Announcement Concerning Year-on-year Earnings Results Comparison for the Fiscal Year Ended March 2012

SOFTBANK CORP. (hereafter “the Company”) announced the following earnings results comparison between the fiscal year ended March 2012 and the fiscal year ended March 2011 (hereafter “the previous fiscal year;” “year on year”).
This press release is announced based on Tokyo Stock Exchange's guideline.

1. Comparison of earnings results

2. The earnings results' year-on-year fluctuation

For the fiscal year ended March 2012, the SOFTBANK Group achieved consolidated net sales of JPY 3,202,435 million, a 6.6% increase, with a 7.3% increase to JPY 675,283 million in operating income. Ordinary income grew 10.2% to JPY 573,651 million. Net income rose 65.4% to JPY 313,752 million.

(a) Net Sales

Net sales totaled JPY 3,202,435 million, for a JPY 197,795 million (6.6%) year-on-year increase. This was mainly due to increased telecom service revenue, primarily from steady growth in the number of mobile phone subscribers. Another factor was an increase in sales of mobile handsets due to strong growth in shipments of iPhone 4S^*1, which was launched in October 2011.

(b) Cost of Sales

Cost of sales rose JPY 112,133 million (8.2%) year on year to JPY 1,485,750 million. This was primarily due to an increase in the cost of sales for mobile handsets in the Mobile Communications segment as the number of handsets shipped^*2 increased in line with the launch of iPhone 4S, along with higher depreciation and amortization expenses, mainly relating to the installation of additional base stations.

(c) Selling, General, and Administrative Expenses

Selling, general, and administrative expenses grew JPY 39,541 million (3.9%) year on year to JPY 1,041,401 million. This was mainly because of an increase in the total amount of sales commissions paid^*3 in the Mobile Communications segment, resulting from a rise in the number of handsets sold^*4 following the launch of iPhone 4S.

(d) Operating Income

As a result, operating income totaled JPY 675,283 million, for a JPY 46,120 million (7.3%) year-on-year increase. The operating margin rose 0.2 of a percentage point year on year to 21.1%.

(e) Non-operating Income / Expenses

Non-operating income totaled JPY 11,308 million, a JPY 6,012 million year-on-year decrease. Non-operating expenses were JPY 112,940 million, a JPY 13,128 million year-on-year decrease. Interest expense decreased by JPY 41,813 million as SOFTBANK MOBILE Corp. paid off its SBM loan^*5 in October 2011. Meanwhile, refinancing related expenses totaled JPY 24,956 million. These mainly comprised costs relating to the Company's newly procured funds for refinancing of the SBM loan, and repayment of the SBM loan.

(f) Ordinary Income

Ordinary income therefore totaled JPY 573,651 million, for a JPY 53,236 million (10.2%) year-on-year increase.

(g) Special Income

Special income totaled JPY 117,765 million. The main components of this were gain on sale of investment securities of JPY 88,368 million and dilution gain from changes in equity interest of JPY 20,185 million.
The gain on sale of investment securities was primarily attributable to a JPY 76,430 million gain on sale of Yahoo! Inc. shares. In connection with the Company's financing of USD 1,135 million from CITIBANK, N.A. through one of its U.S. subsidiaries in February 2004, certain forward contracts (“collar transaction”) were entered into, which allowed the obligation to be settled at maturity by delivering Yahoo! Inc. shares held by this subsidiary. The forward contracts were to effectively hedge the variability of cash flows associated with the future market price of the underlying security.
During the second quarter of the fiscal year ended March 2012, the obligation under the forward contracts was settled at maturity by effectively delivering the shares of Yahoo! Inc. (book basis of USD 142 million) to CITIBANK, N.A. The cash proceeds received by the Company's aforementioned subsidiary from delivering the shares of Yahoo! Inc. to CITIBANK, N.A. were then remitted to repay the related obligation. Gain on sale of investment securities of JPY 76,430 million (USD 993 million) was recorded as a result of settling the forward contracts.
Dilution gain from changes in equity interest was recorded mainly in relation to the Company's equity method affiliate Renren Inc.'s listing on the New York Stock Exchange in May 2011.

(h) Special Loss

Special loss was JPY 59,160 million. The main components of the loss were a premium expense on advanced repayment of long-term debt of JPY 21,875 million, loss on liquidation of subsidiaries and affiliates of JPY 19,071 million, and a valuation loss on investment securities of JPY 13,971 million. The premium expense occurred in relation to SOFTBANK MOBILE Corp.'s repayment of the abovementioned SBM loan in October 2011. The loss on liquidation of subsidiaries and affiliates relates to the liquidation of the Company's subsidiary Charlton Acquisition LLP, which held the Betfair Group plc shares as a holding company in the U.K. The valuation loss on investment securities was mainly associated with a drop in the stock price of Betfair Group plc.

(i) Income Taxes

Provisions for current income taxes were JPY 196,509 million and provisions for deferred income taxes were JPY 58,203 million. Total income taxes increased JPY 21,763 million year on year to JPY 254,712 million.

(j) Minority Interests in Net Income

Minority interests in net income totaled JPY 63,790 million, mainly related to net income recorded at Yahoo Japan Corporation.

(k) Net Income

As a result of the above, net income totaled JPY 313,752 million, for a JPY 124,039 million (65.4%) year-on-year increase.