SOFTBANK CORP.
CONSOLIDATED FINANCIAL REPORTFor the interim period ended September 30, 2003
Tokyo, November 10, 2003
SOFTBANK CORP. today announced its consolidated results for the interim period ended September 30, 2003
(April 1 to September 30, 2003).
FINANCIAL HILIGHTS
1.

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

Operating loss

Ordinary loss

Net lossAmount%Amount%Amount%Amount%Interim period ended
September 30, 2003

¥225,454

18.0¥(39,357)-¥(53,645)-¥(77,338)-

Interim period ended
September 30, 2002

191,052

4.2(31,199)-(45,956)-(55,802)-

FY2003 ended
March 31, 2003

¥406,892-¥ (91,997)-¥ (109,808)-¥ (99,989)-

Net loss per share—
primary (yen)Net loss per share—
diluted (yen)Interim period ended
September 30, 2003¥(229.81)-

Interim period ended
September 30, 2002

(166.27)-

FY2003 ended
March 31, 2003

¥ (296.94)-

Notes:
1.

Equity in (losses) gains under the equity method
Interim period ended September 30, 2003:
Interim period ended September 30, 2002:
Fiscal year ended March 31, 2003:

2.

¥(1,358) million¥2,655 million¥11,107 million

Weighted-average number of common stock issued and outstanding during each fiscal period (consolidated)
Interim period ended September 30, 2003:
Interim period ended September 30, 2002:
Fiscal year ended March 31, 2003:

336,540,038 shares
336,869,930 shares
336,857,133 shares

3.

No changes in accounting methods

4.

Percentage changes for net sales, operating loss, ordinary loss and net loss are compared with the corresponding period of
the previous fiscal year.

12.

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

Shareholders’ equity
Equity ratio (%)

equityper share (yen)September 30, 2003

¥974,456¥217,29622.3¥644.97

September 30, 2002

903,283

288,34231.9

855.33

FY2003
March 31, 2003

¥946,331¥257,39627.2¥767.56

Note: Number of shares outstanding (consolidated)
As of September 30, 2003:
As of September 30, 2002:
As of March 31, 2003:

3.

336,907,285 shares
336,867,620 shares
335,293,326 shares

Cash Flows

Operating activities(Million yen; amounts less than one million yen are omitted.)
Cash and cash
equivalents
Investing activities
Financing activities
at the end of the period

Interim period ended
September 30, 2003¥(53,678)¥65,059¥12,006¥169,734

Interim period ended
September 30, 2002

(11,219)

63,574(56,339)

107,844

FY2003 ended
March 31, 2003

¥ (68,600)¥119,749¥(17,615)¥147,526

4.

Scope of Consolidation
Consolidated subsidiaries:
Equity-method non-consolidated subsidiaries:
Equity-method affiliates:

5.

175
2
107

Changes in Scope of Consolidation
Consolidated subsidiaries:
Newly added:
Newly excluded:

7101

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

8
15

2

The SOFTBANK GroupAs of September 30, 2003, the SOFTBANK Group comprised 284 companies with operation in 8 segments as follows.

Business segment

Consolidated
subsidiaries (includes
partnerships)

Equity-method
non-consolidated
subsidiaries andaffiliates (includes
partnerships)

1.

Broadband
Infrastructure

15

7

2.

e-Commerce

19

10

3.

e-Finance

44

14

4.

Media & Marketing

13

6

5.

Broadmedia

15

2

6.

Internet Culture

13

5

7.

Technology Services

7

4

8.

Overseas Funds

37

55

9.

Others12

6

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 web-based financial operations, including on-line
security business; management of domestic venture capital funds;
incubation of portfolio companies
Book and magazine publication in such areas as PCs, the Internet,
entertainment, etc.; web content development
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
Systems solution business; business solution business
U.S.- and Asia-focused global private equity operations inInternet-related companies
Holding company functions for overseas operations; back-officeservices in Japan

175
109
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.

Broadband Infrastructure［ Overseas ］

e-Commerce［ Domestic ］
Dee Corp.

IP REVOLUTION, INC.

Vector Inc.

SOFTBANK BB Corp.
（Operation Holding
Companies）

SOFTBANK INVESTMENTCORPORATION

Tavigator, Inc.

E*TRADE Japan K.K.
Morningstar Japan K.K.

e-Shopping! Books CORP.

［ Overseas ］［ Domestic ］

SOFTBANKFINANCECORPORATIONSOFTBANK CORP.
(Pure Holding Company)（Operation Holding
Companies）
SOFTBANK
Broadmedia
Corporation

Club iT Corporation（Operation Holding
Companies）
SOFTBANK
Holdings Inc.

（Operation Holding
Companies）

BB Cable Corporation

Broadmedia

e-Finance

Carview Corporation

Yahoo Japan Corporation

Internet Culture

SOFTBANKTECHNOLOGYHOLDINGS CORP.

SOFTBANK Publishing Inc.
SOFTBANK ZDNet Inc.

［ Domestic］［ Overseas ］

SOFTBANK Korea Co., Ltd.

Overseas Funds
SOFTBANK US Ventures VI LP
SB Life Science Ventures Ⅰ,LP

cyber communications inc.

Media & MarketingTechnology Services［ Domestic ］

SB CHINA HOLDINGS PTE LTD

SOFTBANK Media &Marketing Corp.

SOFTBANK TECHNOLOGY CORP.

Morningstar Inc.

SOFTBANK FRONTIERSECURITIES CO., LTD.
Finance All Corporation

・・・・ Segment［ Overseas ］

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

Notes: On June 2, 2003, SOFTBANK INVESTMENT CORPORATION mergedwith E*TRADE Japan K.K. with the former the surviving company.

3

SOFTBANK subsidiaries listed on domestic stock exchanges as of September 30, 2003:
Subsidiary

Listed exchange

1.Yahoo Japan Corporation

JASDAQ

2.SOFTBANK TECHNOLOGY CORP.

JASDAQ

3.Morningstar Japan K.K.

Hercules

4.Vector Inc.

6.SOFTBANK FRONTIER SECURITIES CO., LTD.

HerculesTokyo Stock Exchange 1st section
Osaka Securities Exchange 1st section
Hercules7.Club iT Corporation

Hercules5.SOFTBANK INVESTMENT CORPORATION

4

Management Policies

1. Fundamental Management Policy
The core management philosophy of the SOFTBANK Group (hereinafter called “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.
During the first half of the fiscal year, the Group continued to develop broadband businesses toaccelerate the pace of the IT revolution.

In Japan, the number of broadband subscribers rose to 12.25 million as of September 30, 2003, a
figure that includes more than 9.22 million DSL subscribers (according to data compiled by the
Ministry of Public Management, Home Affairs, Posts and Telecommunications), or more than 75% of
all broadband subscribers. DSL services, which sparked the rapid diffusion of broadband Internet
access, continue to be the driving force of growth for the broadband market. The Yahoo! BB
comprehensive broadband service, which is offered jointly by Group companies, has the leading
market share among Japan’s DSL communication carriers. The Group continues to introduce
revolutionary services, such as the July 2003 introduction of an ADSL service with a maximum
downstream speed of 26 Mbps, retaining its position as the market leader.

As broadband Internet access gains greater acceptance, hopes are high for the expansion of new
broadband-related markets as well as the infrastructure business. Public awareness of IP telephonyservices is rising rapidly, indicating that market penetration will climb with increasing momentum.
The Group was first in Japan to roll out an IP telephony service. In October 2003, BB Phone broke the
3 million-user mark as it preserved an overwhelming lead over competitors. The Group is dedicatednot only to conducting businesses with foresight and innovation, but also to continuing to adapt withflexibility and speed to social change and shifts in the operating environment, conducting its businessactivities so as to maximize opportunities to generate earnings.

2. Basic Policy Regarding Allocation of Earnings
SOFTBANK CORP. (hereinafter called “the Company”) has followed a policy of distributing
earnings to shareholders in a steady and appropriate manner, taking into consideration the need tomaintain the proper balance between measures to bolster the operating base and to preserve a stabledividend for shareholders over the medium- and long-term perspective.
The Company thus plans to pay a dividend that reflects operating results. However, no decision has
yet been reached regarding a dividend applicable to the current fiscal year.

53. Medium- and Long-Term Management Strategy
The Group’s strategy is to become the number-one company in the broadband business domain. With
the broadband infrastructure business as the nucleus, the entire Group is working as one to promotethese businesses. SOFTBANK BB Corp., which handles the infrastructure business, has consistently
ranked number one among Japanese DSL communication carriers since August 2002 in terms of thenumber of cumulative lines installed and since June 2002 in terms of the net increase in lines installed
on a monthly basis. As of September 30, 2003, the number of lines installed exceeded 3.24 million(and was 3.399 million as of the end of October 2003). Work will continue on acquiring morecustomers to establish a solid customer base, which is a key issue in the infrastructure business,thereby generating and maximizing stable earnings and cash flows.

At the same time, the Group is developing businesses in the content and services domains in a mannerthat maximizes synergies with the broadband infrastructure business. Yahoo Japan Corporation isbenefiting from the widespread availability of high-speed, high-capacity, always-on Internet
connections. Its advertising business is performing very well and its e-commerce businesses, such as
the auction and shopping businesses, are growing. In July 2003, BB Cable Corporation*1, which
offers the BB Cable TV service by using the ADSL network of Yahoo! BB, began expanding its
service area outward from Tokyo’s 23 wards to other areas of Tokyo and three neighboring
prefectures (Kanagawa, Chiba and Saitama), using the Yahoo BB! service to develop new markets.
Also in July 2003, SOFTBANK BB Corp. opened the BB Games online game portal site inconjunction with BB Serve Corporation*2 By making effective use of the Yahoo BB! customer base,the Group aims to capture a substantial share of the growing online game market. The Group aims toestablish a diverse range of earnings sources and generate cash flows by capturing synergies between
the broadband infrastructure business and Group companies whose operations are rooted in theInternet. With these goals in mind, the entire Group will continue to work together to develop
broadband businesses.
*1 Consolidated subsidiary that is a wholly owned subsidiary of Club iT Corporation.
*2 Consolidated subsidiary that is 55% owned by SOFTBANK BB Corp.

4. Important Management Issues
Achieve Profitability in the Broadband Infrastructure Business and Increase Earnings Power
Now that Yahoo! BB has exceeded 3 million cumulative lines installed, the broadband infrastructurebusiness of SOFTBANK BB Corp. is making steady progress toward achieving profitability at theoperating level on a monthly basis. At the same time, substantial expenses are being incurred for
acquiring customers and other requirements because this business is in its start-up and growth phases.
From the standpoint of achieving the proper balance between expansion of the customer base and the6level of expenses, the Group is working to achieve efficient growth in the number of lines installed
and paying customers while adding new services and taking other steps to increase average revenue
per user. Through these actions, the Group aims to achieve profitability in the broadband
infrastructure business at an early stage.

Changes in Competitive and Regulatory Environments
The Group is active in the IT and communications industries, both fields where the speed oftechnological progress is extremely fast. Dramatic changes in the competitive environment are
expected to continue. The constant evolution of the regulatory climate for communications services islikely to have an effect on the Group’s business plans. The Group is responding aggressively andrapidly to these changes by introducing revolutionary services before competitors and conducting
businesses in a flexible manner that reflects regulatory changes and shifts in demand patterns.

Growth and Stability in Other Group Segments
Now that high-speed, high-capacity, always-on Internet connections are readily available, the Group
expects to see further growth at Group companies whose operations are rooted in the Internet. The
Group will maximize synergies between these companies and its broadband infrastructure businesswith the aim of generating more growth.

Diversifying Funding Channels
During the first half of the fiscal year, the Group primarily utilized cash and cash equivalent, proceedsfrom sale of investment securities and stock in affiliated companies associated with business portfolio
realignments, lease financing and the liquidation of assets to finance the broadband infrastructurebusiness and redeem maturing bonds. In segments other than the broadband infrastructure segment,
the Group has already delineated a clear policy of having each business meet its funding needs
through its own cash flows. On the other hand, the Group plans to employ a variety of methods toprocure the funds needed for capital expenditures, acquiring customers and for other requirements inthe broadband infrastructure business.

5. Fundamental Policy and Measures Regarding Corporate Governance
The Company believes that corporate governance is essential to conducting management that places
priority on shareholders and cash flows. As a pure holding company, the Company manages andcoordinates the Group’s diverse businesses mainly through its board of directors and CEO Conference,and is working to strengthen its Group management system.

7

The board of directors has nine members, three of whom are outside directors. Directors are
responsible for making decisions regarding important management matters and supervising
management. The CEO Conference, whose members are the Company’s representative director, theCEOs of each business segment and others, coordinates management policies, manages operating
results and handles other matters. All meetings of the board and CEO Conference are attended by an
external attorney who provides guidance and advice in order to strengthen corporate governance. The
Company continues to use the corporate auditor system whereby the auditors monitor the performanceof directors in the execution of their duties. The majority of the corporate auditors are from outside theGroup, ensuring fairness and transparency.

With regard to internal controls, the Internal Audit Department evaluates and verifies businessactivities of all types to be certain that the Company and Group companies conform to management
policies, laws and regulations, the articles of incorporation, guidelines and other applicable rules.
Furthermore, this department gives specific suggestions and directives in order to improve operations
as well as to prevent problems from occurring.

Throughout the Group, compliance and risk management are viewed as the responsibility of directors
and all employees. Based on this stance, each Group company conducts educational activities. One
illustration is SOFTBANK BB Corp., the Group’s largest operating company. This company has
established a Crisis Management Committee, Privacy Management Committee and System Security
Management Committee, creating a system that can strengthen capabilities to minimize latent risks,
formulate means to prevent problems, prepare for contingencies and ensure the security of information.
This company is constantly reviewing these systems to make them even more effective.

6. Other Items
Fundamental Policy regarding Relationships with Related Parties
None

Other Important Matters Regarding the Company’s Management
None8Results of Operations and Financial Position

1. Consolidated Results of OperationsFirst-Half Overview
Net sales increased ¥34,402 million, or 18.0%, year-to-year to ¥225,454 million. Net sales in the
Broadband Infrastructure segment increased significantly as the number of Yahoo! BB paying
customers grew. Net sales in the Internet Culture segment continued to increase.

Operating loss increased ¥8,157 million year-to-year to ¥39,357 million. This was mainly due tohigher expenses for acquiring new customers and other up-front expenses associated with growth in
the scale of operations in the Broadband Infrastructure segment. Excluding the Broadband
Infrastructure segment, aggregate operating income for the other segments continued to increase,rising ¥10,245 million to ¥10,308 million. Two major contributors were a strong performance in theInternet Culture segment and a profit in the e-Finance segment following a period of losses.

The ordinary loss increased ¥7,688 million year-to-year to ¥53,645 million. In addition to operating
loss, this reflected net non-operating expenses of ¥14,288 million. Due to the yen’s appreciation
during the first half, there was a net exchange gain of ¥3,471 million, a ¥12,712 million improvement
over last year’s loss. However, there was a net equity in losses of ¥1,358 million under the equity
method, which is ¥4,013 million less than last year’s gain, mainly due to the sale of all shares in
Aozora Bank, Ltd. (“Aozora”) As a result of the sale, Aozora was excluded from affiliates accounted
for under the equity method and the equity gain associated with Aozora was recognized for a shorter
period than in the first half of the previous fiscal year. Net interest expense increased ¥1,376 million
year-to-year to ¥5,290 million. Non-operating items also included a valuation loss of ¥10,052 million
with regard to inventories that the Group purchased at the initial stage of the Broadband Infrastructurebusiness.

The net loss increased ¥21,536 million year-to-year to ¥77,338 million. The main component ofspecial income was a gain on sale of investment securities of ¥18,213 million, mostly due to thepartial sale of stock in UTStarcom, Inc. and cyber communications inc. The main components ofspecial losses were a loss on sale of investment securities of ¥10,446 million, primarily due to the saleof all shares held in Aozora, and a valuation loss on investment in affiliates of ¥6,712 million, mostly
resulting from a one-time amortization of goodwill for SOFTBANK Korea Co., Ltd., due to arevaluation of its portfolio companies.

9Results of Operations by Business Segment
Broadband Infrastructure—Segment sales were ¥53,549 million, a year-to-year increase of ¥40,028
million, or 296.1%. In the Yahoo! BB business, significant growth in the number of paying customers
contributed to sales growth at SOFTBANK BB Corp. and the ISP revenue growth at Yahoo Japan
Corporation. Also contributing to sales growth was an increase in the average revenue per user,
particularly from the increase in share of paying customers who use higher priced services, such as an
ADSL service with a maximum downstream speed of 12 Mbps, and additional services such as awireless LAN service. Mainly due to expenses for acquiring new customers in the Yahoo! BB business,
operating loss increased ¥18,402 million year-to-year to ¥49,665 million.

e-Commerce—Segment sales decreased ¥9,098 million, or 7.1%, to ¥118,252 million and operating
income was down 9.5%, or ¥118 million year-to-year, to ¥1,133 million. Results were impacted mostby lower sales of software to consumers by SOFTBANK BB Corp. because of sluggish markets. To
increase profitability, this company is concentrating on developing its solutions business. Although
this solutions business is not currently making a significant contribution to sales, earnings are
increasing steadily. In other companies in this segment, operating income was generally higher
compared with the first half of the previous fiscal year. Earnings growth was particularly strong at
Carview Corporation, Dee Corp., e-Career CORP. and Vector Inc.

e-Finance—Segment revenue increased ¥1,261 million, or 9.3%, year-to-year to ¥14,760 million. A
major source of growth was an increase in brokerage commission revenue at E*TRADE
SECURITIES CO., LTD. because of the higher trading volume in Japan’s recovering stock markets.
The segment had operating income of ¥815 million, an improvement of ¥2,920 million over the loss inthe first half of the previous fiscal year. In addition to higher earnings at E*TRADE SECURITIESCO., LTD. and a decrease in the valuation loss on operational investment securities of SOFTBANKINVESTMENT CORPORATION, operating income benefited from a gain on sale of operational
investment securities.

Media & Marketing—Segment sales decreased ¥978 million, or 12.0%, to ¥7,184 million andoperating loss increased ¥94 million to ¥557 million, year-to-year, respectively. This performance
mainly reflects lower sales and earnings at SOFTBANK Publishing Inc., the result of declining
magazine and book sales amid a prolonged slump in the publishing market. There was a gain on saleof investment securities of ¥7,070 million from the partial sale of shares in cyber communications inc.

Broadmedia—Segment sales increased ¥1,304 million, or 24.3%, year-to-year to ¥6,661 million andoperating loss increased ¥860 million to ¥1,461 million. This was mainly attributable to start-up

10

expenses at BB Cable Corporation, which operates the “BB Cable TV” service via the ADSL network,and expenses associated with the commencement of operations of this service.

Internet Culture—Segment sales increased ¥12,269 million, or 78.2%, year-to-year to ¥27,962
million and operating income was up ¥8,029 million, or 130.9%, year-to-year to ¥14,161 million. Thiswas mainly due to steady growth in advertising revenue and an increase in system utilization fees in
the auction business at Yahoo Japan Corporation.

Technology Services—Segment sales increased ¥578 million, or 5.9%, year-to-year to ¥10,360
million. This was mainly attributable to higher sales from the e-business service of SOFTBANKTECHNOLOGY CORP., which handles everything from sales and procurement activities to billingand bill collection for e-commerce site operators. Operating income decreased ¥110 million, or 41.0%,
year-to-year to ¥158 million. This was mainly the result of erosion in the gross margin due to severe
price competition, as well as higher personnel expenses at SOFTBANK TECHNOLOGY CORP.

Overseas Funds—Segment revenue decreased ¥709 million, or 36.0%, year-to-year to ¥1,258 million.
This was mainly due to lower fund management fees at SOFTBANK Holdings Inc. Operating income
was down ¥865 million, or 58.3%, year-to-year to ¥619 million.

Others—Segment sales decreased ¥9,656 million, or 81.3%, year-to-year to ¥2,219 million, mainly areflection of lower sales at SOFTBANK Commerce Korea Corporation, and Operating loss decreased¥1,553 million year-to-year to ¥2,292 million.

2. Consolidated Financial Position
Balance Sheet Analysis
Current assets increased ¥86,610 million to ¥494,048 million, compared with March 31, 2003. Thiswas mainly because of a ¥27,311 million increase in cash and deposits and an increase of ¥77,693
million in cash segregated as deposits related to securities business and receivables related to margintransactions at E*TRADE SECURITIES CO., LTD.

Property and equipment decreased ¥1,259 million to ¥100,989 million, compared with March 31,
2003. There was an increase in transmission equipment of ¥6,958 million, mainly at SOFTBANK BB
Corp. Offsetting this increase was a ¥8,217 million decrease in the other component of property andequipment that mainly resulted from the exclusion of WEB-Lease Co., Ltd. from the scope of
consolidation, thereby removing its leasing assets from the consolidated balance sheet.

11

Investments and other assets decreased ¥52,269 million to ¥360,077 million, compared with March
31, 2003. The primary reason was a ¥45,840 million decrease in investment securities, mostly
reflecting the sale of all shares held in Aozora. Offsetting this decline somewhat was an increase in themarket value of stock held in Yahoo! Inc. and UTStarcom, Inc., which was reclassified from anequity-method affiliate to an available-for-sale security and carried at market value at the end of thefirst half.

Total Liabilities increased ¥61,290 million to ¥704,219 million, compared with March 31, 2003. One
reason was an increase of ¥20,614 million in long-term deferred tax liabilities resulting mainly fromthe increase in net unrealized gain on other securities in relation to stock in Yahoo! Inc. andUTStarcom, Inc. Another factor was a ¥69,467 million increase in payables related to margintransactions and guarantee deposits received from customers related to securities business at
E*TRADE SECURITIES CO., LTD. There was a ¥4,660 million decrease in interest-bearing debt,
compared with March 31, 2003, mostly the result of the redemption of bonds.

Shareholders’ equity was down ¥40,100 million to ¥217,296 million, compared with March 31, 2003,
mainly due to a ¥80,048 million increase in accumulated deficits. Offsetting this somewhat was a¥46,951 million increase in net unrealized gain on other securities in relation to stock in Yahoo! Inc.
and UTStarcom, Inc.

Cash Flows Analysis(1) Summary
While cash was used for operating activities, it was provided by investing and financing activities. As
a result, cash and cash equivalents increased ¥22,208 million to ¥169,734 million, compared with
March 31, 2003.

Net cash used for operating activities was ¥53,678 million, ¥42,458 million more than cash used in
the first half of the previous fiscal year. Loss before income taxes and minority interest was ¥65,154
million, mostly the result of operating loss in the Broadband Infrastructure segment. Interest of ¥6,033
million was paid, and income taxes of ¥9,692 million were paid, mainly at Yahoo Japan Corporation.
Depreciation and amortization increased ¥7,052 million year-to-year to ¥15,717 million.

Net cash provided by investing activities was ¥65,059 million, an increase of ¥1,485 million fromthe first half of the previous fiscal year. Though ¥39,431 million was used mainly for the purchases oftransmission equipment at SOFTBANK BB Corp., there were proceeds of ¥125,689 million from saleof marketable and investment securities, including stock in Aozora and UTStarcom, Inc.

12

Net cash provided by financing activities was ¥12,006 million, an increase of ¥68,345 million fromthe first half of the previous fiscal year. Despite the use of ¥16,720 million for repayment of shortterm borrowings (net) and of ¥44,270 million for bond redemptions, there were proceeds of ¥57,410
million from long-term debt and proceeds of ¥17,000 million from the issuance of commercial paper(net).

(2) Factors That May Have a Material Impact on Cash Flows in the Second Half andSubsequent Fiscal Periods
・Growth in Installed Lines at Yahoo! BB
In the broadband infrastructure business, where the Company is concentrating its management
resources, growth in the number of lines installed at Yahoo! BB will result in start-up expenses
associated with acquiring new subscribers. Therefore, this growth will temporarily have a negative
influence on operating cash flows.
・Redemption of Bonds
As of September 30, 2003, the Group had ¥131,344 million of bonds outstanding. Bond redemptions
totaling ¥12,660 million are scheduled for the second half of the fiscal year 2004 and redemptions
totaling ¥36,154 million are scheduled for the fiscal year 2005.
・Commitment-line Contract
On October 22, 2003, the Company entered into a ¥98,000 million commitment-line contract withseven financial institutions, which was arranged by Mizuho Corporate Bank, Ltd. The Company plans
to exercise this commitment-line as required, taking into consideration its liquidity, capital structure
and other fund procurement activities.

(3) Trends in Cash Flow Indicators
A summary of trends in cash flow indicators is presented below.

Equity ratio
Equity ratio (Market cap.)
Debt repayment period
Interest coverage ratio

As of Sept. 30,
2003
22.3％
163.2%――

As of Mar. 31,
2003
27.2%
48.9%
―
―

13

As of Sept. 30,
2002
31.9%
43.9%
―
―

As of Mar. 31,
2002
40.0%
68.8%
―
―

Notes:1. The above indicators are calculated using the following formulas based on consolidated figures.
Equity ratio:
Shareholders’ equity divided by total assets
Equity ratio (Market cap.): Market capitalization divided by total assets
Debt repayment period:
Interest-bearing debt divided by operating cash flows
Debt repayment period
at the first half:Interest-bearing debt divided by interim operating cash flows times
twoInterest coverage ratio:
Operating cash flows divided by interest expenses
2. Market capitalization is calculated by multiplying the closing stock price by the number of shares
outstanding, net of treasury stock, as at September 30, 2003.
3. Interest-bearing debt is the sum of all consolidated liabilities on which interest must be paid.
4.Operating cash flows and interest expenses are the figures shown on the consolidated statements ofcash flows.
5. Negative figures are indicated by a “−” sign.

14

CONSOLIDATED BALANCE SHEETS(Millions of yen; amounts less than one million yen are omitted.)
FY2003
FY2003 interim
Increase(As of March 31, 2003)(As of September 30, 2002)（Decrease）
Amount%Amount%

FY2004 interim(As of September 30, 2003)
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 margintransactions
Other current assets
Less : Allowance for doubtful
accounts
Total current assets¥174,814
64,7832,512
30,345
4,655¥147,503
64,255
5,059
42,201
7,035¥27,311528(2,547)(11,856)(2,380)¥102,379
55,912
7,612
41,1196,155

66,09334,57431,51831,24795,022

48,847

46,17552,31964,57865,227(649)

59,116(8,757)(7,268)(1,489)(1,494)43.1

86,610354,369

39.2

10.8

6,958
(8,217)(1,259)48,944
24,62173,566

8.1

2.5(6,018)
1,276(4,742)

12,82916,84829,6783.3

494,04850.7

407,437

10.3

79,28422,964102,249

2.0

9,830
14,00823,838Non-current assets:
Property and equipment, net
Transmission equipment
OthersTotal tangible assets

86,242
14,747
100,989

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

3,811
15,28419,096

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

221,574
94,557
1,431
28,827
15,166

267,414
97,606780
32,701
15,637(45,840)(3,049)650(3,874)(470)

254,633
130,527858
48,835
11,797(1,480)(1,794)314(1,538)360,077

37.0

412,34643.6(52,269)

445,115

49.3

Deferred charges

245

0.0

459

0.0

(213)

555

0.1

Total assets¥974,456

100.0¥946,331

100.0¥28,125¥903,283

100.0

15

CONSOLIDATED BALANCE SHEETS

FY2004 interim(As of September 30, 2003)
Amount%(Millions of yen; amounts less than one million yen are omitted.)
FY2003
FY2003 interim
Increase(As of March 31, 2003)（Decrease） (As of September 30, 2002)
Amount%Amount%LIABILITIES ANDSHAREHOLDERS' EQUITYCurrent liabilities:
Notes and accounts payable - trade
Short-term borrowings
Commercial paper
Current portion of corporate bonds
Current portion of convertible bonds
Accounts payable - otherAccrued 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¥41,591
173,546
21,00041,92460
40,90014,013
13,153106
87,683¥58,534
150,557
4,000
56,21960
60,243
14,576
10,912
5,97844,458¥(16,942)
22,98817,000(14,294)(19,342)
(563)
2,241
(5,871)
43,224¥55,192
82,35810,00067,91960,80834,56526,24331,98748.5

16,535
71,21829,808391,778

43.4

137,132
105
9,875
8,383
39
20,825
176,360

19.5

34,935
529,72354.4

18,399458,504

19.4(32,448)
2,093
20,614(20)(168)(9,928)32,635
13,086
23,516553
44,720Long-term liabilities:
Corporate bonds
Convertible bonds
Long-term debt
Deferred tax liabilities
Accrued retirement benefits
Other liabilities
Total long-term liabilities

89,31545
10,24353,90029
20,961
174,49617.9

121,763
45
8,149
33,285
49
21,130184,424

Total liabilities

704,21972.3

642,929

67.9

61,290568,13962.9

52,941

5.4

46,0054.9

6,936

46,802

5.2

Common stock

137,958

14.1

137,867

14.6

90

137,867

15.3

Additional paid-in capital

162,354

16.7

162,23117.1

123

162,231

17.9

Accumulated deficits(181,079)(18.6)(101,031)(10.7)(80,048)(54,223)(6.0)

Net unrealized gain on other securities

86,547

8.9

39,595

4.2

46,951

19,215

2.1

Translation adjustments

11,567

1.2

20,932

2.2(9,364)23,268

2.6

(52)

(0.0)

(2,199)

(0.2)

2,146

(17)

(0.0)

217,29622.3

257,39627.2(40,100)

288,34231.9¥974,456

100.0¥946,331

100.0¥28,125¥903,283

100.0

Minority interestin consolidated subsidiaries

Shareholders' equity:

Less: Treasury stock
Total shareholders' equity
Total liabilities andshareholders' equity

16

CONSOLIDATED STATEMENTS OF INCOME(Millions of yen; amounts less than one million yen are omitted.)

FY2004 interim(April 2003 throughSeptember 2003)
Amount%

FY2003 interim(April 2002 throughSeptember 2002)
Amount%Increase(Decrease)

FY2003(April 2002 throughMarch 2003)
Amount%Net sales¥225,454

100.0¥191,052

100.0¥34,402¥406,892

100.0

Cost of sales

176,35178.2

168,399

88.1

7,952

361,243

88.8

Gross profit

49,10321.8

22,653

11.9

26,45045,648

11.2

Selling, general and administrative expenses

88,46039.2

53,85228.2

34,607

137,646

33.8

Operating loss

(39,357)(17.4)(31,199)(16.3)(8,157)(91,997)(22.6)

1,092

2.8

(179)
3,471
(2,655)43680

19,11935,5648.8

525Interest income
Exchange gain
Equity in gains under the equity method
Other non-operating income
Non-operating income

346
3,471

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

5,636
1,358
10,052
3,422
20,470

9.1

6,579
20,25910.6

1,197(9,240)1,358
10,052(3,157)211

Ordinary loss

(53,645)(23.8)(45,956)(24.1)(7,688)(109,808)(27.0)

Gain on sale of investment securities
Other special income
Special income

18,213
1,965
20,1789.0

46,618
4,499
51,11726.8(28,404)(2,534)(30,938)

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

10,446
4,117
6,712
10,411
31,68814.1

9,764
18,68521,714
8,405
58,56930.7

682(14,567)(15,001)
2,005(26,881)

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

23.6

Loss before income taxes and minority interest(65,154)(28.9)(53,408)(28.0)(11,746)(71,474)(17.6)

13,0285.8(4,730)(2.1)

23,784
4,957(15,338)

12.4
2.6
(8.0)

(10,755)(4,957)
10,607

14,84911,12527,350

3.6
2.7
6.7

3,886

1.7

(1,095)

(0.6)

4,981

(2,560)(0.6)¥(77,338)(34.3)¥(55,802)(29.2)¥(21,536)¥(99,989)(24.6)

2,655
2,321
5,501

2,364
6,182

2.7

4,439
9,240

-

-

11,107
5,553
17,753

4.4

8,741
7,704
-

Income taxes:
Current
RefundedDeferred
Minority interest
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. has presented the combined results ofoperations of non-financing business and financing business in the accounts of "Net sales", "Cost of sales", and "Selling, general and administrative expenses"
in the consolidated statements of income.

17

CONSOLIDATED STATEMENTS OF
ADDITIONAL PAID-IN CAPITAL AND RETAINED EARNINGS(Millions of yen; amounts less than one million yen are omitted.)
FY2003 interim
FY2003
FY2004 interim(April 2002 through(April 2002 through(April 2003 throughSeptember 2002)
March 2003)
September 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
Additional paid-in capitalat the end of the period¥162,231¥162,231¥162,231

90

-

-

32

-

-

¥162,354¥162,231¥162,231(Millions of yen; amounts less than one million yen are omitted.)
FY2003 interim
FY2003
FY2004 interim(April 2002 through(April 2002 through(April 2003 throughSeptember 2002)
March 2003)
September 2003)

RETAINED EARNINGS (DEFICITS)
Retained earnings (deficits)at the beginning of the period¥(101,031)¥4,035¥4,035(77,338)(2,342)(73)(55,802)(2,358)(75)(99,989)(2,358)
(75)

(338)

(14)

(2,636)

44

(1)

9

-

(6)

(17)

¥(181,079)¥(54,223)¥(101,031)

Net loss
Cash dividends
Bonuses to directors
Net adjustments to retained earnings due tochanges in investment in the affiliatedcompanies accounted for under the equity method
Net adjustments to retained earnings due tochanges in the scope of the consolidation
Decrease due to merger
Accumulated deficits
at the end of the period

Note:
Under Japan GAAP, the cumulative effect of any changes in the scope of the consolidation and the application of theequity method to affiliated companies is treated as an adjustment to retained earnings in the consolidated statementsof additional paid-in capital and retained earnings.

18

CONSOLIDATED STATEMENTS OF CASH FLOWS(Millions of yen; amounts less than one million yen are omitted.)
FY2003 interim
FY2003
FY2004 interim(April 2003 through (April 2002 through (April 2002 throughSeptember 2002)
March 2003)
September 2003)

I Cash flows from operating activities:
Loss before income taxes and minority interest
Adjustments 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
Gains on sale of marketable and investment securities, net
Exchange (gain) loss, net
Interest and dividend income
Interest expense(Increase) decrease 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 for operating activities
II 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
Collections of loans
Others, net
Net cash provided by investing activities
III 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
Cash dividends paid
Cash dividends paid to minority shareholders
Others, net
Net cash provided by (used for) financing activities
IV Effect of exchange rate changes
V Net increase (decrease) 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 ofentities previously consolidated
VIIICash and cash equivalents at the beginning of the period
IX Cash and cash equivalents at the end of the period

19¥(65,154)¥(53,408)¥(71,474)

15,717
1,358
10,829(7,777)(2,788)(563)
5,636(1,734)(15,862)(38,842)
37,04819,805(42,326)

8,664(2,655)40,399(36,854)
9,177
(591)
4,439
6,564
(3,632)(6,436)
11,85818,333(4,141)

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)606(6,033)(9,692)
3,767(53,678)773(5,224)(8,646)
6,018(11,219)

1,138(9,386)(13,202)
5,911(68,600)(39,431)(20,889)
125,689(563)(26,213)(20,441)
110,261(680)(64,500)(33,413)
171,350(591)(1,010)

(220)

(23)

2,001
(3,295)
1,843
715
65,0591,080(3,381)
1,085
2,084
63,57456,356(5,211)
1,975(6,191)
119,749

1,123(16,720)
36,500(19,500)
57,410(3,861)(44,270)(2,308)(96)
3,730
12,006

4,763(27,574)
10,000(10,000)
30(7,406)
2,396(24,782)(2,318)(28)(1,418)(56,339)

4,842
44,10414,000(20,000)
1,380(7,758)2,496(52,223)(2,354)(122)(1,980)(17,615)169
23,556(7,950)(11,935)(5,728)27,805-34

60(1,348)

(108)

(194)

147,526¥169,734

119,855¥107,844

119,855¥147,526

Basis of Presentation of Consolidated Financial Statements
1. Changes in Scope of Consolidation(1) As of September 30, 2003, SOFTBANK CORP. (the "Company") consolidated 175 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.
Main changes in the scope of the consolidation for the interim period ended September 30, 2003 were as follows:<Increase；including partnerships>
7 companies were newly consolidated.
<Decrease；including partnerships>
1. Softbank Investment International (Strategic) Limited
and its 79 subsidiaries
2. Finance All Corporation and its 4 subsidiaries
3. E*TRADE Japan K.K.

Decrease in shareholding percentage
Sale of a portion of shares and decrease in shareholding percentage
MergerOther 15 companies(2) As of September 30, 2003, the Company held 2 non-consolidated subsidiaries and 107 affiliates, all of which were accounted forunder the equity method.
Main changes in the application of the equity method for the interim period ended September 30, 2003 were as follows:<Increase；including partnerships>
1. Finance All Corporation

Change from consolidated subsidiary

Other 7 companies<Decrease；including partnerships>
1. UTStarcom, Inc.
2. Aozora Bank, Ltd.

Sale of a portion of shares
Sale of shares

Other 13 companies
2. Fiscal year end
Fiscal year ends of consolidated subsidiaries in terms of domestic and overseas are as follows:<Fiscal year end>
March end
(as same as consolidated B/S date)June end
July end
September end
December end
January end
February end<Domestic><Overseas>
93

28

2
1
2
16
1
2

3
27
-

20

3. Summary of Significant Accounting Policies[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 price at the balance sheet date
(Unrealized gains/losses are included as a separate component of "Shareholders' equity",
net of tax, while cost is determined primarily based on 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:
Others:(2) Intangible assets:

Computed using the straight-line method
Computed primarily using the declining-balance method
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 doubtful receivables, plus
an amount for receivables other than doubtful receivables calculated using historical write-off experience ratios from certain priorperiods.
[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 the respective 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 performed by 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 forthe 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 the assets istransferred to the lessee at the end of the lease term, are accounted for as operating leases with certain disclosures.
[6] Accounting method for consumption taxes
Consumption taxes are accounted for using net-of-tax method.
4. The Scope of Cash and Cash Equivalents in the Consolidated Statements of Cash Flow
"Cash and cash equivalents" comprise cash on hand, bank deposits withdrawable on demand and highly liquid investments with initial
maturities of three months or less and a low risk of fluctuation in value.

21

NOTES
1. Accumulated depreciation of property and equipment
September 30, 2003
32,104 million yen

March 31, 2003

September 30, 2002

27,417 million yen

18,999 million yen

2. Number of treasury stock held by the Company and its subsidiaries
September 30, 2003

March 31, 2003

September 30, 2002

Held by the Company

common stock

29,541 shares

24,781 shares

9,206 shares

Held by consolidated subsidiaries

common stock- shares

1,558,719 shares- shares

Number of shares issued

common stock

336,936,826 shares

336,876,826 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:
September 30, 2003
Receivables related to margin transactionsLoans receivable from customers for
margin transactions
Cash deposits as collateral for securities
borrowed from securities financecompanies
Payables related to margin transactionsLoans payable to securities finance companies
for margin transactions
Proceeds from securities sold for margintransactions

March 31, 2003

September 30, 2002

88,545 million yen

42,457 million yen

46,914 million yen

6,477

6,389

5,405

63,302

27,906

31,60024,38016,552

13,11922

4. Assets pledged as collateral(1) For future lease liabilities
September 30, 2003

March 31, 2003

September 30, 2002

Assets pledged as collateral:
6,412 million yen

Notes and accounts receivable - trade
Other current assets (accounts receivable -other)
Secured liabilities:
Notes and accounts payable - trade

9,450 million yen

5,740 million yen

60

81

67

175 million yen

251 million yen

278 million yen

Note:
The collateral for the future lease liabilities was provided by mortgaging against the aggregate of the current and future receivables due from customers ofcertain consolidated subsidiaries and a broadcasting company, based on marketing agreements, etc.
The future lease liabilities at the end of the periods are as follows:
September 30, 2003
Future lease liabilities (including the above "Notes andaccounts payable-trade")

42,377 million yen

March 31, 2003

32,732 million yen

September 30, 2002

35,817 million yen(2) For short-term borrowings and long-term debt
September 30, 2003
Assets pledged as collateral:
Cash and deposits

485 million yen

Notes and accounts receivable - trade
Inventory

March 31, 2003

September 30, 2002

- million yen- million yen

1,126

-

-

1,692

1,704

-

Marketable securities

307

-

-

Transmission equipment

7,228

-

-

-

195

86

151,973

55,711-805 million yen
48,769- million yen
19,920- million yen
43

Other property and equipment
Investment securities
Secured liabilities:
Notes and accounts payable - trade
Short-term borrowings
Accounts payable - otherAccrued expenses
Other current liabilities

97-

Long-term debt
Other long-term liabilities

58

-

388

-

-

6,639

1,350

-

291

-

-

Note:
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:

September 30, 2003

March 31, 2003

September 30, 2002

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

151,708 million yen
151,708
76,52755,711 million yen
63,17534,758- million yen-

Secured liabilities:
Short-term borrowings
Accrued expenses

42,275-

19,83358-

23

4. Assets pledged as collateral (continued)(3) For long-term debt owed by a third party
September 30, 2003

March 31, 2003

September 30, 2002

Assets pledged as collateral:
Investments in partnerships

1,993 million yen

2,229 million yen

1,982 million yen

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

2,367

2,388

2,400

September 30, 2003

March 31, 2003

September 30, 2002

5. Line of credit as a creditor (not used)
49 million yen

51 million yen

24 million yen

6. Balance of accounts receivable sold
September 30, 2003
5,888 million yen

March 31, 2003
7,466 million yen

September 30, 2002
8,071 million yen

7. Valuation loss on investments in subsidiaries and affiliates"Valuation loss on investments in affiliates" recognized as a special loss in the consolidated statements of income are as follows(1) Valuation loss on investment in consolidated subsidiaries
September 30, 2003
5,380 million yen

September 30, 2002
6,065 million yen

March 31, 2003
10,610 million yen(2) Valuation loss on investment in affiliates accounted for under the equity method
September 30, 2003
1,332 million yen

September 30, 2002
15,649 million yen

March 31, 2003
21,713

8. Consolidated statements of cash flow
Reconciliation of cash and cash equivalents to the amounts presented in the accompanying consolidated balance sheets
September 30, 2003
Cash and deposits

174,814 million yen

September 30, 2002
102,379 million yen

Marketable securities

2,512

7,612

Time deposits with original
maturity over three months(5,568)(431)

Deposits received from customers
in commodities business

(100)

(19)

Stocks and bonds with original
maturity over three months(1,922)(1,696)

Cash and cash equivalents

169,734 million yen

107,844 million yen

24March 31, 2003
147,503 million yen
5,059(2,866)(29)(2,140)147,526 million yen

9. Leases
1. Capital leases in which the ownership of leased assets is not transferred to lessees at the end of the lease periods(as a lessee)(1) Amounts equivalent to acquisition costs, accumulated depreciation and net book value at the end of the periods
September 30, 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

September 30, 2002

71,88852,31147,369(25,973)(17,328)(12,567)

45,915 million yen

34,982 million yen

34,802 million yen

1,969

1,105

574

(502)

(261)

(200)

1,466 million yen

844 million yen

373 million yen

73,85853,41747,944(26,475)(17,589)(12,767)

47,382 million yen

35,827 million yen

35,176 million yen(2) The future lease payments for capital lease at the end of the periods
September 30, 2003
Due within one year
Due after one year
Total

16,64333,54950,193 million yen

March 31, 2003
12,43425,70838,143 million yen

September 30, 2002
11,44529,29640,741 million yen(3) Lease payments, amounts equivalent to depreciation and interest expense
FY2004 interim
April 2003 throughSeptember 2003
Lease payments

FY2003
April 2002 throughMarch 2003

FY2003 interim
April 2002 throughSeptember 2002

7,194 million yen

12,021 million yen

5,680 million yen

Amount equivalent to depreciation expenses

6,070

10,062

4,739

Amount equivalent to interest expense

1,073

2,142

1,069

(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 noresidual 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 allocatedover the lease periods based on the interest method.

25

9. Leases transaction (continued)
1. Capital leases in which the ownership of leased assets is not transferred to lessees at the end of the lease periods(as a lessor)(1) Acquisition costs, accumulated depreciation and net book value at the end of the periods
September 30, 2003

March 31, 2003

September 30, 2002

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

613
(262)
350 million yen

993
(327)
666 million yen

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

295
(141)
154 million yen

514
(185)
328 million yen

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

909
(404)
504 million yen

1,507
(512)
994 million yen(2) The future lease receivables for capital leases at the end of the periods
September 30, 2003
Due within one year
Due after one year
Total

- million yen

March 31, 2003
188
348
536 million yen

September 30, 2002
295
748
1,043 million yen(3) Lease income, depreciation and amount equivalent to interest income
FY2004 interim
April 2003 throughSeptember 2003

FY2003
April 2002 throughMarch 2003

FY2003 interim
April 2002 throughSeptember 2002

Lease income

108 million yen

333 million yen

177 million yen

Depreciation Expense

93

286

150

Amount equivalent to interest income

15

63

35

(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 estimatedresidual 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 leases
September 30, 2003
Due within one year
Due after one year
Total

258
184
443 million yen(as a lessor)
No transactions applicable.
10. Significant subsequent events
There were no significant subsequent events.
26

March 31, 2003
210
240
451 million yen

September 30, 2002
112
215
327 million yen

SEGMENT INFORMATION
1. Business Segment Information(1) FY2004 interim (for the six-month period ended September 2003)
Broadband
e-Commerce
Infrastructure
Net sales(1) Customers(2) Inter-segment
Total
Operating expenses
Operating income (loss)¥53,47276
53,549103,214¥(49,665)¥112,148
6,104
118,252
117,119¥1,133e-Finance

Media &
MarketingBroadmedia¥12,149
2,611
14,76013,945¥815¥6,639
545
7,184
7,741
¥(557)¥4,469
2,192
6,661
8,122
¥(1,461)Internet
Culture¥27,714247
27,96213,800¥14,161

Technology
Services¥6,0804,280
10,360
10,201¥158(Millions of yen; amounts less than one million yen are omitted.)
Elimination
Overseas
Consolidated
Others
Total
or
Funds
Total
corporate¥1,258
1,258
639
¥619

¥1,523
696
2,219
4,511
¥(2,292)¥225,454
16,754242,209279,297¥(37,087)¥(16,754)(16,754)(14,485)¥(2,269)¥225,454
225,454
264,811¥(39,357)(2) FY2003 interim (for the six-month period ended September 2002)

27

Net sales(1) Customers(2) Inter-segment
Total
Operating expenses
Operating income (loss)

Broadband
Infrastructure

e-Commerce¥13,49326
13,52044,782¥(31,262)¥119,813
7,538
127,351
126,099¥1,252e-Finance¥11,249
2,249
13,49915,605¥(2,105)

Media &
Marketing¥7,804
359
8,163
8,626
¥(463)

Broadmedia¥5,198
158
5,357
5,957
¥(600)

Internet
Culture¥15,456
236
15,692
9,559¥6,132

Technology
Services¥4,798
4,983
9,782
9,512
¥269

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

Overseas
Funds¥1,967
1,967
482¥1,484¥11,270
605
11,876
15,721¥(3,845)¥191,052
16,158207,211236,349¥(29,138)¥(16,158)(16,158)(14,097)¥(2,061)¥191,052
191,052
222,251¥(31,199)

SEGMENT INFORMATION
1. Business Segment Information (continued)(3) FY2003 (for the fiscal year ended March 2003)

Net sales(1) Customers(2) Inter-segment
Total
Operating expenses
Operating income (loss)

Broadband
Infrastructure

e-Commerce¥39,94562
40,007
136,212¥(96,204)¥250,782
15,304
266,086
263,620¥2,466e-Finance¥23,615
4,551
28,16733,990¥(5,823)

Media &
Marketing¥15,916996
16,912
17,436¥(523)

Broadmedia¥10,442
1,502
11,944
13,560¥(1,615)Internet
CultureTechnology
Services¥37,740
459
38,20021,319¥16,881¥10,912
14,81525,72824,615¥1,113(Millions of yen; amounts less than one million yen are omitted.)
Elimination
Consolidatedor
Others
Total
Total
corporate

Overseas
Funds¥3,2773,277
1,286¥1,991¥14,258
1,603
15,862
22,246¥(6,383)¥406,892
39,296446,188534,286¥(88,098)

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. Main businesses by segment:

28(1) Broadband Infrastructure

ADSL high-speed Internet connection service and IP telephony service; fiber-optic ultra-high-speed Internet connection service and other operations(2) e-Commerce

Distribution of PC software and such hardware as PCs and peripherals; enterprise solutions; diversified e-commerce businesses,
including business transaction platform (B2B) and consumer-related e-commerce (B2C)(3) e-FinanceAll-inclusive web-based financial operations, including on-line security business; management of domestic venture capital funds; incubation of portfolio companies(4) Media & MarketingBook and magazine publication in such areas as PCs, the Internet, entertainment, etc.; web content development(5) Broadmedia

Provision of applications and content for broadband broadcasting and communications and promoting the spread of such operations(6) Internet Culture

Internet-based advertising operations; broadband portal business; Internet-based auction business(7) Technology Services

Systems solution business; business solution business(8) Overseas Funds

U.S.- and Asia-focused global private equity operations in Internet-related companies(9) Others

Holding company functions for overseas operations; back-office services in Japan¥(39,296)(39,296)(35,397)¥(3,899)¥406,892
406,892
498,889¥(91,997)

2. Geographic Segment Information(1) FY2004 interim (for the six-month period ended September 30, 2003)

Japan
Net sales(1) Customers(2) Inter-segment
Total
Operating expenses
Operating loss

¥221,579
296
221,876
256,532¥(34,656)(Millions of yen; amounts less than one million yen are omitted.)
Elimination
North
Consolidated
OthersTotalorAmerica
Total
corporate¥1,149
22
1,172
2,021
¥(848)¥2,725
29
2,755
3,884
¥(1,129)¥225,454
349
225,804
262,438¥(36,634)¥(349)(349)
2,372¥(2,722)¥225,454
225,454
264,811¥(39,357)(2) FY2003 interim (for the six-month period ended September 30, 2002)

Japan
Net sales(1) Customers(2) Inter-segment
Total
Operating expenses
Operating loss

¥175,604
287
175,892
202,417¥(26,524)

North
America¥1,824
731
2,555
2,879
¥(323)

Europe(Millions of yen; amounts less than one million yen are omitted.)
Elimination
Consolidated
Others
Total
or
Total
corporate

Korea

¥163
163
534
¥(371)¥11,340
11,34012,399¥(1,058)¥2,282
13
2,296
3,146
¥(850)¥191,052
1,196
192,248
221,377¥(29,128)¥(1,196)(1,196)874¥(2,070)¥191,052
191,052
222,251¥(31,199)(3) FY2003 (for the fiscal year ended March 31, 2003)

Japan
Net sales(1) Customers(2) Inter-segment
Total
Operating expenses
Operating loss

¥386,477
555
387,033
469,288¥(82,255)

North
America¥2,992
872
3,864
4,482
¥(617)

Europe(Millions of yen; amounts less than one million yen are omitted.)
Elimination
Consolidated
Others
Total
or
Total
corporate

Korea

¥160
160
734
¥(573)¥13,973
13,973
16,790¥(2,817)¥3,448
26
3,475
5,283
¥(1,807)¥406,892
1,615
408,507496,578¥(88,071)¥(1,615)(1,615)2,310¥(3,925)¥406,892
406,892
498,889¥(91,997)

Notes:Net sales by geographic region were recognized based on geographic location.
1. Significant countries in each region disclosed for the interim period ended September 30, 2003 are shown below:
North America: U.S.A. and Canada
Others: Europe, Korea, China, Hong Kong and Singapore
2. SOFTBANK CORP. had presented the results of "Europe" and "Korea" for the interim period ended September 30, 2002
and the fiscal year ended March 31, 2003. Effective from April 1, 2003, SOFTBANK CORP. has included the results of "Europe" and "Korea"
into "Others" due to the decrease in materiality of the results of "Europe" and "Korea".

3. Overseas Sales
Disclosure of overseas sales was omitted because the total overseas sales were less than 10% of total consolidated sales.

29

PER SHARE DATA

Net loss per share - primary (yen)Net loss per share - diluted (note 1)
Net assets per share (yen)

FY2004 interim¥(229.81)
644.97

FY2003 interim¥(166.27)
855.33

FY2003¥(296.94)
767.56

336,540,038

336,869,930

336,857,133¥(77,338)¥(56,010)¥(100,027)

-

207

38

Basic data for computation of the per share data
1. Average number of common stock outstanding
during each fiscal period (unit: shares) (note 2)
2. Net loss allocated to common stock outstanding(in millions of yen)
3. Net loss not allocated to common stock holders(in millions of yen) (note 3)

Notes:
1. Diluted net income per share is not disclosed due to the loss position.
2. There were no common stock equivalents at each period end.
3. The primary component is "Bonuses to Directors".

30

Investments in Debt and Equity Securities
FY2004 interim (as of September 30, 2003)
1. Trading securities
Trading securities and others(Millions of yen; amounts less than one million yen are omitted.)
Carrying amount
AssetsLiabilities¥-(1) Equity securities¥2,101(2) Debt securities

782-(3) Others

117-¥3,001¥-Total
2. Non-trading securities(1) Other securities (available-for-sale) at fair value(Millions of yen; amounts less than one million yen are omitted.)
Investment Cost

(1) Equity securities¥31,283

Carrying amount

Differences¥168,866¥137,583(2) Debt securities
Government bonds(3) Others
Total

109

110

0

402

337

(65)

¥31,795¥169,313¥137,518(2) Unlisted investment securities(Millions of yen; amounts less than one million yen are omitted.)
Carrying amounts(1) Unlisted held-to-maturity securities:
Foreign debt securities¥0(2) Unlisted other securities (available-for-sale):
Equity securities (excluding over-the-counter stocks)
Domestic debt securities

20,2720Foreign debt securities

991

MMF

4,255

Mid-term government bond fund261

Preferred fund certificates

2,000

Others5
Total¥27,78631

Investments in Debt and Equity Securities (continued)
FY2003 (as of March 31, 2003)
Non-trading securities(1) Other securities (available-for-sale) at fair value(Millions of yen; amounts less than one million yen are omitted.)
Investment
Carrying Amount
Differences
Cost
Carrying Amount > Investment Cost
(1) Equity securities(2) Debt securities
Government bonds(3) Others
Subtotal
Carrying Amount≦Investment Cost
(1) Equity securities(2) Debt securities
Government bonds(3) Others
Subtotal
Total¥16,312¥78,934¥62,6219
0
16,322

9
0
78,9440062,622

7,094

4,444

(2,649)

100
469
7,664
¥23,987

100
297
4,842
¥83,787(0)(172)(2,822)¥59,800(2) Unlisted investment securities(Millions of yen; amounts less than one million yen are omitted.)
Carrying Amounts(1) Unlisted held-to-maturity debt securities
Domestic debt securities
Foreign debt securities(2) Unlisted other securities (available-for-sale)
Equity securities (excluding over-the-counter stocks)
Domestic debt securities
Foreign debt securities
MMF
Mid-term government bonds fundCommercial paper
Preferred fund certificates
Others
Total

¥0
199
19,109
250
1,724
4,370
320
1,999
2,000
605
¥30,580

FY2003 interim (as of September 30, 2002)
Non-trading securities(1) Other securities (available-for-sale) at fair value(Millions of yen; amounts less than one million yen are omitted.)
Investment Cost
Carrying amount
Differences(1) Equity securities(2) Debt securities
Government bonds(3) Others
Total¥37,888¥62,614¥24,725310
107¥38,307

310
105¥63,030(0)(2)¥24,723(2) Unlisted investment securities(Millions of yen; amounts less than one million yen are omitted.)
Carrying amounts(1) Unlisted held-to-maturity securities:
Domestic debt securities¥1(2) Unlisted other securities (available-for-sale):
Equity securities (excluding over-the-counter stocks)
29,714
Domestic debt securities
1,845
Foreign debt securities
5,248
MMF
9,257
Mid-term government bond fund408
Preferred fund certificates
2,000
Others0
Total¥48,47632

Derivative transactions
1. Trading transactions
Nature of transaction

AssetsContract amounts

Forward exchange contracts(Millions of yen; amounts less than one million yen are omitted.)
September 30, 2003
Liabilities
Fair value
Contract amounts
Fair value¥149

Nikkei futures transactions

¥5
-

Total

-

¥149

¥5

¥139

¥5

10

0

¥149

¥6

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 September 30, 2003

Nikkei futures transactions

Nikkei futures prices as of September 30, 2003

3. Derivative liabilities from trading transactions were included into "Other current liabilities" on the consolidated balance sheet.

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

September 30, 2003

Nature of transaction

Contract amounts

Contract amounts

September 30, 2002

Over 1 year

Fair
value

Unrealized
gain (loss)¥1,000¥15¥15

Contract amounts
Over 1 year

Fair
value

Unrealized
gain¥1,000¥24¥24Over 1 year

Fair
value

Unrealized
gain (loss)¥1,000¥1,000

¥40

¥40

9,652
(94)

(-)

28

(66)

-

-

-

-

-

-

-

-

8,718
(94)

(-)

(206)

(111)

-

-

-

-

-

-

-

-

・ Purchase U.S. dollars andsell Japanese yen

69,161- 65,138(4,021)

49,124- 50,105

980

-

-

-

-

・ Purchase Japanese yen andsell U.S. dollars

11,085- 11,124

(39)

-

-

-

-

-

-

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

Option transactions to・ Purchase U.S. dollar call option
and Japanese yen put option
Off-market
transactions ・ Sell U.S. dollar put option andJapanese yen call option
Forward exchange contracts to-

Total

-

¥996

¥(4,197)¥24

Notes: 1. The amounts in ( ) under "Contract amounts" are option fees.
2. Fair value is based on information from 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 consolidated subsidiaries did not apply hedge accounting.

Interest Related(Millions of yen; amounts less than one million yen are omitted.)
March 31, 2003

September 30, 2003

Nature of transaction

Notional amounts
Over 1 year

Fair
value

Unrealized
gain (loss)¥1,285¥1,142

¥79

¥79

2,142

1,571

(119)

1,000

1,000

36

Notional amounts

March 31, 2003
Notional amounts
Over 1 year

Fair
value

Unrealized
gain (loss)¥1,528¥1,428

¥126

¥126

(198)

2,814

2,714

(203)

(203)

36

1,000

1,000

37

37

Over 1 year

Fair
value

Unrealized
gain (loss)¥1,528¥1,285

¥121

¥121

(119)

2,814

2,142

(198)

36

1,000

1,000

36

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)
Total

¥(2)

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

33

¥(40)

¥(39)