SoftBank Group Corp. ANNUAL REPORT 2016 Corporate Philosophy Information Revolution – Happiness for everyone Vision The corporate group needed most by people around the world SoftBank Group Corp. ANNUAL REPORT 2016 001 A History of Challenges A History of Challenges The view is different when you challenge yourself Continuing to take on new challenges and embrace change without fear. Driving business forward through exhaustive debate. This is the SoftBank Group’s DNA. SoftBank Group Corp. ANNUAL REPORT 2016 002 A History of Challenges Established SoftBank Japan. 1981 Commenced operations as a distributor of packaged software. 1982 Entered the publishing business. Launched Oh! PC and Oh! MZ, monthly magazines introducing PCs and software by manufacturer. 1994 Acquired events division from Ziff Communications Company of the U.S. through SoftBank Holdings Inc. 1996 Acquired Ziff-Davis Publishing Company, U.S. publisher of PC WEEK magazine and provider of leading-edge information on the PC industry. SoftBank Group Corp. ANNUAL REPORT 2016 003 A History of Challenges Established Yahoo Japan through joint investment with Yahoo! Inc. in the U.S. 1996 Began to develop into an Internet company at full scale. Yahoo Japan Net income* 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 FY (Note) Accounting standard: JGAAP up to fiscal 2012; IFRSs from fiscal 2013 onward. * Net income attributable to owners of the parent. SoftBank Group Corp. ANNUAL REPORT 2016 004 A History of Challenges Made full-scale entry into the telecommunications business. 2000s Contributed to faster, more affordable telecommunications services in Japan. 2001 Launched Yahoo! BB comprehensive broadband service. SoftBank Corp. Operating income 2004 Consolidated JAPAN TELECOM (currently SoftBank Corp.). (Fixed-line business)* Entered the fixed-line telecommunications business. 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 FY Consolidated Vodafone K.K. (currently SoftBank Corp.). 2006 (Note) Accounting standard up to fiscal 2011: JGAAP; from fiscal 2012 onward: IFRSs. Entered the mobile communications business. * Fixed-line business: Broadband Infrastructure segment + Fixed-line Telecommunications segment. SoftBank Corp. Operating income (Mobile Communications)* 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 FY (Note) Accounting standard up to fiscal 2011: JGAAP; from fiscal 2012 onward: IFRSs. * Fiscal 2006–2011: Mobile Communications segment operating income. Fiscal 2012–2014: Mobile Communications segment income. SoftBank Group Corp. ANNUAL REPORT 2016 005 A History of Challenges 2013 Consolidated Sprint (U.S.), entered the U.S. telecommunications market. Entered the telecommunications business in the U.S., which exceeds Japan in both population and GDP, aiming to turn around the Sprint business by leveraging experience Sprint Adjusted EBITDA and expertise developed in Japan. (U.S. GAAP) 2010 2011 2012 2013 2014 2015 2016 FY Forecast SoftBank Group Corp. ANNUAL REPORT 2016 006 A History of Challenges Global development Accelerated strategic Internet-related investment. 1994 Established SoftBank Holdings Inc. in the U.S. to gather information on Internet-related companies with a view to strategic investments. 2000 Invested in Alibaba.com Corporation (currently Alibaba Group Holding Limited, “Alibaba”). 2013 Acquired shares in Supercell Oy (Finland) and consolidated it. 2014 Acquired shares in Brightstar Corp. (U.S.) and consolidated it. Invested in Indonesia’s PT Tokopedia, India’s ANI Technologies Private Limited (Ola), India’s Jasper Infotech Private Limited (Snapdeal), and Singapore’s GrabTaxi Holdings Pte Ltd (currently Grab Inc.) 2015 Invested in China’s Travice Inc. (currently Xiaoju Kuaizhi Inc.), South Korea’s Forward Ventures, LLC (Coupang), and U.S.-based Social Finance, Inc. 2016 Procured total of US$10 billion by monetizing some of the shares in Alibaba. Sold all shares of Supercell Oy for US$7.3 billion. SoftBank Group Corp. ANNUAL REPORT 2016 007 Further Challenges Further Challenges We are confident in the future Today, SoftBank Group Corp. continues to evolve into a group of innovative entrepreneurs from around the world, leading the way in their respective businesses guided by the corporate philosophy, “Information Revolution – Happiness for everyone.” Continued collaboration in this entirely new kind of organic corporate group is the true source of our growth. SoftBank Group Corp. ANNUAL REPORT 2016 008 Contents A History of Challenges P.001 Basic Information P.016 017 Group Structure Further Challenges P.007 018 Graphs 021 Eleven-year Summary CEO Message Domestic Telecommunications 023 Summary of Segment Information P.009 Business Strategy P.012 024 A Group of Innovative Entrepreneurs 025 Major Subsidiaries and Associates Management Organization P.028 Chairman & CEO 029 Message from an External Audit & Supervisory Board Member Masayoshi Son explains 030 Directors and Audit & SoftBank Group Corp.’s Supervisory Board Members initiatives. Ken Miyauchi 032 Compliance Representative director, 034 Risk Management president & COO, SoftBank Group Corp. 035 Information Security President & CEO, SoftBank Corp. 036 Corporate Social Responsibility (CSR) Masayoshi Son Chairman & CEO, SoftBank Group Corp. Sprint Business Strategy P.014 Financial Section P.037 038 Financial Strategy 040 Management’s Discussion and Analysis of Results of Operations and Financial Position 072 Consolidated Financial Statements 080 Notes to Consolidated Financial Statements 166 Independent Auditor’s Report Corporate Information P.167 Marcelo Claure 168 Corporate Data President and CEO, 169 Stock Information Sprint Corporation 170 Glossary Disclaimers Transition to IFRSs Regarding Trademarks • This annual report is made based on information available at the time of writing. Plans, forecasts, strategies, • The Company has prepared the consolidated financial statements in accordance with the International • TM and © 2016 Apple Inc. All rights reserved. Apple and iPhone are trademarks of Apple Inc., registered in and other forward-looking statements in this report are not historical facts, and include elements of risk and Financial Reporting Standards (IFRSs) from the three-month period ended June 30, 2013, the first quarter of the U.S. and other countries. The trademark “iPhone” is used with a license from Aiphone K.K. App Store is a uncertainty. Actual results may therefore differ materially from these forward-looking statements due to the fiscal year ended March 31, 2014. The date of transition to IFRSs is April 1, 2012. The financial data for service mark of Apple Inc. changes in the business environment and other factors. the year ended March 31, 2013 is also presented based on IFRSs. • Google and Google Play are trademarks or registered trademarks of Google Inc. • Information in this report regarding companies other than the Company is quoted from public and other Definition of Terms • Yahoo! and the Yahoo! logo are registered trademarks or trademarks of Yahoo! Inc. in the U.S. sources. We do not guarantee the accuracy of this information. • “Fiscal 2015” refers to the fiscal year ended March 31, 2016, and other fiscal years are referred to in a • Other names of companies, products, and services and such that appear in this annual report are trademarks or • The Company expressly disclaims any obligation or responsibility to update, revise or supplement any forward- corresponding manner in this annual report. FYE denotes the fiscal year-end. For example, FYE2015 denotes registered trademarks of their respective companies. looking statements in any presentation material or generally to any extent. Use of or reliance on the informa- March 31, 2016, the last day of fiscal 2015. tion in this annual report is at your own risk. Company Names • Unless specifically stated otherwise “the Company” refers to SoftBank Group Corp. and its subsidiaries. Please refer to page 82 for the abbreviation of subsidiaries’ and affiliates’ company names. SoftBank Group Corp. ANNUAL REPORT 2016 009 Further Challenges CEO Message CEO Message Finding Opportunities in Adversity In 2016, 35 years after our foundation, I find myself filled with a sense of excitement every day. Although we have been tackling the Herculean task of rebuilding Sprint since we acquired it in July 2013, my optimism is undaunted. My confidence was challenged at times by the sheer difficulty of the undertaking, but we have now reached a point where the view is bright and clear. So even if the environment is an adverse one, by taking a different perspective we can see things in a completely different light. This has been my experience in the past. When the Internet bubble had burst back in 2000 and virtually everyone had retreated into a defensive position, I thought “now is the moment of greatest opportunity” and made an aggressive advance with the Yahoo! BB broadband service. From fiscal 2001 to fiscal 2004 we continued to post heavy losses, but it eventually led to a huge step forward for the Company, as many of you know. The task of rebuilding Sprint has proved more challenging than we initially anticipated, but I have personally led our effort on this, working with Sprint’s engineering team and drawing on all of our combined wisdom. Our efforts have finally begun to show measurable progress on the most challenging and important aspect – network improvement – and I am now certain that we will turn Sprint’s performance around Masayoshi Son and see