As of March 31, 2011, the SOFTBANK Group comprised the pure holding company SOFTBANK, four reportable segments, and Others. Numbers of consolidated subsidiaries and equity method companies in each segment are as follows:
SOFTBANK owns 100% shares issued by WILLCOM. However, WILLCOM is in the process of rehabilitation under the Corporate Rehabilitation Act and the Company does not have effective control over WILLCOM. Therefore, WILLCOM is not treated as a subsidiary.
| Business Segments | Consolidated Subsidiaries | Equity Method Non-consolidated Subsidiaries and Affiliates |
|
|---|---|---|---|
| Reportable segments | Mobile Communications | 3 | 1 |
| Broadband Infrastructure | 3 | - | |
| Fixed-line Telecommunications | 2 | - | |
| Internet Culture | 13 | 9 | |
| Others | 96 | 63 | |
| Total | 117 | 73 | |
For fiscal 2011 (April 1, 2010 to March 31, 2011), the Group achieved consolidated net sales of 3,004,640 million yen, a 241,234 million yen (8.7%) increase compared with fiscal 2010 (April 1, 2009 to March 31, 2010; “year on year”), with a 163,292 million yen (35.1%) increase in operating income to 629,163 million yen. This consolidated revenue and profit growth was driven by strong performance in the Mobile Communications segment.
Net sales totaled 3,004,640 million yen, for a 241,234 million yen (8.7%) year-on-year increase. This was mainly the result of strong growth in the number of mobile phone subscribers, combined with a rise in ARPU*1 and the number of mobile handsets shipped,*2 in the Mobile Communications segment.
Operating income totaled 629,163 million yen, for a 163,292 million yen (35.1%) year-on-year increase. The operating margin rose 4.0 percentage points year on year, to 20.9%.
Cost of sales rose 47,045 million yen (3.5%) year on year to 1,373,617 million yen. This was mainly due to higher cost of goods on the increase in the number of mobile handsets shipped, while depreciation and amortization expenses relating to the 2G mobile phone service decreased due to termination of this service in March 2010, in the Mobile Communications segment.
Selling, general and administrative expenses grew 30,897 million yen (3.2%) year on year to 1,001,860 million yen. This was mainly because of increased sales commissions*3 associated with the increase in the number of mobile handsets sold*4 in the Mobile Communications segment.
Income before income taxes and minority interests grew 191,363 million yen (66.2%) year-on-year, to 480,613 million yen.
A decrease in interest-bearing debt resulted in a 7,133 million yen year-on-year reduction in interest payments to 104,020 million yen.
The Group recorded a 5,898 million yen gain on sale of investment securities, net along with a 8,740 million yen valuation loss on investment securities.
In addition, the Group recorded a 14,416 million yen loss on disaster, a 9,522 million yen valuation loss on option, a 7,100 million yen loss on retrospective adjustment for changes of accounting standard for asset retirement obligations, and a 4,187 million yen gain on repurchase of minority interests and long-term debt.
Loss on disaster was recorded in connection with the Great East Japan Earthquake that occurred in March 2011.
The Company has entered into agreements containing a put option*5 and a call option*6 for shares of Wireless City Planning (“WCP”), which is the Company's affiliate under the equity method, with WCP's shareholders other than the Company. These options were measured at fair value and the valuation loss was recorded as described above.
Gain on repurchase of minority interests and long-term debt was the result of an acquisition made by the Company during fiscal 2011, amounting to a total of 412,500 million yen. This acquisition was of all class 1 preferred stock series 1 and stock acquisition rights issued by BB Mobile to Vodafone International Holdings B.V. and the entire amount of the principal and accrued interest of a long-term loan receivable, which was recorded as long-term debt in the Group's consolidated balance sheets, from SOFTBANK MOBILE to Vodafone Overseas Finance Limited.
Provisions for current income taxes were 173,510 million yen, provisions for deferred income taxes were 32,048 million yen, and additional tax expenses of 27,392 million yen were recorded as income taxes – corrections. Minority interests in net income totaled 57,950 million yen.
As a result of the above, net income totaled 189,713 million yen, for a 92,997 million yen (96.2%) increase year on year.
Comprehensive income was 219,942 million yen. Of this, comprehensive income attributable to owners of the parent was 159,777 million yen and comprehensive income attributable to minority interests came to 60,165 million yen.
| 2007 | 2008 | 2009 | 2010 | 2011 | |
|---|---|---|---|---|---|
| Net sales | 2,544,219 | 2,776,169 | 2,673,035 | 2,763,406 | 3,004,640 |
| Cost of sales | 1,409,520 | 1,467,364 | 1,365,903 | 1,326,572 | 1,373,617 |
| Gross profit | 1,134,699 | 1,308,805 | 1,307,132 | 1,436,834 | 1,631,023 |
| Selling, general and administrative expenses | 863,633 | 984,518 | 948,011 | 970,963 | 1,001,860 |
| Operating income | 271,066 | 324,287 | 359,121 | 465,871 | 629,163 |
| Other income (expenses): | |||||
| Interest income | 3,394 | 3,137 | 1,399 | 1,025 | 2,228 |
| Interest expense | △79,522 | △114,864 | △112,346 | △111,153 | △104,020 |
| Equity in (losses) earnings of affiliated companies | 2,131 | 55,411 | △13,760 | △3,616 | 2,874 |
| Foreign exchange gain, net | △835 | 4,981 | 1,885 | 1,708 | 1,809 |
| Gain on sale of investment securities, net | 79,852 | 6,299 | 3,228 | 4,527 | 5,898 |
| Dilution gain from changes in equity interest, net | 2,484 | － | － | － | － |
| Valuation loss on investment securities | △5,351 | △21,856 | △11,504 | △5,168 | △8,740 |
| Loss on additional entrustment for debt assumption | － | － | △75,000 | － | － |
| Other, net | △64,645 | △31,508 | △45,685 | △63,944 | △48,599 |
| Other expenses, net | △62,492 | △98,400 | △251,783 | △176,621 | △148,550 |
| Income before income taxes and minority interests | 208,574 | 225,887 | 107,338 | 289,250 | 480,613 |
| Income taxes: | |||||
| Current | △48,726 | △48,650 | △39,390 | △117,877 | △173,510 |
| Corrections | － | － | － | － | △27,392 |
| Deferred | △93,677 | △29,533 | 19,674 | △26,683 | △32,048 |
| Total income taxes | △142,403 | △78,183 | △19,716 | △144,560 | △232,950 |
| Net income before minority interests | － | － | － | 144,690 | 247,663 |
| Minority interests in net income | △37,356 | △39,079 | △44,450 | △47,974 | △57,950 |
| Net income | 28,815 | 108,625 | 43,172 | 96,716 | 189,713 |
| 2011 | |
|---|---|
| Net income before minority interests | 247,663 |
| Other comprehensive loss: | |
| Unrealized loss on available-for sale securities | △6,822 |
| Deferred loss on derivatives under hedge accounting | △3,177 |
| Foreign currency translation adjustment | △10,195 |
| Share of other comprehensive loss in affiliated companies | △7,527 |
| Total other comprehensive loss: | △27,721 |
| Comprehensive income | 219,942 |
| Total comprehensive income attributable to | |
| Owners of the parent | 159,777 |
| Minority interests | 60,165 |
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