SOFTBANK CORP.
CONSOLIDATED FINANCIAL REPORTFor the nine-month period ended December 31, 2003
Tokyo, February 12, 2004
FINANCIAL HILIGHTS
1.

Results of Operations(Million yen; amounts less than one million yen are omitted.)

Nine-month period
ended
December 31, 2003
FY2003
April 2002 throughMarch 2003

Nine-month period
ended
December 31, 2003
FY2003
April 2002 throughMarch 2003

Net Sales

Operating loss

Ordinary loss

AmountAmountAmountAmount¥362,154¥(46,009)¥(62,275)¥(93,683)¥406,892¥ (91,997)¥ (109,808)¥ (99,989)

Net loss per share—
primary (yen)Net loss per share—
diluted (yen)¥(278.18)-¥ (296.94)-

Net loss

Note: No changes in accounting methods during the nine months ended December 31, 2003.
2.

Financial Condition(Million yen; amounts less than one million yen are omitted.)
Shareholders’
Total assets

Shareholders’ equity
Equity ratio (%)

equityper share (yen)December 31, 2003

¥1,194,036¥265,650

22.2¥755.97

FY2003
March 31, 2003

¥946,331¥257,39627.2¥767.56

3.

Cash Flows

Operating activities
Nine-month period
ended
December 31, 2003
FY2003
April 2002 throughMarch 2003

(Million yen; amounts less than one million yen are omitted.)
Cash and cash
Investing activities
Financing activities
equivalents
at the end of the period¥(72,447)¥61,785¥172,237¥308,374¥ (68,600)¥119,749¥(17,615)¥147,526

1

4.

Scope of Consolidation at December 31, 2003
Consolidated subsidiaries:
Equity-method non-consolidated subsidiaries:
Equity-method affiliates:

5.

172
1
105

Changes in Scope of Consolidation during the Nine Months ended December 31, 2003
Consolidated subsidiaries:
Newly added:
Newly excluded:10
107

Equity-method non-consolidated
subsidiaries and affiliates:
Newly added:
Newly excluded:

7
17

2

The SOFTBANK GroupAs of December 31, 2003, the SOFTBANK Group comprised 278 companies with operation in 8 segments as follows.

Business segment

Consolidated
subsidiaries

Equity-method
non-consolidated
subsidiaries andaffiliates

1.

Broadband
Infrastructure

15

7

2.

e-Commerce

19

8

3.

e-Finance

38

11

4.

Media & Marketing

13

6

5.

Broadmedia

15

2

6.

Internet Culture

16

5

7.

Technology Services

7

4

8.

Overseas Funds

37

60

9.

Others123

Principal products and operational content of each business
ADSL high-speed Internet connection service and IP telephonyservice; fiber-optic ultra-high-speed Internet connection service andother operations
Distribution of PC software and such hardware as PCs andperipherals; enterprise solutions; diversified e-commerce businesses,
including business transaction platform (B2B) and consumer-related
e-commerce (B2C)
All-inclusive financial operations, including on-line security
business; management of domestic venture capital funds; incubationof portfolio companies
Book and magazine publication in such areas as PCs, the Internet,
entertainment, etc.; development of web content specialized in IT
Provision of applications and content for broadband broadcasting andcommunications and promoting the spread of such operations
Internet-based advertising operations; broadband portal business;
Internet-based auction business
System solution business; business solution business
U.S.- and Asia-focused global venture capital business with a main
focus on Internet-related companies
Holding company functions for overseas operations; back-officeservices in Japan

172
106
Total
Note: SOFTBANK BB Corp., which is engaged in the Broadband Infrastructure and e-Commerce segments, is included in the
Broadband Infrastructure segment; Yahoo Japan Corporation, which is engaged in the Internet Culture and Broadband Infrastructure
segments, is included in the Internet Culture segment. Both of them are consolidated subsidiaries.
［ Ove rseas ］

Broadband Infrastructure

e - Commerce［ Domestic ］
Dee Corp.

IP REVOLUTION, INC.

Vector Inc.

SOFTBANK BB Corp.
Inte rn et Cu ltu re（ Ope r at i o n Ho l di n g
C o m pan ie s）

SOFTBANK INVESTMENT CORPORATIONE*TRADE SECURITIES CO., LTD.

Tavigator, Inc.

Morningstar Japan K.K.

e-Shopping! Books CORP.

［ Ove rse as ］

［ Dome stic ］

SOFTBANKFINANCECORPORATIONSOFTBANK CORP.
(Pure Holding Company)（ Ope r at i o n Ho l din g
C o m pan ie s）（ Ope r at i o n Ho ldi n g
C o m pan ie s）

SOFTBANK
Broadmedia
Corporation

Club iT Corporation

SOFTBANK
Holdings Inc.
（ Ope r at i o n Ho ldi n g
C o m pan ie s）

BB Cable Corporation

Broadmedia

e- Fin an ce

Carview Corporation

Yahoo Japan Corporation

SOFTBANKTECHNOLOGYHOLDINGS CORP.

Morningstar Inc.

SOFTBANK FRONTIERSECURITIES CO., LTD.
World Nichiei Securities
Co., Ltd.
Finance All Corporation［ Dome stic ］［ Overse as ］

SOFTBANK Korea Co., Ltd.
SB CHINA HOLDINGS PTE LTD

SOFTBANK Media &Marketing Corp.
SOFTBANK Publishing Inc.

Ove rseas Fun ds
SOFTBANK US Ventures VI LP
SB Life Science Ventures Ⅰ,LPSOFTBANK TECHNOLOGY CORP.

SOFTBANK ZDNet Inc.

［ Domestic］ cyber communications inc.
Me dia & Marketin g

Tec h nology Se rvic es［ Ove rseas ］

Notes: Changes on January 1, 2004 or later
1. As of January 8, 2004, SOFTBANK ZDNet Inc. changed its name to Softbank ITmedia Inc.
2. World Nichiei Securities Co., Ltd. merged with SOFTBANK FRONTIER SECURITIESCO., LTD. with the former the surviving company as of February 2, 2004, and it changed its
company name to WORLD NICHIEI FRONTIER Securities Co., Ltd.

3・・・・ Segment・・・・ Consolidated subsidiary・・・・ Equity-method subsidiaryor affiliate

Management Policies

The core management philosophy of the SOFTBANK Group (hereinafter “the Group”) is“Endeavoring to benefit society and the economy by fostering the sharing of wisdom and knowledge
gained through the IT revolution.” By conducting business activities in a creative manner, the Groupfocuses its energy on enriching society and revitalizing industry while enhancing its corporate value.

The broadband market, where the Group is placing the highest priority, is expanding steadily. In Japan,
the number of broadband subscribers was 13.64 million as of December 31, 2003 (according to datacompiled by the Ministry of Public Management, Home Affairs, Posts and Telecommunications). The
Group is taking actions aimed at steadily expanding its base of customers and improving profitability
in the broadband infrastructure business. At the same time, in broadband-related markets, the Group isdeveloping businesses by capturing synergies from knowledge gained by Group companies involved
in Internet businesses and the broadband infrastructure business.

As of December 31, 2003, the cumulative number of lines installed by the Group’s Yahoo! BB
comprehensive broadband service was more than 3.69 million (and was 3.817 million as of January 31,2004). This helped the Group to retain its number-one position in ADSL services in Japan amongcommunications carriers and ISPs. The BB Phone IP telephony service also remained the clear market
leader (the Group data) with 3.457 million lines as of December 31, 2003 (, and the number of BB
Phone lines as of January 31, 2004 was 3.584 million). As part of efforts to further expand thecustomer base and improve profitability, the Group is continuing to broaden services, such as theJanuary 2004 introduction of Yahoo! BB 45M service. Furthermore, plans call for the development ofvarious kinds of utility computing (*1) services utilizing the Group’s broadband network. One example
is the streaming distribution of applications, new type of software distribution, by which the Groupaims to develop new markets and increase earnings in the e-Commerce business. All Group
companies continuously commit to work together to develop businesses utilizing its broadband
infrastructure, with the goal of ultimately building reliable, diversified earnings sources and robust
cash flows.

In December 2003, the Group acquired a preliminary license to test third-generation (3G) mobile
phone standards, TD-CDMA and CDMA2000. Based on the results of upcoming trials, the Group willconsider future actions, taking into consideration necessary management resources, economic viability
and other factors. (*2)

4

Important issues for implementing the business expansion outlined above are making the broadband
infrastructure business profitable, enhancing its profitability, and diversifying fund procurement
channels. In the broadband infrastructure business, the Group incurs substantial expenses associatedwith acquiring new customers and other activities as a one-time cost during the start-up and growthphases of the broadband infrastructure business. By continuously monitoring the balance between thelevel of expenses and expansion of the customer base, the Group aims to develop this business in an
efficient manner. At the same time, the Group will take measures to raise average revenue per
customer such as the introduction of new services, which should lead to improvement in profit
margins. Through these actions, the Group aims to make the broadband infrastructure businessprofitable at an early stage.

Regarding fund procurement activities, SOFTBANK CORP. procured a total of ¥198,680 million inEuro markets in December 2003. The issuance of 14,500,000 shares of common stock generated
proceeds of ¥48,680 million. The issuance of Euroyen-denominated convertible bonds with stockacquisition rights, which had different terms, generated proceeds of ¥150,000 million. Of total
proceeds, ¥140.5 billion is earmarked for the repayment of interest-bearing debt and the remainder forthe broadband business. Along with the procurement of funds, this fundraising also led to
improvement in indicators of the Group’s financial stability and soundness.

Regarding future fund procurement activities, the Group plans to continue diversifying its funding
channels to quickly meet requirements for funds in the broadband business and for the repayment ofinterest-bearing debt. This will be done by continuously monitoring trends in bond and equity markets
while taking into consideration the maintenance of an optimum capital structure. In particular, because
long-term interest rates are at a historic low, the Group plans to consider the possibility of issuingbonds domestically or abroad while monitoring market trends.
(*1)

Utility computing is a concept whereby users are supplied with precisely the amount of computing power andapplications they need at any required time, just as one turns a water faucet on and off. For example, users can access a
server and utilize an application via a broadband connection only when needed. This service offers many benefits,
especially the ability to cut management expenses for companies that use large numbers of PCs and applications.
(*2)

The TD-CDMA standard may not receive regulatory approval in Japan, and it is possible that the Group may not beable to acquire a commercial license to use these transmission technologies mentioned above.

5

Results of Operations and Financial Position

1. Consolidated Results of Operations
Overview of First Three Quarters (Nine-month period)
For the first three quarters of the fiscal year 2004, the Group recorded net sales of ¥362,154 million,
operating loss of ¥46,009 million, ordinary loss of ¥62,275 million and net loss of ¥93,683 million.

Regarding net sales, in addition to net sales in the e-Commerce segment, there was a steady
performance by the Broadband Infrastructure segment due to a significant growth in the number ofpaying customers in the Yahoo! BB service and an increase in average revenue per customer. There
were also strong performances by the Internet Culture and e-Finance segments.

Operating loss of ¥46,009 million was primarily due to customer-acquisition costs and other up-front
expenses incurred associated with the growth in the scale of operations in the Broadband
Infrastructure segment. Excluding the Broadband Infrastructure segment, there was aggregate
operating income of ¥21,637 million for the first three quarters of the fiscal year 2004.

The Group recorded ordinary loss of ¥62,275 million, which included non-operating expenses of¥16,265 million, net of non-operating income. Net exchange gain was recorded because of the yen’s
appreciation during the first three quarters of the fiscal year 2004, but there was a valuation loss oninventories of ¥10,052 million recorded in the first half of the fiscal year 2004, associated withinventories purchased at the initial stage of the Broadband Infrastructure business.

Net loss of ¥93,683 million was mainly the result of gains on sale of investment securities; losses onsale of investment securities, mainly all shares held in Aozora Bank, Ltd.; and a valuation loss on
investment in affiliates and others, most of which was recorded during the first half of the fiscal year
2004.

Overview of Third Quarter (three-month period)
For the third quarter of the fiscal year 2004 (October 1, 2003 to December 31, 2003), the Group
recorded net sales of ¥136,699 million, operating loss of ¥6,652 million, ordinary loss of ¥8,630
million and net loss of ¥16,344 million.

Net sales increased ¥15,126 million compared with the second quarter of the fiscal year 2004.
Contributing to this growth were sales of ¥34,422 million in the Broadband Infrastructure segment andcontinued growth in sales in the Internet Culture and e-Finance segments.

6

Operating loss was ¥6,652 million, primarily due to customer-acquisition costs and other up-front
expenses incurred associated with growth in the scale of operations in the Broadband Infrastructure
segment. This was an improvement of ¥8,506 million over the second quarter of the fiscal year 2004,
indicating a trend of quarterly decline in operating loss.

Ordinary loss was ¥8,630 million, due to interest expenses of ¥2,522 million, net of interest income,and other expenses incurred, while the Group recorded a net exchange gain of ¥1,603 million due tothe yen’s appreciation during the third quarter of the fiscal year 2004.

Loss before income taxes and minority interest was ¥10,693 million, due mainly to other special
losses of ¥3,827 million and other expenses recorded, while the Group recorded a ¥2,327 million gainon sale of investment securities due to the partial sale of shares in cyber communications inc. andother portfolio companies. After a deduction of ¥4,624 million for minority interests in earnings ofYahoo Japan Corporation and other items, there was net loss of ¥16,344 million.

Results of Operations by Business Segment for the First Three Quarters (nine-month period)
Broadband Infrastructure—Segment sales were ¥87,971 million. In the Yahoo! BB business,significant growth in the number of paying customers and an increase in average revenue per customer
resulting from the increase in share of paying customers who use services such as an ADSL service
with maximum downstream speeds of 12Mbps and 26Mbps, BB Phone, and a wireless LAN service,contributed to higher sales at SOFTBANK BB Corp. There was also ISP revenue growth at Yahoo
Japan Corporation. Segment sales have been increasing steadily on a quarterly basis. Due mainly tocustomer-acquisition costs incurred in the Yahoo! BB business, there was an operating loss of ¥67,646
million, although operating loss has been declining steadily on a quarterly basis.

e-Commerce—Segment sales were ¥180,959 million and operating income was ¥2,402 million.
Results were impacted by lower sales of software to consumers by SOFTBANK BB Corp., reflecting
sluggish markets. Sales and operating income recovered in the third quarter relative to the first andsecond quarters because of higher sales of computer peripherals to consumers and a strategic focus on
the solutions business. With the growing acceptance of broadband connections that make possible
high-volume data transmission, SOFTBANK BB Corp. is seeking to increase sales by using new typesof software distribution such as downloads and ASP services. At the same time, this company isfurther concentrating on the highly profitable service and solution businesses. The solution business,with a focus on security-related solutions such as antivirus services and firewalls, is gradually making
a greater contribution to operating income. Operating income at other e-Commerce segment

7

companies is stable. Earnings growth was solid at Carview Corporation, eCareer CORP. and Vector
Inc.
e-Finance—Segment revenue was ¥28,314 million. Revenue of World Nichiei Securities Co., Ltd. (*3)
for the third quarter (October 1, 2003 to December 31, 2003) was included following the acquisitionof a controlling stake in this company by SOFTBANK INVESTMENT CORPORATION. In addition,
there was a substantial increase in brokerage commission revenue at E*TRADE SECURITIES CO.,LTD. due to the higher trading volume in Japan’s active stock markets. Operating income was ¥3,581
million. In addition to the contributions of E*TRADE SECURITIES CO., LTD. and World Nichiei
Securities Co., Ltd., operating income benefited from a gain on sale of operational investment
securities by SOFTBANK INVESTMENT CORPORATION. SOFTBANK INVESTMENT
INTERNATIONAL (STRATEGIC) LIMITED, which posted operating loss in the first half of the
fiscal year 2004, was excluded from the scope of consolidation from the third quarter of the fiscal year
2004. As a subsequent event, we sold part of our holding in E*TRADE SECURITIES CO., LTD. and
SOFTBANK INVESTMENT CORPORATION in January 2004. Gains on such sale of investment
securities will be recorded in results of the fourth quarter of the fiscal year 2004. These transactions
will not affect these companies’ consolidated subsidiary status.
(*3)

World Nichiei Securities Co., Ltd. became a consolidated subsidiary in October 2003 following the acquisition ofcontrolling stake in this company by SOFTBANK INVESTMENT CORPORATION. On February 2, 2004, World
Nichiei Securities Co., Ltd. merged with SOFTBANK FRONTIER SECURITIES CO., LTD. and was renamed
WORLD NICHIEI FRONTIER Securities Co., Ltd.

Media & Marketing—Segment sales were ¥10,795 million and operating loss was ¥842 million. This
performance mainly reflected lower sales at SOFTBANK Publishing Inc. of magazines and books dueto the absence of popular titles amid a prolonged slump in the publishing market. There was a gain onsale of investment securities of ¥7,857 million from the partial sale of shares in cyber communications
inc., most of which was recorded in the first half of the fiscal year 2004.

Broadmedia—Segment sales were ¥9,791 million and operating loss was ¥2,376 million. This loss
was mainly attributable to start-up expenses at BB Cable Corporation, which operates the BB Cable
TV service using the ADSL network, expenses associated with the commencement of operations of
this service, and expenses for the acquisition of content for broadcasts and video-on-demand (VOD).

Internet Culture—Segment sales were ¥45,075 million and operating income was ¥23,147 million.
This performance was mainly due to steady growth in system utilization fees in the auction business at8

Yahoo Japan Corporation as the volume of transactions rose and to continued strength in thiscompany’s advertising revenues.

Technology Services—Segment sales were ¥15,948 million. There was a steady performance by thee-business service provided by SOFTBANK TECHNOLOGY CORP., which handles everything fromsales and procurement activities to billing and bill collection for e-commerce site operators. However,sales were no longer recorded from the ADSL sales support service, which was reflected inperformance. Operating income was ¥306 million. The operating margin is declining due to higher
personnel expenses at new businesses.

2. Consolidated Financial Position
Balance Sheet Analysis
Assets increased ¥247,705 million to ¥1,194,036 million, compared with March 31, 2003. Cash anddeposits increased ¥162,217 million, compared with March 31, 2003, mainly through the issuance ofEuroyen convertible bonds with stock acquisition rights in December 2003, which generated proceedsof ¥150,000 million, and issuance of common stock (14,500,000 shares), which generated proceeds of¥48,680 million. Furthermore, compared with March 31, 2003, there was an increase of ¥110,190
million in cash segregated as deposits related to securities business and receivables related to margintransactions. This was due to growth in the number of margin accounts and transactions at E*TRADE
SECURITIES CO., LTD. and the inclusion of World Nichiei Securities Co., Ltd. in the scope of
consolidation in the third quarter of the fiscal year 2004. In addition, there was an increase of ¥6,127
million to ¥85,411 million in transmission equipment, mainly at SOFTBANK BB Corp.

Investments and other assets decreased. The primary reason was a ¥4,783million decrease ininvestment securities, compared with March 31, 2003, mostly reflecting the sale of all shares held in
Aozora Bank, Ltd. This was partly offset by an increase in the market value of stock held in Yahoo!
Inc. and UTStarcom, Inc. (*4)

Total liabilities increased ¥214,053 million to ¥856,982 million compared with March 31, 2003.
Short-term borrowings decreased, but there was a ¥93,412 million increase in payables related tomargin transactions and guarantee deposits received from customers related to securities business,
mainly at E*TRADE SECURITIES CO., LTD. and World Nichiei Securities Co., Ltd. In addition,
there was a ¥123,751 million increase in corporate bonds (long-term liabilities) because of the abovementioned December 2003 bond issuance. Although there was a ¥111,868 million increase in interestbearing debt to ¥452,663 million, net interest-bearing debt (*5) decreased ¥46,951 million to ¥141,280
million, compared with March 31, 2003.

9

Shareholders’ equity increased ¥8,253 million to ¥265,650 million, compared with March 31, 2003.
Accumulated deficits increased by ¥96,384 million, mainly due to net loss recorded for first threequarters of the fiscal year 2004. However, this was outweighed by a increase in common stock andadditional paid-in capital resulting from the above-mentioned issuance of common stock, and a¥68,027 million increase in net unrealized gain on other securities in relation to stock in Yahoo! Inc.
and UTStarcom, Inc. (*4)(*4)

UTStarcom, Inc. was reclassified from an equity-method affiliate to an available-for-sale security.

(*5)

Interest-bearing debt, net of cash and deposits and marketable securities.

Cash Flow Analysis
Net cash used for operating activities was ¥72,447 million. This was mainly attributable to loss
before income taxes and minority interest of ¥75,847 million, mostly due to operating loss recorded in
the Broadband Infrastructure segment; depreciation and amortization of ¥23,868 million; and, income
taxes paid of ¥16,095 million, mainly at Yahoo Japan Corporation.

Net cash provided by investing activities was ¥61,785 million. Although ¥54,520 million was used
for the purchase of property and equipment and intangibles, mainly transmission equipment purchased
at SOFTBANK BB Corp., there were proceeds of ¥142,414 million from the sale of marketable andinvestment securities, including stock in Aozora Bank, Ltd. and UTStarcom, Inc., mainly in the firsthalf of the fiscal year 2004.

Net cash provided by financing activities was ¥172,237 million. Although ¥67,442 million was used
for the repayment of short-term borrowings (net), mainly in the third quarter of the fiscal year 2004,
there were proceeds of ¥162,761 million from the issuance of bonds, chiefly the December 2003 bondissuance, and ¥48,861 million from the issuance of shares.

As a result of the foregoing, cash and cash equivalents as of December 31, 2003 totaled ¥308,374
million, an increase of ¥160,848 million from March 31, 2003.

10

CONSOLIDATED BALANCE SHEETS(Millions of yen; amounts less than one million yen are omitted.
Increase
March 31, 2003
December 31, 2003
(decrease)
Amount%Amount%ASSETS
Current assets:
Cash and deposits
Notes and accounts receivable - tradeMarketable securities
Inventories
Deferred tax assets
Cash segregated as deposits
related to securities business
Receivables related to margin transactions
Other current assets
Less : Allowance for doubtful accounts
Total current assets¥309,720
70,097
1,661
32,743
4,899¥147,503
64,255
5,059
42,201
7,035¥162,217
5,842(3,398)(9,458)(2,136)75,89934,574

41,325

117,71271,312(9,011)
675,035

56.5

48,84765,227(7,268)407,43743.1

68,864
6,084(1,743)
267,598

8.7

79,28422,964102,249

10.8

6,127
(4,856)
1,270

1.2

9,830
14,00823,838

2.5(9,830)1,023(8,806)262,631
90,49728,55523,675(5,660)399,69933.5

267,414
97,60632,701
16,417(1,794)412,34643.6(4,783)(7,109)(4,146)
7,258(3,866)(12,647)

749

0.1

459

0.0

290

¥1,194,036

100.0¥946,331

100.0¥247,705

Non-current assets:
Property and equipment, net
Transmission equipment
OthersTotal tangible assets

85,411
18,108103,520

Intangible assets, net:
Consolidation adjustment
Other intangibles
Total intangible assets

15,031
15,031

Investments and other assets:
Investment securities
Investments in partnerships
Deferred tax assets
Other assets
Less : Allowance for doubtful accounts
Total investments and other assets

Deferred charges

Total assets

11

CONSOLIDATED BALANCE SHEETS(Millions of yen; amounts less than one million yen are omitted.
Increase
March 31, 2003
December 31, 2003
(decrease)
Amount%Amount%LIABILITIES ANDSHAREHOLDERS' EQUITYCurrent liabilities:
Notes and accounts payable - trade
Short-term borrowings
Commercial paper
Current portion of corporate bonds
Accounts payable - otherand accrued expenses
Income taxes payable
Deferred tax liabilities
Payables related to margin transactions
Guarantee deposits received from
customers related to securities business
Other current liabilities
Total current liabilities¥41,660
127,585
16,00044,584¥58,534
150,557
4,000
56,279¥(16,874)(22,971)
12,000(11,694)

55,69674,819(19,123)

9,144
311
99,416

10,912
5,97844,458(1,767)(5,667)54,95773,02034,56538,45434,369501,787

42.0

18,399458,504

48.5

15,96943,282

19.4

123,751
10,78334,066
2,713(544)
170,770

Long-term liabilities:
Corporate bonds
Long-term debt
Deferred tax liabilities
Consolidation adjustment
Other liabilities
Total long-term liabilities

245,560
18,932
67,352
2,713
20,635355,195

29.8

21,179184,424

Total liabilities

856,98271.8

642,92967.9

214,053

71,4036.0

46,005

4.9

25,398

Common stock

162,303

13.6

137,867

14.6

24,436

Additional paid-in capital

186,690

15.6

162,23117.1

24,458

Accumulated deficits(197,416)(16.5)(101,031)(10.7)(96,384)

Net unrealized gain on other securities

107,623

9.0

39,595

4.2

68,027

Translation adjustments

6,510

0.5

20,932

2.2(14,422)

Less: Treasury stock

(60)

(0.0)

(2,199)

(0.2)

2,138

265,650

22.2

257,396

27.2

8,253

¥1,194,036

100.0¥946,331

100.0¥247,705

Minority interestin consolidated subsidiaries

121,808
8,149
33,285-

Shareholders' equity:

Total shareholders' equity
Total liabilities andshareholders' equity

12

CONSOLIDATED STATEMENTS OF INCOME(Millions of yen; amounts less than one million yen are omitted.
Nine-month period ended
FY2003
April 2002 through March 2003
December 31, 2003
Amount%Amount%Net sales¥362,154

100.0¥406,892

100.0

Cost of sales

273,88675.6

361,243

88.8

Gross profit

88,26824.4

45,648

11.2

Selling, general and administrative expenses

134,27737.1

137,646

33.8

Operating loss

(46,009)(12.7)(91,997)(22.6)

Interest income
Exchange gain
Equity in gain under the equity method
Other non-operating income
Non-operating income

1,092

504
5,075

-

4,929
10,5092.911,107
5,553
17,753

4.4

8,741
7,704

Interest expense
Exchange loss
Equity in losses under the equity method
Valuation loss on inventories
Other non-operating expenses
Non-operating expenses

1,780
10,052
6,623
26,775

7.4

19,11935,564

8.8

Ordinary loss

(62,275)(17.2)(109,808)(27.0)

Gain on sale of investment securities
Other special income
Special income

20,5402,468
23,0096.4

127,607
6,797
134,405

33.0

Loss on sale of investment securities
Valuation loss on investment securities
Valuation loss on investment in affiliates
Other special losses
Special loss

10,512
4,237
7,592
14,23836,582

10.1

10,84633,84832,32319,051
96,071

23.6

Loss before income taxes and minority interest(75,847)(20.9)(71,474)(17.6)

Current
RefundedDeferred

13,806

3.8(4,481)(1.2)

14,84911,12527,350

3.6
2.7
6.7

Minority interest

8,511

2.4

(2,560)(0.6)¥(93,683)(25.9)¥(99,989)(24.6)

8,317--

Income taxes:

Net loss

Note:
SOFTBANK CORP. had presented the results of the financing businesses separately in the accounts of "Revenue from financing business"and "Financing business expenses" in the consolidated statements of income. Effective from April 1, 2003, SOFTBANK CORP. haspresented the combined results of operations of non-financial business and financial business in the accounts of "Net sales", "Cost of sales",and "Selling, general and administrative expenses" in the consolidated statements of income.

13

CONSOLIDATED STATEMENTS OF
ADDITIONAL PAID-IN CAPITAL AND RETAINED EARNINGS(Millions of yen; amounts less than one million yen are omitted.)
FY2003Nine-month period endedApril 2002 through March 2003
December 31, 2003
ADDITIONAL PAID-IN CAPITAL
Additional paid-in capitalat the beginning of the period
Increase due to issuance of shares
Increase in paid-in capital due tosale of treasury stock¥162,231¥162,231

Additional paid-in capitalat the end of the period

24,425-32-¥162,231¥186,690(Millions of yen; amounts less than one million yen are omitted.)
FY2003Nine-month period endedApril 2002 through March 2003
December 31, 2003
RETAINED EARNINGS (DEFICITS)
Retained earnings (deficits)at the beginning of the period¥(101,031)¥4,035Net loss(93,683)(99,989)

Cash dividends(2,342)(2,358)Bonuses to directors

(73)

(75)

Net adjustments to retained earnings due tochange in scope of the consolidation(286)(2,627)-(17)¥(197,416)¥(101,031)

Decrease due to merger
Accmulated deficits
at the end of the period

Note:
Under Japanese GAAP, the cumulative effect arising from any changes in scope of consolidation is treated as an adjustment to retained
earnings in the consolidated statements of additional paid-in capital and retained earnings.

14

CONSOLIDATED STATEMENTS OF CASH FLOWS(Millions of yen; amounts less than one million yen are omitted.)
FY2003Nine-month period endedApril 2002 through March 2003
December 31, 2003
I

Cash flows from operating activities:
Loss before income taxes and minority interest¥(75,847)¥(71,474)

23,868
1,780
11,830(10,023)(4,098)(754)
8,317(6,992)(15,496)(53,384)
46,194
22,114(52,492)

20,904(11,107)
66,172(116,839)
8,626(1,311)
8,741(3,522)
3,172
8,576
2,208
32,792(53,061)

870(8,497)(16,095)
3,767(72,447)

1,138(9,386)(13,202)
5,911(68,600)

Cash flows from investing activities:
Purchase of property and equipment and intangibles
Purchase of marketable and investment securities
Proceeds from sale of marketable and investment securities
Additional investments in newly consolidated entities
Proceeds from sale of interests in subsidiaries previously consolidated
Proceeds from sale of interests in consolidated subsidiaries
Increase in loan receivables
Collection of loans
Others, net
Net cash provided by investing activities(54,520)(25,623)
142,414
321(1,158)2,393(16,108)
11,1672,899
61,785(64,500)(33,413)
171,350(591)(23)
56,356(5,211)
1,975(6,191)
119,749

Cash flows from financing activities:
Proceeds from issuance of shares to minority shareholders(Decrease) increase in short-term borrowings, net
Proceeds from issuance of commercial paper
Repayment of commercial paper
Proceeds from long-term debt
Repayment of long-term debt
Proceeds from issuance of bonds
Redemption of bonds
Proceeds from issuance of shares
Cash dividends paid
Cash dividends paid to minority shareholders
Others, net
Net cash provided by (used in) financing activities

2,520(67,442)
59,500(47,500)
66,312(5,138)
162,761(48,470)
48,861(2,312)(97)
3,243
172,237

4,842
44,10414,000(20,000)
1,380(7,758)2,496(52,223)(2,354)(122)(1,980)(17,615)620(5,728)

162,196

27,805Adjustments to reconcile loss before income taxes andminority interest to net cash used for operating activities:
Depreciation and amortization
Equity in losses (gains) under the equity method, net
Valuation loss on investment securities
Gain on sale of marketable and investment securities, net
Exchange (gain) loss, net
Interest and dividend income
Interest expense
Increase in receivables- trade(Decrease) increase in payables-trade(Increase) decrease in other receivables
Increase in other payables
Others, net

Interest and dividends received
Interest paid
Income taxes paid
Refund of income taxes
Net cash used in operating activities
IIIII

IV Effect of exchange rate changes
V Net increase in cash and cash equivalents
VI Increase in cash and cash equivalents due to the companies
newly consolidated
VII Decrease in cash and cash equivalents due to exclusion of
the entities previously consolidated-

60(1,348)(194)

VIII Cash and cash equivalents at the beginning of the period

147,526

119,855

IX Cash and cash equivalents at the end of the period¥308,374¥147,526

15

Condensed quarterly financial information
Condensed Statement of Income(Millions of yen; amounts less than one million yen are omitted.)Three-month period ended Three-month period ended Three-month period ended
September 30, 2003
June 30, 2003
December 31, 2003
AmountAmountAmount¥136,699¥121,572¥103,881

Cost of sales

97,53592,526

83,824Gross profit

39,16429,046

20,057

Selling, general and administrative expenses

45,81644,20544,255

Operating loss

(6,652)(15,159)(24,197)

Non-operating income
Non-operating expenses

4,327
6,304

3,042
10,895

3,139
9,575

Ordinary loss

(8,630)(23,011)(30,633)

Special income
Special loss

2,830
4,894

7,815
25,02012,362
6,667(10,693)(40,215)(24,938)

Income taxes:
Current
Deferred

777
248

3,668
(4,009)

9,360
(721)

Minority interest

4,624

2,729

1,156

¥(16,344)¥(42,603)¥(34,734)

Net sales

Loss before income taxes and minority interest

Net loss

Condensed Statement of Cash Flows(Millions of yen; amounts less than one million yen are omitted.)Three-month period ended Three-month period ended Three-month period ended
September 30, 2003
June 30, 2003
December 31, 2003
AmountAmountAmountI

Net cash used in operating activities¥(18,769)¥(15,856)¥(37,821)

II

Net cash (used in) provided by investing activities(3,273)

72,959(7,899)III

Net cash provided by (used in) financing activities

160,231(10,785)

22,791IV

Effect of exchange rate changes

451

(44)

213

V

Net increase (decrease) in cash and cash equivalents

138,640

46,273(22,716)VI

Decrease in cash and cash equivalents due to
exclusion of entities previously consolidated(0)(1,198)(149)

VII Cash and cash equivalents at the beginning of
the period

169,734

124,660

147,526

VIII Cash and cash equivalents at the end of the period¥308,374¥169,734¥124,660

Note:
Three-month period ended Three-month period ended Three-month period ended
June 30, 2003
September 30, 2003
December 31, 2003
Depreciation and amortization included in
net cash used for operating activities¥8,151

16¥8,129¥7,587

Basis of Presentation of Consolidated Financial Statements
1. Changes in scope of consolidation(1) As of December 31, 2003, SOFTBANK CORP. （the "Company") consolidated 172 subsidiaries. 12 subsidiaries were notconsolidated due to their immateriality in terms of the consolidated total assets, net sales, net loss and accumulated deficits of the
SOFTBANK consolidated financial statements.
Significant changes in the scope of the consolidation were as follows:<Increase>
World Nichiei Securities Co., Ltd.
<Decrease>
SOFTBANK INVESTMENT INTERNATIONAL (STRATEGIC) LIMITED and its 79 subsidiarie(2) As of December 31, 2003, the Company held one non-consolidated subsidiary and 105 affiliated companies, all of which were
accounted for under the equity method.
Significant changes in the application of the equity method were as follows:<Decrease>
Aozora Bank, Ltd.
UTStarcom, Inc.

2. Summary of significant accounting policies and methods[1] Standards and methods of valuation for significant assets(1) Marketable securities and investment securities
Held-to-maturity debt securities :Other securities:
With market quotations:With no market quotations:

Stated at amortized cost

Stated at fair value, which represents the market prices at the balance sheet date
(Unrealized gain/loss is included as a separate component in shareholders' equity,
net of tax, while cost is primarily determined using the moving-average method)
Carried at cost, primarily based on the moving-average method(2) Derivative instruments:

Stated at fair value(3) Inventories:

Carried at cost, primarily based on the moving-average method[2] Depreciation and amortization(1) Property and equipment:
Transmission equipment:

Computed using the straight-line method

Others:Computed primarily using the declining-balance method(2) Intangible assets:

Computed using the straight-line method[3] Accounting principles for major allowances and accruals
Allowance for doubtful accounts:
The allowance for doubtful accounts is calculated based on the aggregate amount of estimated credit losses on doubtfulreceivables, plus an amount for receivables other than doubtful receivables calculated using historical write-off experience
ratios from certain prior periods.

[4] Translation of foreign currency transactions and accounts
Foreign currency transactions are generally translated using the foreign exchange rates prevailing at the respective
transaction dates. All assets and liabilities in foreign currencies are translated at the foreign exchange rates prevailing at therespective balance sheet dates. Exchange gains or losses are credited or charged to current income when incurred.
The translation of revenues and expenses in the financial statements of foreign subsidiaries into Japanese yen is performedby using the average exchange rates for the period. Assets and liabilities are translated using the foreign exchange rates
prevailing at the balance sheet dates, and capital stock is translated using the historical rates.
Foreign currency financial statement translation differences are presented as a separate component of "Shareholders' equity",
except for the portion pertaining to minority shareholders, which is included in "Minority interest in consolidated
subsidiaries".
[5] Leases
Under the Japanese accounting standards, capital leases, as defined therein, other than those whereby ownership of theassets is transferred to the lessee at the end of the lease term, are accounted for as operating leases with certain disclosures.

3. Scope of cash and cash equivalents in the consolidated statements of cash flows"Cash and cash equivalents" comprises cash on hand, bank deposits withdrawable on demand and highly liquid investments withinitial maturities of three months or less and a low risk of fluctuation in value.

17

NOTES
1. Accumulated depreciation of property and equipment
December 31, 2003
38,608 million yen

March 31, 2003
27,417 million yen

2. Number of treasury stock held by the Company and its subsidiaries
December 31, 2003

March 31, 2003

Held by the Company

common stock

31,319 shares

24,781 shares

Held by consolidated subsidiaries

common stock- shares

1,558,719 shares

Number of shares issued

common stock

351,436,826 shares

336,876,826 shares

3. Receivables and payables relating to margin transactions
Receivables and payables relating to margin transactions in securities businesses engaged by certain consolidated
subsidiaries are as follows:
December 31, 2003
Receivables related to margin transactions Loans receivable from customers for
margin transactions
Cash deposits (collateral) for securities
borrowed from securities
companies

113,093 million yen

Payables related to margin transactions Loans payable to securities companies
for margin transactions
Proceeds from securities sold for margintransactions

March 31, 2003

42,457 million yen

4,619

6,389

77,60327,906

21,812

16,552

4. Assets pledged as collateral(1) For future lease liabilities
December 31, 2003
Assets pledged as collateral:
Notes and accounts receivable - trade
Other current assets (accounts receivable -other)
Secured liabilities:
Notes and accounts payable - trade

March 31, 2003

7,407 million yen
48

9,450 million yen
81

117 million yen

251 million yen

Note: The collateral for the future lease liabilities was provided by mortgaging against the aggregateof the current and future receivables due from customers of certain consolidated subsidiaries and abroadcasting company, based on marketing agreements, etc.
The future lease liabilities at the end of periods are as follows:
December 31, 2003
Future lease liabilities (including the above"Notes and accounts payable-trade")

42,881 million yen

18

March 31, 2003
32,732 million yen

4. Assets pledged as collateral (continued)(2) For short-term borrowings and long-term debt
December 31, 2003

March 31, 2003

Assets pledged as collateral:
Cash and deposits
Notes and accounts receivable - trade
Inventories
Marketable securities
Transmission equipment
Property and equipment-others
Investment securities

181 million yen
1,129
3,182
329
6,201
1,512
185,490- million yen
1,704
195
55,711

Secured liabilities:
Notes and accounts payable - trade
Short-term borrowings
Accounts payable - other and accrued expenses
Other current liabilities
Long-term debt
Other long-term liabilities

268
53,852
93
374
5,328
280

19,920
58
1,350
-

Note:
1. In addition, stocks of ¥3,612 million which are deposited by customers as collateral for
margin transactions in relation to sales of securities were pledged as collateral.
2. SOFTBANK America Inc. ("SBA"), a wholly-owned subsidiary of the Company, pledged
and delivered investment securities into a collateral securities account. SBA is able to release
the excess amount over 142.857% of the secured liabilities.
The assets pledged as collateral and secured liabilities at the end of the periods are as follows:
December 31, 2003

March 31, 2003

Assets pledged as collateral:
Investment securities(Book value)(Fair market value)(Releasable amount)

180,820 million yen
180,820
106,064

55,711 million yen
63,17534,758

Secured liabilities:
Short-term borrowings
Accounts payable - other and accrued expenses

40,709-19,83358(3) For long-term debt owed by a third party
December 31, 2003

March 31, 2003

Assets pledged as collateral:
Investments in partnerships

1,993 million yen

2,229 million yen

Secured liabilities:
Long-term debt owed by a third party

2,358

2,388

5. Line of credit as a creditor (not used)
December 31, 2003
109 million yen

March 31, 2003
51 million yen

6. Balance of accounts receivable sold
December 31, 2003
6,713 million yen

19

March 31, 2003
7,466 million yen

7. Valuation loss on investments in subsidiaries and affiliates"Valuation loss on investments in affiliates" presented as a special loss in the consolidated statements of income is as follows.
(1) Valuation loss on investment in consolidated subsidiaries
December 31, 2003

March 31, 2003

5,668 million yen

10,610 million yen(2) Valuation loss on investment in affiliates accounted for under the equity method
December 31, 2003

March 31, 2003

1,923 million yen

21,713 million yen

8. Consolidated statements of cash flows
Reconciliation of cash and cash equivalents to the amounts presented in the accompanying consolidated balance sheets

Cash and deposits

December 31, 2003

March 31, 2003

309,720 million yen

147,503 million yen

Marketable securities

1,661

5,059

Time deposits with original
maturity over three months(1,723)(2,866)

Deposits received from customers
in the commodities business

(104)

(29)

Stocks and bonds with original
maturity over three months(1,180)(2,140)Cash and cash equivalents

308,374 million yen

147,526 million yen

20

9. Leases
1. Capital leases in which the ownership of leased assets is not transferred to lessees at the end of lease periods(as a lessee)(1) Amounts equivalent to acquisition costs, accumulated depreciation and net book value at the end of the periods
December 31, 2003
Property and equipment
Equivalent to acquisition costs
Less: amount equivalent to accumulated
depreciation
Net book value

Software (intangible assets)
Equivalent to acquisition costs
Less: amount equivalent to accumulated
amortization
Net book value

Total
Equivalent to acquisition costs
Less: amount equivalent to accumulated
depreciation
Net book value

March 31, 2003

74,111

52,311(27,492)
46,618 million yen(17,328)
34,982 million yen

1,977

1,105

(595)
1,382 million yen(261)
844 million yen

76,08953,417(28,087)
48,001 million yen(17,589)
35,827 million yen(2) The future lease payments for capital lease at the end of the periods
December 31, 2003
Due within one year
Due after one year
Total

17,10932,441
49,550 million yen

March 31, 2003
12,43425,70838,143 million yen(3) Lease payments, amounts equivalent to depreciation and interest expense
Nine-month period ended
December 31, 2003

FY2003
April 2002 through March

Lease payments

11,734 million yen

12,021 million yen

Amount equivalent to depreciation expense

10,751

10,062

Amount equivalent to interest expense

1,812

2,142

(4) Calculation method of amount equivalent to depreciation and interest expense
The amount equivalent to depreciation is computed using the straight-line method over the period of the capital leases,
assuming no residual value except in cases where the residual value is guaranteed in the lease contract.
The amount equivalent to interest expense, which is calculated by subtracting acquisition costs from total lease
payments, is allocated over the lease periods based on the interest method.

21

9. Leases (continued)
1. Capital leases in which the ownership of leased assets is not transferred to lessees at the end of lease periods(as a lessor)(1) Acquisition costs, accumulated depreciation and net book value at the end of the periods
December 31, 2003

March 31, 2003

Property and equipment
Acquisition costs
Less: accumulated depreciation
Net book value- million yen

613
(262)
350 million yen

Software (intangible assets)
Acquisition costs
Less: accumulated amortization
Net book value- million yen

295
(141)
154 million yen

Total
Acquisition costs
Less: accumulated depreciation
Net book value- million yen

909
(404)
504 million yen(2) The future lease receivables for capital leases at the end of the periods
December 31, 2003
Due within one year
Due after one year
Total

- million yen

March 31, 2003
188
348
536 million yen(3) Lease income, depreciation and amount equivalent to interest income
Nine-month period ended
December 31, 2003

FY2003
April 2002 through March

Lease income

108 million yen

333 million yen

Depreciation expense

93

286

Amount equivalent to interest income

1563(4) Calculation method of amount equivalent to interest income
The amount equivalent to interest income, which is calculated by subtracting acquisition costs from total of lease
income and estimated residual value, is allocated over the lease periods based on the interest method.

2. Non-cancelable operating lease transactions(as a lessee)
The future lease payments for non-cancelable operating lease
December 31, 2003
Due within one year
Due after one year
Total

377
226
603 million yen(as a lessor)
No transaction applicable.

22

March 31, 2003
210
240
451 million yen

10. Significant subsequent events(1) Sale of partial shareholdings of E*TRADE SECURITIES CO., LTD.
In January 2004, the Company sold 63,595,000 shares of E*TRADE SECURITIES CO., LTD.
through SOFTBANK INVESTMENT CORPORATION, a subsidiary of the Company, for ¥14,944
million. A capital gain of approximately ¥5.9 billion on this sale will be recorded in the Company's
consolidated financial statements for the fiscal year ending March 31, 2004.
The Company holds 75% of voting rights of E*TRADE SECURITIES CO., LTD. after the sale of theshareholdings.

(2) Sale of partial shareholdings of SOFTBANK INVESTMENT CORPORATIONIn January 2004, the Company sold 100,000 shares of SOFTBANK INVESTMENTCORPORATION through SOFTBANK FINANCE CORPORATION, a wholly-owned subsidiary of
the Company, for ¥11,737 million. A capital gain of approximately ¥9.8 billion on this sale will berecorded in the Company's consolidated financial statements for the fiscal year ending March 31,
2004.
The Company holds approximately 47.3% of voting rights of SOFTBANK INVESTMENTCORPORATION after the sale of the shareholdings, and SOFTBANK INVESTMENTCORPORATION is still a consolidated subsidiary of the Company in accordance with the effective
control approach.

23

Segment information
Business Segment Information(1) For the nine-month period ended December 31, 2003
Broadband
e-Commerce
Infrastructure

e-Finance

Media &
MarketingBroadmedia¥25,670¥9,869¥6,792

Internet
CultureTechnology
Services(Millions of yen; amounts less than one million yen are omitted.)
Elimination
Overseas
Total
Consolidated
OthersorFunds
corporate

Net Sales(1) Third parties(2) Inter-segment¥87,862¥172,569¥44,719¥9,869¥1,863¥2,936¥362,154¥-¥362,154

109

8,389

2,643

925

2,998

356

6,079

-

1,175

22,678(22,678)-

87,971

180,959

28,314

10,795

9,791

45,075

15,948

1,863

4,111

384,832(22,678)

362,154

Operating expenses

155,618

178,557

24,732

11,637

12,16821,92815,642820

7,047

428,151(19,987)

408,163

Operating income (loss)¥(67,646)¥2,402¥3,581¥(842)¥(2,376)¥23,147¥306¥1,043¥(2,935)¥(43,319)¥(2,690)¥(46,009)

Total(2) For the year ended March 31, 2003
Internet
CultureTechnology
Services

24(Millions of yen; amounts less than one million yen are omitted.)
Elimination
Overseas
Others
Total
Consolidatedor
Funds
corporate

Broadband
Infrastructure

e-Commerce

e-Finance

Media &
MarketingBroadmedia(1) Third parties¥39,945¥250,782¥23,615¥15,916¥10,442¥37,740¥10,912¥3,277¥14,258¥406,892¥-(2) Inter-segment

62

15,304

4,551

996

1,502

459

14,815-

1,603

39,296(39,296)

40,007

266,086

28,167

16,912

11,94438,20025,72815,862446,188(39,296)

Operating expenses

136,212263,620

33,99017,436

13,56021,31924,615

1,286

22,246534,286(35,397)498,889

Operating income (loss)¥(96,204)¥2,466¥(5,823)¥(523)¥(1,615)¥16,881¥1,113¥1,991¥(6,383)¥(88,098)¥(3,899)¥(91,997)

Net Sales

Total

3,277

¥406,892
406,892

Notes:
1. Business segments are categorized primarily based on the nature of business operations, type of services, and similarity of sales channels, etc., which the SOFTBANK Group uses for its internal management purpose.
2. Please refer to the chart of "The SOFTBANK Group" for main businesses by segments

Investments in Debt and Equity Securities
1. Trading securities
Trading securities and others(Millions of yen; amounts less than one million yen are omitted.)
December 31, 2003
Carrying amount
AssetsLiabilities(1) Equity securities(2) Debt securities(3) Others
Total

¥177
3
¥180

¥715
2,172
117
¥3,006

2. Non-trading securities(1) Other securities (available-for-sale) at fair value
December 31, 2003

(1) Equity securities(2) Debt securities
Government bonds(3) Others
Total

Investment Cost

Carrying amount¥38,320¥208,143

100
382¥38,802100
328¥208,572(Millions of yen; amounts less than one million yen are omitted.)
March 31, 2003
Investment Cost

Carrying amount

Differences¥169,823¥23,407¥83,379¥59,9720(53)¥169,770

109
469¥23,987110
297¥83,7870(172)¥59,800

Differences(2) Unlisted investment securities(Millions of yen; amounts less than one million yen are omitted.)
March 31, 2003
December 31, 2003
Carrying amounts
Carrying amounts(1) Unlisted held-to-maturity securities:¥0
Domestic debt securities¥199
Foreign debt securities(2) Unlisted other securities (available-for-sale):
19,109Equity securities (excluding over-the-counter stocks)
20,529250
Domestic debt securities
71
1,724
Foreign debt securities
1,086
4,370
MMF
2,978
320
Mid-term government bond fund
261
1,999
Commercial paper
2,000
Preferred fund certificates
2,000
605
Others0¥30,580
Total¥26,927

25

Derivative transactions
1. Trading transactions
AssetsNature of transaction
Contract amounts(Millions of yen; amounts less than one million yen are omitted
December 31, 2003
Liabilities
Fair value
Contract amounts
Fair value

Forward exchange contracts

¥0

¥0

¥7

¥0

Bond futures contracts

137

0

-

-

¥138

¥0

¥7

¥0

Total

Notes: 1. Deemed settlement gains (losses) are recorded under "Fair value".
2. Valuation method of fair value

Forward exchange contracts

Forward foreign exchange rates as of December 31, 2003

Bond futures contracts

Bond futures prices as of December 31, 2003

2. Non-trading transactions
Currency Related(Millions of yen; amounts less than one million yen are omitted.)
March 31, 2003

December 31, 2003

Nature of transaction

Contract amounts

Contract amounts
Over 1 year

Fair
value

Unrealized
gain (loss)¥1,000

¥15

¥15

-

-

-

-

-

-

-

49,124-

50,105980

Over 1 year

Fair
value

Unrealized
gain (loss)¥1,000¥1,000

¥18

¥18

9,652
(94)

(-)

1

(92)

-

and Japanese yen put option
・ Sell U.S. dollar put option andJapanese yen call option

8,718
(94)

(-)

(256)

(162)

48,911-

43,854(5,055)

Swap transactions to・ Receive Australia dollars andpay Japanese yen¥1,000

Option transactions toOff-market
transactions

・ Purchase U.S. dollar call option

Forward exchange contracts to・ Purchase U.S. dollars andsell Japanese yen
Total

¥996

¥(5,292)

Notes:
1. The amounts in ( ) under "Contract amounts" are option fees.
2. Fair value is based on information provided by financial institutions.
3. The Company and some consolidated subsidiaries entered into forward exchange contracts in order to manage the risk of foreign exchange rate fluctuations relating
to the value of assets and liabilities denominated in foreign currency. The Company and its cInterest Related(Millions of yen; amounts less than one million yen are omitted.)
March 31, 2003

December 31, 2003

Nature of transaction

Notional amounts
Over 1 year

Fair
value

Unrealized
gain (loss)

Notional amounts
Over 1 year

Fair
value

Unrealized
gain (loss)

Swap transactions to・ Receive fixed rate andpay floating rate
Off-market
・ Receive floating rate andtransactions
pay fixed rate
・ Receive fixed rate (receipt later)
and pay fixed rate (prepayment)¥1,285¥1,142¥76¥76¥1,528¥1,285¥121¥121

12,142

11,571

(280)

(280)

2,814

2,142

(198)

(198)

1,000

1,000

35

35

1,000

1,000

36

36

Total

¥(168)

Note: Fair value is based on the information provided by the financial institutions.

26¥(40)