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claims from third parties which allege that we have infringed upon their
intellectual property rights. Furthermore, from time to time we may
patent and other intellectual property claims from competitors and nonpracticing entities. Some of our agreements with advertisers, platform
platform partners and data partners may also discontinue use of our
products, services and technologies as a result of injunctions or otherwise,
which could result in loss of revenue and adversely impact our business.
may grow. There may be intellectual property or other rights held by others,
including issued or pending patents, that cover significant aspects
of our products and services, and we cannot be sure that we are not
infringing or violating, and have not infringed or violated, any third-party
litigation could adversely affect our business, financial condition and results
of operations.
operations.
Some of our foreign operations functional currencies are not the Japanese
yen, and the financial statements of such foreign
may not be the same as the currency in which expenses are incurred,
foreign exchange rate fluctuations may materially affect our results of
operations. In 2013, 2014, 2015 and the first three months of 2016, 13.1%,
24.2%, 29.6% and 28.9%, respectively, of our revenues were
yen against certain foreign currencies may have a material adverse effect
on our results of operations. See Managements Discussion and
Our income tax obligations are based on our corporate operating structure
and intercompany arrangements, including the manner in
which we develop, value, and use our intellectual property and the
valuations of our intercompany transactions. The tax laws applicable to our
business activities, including the laws of Japan and other jurisdictions, are
subject to interpretation. The taxing authorities of the jurisdictions
our worldwide effective tax rate and harm our financial position and results
of operations. In addition, our future income taxes could be
Any adverse outcome of such a review or audit could have a negative effect
on our financial position and results of operations. In addition, the
determination of our worldwide provision for income taxes and other tax
liabilities requires significant judgment by management, and there are
outcome may differ from the amounts recorded in our financial statements
and may materially affect our financial results in the period or
our income and gross assets (and the income and assets of our subsidiaries
pursuant to applicable look-through rules) either (i) 75% or more
of our gross income consists of certain types of passive income or (ii) 50%
or more of the average quarterly value of our assets is
attributable to passive assets (assets that produce or are held for the
production of passive income). We believe that we were not a PFIC for
U.S. federal income tax purposes in 2015 and do not expect to be a PFIC in
subsequent taxable years. PFIC status is a factual determination
made annually after the close of each taxable year on the basis of the
composition of our income and the value of our active versus passive
assets. Because our belief is based in part on the expected market value of
our equity, a decrease in the trading price of our common stock and
ADSs following this offering may result in our becoming a PFIC. Additionally,
the overall level of our passive assets will be significantly
that does not make a mark to market election may incur significantly
increased U.S. income tax on gain recognized on the sale or other
common stock or ADSs will be subject to additional U.S. tax form filing
requirements, and the statute of limitations for collections may be
suspended if the U.S. Holder does not file the appropriate form. See
Taxation United States Federal Income Taxation Passive Foreign
Investment Company.
in any other jurisdiction. Shareholders rights under Japanese law may not
be as extensive as shareholders rights under the law of other
jurisdictions.
Dividend payments and the amount you may realize upon a sale of shares of
our common stock or ADSs that you hold will be affected
by fluctuations in the exchange rate between the U.S. dollar and the
Japanese yen.
Japanese yen and then converted by the depositary into U.S. dollars, subject
to certain conditions. Accordingly, fluctuations in the exchange
rate between the Japanese yen and the U.S. dollar will affect, among other
things, the amounts a holder of ADSs will receive from the
depositary in respect of dividends, the U.S. dollar value of the proceeds that
a holder of ADSs would receive upon sale in Japan of the shares
of our common stock obtained upon surrender of ADSs and the secondary
market price of ADSs. Such fluctuations will also affect the U.S.
Daily price range limitations imposed by the Tokyo Stock Exchange may
prevent you from selling shares of our common stock at a
Tokyo Stock Exchange sets daily upward and downward price range
limitations for each listed stock based on the previous days closing price
particular trading day, no transactions may take place outside these limits.
Consequently, an investor wishing to sell shares of our common
stock at a price above or below the relevant daily limit may not be able to
effect a sale at such price on a particular trading day, or at all.
USE OF PROCEEDS
We estimate that we will receive net proceeds from the sale of shares of our
common stock (including shares represented by ADSs)
is the midpoint of the estimated offering price range shown on the front
cover page of this prospectus. The international underwriters will
purchase shares from us in Japanese yen, including for the portion of shares
that will be represented by ADSs. If Morgan Stanley & Co. LLC,
payable by us.
payable by us.
The primary purposes of the global offering are financing our business
expansion, which may include investment, acquisition or
loans, all due between July and September 2016, with interest rates
between 0.07% and 0.18%, including 5,000 million in short-term
exercise discretion over the terms and timing of any future transaction in
light of the changing needs of our business. In the meantime, we