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

[Interpreted] Good morning, ladies and gentlemen. Thank you very much for joining for today's SoftBank Group Corp. investors briefing on the earnings results for 3 months period ended June 30, 2020. First, I would like to introduce a representative from SoftBank, Mr. Goto, Senior Vice President and CFO of SoftBank Group Corp; Ms. Kimiwada, Senior Vice President and Head of Accounting Unit; and Mr. Navneet Govil, Managing Partner and CFO, Softbank Investment advisers from U.S. This session starts with overview of our consolidated results by Ms. Kimiwada and financial update by Mr. Goto, followed by SoftBank Vision Fund update by Mr. Navneet Govil. You can choose either the English or Japanese for this meeting, and we can take both English and Japanese questions within Zoom after the presentation. And this meeting will be available on our corporate website later. Now I would like to invite Ms. Kimiwada to talk about the consolidated. Now Ms. Kimiwada, please unmute, and please give us your presentation.

[Interpreted] Thank you very much. This is Kimiwada speaking. Good morning to all of you. First of all, I would like to -- first of all, talk about the consolidated results. Please go to Page 2. This page shows what was presented yesterday and the outline of the consolidated results. First quarter 2020 results are shown. So for net sales, income before tax and the net income are indicated. And the net income exceeded JPY 1.2 trillion. So as compared to the same period last year, this shows the increase of JPY 134 billion. And as for these numbers, I would like to explain more in detail by showing the following pages. Please go to Page 3. First of all, we introduced the changes in presentation of P&L. While we used to show the operating income, but we stopped showing operating income from now on. So the -- we have net sales and the gross profit. And then, well, the income before income tax. But before that, we have another -- the line, which is a gain and loss on investment. And this is the new format of our P&L. And the reason why we decided to introduce this format is that, well, the Sprint/T-Mobile merger was completed. And Sprint used to be the subsidiary. However, it was removed from the consolidated account. So the importance of investment activities in -- on P&L has become -- has increased. As for the gain and loss on investments, the Vision Fund investment performance was only included. And investment by the holding company came below the operating income, so these 2 separate. And it is difficult to understand the total picture regarding the gain and loss on investment. So we introduced the new section in this P&L in the form of a gain and loss on investments. So as you see on the right-hand side, what is meant by a gain and loss on investments is shown in the light blue area. So the investment business of holding companies and investments at the SoftBank Vision Fund as well as other investments are included in this section. So as an investment company, or the outperformance of SoftBank Group will become clearer with this indication. So what is included in this? As you see on the left-hand side, at the bottom, number one, we realized the gain/loss on sales of investment securities, financial assets at FVTPL and investments accounted for using the equity method; number 2 unrealized gain and loss on valuation of financial assets at FVTPL; number 3 is dividend income from investments; and number 4 is derivative gain or loss related to financial assets at FVTPL and other investments. So not just the financing activities or the derivatives -- regarding the financial activities is not included in this section. So this is the format of the P&L and income statement that we will start using for your communication. Now moving on to the next page. There was also a change in terms of the reportable segments. But the bottom half for fiscal 2020, these are the new segments. And for Lyft, we have a box showing investment business of a holding company segment. This is a major change for the -- in terms of this segment information. We have the segment and the income and it was revised, the income before income tax from operating income to include income or loss on equity method investments. As for other segments, operating income numbers where we no longer show them, so segment income means the income before income tax. So we can confirm the income before income tax for each segment. So segment by segment, you will have a better understanding about the performance of each segment. Please go to Page 5. As for the investment business of our holding companies, our main businesses included and also core companies included, are shown here. So the business, main business are the investment activities by SBG and its subsidiaries. And as for the companies, what companies are included in this segment? SoftBank Group, SoftBank Group Capital Limited and SoftBank Group Japan. So these; are the main core companies included in this segment. As for the investment companies or the industries, there are altogether about 120 companies: Alibaba, T-Mobile, WeWork, e-Mobi, Lemonade, Social Finance, these are the -- some of the companies included in this section. Now please go to Page 6, which shows the segment income of investment business of holding companies. And there are some main highlights in the -- main numbers I'd like to explain. First of all, T-Mobile -- gain related to sales of T-Mobile shares at the top. Back in June, we conducted the partial sale of our stake in the T-Mobile. So number one, gain of JPY 280.3 billion on the partial sale of T-Mobile shares. And also, what used to be the equity method company became the regular industry or investment activity. So change of the consideration, and that amount is JPY 296 billion as a result of the reevaluation. Number 3 is related to the derivative loss of JPY 154.5 billion relating to the cooptions received by Deutsche Telekom AG for T-Mobile shares held by the company. And as a whole, JPY 421.9 billion was posted. As for the T-Mobile, while the profit and loss, more than JPY 700 billion at the time of the merger, and this is a discontinued business, and this will be included in the net income. So the segment, that number is not included in the segment income numbers. And that was the top of the table, well, the realized gain on sale of investments. As part of the JPY 4.5 trillion program, highly liquid, high-quality shares, stocks are being sold. So in the first quarter, JPY 65.4 billion is included in this section. And as for unrealized gain on valuation of investments, JPY 28.5 billion is posted here. Below that, derivative gain loss relating to investments, JPY 133.3 billion, T-Mobile and Sprint merged. And we received -- well, the right to receive the T-Mobile shares, if certain conditions are met. And every quarter we evaluated based upon the fair value and the value increased in the first quarter. And the JPY 129.6 billion, so this number is included in the total of JPY 133.3 billion. And -- well, the profit and loss related based upon the equity method. As for T-Mobile in the first, well, the equity method calculation is applied only in the first quarter. And Alibaba equity method, well resulted in a negative JPY 18.5 billion. This is the affiliated companies, and starting from January through March. So the number during that period was picked up here. An IFRS adjustment was conducted and Alibaba equity method. But the result was negative in terms of the investment and a derivative related the profit and loss. So this is not related to investment. This was explained yesterday. But by using Alibaba shares, well, there was the prepaid forward contract. So the Alibaba shares increased towards the end of June. So JPY 179.5 billion of derivative loss was posted as a result. So the JPY 458.9 billion is the total segment income, based upon this understanding. Please then move on to the next page. This is about the completion of the merger of Sprint and the T-Mobile U.S. Inc. On the 1st of April, 2020, the merger was completed. And for gain and loss, well the -- this is included in the gain relating to loss of control on the left-hand side of the bar. Well, this is the conservation that we can receive, JPY 2.9 trillion. So the T-Mobile shares that we received fair value as of the 1st of April, our share price and the exchange rate are used to predicate this number. And a certain -- the conditions are met in order to, well the -- receive the T-Mobile shares, about JPY 2.9 trillion is also posted -- more than JPY 2.7 trillion is also on the left-hand side. Now the Sprint -- the book value was at JPY 2.1 trillion and there's a difference between JPY 2.9 trillion, the total, and the JPY 2.1 trillion. So the difference is again relating to loss of control, JPY 736.4 billion. Please go to Page 8. Page 8 shows that T-Mobile shares, a partial share -- partial sale and evaluation at the end of the first quarter and the transactions in July and August. Well, the comprehensive picture regarding T-Mobile for the -- on the 26th of June, #1 and #2, T-Mobile shares were partially sold as a result. As for gains, the 180 -- 183 was received. And also, well, there was another, the sale of the T-Mobile shares. And #6, Deutsche Telekom, for the core auction, the other right was -- so the JPY 165.4 billion that was added. By providing the option derivative regarding -- was the JPY 454 billion that was posted in the first quarter. This is a little complicated. But as for the information -- well, this is comprehensive in terms of the data and information, transactions in June, transactions in July and also the assignment of the options. So the as -- well, you see, these numbers from 1 through 7, and so please confirm these numbers later on at your leisure. Please go to Page 9. This is about the prepaid forward contract using Alibaba shares. Between April through June, in the first quarter, JPY 13.7 billion over the -- $13.7 billion was procured. And derivative-related profit and loss, a gain and loss are also indicated. So what we did previously, well methodology, as well as how to handle this in the accounting, the purpose, is similar to our previous transactions. Please go to Page 10. This shows -- well, the partial sale of SoftBank KK shares and after-tax cash proceeds. In May 2020, SoftBank Group Japan, we call this SBGJ, through this entity, we have the shares of SBKK. And we partially sold the SBKK shares and the -- for JPY 310.2 billion. And the shareholding ratio after the sale became 62.1%. So we still continue our influence -- control of this company. So this is still our subsidiary. But this will not show on P&L. This is recognized in the asset section. And at the SBGJ, loss carryforward was not recognized. So that question, well the, is shown on the tax section of the P&L. So that is shown in the red part which is JPY 58.1 billion tax and JPY 37.9 billion, which is accrued cash tax for the future. And the number 6 is the after tax cash proceeds, JPY 272.3 billion. Please go to Page 11. Page 11 shows the consolidated P&L summary. Already, probably you have confirmed this with [ Tanshin ] with flash report. So first of all, the green line, total gain on investment. So the JPY 664 billion and the JPY 264 billion. And as for the investment, the pink portion, net income from continuing operations. So this is what I explained earlier that is included in this number. And the -- at the bottom, for the net income from discontinued operations as well, this is the event on the 1st of April, so JPY 736 billion is posted here. Please go to Page 12. This is a balance sheet. And we'll just give you the highlight. Number three, please look at section 3, number three, investment securities. Here, T-Mobile shares. Well, the -- after partial sale, we still continue holding some T-Mobile shares, so JPY 1.470 trillion equivalent. So based upon the fair value, we will continue evaluating this. And -- well, the -- this will be included in the investment business of a holding Company segment and the -- the excess -- the cash from the JPY 4.5 trillion program, JPY 365.2 billion of surplus funds is included here. Please go to Page 15. We jump to Page 15, this is about cash flow. So listed shares, well, the sale and the purchase and sale of the listed companies. Well, the operating cash flow, which is in the red color, surplus fund is used to acquire the listed companies for the JPY 1.06 trillion, and the sale at about JPY 2.4 trillion, JPY 564 billion is included. T-Mobile shares or the partial sale, JPY 1,830,400,000,000 is also included here. Please go to Page 16. Page 16 shows, this is also the same information as [ Tanshin ], but the SBF and the other SBIA managed funds that are indicated on this page. So, so much for my part of the presentation. Thank you very much for your kind attention.

[Interpreted] Yes. Next, Mr. Goto will give you the financial update. Mr. Goto, please unmute and start your static presentation. Thank you.

[Interpreted] Good morning, everyone. This is Goto speaking. Thank you very much for your time today. As Ms. Kimiwada explained to you, the way of explain or expressing the finance of SBG has been changed, and basically the net income is going to be important. And as an investment company, we believe that we have prepared as an investment company to disclose all the information. So I believe that we are in a fresh start from here. And our corporate philosophy has not been changed, even that our business has been changing here and there. This time, has been transforming to investment company. About 2 years ago, about 70% of our revenue and sales were coming from SoftBank Corp. and the IPO of this company has happened in 2 years ago. And since then, that we have announced that we are transforming ourselves to the investment company. And since then, we have spent about 2 years. And there, bank groups and major shareholders who have been supporting us, are we receiving a lot of feedback from them, that along with the growth of the investment company that the culture of SoftBank may decrease. However, we haven't changed our vision at all. We don't have any intention to do so at all: corporate philosophy; happiness for everyone; information revolution, this has not changed at all since the foundation of the business, when we start with the wholesale of software. After then that we start providing broadband, launching the mobile phone operations and so on. But since then, we haven't changed our corporate philosophy at all. And as an investment company, we would like to keep growing to aim for the leading company of the world. And I believe still this corporate philosophy stays with us. So that -- and we've been providing a lot of resources through the Vision Funds to many businesses and companies. And this also comes from our corporate philosophies, along with results that we would like to grow together. So when it comes to the finance rating agencies: Bank groups, investors, I believe that we have spent enough, 2 years, to have a communication regarding our changes. And also, even with this pandemic situation that we would like to maintain this philosophy, but we, of course, appreciate your feedbacks and opinions for us. Now that I would like to go into my presentation, to Page 2. So this is a summary of first quarter of 2020. We have 3 main highlights. So as an investment company, we would like to take an advantage of strong portfolio so that we can improve our financials and increase our equity value of holdings, and we were able to achieve both at the same time. As we announced, a JPY 4.5 trillion program, monetization has already executed up to JPY 4.3 trillion so far. And while we're executing such program, we also marked about JPY 27.4 trillion of equity value of holdings. For -- when it comes to each. For example, Alibaba, we have monetized about JPY 14.7 billion. In Alibaba, actually also announced the ANT Group's IPO, which makes us even more exciting about the future of the group. And the second of all is T-Mobile. As Kimiwada-san mentioned earlier, JPY 22.4 billion monetization has already achieved. Starting from this first quarter, we still maintain about 1/3 of the shares so that it's evaluated at fair value as investment securities from first quarter fiscal '20. SoftBank Corp., we used a block trade for about JPY 310 billion monetization, and this is doing pretty well as a business. And our group company, Japan is doing pretty well as well. Under such pandemic situation, I believe that they are continuously making steady growth and progress. And the fourth one is Vision Fund. At fiscal '19 end -- year-end announcement, we made -- we recorded quite a large negative number for valuation. But the first quarter this fiscal year, we were able to show the very good progress since then. Total, JPY 3.5 billion in total has realized. And also, including realized and unrealized, and also one portfolio company went public. So Vision Fund is also making a very steady progress here. Second highlight is the debt reduction. In the COVID situation and very sensitive environment, we have reduced debt by JPY 1.3 trillion. One came from early repayment of USD 9.4 billion margin loan using Alibaba share; redemption of JPY 100 billion maturity of domestic senior retail bonds; and the repurchase and retirement of JPY 167.6 billion domestic senior bonds, which I will touch on this later a little bit in detail. And the third highlight is improvement of LTV. We've been seeing the improvement quarter-by-quarter. And right now, our loan-to-value is 11%, which is very safe level that we are keeping. At the same time, loan-to-value is the kind of a big picture of our company. So at the same time, want you to also look at cash position. By seeing the -- taking the cash position, if there is any big change in market, to our environment, we will be able to still maintain our steady base. So by having a JPY 3.4 trillion of cash position, which is about 4 -- 2x of what we set as a financial policy, which means more than bond reduction for the next 4 years. So because of some lack of communication, we may still have some misunderstanding of our company, but we would like to take time to make sure that we fully receive your understanding of our company and financials, so that we'll be able to have a clear understanding of our business. So progress of JPY 4.5 trillion program that I would like to elaborate a little bit. Here on Page 4, this is a share price and also CDS chart. This explains the kind of valuation by the investors. And I believe this is the one-way of expressing the business. So share price has gone by 2.4x from the bottom. And the CDS, on your right-hand side -- CDS has been difficult positions because of the market concerns of SoftBank. But right now that I believe that we are in a safe -- safer level. Of course, our bond, it's still junk bond level. So 200 around is the CDS level for us. But based on the credit, I believe that this is something that moving along with that. Next page, Page 5, purpose of use for JPY 4.5 trillion has not been changed since we announced. There are 2 purpose of use. One is the return to shareholders and also of financial improvements for the bondholders, for example, and also for new investments out of that is coming as well. But at the same time, as Masa mentioned in yesterday's presentation, some will be used for, or listed securities or management of such cash is also explained from yesterday's presentation. So into the financial improvements that we will be having quite a large number of cash positions and cash equivalents, so that we would like to be flexible or not, based on the safety first, but at the same time, like to manage some amounts of the cash from here as well. On Page 6, about 95% of the monetization has completed. And the amount, breakdown-wise, about JPY 1 trillion return to shareholders, which is the buyback has already been completed and remaining JPY 1.5 trillion will be addressed, based on the market datas and we would like to -- well, manage the buyback. And also for debt reduction. This includes loan repayments and the buyback of bonds. We have reduced by JPY 1.2 trillion. And this is still ongoing. So we would like to do the harder buyback for the debt reduction and some to do new investment. So JPY 4.5 trillion, I believe, that this is the kind of 1 block that we will be monetizing and using for these purposes. Page 7. This is the detailed breakdown of the JPY 4.5 trillion program. So 3 large highlights: Alibaba, SoftBank Corp. and T-Mobile. So for us, for Alibaba, there are forward, prepaid forward contracts, color transactions, those are the main costs. And as for SoftBank Corp. block trade. And T-Mobile, there are several transactions. So this is a combination of several deals, several transactions. So public offering, JPY 18 billion, also margin loan, using shares, JPY 2.3 billion. But this JPY 2.3 billion, the margin loan raising itself was about JPY 4.4 billion. However, why we say JPY 2.3 billion here, which is only the half of it is because remaining JPY 2.1 billion equivalent, as supported by the guarantee of SBG, so this is with recourse transaction. So this is the debt financing from our point of view. Margin loan from nonrecourse point of view, JPY 2.3 billion, is the only amount that we should be showing here. In total, about JPY 40 billion, so JPY 4.3 trillion is our actual monetization progress so far. Page 8. Debt reduction, buyback of domestic bonds, JPY 167 billion has already achieved, as I mentioned earlier. Other than that, do we have margin loan of about JPY 1 trillion. So our environment-wise, many companies and businesses are having difficulty in debt financing, and they try to bring forward the schedule as soon as possible to do the debt financing. So I believe that it's obvious from the chart on your right-hand side, and we are in the opposite, as a matter of fact, we have very strong assets with us. Page 9, domestic fund. So face value repurchase is JPY 167 million, which is not that large number from our balance sheet's point of view. But actually, this buyback was the largest EBA bond repurchase in Japan, and also the first program repurchasing retail bonds in Japan. From the sense, it was very focused and paid attention. And we set the offer, but actually subscription rate was about 10%. So this time, JPY 1.69 trillion was the total issue amount of targeted bonds, and about 10% subscription rate, which is -- have been used as well. The many retail investors actually responded and more than 90% show the intention of longer holdings, not offer -- responding to the offer. So that was also a good news for us as well because they have trust in us. On your right-hand side chart, after the announcement of bond repurchase announced actually, that reaction was quite positive, spread has been also improved. Page 10, this is the return to shareholders. So as mentioned, total amount of repurchase has already reached JPY 1 trillion. And from the company's point of view in Japan, buyback has a 1-year duration. So once that we set the framework and then that we can repurchase in 1 year. But regardless of this frame -- time frame mark, that we would like to accelerate our buyback if the market condition is good. But at the same time that we cannot speed up too fast in terms of buybacks, so we would like to be flexible based on the market situation so that we will be able to achieve our target of a buyback. Share price and growth trends has also been shown on your right-hand side, Page 11. This explains the global comparisons of our share buyback program. Apple, about $50 billion, which was quite a large buyback program, has happened, but we are the next to Apple as a matter of fact, in terms of size. Page 12, this is domestic comparison. In Japan, we are leading #1, as a matter of fact. And for shareholders, I believe that we've been able to give you satisfaction on our program. Now switch gears to our status of assets on Page 14. To achieve the JPY 4.12 trillion program, there are several asset monetization or some transaction being executed. So usually, we should have received the pressure for -- down pressure for the share price. However, because of the equity value of holdings that which is marked at JPY 27.4 trillion that has been supported for share price. So as you see on Page 15, on Alibaba shares or T-Mobile share price, even that we having a monetization program but still, the prices are still solidly trending. And also, these companies are very resilient in terms of the pandemic situation, therefore -- of course, the Vision Fund is a very important part of our business. But when you look at all the holdings, actually, these 3 companies are larger in terms of the proportions' point of view. And these are the highly listed securities. And at the same time, gives us a very -- comfort under the pandemic situation, which are the main core of our assets at this moment. Page 16. This is the Alibaba share stability and growth, which is a majority of our holdings. And we started a relationship with the company back in year 2000. And now that 20 years have passed, on your right-hand side, you see many group companies has creating the ecosystems, payment and financials in the very bottom, is now expecting to become the bigger engine for the future growth. And now I would like to talk about Vision Fund on Page 17. So first, I want you to see the performance so far on a cumulative basis. Since the inception, JPY 1.8 trillion markup, JPY 1.6 trillion in the markdown. So total of JPY 2 billion or JPY 0.2 trillion is the investment market uplift and realized gains. Page 18. This shows the late -- these recent performance of those listed shares. On Page 19, that shows the figures. Here, you can see, in the past -- recent 3 months, Relay Therapeutics investment cost offer was about JPY 300 million. And right now, we see about JPY 1.1 billion gross return to Vision Fund 1. So net-net with others, about JPY 4.7 billion, as of August 10, 2020 for gross gain. So the multiple was, it's 1.5x. As Masa mentioned yesterday, we are expecting potential IPOs so that we believe that there are further contribution by Vision Fund for our value enhancement. Page 20 is the current portfolio companies, over 86. And portfolios that we have had as a private company in direct investments and some that engaged in diverse -- and these companies are engaged in diversified businesses. On Page 21, so this shows the kind of strength of portfolio companies. One is the high ratio of listing securities. So many of the companies, even that they have a large total asset, but it's really difficult to monetize or liquidate some large enterprise, large companies. Because of those are the important subsidiaries, so they cannot sell. But in our case, we are the investment holding company so that we can monetize in any way. So 77% of this securities ratio gives us the flexibilities of monetization. And also, at the same time that we were able to maintain this diversification. So when you see the pie chart, 57%'s Alibaba, you may say, but at the same time, actually, Alibaba is not the 1 solo business that they are running. Actually, they are the Internet business. However, this is only the infrastructure. Through this infrastructure, they've been accessing to the many segments and industry. So that I don't believe that we can see Alibaba as one business or one company. Actually, this is the combination of many segments in the industry. That's how I would like you to also see Alibaba. Page 22. From yesterday's Masa's presentation, he mentioned about this establishment of the investment management subsidiary. The purpose is to manage excess cash and diversify our assets, so that those assets that I explained in earlier pages that we would like to diversify the business, diversify the region in any, many way that we would like to diversify. And capital investment is about JPY 60 billion. Shareholder's holdings, 2/3 belongs to SBG, SoftBank Group Corp., and 1/3 to Masa-san, our Chairman and CEO. Investment criteria, primarily highly liquid public-listed stocks and the investments method is direct investments. And also includes some derivative transactions to seek for the efficiency. After this announcement, we have received several questions from investors. And from -- for the shareholdings, it's not 100% subsidiary of SBG, why Masa is taking 33% and the reason and the purpose was also questioned. Masa also touched on a little bit yesterday that in this group, ultimate compensation system that when we think about, I believe that how -- what will be the best approach, best structure that which was said, that's something that we've been discussing. And with this investment to make this investment successful, once that you succeed, you receive the compensation. But if you do not succeed, not only receiving compensation, but also making a loss, which comes to also Masa himself. So it's a little bit difficult to explain everything in just a governance point of view. But I believe there are many arguments whether this is tightly governed. But when you look at the many companies' CEO, receiving a large amount of compensation. However, when you look at Masa, his compensation that he is receiving is very small, relatively small compared to the many companies' CEO. So considering that, that I believe there must be several discussion regarding the compensation approach or governance approach. Of course, for this establishment of company that we have received the approval by the Board. And last but not least on 24, loan-to-value. We've been steadily improving the loan-to-value. And since the last quarter announcement that the 3% point has improved so far. Page 25. This shows the improvements on a quarterly basis. Currently, we are in 11%, which is very safety zone for us. The calculation of loan-to-value, for example, nonrecourse finance, once again, that we would like to clarify that we explained that whether we should include or not. And the safety-ness and the loan-to-value, because I'm also the expender, so that from the lender's point of view, most appropriate or optimized definition is important. And loan-to-value should not be just the formalities measure, but also like to use this measure, or the KPI as still one of the most important KPI for running our company. So that I would like to also share with the bondholders or shareholders with -- so that the best and optimized definitions for LTB is important for us as well. Page 26 is cash position. As of the end of June, JPY 4.2 trillion. And since then, as a subsequent event, for example, loan repayments as a part of the balance sheet improvement. And if we exclude those, that the latest number of cash position is JPY 3.4 trillion. Compared to JPY 4.2 trillion, of course, it's smaller. But still, that covers the 4-year equivalents of the bond redemption as a matter of fact. Page 27. This is the SoftBank group stand-alone interest-bearing debt latest numbers, if we include nonrecourse SBG, that will give us JPY 9.8 trillion of the interest-bearing debt. If we take nonrecourse out, which is JPY 3.4 trillion, that currently, the recourse to SoftBank Group's interest-bearing debt is JPY 6.3 trillion. This is the number as of the end of June, so this includes JPY 1 trillion in margin loan using Alibaba share. And as of July, this has also -- or used for the repayment and so on. So that changes a little bit since the end of June. Page 28. This is a stand-alone cash position. As on subsequent events, by the repayments process that the number has changed. For example, the margin loan repayment is quite a large portion. So with that, it's JPY 3.4 trillion after the repayments of margin loan. So net interest-bearing debt is about JPY 3 trillion, as you see on Page 29. As of the end of June from JPY 5.6 trillion to JPY 3 trillion, number has improved because of the JPY 2.4 trillion of adjustment of asset bank finance. Page 30 shows the redemption schedule. And as you can see, we have no problem at all in terms of redeeming our bonds. And also, with each finance transactions, we would like to prepare the source for the repayments, but at the same time, try to consider the -- another instrument. And the Page 20 and on, these are the financial strategy, which is exactly the same as what we announced on back in May, so we will keep this strategy going forward. So establishing new investment management company, which is a new challenge for us. But actually, even more important, our top priority is this financial policy. This is something that we will keep. Keeping and maintaining our LTV, maintaining our cash position. And on top of that, if there is any excess cash, that we would like to efficiently use those. So that's our challenges that we can think of for the mid- to long-term period. So that is all for me. Thank you very much.

[Interpreted] Thank you. So last but not least, Mr. Navneet Govil, CFO of SoftBank Investment Advisers, will give you update on SoftBank Vision Fund. As CFO of Vision Fund, he will explain about the accounting and the structure of Vision Fund. Navneet, please unmute, and please start your presentation. Thank you.

Hello, everyone. Before we begin, please read SBIA legal disclaimers on Slide 2 related to the information you received in this presentation. Please refer to the online presentation for more details. Today, as you'll see on Slide 4, I'll summarize first quarter performance and discuss our key highlights for the 3-months ended June 30. I'll then discuss the fund's financial impact on SoftBank. Finally, in my in-focus section, I'll describe how our portfolio is well positioned to benefit from the accelerated technological shift underway due to the pandemic. COVID-19 has expanded addressable markets in a range of sectors, from food delivery to enterprise software. We believe our portfolio of companies are well positioned in many of the most coveted industries in the current environment. We continue to invest. To start, on Slide 6, since announcing Vision Fund 2, we've made 7 investments with a total acquisition cost of JPY 2.1 billion. SoftBank has made a multibillion-dollar commitment to Vision Fund 2, and there is sufficient undrawn capital to continue making new investments for the next several quarters. Our Vision and investment thesis for Vision Fund 2 remains the same as the first, which is to invest in businesses using next-generation technology platforms to leverage data and artificial intelligence. We believe each of the companies listed here are well positioned versus the established players and are poised to disrupt their sectors. We continue to invest in Vision Fund 1 as well and return capital to our limited partners. On Slide 7, you'll see that during the last 3 months, we've made prudent capital allocation decisions, deploying JPY 1 billion of capital into 11 follow-on investments and 1 joint venture. The fair value of our portfolio increased JPY 2.9 billion during the period. We're seeing rapid adoption of digital services as many people around the world settle into a new way of doing things amid the pandemic. During this time, we monetized JPY 1.8 billion from our public portfolio, partially exceeding our investments in 10x Genomics, Guardant Health, Ping An Good Doctor and Slack. We also distributed an additional $1 billion to our limited partners. Finally, we repaid $3.9 billion of debt reducing, our portfolio financing by $800 million and fully paying down our subscription credit facility. On Slide 8, you'll see that total commitments for our Vision Fund 1 are $98.6 billion. In the 3 years following our initial close of the Vision Fund, we have invested $82.6 billion and recorded gross investment gains of $3.5 billion. We've also distributed $11.6 billion back to our limited partners from realized exits, portfolio financing and the payment of the preferred equity coupon. In a moment, I'll elaborate on how these distributions reduce the preferred equity outstanding. Of the fund's total commitments of $98.6 billion, SoftBank's portion is $28.1 billion. SoftBank has contributed $24.1 billion to date and has received distributions of $1.6 billion. Moving on to Slide 9. Since the inception of the Vision front, we've made 92 investments, including a new joint venture with an existing portfolio company. Our current total number of investments after 6 full exit is now 86. On Slide 10, we present the 7 sectors we invest in by cost and fair value. In our consumer sector, the pandemic is reordering the landscape, creating new winners and exposing retailers who are struggling. Consumers have rapidly adopted e-commerce and food delivery during the pandemic, which benefits our portfolio. Many believe these consumption patterns will remain once life returns to normal. Here on Slide 11, you can see our realized and unrealized gains. The realized values of our exited and monetized investments as well as the fair market value of our public holdings are both above our cost at the end of June. Indeed, our public companies represent an additional $10 billion of available liquidity on our balance sheet. While fair value is below cost in our private portfolio, it is up $1.2 billion from the March quarter. As always, we were judicious in marking up the value of our assets. We remain long-term patient investors and believe the value of our private portfolio will benefit from the ongoing disruption caused by the rapid adoption of digital services. Since the inception of the Vision Fund through June 30, 8 portfolio companies have listed publicly, which is shown on Slide 12. As shown on Slide 13, subsequent to quarter end, another portfolio company in Relay Therapeutics, clinical-stage precision medicine company had its IPO. Our acquisition cost in December 2018 was $10.75 per share. Relay's IPO in mid-July was priced at $20 per share, which was above the range set by their bankers. Since then, the stock continues to appreciate, and today closed above $41 per share. The strong demand from institutional investors participating in the IPO validates our valuation. Furthermore, we are encouraged by the market's strong support post-IPO, which we believe reflects the underlying potential of Relay's business. Shifting gears on Slide 14. I'd like to share several examples of our company successfully raising round at higher valuations led by investors other than SoftBank. Let's start with Cohesity. In April 2020, the company raised $250 million at a pre-money valuation of $2.3 billion in a round that was led by DFJ Growth, Foundation Capital, Greenspring and Wing Venture Capital. A couple of months later in June 2020, FountainVest and Tiger Global late CVV funding round for Zuoyebang, raising $750 million at a pre-money valuation of $6.5 billion. My last example is DoorDash. They raised $400 million in a Series H funding Round co-led by Durable Capital and Fidelity at a pre-money valuation of $15.6 million. We believe the investors participating in these recent funding rounds validate our prior and current valuations and reflect the strong underlying growth of each company's business. In these examples, the Vision Fund only participated to maintain our pro rata ownership. As I mentioned earlier, we've also distributed $11.6 billion to our limited partners. On Slide 15, we split this distribution into its constituent parts so you can see the full detail. As you recall, we have different securities that make up the Vision Fund capital in order to cater to the varied risk appetites of our limited partners. Our capital structure includes preferred equity capital as well as standard equity capital. While $40 billion of our total commitments of $98.6 billion are preferred equity, we only pay a coupon on outstanding capital that has been called. As of June 30, our outstanding preferred equity capital was $29.5 billion. As we returned this capital, our coupon payments declined. We're pleased that in the first 3 years of the fund, we've already returned $6 billion of limited partners' capital and have already provided a return on equity capital. This reflects our disciplined approach to monetizations and distribution. Since inception, our combined return, including both the preferred equity coupon and equity gains was $5.6 billion. Moving down to Slide 16. Our remaining $14.6 billion of undrawn capital will be used for follow-on investments and to pay management fees, fund expenses and the preferred equity coupon. This, in combination with our $10 billion of liquid public assets and cash on hand of $2.4 billion means our available capital totals $27 billion. This dry powder shows our limited partners, including SoftBank, that we can continue to provide additional distributions to them. It also gives our portfolio companies the freedom to consider strategic opportunities in this market. Let's discuss the impact of the fund's financial performance on SoftBank. As you can see on Slide 18, for the 3 months ended June 30, SoftBank's share of the Fund's net profit was $1.23 billion. Combined with management fees, the total contribution to SoftBank is $1.29 billion. This compares to $2.05 billion in net profit in fees to SoftBank for the same period last year. Moving on to Slide 19. Cumulatively, from Vision Fund inception through June 30, SoftBank's share of the fund net loss was $670 million as an investor. Factoring in an additional $420 million in management fee income, the total contribution from inception-to-date for SoftBank is negative $250 million from the fund. On Slide 20. From a balance sheet perspective, as of June 30, SoftBank contributed $24.1 billion in capital to the fund. This amount is slightly down in total value to $23.4 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 22. We showed that SoftBank had the foresight to anticipate the major technological shifts of the last several decades. Just as important, he had the conviction to invest significant capital behind these trends. Now SoftBank's mission for our fund is to invest in businesses that are enabling the next stage of the information revolution. We are unwavering in our belief that artificial intelligence will create tremendous value in the years ahead. On Slide 23, you can see various industries as defined by Standard & Poor's and how they are being impacted by COVID-19. As you can see on Slide 24, implementing SoftBank's vision has positioned us well. Before the pandemic, the information revolution was disrupting inefficient industries and creating entirely new category. While the pandemic has adversely affected some of our companies, such as those in travel and hospitality, it has positively impacted many more, as you can see on the right-hand side of the screen. Moving on to Slide 25. Earlier this year, demand picked up dramatically in several sectors as society responded to the pandemic. These include e-commerce, entertainment, enterprise solutions, health care, education and food delivery. In the following slides, I'll discuss these trends and highlight how our companies are involved. Let's start with e-commerce on Slide 26. It is sometimes said, there are decades where nothing happens and there are weeks where decades happen. When it comes to e-commerce, we've seen this unfold in front of our eyes. Consider this. In the United States, it took 10 years for e-commerce penetration to increase 10 percentage points, from 6% in 2009 to 16% in 2019. Then starting in March 2020, it took less than 10 weeks to grow from 16% to 27%. This is a remarkable acceleration and is representative of growth happening around the world. Our company, Coupang, is a key player in this retail disruption. Based in South Korea, the third largest e-commerce market in the world, Coupang has built best-in-class logistics and fulfillment capabilities optimized to provide differentiated delivery experience for customers. As a result, they are now South Korea's #1 in gross merchandise value, ease of delivery and number of customers. In the entertainment sector, shown on Slide 27, our portfolio company, ByteDance has seen 615 million global downloads of its TikTok social video sharing app in the first 6 months of 2020, which is up 35% year-over-year. This was the highest for any app, surpassing Zoom, WhatsApp and Facebook. Moreover, ByteDance has more than tripled its number of pick top monthly active users to 480 million and increased the average time users spend on its platforms by 73% year-on-year as of March. While we're excited about TikTok's growth and future potential, I'd like to acknowledge the significant media speculation in the last several weeks about TikTok's future with parent company, ByteDance. I will not discuss this speculation today nor will I answer questions on this topic. On Slide 28, I'd like to highlight 3 enterprise solutions companies that are experiencing rapid adoption amid the pandemic. These portfolio companies are Slack, Automation Anywhere and Arm. Slack, with its highly rated service to support remote working, reported a 27% year-on-year increase in enterprise customers in April 2020. There are now 750,000 organizations using Slack, including 65 of the Fortune 100. Automation Anywhere is a fast-growing software company creating bot, also known as digital workers that automate processes in order to increase business efficiency. They have deployed over 2 million bots for customers in over 90 countries. In December 2019, Amazon Web Services, the world's largest cloud computing company, announced its new Graviton 2 processor, which uses Arm's latest technology. In addition to increasing processing speed by up to 65% compared to existing servers, Graviton 2 processors help AWS customers reduce costs by up to 40%. To date, 172 billion Arm-based chips have been shipped, a staggering figure that speaks to the company's ongoing success. We also have several companies in the health care space that are having a direct and positive impact on supply. On Slide 29, I'd like to call out one such company, which is Ping An Good Doctor. Headquartered in China, it is that country's leading online health care platform. The company do 1.1 billion visits to their app over a 3- week period at the outset of the pandemic in China. From January to February, the company grew new users tenfold, and its online medical consultation between health care providers and patients were up 9x. Along with the biotech companies mentioned on the right-hand side of this slide, our companies are solving many of today's biggest global health care problems. Let's move on to Slide 30. Distance learning is making the jump to light speed during the pandemic. Amid a rush of school closures earlier this year, Zuoyebang, the #1 provider of online educational services in China, reported a year-on-year increase of 52% in monthly active users, now reaching 137 million as of April 2020. We firmly believe technology will play a critical role in the future of education, and this market will continue to grow rapidly. With many restaurants unable to host guests, consumers are adjusting to dining at home instead of dining out. As shown on Slide 31, we had several companies spread across the food delivery ecosystem. Let's begin with Reef, a dark kitchen provider. The company is enabling local restaurants and national players to reach thousands of new customers. Reef has deployed over 70 kitchens to prepare and deliver meals to urban consumers. The pandemic has driven business their way, leading to a growth in monthly revenue of 144% between January and May. DoorDash and Uber Eats are delivering meals and groceries. DoorDash is a market share leader with 46%, and has seen its business grow 50% faster than the industry. Meanwhile, Uber Eats posted gross bookings of $7 billion in the June quarter, up 113% year-on-year. Finally, in autonomous delivery, our portfolio company Nuro recently partnered with Kroger and CVS stores on same-day deliveries of groceries and other necessities. Due to the contactless nature of autonomous delivery, the company has seen a 3x increase in demand in the months following the onset of the pandemic. As you can see on Slide 32, the Vision Fund is at the center of these key investment trends and is well positioned to succeed in the current market environment. Before I close on Slide 33, I'd like to discuss an important program of the Vision Fund. Established last year with our partners at WeWork, we created the Emerge Accelerator to help underrepresented founders access networks, schools, and capital to grow their startup. In June, our first cohort of 14 Emerge founders presented to more than 100 investors. We plan to expand the accelerator to 2 cohorts per year and open it up to underrepresented founders around the world. Thank you for listening. Today, I discussed our performance and our contribution to SoftBank. I also discussed the accelerating technological shift underway and how our portfolio is well positioned to benefit disproportionately from this disruption. I look forward to your questions. Thank you.

Yes. Thank you very much. Now we would like to receive your questions until 11:30 Tokyo time. [Operator Instructions] We would like to take up to 2 questions per panso that we can take questions from as many people as possible. We take questions in both Japanese and English. As presenters are also joining this meeting remotely, please specify who you like to ask your question to. And if you refer to any material, please identify the page number and question. Make a question, please. So you see the page numbers on each slides, so please -- I thank you for your cooperation. We also like to remind you that we will not be able to answer any questions regarding Vision Fund strategy, performance, IPO status of portfolio companies or exit strategy. First, we would like to take Japanese questions. For English questions, we will take it after we finish Japanese questions, so please wait a moment. Thank you. So any questions, please press raise hand button. So please bear with us. We are taking the question now. Thank you very much, and thank you for your patience. From Mr. Masuno from Nomura Securities, you can ask a question. So please unmute and ask your question.

[Interpreted] Thank you very much. Can you hear me?

[Interpreted] Yes. We can hear you.

[Interpreted] I have two questions. Number one is cash flow -- page on cash flow. Investment cash flow, JPY 1.1 trillion, you -- the -- acquired that amount. So I want you to explain what is included.

[Interpreted] So this year, the JPY 360 billion, that's included, I believe. And also JPY 4.5 trillion asset sale, the JPY 65.4 billion is from the highly liquid listed shares.

[Interpreted] So listed shares and the sales and acquisition, could you please explain more in detail about these aspects?

[Interpreted] Thank you very much. So first of all, the acquisition of the listed shares. Cash flow, Page 15. I believe that it is on Page 15. And so the expenditure, the JPY 1.6 trillion, so that is the amount used for the acquisition of the listed shares. So did I answer your question?

[Interpreted] So this means just shares, am I correct?

[Interpreted] Yes. Listed shares.

[Interpreted] JPY 1 trillion, you already acquired -- purchased the shares, listed shares and also the gain, the proceeds from the sale of the investment. So this means the sale of listed shares?

[Interpreted] As for the gain from this sale of listed shares, Page 6, I believe, it's -- so JPY 65.4 billion. So this is the gain on investment, investment business of our holding company segment. So that is the listed shares. So the balance at the end of June, so the balance of -- is JPY 1 trillion right now. That's the related listed shares.

[Interpreted] Hello. Can you hear me? Sorry. JPY 1 trillion?

[Interpreted] We purchased the listed shares. We -- and JPY 65.4 billion is a gain from the sale and then the remainder is on the balance sheet. I already explained. And so still the shares that are still remaining are on the balance sheet.

[Interpreted] So that is JPY 636 billion?

[Interpreted] Yes. So that's the -- what is remaining on the balance sheet. On this point, as I mentioned, the -- in order to effectively manage the excess -- the liquidity, we purchased the listed shares, and JPY 36 billion is what still remains.

Thank you very much. We would like to take the next question. Mr. Kikuchi, SMBC Nikko Securities, please go ahead and ask your question. Thank you.

[Interpreted] Yes, this is Kikuchi speaking. I have two questions, please. First, from the accounting start, Page 8, T-Mobile share of sales, #3 and #4. After June -- so this is the sales after June. So it's not reflecting to the P&L of first quarter, but this will be reflecting the second quarter P&L. Is my understanding correct?

[Interpreted] This chart explains the outstanding balance as well. And also wanted to show you the big picture. So that is why that we also show these #3 and #4 as well.

[Interpreted] We don't know the book value. But if it's not too much difference, then you may be able to realize some gain from here, right? In second quarter?

[Interpreted] Those transactions after July? By the end of June, most -- majorities are already taken in because the price for the sales has already been set. In more details, from accounting's point of view, investment itself has already valuated in the first quarter, and also the price has already set. So it's like treated as a derivative to us there. So considering positive and negative P&L impact showing the quarters are very small and minor.

[Interpreted] Then after second quarter and on, you may see some movements in here based on the T-Mobile share, is that right?

[Interpreted] If T-Mobile share increased, #5 is the only part that we may see some negative because this is price already set as a derivative price. So #5, the core option received by Deutsche Telecom, we don't know when they exercise their rights. So that also -- that may move based on the share price of T-Mobile. #3 and #4 is already daunting. So we don't expect much of the impact. And even in the second quarter, the recollection to the P&L is going to be very minor.

[Interpreted] Then, if share price goes up, you may recognize a negative, is that correct?

[Interpreted] #5, I believe that the setted price for share price is JPY 103. So if share price goes up beyond there, but still, it's kept at JPY 103. So that will give us some negatives due to that.

[Interpreted] My second question. I have question to Goto-san. JPY 4.5 trillion program, and majority has already been completed, like JPY 4.3 trillion. And the remaining JPY 0.2 trillion you'll be able to achieve from the asset financing? Or are you expecting to sell or divest any of the assets to achieve the JPY 0.2 trillion. In this JPY 4.5 trillion, does this include Arm, or does this -- this does not include Arm?

[Interpreted] Goto-san speaking that we have up to JPY 4.3 trillion achievements so far on this program, remaining JPY 0.2 trillion, I think there are many ways that we can achieve this. I believe that this can achieved using our assets. And I don't answer any questions regarding which portfolio we'll be using or anything.

[Interpreted] I have additional questions. So Arm. For this JPY 4.5 trillion program, do you include Arm for the consideration?

[Interpreted] Arm -- Goto-san speaking. Arm is also one of the portfolio, but I don't answer any questions regarding specific portfolio -- regarding the breakdown.

[Interpreted] So JPY 4.5 trillion. This is a maximum amount, I believe. That's how you explained when you announced. As a result, if you sell Arm, then in total, that can be JPY 8 trillion or something like that, JPY 9 trillion. If that's the case, those above excess portion due to the Arm divestments, that's outside the JPY 4.5 trillion program.

[Interpreted] I don't answer to the question regarding Arm-related. This is a JPY 4.5 trillion program. If we have any divestments, monetization over JPY 4.5 trillion, of course, could happen because we are an investment company. So I don't discuss any of the specific portfolio companies regarding how we are going to do.

[Interpreted] So if you have divestments, is that going to be used for additional shareholders' return or additional debt reduction?

[Interpreted] So as for JPY 4.5 trillion program, this is something that we announced. So anything above that, we would like to consider, once again, what would be the best way to return to our stakeholders. That's, I believe, case by case.

Is that okay? [Operator Instructions] So next person, Amundi Japan, Mr. Homura. You can ask a question. So please unmute and ask your question.

[Interpreted] Can you hear me?

[Interpreted] Yes, so we can hear you, Mr. Homura.

[Interpreted] So this is not related to financial performance, but The Financial Times, Wall Street Journal, these -- the media. Well, they pick up the relationship between [indiscernible] the Wirecard and the SoftBank. Well, the -- in September last year, Wirecard. Well, the strategic alliance was mentioned. And also convertible bond, that the investment will be made by SoftBank to the company. So these are the statements that we have seen. So I'd like to confirm whether these are correct or not. So between Wirecard and the SoftBank Group, are there any strategic relationships between the EU and the company? May I confirm whether this is correct?

[Interpreted] So this is Goto speaking. As for strategic partnership or the relationship, Wirecard, the technology is -- the business that is applied globally extensively. And we also have the Vision Fund portfolio, which is global. And if we can generate the synergy, then as a business opportunity, I think it is interesting. However, well, the -- and we are aware that these are the comments they made. But the...

[Interpreted] Well, are there any specific transactions that we came to conduct with the company?

[Interpreted] No, we haven't conducted any such transactions with them.

[Interpreted] Okay. And as for the convertible bond, SBIA, senior executives. Well, as part of the Vision Fund, they conducted due diligence, and they made a personal investment that is what was reported by media. So there -- are there concerns like the governance? What's the position of the SoftBank Group?

[Interpreted] Well, in terms of the governance, there is -- we see no problem. Well, the -- initially, SoftBank group, ourselves considered the investment in these opportunities, and we conducted the due diligence. But as a result of our due diligence, we came to the conclusion that we would not go ahead with the investment. So that was a decision made by the company. And the -- as for the individuals conducting the transactions after we -- and make decision about the deal, and we see no problem about the governance.

[Interpreted] Like to receive the next question. Mr. Ando, Daiwa Securities. Please go ahead. Mr. Ando, please unmute and start your question. We don't hear you. Sorry, we cannot hear you. So we would like to go to the next question. We would like to take other person question first, and we will try once again after that, to you. So we'd like to have Mr. Moriyuki from SBI Securities. Please unmute and start your question.

[Interpreted] This is Moriyuki speaking. Regarding excess cash and also investment using excess cash that I have questioned about, is this going to impact the calculation for LTV? Or because of high liquidity, is this going to be seen as cash flow that that be won't impact too much on LTV? That's my first question.

[Interpreted] This is not cash. This is excluded from the calculation for LTV. We won't count as a cash, we don't -- we count as asset.

[Interpreted] Yes. And my next question. So you've been monetizing quite aggressively. So you have a policy of managing LTV less than 25%. But what is your expectation of your LTV trend going forward?

[Interpreted] Yes. Goto speaking. As a financial policy, we always like to manage our LTV less than 25%, even of a normal situation, less than 35%. That's our policy to maintain. And such policy that we are currently 11% of loan to value. Very safety zone, I can say. And also for this level, I don't have -- we don't have any plan to say that we're going to improve even further from here or anything like that because, is that really leveraged from the view of maximizing shareholders' value? So that for equity investors or the debt investors, we would like to maximize their value, and a loan to value needs to balance with that. So 11%, we are happy about that, but the way we need to keep is to manage less than 25%.

[Interpreted] So again, if we keep this circumstance, are you expecting to maintain 11% LTV in the meantime?

[Interpreted] I don't commit to that.

[Interpreted] And another question. So once you increase excess cash investment, you may see the some increase in loan-to-value from 11%?

[Interpreted] From the math, if you just do the math, that may be the case. But also, there are many cases how you invest, so that is a simple case. If we invest the lease securities using SPG's money, then that's going to impact. But if we invest through the investment company, based on the agreement between the portfolios and us or sometimes that today, portfolio raised by themselves. So there are many cases. So even in independently raised, but its consolidated company. If it's normally cost to SoftBank group, then we don't need to account those raising.

[Interpreted] Thank you very much. And we would like to entertain questions from other people. [Operator Instructions] Are there anybody who would like ask questions in English? SMBC Nikko Securities, Mr. Mr. Harada, you can ask a question.

[Interpreted] SMBC Nikko. My name is Harada. I have two questions. First question, Alibaba monetization. There are 147 -- or the $14.7 billion. So the payment kind is what you expect or payment in cash? So do you -- which do you expect? That's my first question.

[Interpreted] So either way is possible on the contract. And there was no recourse financing. And what's going to happen, as of now, we are not able to tell you.

[Interpreted] Second question is on Page 5, the financial section, Page 5. JPY 4.5 trillion program or the margin loan provisioning of the margin loan as well as investing in listed shares, I'd like to confirm on this.

[Interpreted] So on Page 5, in order to improve the cash position that is, I believe, relevant. A margin loan on Page 6, I believe this page is also relevant. JPY 4.5 trillion monetization program and the JPY 2.8 billion equivalent of T-Mobile shares. And when it comes to debt repayment, well, the Alibaba margin loan of the 9.6 is included.

[Interpreted] So monetization and margin loan is included in the repayment of the debt is included and noted here. So what is the intention behind this?

[Interpreted] Goto speaking. I am not sure if I'm responding directly to your question, but when it comes to the repayment -- payment of the debt. Well, there are certain assets on the -- that facilitates the repayment of the debt. Here, there is less impact. So we are thinking about the different ways to do so. So the -- we sold out our ideas and the calculated and we structured JPY 4.5 trillion program. And I'm sure you understood the structure.

[Interpreted] Okay. So as for listed shares, using excess fund, page 5. So the -- where does it fit to this -- the slide on Page 5, to improve the -- and the financial improvement is where it belongs to?

[Interpreted] So could you please elaborate your question?

[Interpreted] So financial improvements. And what is included in this part? I beg your pardon. So yesterday, you announced the establishment, the JPY 60 billion will be paid to establish the investment management subsidiary. So where does it fit to this page to use the excess fund? So on Page 1, where does it belong to? I do not understand where it fits into this slide.

[Interpreted] So it is outside of the JPY 4.5 trillion monetization program. But JPY 4.5 trillion will give us the cash position. Now let's say, we have JPY 1 trillion, JPY 2 trillion of the cash position. And the -- we may use part of that money for the safe management of our money by investing in some safe securities. So that's the one idea.

[Interpreted] And we have somebody that asking question through chat, but we can now accept your question on chat. [Operator Instructions] Then I would like to go to the next question, Mr. Hoshi, Nomura Securities. Please unmute and start.

[Interpreted] My name is Hoshi. Can you hear me okay?

[Interpreted] Yes. Please go ahead.

[Interpreted] So I have a question to Goto-san. The yesterday's Masa's presentation, JPY 400 billion to JPY 500 billion buyback, foreign-denominated bond is something that you discussed. When are you expecting to announce the details of that, especially, I believe, that the target is a target be a dollar a pop? Or is it the senior notes? As long as you can say that, that's -- if you can share with us any information, that will be helpful.

[Interpreted] What I said yesterday was kind of conceptual. So once the market and the environment is ready, we may want to study and look into. So maybe I said -- depending on the situation, the size can be large, size can be small because bond price goes high. What happened? So even goes high, are we going to do that? If once we say we do that. But if the bond price is high, mean that the many people wants to know so that we don't have motivation to buy those back. So that we want to see the price, we want to see the environment. So the -- I believe that the size and the price can be fluctuate. So -- and at this moment, we are not at the stage we can discuss any detail. We cannot discuss what will be the target bonds because everything is depending on the market and the size. So once we are ready, we will share with you, but please wait for a moment so that -- until then.

[Interpreted] My second question, as Masa mentioned yesterday, JPY 60 billion investment management subsidiary. In the future, how much proportion are you expecting the denominator for loan-to-value calculation?

[Interpreted] At this moment, we don't have any specific threshold and how much or how far are we going to do. This type of management is just about beginning. And we are just about testing this scheme. So once everything is ready -- they did -- we may consider expanding this company. However, whenever we do any transaction through this company, we also need to check that whether this company's management of the asset is nonrecourse to SBG or not. That also changes the calculation for LTV. So at the end of June quarter, the numbers you just saw. So we would like to make sure that we have appropriate accounting process based on the market and the fact -- the situations.

[Interpreted] Thank you very much. So we are still inviting questions, and we would like to questions in English as well. [Operator Instructions] So Mr. Masuno from Nomura Securities. And now you can go ahead. So please unmute and ask your question.

[Interpreted] This is the second round. Sorry, but Page 26, the -- this is the question to Mr. Goto, Page 26. So according to the numbers that you have issued, for the liquidity, after June, the JPY 3.4 trillion and asset sale, the JPY 200 billion. So the -- putting that together will give us a JPY 3.8 trillion. So towards the end of June, 3 -- about JPY 4 trillion of liquidity or cash position will be achieved according to the announcement, JPY 1.5 trillion, the limit is not carried out yet, which was announced in June, July. So if you deduct, still, the JPY 2.5 trillion remains. So the cash reserve or the debt on the response or the usage of this amount of money, am I correct in understanding that? I believe that you will be announcing some new activities from now on. But that is the mass that conducted. So is that the rough understanding about the numbers?

[Interpreted] Yes. So generally, you're -- I am comfortable with your analysis. And as for the order, so the sequence of the programs, JPY 4.5 trillion program, that is the round box. And I'm holding a key to the lock that the keeps the JPY 4.5 trillion. So the credit return and the stockholder return, that is the intention of the JPY 4.5 trillion. But the excess cash. On top of this JPY 4.5 trillion program, there are many different ways to use that -- the amount.

[Interpreted] Okay. Understood. And another question to Kimiwada-san. Sorry, this is in detail, but the Alibaba -- the IFRS adjustment was conducted, which will -- gave the rather small number for the Alibaba, the equity method valuation. So the IFRS adjustment that you conducted, could you please give me more detailed explanation?

[Interpreted] As for details, Alibaba, there are certain things that Alibaba is not disclosing. So just roughly, I would like to respond. But the investment impairment actually happened.

So the -- in terms of the amount, how big was it? Adjustment amount?

Later on, I would like to give you the response in detail.

[Interpreted] Thank you for your question. So we have a follow-up on the question. Next question, Mr. Kikuchi, SMBC Nikko Securities.

[Interpreted] My name is Kikuchi. JPY 60 billion investment management subsidiary. I would like to confirm a little bit. So I believe scheme is -- may not be finalized yet, but is there going to be SoftBank investment at [indiscernible] who will be doing the investment activity? Or is there any other entity going to -- is any other entity that going to do the investment? And also, are you going to lever? Do you have any leverage in this company? So [ 100 and JPY 360 billion yen ] out of JPY 1 trillion purchase. Is it nothing to do with the JPY 60 billion for this company?

[Interpreted] Goto speaking, that entity of this company is nothing to do or separate from this BIA. So this is a separate operation of the investments. And as for leverage, that's, of course, necessary strategy for investment strategy. So that, that's also within the scope for this company, too. And JPY 1 trillion to JPY 650 billion. That's SBG purchase, and the remaining was the JPY 350 billion. So that's separate from this company's amount.

[Interpreted] So regarding the leverage, I believe that you will be taking some leverage here, but like Vision Fund, is it going to be somebody, a third-party partner like the Vision Fund? Or is it going to be borrowings? In case of borrowings, I believe it's going to be difficult to make a nonrecourse, but is it going to be recoursed to SBG? So how are you going to think about these borrowings? How are you going to put the lever on it?

[Interpreted] Goto-san speaking, it's just the beginning. We will look into that based on the actions. We don't expect to structure LTV or anything like that, but we just look at -- wait and see how it goes.

[Interpreted] Thank you very much. So we have 10 minutes to go. Are there any other questions? [Operator Instruction]

[Interpreted] Okay. As earlier, may I respond to the previous question? So the adjustment to the IFRS, JPY 120 billion, in Japanese yen, that is the impact or the size of the adjustment. So does that answer your question? We would like to entertain the next question. Those of you who would like to ask a question, please press the button to raise hand, and you can ask a question in English. So are there any questions either in Japanese or English? Any other questions? If you -- we have about 5 minutes or so if you have any questions, please raise hand button. So it seems like we don't have any further questions. So it's a bit early, but we would like to close the meeting now. So thank you very much. This concludes the SoftBank Group Corporate Investors briefing for the 3-months period ended June 30, 2020. And at the closing remark, Mr. Yotaro Agari, who's in the Head of IR position as of July 1, he would like to make one comment.

Yes. My name is Agari. Thank you very much. I take the -- I'm now the Head of IR, so that in the -- we would like to enhance the communication with the investors for the mid- to long-term period of strategy. And yesterday's Masa's presentation and today's investors meeting, an analyst meeting that I believe you have more questions. So if you have anything, please feel free contact to IR any time. Thank you very much. Thank you. So that concludes today's meeting. Thank you very much for your time and joining us. And you would be able to see this meetings on our corporate website. Thank you very much, and thank you, Navneet.

Thank you. Some other time. Bye-bye.

Bye. Thank you.