SoftBank Group Corp. (9984) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. Thank you very much for waiting. Now we'd like to start the SoftBank Group Corporation investors briefing on earning results for the fiscal year ended March 31, 2020. First of all, I'd like to introduce the representatives from SoftBank. Mr. Goto, Senior Vice President and CFO of SoftBank Group Corporation; Ms. Kimiwada, Senior Vice President and Head of Accounting unit of SoftBank Group Corporation; Mr. Navneet Govil, Managing Partner and CFO of SoftBank Investment Adviser from U.S. This session starts with overview of our consolidated results by Ms. Kimiwada, financial update by Mr. Goto, followed by SoftBank regional fund update by Mr. Navneet Govil. You can choose either English or Japanese for this meeting, and we can take both English and Japanese questions after the presentation. And this meeting will be available on your -- on our website later. Now I'd like to invite Ms. Kimiwada to talk about consolidated results. Ms. Kimiwada, please.

[Interpreted] Good morning, ladies and gentlemen. My name is Kimiwada, Head of Accounting of SoftBank Group. We released our earning results the day before yesterday, and let me walk you through from accounting perspective. Please take a look at Slide #2. This is a consolidated results. For the numbers, I'm sure you are well aware of them. Just please note that on April 1, Sprint got merged with T-Mobile. Before, it was subsidiary, but as for this earning result, we treat them as discontinued operation. And numbers for FY '18, we made adjustment which we expect to [indiscernible]. So operating income and net sales do not include Sprint numbers, just to remind you. Please take a look at Page 3, change in our reportable segments. Like I said earlier, Sprint is now excluded from our segments. Page 4, Sprint/T-Mobile merger and impact on consolidated earnings. This is a summary of the impact. Again, April 1, the merger was completed, and Sprint became no more subsidiary. And new T-Mobile instead, became an equity method associate. And we own approximately 24% of the new company. So for FY '19, Sprint is classified as discontinued operations. And for assets and liabilities, they are presented as assets and liability held for sales at FY '19 end. And for FY '20, we expect to record a gain relating to loss of control under net income or loss from discontinued operation. More specifically, the difference between the total value of new mobile shares, new T-Mobile shares and the consolidated carrying amount of Sprint will be represented. This share include earnout shares as well. Page 5, talking about WeWork, which had a huge impact on FY '19 earnings. Fair value of WeWork as of end of March was down to $2.9 billion. This is private company. For allocating fair value, we used an income approach discount cash flow method. As you can see in the table, in October 2019, we signed some agreements with WeWork, and these statements show detail of the update. And if you take a look at number 3, credit support and notes purchase. For number A, credit support. And for B, unsecured notes. Neither A nor B have been either used or issued. But because of the deteriorating in performance, we recorded numbers accordingly. I'll come back to the point later. Page 6. Again, WeWork. Investment in WeWork by WeWork investment subsidiary. This is from SoftBank perspective, which means excluding investment by SoftBank Vision Fund. So talking about the investment or quality guarantee by SoftBank Group. If you take a look at -- on the far right, Q4, minus $1.777 billion in total. That was the loss recorded for FY -- excuse me, Q4. And details are shown in the table. And moving on to Slide 7. This probably is new to you, talking about financial guarantee contract and loan commitment, liabilities associated with them. Credit around WeWork got deteriorated in Q4. In Q3, loss was recorded already. But on top of that, because of poor credit around WeWork, we decided to account for provision. In Q3, yield on WeWork [ not ] was about 12%. And Q4, it went up to 35%. So credit card deteriorated in Q4. So accordingly, provision were recorded. So additional provisions, once credit gets improved, there will be coming back. Provision in Q3 will be coming back as it goes up, unless there is a significant event will take place. In terms of stand-alone basis, on Japan basis, we don't have to record a provision. But for consolidated basis, which is based on IFRS, we recorded a provision. But for stand-alone basis, we did not recognize provision for the worsening credit of WeWork. Page 8, valuation changed from Q3, but not materially. And Page 9 is talking about consolidated P/L summary based on IFRS. If you take a look at the line gain or loss from financial instrument at FVTPL, minus JPY 668 billion, which mainly consists of a loss around decrease of WeWork. And for Sprint, net loss from discontinued operation, that's about Sprint. And with regards to balance sheet, on Page 10, there's nothing to be noted. So please take a look at the B/S summary later on your own. So moving on to Page 14, if I may, income and loss arising from SVF and other SBIA-managed funds. So earnings or loss before tax line are showing, as we have done in the past. And Page 15 is talking briefly about tax. Earnings before tax was very small, which is JPY 35.5 billion. And tax rates are rather complicating. So let me try to explain briefly from tax perspective. Effective income tax rate from amount perspective is JPY 797 billion, which includes current Vision and the deferred. Domestic business, SoftBank Corp. and Yahoo! or Z Holdings, they are profitable. About JPY 230 billion for current provision were recorded. For deferred section, Alibaba's forward contract expenses from deferred perspective and gain from change in holdings related to Alibaba's listing and gain from our ownership is around JPY 300 billion or so. So all in all, JPY 797.7 billion is effective income tax rate and the rate wise, which is kind of crazy, but I just want to give you an attention -- give you perspective with regards to tax rate. And next slide, those carryforwards, how much we own is shown in the table. All in all, from a consolidated perspective, we have about JPY 1 trillion worth of loss carried forwards. For our domestic business, most of them are owned by SoftBank Group. We are often asked about tax associated with JPY 4.5 trillion of monetization program. And of course, we are considering taking advantage of those carryforwards. After April 1, financing using Alibaba shares even though we end up selling them, timing-wise, it will be 2 years ahead, 3 years ahead. So we don't expect taxation pretty soon. And taxable income determine a tax amount to be paid, but we will take advantage of those carryforward in accordance to tax regulation in respective countries -- tax treatment in respective country. That's all from myself. Thank you.

[Interpreted] Thank you very much. Next, I would like to invite Mr. Goto to give you a financial update. Mr. Goto, please. And please give us a moment to change to the Mr. Goto's slide. Thank you.

[Interpreted] Good morning, everyone. This is Goto, our CFO of SoftBank Group Corp. Thank you very much for joining today under certain circumstance that we -- it is unfortunate that we are not able to see you in person, but I believe that you all understand. Now let me go into the presentation. On Page 2, this is the recent newspapers, very symbolic articles from the newspaper. It's a very unprecedented environment, and I believe that this size of the global-based pandemic situation is the first time in 100 years, I believe. And also industrial structure and lifestyles are completely different compared to 100 years ago. And on your left-hand side table, this is the very eye-catching financing activities by several companies that we picked up by our own. I am not going to talk about each individual, but you can tell from this table that this variety of the industry segments, leading companies are in necessity of raising money. That's the situation that we are facing right now. And that's all the same for all of us in worldwide, and I believe that each country's government is trying to address the situation as much as possible, so as each company. From the SoftBank Group's point of view, our safetiness of the group is actually very high even under certain circumstance. This is not that we are trying to searching ourself and finding some good news to make the comments, but looking at our credit status and also our financial status, capability operating, also looking at the net liquidity, I believe that we are in a very strong position. And that is because each individual group companies are focusing on the information communication service. As you know, Masa, our Founder and CEO, even after 40 years, that he is still leading the company and managing the company. And when he founded the business, which you hear this often, but Masa, you often said, that he rolled up all the industry and segment and thought about which segment is the most or long-lasting segment or business. And he kind of delete one by one that he thought that they won't last long. For example, productions, that looks very robust and steady industry, especially manufacturing. Once you gain the brand and also leading the market, then such manufacturing business looks very stable and sound. However, there are also a risk for the manufacturing business when products won't sell anymore or a paradigm shift occurs, then that there will be another person leading the market. Also in the commerce market, retail commerce always requires CapEx because they need to distribute to the stores and so on. So considering all that, Masa chose this business as our core business, and that also indicated in our corporate philosophy. So this corporate philosophy is going to be cherished for a long time. And also we, as a finance team, we would like to make sure that we will be able to operate and manage our company healthy and sound. And I believe that is why we have been able to build such a robust base to manage the company even under such a crisis situation. Page 3. Under such circumstance, equity value of holdings is about JPY 28.5 trillion, of which 70% are the listed securities. Net debt, if you lease -- less net debt to calculate loan-to-value, that gives us 14.2%. Cash position as of today is about JPY 3 trillion. As for cash position, you can see some small graph underneath that our liquidity is, amongst all the companies in Japan, we are in a very high level of cash positions, no doubt about it. Healthiness of company is the status of asset and the cash position. Those 2 are the main indicators to measure the company's soundness, I believe. And from that sense, we are very sound as business. And as an investment company, I believe that there are many opinions on that. But being as an investment company and being an operating company, which is more safe, that's the kind of arguments that the people may make. But if you have operating business and expecting generating cash flows and if you can measure your enterprise value by calculating discount cash flow, and that's very popular, so that many people think they're very safe. But that's not always true because if you see this is crisis situation, that makes it even more clear that compared to the other segment, we are even safer. And that's something that you can see from the current situation. We are on Page 4, a strategic investment holding company. Meaning our current core business is investments. So once again, looking at the inflow and outflow of cash, if the situation is severe, then you just become more conservative on new investment then that we'll be able to manage our outflow of cash flow. Therefore we just wait and see where will be the best timing to be more aggressive or aggressive once again. And that timing can be measured based on several KPIs by showing the safetiness of the business that we'll be able to make our next move. And that's something that's required for our finance team. In the Page 5, the biggest source for that, which is the equity value of holding, currently JPY 28.5 trillion. This is due to the receiving some impact from coronavirus for past few months. The impact, as a matter of fact, is up at JPY 2 trillion level. If you look at this graph, starting from 1999, and this is a trend of the equity value of holdings, crash bubble, Internet bubble, financial crisis back in 2008, compared to that, our current balance sheet is actually even more stronger and expanded. And with those, I believe that we are having a very safe management. And for the details, I will touch on this later pages, but this JPY 28 trillion is mainly consist of the very defensive securities. So that's another reason why that we think we are very sound. In the past, when we just started the Yahoo! Japan and we just rely on Yahoo! Japan for quite a long time, and since then, after the acquisition of Vodafone, you see the green bar. This is the mobile base, which has been unlisted for a while. And the orange is Alibaba, which in past 6 years, has been contributing quite dramatically. And actually, our investment in Alibaba is back in year 2000, so there a long time that was unlisted but trying to encourage them to grow. Green bar, actually, the listing was happened only last year. Looks like the value decreased a little bit, but because we did a public offering and we reduced the ownership, but at the same time, they've been making a good contribution in terms of cash. Page 6. And this is a comparison with the financial crisis back in 2008 and today. So 2008, 2009 and 2020. Actually, equity value of holdings has grown by about 6x, of which 78% are the listed securities. In the middle, loan-to-value, currently 14.2%. Back in financial crisis moment, we were 55%. Of course, that's the time where that our consolidating the mobile business but not listed. So we were in 1 team for the operation of the mobile business. Therefore, EBITDA from this mobile business, which is the EBITDA margin or the leverage ratio, those were important KPI which is not important now, but back then was very important KPIs. And also far right is the bonds that we've been issued. So the CDS for the bonds, and back in March 2009, it was exceeding 2,000 basis points. And now that it's currently around 500 basis points. So even in the current situation, it's still this level. So our credit level compared to back in 2009 is drastically changed and we've been able to be safer since then. Page 7. Compared to the previous quarter, back in February, what happened in the past 3 months, and the main impact is coming from the coronavirus, I believe. Equity value of holdings, about JPY 2.6 trillion down, which is reflecting the coronavirus situation. But still, it was quite limited in terms of impact. Loan-to-value, 16.1% to 14.2%, so about 2% improvement here. In this level, 2% level improvement in loan-to-value is quite a large things, I believe. And cash position is currently JPY 3 trillion. So we have increased by JPY 1 trillion so far. So compared to the previous quarter announcement, safetiness has increased for 3 months, as a matter of fact. On Page 8. So how we addressing the moment, which is unprecedented crisis, first time in 100 years. Hopefully, this is temporary things, but it may last long so that we do need to address the situation. From a financial point of view as well, looking at the current situation, as you know, the macro economies uncertainty is increasing, therefore investors anxiety is increasing. Even for our share price, we have dropped by 53%. CDS also jumped to nearly close to 400 basis points. So that's something that we have experienced in the past 3 months due to this crisis moment. Because of that, we do need to make sure we can maintain our financial disciplines, so no change in our financial policy. And we can say that because our financial disciplines has been -- has not been changed at all for a long time, and we believe we can do the same. So at this moment, we -- in the timing for being aggressive, or should we do nothing? I believe that everybody is facing a very difficult situation. We have such a very safe position. There are things that we can do with such a safe position, which is something written to the stakeholders. So I mentioned, recently, regarding JPY 4.5 trillion asset disposal or monetization, so those can be the good return to the equity holders and bondholders. And that's something that we can do at this moment. And that's because of SoftBank that we can do this. And one another thing is the aggressive activities like new investments. Do we not going to do anything at all? Should we just sleep on the cash? That's not something that we don't want to do because we do need to be prepared for the future growth as well during this time so that what we have committed, like stakeholders return and the financial improvement, by realizing all those, on top of that, we would like to consider and of course, being careful and very conservatively, that we would like to also consider the new investment opportunity as well. So being conservative is, of course, no doubt about it. But our current environment can be a good opportunity as well in a sense, therefore, or we would like to make sure that we don't lose any opportunities. So safetiness first. But at the same time, we would like to challenge if there is any chance as well. Page 9. JPY 4.5 trillion program, we just announced recently. And right now, we are proceeding or executing. And once again, to refresh your memory, JPY 4.5 trillion monetization in asset sales is a program we are trying to do. So JPY 2 trillion for return to shareholders and the JPY 500 billion has already been announced before this JPY 4.5 trillion. So in total, JPY 2.5 trillion is the amount for share -- returns to shares or share buybacks. And the remaining JPY 2 trillion from JPY 4.5 trillion, that gives us JPY 2 trillion -- excuse me, JPY 2.5 trillion. So that's give us [ JPY 5 trillion ]. We may need to consider some of the tax considerations and others but excluding all those that we would like to use for the financial improvement, there are 3 elements that we should be proceeding. One is the -- we have a loan borrowing and also even issuing bonds. And we have cash reserve. So those 3. In how much should we be paying a loan, which will make banks happier. For bonds, what kind of program of buying back that can we execute to get good feedback from bondholders? How much cash reserve should we keeping? So we are exploring the best combination of those 3. And -- excuse me, JPY 4.5 billion is going to be used on the for return to shareholders and financial improvements. Or we are not considering to use this for new investments, which is also explained in the previous announcement. On Page 10, JPY 4.5 trillion program progress. So in latest earnings call, also explained that we've been using Alibaba share for the monetization to some extent. So using the derivative transaction, 3 types, collar transactions, floor transaction and the forward transactions. Forward, it's something that we decide on settling shares and receive the cash upfront. Floor transaction is that we set the floor. And for upside, we can get those up. We have an option to get those upside, so that's a derivative transaction with upside. Collar transaction is to fix the downside risk in option as an optionality. And also, to some extent, we'd still be able to receive the upside as well. So if share price goes below, or the -- what we have promised with investors that that's a floor, so that we have already set the floor, that's going to be limiting our downside. And also at the same time, upside we'll be able to gain. But if share price goes even beyond that, that's going to be going to investors. So that's the kind of basic concept for these transactions. Marketability-wise, collar transaction had the biggest market, I believe. So in total, $11.5 billion funding amount for this transaction. So in Japanese yen, it's about JPY 1.2 trillion or so. So for the JPY 4.5 trillion, about 1/4 has already been funded in -- for April and May. For share buyback, about JPY 250 billion has been already bought. Up until the end of April, we've been doing this program and over 1 year, totaled JPY 2.5 trillion. So we still have JPY 2.250 trillion to go. So that we would like to proceed steadily. And for JPY 4.5 trillion program has been questioned very oftenly, but that you see our status of finance, about 78% of our holdings are the listed securities, therefore we will not be announcing in advance in terms of any transaction using our listed securities. Once that we execute, we will be sharing with you when it's done. On Page 11, so we mentioned that we are defensive in terms of our share price or shares. And probably, this chart tells you the most. Compared to Dow Jones, Nikkei 225, since the beginning of this year, this is the movement of those price. And as of May 6, Dow Jones has dropped by about 14% and 15% for Nikkei. Compared to that, we, SoftBank KK, which is domestic telecom, only 3.6% decrease. And as SoftBank Group, share price itself has only decreased by 2.8%. Alibaba, actually, on the other hand, is increasing by 1.5%, and T-Mobile is increasing 30%. So meaning our assets are very steady, and you can tell from this chart. And the remaining further unlisted securities or private securities, such as Arm, Vision Fund. And so on Arm, it's something that we believe that there will be the core or [ hurt ] of the IT or AI world going forward. And they have a big -- and a good portion of our market share. So we believe that we are quite convinced that their growth is very bright in future. And the SoftBank domestic telecom also doing pretty good. So under the coronavirus situation, it's not really damaging the principle itself. So that for future, we are still looking this company or business in mid- to long-term period. Page 12. This is the very simple but our composition of portfolio. Alibaba, S&P level AA+ or above; SoftBank domestic telecom, also in domestic rating-wise, AA; T-Mobile, BB. But still actually, Sprint before the merger was single B. It's the concern from there that we believe that we've been very steady in terms of credit and also high liquidity and infrastructure there has been still very robust. And also e-commerce, on top of that, is actually being very steady even in this abnormal situations or abnormal changes in lifestyle. So as an industry or segment, I believe this is the most robust segments. And at the same time, they are competitive amongst the other peers. On Page 13, as Kimiwada-san mentioned earlier, this is the merger between Sprint and T-Mobile. As a result, this been helping to our asset value as well. This merger, the 2 companies, becomes one of the top big 3 players in United States in mobile market. So that gives us the EBITDA safetiness for overall as well. On Page 14, Vision Fund. Compared to last year, the fair value of investment assets are shown on this slide. Last -- as of last December, as an acquisition cost, we -- there was about $74 billion and about -- that was the valuation gain of 7%. But as of March this year, acquisition costs of $75 billion and 7% valuation down. But on the contrary, if you look at in detail, especially those 8 companies has already gone public on Page 15. At the earnings call the day before yesterday, we show you -- only show you the value of those listed securities as of the end of March. But here, we would like to share with you how these shares are moving to most recently. So as of May 15, which is the last Friday, the value of these 8 companies are now totaled $3.4 billion. So it's about JPY 370 billion. Positive has been already shown. As you can see, Guardant Health is making great progress and giving us a good return to investment. And Uber, which is a relatively big one, and the share price has dropped sharply once, and we worried a bit. However, in the past few weeks, they've been recovering quite largely. Not only Uber, but also there are DiDi in China or Grab in Southeast Asia as a ride-hailing businesses. Those are also exciting business that we are looking at. So together with Uber's group, we expect that those value of the businesses can be something growing from our expectation. On Page 16, this is the summary of whole year, full year. Financial activity-wise for funding, retail bonds, domestic retail bonds or institutional or investors bond that we have issued several times. And we have very good demands, and we have a very good transactions with the investors. So we did a good project here. And also, we have owned 65% of SoftBank Corp. domestic telecom shares, and we have raised about JPY 500 billion, having a margin loan with using this share. Other than that, we have JPY 4.5 trillion program has announced, as I explained earlier. In asset status in the middle, once again, even with the coronavirus crisis, our equity value of holdings stays in JPY 28.5 trillion. Vision Fund segment completed the new investments. So it's about JPY 100 billion, JPY 100 billion fund. And from the beginning that we've been originally scheduled to invest for about 80% to 85%. So now that we are focusing on for the 1 investments, and also, we have preferred investors as well. So we have a coupon to pay to those preferred that we will be using from the savings for the remaining. And Sprint merger has completed with T-Mobile. And SoftBank Corp., the domestic telecom, in the past 1 year, they've been developing very aggressive strategy once after -- one after another. First is to make the Z Holding a subsidiary and also the integrating business with LINE, which was a quite business-enhancing event. So that's adding more value for the domestic telecom compared to the peers. In financial indicators, as I mentioned, there is solid and safety -- safe. A bit detail on Page 17. This is SBG stand-alone interest-bearing debt. In the past 3 months, raising JPY 500 billion from margin loan using SoftBank Corp. shares and the net amount has been increased for that. Page 18 is the cash position. About JPY 3 trillion up until recently. And I also mentioned the monetization using Alibaba share, JPY 1.3 trillion equivalent. Other than that, we have some program. For example, some proceeds out from the exit of Vision Fund or share buyback up until end of March, JPY 230 billion exercised. And netting those out, that our current cash position is about JPY 3 trillion. Page 19, this cash position as a financial discipline. Compared to our 2-year equivalent service debt, the current JPY 3 trillion is actually covers 4-year equivalent of redemption, as a matter of fact. Of course, we will be doing some buybacks, too. And at the same time, there are some more asset disposals or monetization going on, therefore compared to 2-year equivalent of the redemption of the debt, I believe that we are keeping very safe level of cash position and we will be able to share with you every quarter how safe it is. Page 20 is the net interest-bearing debt after cash position. What has been improved is the raised money coming in. And also, this is a loan-to-value in the other calculation method. So nonrecourse in the asset to repaying the loan has been also less from there. Therefore, under such definition, loan-to-value-wise, it's been very much improving. Page 21. As of March, loan-to-value is 14%. So what we've been sharing with you as a financial discipline, which is to manage loan-to-value less than 25% and we are achieving well far on that. Page 22 is redemption schedule, which is you're very familiar with. Fiscal '21 has a quite high redemption. That is why that we're trying to accumulate our cash position relatively high. Frequently asked question is that hybrid bonds that we are issuing, are we going to call as schedule. And as we committed with the investor, we will keep our words. Page 23. This is as a for this year 4-year, 2 big agenda for finance. So our top priority as an investment company, financial policy is a top priority for the strategy of the company. So we would like to make sure always keeping our words on our financial policy. But at the same time, because of the under such uncertain circumstance, we would like to agile financial management as well to address the changes immediately. And the financial policy to be maintained, on Page 24. No change at all. Manage loan-to-value, less than 25% at normal periods. Even in abnormal case, in 35%. And also maintain cash position covering 2-year equivalent bond redemption and also secure sustainable distribution and dividend income from Vision Fund and others. And also, WeWork crisis, so-called, because of the negative impact to us, and there are lessons learned from that event. And we decide on these 2 policies on Page 25, the new policy. So a portfolio company finance will be self-financed, they are independent by itself. And we don't provide any rescue program. And also, investees from SoftBank Vision Fund should be decided by Vision Fund whether they're going to be making any follow-on investment or not. So it's Vision Fund investment committee decisions on any follow-on investment to investee. So that's separate from our decisions. On Page 26, in the past 1 year, this is to recap. JPY 4.5 trillion program. This is I believe one of the most important program for both equity holders and the bondholders so we would like to make sure we will be proceeding and achieving this, and at the same time, appropriately control the balance between new investments and exit. So on top of JPY 4.5 trillion, which means after we executing JPY 4.5 trillion, once we have any new raising or new monetization, if we have some excess above JPY 4.5 trillion, we would like to manage appropriately but to be prepared for the next investment opportunities. And because of such circumstance, dialogue with market is going to be even more important. We would like to focus more on the dialogue with the investors. So both equity market and bond market, we would like to make sure to have a frequent communication with markets. Page 27, last but not least, this is the direction of financial management. As an investment company, investment asset value may goes up and down, so by collecting the investment that will be used for new investment, so that the total value should be improved. When you look at the loan-to-value, we do need to keep our financial policy in terms of loan-to-value, and at the same time, improve value in safely manner. So that cycle, we would like to make sure to proceed. And by keeping our financial policy and also improving the asset value, I believe rating is one of the important indicator for the market. And for us, also it's important. S&P and JCR is the rating agency that we're asking for the rating, and we will keep aiming for the improvement of the rating as well. That is all from me. Thank you very much.

[Interpreted] Thank you. So last but not least, we would like to invite Mr. Navneet Govil, CFO of Softbank Investment Advisers, to give you an update on SoftBank Vision Fund. As the CFO of SoftBank Vision Fund, he will explain to you the accounting structure of Vision Fund. Now Navneet, please unmute yourself and please start your presentation. Thank you.

Hello, everyone. I'm glad to be here with you today. Before we begin, I'd like to draw your attention to SBIA legal disclaimers on Slide 2 related to the information you'll receive in this presentation. Please refer to the hard copy for more details. Today, as you will see on Slide 4, I will summarize full year performance and discuss the impact of the unprecedented pandemic we are all experiencing. I'll then discussion the fund's financial impact on SoftBank. Finally, my in-focus section demonstrates how the Vision Fund was designed for long-term resilience and explain how we are supporting our portfolio company in today's volatile environment. Moving on to Slide 6. During today's presentation, I'll answer 4 important questions, which I'm sure are on your mind. They are: what is the impact of the pandemic on our portfolio? Have we considered the impact of the public market on our private assets? What is the liquidity position of our investments? How are we helping our portfolio company? I'd like to first provide an update on our activities over the last 12 months. On Slide 7, you will see that during the last fiscal year, we made investments in 20 new portfolio companies and 25 follow-ons, deploying $17.1 billion. During this time, we distributed an additional $5 billion in capital to LP. As previously announced, we fully exited one of our consumer companies and partially exited Guardant Health, Ping An, Roivant and Slack. Also, 5 more of our portfolio companies went public last year, bringing the total value of our marketable securities to $11.6 billion as of May 15, 2020. Over the last year, the overall fair value of the portfolio has declined by $15.6 billion. This write-down is a result of mark-to-market valuation adjustments, which are driven by current market volatility and are in line with our triangulating approach to valuations. Moving on to Slide 8. We've responded quickly to the COVID-19 crisis and are prepared for a challenging year. This pandemic is having an unprecedented impact on individuals, communities, businesses and the economy. Keeping people safe is critical, and our portfolio companies are prioritizing the right thing at this moment: the health of their employees and customers. Billions of people have been asked to shelter in place, preventing them from traveling, working and spending time in their community. Many of our portfolio companies do best where cities are vibrant and society is moving forward. Sadly, this is still not the current situation in much of the world. Looking across our portfolio, our various sectors are being affected differently. Some of our companies have seen revenues decline significantly, such as those in real estate. Many, however, are outperforming. Vir Biotechnology and Roivant Sciences are working on disease prevention and treatment. DoorDash and Uber are helping restaurants survive with meal deliveries and are providing work opportunities for many people. Uber Eats, for example, saw bookings increase more than 50% compared to the same period last year. Moreover, growth is accelerated. And in April, bookings were up nearly 90%. Uber Eats restaurant platform is now working with 4,000 partners in 45 countries. Overall, this opportunity is greater than we expected. In the enterprise sector, flat growth has accelerated too. From February 1 to March 25 of this year, which includes the period of early shelter-in-place orders, Slack added 9,000 new paid customers, an 80% increase over the full quarterly total for the preceding 2 quarters. Other examples of our portfolio companies doing well include ByteDance in entertainment, which continues to see strong user growth around the world; Coupang in e-commerce, where business has accelerated in the current environment; Grofers in online grocery delivery, which continues to double the size of its business each year; Ping An Good Doctor in telemedicine, which experienced a ninefold increase in usage from December 2019 to January 2020; REEF has any portfolio companies that are providing goods and services to customers at home. These are also the businesses that are outperforming in this environment. In difficult times, our entrepreneurs are stepping up. COVID-19 has had substantial economic impact, but many of our portfolio companies have used this time to both support their community and maintain or accelerate growth. We expect many of our companies to come out of this crisis stronger than before. On Slide 9, we present the same sectors by cost and share value. 4 of our 7 sectors remained in positive territory. Our enterprise, frontier tech and health tech portfolios are performing particularly well in the current environment. Looking on Slide 10 at our portfolio by geography, 18% of our investments are held in EMEA, while 46% are held in Asia. While societies and economies are being adversely affected in many countries around the world, our portfolio companies were impacted in phases. As we've seen, many Asian economies suffered first but are now rebounding. We're cautiously optimistic that economies in Europe and U.S. will also respond positively as national and local governments begin to reopen their community. Of the 36% of our investments held in the Americas, shown on Slide 11, many are headquartered in California. Elected officials along the West Coast of the United States responded early and decisively and ordered citizens to shelter in place. These decisions saved many lives. We are hopeful that the speed of the regional response will enable faster economic recoveries. You will see on Slide 12 total capital commitments for Vision Fund 1 are $98.6 billion. In the nearly 3 years following our initial close of the Vision Fund, we've invested $81.3 billion. We've also distributed $10.7 billion on a cumulative basis back to our limited partners from both realized exits and portfolio financing. Of the firm's total commitments of $98.6 billion, SoftBank's portion is $28.1 billion. SoftBank has contributed $24.4 billion to date, which has declined to $22.5 billion in total value, including distributions of $1.6 billion. Moving on to Slide 13. Since the inception of the Vision Fund less than 3 years ago, we've made 91 investments and have realized value from 7 investments. This includes 3 full exits and 4 partial exits. Here, you can see on Slide 14 the realized gains from these exits. Realized values of our exited investments and fair market value of our public holdings are both above our cost at the end of March. Indeed, our public company represents an additional $10.1 billion of available liquidity on our balance sheet. However, fair value is below cost in our private portfolio. Our private portfolio valuations reflect the new realities that other investors are also experiencing. I'd like to remind this group, however, that we are long-term patient investors. Since the inception of the Vision Fund, 8 portfolio companies have listed publicly. These listings, shown on Slide 15, reflect our progress to date as a relatively new fund. Each demonstrates the appeal of our companies to the public market and provide valuation transparency. Now that we're already halfway through the current quarter, our public portfolio continues to show signs of recovery. Moving on to Slide 16. Last July, we announced our portfolio financing facility, which is designed to enhance performance and accelerate distribution. Given current market conditions, we felt it was prudent to delever this facility and we repaid $1.2 billion such that the outstanding amount is now $2.3 billion. Separately, as you can see on Slide 17, we increased the size of our fund level facility, which serves as our line of credit from $3.1 billion to $3.4 billion. The world's leading bank continued to back this facility, demonstrating the capital market's ongoing support for our investment strategy. This facility allows us to move quickly from signing an agreement to investing in the company. In addition, it ensures we can meet funding time lines and help founders focus attention on growing their businesses. Let's now discuss the impact of the fund's financial performance on SoftBank. As you can see on Slide 19, for the full year ended March 31, 2020, SoftBank share of the fund's net loss was $7.08 billion. Combined with management fees and the change in accrued performance fees for the period, the sum of net loss in fees to SoftBank is negative $9.43 billion. This compares to $5.9 billion in net profit and fees to SoftBank for the same period last year. This net loss is mostly driven by the significant unrealized loss we took in the September quarter due to the WeWork write-down as well as the March quarter write-down in response to COVID-19. Moving on to Slide 20. Cumulatively, from Vision Fund inception through March 31, SoftBank's share of the fund's net loss was $1.91 billion as an investor. Factoring in an additional $360 million in management fee income, the total amount is negative $1.55 billion in net loss and fees from the fund. On Slide 21, from a balance sheet perspective, as of March 31, SoftBank contributed $24.4 billion in capital to the fund. This amount has declined in total value to $22.5 billion, which includes $1.6 billion in distribution. I'd now like to turn your attention to this quarter's In Focus section, starting on Slide 23. While no one anticipated a crisis of this magnitude, we've built our portfolio to weather the storm. In today's In Focus section, I'll tell you how, focusing on 6 critical points: one, our role as a long-term investor; two, our focus on the path to profitability; three, portfolio liquidity and leverage; four, our dry powder; five, our operational support; and six, our ecosystem. We are long-term patient investors. As you can see on Slide 24, the Vision Fund is a 12-year investment vehicle and has 2 offshore 1-year extension, meaning that the fund could operate for up to 14 years. In setting up a long-term fund, it was important to be realistic about the potential risk based in that window of time. Indeed, we anticipated multiple downturns. We believe tech and tech-enabled businesses, those that rely on artificial intelligence and data, will be significant long-term economic drivers in the years ahead. With more than 10 years remaining in fund we can look past short-term situations and focus on generating long-term sustainable returns. Moving on to Slide 25. Many of our companies are well positioned because we've been helping them build leaner and more profitable businesses for some time. For the last year, we've been communicating the importance of positive unit economics as the foundation of lasting businesses. In September, you may recall that we held our inaugural [ Stoneville ] CEO summit. It was there that Son-san urged our founders to accelerate their path to profitability. Shortly after, we helped our portfolio companies bolster their governance practices based on lessons learned from WeWork. Because of our counsel, founders had several months to build stronger, more economically sustainable businesses before COVID-19 hit. In a downturn, companies with heavily indebted balance sheets struggle. Refinancing costs rise as cash flow falls. In contrast, as you can see on Slide 26, we our portfolio companies are well capitalized. As a group, equity exceeds debt by more than 30x and cash is nearly 5x total debt. This is enough capital to last the next 18 months to 2 years. These key metrics show our companies are relatively well positioned. The well-capitalized balance sheet with limited to no debt enabled much needed flexibility during times like these. Our portfolio companies are actively limiting cash burn and extending their runway with the goal of reaching profitability and some are already there. Moving on to Slide 27. As we have discussed in prior meetings, the investment period ended for Vision Fund 1 last September after having invested about 80% of our committed capital. Our remaining $13.4 billion of undrawn capital will be used for follow-on investments and paying management fees, fund expenses and the preferred equity coupon. This, in combination with our liquid public assets, means our available capital is also 5x our total debt. This dry powder is significant and give our founders comfort that we can provide additional financial support where the incremental investments meet our risk-adjusted return threshold. It also shows our limited partners that we can continue to provide additional distribution to them. In fact, during the March quarter, we continued to invest in our existing companies to help them navigate through this crisis, and we continue to seek attractive opportunities to partner with remarkable entrepreneurs. Moving on to Slide 28. We offer our portfolio companies more than capital. In these volatile times, we are providing substantial operational support and guidance. We have a dedicated operating group that is deeply engaged with our companies on multiple levels to provide the support our company's needs. To reduce liquidity risk, we are working closely with company leaders by providing strategy and guidance on how to manage costs and reduce cash burn. In addition, we are helping our companies mitigate future risk, scenario plans and explore potential financing solutions. Downturns are challenging, especially given their unpredictable nature of a pandemic, but hard times build resilient companies and set them up for future success. We are here to support our portfolio as they move forward through volatility. In challenging times, we believe businesses have an obligation to pitch in and support their communities. We want to share examples on Slide 29 of how our portfolio companies are advancing relief efforts. These include contributing resources, harnessing expertise and innovating to help their local and global communities respond to the virus' impact. In addition to the direct impact of our health portfolio companies I mentioned earlier. Here are other examples. Fanatics, a sports apparel maker in normal times, has pivoted operations to mass produce personal protective equipment. Others like Flexport and OYO are providing critical medical supplies, donated meals, transportation and housing to frontline health care workers. Companies like ByteDance and Slack are addressing new [ needs ] by offering free video and collaboration tools to help students study at home and small businesses to continue operations remotely. I'm providing a link so you can visit our website and see the full list. We are proud of the goodwill and ingenuity of the people working at our portfolio companies. More than ever, we are confident in the positive impact of technology on society. Thank you for listening. Today, I discussed our performance and our contribution to SoftBank. I also shared ways in which the Vision Fund is resilient. I hope you feel as I do that we are well positioned to weather the storm and come out stronger on the other side. I look forward to sharing our progress in future quarters. Please stay healthy. Thank you.

[Interpreted] [Operator Instructions] We'd like to remind you that we will not be able to answer any questions regarding SoftBank regional fund strategy, performance, IPO status of portfolio companies or exit strategy. Now we'd like to take your questions. [Operator Instructions]

[Interpreted] Kikuchi from SMBC and Nikko Securities. First, with regards to Alibaba shares, the collar for contracts using Alibaba shares, what the impact be on PL, and what timing should we expect impacts on P&L?

[Interpreted] Thank you. I'm sure you're talking about $11.5 billion. We have not sold them yet in the period. We value at fair value as derivative transaction. So any changes will be reflected on P&L. It's like what we have done with the collar transaction before. After the contract is closed and when it comes to settlement, then we will recognize -- proceed a loss from the sales. But up until then, we don't do anything, and we might end up just repaying debt associated with some option transactions.

[Interpreted] I wonder for 3 contract -- I wonder if there are any difference in terms of the period or the term for the 3 transactions.

[Interpreted] Thank you. Sorry, we can't disclose the details of each of 3 transactions. Thank you.

[Interpreted] The price at the timing of sales, maybe you can't tell. I mean the price at the time of sales, has it been fixed? I'm sure a price is already determined at which sales will be carried out.

[Interpreted] Well, it's not necessarily the case. For example, for collar transaction, like we have done in the past.

[Interpreted] If the current share price is $100 and later, stock price goes up or down, option to fix the bottom and to have certain percentage of upside, that's a collar transaction. So the question is, finally, when -- how much would be the stock price, then whatever reflected on the P&L will be made accordingly? Second question regards to COVID-19 impact. In fact, some several questions around that. You decreased the fair value of WeWork, and maybe yield will be calculated technically and also, DCF is changed. I wonder if it's associated with the impact from COVID-19 or if there's any changes in operations or impact from any changes in operations, not only WeWork, but also other investees. When you calculate the value of your investees, what kind of assumption you used or criteria when you calculated fair value of your investees? And for the foreseeable future, we have some challenging period. And you mentioned, I think that you will continue supporting them from operations perspective to a certain extent. But nonetheless, from your finance policy perspective, you will not rescue them at all, no matter -- whatever circumstance will be.

[Interpreted] Thank you. My name is Kimiwada. About WeWork, of course, impact on COVID-19 was huge, but we can't separate impact from COVID-19 and impact from other factors. Impact from COVID-19, well, of course, when you calculate DCF, sometimes, we expect that decrease in cash flow or sometimes we make an adjustment using discount rate. So there are several ways, and we pick method case by case. But for this term's earnings, as of March end, we believe that we factored in every possible factor we could think of as of end of March. And with regards to your question around the rescue for the investees, maybe I should have explained more clearly. I'm sure you're looking at Page 21. It says no rescue package. That's our principle. And investees may face some difficulties, but if it's invested by [ SFP ], SBG, SoftBank Group, we will not rescue them, if those investees are invested by SoftBank Vision Fund. That's our policy principle.

[Interpreted] All right. If I may, follow-up question. Talking about impact from COVID-19 again, your assumption is when things will get back to normal or post COVID-19. So again, any view on assumption with regards to when do you expect things will get back to normal or...

[Interpreted] Depend on investees, maybe 3 times -- sorry, 3 months or 6 months, it's case by case.

[Interpreted] My name is Masuno from Nomura Securities. My first question is JPY 4.5 trillion program. And I'd like to ask you for the priority, JPY 2.5 trillion buyback will be your own share and fund repay and service debt, and the remaining, Vision Fund 1 capital core. I believe there are about JPY 500 billion left. Is there going to be also use from here? And the remaining is going to be on cash on balance sheet? Is my understanding correct? And regarding Vision Fund 1, I believe that the coupon payments for the [ fee paid ] is going to be continued. I believe in the last, that is going to be JPY 40 billion, but 7%. And how much distribution per year is necessary? Probably maximum JPY 2 billion. But for that, I believe that you can only call your capital to pay the distribution. But how much room do you have to pay the coupons for the preferred based on your capital call?

[Interpreted] Yes. Goto speaking. Thank you very much. First of all, JPY 4.5 trillion program, the way -- how we use the JPY 4.5 trillion has been clearly communicated on our press release. So we are not thinking to use the proceeds other than what we have wrote on the press release. So we will be raising more than JPY 4.5 trillion and the 2 -- as for JPY 2.5 trillion will be used for the JPY 2 trillion buyback and also remaining JPY 2.5 trillion of which, after less some necessary cost that's going to be used for improvement of our balance sheet, which includes service debt, buyback of bonds, remaining for the cash reserve. So we will be trying to achieve the best combination of those, and this will be executing and that's going to be -- we're taking over 1 year to March next year. So within a year, some may go first. Some may go later. That's something that we would like to keep as flexibility and let us address that. And also for the Vision Fund, they have already completed the new investment stage so that the remaining will be used for the follow-on investments, payments for coupon for preferred in the meantime and also some cost for funds, and not everything is going to be paid from here. So we cannot -- it's not that we can discuss how much room they are dividing by the coupon payment and so on. But for the future numbers, we don't disclose so that I believe you can calculate every time when you see the numbers disclosed.

[Interpreted] Masuno once again. Let me confirm. So JPY 2.5 trillion buyback. So after JPY 4.5 trillion monetization, so this is not going to use for the capital call for Vision Fund 1, not for Vision Fund 1. In the Vision Fund 1 call capital will be used from the other source.

[Interpreted] Yes. Goto speaking, we will be having another option for the raising. So that's going to be the money to be used for the call of capital.

[Interpreted] Masuno once again. As of today, payments of the coupon for preferred is being using the call capital. Are you going to continuously do that? And will you be able to cover your coupons based on capital call? I would like to hear sometime when you have chance that we would like to hear the status of the coupon payments. Now would you be able to share the status of the coupon payments? Are you going to be paying only by the capital call? Do you have any other sources for payment coupons?

Sure. Thank you for the questions. So a couple of things. You're correct. The total of $98.6 billion in capital commitments to the Vision Fund, $40 billion is preferred equity capital, which earns 7% annual coupon. However, the 7% coupon is only on the capital that has been drawn, not on the total commitment. Your amount of approximately $2 billion in preferred equity coupon payment is correct. We will be paying those from $13.6 billion of uncalled capital that we have left in Vision Fund 1. So even if you take the next couple of years of preferred equity coupon payment, there is substantial uncalled capital left both to pay the preferred equity coupons as well as to support our portfolio companies with follow-on investments. So we will be using that to -- the uncalled capital for the return equity coupons. We're not raising any other cash for that. Thank you.

My name is Atul Goyal from Jefferies. 2 questions. Firstly, Goto-san, if we look at the loan-to-value ratio and the asset value that you show on early pages, it compares JPY 28.5 trillion to 14.2%. This is on Page #3. Is that a fair thing to show? Because JPY 28.5 trillion is -- includes all the shareholdings you have and 14.2% is after adjusting for the margin loans. So if you look at another slide on your presentation, which is, I think, on Page #29, there, you compare the low adjusted net debt of JPY 3.58 trillion to the equity value holdings of JPY 25 trillion. The reason I'm asking this is because by this calculation, what you can do is take more margin loan against your Alibaba or T-Mobile shares and reduce to take more loan and reduce the net debt because your cash will increase. So you can reduce the net debt to 0 and show the loan-to-value ratio of 0% or 2% or 5%. So this starts to lose credibility. This amount and the number that you show starts to lose credibility if this kind of margin loan is not even included in the total debt. How do you respond to that? And then I have another question for Navneet.

[Interpreted] This is Goto. Thank you very much. As you explained, with regards to allocation of our loan-to-value, for loan, from a corporate perspective, we look at the recourse loan when you calculate the balance of the loan. And when it comes to asset-backed finance, when redemption comes, the appropriate assets will be disposed. So it will be netted out. So I think that's our way of thinking, which is reasonable. Based on the principle, we make this calculation as we show on Page 29.

So you can actually see more margin loan and reduce your net debt to 0, it's possible, right? You can -- just like you've taken the asset-backed finance, if you take at JPY 3.5 trillion more asset-backed finance, then your net debt can be shown as 0. Is that correct?

[Interpreted] Yes, you're right. From a; calculation perspective, yes. Yes. So because we provide assets as non-recourse, which means source for repayment is locked, and at the time of redemption, we make sure that repayment will be done. So I think that our way of thinking is pretty reasonable.

All right. That's one way to think. Now a question for you about the fees. So in one of the slides, you have shown that net of fees, the losses are where they are. And I think it's Page #20 of your slide. The question is when it comes to performance fees, we have to start factoring in the benefits to SoftBank Group. We also need to understand when it starts to earn performance fees. So I know some of these things are confidential, some of them, you can't share. But is there some level of publicly -- something that you can share publicly, which is about the performance level that you need to meet before you start getting this performance peak again, so we know that when those fees start accruing to you? Any color on that one, please?

Yes. Thank you, Atul, for the question. So I believe there are 2 parts to your question. If you look at Slide 19, you'll see that in the current fiscal year, we have reversed the performance fee given the performance of the fund. And in terms of the level of which we earn the performance fees, this is something that Son-san had shared in the past that threshold is 8%. We have an 8% hurdle rate at the fund.

[Interpreted] My name is Tsuruo from Citi Securities. I have first question about T-Mobile. Kimiwada-san's material, Page 4. First quarter, so you are recording the gain relating to loss of control. So is it going to be end of June that you're recording this? And also, you mentioned about the earnout share. Can you elaborate a little bit more regarding earnout share? And also, if you have, give us some rough ideas on the sides of this. That's my first question, please.

[Interpreted] Yes, Kimiwada speaking. So of when -- as when of the share price, that you asked, I believe, and this is the -- at the time of completion of merger, which is April 1, opening balance, our share price is going to be used for the calculation. And also regarding our note, as we already explained, not in details, but as long as we satisfy the certain level of the share price, we will be able to receive the share. So that's the kind of the one option that we have. So day 1, as of April 1, fair value base, we've been evaluating and recall that, and that amount will be part of the gain relating to loss of control, and after then, every quarter basis, we will evaluate, and fluctuation of valuation will be recorded on our P&L. And for the amount or size, we are still under calculation of those. So maybe at the time of first quarter, we will be able to disclose. If early here, we may be able to disclose the annual report -- annual securities report. But for sure, we will be able to disclose that on the first quarter.

[Interpreted] Sorry that I was mute. So I have another question. So about the share price of the earnout, you will be able to disclose at the -- and reflect that at the end of the quarter.

[Interpreted] Kimiwada speaking. It's not going to be that direct, I believe. So once we meet, once we have higher chance of meeting the threshold and also share price is one of the elements, but we will be calculating the derivative. So that's the things that we will do.

Then my second question is to Goto-san. So Alibaba transaction, the amount that you have announced has been already done with the individual contract. So the detail of the transaction will not be shared with press release because this is the individual agreement, I believe. And based on that assumption, so you have a JPY 3 trillion net of gross cash and also the way of using those proceeds that you relatively like to keep the cash high, cash level high. And at the same time, you are running your buyback program. So I understand that. And usually, you've been keeping about JPY 2 trillion level of the gross cash. But where is your kind of target for the gross cash level? And based on that, I believe we'll be able to have a better understanding on the pace for the buybacks and the monetization of assets and so on.

Thank you for your question. This is Goto speaking. And your first question, regarding disclosure on the Alibaba transactions, we -- it's not -- it is not disclosed because this is the individual agreement, and this is a collar transaction so that it's not like the convertible bonds are something like that. And also for your second question regarding cash position target, we -- as our financial policy or discipline that we keep our cash balance for 2 years equivalent of redemption of bonds regardless of JPY 4.5 trillion program that we would like to keep our financial disciplines. So it's a bit difficult to specifically say the level of the cash. But after we exercise all those JPY 4.5 trillion program, about JPY 2.5 billion to JPY 2 trillion less, some cost is going to be used for the loan repayment or the service debt and also added on to the cash balance. And this cash position part will be on top of the cash balance we will be keeping for 2-year equivalent debt redemption. It's a bit difficult to identify a numerical way, but I think you can have a rough idea on that.

[Interpreted] [Operator Instructions] Tanaka from Mitsubishi UFJ Morgan Stanley.

[Interpreted] Can you hear me?

[Interpreted] Yes.

[Interpreted] I have 2 questions, if I may. First, to Goto-san. Page 7 of your part, finance part, LTV, et cetera. Value of shares held. Does that include the shares -- Alibaba shares to be sold, whereas cash position includes the amount that you're going to get after selling Alibaba shares?

Thank you for your question. This is Goto speaking. Yes, the transaction that increased our cash position and the assets associated with that are deducted when we calculated LTV. However, our equity value of holding includes of course, details you may not be able to share. But if share price stay the same, for example, at certain point in the future, you will lose, let's say, 10% of Alibaba shares. Yes, when a settlement is done, yes. If I may repeat, for cash position up and equity value holding deducted because from an accounting prospective, it's liabilities. But when you can calculate loan to value, since this is a pure recourse, so we will be -- deducted it for calculation.

[Interpreted] And for Kimiwada-san, maybe other segments or Latin Am fund. JPY 5 billion was already invested, and you already incurred some losses. So Kimiwada-san, if you have, give us any view.

[Interpreted] Kimiwada speaking. Our investment amount was so far JPY 1.5 billion roughly. With regards to loss, yes, we recognize loss. Fair value of investees and impact from foreign exchanges, all in all, about JPY 6 billion or so loss was incurred recognized from the investment by Latin America.

[Interpreted] So considering the market, maybe you will take some cautious approaches in investing for the future?

[Interpreted] Yes.

[Interpreted] My name is Takahashi from UBS Securities. I have 2 questions, please. First, regarding monetization or asset disposal. I believe you cannot mention about each company's status, but one confirmation I would like to make regarding T-Mobile, you have lockup terms. And what is the status on lockup? There has been disclosure on lockup agreements. And is that still alive? Or has that been changed so that within a year or so, you'll be able to sell the shares? Can you make any comment on that?

[Interpreted] Thank you. Goto speaking. At the completion of merger, April 1, lockup time, still alive, and that stays the same.

[Interpreted] Question again. So in the past few days, there are some media coverage on that. But in principle, you know there is no change in lockup.

[Interpreted] Goto speaking. No change as of today.

[Interpreted] My second question about Vision Fund. At the earnings call, Masa said out of 88 investees, 15 will go bankrupt. A high chance of going bankrupt that he mentioned that. And this time, fourth quarter announcement and evaluation loss has been made fully so that we have less chance of seeing additional loss going forward for the evaluation.

[Interpreted] So Goto -- this is Goto. Let me first answer that, and I would like to pass on to Navneet after then. And at the earnings this time, as all the valuation necessary has been reflected to our earnings. And based on that, Masa mentioned 15. So he made a specific number. That makes a big argument right now. But Masa after then mentioned a complementary comment that this is just one measure out of the -- if we set 100 as the fund, 15 top is excess for -- 15 bottom is failure or bankrupt and in the middle is so-so. That's the kind of a rough idea that Masa is having. Navneet, do you have any additional comment on that?

Thank you, Goto-san. I agree with you. I wouldn't focus so much on the 15 number. What Son-san was saying is that there is a distribution. Some companies will struggle. And during this pandemic, we'll get to know which companies are not doing so well. And there's a good portion of the companies that will do okay, and there are a few companies that are going to do exceedingly well. Some of the companies we are already seeing, which are doing exceedingly well, ByteDance has seen a lot of the daily active users. Coupang, as Son-san said, the e-commerce business is doing really well and Coupang is doing well. And also, as Son-san said, a lot of the ride share companies are pivoting from ride share to food delivery. DoorDash has been doing well. And during the pandemic, companies like Zuoyebang, which is online education, those are doing very well. And of course, health technology companies are doing well.

[Interpreted] Koshi from Nomura Securities. Can you hear me well?

[Interpreted] Yes, we can, clearly.

[Interpreted] I have 2 questions. First, about JPY 4.5 trillion monetization program. Goto-san mentioned earlier that -- you mentioned purchasing bonds program. Of course, JPY 1.3 trillion of bonds, you need to be repaid in 2021. So those bonds are the ones that you're looking at, when you talk about purchase of bond program? And second, with regards to rating, Moody's rating in particular, you mentioned -- there was announcement on 26th of March with you of Moody's rating. But it's been 2 months since then, but we can see the rating by Moody's on website. So I wonder whether you are still in discussion with Moody's or eventually waiting from -- by Moody's will be gone. Then you have discussion with other rating agencies that you may use.

[Interpreted] Thank you. Goto speaking. About bond buyback program, to improve our financial position, of course, we are looking at price of bonds in the market and figure out when and how we repurchase those bonds. I think 2 views here. When it comes to repurchase, if our bond price is under par, if there is a financial benefit, of course, we should repurchase them. But for bond investors, we should look at -- from bond investors' perspective, whether it's beneficial to bond investors or not. With regards to rating -- excuse me, we need to also make sure that our action will be beneficial to securities firms as well. So we will take at a lot of angles when we decide approach of our bond repurchase. With regards to rating, about Moody's in particular, as we made a press release, we already terminated our deal with Moody's. So we have not continued deal with Moody's. And it's unacceptable that they keep posting their rating on us, which is really outrageous, unacceptable. So let me reiterate. Moody's comment about us are -- whatever they say about our company is unacceptable for us. So please don't take a look at that. I mean don't refer to it, disregard it. So again, I confirm that we don't have any relation with Moody's anymore. And we got advice actually, comments from other rating agencies. And most of the investors, most of analysts support our actions. That's our understanding. So again, thank you for your understanding.

[Interpreted] My name is Ando from Daiwa Securities. I have 2 questions, please. First, you may not be feeling this way, but post corona and assuming that we are on the path to the recovery from coronavirus, do you change your strategy? In a year or 2-year span, SBG, would your strategy change post corona or the Vision Fund strategy, you may be going some exits or returning status how you look at your strategy to be changed or not after the coronavirus situation.

[Interpreted] Thank you for your question. That's difficult to tell, and we don't feel that way yet that it's so difficult to answer that question. But recovery from coronavirus may not be exactly the same timing with the investment environment recovery. If it's the same, then Vision Fund 2, which we are kind of wait and see the situation -- but may proceed the further study in explorer on the Vision Fund 2. So without recovery of the environment, it's really difficult to do the marketing for LPs for the next fund. And in the meantime, we will be using our excess cash to continuously have investment activities. And as for Vision Fund strategy, I would like to ask Navneet to explain, will that be changed after corona. But when it comes to the return, if you ask about the return, it's not going to be the return to equity holders. Yes, if it's the return to the equity holders, we have not changed on our policy. If the situation be recovered and improved, JPY 4.5 trillion program is going to be used for the return to bondholders and equity holders. So that's going to be the purpose of use for proceeds. But if the environment changes, then we may add new investment opportunity. So those 3 is going to be the 3 main pillar for the combination, then we seek for the best mix. So the purpose of proceeds for the KK offering was also the same, the 3 pillars. So that's going to be the same.

[Interpreted] So Vision Fund strategy change, Navneet, can you comment? Will you be changing your strategy after the coronavirus? Why -- when we have a recovery from the coronavirus?

The Vision Fund strategy will continue on focusing on leveraging our companies that are leveraging artificial intelligence and big data. Of course, we are going to be looking at investments very judiciously. And in this environment, the size of the check that we will be making will be relatively small. Also, we will continue to ensure that our portfolio is very well diversified.

[Interpreted] My next question is about PayPay. So this is the SoftBank Corp. It sounds like there may be some changes in ownership in PayPay. And do you have any forecast in the meantime on PayPay? And also, how do you look at the ownership for the future of PayPay going forward?

[Interpreted] About PayPay business, it's not us that is the appropriate person to answer so that I believe it should be coming out from SoftBank Corp. management. As a group overall, PayPay's value is something very promising, and we believe it's -- we are expecting a good upside out from there. So as a new business to become the key and I believe -- we believe that the PayPay is going to grow as a leading company for payment services and also expecting good synergies out of this new payment service with our existing portfolios. At this moment, we are not in a position of making any comments about the change of ownership. If there is any things that discussed and when the time comes for the disclosure, I believe the SoftBank Corp. management will be disclosing. Thank you.

[Interpreted] Moriyuki from SBI Securities. A question about LTV, JPY 4.5 trillion monetization program. As you proceed, LTV goes down. If security price goes well, maybe less than half of the target LTV level. Under the circumstance, I wonder if it's acceptable or if you assume that stock price goes well, maybe you may want to stop monetization or return to shareholders. So what's your view around that?

[Interpreted] Thank you. This is Goto speaking. About loan-to-value, of course, this is our principle, and we keep our targeted LTV, but JPY 4.5 trillion monetization program, this is a message to our stakeholders. So it's a separate issue. Having said that, consequently, LTV should be better, should be improved. So -- it's not something that if it's too good, it's bad. LTV is not like that. Of course, shareholder value may go up with a certain leverage. But Moriyuki, as I mentioned earlier, that LTV may drop by half against the target level. But we will also do remember repurchase shares. Of course, LTV can be better, but it's not that extremely. I would say that maybe 2% to 1 point improvement. Well, I thought that it should not -- half of 25%.

[Interpreted] So JPY 4.5 trillion program is not going to be used for new investment. But when your financial position gets better, you have some leeway. And maybe you may consider something.

[Interpreted] Well, Goto speaking. The source for new investment is outside JPY 4.5 trillion program. We are not saying that we are not going to finance beyond JPY 4.5 trillion at all. We will take advantage of asset-backed finance. And if there is a huge demand, we may issue bonds. So we will have several options. If improvement is well enough, then you may have some excess or leeway for new investment. It could be happening. Once financial position gets better, then there might be more demands from investors for bonds.

Second question to Kimiwada-san maybe. Well, sales of Alibaba shares have not been made yet. Going forward, when it comes to selling, almost 0 tax payment?

[Interpreted] Kimiwada speaking. We can't expect how much tax payment will happen. But loss carryforward, the term is rather long for us to use our loss carried forward. We try to save as much as possible. Thank you very much.

[Interpreted] Thank you very much, ladies and gentlemen. That concludes the SoftBank Group Corporation Investors Briefing. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]