporate Governance ReadyfortheWorld 31 Special Feature: 22 President Interview SpaceandSatellite 20 MultichannelPayTV 18 Review ofOperations 18 To OurShareholdersand 16 10 History Business Model&Strengths 06 Market &Position 04 14 Consolidated 01 Proﬁ Responsibility Investors Highlights le Business Business Financial

Corporate Data Financial Section Corporate Social Corporate Special Feature Review of To Our Shareholders Consolidated Overview Satellite Basics/Glossary Responsibility Governance Operations and Investors Financial Highlights SKY Perfect JSAT Holdings Inc. and Consolidated Subsidiaries CONSOLIDATED FINANCIAL HIGHLIGHTS Years ended March 31

Thousands of U.S. Millions of yen, except Per Share Data and Selected Financial Indicators dollars, except per share data (Note 1)

For the Year: 2010 2011 2012 2013 2014 2014 Revenues ¥ 141,069 ¥ 141,850 ¥ 155,242 ¥ 159,610 ¥ 171,683 $ 1,668,121 Cost of Services 86,151 86,028 99,062 106,168 111,253 1,080,961 Selling, General and Administrative Expenses 39,825 42,319 38,694 37,289 38,717 376,190 Operating Income 15,093 13,503 17,486 16,153 21,713 210,970 Income before Income Taxes and Minority Interests 16,446 9,862 15,897 15,644 18,543 180,173 Net Income 14,223 4,421 8,569 9,683 9,659 93,853 Comprehensive Income — 3,658 9,065 11,358 11,053 107,397 EBITDA (Note 2) 41,702 35,257 42,006 42,448 43,673 424,341 Depreciation and Amotization 23,807 24,039 24,892 26,995 25,311 245,931 Capital Expenditures 29,710 18,757 13,972 13,851 23,002 223,493

Net Cash Provided by Operating Activities 39,340 38,957 39,977 38,372 33,345 323,994 Net Cash Provided by (Used in) Investing Activities (23,887) (28,595) 1,995 (11,119) (18,970) (184,316) Free Cash Flow (Note 3) 15,453 10,362 41,972 27,253 14,375 139,678 Net Cash (Used in) Provided by Financing Activities 10,836 (17,302) (34,993) (19,402) (25,444) (247,224)

At Year-End: Cash and Cash Equivalents ¥ 66,727 ¥ 59,500 ¥ 66,405 ¥ 74,473 ¥ 63,784 $ 619,740 Total Assets 335,164 322,079 300,133 290,487 287,580 2,794,211 Interest-Bearing Debt 107,511 91,693 62,506 49,398 44,994 446,895 Total Equity 183,338 180,065 185,052 192,693 184,680 1,794,401

Per Share Data (Yen and U.S. dollars) Net Income (Note 4) ¥ 42.26 ¥ 13.14 ¥ 25.46 ¥ 28.77 ¥ 29.50 $ 0.29 Total Equity (Note 4) 535.60 534.52 549.53 571.33 598.13 5.81 Cash Dividends (Note 4) 12.00 12.00 12.00 12.00 12.00 0.12

Selected Financial Indicators (%) Operating Margin 10.7 9.5 11.3 10.1 12.6 EBITDA Margin 29.6 24.9 27.1 25.8 25.4 Equity Ratio (Note 5) 53.8 55.9 61.6 66.2 64.1 ROE (Note 6) 8.1 2.5 4.6 5.0 5.2 Dividend Payout Ratio 28.4 91.3 47.1 41.7 40.7

Notes: 1. U.S. dollar amounts are included solely for the convenience of readers outside Japan and have been made at the rate of ¥102.92 to $1, the approximate rate of exchange at March 31, 2014. 2. EBITDA is calculated as Net Income + Tax Expense + Depreciation Expense + Interest Expense. 3. Free Cash Flow is calculated as Net Cash Provided by Operating Activities + Net Cash Provided by (Used in) Investing Activities. 4. Per share ﬁ gures have been restated, as appropriate, to reﬂ ect a hundred-for-one stock split effected October 1, 2013. 5. In calculating Equity Ratio, equity excludes minority interests and stock acquisition rights. 6. In calculating ROE, equity excludes minority interests and stock acquisition rights.

SKY Perfect JSAT Holdings Inc. 14 (%) ROE (Millions ofyen) Free CashFlow (Millions ofyen) EBITDA, EBITDAMargin (Millions ofyen) Revenues 100,000 150,000 200,000 50,000 10,000 20,000 30,000 40,000 50,000 10,000 20,000 30,000 40,000 50,000 10 0 0 0 2 4 6 8 0 0021 022013 2012 2011 2010 141,069 0021 022013 2012 2011 2010 0021 022013 2012 2011 2010 0021 022013 2012 2011 2010 41,702 15,453 8.1 EBITDA Margin EBITDA 29.6 141,850 35,257 10,362 2.5 24.9 155,242 41,972 42,006 4.6 27.1 159,610 27,253 42,448 5.0 25.8 2014 14,375 171.683 2014 2014 2014 43,673 5.2 25.4 (%) 0 10 20 30 40 50 (Millions ofyen) Cash andEquivalents (Millions ofyen) Depreciation andAmotization (Millions ofyen) Operating Income,Margin (%) Dividend PayoutRatio 100,000 10,000 15,000 25,000 10,000 20,000 30,000 00020 20,000 20,000 40,000 60,000 80,000 5,000 120 40 80 0 0 0 0 0021 022013 2012 2011 2010 0021 022013 2012 2011 2010 0021 022013 2012 2011 2010 0021 022013 2012 2011 2010 66,727 23,807 15,093 28.4 Operating Margin Operating Income 079.5 10.7 59,500 24,039 13,503 91.3 15 17,486 14,223 66,405 24,892 47.1 Annual Report 2014 11.3 16,153 74,473 26,995 41.7 10.1 63,784 2014 2014 2014 2014 25,311 21,713 40.7 12.6 (%) 0 5 10 15 25 (Millions ofyen) Capital Expenditures (Millions ofyen) Net Income See page18-21for moredetailsofeachsector. (Millions ofyen) Total Equity,EquityRatio Sector Revenues bySector,OperatingIncome by Sector Revenues 100,000 150,000 200,000 250,000 10,000 20,000 30,000 40,000 10,000 15,000 20,000 50,000 5,000 0 0 0 (%) 183,338 0021 022013 2012 2011 2010 0021 022013 2012 2011 2010 0021 022013 2012 2011 2010 29,710 Equity Ratio Total Equity 53.8 Space &SatelliteBusiness Multichannel PayTVBusiness 33.9 180,065 18,757 4,421 55.9 94.7 185,052 13,972 8,569 5.3 61.6 192,693 13,851 9,683 66.1 66.2 184,680 2014 2014 2014 23,002 9.659 Operating by Sector Inceme 64.1 40 60 80 100 (%) 0 20

We are overhauling the earning and cost structures with the aim of generating new growth.

Shinji Takada Representative Director/President

We achieved profi tability for the The cost structure of the Multichannel Pay TV Business will Multichannel Pay TV Business and change drastically with the end of standard-defi nition broad- recorded high operating income. casts in the premium service at the end of May. Free of the The Multichannel Pay TV Business recorded its fi rst-ever net de- cost burden associated with the transition, we will strategically crease in subscribers, making fi scal 2013 challenging year for allocate funds to fortify content and enhance customer service. the business. However, increased viewing revenue from the bet- The objectives of this cost structure reform, running the new ter-than-expected transition of the standard-defi nition service to customer management system, and marketing reform using high-defi nition (HD) service, reduced customer center operating data collected from audience trend surveys and other sources costs, and other factors contributed to the segment achieving are to increase subscribers (other than the forced subscription profi tability for the year. The Space & Satellite Business record- cancellations caused by ending standard-defi nition broadcasts) ed substantial profi t growth on system update orders from gov- and viewing revenue. ernment agencies and steady performance of its international We will also actively implement new measures to create a services. The result was year-on-year growth in both revenue foundation for future growth, including increasing the number and income with operating revenue rising 7.6% to ¥171.7 billion of users paying for the any device, anytime, anywhere SKY Per- and operating income growing 34.4% to ¥21.7 billion. fecTV! On Demand service, fully participating in next-generation TV broadcasting, such as Channel 4K beamed via the JCSAT- Funds will be strategically allocated to content 3A satellite, and further developing and expanding the WAKU- and customer service. WAKU JAPAN channel for overseas markets. We have designated fi scal 2014, the penultimate year of the We also plan to increase operating revenue in the Space & Medium-term Business Plan, as the “Year of Transformation” Satellite Business by further strengthening our business de- that will position the Company to achieve the plan’s goals and velopment activities in the domestic market for emergency set a solid course for future growth. response services and in the global market in the Asia and

SKY Perfect JSAT Holdings Inc. 16 next generation X-band satellite communication functions for next generationX-bandsatellite communicationfunctionsfor addition, weexpectsteadilyprogress towardtheoperationof porary factorsrestrainingrevenue infi scal 2014 fallaway. In We alsoexpecttheoperatingincomebasetoriseas tem- in fiscal 2015,thefi nal yearoftheMedium-termBusinessPlan. Atthesame time,weprojectreboundingrevenueandprofi basis, infi declines inbothrevenueandprofi t, onanoperatingincome the fiscal 2013profi t level.Overall,weanticipateyear-on-year a temporaryfallbackintheSpace&SatelliteBusinessfrom from standard-defi nition broadcasters’satelliteusage fees,and tion broadcastsinthepremiumservice,adeclinerevenue tion ofsomeviewercontractswiththeendstandard-defi basic feesandotherchargescausedbytheforcedcancella- Our outlookforfi scal 2014includesadeclineinrevenuefrom targets andaccelerategrowth. We achieveourMedium-term BusinessPlan and ships. the mobilemarket,suchasforInternetserviceonairplanes We willalsofocusonrespondingtogrowingdemandin Oceania regionswhereeconomicgrowthisexpected. (Millions ofyen) Revenues 100,000 150,000 200,000 50,000 0 +7.6 155,242 2012 scal 2014. Revenues

(Years endedMarch31) > 159,610 2013 171,683 % 2014 20,000 (Millions ofyen) Operating Income 10,000 15,000 25,000 5,000 +34.4 0 Operating Income 17,486 022013 2012

(Years endedMarch31) > 16,153 2014 21,713 % ni- 17 t Annual Report 2014 surpasses the¥20billiontargettoreach¥25billion. erating revenuetothe¥200billionlevelwhileoperatingincome optimized coststructure,andotherdevelopmentstopropelop- the MinistryofDefense*,advancesinglobalbusinesses,an * A projectinwhichweplantolaunchandoperatetwooutofthreeX-band sat- July 2014 We lookforwardtothecontinuedsupportofourshareholders. per sharetradingunit(¥12share)infi 2013. We currentlyplantoprovidedividendpaymentof¥1,200 ute anannualdividendof¥1,200persharetradingunitinfi maintain steadydividendpayments,wedeterminedtodistrib- growth investmentsandtakingintoconsiderationtheabilityto While ensuringtherearesuffi cient internal fundsforfuture dividend payments. growth investmentwhilemaintainingsteady We plantokeepinternal reservesforfuture band notlessthan8GHz. and abletocommunicateinfaststable manner, utilizingahighfrequency generation X-bandcommunicationisapt tobeunaffectedbyclimatechange ellites operatedbytheMinistryofDefense andtheSelf-DefenseForce.Next (Millions ofyen) Net Income 10,000 5,000 0 -0.2

022013 2012

8,569 Net Income (Years endedMarch31) > 9,683 % 2014 9,659 (Millions ofyen) EBITDA 10,000 20,000 30,000 40,000 50,000 0 scal 2014. +2.9 022013 2012 42,006 EBITDA (Years endedMarch31)

42,448 > % 2014 43,673 scal scal

With the business now generating proﬁ ts, we plan to strategically allocate funds to fortify content and enhance customer service while securing proﬁ ts by developing new strategies to SKY PerfectTV! On De- mand, internet-based service, as another core business.

Akira Tanaka Director, in charge of Multichannel Pay TV Business

Review of Fiscal 2013 Revenues Operating Income (Loss) (Millions of yen) (Millions of yen) The operating environment for the Multichannel Pay TV Busi- 150,000 1,500 ness is changing at an ever-faster pace as the proliferation of 1,184 1,200 114,416 121,156 122,200 smartphones and tablet computers creates a wider diversity of 120,000 1,000 viewing situations and new technology enables 4K and 8K Ultra 90,000 500 HD broadcasts and other next-generation transmission services. In this environment, our top priority in fi scal 2013 was to mi- 60,000 0 grate customers of our SKY PerfecTV! Premium Service from 30,000 -500 standard-defi nition broadcasts to our HD service. Our strate- -819 gies worked well as the number of subscribers that upgraded 0 -1,000 2013 2014 2015 2013 2014 2015 to the new service was 286,843 and surpassed our target of (Forecast) (Forecast) 246,000 set at the beginning of the year. (Years ended March 31) Operating revenue rose 6.8% year on year to ¥122.1 billion raising average monthly revenue per unit (ARPU), and fully de- and cost-cutting efforts, such as trimming operating costs at veloping the Internet video streaming service. We believe video our customer centers to reduce outsourcing expenses, helped streaming can become a core part of our future business and improve operating income by ¥2.0 billion, enabling the Multi- will focus on developing new channels and content and broad- channel Pay TV Business to post a profi t of ¥1.1 billion. ening subscription access routes. We also plan to take solid At the same time, however, our subscription numbers de- steps to prepare the SKY PerfecTV! Premium Service for the teriorated signifi cantly as the number of new subscriptions de- coming era of 4K/8K Ultra HD broadcasts. clined by 142,269 from the end of the previous fi scal year to We will also seek to further raise customer satisfaction by 479,980, and the net result of contract cancellations and new developing customer loyalty programs, effectively applying the subscriptions was a decline of 112,805. We launched “SKY new customer management system, and enhancing our mar- PerfecTV! Select 5” package service in March 2014 to coun- keting efforts. ter this trend and attract new subscriptions. Our new business development activities include the launch of the all-Japanese channel WAKUWAKU JAPAN in Indonesia Outlook for Fiscal 2014 in February 2014 and in Myanmar in June. We see signifi cant In fi scal 2014, we will completely revise our spending on mar- growth potential for the channel in Asian countries and plan to keting aimed at new subscriptions and put more emphasis on continue expanding the broadcast range. allocating funds to content development. While advancing these initiatives, we will also seek to mini- With these initiatives, we will be fortifying our foundation for mize the impact from the termination of the standard defi nition growth on several levels, including further differentiating our broadcasts. We are aiming to maintain fi scal 2014 operating rev- services from those of competitors and attracting new sub- enue and operating income at the same levels of the previous scriptions as well as lowering the contract cancellation rate, fi scal year, or ¥122.2 billion and ¥1.2 billion, respectively.

SKY Perfect JSAT Holdings Inc. 18 *Sum ofSKYPerfecTV! Key Performanceindicators* Main IndicatorsfortheMultichannelPayTVBusiness (units: JPY) SAC (units: JPY) ARPU Payment (units:JPY) Average MonthlySubscriber’s (units: thousand) Subscribers ShiftedtoHDTV (units: thousand) Cumulative Total Subscribers (units: thousand) Net Increase (units: thousand) Number ofNewSubscribers 100,000 200,000 300,000 400,000 0 QF21 Q4 2Q 4Q 3Q 1Q/FY2012 * Thequarterlyaverageofmonthlychurnrate.Calculated forallofthethreeservices. Churn Rate 172,712 24,696 1.3 1.5 Churn rateaftertheexclusionofre-subscriptions Churn rate 159,342 , PremiumServiceandHIKARI 1.2 1.4 59414,623 15,924 2Q * Annual churnrate:18.5% 191,216

1.7 1.5 187,684 48,668 . 1.4 1.2 . 1.6 1.6 1Q/FY2013 188,491 24,444 152,782 FY2012 29,931 1.3 19,938 1.2 1,784 3,200 3,829 406 622 Re-registered subscribers Churn 15 198,445 16,155 1.8 1.6 Q4Q 3Q FY2013 36,007 170,019 2,004 3,179 3,717 56,415 -113 1.4 1.6 287 480 (%) 0.0 0.5 1.0 1.5 2.0 19 Annual Report 2014 (Yen) ARPU (Yen) Average MonthlySubscriber’sPayment (Millions ofyen) SAC total (Yen) SAC perunit 50,000 10,000 20,000 30,000 40,000 4,000 1,000 2,000 3,000 1,000 1,500 2,000 2,500 4,000 5,000 1,000 2,000 3,000 6,000 7,000 500 0 0 0 0 * * * * QF21 Q4 2Q 4Q 3Q 1Q/FY2012 QF21 Q4 2Q 4Q 3Q 1Q/FY2012 QF21 Q4 2Q 4Q 3Q 1Q/FY2012 QF21 Q4 2Q 4Q 3Q 1Q/FY2012 Total forthreeservices. Total forthreeservices. free ofcharge. Total forallthreeservices.TheSACunitpriceexcludesthecostsofcontentprovided Total forallthreeservices. (AverageMonthlyRevenueperUnit) 3,223 ,3 1,765 1,738

26,117 4,603 Advertising expenses PPV subscriptionfee Basic fee Campaign expenses 5 5 5 356 357 61 358 61 359 2,577 62 61 2,623 67 129 2,603 69 132 3 2 137 129 132 02 37 29 30 5 5 5 356 357 358 359 16 161 61 61 61 1,157 (SubscriberAcquisitionCost) 990 1,006 527 348 1,435 294 3,238 35,244

(SubscriberAcquisitionCost) 5,285 2Q 2Q 2Q 2Q ,8 1,216 1,188 857 827 407 474 2,046 672 1,808 3,194

28,319 5,042 61 126 137 996 870 511 531 1,590 542 Revenues fromSKYPerfect’sowncontent Rental fee Others Promotional expenses 1,828 3,143

31,065 5,764 61 2,540 126 36 1,251 1,220 894 507 704 1,875 561 QF21 Q4Q 3Q 1Q/FY2013 QF21 Q4Q 3Q 1Q/FY2013 QF21 Q4Q 3Q 1Q/FY2013 QF21 Q4Q 3Q 1Q/FY2013 3,190 1,938 *

30,121 4,399 Monthly subscriptionfee * 5 5 5 354 354 45 355 56 354 2,566 46 58 2,588 52 147 2,573 53 152 152 35 5 5 5 354 354 355 354 85 656 56 56 58 ,3 ,9 ,3 1,475 1,433 1,396 1,338 * 1,017 767 388 404 1,384 436

3,198 1,991

32,888 4,173 4 151 147 838 38 Sales incentives Free contentcosts * 825 619 356 430 1,423 517 2,032

36,524 3,174 4,639 56 136 151 844 591 271 448 1,970 513 2,059 3,153

44,558 6,266 56 2,563 136 39 904 732 385 602 2,912 728

The Space & Satellite Business currently owns and operates 16 satellites, making it the largest satellite communications company in Asia and the ﬁ fth largest in the world. The segment, which is entering its 25th year anniversary, plans to continue expanding with the launches of four additional satellites by 2016.

Koki Koyama Director, in charge of Space & Satellite Business

Review of Fiscal 2013 Revenues Operating Income (Millions of yen) (Millions of yen) Demand for satellite-based services continued growing world- 80,000 25,000 21,083 wide, particularly in emerging countries in Asia. In Japan as well, 62,587 56,646 53,200 20,000 government agencies and private enterprises are increasingly 60,000 17,599 17,500 looking to utilize satellite transmissions for disaster contingen- 15,000 40,000 cy and business continuity plans (BCPs). 10,000 20,000 In our overseas businesses in fi scal 2013, use of our satellites 5,000 expanded in Southeast Asia, including by the LIPPO Group of 0 0 Indonesia which began using our network for its BiG TV broad- 2013 2014 2015 2013 2014 2015 (Forecast) (Forecast) casts in September, in North America, Asia, and Oceania for (Years ended March 31) services provided to U.S. government agencies, and in Russia. The mobile satellite communications business also grew on expanded “OceanBB” broadband service for vessels and satellite transmission services for in-fl ight Internet access services. In addition, consolidated subsidiary JSAT Mobile Communications teamed with OnAir in March 2014 to begin providing Inmarsat SwiftBroadband in-fl ight satellite communication services to the Japanese market. Domestic business revenues were boosted by expanding satellite use in disaster contingency plans and BCPs and received a strong contribution from satellite communication system upgrades for government agencies. Operating revenue in fi scal 2013 rose 10.5% from the previ- Nipponmaru ous fi scal year to ¥62.6 billion supported by government orders for system upgrades and other single-year factors. Operating

SKY Perfect JSAT Holdings Inc. 20 where demandforsatelliteisbooming. Thesepreparationswill boost intransmissioncapacity to theAsiaandOceaniare 14 inthefi rst halfoffi Duringtheyear, wewillbepreparingtolaunchtheJCSAT- scal 2015,whichwillenableahuge to thelevelofpreviousfi and operatingincomefalling17.0%to¥17.5billion,roughly ing revenuedecliningby15.0%yearonto¥53.2billion ment agencies.Asaresult,weforecastfi scal 2014operat- fallback fromtemporaryriseinsystemordersgovern- standard-defi the terminationofSKYPerfecTV In fi scal 2014,weanticipateadeclineinrevenuefollowing Outlook forFiscal2014 cline insatellite-relateddepreciationexpenses. income increased19.8%to¥21.1billion,whichincludedade- Yokohama SatelliteControlCenter(YSCC) nition broadcastsattheendofMay2014anda scal2012. ! PremiumService’s gions gions 21 Annual Report 2014 of theX-Bandsatellitesystem fortheMinistryofDefense. taining andmanagingtherelay functionandotheroperations solidated subsidiaryDSNCorporationwillalsocontinuemain- operations usedindisastercontingencyplansandBCPs.Con- Inourdomesticbusinesses,wewillcontinuefortifying connection services. mission salesintheexpandingmarketforin-fl that isjointlyownedwithIntelsatLtd.,andofsatellitetrans- service forvessels,suchasbyusingtheJCSAT-85 satellite focus onexpandingsalesoftheOceanBBsatellitebroadband Inthemobilesatellitecommunicationsbusiness,wewill seas satelliteoperators. continue activelyadvancingtie-upopportunitieswithover- with afocusontheAsiaandOceaniaregions.We willalso include fortifyingourbusinessactivitiesintheglobalmarkets ight Internet ight

SKY Perfect JSAT Holdings Inc. 22 ceed ourconsolidatedoperatingincometargetandarenowlookingtoattain¥25billioninﬁ including thoseofourvideoondemand(VOD)service.Atthesametime,however, weexpecttovastlyex- subscribers. Atthispoint,giventhecurrentsituation,weforecastreaching3.8milliontotalsubscribers, ¥200 billioninoperatingrevenue,¥20income,and4millionSKYPerfecTV In ourmedium-termbusinessplan,wesetconsolidatednumericaltargetsforﬁ for newgrowth target andacceleratingreform Aiming wellabovetheMid-term SPECIAL FEATURE 1:PRESIDENTINTERVIEW Operating Income Revenues Y01F21 Y03FY2014 FY2013 FY2012 FY2011 23 Annual Report 2014 Q 1

lieving so? the targetsandwhatisyourbasisforbe- are youatthismomentaboutreaching appearing tohaveslowed,howconﬁ With thegrowthpaceofoperatingincome (forcast) ¥ ¥ 190 25 scal year2015toexceed (outlook) FY2015 billionyen billionyen scal year2015. ! total dent dent

Corporate Data Financial Section Corporate Social Corporate Special Feature Review of To Our Shareholders Consolidated Financial Overview Satellite Basics/Glossary Responsibility Governance Operations and Investors Highlights The consolidated forecast for operating income in fi scal year 2014 is calling for Q1 a 17.1% year-on-year decline to ¥18.0 billion. Do you still aim to surpass the initial target by ¥5.0 billion to reach ¥25.0 billion in fi scal year 2015, the fi nal year of the medium-term business plan?

We fully believe we can reach the new target. The declines we anticipate in fi scal year 2014 mainly represent a fallback from the jump in income in fi scal year 2013 from the large government project order. This dynamic will not be in play in fi scal year 2015, when we also expect to benefi t from the Ministry of Defense project and our cost restructuring.

Our revenue and cost structure will also change dramatically during 2014 with the ending of the MPEG-2 format standard-defi nition broadcasts at the end of May 2014 that we have been offering since 1996. The Multichannel Pay TV Business will no longer be bur- dened by costs associated with the transition to the H.264 format high-defi nition services. In addition, we had been maintaining and operating three broadcast centers—two for standard-defi nition service and one for high-defi nition service. Consolidating these into a single high-defi nition broadcast center will also reduce operating costs. One area where we will see a decline is in basic subscription fee revenue because of the contract cancellations with the end of standard-defi nition broadcasts. The Space & Satellite Busi- ness will also see a fallback from the fi scal year 2013 performance levels following the substantial contribution from the government order for system updates in the past year while the end of standard-defi nition broadcasts will decrease fee revenue from satellite communications services. We see fi scal year 2014 as a year where we will see a concentration of temporary factors that will hold down profi ts but that will mark a turning point for new growth going forward. The growth will begin quickly in fi scal year 2015 when the benefi ts of our cost structure reform efforts start to appear, our maintenance and operating services for the Min- istry of Defense’s X-band satellite operations begin fully contributing to revenue, and our satellite depreciation expenses decline. We believe the combination of increasing revenue and reduced costs will place consolidated operating income of ¥25 billion well within our reach in fi scal year 2015.

Performance Results and Forecast

FY2011 FY2012 FY2013 FY2014 FY2015 (Results) (Results) (Results) (Forecast) (Target) (Outlook)

Revenues (billion yen) 155.2 159.6 171.7 163.5 200 190

Operating Income (billion yen) 17.5 16.2 21.1 18.0 20 25

3,800 Total Subscribers (thousands) 3,814 3,829 3,717 3,557 4,000 (VOD added)

SKY Perfect JSAT Holdings Inc. 24 100 200 300 400 0 0720 0921 0121 0321 2015 2014 2013 2012 2011 2010 2009 2008 2007 Subscribers OutlookResultsandForecasts MPEG-2 Q2 viewers toselectfive channelsforamonthly feeof¥1,980toraiseARPUinthelowsub- of totalcustomers.We will putparticularfocusonthisgroup. certain customersthatpaypremiumfeeswhiletheyaccountforarelativelysmallportion Dataonmonthlysubscriptionfeesrevealsthatalargeportionofrevenuecomesfrom length andcreateaservicestructuretoattractkeepmoreviewerslonger. troduce aSupportandRewardProgrambasedonsubscriptionfees(ARPU)contract will initiallybepositionedasashowcasechanneltoattractsubscribers.We willalsoin- will berevampedtobetterdifferentiatetheservicefromotherplatforms,and TheBSSKYPerfecTV! activities willbeallocatedtoourcontent. In addition,thefundssavedfromcost-effi defi Coststructurereformtoincreasesubscription feerevenue The first changeistofortifyourcontentandcustomerservices. Withtheendofstandard- Change Change At thesametime,welaunchedSKYPerfecTV! tomer services,andfullydevelopingourVODservices. ness planstogenerateprofi competition isintensifying.Inthisenvironment,theMultichannelPayTVBusi- People arewatchingcontentinincreasinglydiversesettingsandcross-media How doestheCompanyplantoreestablishitssubscribernumbers? cancellations associatedwiththeterminationofstandard-defi (excluding VOD)attheendoffi scal year2014,includingapproximately250,000 3,717,000 infi scal year2013.TheCompanyforecaststotalsubscribersof3,557,000 Total subscriberstotheSKYPerfecTV nition service, we will no longer bear expenses from the shift to HD service contracts. nition service,wewillnolongerbearexpensesfromtheshifttoHDservicecontracts. 1 H.264 25 VOD Annual Report 2014 Channel will be reorganized in autumn. The business model Channelwillbereorganizedinautumn.Thebusinessmodel scription revenue. tives toincreasesubscriptions aswelltoraiseoverallsub- for raisingcustomersatisfaction whilealsodevelopinginitia- funds towardenhancingcontentandcreatingnewsystems for theSelect5. being realizedwhileover10%ofnewsubscribersareopting isting subscribersofbasicchannelcontractsaddSelect5is fee customersisholdingsteadyandourtargetofhavingex- content andpromotions.Thenumberofhighsubscription from the(currently)45channels,whichhelpsusfortifyour casters. Productcompetitivenessisrequiredtobeselected scription feezone. Beginning infi scal year2014,weplantoactivelyallocate The Select5isalsoencouragingcompetitionamongbroad- t byfocusingonfortifyingcontent,enhancingcus- ! service declined by approximately 113,000 to servicedeclinedbyapproximately113,000to cient advertising and customer acquisition cientadvertisingandcustomeracquisition Select 5 in March 2014 offering Select5inMarch2014offering nition service. nitionservice.

The second change is to revamp our marketing strategy. We initiated a new customer management system to better interact with customers on an individual basis and actively work to improve our service. The new system replaces the previous method of gathering customer information based on the IC card units with a new system with the ability to consolidate the information of multiple contracts and follow trends on a household basis. We are also revising our online viewing procedures to enable online subscription applications and increasing the number of application procedures than can be completed online, which will enable quick-response to demand to view new channels while further lowering our customer center costs. We also conducted our first survey of viewer trends for the satellite broadcast of our multichannel pay TV service. With the cooperation of some 10,000 subscribers, we collected minute-by-minute data on which programs were being watched on which channels, when they were watching, and other attributes that we will use to develop attractive products and formulate our channel formats. We will also integrate big data gathered from consumer behavior surveys and social media to develop marketing programs better designed to meet customer needs.

Change 3 Developing SKY PerfecTV! On Demand into a core service

The third change is to develop the SKY PerfecTV! On Demand into one of our major services. We launched this video on demand (VOD) service in October 2011 with the primary aim of adding convenience to existing customers by enabling access multiple devices, including smartphones, computers, and tablets. However, Towards Positioning SKY PerfecTV! On Demand as our Main Service the proliferation of smartphones and tables has led to a growing number of new registrations for VOD-only subscriptions. We are responding to this trend by providing viewers with the ability to watch anywhere and to watch programs they had missed and also by actively developing products and packages specifically for SKY PerfecTV! J.League On Demand On Demand and increasing our links with other platforms, such as PlayStation Vita TV. We plan to continue developing VOD into a core service for attracting new pay TV users. To promote the market penetration of SKY Perfec- Linkage with other platforms Availability on multiple devices TV! On Demand, in April 2014 we also began broadcasts on the J.COTT, smart TV service for cable TV stations. At the end of fiscal year 2013, SKY PerfecTV! On De- mand’s 56 channels and 11 content genres had attracted

CATV Fiber Internet PC Smart Phone Tablet approximately 274,000 member registrations including 126,000 paying users. We plan to increase the number of paying VOD users to 200,000 in fiscal year 2015.

SKY Perfect JSAT Holdings Inc. 26 Q3 gy andmediaoperationsinSoutheastAsia. revenue structurewhilecontinuingtoexplorewayslinkwiththe“CoolJapan”strate- We plantoactivelydeveloptheWAKUWAKU JAPAN businessandestablishafi for furtherdetails.) of WAKUWAKU JAPAN throughits4TVpayTVservice.(PleaseseeFeature2onpage31 Myanmar’s leadingmediacompanytheForeverGroupbeganterrestrialdigitalbroadcasts content inIndonesiawasvastlyapparentfromthechannel’s veryfi rst broadcasts.InJune, owned byMNCGroup,theleadingmediacompanyinIndonesia.TheinterestJapanese WAKUWAKU JAPAN’s Japaneseprogramminginlocallanguagesviasatelliteplatform business fortheAsiamarket.InFebruary2014,welaunched24-hourchannel Intermsofcontent,wearedevelopingtheall-JapanesechannelWAKUWAKU JAPAN SKY PerfecTV! Hikari fi NTT Grouptocontinuetechnologyverification for4KbroadcastsusingtheNTTFlet’s sales of4Kreceiversareaccelerating.We arealsostrengtheningourtieswiththe data broadcastssuchasforUltraHD,andweplantoincreasebroadcastperiods standard-defi June 2014viaourJCSAT-3A (128°E)satelliteonbandwidththatopenedupafterour promotion ofUltraHDbroadcasts.NexTV-F begantestbroadcastsofa4Kchannelin (NexTV-F), ofwhichweareafoundingmember, isestablishingaroadmapforthe Hi-Vision” inJapan.TheNextGenerationTelevision &BroadcastingPromotionForum The fi 4K broadcastwith fourtimesasmanypixels HD fullhighvisionTV nels foroverseasmarketscenteredonAsia. 2020 T We arefocusingoureffortsonadvancingUltraHDbroadcasttechnologyforthe gaining momentum? quick realizationofnext-generationbroadcastsandtheCoolJapaninitiativeis in thecurrentenvironmentwherepublicandprivatedemandiscallingfor How willyouadvancetheCompany’s mediumandlongtermgrowthstrategies rst stepistoprovide4K/8KUltraHDbroadcasts,whichwillbeknownas“Super bernetworkwhilealsoaimingforearlyintroductionof4Kbroadcastsonour okyo OlympicsandParalympicsdevelopingJapanesecontentchan- nition serviceended.Satellitesarethelogicalchoiceforlarge-volume PremiumServiceHikari. 27 Annual Report 2014 rm rm

Corporate Data Financial Section Corporate Social Corporate Special Feature Review of To Our Shareholders Consolidated Financial Overview Satellite Basics/Glossary Responsibility Governance Operations and Investors Highlights What are the conditions in the domestic market for the Space & Satellite Busi- Q4 ness now that the surge in demand from satellite communications after the 2011 the Great East Japan earthquake has settled down?

In Japan, satellite systems are being recognized reliable and useful in disaster situations and business continuity planning (BCP). We are fortifying our operations to address growing number of inquiries over the protective measures against potential earthquakes in Japan. The business is also steadily preparing to launch the X-band communications satellites for the Ministry of Defense.

Local governments are increasingly using satellite communications in their nuclear disaster prevention efforts. Satellite systems are also being looked to as remote monitoring posts for their ability to remain operational even while terrestrial systems are down. Gas utility companies are also increasingly using satellites to monitor their pipeline as part of their BCP. In January 2013, the Ministry of Defense selected a consortium led by SKY Perfect JSAT to maintain and operate two X-band military telecommunications satellites scheduled for launches in December 2015 and January 2017. The Space & Satellite Business will be responsible for operating two of the three X-band satellites the Self-Defense Forces of the Ministry of Defense use as communication infrastructure interlinking the land, sea and air activities of the nation’s Self-Defense Forces. In addition, in October 2013, Ja- pan’s three major expressway companies (NEXCOs)—NEXCO East Japan, NEXCO Cen- tral Japan, and NEXCO West Japan—asked us to provide the satellites for their planned communications systems upgrade, and we are progressing with the system installation for operations to start in the fi rst half of 2015. The business also continues to promote usage and operational services of the Kizuna (WINDS) satellite enabling ultra-high-speed Internet access for the Japan Aerospace Explo- ration Agency (JAXA) and has begun working with public and private agencies to monitor space debris and ocean conditions. The enactment of the Aerospace Basic Act is expected to increase business opportunities in the space exploration fi eld, and we are widening our scope beyond the broadcasting and communications fi elds to enter new business domains where we can generate synergies with our existing business operations.

Satellite System for BCP Image of Space Debris in Low Orbit

Monitoring Center

SKY Perfect JSAT Holdings Inc. 28 SKY Perfect JSATSKY Perfect CandKu-bandCoverage Q5 activities toothercommercialshippers. contracted vesselsfrom95to160infiscal year2013.We plantostepupourmarketing NYK, MitsuiO.S.K.Lines,andKawasakiKisenKaisha—andincreasedthenumberof vices totheoceangoingvesselsofJapan’s threemajorcommercialshippingoperators— We arealsoexpandingoursatellitecommunicationsuseforInternet connectionser- using theInmarsatsatellitecommunicationservice. 2014, wepartneredwithOnAirtoprovidein-fl ight Wi-FiservicestoAllNipponAirways ics, whichprovidesonboardWi-FiserviceforclientssuchasJapanAirlines.InMarch ues togrowwiththeprovisionofsatelliteconnectionsforUS-basedPanasonicAvion- Atthesametime,oursatellitecommunications servicesformobilevehiclescontin- satellite communicationssystemstoTurkey andChile. Japan consortiumequipment,facilities,andoperationalexpertisefordisasterresponse prone regions.We arecurrently proposinghardwareandsoftwarepackagesincorporating learned fromtheexperienceisdrawingincreasingattentioncountriesinearthquake- used duringtheGreatEastJapanearthquakeandsubsequentlyimprovedfromwhatwas Inaddition,Japan’s satellitecommunicationssystemfordisasterpreventionthatwas launch oftheJCSAT-14 satellite,whichwillbethesuccessortoJCSAT-2A (154°E)satellite. tivities areunderwayinAsia,OceaniaandalsoRussiapreparationfortheplanned2015 area andweareacceleratingdevelopmenttofulfill thebusinesspotential.Pre-marketingac- pected tohavegrowingnumberofmiddle-incomehouseholds,isalreadyourmaincoverage The AsiaandOceaniaregion,whichcontainsoverhalfoftheworld’ ects withtheJapanconsortium. with astrongbaseinAsiaandOceaniaisalsofocusingondevelopingproj- The Space&SatelliteBusinessisaimingtogrowintoasuperregionalplayer of IndonesiastartedinSeptember2013? overseas satellitebusiness,suchastheBiGTVbroadcastingforLIPPOGroup What globalbusinessdevelopmentisthecompanyengagedinotherthan Ku-band coverage C-band coverage 29 Annual Report 2014 （ Forecast forSatelliteDemandsinAsia-Pacifi 20,000 40,000 60,000 80,000 MHz ） 0 Source: NorthernSky Research Total bandwidthofsatellite transponders(MHz) 0421 0822 2022 2020 2018 2016 2014 s populationandisex- c Region

Corporate Data Financial Section Corporate Social Corporate Special Feature Review of To Our Shareholders Consolidated Financial Overview Satellite Basics/Glossary Responsibility Governance Operations and Investors Highlights Q6 What is your plan for the shareholder return policy? We plan to invest aggressively, such as launching four satellites, to establish a foundation for future growth while maintaining healthy ﬁ nancial condition and to review our shareholder return policy after achieving the medium-term business plan targets.

We are currently entering a stage where we will vastly increase investment to advance our strategies for growth, which includes launching four satellites from fi scal year 2015 to the fi rst half of fi scal year 2016 and in April 2014 entered into an agreement with Space Systems/Loral of the United States for procurement of its new JCSAT-15 and JCSAT-16 satellites. JCSAT-15 will succeed and replace N-SAT-110, being used at 110° east longitude for broadcasting the SKY PerfecTV! service, and JCSAT-16 will function as an in- orbit back-up satellite enabling provision of more stable satellite services. In the Multichannel Pay TV Business, investment will focus on fortifying programming content and preparing for 4K broadcasting with the aim of upgrading and expanding our global business.

Laying the foundation for new growth strategies in fi scal year 2014 The Company has a fi rm fi nancial foundation with an equity ratio of 64.1% at the end of fi scal year 2013. As a corporate group providing broadcasting and communications services in Japan and overseas. We, as being in the public interest, believe is it our responsibility to maintain a healthy fi nancial position and plan to continue fulfi lling our commitment to return profi t to shareholders upon achieving our medium-term business plan target of ¥25 billion in operating income in fi scal year 2015, the last year of the plan. To realize these, we want to make fi scal year 2014 a “Year of Transformation” in which we advance steadily toward meeting the medium-term business plan operating income target and establish a foundation for new growth strategies.

Future Satellite Launch Plans Capital Expenditures and Interest-Bearing Debt and Free Cash Flow Equity Ratio

JCSAT-14 First half of FY2015 (Billion yen) (Billion yen) （％） (Successor to JCSAT-2A) (scheduled) 50 50 100

40 80 40 30 60 Superbird-8 Second half of (Successor to Superbird-B2) FY2015 (scheduled) 30 20 40 Zero 10 20 net 20 debt 0 0 JCSAT-15 First half of FY2016 (Successor to N-SAT-110) (scheduled) -10 -20 10 -20 -40

JCSAT-16 First half of FY2016 0 -30 -60 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 (Back-up) (scheduled) Capital Expenditures Interrest-Bearing Debt Free Cash Flow Equity Ratio

SKY Perfect JSAT Holdings Inc. 30 WORLD the for READY SPECIAL FEATURE 2:THEWAKUWAKU JAPAN CHANNEL 31 Annual Report 2014 ©WAKUWAKU JAPAN

In Indonesia in February 2014, we launched WAKUWAKU JAPAN specializing in Japanese content for overseas audiences. Available via two of Indonesia’s leading direct broadcast satellite providers, INDOVISION and Okevision, WAKUWAKU JAPAN offers a selection of the most popular Japanese Dramas, Movies, Music, Anime/Tokusatsu, Sports, and other programs all in local languages 24 hours a day, 7 days a week. We also embarked on the ©WAKUWAKU JAPAN pay TV services BiGTV, First Media, Orange TV, Transvision in June to reach an estimated 2.5 million households in Indonesia.

WAKUWAKU JAPAN debuts in Myanmar

WAKUWAKU JAPAN commenced broadcasting in Myanmar in June 2014 via the 4TV, a terrestrial broadcast pay TV service provided by the Forever Group, Myanmar’s leading media company. We plan to continue expanding the broadcast region for WAKUWAKU JAPAN with a focus on Southeast Asia.

Leveraging the Japan Boom in Asia

The content market in Japan is currently second only to the United States in terms of size, yet just 5% of the content is exported outside of the country. Additionally in Japan, while

©WAKUWAKU JAPAN broadcast content accounts for over 30 percent of the total content and has 10 times the WAKUWAKU JAPAN is being pro- volume of the South Korean broadcast market, it only commands one-third of the export moted across Indonesia with a new value of programs to South Korea. commercial featuring the popular Indonesian idol group JKT48. However, the Japanese government’s “Cool Japan” strategy to promote Japan’s

SKY Perfect JSAT Holdings Inc. 32 No knowledgeof selling event tickets and goods. selling eventticketsandgoods. profi AsSoccerisespeciallypopular inIndonesia,J.leaguecontentisdeemed Ama-chan, whichwereaggressivelyadvertisedatthechannel’s launch. professional soccergames,UltramanCosmos,andtheNHKserialdrama grams wereverypopularandviewershipwasextremelyhighforJ.League two hours.TheSports,Anime/Tokusatsu, Drama,andTravel/Food pro- of WAKUWAKU JAPAN anddailyaverageviewingofthechannelwasover Our fi rst viewersurveyinIndonesiafoundthatsome70%ofviewersknew Hugely popularJapanesecontent table. We aredevelopingadiverserangeofbusinesstie-insincluding knowledge of channel Not much channel 21.5% 9.4% Awareness of WAKUWAKU JAPAN Japanese contentandbusinessresourcespromotestheirdevelopmentoverseas. both sides,wewillaimtoconstructamediaplatformthathighlightstheattractivenessof region. Bycombiningtheknowledgeandconnectionsofinitiative’s resourcesfrom clarifying plansforthemediaandrelatedbusinessesinaroundSoutheastAsia into abasicagreementwithCoolJapanFundInc.beginningofthejointreviewtowards WhileprovidingJapanesecontentoverseasthroughWAKUWAKU JAPAN, weentered present Japanesecultureworldwide. corporate fundingtopromotedevelopmentofdemandoverseasbydisseminatingand Fund Inc.,apublic-privatefundwith¥30billioningovernmentand¥7.5private In thisenvironment,inNovember2013theJapanesegovernmentestablishedCoolJapan Joining withtheCoolJapanFundInc.tosetupaprofi around theworld. Summer OlympicsinTokyo willprovideagoldenopportunitytospreadJapaneseculture strategy thatcanfueltheJapanboomandcaptureoverseasdemand.Moreover, the2020 from programmingcontenttofashion,lifestyle,cuisine,services,andvariousfi the privatesector. EffectivelycommunicatingtheattractivenessofJapaneseindustries industriesoverseasisbelatedlygainingmomentuminboththegovernmentand creative 61.7% Aware ofchannel 7.4% with channel Very familiar 33 Annual Report 2014 March23,2014 extratctedbyquotesample householdswithaccessto guide 10-49from220 Survey Method: Period: WAKUWAKU survey Target Population: Survey Area: JAPAN Diarysurveyandprogram 890 personsaged March 10,2014to Jakarta, Indonesia ©J.LEAGUE PHOTOS t plan elds is a a is elds

ManagementBOARD DIRECTORS AND CORPORATE AUDITORS (As of June 20, 2014)

Board Director Board Director Representative Director, President Representative Director, Chairman Board Director Koki Koyama Masao Nito Shinji Takada Shigeki Nishiyama Akira Tanaka

SKY Perfect JSAT Holdings Inc. 34 Director, SeniorManagingExecutiveOfficer, SKYPerfectJSAT Director, InchargeofSpace&Satellite Business(tothepresent) 2014 Koki Koyama Board Director Director, SeniorManagingExecutiveOfficer, SKYPerfectJSAT (tothepresent) Director, InchargeofMultichannel PayTVBusiness 2013 SeniorManagingExecutiveOfficer, SKYPerfectJSAT 2008 Akira Tanaka Board Director InchargeofFinanceandAdministration, 2013 ChiefRiskManagementOfficer(tothepresent) ChiefInformationManagementOfficer(tothepresent) 2011 InchargeofCorporatePlanning&Strategy(tothepresent), 2010 Director, SeniorExecutiveVice President,SKYPerfectJSAT Director(tothepresent) 2008 Masao Nito SKYPerfectJSAT Corporation(tothepresent) Board Director RepresentativeDirector, President&ChiefExecutiveOfficer, RepresentativeDirector, President,(tothepresent) 2011 Shinji Takada Representative Director, President RepresentativeDirector, Chairman,SKYPerfectJSAT RepresentativeDirector, Chairman,InchargeofInternalControl 2011 Shigeki Nishiyama Representative Director, Chairman Corporation (tothepresent) Corporation (tothepresent) Corporation Engineering, ChiefGroupComplianceOfficer(tothepresent) Corporation (tothepresent) Corporation (tothepresent) (to thepresent) 35 Annual Report 2014 R Noriaki Sakamoto(outside) Corporate Auditors Masayuki Hirata(outside) Kazunobu Iijima Masakatsu Mori(outside)* Iwao Nakatani(outside)* Board Directors(Non-Standing) *Independent director/auditor T Toshiaki Katsushima(outside)* Corporate Auditors(Non-Standing) etsuya Fujita(outside) yoji Hirabayashi

The SKY Perfect JSAT Group strives to maintain transparent corporate governance systems that are able to meet the demands of a rapidly changing business environment. As a corporate entity that provides the highly public services of broadcasting and communications, we pursue rigorous corporate ethics based on legal compliance and ongoing reinforcement of our risk management system.

1. Appropriate, Efﬁ cient, and Highly Transparent Corporate Governance

Board of Directors companies. The directors also share information on important The Company’s Board of Directors consists of 9 directors, three facts related to individual group companies and conduct risk of whom are outside directors, as of June 20, 2014. As the management in an appropriate and prompt manner. basis of the system to ensure effi cient execution of duties of Along with defi ning clearly the duties of each director, the the directors, the Board meets once monthly in principle, and company clarifi es their roles in business execution based on our on other occasions as necessary, to make decisions concern- regulations, as well as appoints a responsible leader of each di- ing important business matters for the Company and Group vision. With this system, the Company ensures the conduct of

Corporate Governance Systems SKY Perfect JSAT Holdings Inc.

General Meeting of Shareholders

Report Appoints Appoints

Board of Corporate Auditors: Board of Directors: 4 Corporate Auditors Audits9 Directors Consults Nomination and (3 Outside Corporate (2 Representative Directors) Remuneration Committee Auditors) (3 Outside Directors)

Report Chairman Consults Auditors Management Committee

Accounting Audit President

Divisions: Internal Audit/Internal Control Promotion/Corporate Planning/ Information Disclosure Human Resource/Corporate Communications & Investor Relations/ Committee Finance/Accounting/General Affairs/ Legal/Information Systems

(As of June 20, 2014)

SKY Perfect JSAT Holdings Inc. 36 execution arediscussed. where importantmattersrelating totheCompany’s business ness companyoftheGroup,holds weeklyexecutivemeetings sidiaries. Moreover, SKYPerfectJSAT Corporation,acorebusi- information ontheprogressof thebusinessoperationsofsub- performs aGroupgovernancefunctionthroughthesharingof ing tothebusinessofCompanyanditssubsidiaries.Italso as necessaryandmembersdiscussimportantmattersrelat- ecution-related mattersasnecessary. TheCommitteemeets body thathelpsthePresidentmakedecisionsonbusinessex- has establishedaManagementCommitteeasconsultative the authorityofmanagement.Alongwiththis,Company thority, includingthePresident’s, basedontheregulations The Companyhasclarifi Management Committee the corporategovernancesystem. of decision-making,aswellincreasestheeffectiveness viewpoints andenhancestherationalityappropriateness es discussionsatBoardofDirectorsmeetingswithavariety of expertiseandexperienceincorporatemanagement,enrich- appointment ofthreeoutsidedirectors,whopossessawealth appropriate andeffi cient businessexecution.Meanwhile, the FY2013 MajorActivitiesConductedbyOutsideDirectors Tadashi Saito Masayuki Hirata Masakatsu Mori Iwao Nakatani Name ed thescopeofdecision-makingau- experience andknowledgeinthefields ofelectronics. to businessdeliberationandothermatters,heprovidedadviceasnecessarybasedonhisabundanceof Saito attended8ofthe10BoardDirectorsmeetingsheldinfiscal yearunderreview. Withregard experience andknowledgeinthefi elds ofcommunications. to businessdeliberationandothermatters,heprovidedadviceasnecessarybasedonhisabundanceof Hirata attendedallofthe10BoardDirectorsmeetingsheldinfiscal yearunderreview. Withregard a consultingfi experience andknowledgeinthefi eld ofcorporatemanagementthathehasacquiredasamanager to businessdeliberationandothermatters,heprovidedadviceasnecessarybasedontheabundanceof Mori attendedallofthe14BoardDirectorsmeetingsheldinfiscal yearunderreview. Withregard level ofexpertiseinthefield ofeconomicsandbusinessmanagement. regard tothebusinessdeliberationandothermatters,heprovidedadviceasnecessarybasedonhishigh Nakatani attendedallofthe14BoardDirectorsmeetingsheldinfi scal yearunderreview. With Activities Activities rm. rm. 37 Annual Report 2014 Rules oftheTokyo StockExchange. fi Information DisclosureCommittee,whichfunctionsastheof- tions andInvestorRelationsDivisionservesassecretaryofthe servers. ThegeneralmanageroftheCorporateCommunica- Full-time auditorsalsoattendtheCommittee’s meetings asob- closure andBoarddirectorsinvolvedininformationdisclosure. ident, andincludesthemanagerinchargeofinformationdis- intended fordisclosure.TheCommitteeischairedbythePres- venes weekly, asageneralrule,toconsiderinformationthatis timely andaccurateinformationdisclosure.TheCommitteecon- mittee, whichpresentssuggestionstothePresidentconcerning Inaddition,theCompanyhasanInformationDisclosureCom- ing thenominationofofficials andthesettingofremuneration. Committee makesindependentrecommendationsconcern- tee thatactsasanadvisorybodytotheBoardofDirectors.The The CompanyhasaNominationandRemunerationCommit- Other Committees cial entity forexaminingandconfi rming theTimely Disclosure

Appointment of Independent Directors/Auditors Board of Corporate Auditors To protect general shareholders and enhance cooperate gov- The Company’s Board of Corporate Auditors consists of four ernance, the Tokyo Stock Exchange, on which the Company members, two of whom are outside auditors. Corporate au- is listed, requires that all listed domestic companies appoint at ditors attend important decision-making meetings, including least one independent director/auditor. An independent direc- Board of Directors and Management Committee meetings, tor/auditor is an outside director or auditor who is unlikely to where they engage in frank and free exchanges of ideas and have any conﬂ ict of interest with general shareholders. In other opinions. They conduct investigations of departments and words, an independent director/auditor is a person who partici- subsidiaries based on annual plans, and audit the business pates in management from a neutral and objective standpoint performance of directors. The Board of Corporate Auditors re- and who does not have any interests in the Company or Group. ceives audit reports from account auditors as necessary, and In accordance with this requirement, the Company has two the board receives reports from the Internal Audit Division, independent directors and one independent auditor. provides advice, and exchanges opinions on the status of internal controls.

Major Activities Conducted by Outside Auditors

Name Activities

Katsushima attended 13 of the 14 Board of Directors meetings and 12 of the 13 Board of Auditors meetings held in the fi scal year under review. He provided advice as necessary with regard to the business Toshiaki Katsushima deliberation and other matters from his standpoint as a certifi ed public accountant and a certifi ed tax account based on his abundance of experience and knowledge in the fi eld of fi nancial accounting.

Takeda attended 8 of the 14 Board of Directors meetings and 11 of the 13 Board of Auditors meetings Shinji Takeda held in the ﬁ scal year under review. He provided advice as necessary with regard to the business deliberation and other matters based on his abundance of experience and knowledge in the ﬁ eld of broadcasting.

3. Status of Development of Internal Control

Compliance Committee and Compliance Help Line tices by employees, executives or members of the Board of To ensure that business execution of the Company’s directors Directors to report them immediately or discuss their concerns and employees comply with relevant laws and regulations, with internal Help Line staff. articles of incorporation and various internal regulations, the Company has established a Compliance Committee and its Risk Management Committee Secretariat, the Compliance Promotion Offi ce. The Commit- To recognize and evaluate risks related to business execution tee appoints a Chief Compliance Offi cer who acts as chairper- comprehensively and conduct appropriate risk management, son of the Committee. The Committee chairperson submits the Company has established risk management regulations. To issues on including compliance program matters and facts re- ensure the effectiveness of the regulations, the Company has garding compliance to the Committee for deliberation, as well established a Risk Management Committee, which is chaired as reports the deliberation results to the Board of Directors as by the Chief Risk Management Offi cer. necessary. The Compliance Promotion Offi ce is in charge of The Committee determines risk management policies, eval- maintaining, managing and determining the content of com- uates risks, and examines risk prevention measures. At the pliance programs for the entire company, and it provides com- same time, the Committee is responsible for strengthening pliance education and training to members of the Board of the overall risk management system through the study of indi- Directors, executives, and employees. vidual events. The Chief Risk Management Offi cer reports to Moreover, the Company has put into place an internal and the Board of Directors on the status of risk management and external Compliance Help Line system that enables those who other matters as necessary. suspect they have discovered illegal business activities or prac-

SKY Perfect JSAT Holdings Inc. 38 Remuneration ofDirectorsandAuditorsintheYear underReview of managementindicesestablishedatthebeginning directors alsoreceiveremunerationbasedontheirachievement ation system.Underthissystem,inadditiontoabasicsalary, The Companyhasadoptedaperformance-linkedcashremuner- 4. Remuneration SystemDesignedtoRaiseCorporateValue Outside Directors/Auditors Position Auditors (ExcludingOutsideAuditors) Directors (ExcludingOutsideDirectors) in chargeofinternalcontrol Representative DirectorandChairman Shigeki Nishiyama agement transparencybyproviding extensiveinformation. accurate informationdisclosure,aswellincreaseourman- To ourshareholdersandinvestors,weensureprompt ness operations. compliance, alongwithfurtherenhancementofsoundbusi- ognition oftheimportancecorporateethicsbasedonlegal changing socialandeconomicenvironmentwithastrongrec- agement. Ontopofthis,wepursueswiftdecision-makingin a our clientsandemployees,atoppriorityofbusinessman- es, butalsowiththeGroup’s variousstakeholders, including holders andcustomerstowhomtheGroupprovidesservic- make establishinggoodrelationshipsnotonlywithourshare- a responsiblelistedcompany. To achievethisobjective,we maximize theGroup’s corporatevalueinthecapitalmarketas ety. Thefundamentalobjectiveofcorporategovernanceisto Perfect JSAT Groupcontributestocreatinganafﬂ vice providerofbroadcastingandcommunications,theSKY With astrongsenseofsocialresponsibilityaspublicser- Basic Performance-linked Total Remuneration(¥millions) uent soci- uent 46 26 61 39 Annual Report 2014 side directors. by anoutsidedirectorandiscomposedofamajorityout- TheNominationandRemunerationcommitteeischaired ﬁ scal yearasanincentivetoimprovecorporateperformance. 58 25 —6 —2 Number ofEligibleRecipients

As we regard it as part of the SKY Perfect JSAT Group’s social responsibility to provide educational support for children, on whose shoulders the future rests, and foster human resources involved in the utilization and development of the space, we engage in a variety of corporate social responsibility (CSR) activities. For exam- ple, At the Sochi Paralympics we set up 24-hour dedicated channel and broadcast over 9 days. We also visited a Junior high school in Tokyo to discuss how to achieve their dreams. Through these activities, we raise public awareness about the social roles of satellite communications and satellite broadcasting.

24-hour channel dedicated to the Sochi Paralympics

SKY PerfecTV! launched Japan’s ﬁ rst channel solely dedicating to providing 24-hour coverage of the Paralympics. The broadcasts of the Sochi 2014 Paralympic Winter Games focused on broadening awareness about the proﬁ le of para-sport and get- ting across the attractiveness of sport itself. The coverage conveyed paralympians who stayed com- mitted to athletic training vying to succeed in in- tense and thrilling competition and the excitement of competitive sport.

©Photo: aﬂ o

SKY Perfect JSAT Holdings Inc. 40 nication skills. working insmallgroupstoenhance theircommu- ported inatrainingprogram aimed forstudents their dreamscometrue.Staffinstructedandsup- learning aboutawiderangeofsubjectstomaking days along,stressingtostudentstheimportanceof when theywereyoung,andeffortsmadeinschool about theirschoolexperiences,dreamstheyhad nation’s workforce.Theexecutiveofﬁ the peoplewhowillbenextgenerationofour tral Tokyo inaprogramtostimulateandencourage at juniorhighschoolnearourheadquartersincen- SKY PerfectJSAT SKY PerfectJSAT ExecutiveVisits Junior highSchool making signiﬁcant contributions toourdailylives. to informthem,inanaturalway, ofthefactthatsatellitesare ellite broadcastingandsatellitecommunications,weseek that theycanunderstandthemechanismofmultichannelsat- the comicbookstyle,withwhichchildrenarefamiliar, wehope and about3,200publiclibrariesacrossJapan.Bymakinguseof for freedistributiontoaround22,300publicelementaryschools channel SatelliteBroadcastingandCommunications” ing Co.,Ltd.aneducationalcomicbooktitled“SecretsofMulti- The SKYPerfectJSAT GrouphasproducedwithGakkenPublish- Multichannel SatelliteBroadcastingandCommunications” Production andDistributionofanEducationalComicBookTitled “Secretsof team conducted special courses team conductedspecialcourses cer talked cer 41 Annual Report 2014

Corporate Data Financial Section Corporate Social Corporate Special Feature Review of To Our Shareholders Consolidated Financial Overview Satellite Basics/Glossary Responsibility Governance Operations and Investors Highlights SKY Perfect JSAT Holdings Inc. and Consolidated Subsidiaries Consolidated Financial Highlights For the years ended as of March 31, 2010, 2011, 2012, 2013 and 2014

Thousands of U.S. Millions of yen, except Per Share Data and Selected Financial Indicators dollars, except per share data (Note 1)

For the Year: 2010 2011 2012 2013 2014 2014 Revenues ¥ 141,069 ¥ 141,850 ¥ 155,242 ¥ 159,610 ¥ 171,683 $ 1,668,121 Cost of Services 86,151 86,028 99,062 106,168 111,253 1,080,961 Selling, General and Administrative Expenses 39,825 42,319 38,694 37,289 38,717 376,190 Operating Income 15,093 13,503 17,486 16,153 21,713 210,970 Income before Income Taxes and Minority Interests 16,446 9,862 15,897 15,644 18,543 180,172 Net Income 14,223 4,421 8,569 9,683 9,659 93,853 Comprehensive Income — 3,658 9,065 11,358 11,053 107,397 EBITDA (Note 2) 41,702 35,257 42,006 42,448 43,673 424,341 Depreciation and Amotization 23,807 24,039 24,892 26,995 25,311 245,930 Capital Expenditures 29,710 18,757 13,972 13,851 23,002 223,493

Net Cash Provided by Operating Activities 39,340 38,957 39,977 38,372 33,345 323,995 Net Cash (Used in) Provided by Investing Activities (23,887) (28,595) 1,995 (11,119) (18,970) (184,314) Free Cash Flow (Note 3) 15,453 10,362 41,972 27,253 14,375 139,681 Net Cash (Used in) Provided by Financing Activities 10,836 (17,302) (34,993) (19,402) (25,444) (247,224)

At Year-End: Cash and Cash Equivalents ¥ 66,727 ¥ 59,500 ¥ 66,405 ¥ 74,473 ¥ 63,784 $ 619,740 Total Assets 335,164 322,079 300,133 290,487 287,580 2,794,211 Interest-Bearing Debt 107,511 91,693 62,506 49,398 45,995 446,895 Total Equity 183,338 180,065 185,052 192,693 184,680 1,794,401

Notes: 1. U.S. dollar amounts are included solely for the convenience of readers outside Japan and have been made at the rate of ¥102.92 to $1, the approximate rate of exchange at March 31, 2014. 2. EBITDA is calculated as Net Income + Tax Expense + Depreciation Expense + Interest Expense. 3. Free Cash Flow is calculated as Net Cash Provided by Operating Activities + Net Cash Used in Investing Activities. 4. Per share figures have been restated, as appropriate, to reflect a hundred-for-one stock split effected October 1, 2013. 5. In calculating Equity Ratio, equity excludes minority interests and stock acquisition rights. 6. In calculating ROE, equity excludes minority interests and stock acquisition rights.

SKY Perfect JSAT Holdings Inc. 42 100,000 150,000 200,000 domestic demandtousesatellitetransmissionsfordisastercontin (Years endedMarch31) (Millions ofyen) Revenues million or7.6%.Theriseinoperatingrevenuesupportedayear- fiscal year2014,representingayear-on-year increaseof¥12,073 by increasedviewerrevenue,amountedto¥171,683millionin expanded thesatellite-basedmobilecommunicationsbusiness. continuity plans,fortifiedtheglobalbusinessoperations,andactively for corporateandgovernmentdisastercontingencybusiness & Satellite Business, the Groupfocusedonprovidingsolutions Service, anddevelopingnewbusinessoperations.IntheSpace high-definition H.264formatservicesoftheSKYPerfecTV! for the SKY PerfecTV the Groupadvancedmeasurescenteredonattractingcustomers long-term growth strategies. In the Multichannel Pay TV Business, In these conditions, the Group steadily implemented its medium and Overview Performance in emergingcountriesAsia. global marketamidstrongdemandforsatelliteservicesparticularly gency and business continuity plans and an increasingly competitive sophisticated services. broadcasts, are also providing opportunities to provide increasingly computers. Advances in new technologies, such as 4K/8K Ultra HD conditions accompanyingthediffusionofsmartphonesandtablet range ofcompetitiveservicesandwiththediversifyingviewing growing to encompass Internet Protocol television (IPTV) and a wide rapidly evolvingwiththemultichannelpayTVbroadcastindustry corporate earningsinthedomesticmarket. led bydevelopedcountriesandimprovingprivateconsumption year endedMarch31,2014,supportedbyasolidglobaleconomy The Japanese economy recovered at a moderate pace in the fiscal Operating Environment Management’s DiscussionandAnalysis 50,000 The SKY Perfect Conditions inthespaceandsatelliteindustryincludedgrowing The operating 0 141,069 0021 022013 2012 2011 2010 141,850 155,242 environment for the SKY Perfect JSAT Group is JSAT Group’s consolidated revenues,supported 159,610 ! services, transitioning subscribers to the 171,683 2014 (Millions ofyen) Administrative Expenses Selling, Generaland 10,000 20,000 30,000 40,000 50,000 0 39,825 0021 022013 2012 2011 2010 42,319 38,694 Premium Premium 37,289 2014 38,717 43 - Annual Report 2014 (Millions ofyen) Operating Income ¥5,527 to from March 31, 2013. from March31,2013. stocks. Theequityratio was 64.1%,down2.1 percentage points and adecreaseof¥15,245millionbyanacquisitiontreasury of anincrease¥5,846millionbynetincomeandotheritems primary decreasewasretainedearnings,whichthenetresult at March31,2014,down¥8,013millionfromayearearlier. The Total equity, includingminorityinterests,was¥184,680million Total Equity debt), down¥3,403million. decliner waslong-termdebt(includingcurrentportionoflongterm million andincometaxespayables,up¥3,598million.Themajor to ¥102,900million. The principal increasewerepayablesup¥5,517 Total liabilitiesincreased¥5,106millionfromthe previousyearend, Total Liabilities construction inprogress,whichgrew¥11,535million. filiated companiesreceivables,whichgrew¥3,046million,and factors were work in process, which grew ¥9,643 million,af- down ¥2,907millionfromayearearlier. Themainincreasing At March31,2014,theGrouphadtotalassetsof¥287,580million, Total Assets Financial Position on year¥24millionor0.2%to¥9,659million. an increaseof¥2,982million.Netincomeultimatelydeclinedyear the previousfiscalyear. Total incometaxeswere¥8,961million, to ¥21,713million. on-year increaseof¥5,560millionor34.4%inoperatingincome 10,000 15,000 20,000 25,000 5,000 ¥18,543 million, an increase of ¥2,899 million or 18.5% from ¥18,543 million, an increase of ¥2,899 million or 18.5% from Principal decliningfactorswereinvestmentsecurities,down Income beforeincometaxesandminorityinterestsamounted 0 0021 022013 2012 2011 2010 15,093 million, cash and cash equivalents down ¥10,689 million. 13,503 17,486 16,153 2014 21,713 (Millions ofyen) Net Income 10,000 15,000 5,000 0 0021 022013 2012 2011 2010 14,223 4,421 8,569 9,683 2014 9,659

Corporate Data Financial Section Corporate Social Corporate Governance Review of Operations Special Feature To Our Shareholders Consolidated Financial Satellite Basics/Glossary Responsibility and Investors Highlights Liquidity and Capital Resources Performance Forecasts Cash Flows For the fi scal year ending March 31, 2015, the Group aims to increase For the year, net cash provided by operating activities amounted to the total number of new subscribers to all SKY PerfecTV! Services ¥33,345 million (compared with ¥38,372 million in the preceding from the previous year’s level to 569,000. However, assuming that year). Major contributing factors included income before income the number of subscribers’ cancellation will increase due to the taxes and minority interests of ¥18,543 million, depreciation and termination of the standard-defi nition service based on the MPEG-2 amortization of ¥24,433 million, and amortization of goodwill of format on May 31, 2014, the Group forecasts a net decrease of ¥878 million. 160,000 subscribers during the year. Net cash used in investing activities totaled ¥18,970 mil- (thousand) lion (compared with net cash provided by investing activities Fiscal Year 2013 2014 (target)* Growth Rate of ¥11,119 million in the previous year). Major factors included New Subscribers (Total) 480 569 18.5% purchases of property and equipment and intangible fi xed assets Net Increase -113 -160 -41.6% of ¥22,323 million. Net cash used in fi nancing activities was ¥25,444 million (down Cumulative Subscribers 3,717 3,557 -4.3% from ¥19,402 million in the previous year). Major factors included * As of March 31, 2015 dividends paid of ¥4,035 million, repayments of long-term debt of ¥13,722 million and acquired treasury stocks of ¥15,252 million. We have made the following consolidated forecasts for the year As a result, cash and cash equivalents amounted to ¥63,784 ending March 31, 2015: revenues of ¥163,500 million (down 4.8% million at March 31, 2014, down ¥10,689 million from a year earlier. year on year), operating income of ¥18,000 million (down 17.1%), ordinary income of ¥17,500 million (down 18.7%) and net income Capital Expenditure of ¥12,000 million (up 24.2%). In the year under review, the Group made capital expenditures Note: The above forecasts for the year ending March 31, 2015 and other forward totaling ¥23,002 million. The spending was allocated mainly to looking predictions are based on judgments of Group management using information available at the present time. Actual results may differ from upgrading broadcasting facilities at the SKY PerfecTV! Tokyo such forecasts due to various unforeseen circumstances. Media Center (Multichannel Pay TV Business) and procurement of a communications satellite intended to ensure the stability, Dividend Policy and Return to Shareholders reliability and effi ciency of the operation of satellites in the Space The SKY Perfect JSAT Group maintains a long-term and com- & Satellite Business. prehensive approach to shareholder return as an important management priority. Our aim is to pay stable dividends while Finance retaining suffi cient earnings to fund our aggressive business The Group borrowed ¥8,574 million from its main fi nancing institu- development plans. Our policy is to determine cash dividend tions in the fi scal year under review to procure funds for the mainte- amounts following extensive consideration of our fi nancial posi- nance and operation of the X-band satellite relay communications. tion, level of earnings, and payout ratio. The Group maintains a ¥77,500 million commitment line agreement (limited loan agreement) with its main fi nancing institutions for funding related to the project.

Total Assets Total Equity Equity Ratio

(Millions of yen) (Millions of yen) (%) 400,000 200,000 192,693 80 185,052 184,680 183,338 180,065 335,164 66.2 322,079 64.1 300,133 290,487 287,580 300,000 150,000 60 61.6 53.8 55.9 200,000 100,000 40

100,000 50,000 20

0 0 0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014

(Years ended March 31)

SKY Perfect JSAT Holdings Inc. 44 including bypreparingmonthly fi nancing plans.Withrespect to risk. EachGroupcompanymanages suchriskinvariousways, Operatingpayablesandborrowingsarealsosubjecttoliquidity (interest rateswap)contractsfor each loanasahedgemechanism. long-term borrowings.To thisend,theGroupentersintoderivative est rateriskoninterestpayablebyfi xing theratesofsomeits interest ratefl uctuations. TheGroupendeavorstomitigateinter- Borrowings withvariableinterestratesaresubjecttotheriskof raise fundsforoperatingtransactionsandcapitalexpenditures. also borrowsfrombanksandissuescorporatebondsinorderto Group’s operatingpayables, areduewithinoneyear. TheGroup Practicallyall notesandaccountspayable,whichconstitutethe Board ofDirectors. of bondissuers(clientcorporations)andsubmitsreportstothe Group regularlymonitorsmarketpricesandthefi securities aresubjecttotheriskofmarketpricefl with whichtheGrouphasbusinessrelationships.Althoughsuch retained earnings,andofsharesinclientothercorporations mainly intheformofbondsfortemporarymanagement MarketableandinvestmentsecuritiesheldbytheGroupare monitoring ofthecreditstatusmajorsubscribersisalsoinplace. ment criteriaestablishedbytheGroup.Asystemallowingregular balance ofreceivableseachclient,pursuanttothecreditmanage- Management ofsuchriskisbasedonrelevanttimeperiodsandthe operating receivables,aresubjecttocreditriskontheclientside. Notes andaccountsreceivable,whichconstitutetheGroup’ Management System Financial Products,AssociatedRisksandRisk Financial Risks TheCompanyexecuteda100for1stocksplitonOctober1,2013.Upon Note: 2013 and2014. actual dividendpersharedeclaredandpaidtoshareholdersin a year-end dividend.Theamountsinthetable belowshowsthe dividend arebasicallypaidtwiceayear:aninterimand surplus, asprovidedinArticle459(1)oftheCompaniesActand sion thattheBoardofDirectorsdeterminesdividendsfrom Furthermore,ourArticlesofIncorporationincludetheprovi- Directors Resolution oftheBoard May 8,2014 Directors Resolution oftheBoard October 30,2013 stock split. dividend representstheactualpaymentamountpersharepriorto resolution oftheBoardDirectorsonOctober30,2013,pershare Date ofRecord (Millions ofyen) Total Dividend Payment 1,849 2,019 nancial situations Per ShareDividend uctuations, the the uctuations, (Yen) 600 6 45 s

Annual Report 2014 and/or fi potential risksthatcouldaffectitsfuturebusinessperformance Below isasummaryofthemainfactorsdeemedbyGroupas Business Risks with financial institutionswithhighcreditratings. To alleviatecreditrisk,theGroupentersderivativecontractsonly based oninternalregulationsthatdeterminetransactionauthority. Theexecutionandmanagement ofderivativetransactionsis as ahedgeagainstinterestrateriskaffectingitsborrowings. ment. TheGroupalsoentersintointerestrateswaptransactions purchase broadcastingrightsandcommunicationssatelliteequip- a hedgeagainstcurrencyfl uctuation riskaffectingfundsraisedto derivatives, theGroupentersintoforwardexchangecontractsas The Group’ •Legal restrictions 1. GeneralRisks fi the followingarebasedonGroup’s judgmentattheendof also has facilities that control communications satellites and facilities also hasfacilitiesthatcontrolcommunications satellitesandfacilities could adverselyimpacttheGroup’s businessresults. TheGroup causes similardamagetotheGroup’s buildingsoruplink facilities the adventofanunforeseenlarge-scale disasterthatdestroysor does nothavefullbackupfacilities forthesebroadcastingfacilities, SKY PerfecTV! the MeguroMediaCenter, andtheplatformfacilitiescenteredon Center, whichintegrated AomiBroadcastingCenterinMarch2014, the playoutfacilitiescenteredonSKYPerfecTV! broadcasts transmittedviacommunicationssatellites.Theyare area thatfunctionasbroadcastfacilitiesformultichannelpayTV The GrouphasthreeuplinkfacilitiesintheTokyo metropolitan • Risks relatedtoseriousdamage tofacilitiescausedbya affect ourbusinessresults. loss ofconfi dence and/ortheburdenofunexpectedcostsmight partners afterillegalaccessbythirdpartiesorotherfactors,the where subscriberinformationleaksfromtheGrouporbusiness information, includingsubscriberinformation.However, incases The Grouppaysthehighestattentiontoprotectionofclient •Security ofsubscriberinformation our operations. is thereanyguaranteethatwewillnotberequiredtohaltpartof the Groupwillnotbeadverselyaffectedbytheseregulations,nor that theseregulationswillcontinueintheircurrentformator any hindrancefromlegalregulations.However, thereisnoguarantee our operation.TheGroupcurrentlycarriesoutitsbusinesswithout communications satellitescouldhaveapotentiallynegativeeffecton and overseasmarkets.Anychangestolegalrequirementsregarding the launch,operation,andcommercialuseofsatellitesindomestic scal yearunderreview. large scalenaturaldisaster nancial position. Forward-looking statements contained in nancial position.Forward-lookingstatementscontainedin s businessinvolvesdomesticsatellitebroadcastingand Tokyo MediaCenter. Therefore,becausetheGroup Tokyo Media

Corporate Data Financial Section Corporate Social Corporate Governance Review of Operations Special Feature To Our Shareholders Consolidated Financial Satellite Basics/Glossary Responsibility and Investors Highlights that serve as hubs for satellite communications services. They are place orders for successors even earlier as a provision for launch the Yokohama Satellite Control Center, Ibaraki Network Control failure or some other delay. However, because the Group has its own Center, Yamaguchi Network Control Center, and Gunma Satellite backup satellites it normally does not adopt this kind of precautionary Control Station. Although the operations of these satellite control measure. Therefore, should there be a delay in the commencement centers are set up so that services will not be seriously affected of operation of a satellite due to some reason or other, and if a backup should one center cease to operate, it is possible that the other satellite is unable to completely backup the functions of the satellite, centers may not be able to perform certain satellite communications the Group’s operations could be adversely affected due to the loss services. Therefore, a disaster could adversely impact the Group’s of its competitive and/or strategic advantage stemming from the business results. loss in profi t, defamation, or the loss of potential customers. The Group outsources the manufacture and launch of satel- 2. Risks Related to Satellite Infrastructure lites. Because globally there is a limited number of companies that •Operational failure of satellites manufacture and launch satellites, there are instances where the The Group’s communications satellites are used for a comparatively Group is unable to place a manufacturing order so that the satellite long period of between 10 and 20 years, and it is not possible will be ready by the required future date, or the launch of a satellite to undertake repairs while satellites are operated in their orbital is not possible on the scheduled date. Also, if the manufacture and/ slots. Therefore, a manufacturing defect, defective part, magnetic or launch of the scheduled satellite is delayed due to a technical storm caused by solar activity, a collision with a meteorite, exces- problem or some other problem on the part of the manufacturer or sive fuel consumption, control or operational problems, or some launch service provider, it is extremely diffi cult to subcontract the other reasons might stop a satellite from functioning or impede its manufacture and/or launch to another manufacturer or launch service performance, in which case there are a limited number of options provider due to technological constraints and the considerable impact available to the Group to secure the safe operation of the satellite on scheduling and economic impact such an event would have. for its scheduled period of use. Should this sort of situation arise, When the Group procures satellites, although normally there the Group’s business results could be adversely affected. is a maximum price, it concludes contracts on the condition it will The Group has one satellite in orbit in the 110 degrees East receive partial compensation from the manufacturer if there is a delay longitude slot exclusively for emergency backup, and also maintains in the delivery schedule, and also on the condition that it receives one other backup satellite in another orbital slot. However, in some guarantees concerning defects in design, materials, workmanship cases these backup satellites are unable to replace the full capacity etc. to within an allowable limit. The Group’s contracts with launch of a failed satellite. In the event of failure, it takes more than a week service provider contracted to launch its satellites do not hold launch to reposition the backup satellite in the orbital slot of the failed service provider liable for a launch delay attributable to the launch satellite. Also, the consumption of fuel during relocation shortens service provider. the service life of the backup satellite. Furthermore, should the There are times when the Group bears unscheduled expenses normal backup satellite be in operation, it is not able to replace the that arise from a design-related reason or some other reason during functions of other satellites. Therefore, during the period from when a satellite’s manufacturing period. the backup satellite begins to replace the functions of the failed satellite through to the launch of a successor, there is no backup •Insurance covering communications satellites satellite available to fi ll the breach in the event that another satellite The Group purchases two types of insurance policies for its satellites: encounters diffi culties. one covering the launch period and the other covering the period of operation in its orbital slot. •Procurement of communications satellites Launch insurance is normally effective for a period of one year In order to continuously maintain and expand satellite services, the from the launch time and also includes compensation covering Group must effi ciently procure and launch satellites. the initial orbital phase. If all or part of a satellite is damaged, this There are considerable risks inherent in the manufacture and launch insurance covers the cost of a replacement satellite and launch of satellites. These risks include manufacturing delay, launch other repair costs. However, there are cases where on account of failure, breakdown, interference, or other damage that hinders the extent or cause of the damage, or for some other reason, the appropriate operation for commercial purposes, and inaccurate insurance does not cover the full cost of ordering a replacement orbital positioning. satellite and launch expenses. It takes approximately two to three years from placing an order If a satellite is damaged or its performance is impaired due to with a manufacturer through to the satellite’s launch and the com- a fault with the launch rocket, some contracts with launch service mencement of operation. The Group’s policy is to place an order provider require that the launch service provider pays a partial for the manufacture of a successor at least two years before the refund proportionate to the extent of the damage, while if the expected end of a satellite’s life. There are satellite operators that satellite is completely destroyed some contracts require the launch

SKY Perfect JSAT Holdings Inc. 46 decline, whichcouldadverselyimpact theGroup’s business results. their subscriptions,thecumulative numberofsubscriberswould Shouldalarger-than-expected numberofsubscriberscancel business performancecouldbeadverselyaffected. out salescampaignsandofferingincentivestoagents,theGroup’s developing contents,strengtheningpromotionalactivities,carrying does notincreaseasprojecteddespitemarketingactivitiessuch the Group’s projections inthefuture.Ifnumberofsubscriptions guarantee thatthenumberofsubscriptionswillincreaseinlinewith at 3,717thousandasofMarch31,2014.However, thereisno Group’ The acquisitionandretentionofsubscribersisamajorfactorinthe •Subscriber acquisitionandretention Risks RelatedtoMultichannelPayTVBroadcasting 3. * * Loss ofincome Third-party * Deliberate orplannednon-performanceofobligationsbythe liability * Radio frequencydamage(excludesphysicaldamage) * Nuclear reactionandradioactivepollutionotherthosewhich * * Nuclear weapons,laserordirected-energybeams Government * War, insurgency, oractsofterror confi of thefollowing: The Group’s insurancepoliciesdonotcoverlosscausedbyany it wantswhenthepolicycomesupforrenewaleachyear. Group maynotalwaysbeabletorenewitspolicywiththeconditions to theaforementionedvolatilityofspaceinsurancemarket, of asatellite.In-orbitinsuranceisusuallyrenewedannually, butdue cidental orconsequentialloss)causedbythetotaltechnicalfailure to business(includesdeclineinmarketshare,profi t loss,andac- this insurancedoesnotcovertheGroup’s third-partyliabilityordamage and doesnotcoverthecostofareplacementsatellite.Furthermore, insurance. Thisin-orbitinsuranceisbasedonasatellite’s bookvalue it launches.Thisinsurancetakeseffectupontheexpiryoflaunch TheGrouppurchasesin-orbitinsuranceforallofthesatellites with theconditionsitwantsforfuturesatellitelaunchesaswell. the Groupmaynotalwaysbeabletoreceivelaunchinsurancecover space insurancemarketfromwhichtheGroupprocuresinsurance, not covered.Itshouldbenotedthatbecauseofthevolatility provided bylaunchserviceprovider, alloftheGroup’s lossesare are notcoveredbylaunchinsurancepaymentsortheguarantees However, becauselossofearningsandotherincidentallosses service providertolaunchthereplacementsatellitefreeofcharge. Platform Service insured oritssubcontractors naturally occurinouterspace that targetacommunicationssatellite s profi tgrowth.Thenumberofsubscriptionsintotalstood scation 47

Annual Report 2014 all available measures, including legal actions such as lawsuits. all availablemeasures,includinglegalactionssuchaslawsuits. Systems Co.,Ltd.,whichownstherighttoB-CAScard,bytaking operation withotherpayTVoperatorsandBSConditionalAccess TheGroupwillstrictlydealwithcasesofillegalviewinginco- but alsoadverselyaffecttheGroup’s businessperformance. on thesounddiffusionofmultichannelpayTVservicesasawhole Suchpracticescouldnotonlyhavesignifi cant adverseeffects have beencontinuouslypostedonInternetbulletinboards. of alterationsthatcouldenableillegalviewingpayTVprograms ferent payTVoperators,methodsofalteringthecardandpractices Regarding theB-CAScard,whichcanbeusedindividuallybydif- •Risks RelatedtoSecurityofICCards Group’s businessresults. deterioration incontractconditions,couldadverselyimpactthe the failureofnegotiationsconcerningcontractconditions,ora valid foreitherone-year, three-year, orfi TheGroup’s ve-year periods. Therefore, consignmentagreementswithbroadcastersare adversely impacttheGroup’s businessresults. the Group’s commissionincomewoulddecrease,whichcould or thenumberofsubscribersdecreasesduetoraisingfees, if theloweringoffeescannotbeoffsetbyanincreaseinsubscribers, Broadcastersholdtherighttodetermineviewingfees.Therefore, the Group’s businessresults. consolidation ofabroadcastingcompany, couldadverselyimpact or adecreaseinthenumberofchannelsduetoabolition or adeclineinprogrammingqualitycausedbyfi fi ing companies,includingsomethatareexperiencingchallenging The Groupprovidesbroadcastservicesforaround100broadcast- •Broadcaster-related risks nancial conditions. Therefore, the cessation of broadcast services nancial conditions.Therefore,thecessationofbroadcastservices nancial diffi culties, culties,

Corporate Data Financial Section Corporate Social Corporate Governance Review of Operations Special Feature To Our Shareholders Consolidated Financial Satellite Basics/Glossary Responsibility and Investors Highlights SKY Perfect JSAT Holdings Inc. and Consolidated Subsidiaries Consolidated Balance Sheet March 31, 2014

Thousands of Millions of yen U.S. dollars (Note 1) 2013 2014 2014 ASSETS Current Assets: Cash and cash equivalents (Note 13) ¥ 74,473 ¥ 63,784 $ 619,740 Receivables (Note 13): Trade 19,718 21,140 205,403 Afﬁ liated companies 95 3,141 30,522 Other 578 1,322 12,841 Allowance for doubtful receivables (715) (637) (6,192) Inventories: Broadcasting rights 3,483 3,649 35,452 Work in process 179 9,822 95,432 Other 655 1,091 10,605 Deferred tax assets (Note 8) 1,354 1,433 13,923 Short-term loans (Note 13) 2,115 2,575 25,015 Other 2,497 2,588 25,158 Total current assets 104,432 109,908 1,067,899

Property and Equipment: Buildings and structures 21,873 22,264 216,323 Machinery, equipment and vehicles 58,104 66,206 643,281 Telecommunications satellites 250,285 250,285 2,431,843 Land 3,041 3,041 29,549 Lease assets 4,009 2,501 24,300 Construction in progress 670 12,205 118,590 Other 11,473 12,072 117,285 Total property and equipment 349,455 368,574 3,581,171 Accumulated depreciation (207,696) (228,227) (2,217,516) Net property and equipment 141,759 140,347 1,363,655

Investments and Other Assets: Software 4,369 3,512 34,127 Goodwill 7,970 7,092 68,910 Investment securities (Notes 3 and 13) 12,434 6,907 67,112 Investment in and advances to afﬁ liated companies (Note 13) 9,315 8,923 86,699 Deferred tax assets (Note 8) 7,609 8,310 80,741 Other 2,651 2,632 25,567 Allowance for doubtful accounts (52) (51) (499) Total investments and other assets 44,296 37,325 362,657 Total ¥ 290,487 ¥ 287,580 $ 2,794,211 See notes to consolidated ﬁ nancial statements.

SKY Perfect JSAT Holdings Inc. 48 *Shares havebeen restated,asappropriate,toreflectahundred-for-one stockspliteffectedOctober 1,2013. Current portionoflong-termdebt(Notes4and13) Current Liabilities: LIABILITIES ANDEQUITY ogtr et(oe n 3 37,142 51,330 478 Equity 300 Commitments andContingentLiabilities 2,451 Total long-termliabilities 10,234 Other Asset retirementobligations(Note6) Deferred taxliabilities(Note8) Liabilities forretirementbenefi ts(Note5) Long-term debt(Notes4and13) Long-Term Liabilities: Total currentliabilities Other Asset retirementobligations(Note6) Accrued bonus Subscription feesreceived(Note13) Income taxespayable(Note13) Affi Trade Payables (Note13): Total Total equity Minority interests Total Defi Foreigncurrencytranslationadjustments Deferredgainonderivativesunderhedgeaccounting Unrealizedgain(loss)onavailable-for-sale securities Accumulated othercomprehensiveincome 36,387,600 sharesin2014* Treasury stock—atcost,8,051,800sharesin2013and Retained earnings Capital surplus Issued,344,603,700sharesin2013and2014* Authorized, 1,450,000,000shares; Common stock lae opne 227 liatedcompanies nedretirementbenefi tplans (Note 7) : (Notes9and14) : 49 Annual Report 2014 ¥ ¥ 290,487 192,282 158,194 192,693 12,256 46,464 16,018 27,882 10,000 (1,137) (3,884) 2,709 1,985 3,736 9,366 2013 411 368 859 892 — Millions ofyen ¥ ¥ 8,8 2,794,211 287,580 $ 184,352 1,791,217 158,194 1,537,057 184,680 1,794,401 (19,129) 28,662 278,489 19,286 187,384 74,238 721,321 21,447 208,388 259,511 26,709 $ 33,728 327,714 10,000 97,163 2,106 20,474 2,105 20,454 1,166 11,324 3,999 38,853 8,926 86,739 9,913 96,315 6,049 58,770 042014 2014 333 3,235 546 5,304 315 3,059 328 3,184 138 1,340 663 6,440 761 7,390 (3) Thousands of U.S. dollars (Note1) (185,859) (28)

Corporate Data Financial Section Corporate Social Corporate Governance Review of Operations Special Feature To Our Shareholders Consolidated Financial Satellite Basics/Glossary Responsibility and Investors Highlights SKY Perfect JSAT Holdings Inc. and Consolidated Subsidiaries Consolidated Statement of Income Year Ended March 31, 2014

Thousands of Millions of yen U.S. dollars (Note 1) 2013 2014 2014 Revenues (Note 17) ¥ 159,610 ¥ 171,683 $ 1,668,121 Operating Expenses: Cost of services (Notes 10 and 17) 106,168 111,253 1,080,961 Selling, general and administrative expenses (Notes 11 and 17) 37,289 38,717 376,190 Operating Income (Note 17) 16,153 21,713 210,970

Other Income (Expenses): Interest and dividend income 445 443 4,301 Interest expense (Note 4) (671) (620) (6,026) Foreign currency transaction gain—net 72 80 781 Equity in net losses of afﬁ liated companies (8) (191) (1,851) Commission fee (385) —— Gain on sales of investment securities (Note 3) — 74 723 Gain on reversal of stock acquisition rights 22 —— Gain on redemption of securities 52 —— Impairment loss (Note 12) (124) (78) (761) Write-down of investment securities (Note 3) — (2,976) (28,916) Other—net 88 98 951 Other Expenses—Net (509) (3,170) (30,798)

Income before Income Taxes and Minority Interests 15,644 18,543 180,172

Income Taxes (Note 8): Current 6,387 9,773 94,952 Deferred (408) (812) (7,888) Total Income Taxes 5,979 8,961 87,064

Net Income before Minority Interests 9,665 9,582 93,108

Minority Interests in Net Loss (18) (77) (745) Net Income ¥ 9,683 ¥ 9,659 $ 93,853

U.S. dollars Yen (Note 1) 2013* 2014 2014 Per Share of Common Stock (Note 2.s): Net Income Basic ¥ 28.77 ¥ 29.50 $ 0.29 Diluted — —— Cash dividends applicable to the year 12.00 12.00 0.12 *Per share figures have been restated, as appropriate, to reflect a hundred-for-one stock split effected October 1, 2013. See notes to consolidated ﬁ nancial statements.

SKY Perfect JSAT Holdings Inc. 50 See notestoconsolidatedfinancialstatements. Year EndedMarch31,2014 Consolidated StatementofComprehensiveIncome SKY PerfectJSAT HoldingsInc.andConsolidatedSubsidiaries Net incomebeforeminorityinterests acutdfruigteeut ehd30 483 Owners oftheparent 233 947 Total comprehensiveincomeattributableto: Comprehensive income Total othercomprehensiveincome accountedforusingtheequitymethod Shareofothercomprehensiveincomeinafﬁ liatedcompanies Foreigncurrencytranslationadjustments Deferredgainonderivativesunderhedgeaccounting Unrealizedgain(loss)onavailable-for-sale securities Other comprehensiveincome Mnrt neet (18) Minority interests (Note15) : 51 Annual Report 2014 ¥ ¥ 11,376 11,358 9,665 1,693 2013 Millions ofyen ¥ ¥ 11,053 107,397 110$108,141 11,130 $ 1,471 14,289 1,274 12,373 93,108 9,582 $ 042014 2014 10 (969) (100) 293 2,843 7)(744) (77) 4 42 Thousands of U.S. dollars (Note 1)

Corporate Data Financial Section Corporate Social Corporate Governance Review of Operations Special Feature To Our Shareholders Consolidated Financial Satellite Basics/Glossary Responsibility and Investors Highlights SKY Perfect JSAT Holdings Inc. and Consolidated Subsidiaries Consolidated Statement of Changes in Equity Year Ended March 31, 2014

Millions of yen

Accumulated other comprehensive income

Defined Outstanding Unrealized Deferred gain retire- number of Stock gain (loss) on on derivatives Foreign currency ment shares of Common acquisition Retained Treasury available-for-sale under hedge translation benefit Minority common stock* stock Capital surplus rights earnings stock securities accounting adjustments plans Total interests Total equity Balance at April 1, 2012 336,551,900 ¥10,000 ¥158,194 ¥ 22 ¥22,238 ¥ (3,884) ¥ (93) ¥ 109 ¥ (1,619) — ¥ 184,967 ¥ 85 ¥185,052 Net income 9,683 9,683 9,683

Cash dividends, (4,039) (4,039) (4,039) ¥12.00 per share* Net change in the year (22) 952 259 482 1,671 326 1,997 Balance at April 1, 2013 336,551,900 ¥10,000 ¥158,194 — ¥ 27,882 ¥ (3,884) ¥ 859 ¥ 368 ¥ (1,137) — ¥ 192,282 ¥ 411 ¥ 192,693 Net income 9,659 9,659 9,659 Cash dividends, ¥12.00 per share* (4,039) (4,039) (4,039) Purchase of Treasury stock (28,335,800) (15,245) (15,245) (15,245) Change in scope of entities accounted for by the equity method 226 226 226 Net change in the year (98) 295 1,275 (3) 1,469 (83) 1,386 Balance at March 31, 2014 308,216,100 ¥10,000 ¥158,194 — ¥ 33,728 ¥ (19,129) ¥ 761 ¥ 663 ¥ 138 ¥(3) ¥ 184,352 ¥ 328 ¥ 184,680

Thousands of U.S. dollars (Note 1)

Accumulated other comprehensive income

Defined Unrealized Outstanding Deferred gain Foreign retire- gain (loss) on number of Stock on derivatives currency ment available-for-sale shares of Common Capital acquisition Retained Treasury under hedge translation benefit Minority securities common stock* stock surplus rights earnings stock accounting adjustments plans Total interests Total equity Balance at April 1, 2013 336,551,900 $97,163 $1,537,057 — $ 270,907 $ (37,738) $ 8,342 $ 3,573 $ (11,033) — $ 1,868,271 $ 3,992 $ 1,872,263 Net income 93,853 93,853 93,853 Cash dividends, $0.12 per share* (39,239) (39,239) (39,239) Purchase of Treasury stock (28,335,800) (148,121) (148,121) (148,121) Change in scope of entities accounted for by the equity method 2,193 2,193 2,193 Net change in the year (952) 2,867 12,373 (28) 14,260 (808) 13,452 Balance at March 31, 2014 308,216,100 $97,163 $1,537,057 — $ 327,714 $ (185,859) $ 7,390 $ 6,440 $ 1,340 $ (28) $ 1,791,217 $ 3,184 $ 1,794,401 *Shares and per share figures have been restated, as appropriate, to reflect a hundred-for-one stock split effected October 1, 2013. See notes to consolidated financial statements.

SKY Perfect JSAT Holdings Inc. 52 Year EndedMarch31,2014 Consolidated StatementofCashFlows SKY PerfectJSAT HoldingsInc.andConsolidatedSubsidiaries See notestoconsolidatedfinancialstatements. Purchase oftreasurystock Proceeds frompaid-incapitalminorityshareholders Repayments oflong-termdebt Proceeds fromlong-termdebt Repayments offi nanceleaseobligations Financing Activities: Netcashusedininvestingactivities Other—net Payments foradditionalacquisitionofsharesaffi liates Proceeds fromcollectionoflong-termloans Proceeds fromsalesandredemptionofinvestmentsecurities Cash andcashequivalents,end ofyear Purchases ofinvestmentsecurities Cash andcashequivalents,beginning ofyear Itrs ad(694) (8,408) 47,048 2,789 (11,646) 68 426 38,372 98 643 (2,976) Purchases ofintangiblefi xedassets Proceeds fromsalesofpropertyandequipment Purchases ofpropertyandequipment — Proceeds fromsalesandredemptionofshort-terminvestments — Investing Activities: Netcashprovidedbyoperatingactivities Income taxespaid Interest paid Interest anddividendsreceived Subtotal Other—net Increase(decrease) indeferredrevenues Decrease insubscriptionfeesreceived Increase inreceivables—tradeandaffi Write-down ofinvestmentsecurities Gain onsalesofinvestmentsecurities Income beforeincometaxesandminorityinterests Operating Activities: Net increase(decrease)incash andcashequivalents eraeices)i netre 21 671 3,007 972 124 878 (445) 26,116 Increase inpayables—tradeandaffi liatedcompanies Decrease(increase) ininventories Decrease(increase) inotherreceivables Decrease(increase) inbroadcastingrights Equity innetlossesofaffi liatedcompanies Interest expense Interestanddividendincome Amortizationofgoodwill Impairment loss Depreciationandamortization(Note17) Adjustments for: Foreign currencytranslationadjustments oncashandequivalents Dividends paid iied adt ioiysaeodr (6) Netcashusedinfi Dividends paidtominorityshareholders nnigatvte (19,402) nancingactivities lae opne (1,840) liatedcompanies 53 Annual Report 2014 ¥ ¥ (13,591) (11,119) 66,405 15,644 74,473 (2,120) (1,938) (4,035) 1,949 1,568 8,068 1,436 2013 (244) (974) 350 217 — — (0) 8 Millions ofyen ¥ ¥ (15,252) (13,722) (18,970) 1,8)(103,859) (10,689) 2,6)(204,683) (21,066) 1,7)(97,930) (10,079) 2,4)(247,224) (25,444) 74,473 723,599 33,345 323,995 39,664 385,392 24,433 237,398 180,172 18,543 $ 374$619,740 63,784 $ (2,106) (1,522) 609 (59,262) (6,099) (1,257) 433 (41,813) (4,303) 405 (39,206) (4,035) 9,680 94,050 2,387 23,194 2,516 24,443 2,950 28,672 2,976 28,916 5,586 54,271 042014 2014 69 (6,502) (4,313) (3,121) (669) (444) (321) 71 (7,391) (1,615) (761) (166) (4,301) (443) 449 4,367 191 1,851 380 3,684 620 6,026 878 8,532 (12) (80) 7)(723) (74) 64 625 78 761 —— —— 9 (88) (9) Thousands of U.S. dollars (Note 1) (148,196) (133,323) (184,314) (20,461) (14,787) (12,209) (122) (775)

Corporate Data Financial Section Corporate Social Corporate Governance Review of Operations Special Feature To Our Shareholders Consolidated Financial Satellite Basics/Glossary Responsibility and Investors Highlights SKY Perfect JSAT Holdings Inc. and Consolidated Subsidiaries Notes to Consolidated Financial Statements Year Ended March 31, 2014

1. BASIS OF PRESENTING CONSOLIDATED FINANCIAL from the acquisition of JSAT Corporation (JSAT) and Space Com- STATEMENTS munications Corporation (SCC) is amortized over 15 years. The accompanying consolidated fi nancial statements have been All signifi cant intercompany balances and transactions have been prepared in accordance with the provisions set forth in the Japanese eliminated in consolidation. All material unrealized profi t included Financial Instruments and Exchange Act and its related accounting in assets resulting from transactions within the Companies are regulations and in accordance with accounting principles generally eliminated. accepted in Japan (“Japanese GAAP”), which are different in certain respects as to application and disclosure requirements of accounting b. Unifi cation of Accounting Policies Applied to Foreign principles generally accepted in the United States of America and Subsidiaries for the Consolidated Financial Statements International Financial Reporting Standards. In May 2006, the Accounting Standards Board of Japan (the “ASBJ”) In preparing these consolidated fi nancial statements, certain issued ASBJ Practical Issues Task Force (PITF) No. 18, “Practical reclassifi cations and rearrangements have been made to the Solution on Unifi cation of Accounting Policies Applied to Foreign consolidated fi nancial statements issued domestically in order to Subsidiaries for the Consolidated Financial Statements.” PITF No. present them in a form that is more familiar to readers outside Japan. 18 prescribes that the accounting policies and procedures applied In addition, certain reclassifi cations have been made in the 2013 to a parent company and its subsidiaries for similar transactions and consolidated fi nancial statements to conform to the classifi cations events under similar circumstances should in principle be unifi ed for used in 2014. the preparation of the consolidated fi nancial statements. However, The consolidated fi nancial statements are stated in Japanese yen, fi nancial statements prepared by foreign subsidiaries in accordance the currency of the country in which SKY Perfect JSAT Holdings Inc. with either International Financial Reporting Standards or generally (the “Company”) is incorporated and operates. The translations of accepted accounting principles in the United States of America Japanese yen amounts into U.S. dollar amounts are included solely tentatively may be used for the consolidation process, except for for the convenience of readers outside Japan and have been made the following items that should be adjusted in the consolidation at the rate of ¥102.92 to $1, the approximate rate of exchange at process so that net income is accounted for in accordance with March 31, 2014. Such translations should not be construed as Japanese GAAP unless they are not material: 1) amortization of representations that the Japanese yen amounts could be converted goodwill; 2) scheduled amortization of actuarial gain or loss of pen- into U.S. dollars at that or any other rate. sions that has been directly recorded in the equity; 3) expensing capitalized development costs of research & development (R&D); 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 4) cancellation of the fair value model accounting for property, plant a. Consolidation and equipment and investment properties and incorporation of the The consolidated fi nancial statements as of March 31, 2014, include cost model accounting; and 5) exclusion of minority interests from the accounts of the Company and its signifi cant subsidiaries (together, net income, if contained in net income. the “Companies”). Consolidation of the remaining subsidiaries would not have a material effect on the accompanying consolidated c. Unifi cation of Accounting Policies Applied to Foreign fi nancial statements. Associated Companies for the Equity Method The numbers of consolidated subsidiaries and affi liated companies In March 2008, the ASBJ issued ASBJ Statement No.16, “Account- in which investments are accounted for under the equity method, ing Standard for Equity Method of Accounting for Investments.” at March 31, 2013 and 2014, are summarized below. The new standard requires adjustments to be made to conform the associate’s accounting policies for similar transactions and 2013 2014 events under similar circumstances to those of the parent company Consolidated subsidiaries 10 10 when the associate’s fi nancial statements are used in applying the Affi liated companies: equity method unless it is impracticable to determine adjustments. Unconsolidated subsidiaries 4 4 In addition, fi nancial statements prepared by foreign associated Associated companies 7 7 companies in accordance with either International Financial Reporting Under the control and infl uence concepts, those companies in Standards or generally accepted accounting principles in the United which the Company, directly or indirectly, is able to exercise control States of America tentatively may be used in applying the equity over operations are consolidated, and those companies over which method if the following items are adjusted so that net income is the Companies have the ability to exercise signifi cant infl uence are accounted for in accordance with Japanese GAAP unless they are accounted for under the equity method. not material: 1) amortization of goodwill; 2) scheduled amortization Investments in unconsolidated subsidiaries and associated of actuarial gain or loss of pensions that has been directed in the companies are accounted for under the equity method. equity; 3) expensing capitalized development costs of R&D; 4) Goodwill, which represents the excess of the cost of an acquisition cancellation of the fair value model accounting for property, plant, over the fair value of the net assets of the acquired subsidiaries and and equipment and investment properties and incorporation of the associated companies at the date of acquisition, is amortized on a cost model accounting; and 5) exclusion of minority interests from straight-line basis over its estimated useful life. Goodwill incurred net income, if contained in net income.

SKY Perfect JSAT Holdings Inc. 54 specifi Inventoriesarestatedatthelowerofcost,determinedby the numberofshowings. of programs,whicharecapitalizedandthenamortizedbasedon process. TheCompaniespurchaserightsrelatingtobroadcasting Inventories consistprimarilyofbroadcastingrightsandworkin e. Inventories due withinthreemonthsofthedateacquisition. mutual fundsinvestinginbonds,allofwhichmatureorbecome Cashequivalentsincludetimedeposits,commercialpaper, and changes invalue. convertible intocashandthatareexposedtoinsignifi cant riskof Cash equivalentsareshort-terminvestmentsthatreadily d. CashEquivalents process, andbythefi outstanding. experience andevaluationofpotentiallossesinthereceivables sidered tobeappropriatebasedontheCompanies’pastcreditloss The allowancefordoubtfulreceivablesisstatedinamountscon- h. AllowanceforDoubtfulReceivables by achargetoincome. declines infairvalue,securitiesarereducedtonetrealizablevalue determined bythemoving-averagemethod.Forother-than-temporary Nonmarketableavailable-for-sale securitiesarestatedatcost determined basedonthemoving-averagemethod. in aseparatecomponentofequity. Thecostofsecuritiessoldis with unrealizedgainsandlosses,netofapplicabletaxes,reported Marketableavailable-for-sale securitiesarestatedatfairvalue intent andabilitytoholdmaturity, arestatedatamortizedcost. Held-to-maturitydebtsecurities,forwhichthereisthepositive ment’s intent. debt securitiesoravailable-for-sale securitiesdependingonmanage- Securitiesareclassifi ed astradingsecurities,held-to-maturity securities intheconsolidatedbalancesheets. Securities areincludedinshort-terminvestmentsandinvestment g. Securities ended March31,2014. expense capitalizedwas¥16million($165thousand)fortheyear capitalized asapartoftheconstructioncostprojects.Interest tion businessofXbandduringthesatelliteprocurementhavebeen by certainsubsidiariesinordertofinance thesatellitecommunica- Interest costsincurredforsatelliteconstructionprojectsconducted f. CapitalizationofInterest storage, ornetsellingvalue. c identifi c cation method for broadcasting rights and work in cation methodforbroadcastingrightsandworkin rst-in, fi rst-out method for merchandise and rst-out methodformerchandiseand 55 Annual Report 2014 an effective date of April 1, 2000, and the other related practical an effectivedate ofApril1,2000,andtheother relatedpractical had beenissuedbytheBusiness AccountingCouncilin1998with which replacedtheaccountingstandard forretirementbenefi 25, “GuidanceonAccountingStandard forRetirementBenefi counting StandardforRetirement Benefi ts” andASBJGuidanceNo. InMay2012,theASBJissuedStatement No.26,“Ac- starting fromtheyearinwhichit occurs. average remainingserviceyearsoftheemployees(12,17years), prior servicecostisamortizedonastraight-linemethodoverthe year followingtheinwhichdifferencesoccur. Unrecognized of theemployeesorashorterperiod(10–19years),startingfrom on astraight-linemethodovertheaverageremainingserviceyears straight-line basis.Unrecognizedactuarialdifferencesareamortized Theprojectedbenefi t obligationsareattributedtoperiodsona sheet datetoprovideforfuturepayments. based ontheprojectedbenefi t obligationsrequiredatthebalance TheCompanies recordtheliabilitiesforretirementbenefi contribution amounts. The costsofthemulti-employerplanareaccruedbasedon tory multi-employerpensionplancoveringalloftheiremployees. Certain subsidiariesoftheCompanyalsoparticipateinacontribu- Board Members. ees otherthandirectors,executiveoffi cers andAudit&Supervisory severance indemnityplanscoveringsubstantiallyalloftheiremploy- The subsidiariesoftheCompanyhaveunfundeddefi l. RetirementandPensionPlans tion oftheassetornetsellingpriceatdisposition. discounted cashflows fromthecontinueduseandeventualdisposi- asset exceedsitsrecoverableamount,whichisthehigherof be measuredastheamountbywhichcarryingof disposition oftheassetorgroup.Theimpairmentlosswould cash fl ows expectedtoresultfromthe continueduseandeventual asset orgroupexceedsthesumofundiscountedfuture impairment losswouldberecognizedifthecarryingamountofan ing amountofanassetorgroupmaynotberecoverable.An whenever eventsorchangesincircumstanceindicatethecarry- The Companiesreviewtheirlong-livedassetsforimpairment k. ImpairmentforLong-LivedAssets (mainly 5years). amortized onastraight-linemethodoveritsestimatedusefullife Software isstatedatcostlessaccumulatedamortizationand j. Software principally as follows: principally asfollows: assets. Theestimatedusefullivesforpropertyandequipmentare by thestraight-linemethodoverestimatedusefullivesof Property andequipmentarestatedatcost.Depreciationiscomputed i. PropertyandEquipment Other Telecommunications satellites Machinery, equipmentandvehicles Buildings andstructures 11–15 years ned benefi ned 2–20 years 2–17 years 2–50 years ts that ts,” ts,” ts t

Corporate Data Financial Section Corporate Social Corporate Governance Review of Operations Special Feature To Our Shareholders Consolidated Financial Satellite Basics/Glossary Responsibility and Investors Highlights guidance, and were followed by partial amendments from time to by law or contract that results from the acquisition, construction, time through 2009. development and the normal operation of a tangible fi xed asset and is associated with the retirement of such tangible fi xed asset. (a) Under the revised accounting standard, actuarial gains and The asset retirement obligation is recognized as the sum of the losses and past service costs that are yet to be recognized in discounted cash fl ows required for the future asset retirement profi t or loss are recognized within equity (accumulated other and is recorded in the period in which the obligation is incurred comprehensive income), after adjusting for tax effects, and any if a reasonable estimate can be made. If a reasonable estimate resulting defi cit or surplus is recognized as a liability (liability for of the asset retirement obligation cannot be made in the period retirement benefi ts) or asset (asset for retirement benefi ts). the asset retirement obligation is incurred, the liability should be recognized when a reasonable estimate of the asset retirement (b) The revised accounting standard does not change how to rec- obligation can be made. Upon initial recognition of a liability for an ognize actuarial gains and losses and past service costs in profi t asset retirement obligation, an asset retirement cost is capitalized or loss. Those amounts are recognized in profi t or loss over a by increasing the carrying amount of the related fi xed asset by the certain period no longer than the expected average remaining amount of the liability. The asset retirement cost is subsequently service period of the employees. However, actuarial gains and allocated to expense through depreciation over the remaining useful losses and past service costs that arose in the current period life of the asset. Over time, the liability is accreted to its present and have not yet been recognized in profi t or loss are included in value each period. Any subsequent revisions to the timing or the other comprehensive income and actuarial gains and losses and amount of the original estimate of undiscounted cash fl ows are past service costs that were recognized in other comprehensive refl ected as an adjustment to the carrying amount of the liability income in prior periods and then recognized in profi t or loss in and the capitalized amount of the related asset retirement cost. the current period shall be treated as reclassifi cation adjustments (see Note 2.t). n. Leases In March 2007, the ASBJ issued ASBJ Statement No. 13, “Account- (c) The revised accounting standard also made certain amendments ing Standard for Lease Transactions,” which revised the previous relating to the method of attributing expected benefi t to periods accounting standard for lease transactions. The revised accounting and relating to the discount rate and expected future salary standard for lease transactions was effective for fi scal years begin- increases. ning on or after April 1, 2008. Under the previous accounting standard, fi nance leases that This accounting standard and the guidance for (a) and (b) above are were deemed to transfer ownership of the leased property to effective for the end of annual periods beginning on or after April the lessee were capitalized. However, other fi nance leases were 1, 2013, and for (c) above are effective for the beginning of annual permitted to be accounted for as operating lease transactions if periods beginning on or after April 1, 2014, or for the beginning certain “as if capitalized” information was disclosed in the note to of annual periods beginning on or after April 1, 2015, subject to the lessee’s fi nancial statements. The revised accounting standard certain disclosure in March 2015, both with earlier application being requires that all fi nance lease transactions should be capitalized permitted from the beginning of annual periods beginning on or by recognizing lease assets and lease obligations in the balance after April 1, 2013. However, no retrospective application of this sheet. In addition, the revised accounting standard permits leases accounting standard to consolidated fi nancial statements in prior that existed at the transition date and do not transfer ownership periods is required. of the leased property to the lessee to continue to be accounted The Company applied the revised accounting standard and guid- for as operating lease transactions. ance for retirement benefi ts for (a) and (b) above, effective March The Companies applied the revised accounting standard effec- 31, 2014. As a result, liability for retirement benefi ts of ¥3,993 tive April 1, 2008. In addition, the Companies continue to account million ($38,793 thousand) was recorded as of March 31, 2014, for leases that existed at the transition date and do not transfer and accumulated other comprehensive income for the year ended ownership of the leased property to the lessee as operating lease March 31, 2014, decreased by ¥3 million ($28 thousand). transactions. All other leases are accounted for as operating leases. The annual provision for retirement benefi ts for directors, executive offi cers and Audit & Supervisory Board Members are calculated o. Income Taxes as a liability at the amount that would be required if they retired at The provision for income taxes is computed based on the pretax each balance sheet date. income included in the consolidated statements of income. The asset-and-liability approach is used to recognize deferred tax assets m. Asset Retirement Obligations and liabilities for the expected future tax consequences of temporary In March 2008, the ASBJ issued ASBJ Statement No.18, “Ac- differences between the carrying amounts and the tax bases of counting Standard for Asset Retirement Obligations” and ASBJ assets and liabilities. Deferred taxes are measured by applying Guidance No. 21, “Guidance on Accounting Standard for Asset currently enacted tax rates to the temporary differences. Retirement Obligations.” Under this accounting standard, an asset retirement obligation is defi ned as a legal obligation imposed either

SKY Perfect JSAT Holdings Inc. 56 2013 and2014. dilute theper-share informationfortheyearsendedMarch31, because theCompanieshadnosecurities outstandingwhichmight Dilutednetincomepershareofcommon stock isnotdisclosed 2013 and2014,were336,551,900 and327,468,918,respectively. numbers ofsharescommonstockfortheyearsendedMarch31, of commonsharesoutstandingfortheperiod.Theweighted-average available tocommonshareholdersbytheweighted-averagenumber Basic netincomepershareiscomputedbydividing s. PerShareInformation are translatedattheforwardexchangecontractrates. Certainliabilitieshedgedbyforeignexchangeforwardcontracts transactions. or lossesonderivativesaredeferreduntilmaturityofthehedged between thehedginginstrumentsandhedgeditems,gains for hedgeaccountingbecauseofhighcorrelationandeffectiveness derivatives usedforhedgingpurposes,ifsuchqualify are recognizedintheconsolidatedstatementsofincomeandb)for measured atfairvalue,andgainsorlossesonderivativetransactions a) allderivativesarerecognizedaseitherassetsorliabilitiesand are classified andaccountedforasfollows: Derivative fi for tradingorspeculativepurposes. currency exchangerisk.TheCompaniesdonotenterintoderivatives forward contractsareutilizedbytheCompaniestoreduceforeign exposures tofl uctuations inforeignexchange.Foreignexchange The Companiesusederivativefi nancial instrumentstomanagetheir r. DerivativeFinancialInstruments translated intoyenattheaverageexchangerate. and expenseaccountsoftheconsolidatedforeignsubsidiariesare comprehensive incomeinaseparatecomponentofequity. Revenue eign currencytranslationadjustments”underaccumulatedother rate. Differencesarisingfromsuchtranslationareshownas“For- sheet dateexceptforequity, whichistranslatedatthehistorical are translatedintoyenatthecurrentexchangerateasofbalance The balancesheetaccountsoftheconsolidatedforeignsubsidiaries q. ForeignCurrencyFinancialStatements exchange contracts. ments ofincometotheextentthattheyarenothedgedbyforward losses fromtransactionsarerecognizedintheconsolidatedstate- consolidated balancesheetdate.Theforeignexchangegainsand currencies aretranslatedintoyenattheexchangerates All monetaryreceivablesandpayablesdenominatedinforeign p. ForeignCurrencyTransactions owned domesticsubsidiaries. combined profi ts orlossesoftheparentcompanyanditswholly tax system,whichallowscompaniestobasepaymentsonthe TheCompaniesfi le ataxreturnundertheconsolidatedcorporate nancial instruments and foreign currency transactions nancial instrumentsandforeigncurrencytransactions 57 Annual Report 2014 Therevisedaccounting standarddoesnotchangehowtorecog- (b) Treatment inthestatementofincomeand Undertherevisedaccountingstandard,actuarialgainsand Underthecurrentrequirements,actuarialgainsandlosses (a) Treatment inthebalancesheet Major changesareasfollows: time through2009. guidance, andwerefollowedbypartialamendmentsfromtimeto with aneffectivedateofApril1,2000,andtheotherrelatedpractical that hadbeenissuedbytheBusinessAccountingCouncilin1998 which replacedtheAccountingStandardforRetirementBenefi 25, “GuidanceonAccountingStandardforRetirementBenefi counting StandardforRetirementBenefi ts” andASBJGuidanceNo. On May17,2012,theASBJissuedStatementNo.26,“Ac- Accounting StandardforRetirementBenefi t. NewAccountingPronouncements per share,andcashdividendsshare. of commonshares,basicnetincomepershare,diluted calculations regardingtheCompany’s weighted-averagenumber to theyearendedMarch31,2014.Suchrestatementsinclude impact ofthestocksplit,andtoprovidedataonabasiscomparable year shareandperfigures havebeenrestatedtorefl of theBoardDirectorsmeetingheldonMay8,2013.Allprior stock splitbywayofafreesharedistributionbasedontheresolution OnOctober1,2013,theCompanyeffectedahundred-for-one of theyear. to therespectiveyearsincludingdividendsbepaidafterend solidated statementsofincomerefertothedividendsapplicable Cashdividendspersharepresentedintheaccompanyingcon- current periodshallbetreatedas reclassifi income inpriorperiodsandthenrecognized inprofi t orlossinthe past servicecoststhatwererecognized inothercomprehensive other comprehensiveincomeand actuarialgainsandlosses have notyetbeenrecognizedinprofi t orloss shallbeincludedin losses andpastservicecoststhat aroseinthecurrentperiodand service periodoftheemployees.However, actuarialgainsand a certainperiodnolongerthantheexpectedaverageremaining loss. Thoseamountswouldberecognizedinprofi t orlossover nize actuarialgainsandlossespastservicecostsinprofi comprehensive income for retirementbenefits) or asset(assetforretirementbenefi resulting defi cit orsurplusshallberecognizedas aliability(liability comprehensive income),afteradjustingfortaxeffects,andany profi losses andpastservicecoststhatareyettoberecognizedin is recognizedasaliabilityorasset. “defi tween retirementbenefit obligationsandplanassets(hereinafter, are notrecognizedinthebalancesheet,anddifferencebe- past servicecoststhatareyettoberecognizedinprofi t orloss t or loss shall be recognized within equity (accumulated other t orlossshallberecognizedwithinequity (accumulatedother cit or surplus”), adjusted by such unrecognized amounts, cit orsurplus”),adjustedbysuchunrecognizedamounts, cation adjustments. ts ect the ts,” ts,” ts). t or ts ts

Corporate Data Financial Section Corporate Social Corporate Governance Review of Operations Special Feature To Our Shareholders Consolidated Financial Satellite Basics/Glossary Responsibility and Investors Highlights (c) Amendments relating to the method of attributing expected Presentation of the consolidated statement of income beneﬁ t to periods and relating to the discount rate and expected In the consolidated statement of income, “income before minority future salary increases interest” under the current accounting standard will be changed The revised accounting standard also made certain amend- to “net income” under the revised accounting standard, and “net ments relating to the method of attributing expected beneﬁ t to income” under the current accounting standard will be changed periods and relating to the discount rate and expected future to “net income attributable to owners of the parent” under the salary increases. revised accounting standard.

This accounting standard and the guidance for (a) and (b) above are Provisional accounting treatments for a business combination effective for the end of annual periods beginning on or after April If the initial accounting for a business combination is incomplete 1, 2013, and for (c) above are effective for the beginning of annual by the end of the reporting period in which the business combi- periods beginning on or after April 1, 2014, or for the beginning nation occurs, an acquirer shall report in its fi nancial statements of annual periods beginning on or after April 1, 2015, subject to provisioned amounts for the items for which the accounting is certain disclosure in March 2015, both with earlier application being incomplete. Under the current accounting standard guidance, the permitted from the beginning of annual periods beginning on or impact of adjustments to provisional amounts recorded in a business after April 1, 2013. However, no retrospective application of this combination on profi t or loss is recognized as profi t or loss in the accounting standard to consolidated fi nancial statements in prior year in which the measurement is completed. Under the revised periods is required. accounting standard guidance, during the measurement period, The Company applied the revised accounting standard for (a) which shall not exceed one year from the acquisition, the acquirer and (b) above effective March 31, 2014, and expects to apply (c) shall retrospectively adjust the provisional amounts recognized at above from April 1, 2014, and is in the process of measuring the the acquisition date to refl ect new information obtained about facts effects of applying the revised accounting standard for (c) above and circumstances that existed as of the acquisition date and that in future applicable periods. would have affected the measurement of the amounts recognized as of that date. Such adjustments shall be recognized as if the Accounting Standards for Business Combinations and accounting for the business combination had been completed at Consolidated Financial Statements the acquisition date. On September 13, 2013, the ASBJ issued revised ASBJ Statement No. 21, “Accounting Standard for Business Combinations,” revised Acquisition-related costs ASBJ Guidance No. 10, “Guidance on Accounting Standards for Acquisition-related costs are costs, such as advisory fees or profes- Business Combinations and Business Divestitures,” and revised sional fees, which an acquirer incurs to effect a business combina- ASBJ Statement No. 22, “Accounting Standard for Consolidated tion. Under the current accounting standard, the acquirer accounts Financial Statements.” for acquisition-related costs by including them in the acquisition costs of the investment. Under the revised accounting standard, Major accounting changes are as follows: acquisition-related costs shall be accounted for as expenses in the periods in which the costs are incurred. Transactions with noncontrolling interest The above accounting standards and guidance for “transac- A parent’s ownership interest in a subsidiary might change if the tions with noncontrolling interest,” “acquisition-related costs” and parent purchases or sells ownership interests in its subsidiary. “presentation changes in the consolidated fi nancial statements” are The carrying amount of minority interest is adjusted to refl ect the effective for the beginning of annual periods beginning on or after change in the parent’s ownership interest in its subsidiary while April 1, 2015. Earlier application is permitted from the beginning of the parent retains its controlling interest in its subsidiary. Under the annual periods beginning on or after April 1, 2014, except for the current accounting standard, any difference between the fair value presentation changes in the consolidated fi nancial statements. In of the consideration received or paid and the amount by which the case of earlier application, all accounting standards and guidance minority interest is adjusted is accounted for as an adjustment of above, except for the presentation changes, should be applied goodwill or as profi t or loss in the consolidated statement of income. simultaneously. Either retrospective or prospective application of Under the revised accounting standard, such difference shall be the revised accounting standards and guidance for “transactions accounted for as capital surplus as long as the parent retains control with noncontrolling interest” and “acquisition-related costs” is over its subsidiary. permitted. In retrospective application of the revised standards and guidance for “transactions with noncontrolling interest” and Presentation of the consolidated balance sheet “acquisition-related costs,” accumulated effects of retrospective In the consolidated balance sheet, “minority interest” under the adjustments for all “transactions with noncontrolling interest” and current accounting standard will be changed to “noncontrolling “acquisition-related costs” which occurred in the past shall be interest” under the revised accounting standard. refl ected as adjustments to the beginning balance of capital surplus and retained earnings for the year of the fi rst-time application.

SKY Perfect JSAT Holdings Inc. 58 ties atMarch31,2013and2014,wereasfollows: Thecostsandaggregatefairvaluesofcertaininvestmentsecuri- of thefollowing: Investment securitiesasofMarch31,2013and2014,consisted 3. INVESTMENTSECURITIES applicable periods. applying therevisedaccountingstandardsandguidanceinfuture on April1,2015,andisintheprocessofmeasuringeffects and guidancefromthebeginningofannualperiod TheCompanyexpectstoapplytherevisedaccountingstandards the beginningofannualperiodsonorafterApril1,2014. permitted forabusinesscombinationwhichwilloccuronorafter periods beginningonorafterApril1,2015.Earlierapplicationis combination whichwilloccuronorafterthebeginningofannual treatments forabusinesscombination”iseffective Therevisedstandardsandguidancefor“provisionalaccounting the first-time applicationoftherevisedstandardsandguidance. applied toallperiodspresentedinfi nancial statementscontaining of thefi rst-time application.Thechangesinpresentationshallbe costs” shallbeappliedprospectivelyfromthebeginningofyear “transactions withnoncontrollinginterest”and“acquisition-related Inprospectiveapplication,thenewstandardsandguidancefor Ohr 522 ¥ 12,434 6,534 ¥ 5,378 Total Other Debt securities Equity securities Investment securities: Other Debt securities Equity securities Available-for-sale Securities classifi edas: Debt securities Held-to-maturity Other Debt securities Equity securities Available-for-sale Securities classifi edas: 38 0 338 — 1,482 ¥ 30 66 ¥ 4,423 91 308 40 553 ¥ 3,961 1,508 ¥ ¥ ¥ ¥ 44 — ¥ 1,000 956 6 9 405 408 ¥ 5,161 ¥ ¥ 1,621 499 30 266 ¥ 126 1,857 5,534 Cost Cost Unrealized Unrealized 2013 Millions ofyen gain gain Millions ofyen Millions ofyen 2014 2013 ¥6 97 ¥ $ 6,907 67,112 486 4,729 4,423 ¥ $ 1,998 42,974 19,409 Unrealized Unrealized 042014 2014 loss loss Thousands of U.S. dollars Fair value Fair value 59 Annual Report 2014 at March31,2014,wereasfollows: contractual maturitiesforsecuritiesclassifi Thecarryingvaluesofdebtsecuritiesandotherinvestmentsby March 31,2014,was¥2,976million. Write-downofavailable-for-sale securitiesfortheyearended during theyearendedMarch31,2013and2014,wasasfollows: Theinformationofavailable-for-sale securitieswhichweresold Available-for-sale: Available-for-sale: Available-for-sale: Other Debt securities Equity securities Available-for-sale Securities classifi edas: Total Equity securities Total Equity securities Total Other Equity securities Total Due aftertenyears Due afterfi veyearsthroughten Due afteroneyearthroughfi veyears Due withinoneyearorless ,8 9 3,281 — $14,396 292 645 $ 2,989 888 42,974 389 5,376 $ 38,486 $14,652 Cost $1 84 $73 $ — $ $ $ 723 — $ 1,824 $ 723 1,824 ¥ ¥ ¥ 188 ¥ ¥ 188 74 ¥ 74 — — ¥ ¥ 1,975 ¥ ¥ ¥ 35 15 ¥ 1,940 0 0 0 15 — Proceeds Proceeds Proceeds Thousands ofU.S.dollars Unrealized gain Thousands ofU.S.dollars edasavailable-for-sale ¥ 4,423 $ 42,974 1,418 — — — 3,005 13,777 — $ ¥ 29,197 2014 Millions ofyen Millions ofyen Millions of Realized Realized Realized Unrealized 2013 2014 2014 yen gain gain gain 042014 2014 loss Thousands of U.S. dollars Realized Realized Realized Fair value loss loss loss

Corporate Data Financial Section Corporate Social Corporate Governance Review of Operations Special Feature To Our Shareholders Consolidated Financial Satellite Basics/Glossary Responsibility and Investors Highlights 4. LONG-TERM DEBT The domestic subsidiary of the Company has concluded lines of Long-term debt at March 31, 2013 and 2014, consisted of the credit agreements with certain fi nancial institutions in order to fi nance following: about the satellite communication business of X band. The status of these lines of credit at March 31, 2013 and 2014, is as follows: Thousands of Millions of yen U.S. dollars Thousands of Millions of yen 2013 2014 2014 U.S. dollars Long-term debt: 2013 2014 2014 Unsecured 1.23% yen Lines of credit ¥ 77,500 ¥ 77,500 $ 753,012 bonds, due 2014 ¥ 20,000 ¥ 20,000 $ 194,326 Credit utilized — 8,574 83,303 Government-owned banks, maturing serially through Available credit ¥ 77,500 ¥ 68,926 $ 669,709 2023, annual interest rates of 0.54%–1.40% at March 31, 2013, and 5. EMPLOYEES’ BENEFIT PLANS AND DIRECTORS’ 0.46%–1.40% at March SEVERANCE INDEMNITIES 31, 2014 6,910 6,991 67,925 The subsidiaries of the Company have unfunded defi ned benefi t Banks and insurance companies, maturing severance indemnity plans under which substantially all of their serially through 2023, employees, other than directors, executive offi cers and audit & annual interest rates of supervisory board member, are entitled, under most circumstances, 0.56%–2.00% at March to lump-sum severance indemnities based on the level of compensa- 31, 2013, and 0.44%– 2.00% at March 31, 2014 22,488 19,004 184,644 tion at retirement or earlier termination of employment, the length Total 49,398 45,995 446,895 of service and other factors, upon mandatory retirement at normal Less current portion 12,256 26,709 259,511 retirement age or earlier termination of employment. Long-term debt, less The Welfare Pension Fund, in which certain consolidated subsidiar- current portion ¥ 37,142 ¥ 19,286 $ 187,384 ies participated, received approval of transfer of past benefi t obligation of the substitutional portion on April 1, 2013, from the Minister of The annual maturities of long-term debt at March 31, 2014, Health, Labor and Welfare. In addition, the subsidiary withdrew were as follows: from the multi-employer welfare pension plan, and implemented

Millions of Thousands of the multi-employer defi ned benefi t corporate pension plan. yen U.S. dollars The benefi ts for the multi-employer defi nded benefi t corporate 2014 2014 pension plan are based on a standard remuneration schedule under Year ending March 31: the length of participation, and other factors. However, assets 2015 ¥ 26,709 $ 259,511 contributed by an employer are not segregated in a separate ac- 2016 2,402 23,338 count or restricted to provide benefi ts only to employees of that employer. Therefore, the contributions to the multi-employer defi ned 2017 5,202 50,544 benefi t corporate plan are recognized as paid and accounted for as 2018 2,002 19,452 a component of net periodic retirement benefi t costs. 2019 — — Thereafter 9,680 94,050 Year Ended March 31, 2013 Total ¥ 45,995 $ 446,895 The funded status of the multi-employer defi ned benefi t corporate plan at March 31, 2012 (available information as of March 31, 2013), Certain domestic subsidiaries of the Company has concluded to which contributions were recorded as net periodic retirement lines of credit agreements with certain fi nancial institutions in order benefi t costs, was as follows: to achieve more effi cient and fl exible fi nancing of working capital.

The status of these lines of credit at March 31, 2013 and 2014, is Millions of yen as follows: Fair value of plan assets ¥ 65,155 Thousands of Millions of yen Pension benefi t obligation recorded by pension fund 77,804 U.S. dollars Difference ¥ (12,649) 2013 2014 2014 The Companies’ contribution percentage for the multi-employer Lines of credit ¥ 15,589 ¥ 15,589 $ 151,467 defi ned benefi t corporate plan at March 31, 2012 was 4.2%. Credit utilized — — — The difference mainly resulted from prior service cost of ¥12,316 Available credit ¥ 15,589 ¥ 15,589 $ 151,467 million, adjustment of asset valuation of ¥333 million. Prior service cost is amortized over 19 years.

SKY Perfect JSAT Holdings Inc. 60 were asfollows: Thechangesindefi of thefollowing: The liabilityforretirementbenefi ts atMarch31,2013,consisted applied totheGroup. The abovecontributionratiodoesnotconformtotheactual March 31,2013,wereasfollows: Thecomponentsofnetperiodicbenefi t costsfortheyearended March 31,2014,wereasfollows: The changesindefi Year EndedMarch31,2014 set forthasfollows: AssumptionsusedfortheyearsendedMarch31,2013were Projected benefi Balance atbeginningofyear defi Contribution tomulti-employer service cost Amortization ofprior Recognized actuarialgain Interest cost Service cost Balance atbeginningofyear Benefi Periodic benefi tcost Balance atendofyear Pastservicecost Benefi Actuarial losses Interest cost Currentservicecost Balance atendofyear Net liability Unrecognized priorservicecost Unrecognized actuarialgain Fair valueofplanassets Net periodicbenefi Amortization periodofpriorservicecost Recognition periodofactuarialgain Discount rate nedbenefi tpaid tspaid tplan tobligation tcosts ned benefi ned ned benefi t obligationfortheyearended t liabilityforsimplifi ¥ 49 $ 185 476 1,795 ¥ $ 3,764 (54) 36,579 (524) (161) 60 586 (1,560) 46 446 353 ¥ 3,426 $ 3,520 34,205 (6) (57) ¥ $ 228 2,214 Millions of Millions of yen yen 12, 17years (26) (2) 57 ¥ 377 ¥ 3,705 ¥ 3,730 196 (171) — 130 10-19 years ¥ 536 1.0%-1.4% ed method Millions ofyen Millions ofyen Thousands of Thousands of U.S. dollars U.S. dollars 61 Annual Report 2014 periodic retirementbenefi March 31,2014),towhichcontributionswererecordedasnet corporate planatMarch31,2013(availableinformationasof Thefundedstatusofthemulti-employerdefi March 31,2014. corporate pensionplanwas¥135millionfortheyearsended icutrt 1.0-1.21% The amountofcontributionstothemulti-employerdefi Discountrate set forthasfollows: Assumptions usedfortheyearendedMarch31,2014,were of March31,2014 balance sheetandthebalancesofdefi Reconciliationbetweentheliabilityrecordedin consolidated ended March31,2014,wereasfollows: Thecomponentsofnetperiodicbenefi t costsfortheyear ment benefi Accumulatedothercomprehensiveincomeondefi Liability forretirementbenefi ts Unfunded defi nedbenefi tobligation Difference Pension benefi tobligationrecorded Fair valueofplanassets Total Unrecognized actuariallosses Unrecognized priorservicecost Service cost Net liability(asset)fordefi Net liability(asset)fordefi Periodic benefi tcostinsimplifi ed Amortization ofpriorservicecost Recognized actuariallosses Interest cost Net periodicbenefi obligation obligation method tplansasofMarch31,2014 tcosts tcosts,wasasfollows: nedbenefi nedbenefi t t ned benefi ¥ (6) (1) $ ¥ (219) $ 218 2,123 (2,129) ¥ $ 3,993 38,793 ¥ $ 3,993 38,793 (31) 12 (304) ¥ 46 120 352 $ 446 3,426 ¥ $ 3,993 38,793 ¥ $ 3,993 38,793 ¥ 428 $ 49 4,164 476 Millions of Millions of Millions of Millions of yen yen yen yen t obligationas ned benefi ned ¥ (15,303) 81,138 65,835 ¥ ned benefi Millions ofyen Thousands of Thousands of Thousands of Thousands of ned retire- U.S. dollars U.S. dollars U.S. dollars U.S. dollars t t

Corporate Data Financial Section Corporate Social Corporate Governance Review of Operations Special Feature To Our Shareholders Consolidated Financial Satellite Basics/Glossary Responsibility and Investors Highlights The Groups’ contribution percentage for the multi-employer having independent auditors, (3) having an Audit & Supervisory defi ned benefi t corporate plan at March 31, 2013 was 4.4%. Board, and (4) the term of service of the directors is prescribed The difference mainly resulted from prior service cost of as one year rather than two years as a normal term by its Articles ¥11,954 million and adjustment of asset valuation of ¥3,348 of Incorporation, the Board of Directors may declare dividends million. Prior service cost is amortized over 18 years. The Group (except for dividends-in-kind) at any time during the fi scal year if expensed special contributions of ¥44 million in the consolidated the company has prescribed so in its Articles of Incorporation. The statement of operations and comprehensive income in the fi scal Company meets all the above criteria. period ended March 31, 2013. The Companies Act permits companies to distribute dividends-in- The above contribution ratio does not conform to the actual kind (noncash assets) to shareholders subject to a certain limitation ratio applied to the Group. and additional requirements. The subsidiaries of the Company also have directors’ unfunded Semiannual interim dividends may also be paid once a year upon severance indemnity plans. Benefi ts under the directors’ plans resolution by the Board of Directors if the articles of incorporation are based on the level of compensation at retirement, length of the company so stipulate. The Companies Act provides certain of service and other factors. Liabilities for severance payments limitations on the amounts available for dividends or the purchase under the directors’ plans at March 31, 2013 and 2014, amounting of treasury stock. The limitation is defi ned as the amount available to ¥6 million and ¥6 million ($60 thousand), respectively, were for distribution to the shareholders, but the amount of net assets stated on the vested benefi t obligation basis, which represents after dividends must be maintained at no less than ¥3 million. the amount that would be required to be paid if all directors and executive offi cers terminated their appointments as of the b. Increases/Decreases and Transfer of Common Stock, balance sheet date. Reserve and Surplus The Companies Act requires that an amount equal to 10% of 6. ASSET RETIREMENT OBLIGATIONS dividends must be appropriated as a legal reserve (a component Asset retirement obligations are mainly recognized on restitution of retained earnings) or as additional paid-in capital (a component obligations associated with real estate rental agreements and of capital surplus) depending on the equity account charged upon leasehold establishment contracts. the payment of such dividends until the total aggregate amount The amount of asset retirement obligations is computed using of the legal reserve and additional paid-in capital equals 25% of discount rates of 0.4% to 2.4% and estimated useful lives of 3 to the common stock. Under the Companies Act, the total amount 50 years after acquisition. of additional paid-in capital and the legal reserve may be reversed The changes in asset retirement obligations for the years ended without limitation. The Companies Act also provides that common March 31, 2013 and 2014, were as follows: stock, the legal reserve, additional paid-in capital, other capital surplus and retained earnings can be transferred among the accounts under Thousands of Millions of yen certain conditions upon resolution of the shareholders. U.S. dollars

2013 2014 2014 c. Treasury Stock and Treasury Stock Acquisition Rights Balance at beginning of year ¥ 2,503 ¥ 2,285 $ 22,206 The Companies Act also provides for companies to purchase treasury Additional provisions associated stock and dispose of such treasury stock by resolution of the Board with the acquisition of property and equipment 32 111 1,077 of Directors. The amount of treasury stock purchased cannot exceed Reconciliation associated with the amount available for distribution to the shareholders, which is passage of time 42 40 389 determined by a specifi c formula. Reduction associated with Under the Companies Act, stock acquisition rights, which were settlement of asset previously presented as a liability, are now presented as a separate retirement obligations (243) (11) (109) component of equity. Other (49) 13 126 The Companies Act also provides that companies can purchase Balance at end of year ¥ 2,285 ¥ 2,438 $ 23,689 both treasury stock acquisition rights and treasury stock. Such treasury stock acquisition rights are presented as a separate component of 7. EQUITY equity or deducted directly from stock acquisition rights. Japanese companies are subject to the Companies Act of Japan (the “Companies Act”). The signifi cant provisions in the Companies Act On October 1, 2013, the Company effected a hundred-for-one stock that affect fi nancial and accounting matters are summarized below: split by way of a free share distribution based on the resolution of the Board of Directors, meeting held on May 8, 2013. a. Dividends Under the Companies Act, companies can pay dividends at any 8. INCOME TAXES time during the fi scal year in addition to the year-end dividend The Companies are subject to a number of different income taxes upon resolution at the shareholders’ meeting. For companies that which, in the aggregate, indicate a normal effective statutory tax rate meet certain criteria such as (1) having a Board of Directors, (2) of approximately 38.0% for the year ended March 31, 2013,and 2014.

SKY Perfect JSAT Holdings Inc. 62 2013 and2014,isasfollows: consolidated statementsofincomefortheyearsendedMarch31, and theactualeffectivetaxratesreﬂ Areconciliationbetweenthenormaleffectivestatutorytaxrates ected inthe accompanying March 31,2013and2014,wereasfollows: carryforwards thatresultedindeferredtaxassetsandliabilitiesat Thetaxeffectsofsigniﬁ cant temporarydifferencesandtaxloss

Depreciation Deferred taxassets: subsidiaries Depreciationinforeign Deferred taxliabilities: Total Lessvaluationallowance Other 829 payable Incomeenterprisetaxes Assetretirementobligations beneﬁ Liabilitiesforretirement securities Write-downofinvestment Operatinglosscarryforwards Ohr Net deferred tax Total Other underhedgeaccounting Deferredgainonderivatives Assetretirementobligations Revenuesnottaxable Normal effectivestatutorytaxrate Actual effectivetaxrate Other Adjustment oftheyear-end deferred Equity innetlossesofafﬁ liated Amortization ofgoodwill Consolidation adjustmentfordividend Change invaluationallowance Expensesnotdeductiblefortaxation statutory taxrate tax assetscausedbyreductionin companies income ts sesassets (893) 9,755 (3,939) 321 1,357 539 2,891 (1,684) (383)

¥ 6,269 ¥ 8,071 1,488 (195) (213) 2013 Millions ofyen (1,166) ¥ ,6 $ 63,788 $ 6,565 ¥ (3,919) (38,076) 14,370 4,958 1,480 510 8,533 878 13,965 1,437 15,542 1,600 20,151 2,074 (2,051) (19,929) (1,433) (147) (3,498) (360) (3,671) (378) ¥ ,7 $ 83,302 $ 8,574 ¥ 06510,625 103,231 (12.3) 2014 38.0% 38.2% 12.3 (3.0) 0.4 0.0 2.1 0.7 2013 — (11,327) Thousands of U.S. dollars 0.9 (10.5) 38.0% 48.3% 10.5 2014 0.5 0.4 1.8 6.1 0.6 2014 63 Annual Report 2014 tions,” requiresthatallfi ASBJ StatementNo.13,“AccountingStandardforLeaseT inception wasbeforeMarch31,2008 Pro formainformationofleasedpropertywhoselease a. FinanceLease 9. LEASES million ($1,554thousand). consolidated statementofincomefortheyearthenendedby¥160 ($1,554 thousand)andtoincreaseincometaxes—deferredinthe consolidated balancesheetasofMarch31,2014,by¥160million effect ofthischangewastodecreasedeferredtaxassetsinthe or afterApril1,2014,fromapproximately38.0%to35.6%.The normal effectivestatutorytaxrateforthefi scal yearbeginning on Newtaxreformlawsenactedin2014Japanchangedthe property tothelesseeonan“asifcapitalized”basiswasasfollows: tion offi nance leasesthatdonottransferownership of theleased leases, depreciationexpense,interestexpenseandotherinforma- depreciation, accumulatedimpairmentloss,obligationsunderfi was beforeMarch31,2008,suchasacquisitioncost,accumulated Pro formainformationofleasedpropertywhoseleaseinception As lessee: and accountedforsuchleasesasoperatingleasetransactions. Company appliedASBJStatementNo.13effectiveApril1,2008, information isdisclosedinthenotetofi nancial statements.The for asoperatingleasetransactionsifcertain“ascapitalized” whose leaseinceptionwasbeforeMarch31,2008,tobeaccounted not transferownershipoftheleasedpropertytolesseeand sheet. However, ASBJStatementNo.13permitsleasesthatdo ized torecognizeleaseassetsandobligationsinthebalance Net leasedproperty Accumulated depreciation Acquisition cost 1,296 27 1,269 Net leasedproperty Accumulated depreciation Acquisition cost nance leasetransactionsshouldbecapital- 62 ¥ 634 ¥ 2 ¥ 632 1,930 ¥ ¥ 29 ¥ ¥ 1,901 ¥ 5 ¥ 253 ¥ ¥ — 893 253 ¥ — ¥ 1,146 ¥ — 893 ¥ 1,146 equipment equipment Machinery Machinery and and Millions ofyen Millions ofyen Software Software 2014 2013 Total Total ransac- nance nance

Corporate Data Financial Section Corporate Social Corporate Governance Review of Operations Special Feature To Our Shareholders Consolidated Financial Satellite Basics/Glossary Responsibility and Investors Highlights Thousands of U.S. dollars 11. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 2014 The major components of selling, general and administrative Machinery expenses for the years ended March 31, 2013 and 2014, were and Software Total as follows: equipment Thousands of Millions of yen Acquisition cost $ 11,138 $ — $ 11,138 U.S. dollars Accumulated depreciation 8,674 — 8,674 2013 2014 2014 Net leased property $ 2,464 $ — $ 2,464 Salaries and wages ¥ 4,510 ¥ 4,357 $ 42,331 Obligations under fi nance leases: Provision for accrued bonuses 292 319 3,095 Thousands of Provision for liabilities Millions of yen U.S. dollars for retirement benefi ts 251 261 2,531 Advertising expenses 7,480 8,316 80,804 2013 2014 2014 Sales promotion Due within one year ¥ 244 ¥ 129 $ 1,253 expenses 5,305 5,792 56,274 Due after one year 431 136 1,324 Sales incentives 2,594 2,141 20,801 Total ¥ 675 ¥ 265 $ 2,577 Subcontracting fees 5,791 6,660 64,710 Depreciation expense, interest expense and other information Provision for doubtful receivables 511 382 3,707 under fi nance leases: Research and development expenses 219 467 4,534 Thousands of Millions of yen U.S. dollars Other 10,336 10,022 97,403 Total ¥ 37,289 ¥ 38,717 $ 376,190 2013 2014 2014 Depreciation expense ¥ 252 ¥ 112 $ 1,084 12. IMPAIRMENT LOSS Interest expense 24 11 106 The Companies reviewed their long-lived assets for impairment Total ¥ 276 ¥ 123 $ 1,190 as of March 31, 2013. As a result, the Company recognized an Lease payments ¥ 286 ¥ 130 $ 1,260 impairment loss of ¥124 million as other expense for the Space & Depreciation expense and interest expense, which are not re- Satellite Business. Due to a continuous operating loss at that unit, fl ected in the accompanying consolidated statements of income, the carrying amount of the relevant assets was written down to are computed by the straight-line method and the interest method, the recoverable amount. The recoverable amount was nil since no respectively. future cash infl ows are expected. The impairment loss consisted of ¥121 million for software and b. Operating Lease ¥3 million for the other assets. The minimum rental commitments under noncancelable operating The Companies reviewed their long-lived assets for impairment leases at March 31, 2013 and 2014, were as follows: as of March 31, 2014. As a result, the Companies recognized an impairment loss of ¥78 million ($761 thousand) as other expense

Thousands of for the Space & Satellite Business. Due to a continuous operating Millions of yen U.S. dollars loss at that unit, the carrying amount of the relevant assets was 2013 2014 2014 written down to the recoverable amount. The recoverable amount Due within one year ¥ 1,469 ¥ 1,739 $ 16,892 was nil since no future cash inﬂ ows are expected. Due after one year 8,650 8,585 83,415 The impairment loss consisted of ¥78 million ($761 thousand) for software. Total ¥ 10,119 ¥ 10,324 $ 100,307

10. COST OF SERVICES Write-downs of inventories and other assets, which were charged to cost of services for the years ended March 31, 2013 and 2014, amounted to ¥229 million and ¥30 million ($290 thousand), respectively.

SKY Perfect JSAT Holdings Inc. 64 Note 14donotreflect marketrisksregardingderivativetransactions. techniques includevariablefactors.Thenominalamountsdisclosedin may differbaseduponassumptionsusedbecauserationalvaluation valuation techniquesareusedinstead.Theresultsofvaluations in activemarkets.Ifaquotedpriceisnotavailable,otherrational Fair valuesoffi nancial instrumentsarebasedonquotedprices c. FairValues ofFinancialInstruments to reducecreditrisks. transactions onlywithfi nancial institutionswithhighcreditstanding and guidelinesasfollows.TheCompanyentersintoderivative accordance withtheinternalpoliciesthatregulateauthorization TheCompanyexecutes andmanagesderivativetransactionsin Please seeNote14formoredetailsaboutderivatives. Company expectstooccurasaresultofforecastedtransaction. satellites andforeigncurrency-basedoperatingreceivablesthatthe of broadcastingrights,capitalexpenditurestelecommunications foreign currencyexchangeratesrelatedtofi nancing forpurchase are usedtomanageexposuremarketrisksfromchangesin Derivativesincludeforwardforeigncurrencycontracts,which into commitmentlineagreements. statements ofcashreceiptsanddisbursementsbyentering liquidity, theCompaniesmanagethisriskbypreparingmonthly Althoughtradeaccountsandloansareexposedtotheriskof and capitalexpenditures. Bankloansandbondsprovidefi nancing relatedtooperations accounts, arelessthanoneyear. Paymenttermsofpayables,suchastradenotesand fi the Companyisperiodicallyprovidedareportonfairvalueand to theriskofmarketpricefl uctuations. TheBoardofDirectors instruments ofcustomersandsupplierstheCompany, areexposed invested forthepurposeoftemporarycashsurplusandequity Marketableandinvestmentsecurities,mainlybondsecurities of majorcustomersbasedontheircreditcontrolrules. balances bycustomersandperiodicallyevaluatethecreditstanding to customercreditrisk.TheCompaniesmanageduedatesand Receivables, suchastradenotesandaccounts,areexposed b. Nature,ExtentofRisksArisingfromFinancialInstruments manage exposuretofinancial risksasdescribedinNote14. assets. Derivativesareused,notforspeculativepurposes,butto Temporary cashsurpluses,ifany, areinvestedinlow-riskfi The Companiesarefi a. PolicyforFinancialInstruments 13. FINANCIALINSTRUMENTS nancial positionoftheissuingentities(customersandsuppliers). and RiskManagementforFinancialInstruments nanced bybankloansandissuanceofbonds. nancial nancial 65

Annual Report 2014 at therateconsideringperiodtomaturityandcreditrisk. is theamountofbothinterestandprincipaltobepaid,discounted The fairvaluesofbondsaremeasuredatthepresentvalue,which (7) Currentportionofbondsand discounted attheCompany’s assumedcorporateborrowingrate. ent valueofbothinterestandprincipalbyeachperiodtheloans, long-term loanswithfixed interestrates aremeasuredatthepres- Thefairvaluesofthecurrentportionlong-termloansand the Companydoesnotvarygreatly. market interestratesforashortperiod,andthecreditstandingof because theinterestratesofloansarevariableandrefl long-term loanswithfl oating interestratesapproximatefairvalues The carryingvaluesofthecurrentportionlong-termloansand (6) Currentportionoflong-termloansand approximate fairvalue. The carryingvalueswhichwillbesettledwithinashortperiod (5) Payables,incometaxespayableandsubscriptionfees period, unlessthecreditstandingsofborrowersvarygreatly. the loansarevariableandrefl ect marketinterestratesforashort companies approximatefairvaluesbecausetheinterestratesof The carryingvaluesofshort-termloansandadvancestoaffi (4) Short-termloansandadvancestoaffi by classification isincludedinNote3. debt instruments.Fairvalueinformationforinvestmentsecurities the quotedpriceobtainedfromfi market priceofthestockexchangeforequityinstruments,andat The fairvaluesofinvestmentsecuritiesaremeasuredatthequoted (3) Investmentsecurities and creditrisk. be receiveddiscountedatarateconsideringtheperiodtomaturity with long-termcollectionperiodsaremeasuredattheamountto short periodapproximatefairvalues.Thevaluesofreceivables The carryingvaluesofreceivableswhicharecollectiblewithina (2) Receivables value becauseoftheirshortmaturities. The carryingvaluesofcashandequivalentsapproximatefair (1) Cashandcashequivalents received nancial institution for certain nancialinstitutionforcertain liated companies liated liated ect ect

Corporate Data Financial Section Corporate Social Corporate Governance Review of Operations Special Feature To Our Shareholders Consolidated Financial Satellite Basics/Glossary Responsibility and Investors Highlights (8) Derivatives Thousands of U.S. dollars Fair value information for derivatives is included in Note 14. 2014 Carrying Unrealized Fair value of fi nancial instruments: Fair value amount gain/loss Millions of yen Cash and cash equivalents $ 619,740 $ 619,740 $ — 2013 Receivables 248,766 Carrying Unrealized Fair value Allowance for doubtful receivables (6,192) amount gain/loss Net 242,574 243,403 829 Cash and cash equivalents ¥ 74,473 ¥ 74,473 ¥ — Short-term loans 25,015 25,015 — Receivables 20,391 Investment securities: Allowance for doubtful receivables (715) Available-for-sale securities 60,650 60,650 — Net 19,676 19,772 96 Total 947,979 948,808 829 Short-term loans 2,115 2,115 — Current portion of long-term debt: Investment securities: Current portion of bonds 194,326 194,733 407 Held-to-maturity securities 1,000 956 (44) Current portion of Available-for-sale securities 7,799 7,799 — long-term loans 65,185 65,204 19 Investment in and advances Payables 211,447 211,447 — to affi liated companies: Income taxes payable 58,770 58,770 — Advances 2,114 2,114 — Subscription fees received 96,315 96,315 — Total 107,177 107,229 52 Long-term debt: Current portion of long-term debt: Long-term loans 187,384 187,491 107 Current portion of Total 813,427 813,960 533 long-term loans 12,256 12,291 35 Derivatives $ 9,609 $ 9,609 $ — Payables 16,245 16,245 — Income taxes payable 2,451 2,451 — Available-for-sale securities and held-to-maturity securities for Subscription fees received 10,234 10,234 — which the fair value was not readily determinable at March 31, Long-term debt: 2013 and 2014, were as follows: Bonds 20,000 20,133 133 Long-term loans 17,142 17,166 24 Carrying amount Total 78,328 78,520 192 Thousands of Millions of yen Derivatives ¥ 554 ¥ 554 ¥ — U.S. dollars 2013 2014 2014 Equity securities ¥ 10,721 ¥ 9,439 $ 91,712 Other 115 149 1,449 Millions of yen Total ¥ 10,836 ¥ 9,588 $ 93,161 2014 Carrying Unrealized Maturity analysis for fi nancial assets and securities with con- Fair value amount gain/loss tractual maturities: Cash and cash equivalents ¥ 63,784 ¥ 63,784 ¥ — Receivables 25,603 Millions of yen Allowance for doubtful receivables (637) 2014 Net 24,966 25,051 85 Due after Due after Short-term loans 2,575 2,575 — Due in one Investment securities: one year fi ve years Due after year through through ten ten years Available-for-sale securities 6,242 6,242 — or less fi ve years years Total 97,567 97,652 85 Cash and cash equivalents ¥ 63,787 ¥ — ¥ — ¥ — Current portion of long-term debt: Current portion of bonds 20,000 20,042 42 Receivables 23,488 1,515 600 — Current portion of Short-term loans 2,575 — — — long-term loans 6,709 6,711 2 Investment securities: Payables 21,762 21,762 — Available-for-sale securities — — 3,005 1,418 Income taxes payable 6,049 6,049 — Total ¥ 89,850 ¥ 1,515 ¥ 3,605 ¥ 1,418 Subscription fees received 9,913 9,913 — Long-term debt: Long-term loans 19,286 19,297 11 Total 83,719 83,774 55 Derivatives ¥ 989 ¥ 989 ¥ —

SKY Perfect JSAT Holdings Inc. 66 and AccountingDivisionofthosecertainsubsidiariesinaccordance at March31,2013,wereasfollows: do not measure the Company’s exposure to credit or market risks. table donotrepresenttheamountsexchangedbypartiesand to theBoardofDirectorsthosesubsidiaries. and thetransactionstatusperformanceareperiodicallyreported with theinternalpoliciesthatregulateauthorizationandguideline, anticipate anylossesarisingfromcreditrisk. major internationalfinancialinstitutions,theCompaniesdonot to occurasaresultofforecastedtransaction. and foreigncurrency-basedoperatingreceivablesthatitexpects for overseas broadcasting rights, telecommunications satellites flows offorecastedtransactionsassociatedwithcertainpayments purpose of reducing the risk arising from changes in anticipated cash contracts. Foreignexchangeforwardcontractsareusedforthe financial instruments,whichincludeforeignexchangeforward Certain consolidatedsubsidiariesoftheCompanyusederivative 14. DERIVATIVE INSTRUMENTS Cash andcashequivalents Total Investment securities: Short-term loans Receivables Foreign currency

forward contracts Available-for-sale securities Buying U.S.dollars Derivative transactions to Th Derivative transactionsareexecutedandcontrolledbytheFinance Because the Foreign exchangeforwardcontractsaresubjecttomarketrisk. e notional amounts of derivatives that are shown in the above counterparties to those derivatives are limited to counterparties to those derivatives are limited to

$ $ Due inone

873,011 619,776 228,219 or less 25,016 year which hedge accounting is not applied which hedge accounting is not applied Contract amount — ¥—¥()¥(1) ¥(1) ¥— ¥ 9

Thousands ofU.S.dollars five years Due after one year $ $ through

14,720 14,720 due after one year Contract amount Millions ofyen — — — 2014 2013

through ten five years Due after $ $ Fair value

years 35,023 29,196 5,827 — —

Unrealized Due after ten years $ $ gain/loss

13,777 13,777 — — — 67

Annual Report 2014 March 31,2013and2014,wereasfollows: March 31,2014. Selling U.S.dollars Buying Euro Buying Euro Buying U.S.dollars forwardcontracts Foreign currency Buying U.S.dollars forwardcontracts Foreign currency Buying U.S.dollars forwardcontracts Foreign currency

Fair valueand deferral Fair valueand deferral Fair valueand deferral deferral Fair valueand deferral Fair valueand deferral Fair valueand Derivative transactions to which hedge accounting is applied at Derivative transactionstowhichhedgeaccountingisappliedat There wasnoapplicabletransactionforthefiscalyearended currencytransactions Fo currencytransactions Fo currencytransactions Fo currencytransactions Fo currencytransactions Fo currencytransactions Fo eatd foreign recasted foreign recasted eatd foreign recasted foreign recasted foreign recasted foreign recasted Hedged item Hedged item Hedged item Thousands ofU.S.dollars Millions ofyen Millions ofyen $ $

¥ ¥ Contract Contract Contract

164,643 ¥ ¥ amount amount amount 2013 2014 2014 16,945

3,275 8,442 868 75

$ $

due after due after due after one year one year one year ¥ ¥ Contract Contract Contract amount amount amount

¥ ¥ 10,289

1,059 1,413

— — —

Fair value Fair value Fair value $ $

¥ ¥ ¥ ¥ 8,964

561

923 645 66 (6)

Corporate Data Financial Section Corporate Social Corporate Governance Review of Operations Special Feature To Our Shareholders Consolidated Financial Satellite Basics/Glossary Responsibility and Investors Highlights 15. COMPREHENSIVE INCOME The balances due to or from the Companies with afﬁ liated Other comprehensive income for the years ended March 31, 2013 companies at March 31, 2013 were as follows: and 2014, consists of the following: Millions of yen

Thousands of Millions of yen Short-term loans ¥ 2,114 U.S. dollars Long-term loans 2,114 2013 2014 2014 Other current assets ¥ 18 Other comprehensive income: Unrealized gain (loss) on available- Year Ended March 31, 2014 for-sale securities Gains arising during the year ¥1,308 ¥ (63) $ (617) The information for the fi scal year ended March 31, 2014 is omitted Reclassifi cation adjustments to since the aggregate value is immaterial. profi t or loss (52) (68) (660) Amount before income tax effect 1,256 (131) (1,277) 17. SEGMENT INFORMATION Income tax effect (309) 31 308 Under ASBJ Statement No. 17, “Accounting Standard for Segment Total 947 (100) (969) Information Disclosures” and ASBJ Guidance No. 20, “Guidance Deferred gain on derivatives on Accounting Standard for Segment Information Disclosures,” under hedge accounting an entity is required to report fi nancial and descriptive information Gains arising during the year 430 1,318 12,803 about its reportable segments. Reportable segments are operat- Reclassifi cation adjustments to ing segments or aggregations of operating segments that meet profi t or loss — 11 110 specifi ed criteria. Operating segments are components of an entity Amounts transferred to the initial carrying amounts of hedged items (54) (895) (8,695) about which separate fi nancial information is available and such Amount before income tax effect 376 434 4,218 information is evaluated regularly by the chief operating decision Income tax effect (143) (141) (1,375) maker in deciding how to allocate resources and in assessing Total 233 293 2,843 performance. Generally, segment information is required to be Foreign currency translation reported on the same basis as is used internally for evaluating adjustments 483 1,274 12,373 operating segment performance and deciding how to allocate Share of other comprehensive resources to operating segments. income in affi liated companies accounted for using the equity method 1. Description of reportable segments Gains arising during the year 27 10 95 The Company’s reportable segments are those for which sepa- Amounts transferred to the initial rate fi nancial information is available and regular evaluation by the carrying amounts of hedged items 3 (6) (53) Company’s management is being performed in order to decide Total 30 4 42 how resources are allocated among the Company. The Company Total other comprehensive income ¥ 1,693 ¥1,471 $ 14,289 has established service divisions at SKY Perfect JSAT Corporation, which is a core operating consolidated subsidiary of the Company and such service divisions design the strategies for their services 16. RELATED PARTY DISCLOSURES and deploy operating activities. The Company consists of service Year Ended March 31, 2013 segments based on the operating divisions of SKY Perfect JSAT Transactions of the Companies with affi liated companies for the Corporation, which include Multichannel Pay TV Business and Space year ended March 31, 2013 were as follows: & Satellite Business as the reportable segments. The Multichan- nel Pay TV Business offers platform services, such as customer Millions of yen management activities to the broadcasting businesses and delivers Collection of loans ¥ 1,949 broadcasting services via communication satellite and fi ber optic network. Space & Satellite Business offers communication satellite Interest income 60 circuits (transponders) to the broadcasting businesses and satellite communication services such as data communication and mobile communication, to the government, public entities and corporations.

SKY Perfect JSAT Holdings Inc. 68 Note 2.Segmentprofit (loss)isreconciledwithoperatingincomeintheconsoli- Areconciliationofincreasein propertyandequipmentintangible (4) (3) A Areconciliationofsegmentassetsintheamount of¥85,200millionis (2) Areconciliationofsegmentprofi (1) Note 1.Reconciliationsareasfollows: Information aboutsales,profi 3. market prices. Intersegmentsalesortransfersaredeterminedbasedon Accounting Policies.” tent withthosedisclosedinNote2,“SummaryofSignifi The accountingpoliciesofeachreportablesegmentareconsis- Methods ofmeasurementfortheamountssales, 2. Amortization Total Other: Segment assets Segment profi transfers Intersegment salesor customers Sales toexternal intangibleassets andequipment Increase inproperty affi Investment in goodwill Amortization of Depreciation and the equitymethod accounted forusing reportable segment profi and otheritemsisasfollows: liatedcompanies dated statementsofincome. and intangibleassetsnotallocatedtoeachreportablesegment. assets intheamountof¥69millionisincreasepropertyandequipment tion ofcorporateassetsnotallocatedtoeachreportablesegment. related toadministrativedivisions. mainly consistofcashandequivalentssecuritiesassets assets notallocatedtoeachreportablesegment.Corporate ¥(818) millionofintersegmentassetsand¥86,018corporate attributable toanysegment. mainly consistofgeneralandadministrativeexpensesthatarenot expenses notallocatedtoeachreportablesegment.Corporate is ¥139millionofintersegmentsalesand¥(766)corporate t (loss),assets,liabilitiesandotheritemsforeach reconciliation ofdepreciationintheamount¥455millionisdeprecia- t(loss) 733 ,2 6 13,851 69 6,429 7,201 7,353 — 878 — 4,150 3,051 878 — 26,116 455 17,614 8,047 16,153 ¥ (627) ¥ 17,599 ¥ (819) 54,900 — ¥ 6,758 (11,452) 4,694 ¥ Multichannel 1,1 666 56,646 114,416 (11,452) 0,2 ¥ 988 —¥ — ¥ 49,888 ¥ 109,722 Business Pay TV t or loss in the amount of ¥(627) million t orlossintheamountof¥(627)million 5,8 520 150,387 85,200 Business Space & t (loss),assets,liabilities Satellite Millions ofyen 2013 Reconciliations (Note 1) Consolidated 159,610 159,610 290,487 (Note 2) cant 69 Annual Report 2014 (2) A reconciliation of segment assets in the amount of ¥74,271 million Areconciliationofsegmentassetsintheamount of¥74,271million (2) 1 Areconciliationofsegmentprofi (1) Note 1.Reconciliationsareasfollows: Amortization Amortization theequitymethod accountedforusing affi Investment in goodwill Amortization of Other: Segment assets Segment profi t(loss) Total transfers Intersegment salesor customers Sales toexternal intangibleassets andequipment Increaseinproperty theequitymethod accountedforusing affi Investment in goodwill Amortization of Other: Segment assets Segment profi t(loss) Total transfers Intersegment salesor customers Sales toexternal intangibleassets andequipment Increaseinproperty Depreciation and Depreciation and liatedcompanies liatedcompanies to administrativedivisions. consist ofcashand cashequivalentsandsecuritiesassets related not allocatedtoeachreportablesegment. Corporateassetsmainly assets and¥75,085million($729,549 thousand)ofcorporateassets ($721,635 thousand)is¥(814)million($(7,914) thousand)ofintersegment to anysegment. consist ofgeneralandadministrativeexpenses thatarenotattributable not allocatedtoeachreportablesegment. Corporateexpensesmainly sales and¥(723)million($(7,026)thousand)ofcorporateexpenses ($(5,383) thousand)is¥169million($1,643ofintersegment 8,0 5,1 405 237,398 4,085 150,110 83,203 — 7 878 — 878 — 24,433 420 15,450 8,563 21,713 ¥ (554) ¥ 21,083 ¥ 1,184 50,216 ¥ 8,392 122,155 62,587 4,667 ¥ 117,488 7,4 4,2 293 223,493 2,923 86,699 147,021 — 73,549 8,532 — 58,532 28,167 8,532 — 210,971 $ (5,383) $ 204,849 $ 487,915 11,505 1,584,661 721,635 — $ 81,537 (126,887) 608,109 45,350 1,186,899 (126,887) $ 1,141,549 23,002 301 8,923 15,131 7,570 — 6,024 2,899 Multichannel Multichannel Business Business Pay TV Pay TV ¥ 54,195 ¥ $ 2,7 —$ — $ 526,572 $ t or loss in the amount of ¥(554) million t orlossintheamount of¥(554)million Thousands ofU.S.dollars 6,9 163,093 74,271 Business Business Space & Space & Satellite Satellite Millions ofyen 2014 2014 ¥ ¥ — ¥ Reconciliations Reconciliations 1,5) — (13,059) (13,059) (Note 1) (Note 1) Consolidated Consolidated 2,794,211 1,668,121 1,668,121 171,683 171,683 287,580 (Note 2) (Note 2)

Corporate Data Financial Section Corporate Social Corporate Governance Review of Operations Special Feature To Our Shareholders Consolidated Financial Satellite Basics/Glossary Responsibility and Investors Highlights (3) A reconciliation of depreciation in the amount of ¥420 million ($4,085 Thousands of U.S. dollars thousand) is depreciation of corporate assets not allocated to each reportable segment. 2014 (4) A reconciliation of increase in property and equipment and intangible Multichannel Space & assets in the amount of ¥301 million ($2,923 thousand) is increase in Pay TV Satellite Reconciliations Consolidated property and equipment and intangible assets not allocated to each Business Business reportable segment. Impairment losses $ — $ 761 $ — $ 761 Note 2. Segment proﬁ t (loss) is reconciled with operating income in the consolidated statements of income. Information about amortization of goodwill and goodwill: Information about amortization of goodwill and goodwill at March Related information: 31, 2013 and 2014, is as follows: 1. Information about products and services Information about products and services is omitted, as the same Millions of yen information is disclosed in “Information about sales, proﬁ t (loss), 2013 assets, liabilities and other items” above. Multichannel Space & Pay TV Satellite Reconciliations Consolidated Business Business 2. Information about geographical areas Amortization of (1) Sales goodwill ¥ — ¥ 878 ¥ — ¥ 878 Under Japanese accounting regulations, the Companies are not Goodwill at required to disclose geographical segment information about sales March 31, 2013 — 7,970 — 7,970 because sales to external customers in Japan represented more than 90% of that of the Companies for the period presented herein. Millions of yen 2014 (2) Property and equipment Multichannel Space & Pay TV Satellite Reconciliations Consolidated Under Japanese accounting regulations, the Companies are not Business Business required to disclose geographical segment information about property Amortization of and equipment because property and equipment located in Japan goodwill ¥ — ¥ 878 ¥ — ¥ 878 represented more than 90% of that of the Companies for the Goodwill at period presented herein. March 31, 2014 — 7,092 — 7,092

Thousands of U.S. dollars 3. Information about major customers 2014 Under Japanese accounting regulations, the Companies are not required to disclose major customer information because sales to Multichannel Space & Pay TV Satellite Reconciliations Consolidated any one external customer do not represent more than 10% of that Business Business of the Companies for the period presented herein. Amortization of goodwill $ — $ 8,532 $ — $ 8,532 Information about impairment losses on long-lived assets Goodwill at by reportable segment: March 31, 2014 — 68,910 — 68,910 Information about impairment losses on long-lived assets by report- Information about recognized bargain purchase gain able segment at March 31, 2013 and 2014, is as follows: (negative goodwill) by reportable segment: Not applicable. Millions of yen 2013 18. SUBSEQUENT EVENTS Multichannel Space & Pay TV Satellite Reconciliations Consolidated Appropriations of Retained Earnings Business Business The following appropriation of retained earnings at March 31, 2014, Impairment losses ¥ — ¥ 124 ¥ — ¥ 124 was approved at the Board of Directors’ meeting held on May 8, 2014:

Millions of yen Millions of Thousands of yen U.S. dollars 2014 Year-end cash dividend, ¥6 ($0.06) Multichannel Space & per share ¥ 1,849 $ 17,968 Pay TV Satellite Reconciliations Consolidated Business Business Impairment losses ¥ — ¥78 ¥ — ¥ 78

SKY Perfect JSAT Holdings Inc. 70 Independent Auditors’Statements 71 Annual Report 2014

CorporateCorporate Data Data Financial SectionFinancial SectionCorporate SocialCorporate Social CorporateCorporate GovernanceSpecial FeatureReview of OperationsReview of Special FeatureTo Our ShareholdersTo Our ShareholdersConsolidated FinancialConsolidated FinancialOverview Satellite Basics/GlossarySatellite Basics/Glossary ResponsibilityResponsibility Governance Operations and Investors and InvestorsHighlights Highlights CORPORATE DATA

Investor Information (As of March 31, 2014)

Corporate Name: SKY Perfect JSAT Holdings Inc. Headquarters: 14-14, Akasaka 1-chome, Minato-ku, Tokyo 107-0052, Japan Telephone: +81-3-5571-1500 URL: www.skyperfectjsat.co.jp/en Established: April 2, 2007 Number of Employees (Consolidated): 796 Capital: ¥10 billion Stock Listing: First Section, Tokyo Stock Exchange (Code 9412) Number of Shares Issued: 344,603,700 Total Number of Shareholders: 33,177 Fiscal Year-End: March 31 Annual General Meeting of Shareholders: June Payment of Dividends (Dividend Record Date): March 31 (and September 30 for interim dividends) Transfer Agent of Common Stock: Mizuho Trust & Banking Co., Ltd.

Major Shareholders

Number of Shareholding shares held*1 ratio (%)*2 Mizuho Trust & Banking Co., Ltd. (Pension trust account for ITOCHU Corporation) 34,657,200 11.24 Fuji Media Holdings, Inc. 28,305,800 9.18 NTT Communications Corporation 26,057,000 8.45 Sumitomo Corporation 22,258,400 7.22 Nippon Television Network Corporation 20,891,400 6.78 Tokyo Broadcasting System Holdings, Inc. 18,434,000 5.98 ITOCHU Corporation 13,605,800 4.41 Japan Trustee Services Bank, Ltd. (Pension trust account for Mitsui & Co., Ltd.) 13,405,200 4.35 Japan Trustee Services Bank, Ltd. (Trust Account) 7,392,800 2.40 The Master Trust Bank of Japan, Ltd. 5,638,700 1.83

*1 Our common shares have split at a ratio of 1;100 on October 1, 2013 *2 As of March 31, 2013, the Company owns 36,387,600 shares of treasury stock. In calculating shareholding ratio, the treasury stock is excluded.

Breakdown of Shareholders

Breakdown by Number of Breakdown by Number of % of Total % of Total Number of Shareholders Shareholders Number of Shares Shares Government and Government and Local Public Authorities 0 0.00 Local Public Authorities 0 0.00 Financial Institutions 40 0.12 Financial Institutions 76,089,495 22.08 Securities Firms 29 0.08 Securities Firms 3,880,127 1.12 Other Japanese Corporations 348 1.04 Other Japanese Corporations 144,119,300 41.82 Foreigners 318 0.95 Foreigners 58,254,849 16.90 Individuals and Others 32,441 97.78 Individuals and Others 25,872,329 7.50 Treasury Stock 1 0.00 Treasury Stock 36,387,600 10.55

SKY Perfect JSAT Holdings Inc. 72 Highlights Group Companies Consolidated Financial

Corporate Name: SKY Perfect JSAT Corporation Capital: ¥50,083 million Principal Activities: Provision of satellite communications and multichannel pay TV platform services and Investors Ownership: 100.0% To Our Shareholders To

Corporate Name: SKY Perfect Customer- Corporate Name: JSAT International Inc. relations Corporation Capital: US$25 million Capital: ¥100 million Principal Activities: U.S. subsidiary working with

Principal Activities: Provision of subscriber joint venture partner, Intelsat, Special Feature management services for to market capacity on satel- multichannel broadcasting lites in North America Ownership: 100.0% Ownership: 100.0%

Corporate Name: JSAT MOBILE Corporate Name: SKY Perfect Broadcasting Communications Inc. Corporation Capital: ¥200 million (Capital appro- Capital: ¥2,500 million priation: ¥175 million) Review of Operations Principal Activities: Provision of broadcasting Principal Activities: A provider of mobile satellite programs communications (Inmarsat) services Ownership: 100.0% Ownership: 53.3%

Corporate Name: SKY Perfect Entertainment Corporate Name: Satellite Network, Inc. Corporate Governance Corporation Capital: ¥1,600 million Capital: ¥10 million Principal Activities: Telecommunications carrier Principal Activities: Licensed broadcaster and a systems integrator for providing multichannel high- satellite communications definition pay TV services via and broadcasting services CS110-degree platform Ownership: 92.0% Responsibility

Ownership: 100.0% Corporate Social

Multichannel Pay TV Business

SKY Perfect Customer-relations Corporation SKY Perfect Broadcasting Corporation

SKY Perfect Entertainment Corporation Financial Section

SKY Perfect JSAT Corporation SKY Perfect JSAT Holdings Inc. Satellite Network, Inc.

JSAT MOBILE Communications Inc.

JSAT International Inc. Corporate Data Space & Satellite Business Satellite Basics/Glossary

73 Annual Report 2014 SATELLITE BASICS

Communication satellite’s main components

Solar Array Panel The solar array panel uses solar power to generate electricity.

Thruster Thrusters keep the satellite positioned at Deployable Mirrored Antenna the correct orbit. This antenna receives and transmits signals. The antenna is called “deployable” because the antenna opens to receive commands from earth after the satellite is launched into space and reaches the proper orbital slot. Heat Dissipation Panel Satellites easily accumulate Telemetry Command Omni Antenna heat, and this panel dissipates This antenna receives and transmits signal while the heat via embedded heat a satellite is being launched into orbit before the conducting pipes to maintain deployable antennas can be opened. a constant temperature inside the satellite.

Communications satellites are generally about as big as a railroad car but can be various sizes depending on the type of satellite.

Do rain and wind affect communication satellite’s signals?

Not all frequencies sent by communications satellites are affected Diagnostic X-ray by rain. Radio wave frequencies that are affected and not affected Ultraviolet by rain can be divided. The most common frequency ranges for Visible light Frequency list satellite communications in Japan are the Ku band and C band. Infrared light Ka 17.3–31 C band frequencies have been widely used since satellite com- Ku 10.6–15.7 X 7.075–8.5 High-frequency munications began because they are not affected by heavy rain, but GHz C 3.4–7.075 low frequencies require large antennas for reception. The Ku band S 1.71–2.7 Television L 1.215–1.71 frequencies enable small antennas to receive large amounts of data (GHz) making it suitable for SKY PerfecTV! broadcasts and communications in Japan. The advantage of reception by small antennas is FM radio MHz somewhat compromised by the fact that the signals are weakened when they bump against water particles in the atmosphere, such as during heavy rain, which can affect reception.

Wind has no affect on signals from communication satellites. Marine Communication KHz Low-frequency Satellite Basics glossary

ARPU H.264 (H.264/MPEG-4 AVC) Communication satellite’s main components Average Monthly Revenue per Unit and actually recog- H.264 is an video data compression coding method nized “revenues” of our group in the average spending endorsed by the International Telecommunication Union per subscriber for monthly subscription fee, etc. (ITU) in May 2003 that is able to provide the same image quality as the existing MPEG-2 with only about half of Solar Array Panel Average Monthly Subscriber’s Payment the data volume. H.264 is used to distribute large data The solar array panel uses solar power to volume, high quality video such as for high-definitionT V. generate electricity. Average spending per subscriber for monthly subscription fee, etc. Conventional “Gross ARPU.” HDTV BS High-definition television. Thruster Thrusters keep the satellite positioned at Broadcasting satellite that provides BS digital broadcast- Deployable Mirrored Antenna the correct orbit. ing services in Japan. MPEG-2 (Moving Picture Experts Group phase 2) This antenna receives and transmits MPEG-2 is a video data compression method and is one signals. The antenna is called “deployable” because the antenna opens to C-band/Ku-band of the MPEG standards used for DVD video and stan- receive commands from earth after C band refers to the 3.43-7.075GHz range of frequen- dard digital televisions. the satellite is launched into space and cies. Downward transmissions from communications reaches the proper orbital slot. MSS (Mobile satellite services) Heat Dissipation Panel satellites to the earth are typically in the 3.4-4.2 GHz Satellites easily accumulate frequency band, whereas transmissions in the opposite MSS refers to networks of communications satellites Telemetry Command Omni Antenna heat, and this panel dissipates direction use the 5.8-6.7 GHz band. intended for use with mobile and portable wireless tele- This antenna receives and transmits signal while the heat via embedded heat the Ku band is the 10.6-15.7 GHz frequency range. phones. There are three major types: AMSS (aeronau- a satellite is being launched into orbit before the conducting pipes to maintain In this band, signals from communications satellites to tical MSS), LMSS (land MSS), and MMSS (maritime a constant temperature inside deployable antennas can be opened. the earth are transmitted at 12.25-12.75GHz, and down- MSS.) the satellite. ward transmissions use the 14-14.5 GHz range. SAC CS Subscriber Acquisition Cost. Communications satellites are generally about as big as a railroad car but Communications satellite is an artificial satellite can be various sizes depending on the type of satellite. equipped with transponders originally designed for com- SDTV munications services. CS has also been used for broad- Standard-definition television. casting services since 1992 in Japan. SKY PerfecTV!’s Do rain and wind affect communication satellite’s signals? services currently use three communications satellites: Ultra-HD (4K/8K) JCSAT-3A (128 degrees east longitude), JCSAT-4B (124 Ultra HD is ultra high definition imaging and display degrees east longitude) and JCSAT-110R (110 degrees technology. The K stands for Kilo, which means thou- Not all frequencies sent by communications satellites are affected Diagnostic X-ray east longitude) and BS. sand. Compared to full HD, which has a pixel count of by rain. Radio wave frequencies that are affected and not affected Ultraviolet 1920 x 1080 pixels, 4K HD has approximately four times by rain can be divided. The most common frequency ranges for Visible light DTH Frequency list and 8K approximately 16 times the number of pixels. satellite communications in Japan are the Ku band and C band. Infrared light Ka 17.3–31 DTH is, direct to the home, the direct transmission of C band frequencies have been widely used since satellite com- Ku 10.6–15.7 content to households via satellite or other means. Uplink/Downlink

High-frequency X 7.075–8.5 munications began because they are not affected by heavy rain, but GHz C 3.4–7.075 An uplink is a transmission from ground transmission S 1.71–2.7 FSS (Fixed Satellite Services) facilities to communications satellites. A downlink is a low frequencies require large antennas for reception. The Ku band L 1.215–1.71 Television The official classification (used mainly in North America) frequencies enable small antennas to receive large amounts of data transmission from communications satellites to ground (GHz) for geostationary communications satellites that provide transmission facilities. making it suitable for SKY PerfecTV! broadcasts and communica- broadcasting service to TV stations, communications tions in Japan. The advantage of reception by small antennas is FM radio MHz and data communications for companies and govern- X-band somewhat compromised by the fact that the signals are weakened nment agencies. X band is the frequency band from 7.075 to 8.5 GHz pri- when they bump against water particles in the atmosphere, such marily used by military communications, weather, and as during heavy rain, which can affect reception. FTTH earth observation satellites. FTTH is a network in which an optical fiber runs from Wind has no affect on signals from communication satellites. Marine Communication KHz the telephone exchange directly to the home. Low-frequency SKY Perfect JSAT Holdings Inc. Annual Report 2014 Highlights Group Companies Consolidated Financial

Corporate Name: SKY Perfect Customer- Corporate Name: JSAT International Inc. relations Corporation Capital: US$25 million Capital: ¥100 million Principal Activities: U.S. subsidiary working with

Ownership: 100.0% Corporate Social

Multichannel Pay TV Business

SKY Perfect Customer-relations Corporation SKY Perfect Broadcasting Corporation

SKY Perfect Entertainment Corporation Financial Section

SKY Perfect JSAT Corporation SKY Perfect JSAT Holdings Inc. Satellite Network, Inc.

JSAT MOBILE Communications Inc. Corporate Data JSAT International Inc. Space & Satellite Business Satellite Basics/Glossary

73 Annual Report 2014