SOFTBANK CORP.
CONSOLIDATED FINANCIAL REPORTFor the nine-month period ended December 31, 2005
Tokyo, February 10, 2006

FINANCIAL HIGHLIGHTS
1.

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

Operatingincome (loss)

Net sales

Ordinary loss

Net income (loss)

Amount%Amount%Amount%Amount%Nine-month period ended
December 31, 2005

¥810,258

44.2¥27,912-¥(2,255)-¥17,819-

Nine-month period ended
December 31, 2004

¥561,793

55.1¥(14,326)-¥(33,942)-¥(32,605)-

Fiscal year ended
March 31, 2005

¥837,018-¥(25,359)-¥(45,248)-¥(59,871)-

Net income (loss) per
share— primary (yen)Net income pershare— diluted (yen)Nine-month period ended
December 31, 2005

¥50.70¥47.31

Nine-month period ended
December 31, 2004¥(92.79)-

Fiscal year ended
March 31, 2005¥(171.03)-

Notes: Percentage changes for net sales, operating income (loss), ordinary loss and net income (loss) are compared with thecorresponding period of the previous fiscal year.
2.

Financial Condition(Millions of yen; amounts less than one million yen are omitted.)

Total assets

Shareholders'equityEquity ratio (%)

Shareholders' equity
per share (yen)As ofDecember 31, 2005

¥1,748,605¥219,11012.5¥623.32

As of
December 31, 2004

¥2,090,043¥204,685

9.8¥582.39

As of
March 31, 2005

¥1,704,853¥178,016

10.4¥505.861

3.

Cash Flows(Millions of yen; amounts less than one million yen are omitted.)

Operating activities

Investing activities

Financing activities

Cash and cash equivalents
at the end of the period

Nine-month period ended
December 31, 2005

¥43,968¥12,331¥(44,885)¥337,122

Nine-month period ended
December 31, 2004¥(30,709)¥(177,564)¥153,724¥381,948

Fiscal year ended
March 31, 2005¥(45,989)¥(242,944)¥277,770¥320,194

4.

Scope of Consolidation at December 31, 2005
Consolidated subsidiaries:
Equity-method non-consolidated subsidiaries:
Equity-method affiliates:

5.

152
5
87

Changes in Scope of Consolidation
Consolidated subsidiaries:
Newly added:
Excluded:20
21

Equity-method non-consolidated subsidiaries and affiliates:
Newly added:
13
Excluded:292Management Policies
1. Fundamental Management Policies
The core management philosophies of SOFTBANK CORP. (hereafter “the Company”) and the SOFTBANK Group(hereafter “the Group”) are “Endeavoring to benefit society and the economy and maximize corporate value by
fostering the sharing of wisdom and knowledge gained through the IT revolution.” By conducting its businessactivities in a creative manner, the Group focuses its energy on both contributing to the development of society andenhancing its corporate value.
Broadband connections have come into wide use in Japanese society, and the household penetration rate is already morethan 42%. The increasing use of broadband connections along with rapid advances in data communications
technology have stimulated discussion about the convergence of telecommunications with broadcasting and are steadily
bringing the world closer to the advent of the ubiquitous information age. As a 21st century lifestyle company thatuses broadband technologies to make people’s lifestyles richer and more fun, the Group aims to be the number one
broadband corporate group in Japan, providing a comprehensive telecommunications infrastructure as well as theportals and content that are deployed over such infrastructure.
As of December 31, 2005, the Yahoo! BB ADSL, a comprehensive broadband service had 5 million accumulated lines
installed, which was achieved just over four years after the beginning of commercial services in September 2001.
Along with the rapid expansion of the broadband infrastructure, the videos are taking over text as mainstream Internet
content. Through these changes in the operating environment, the Group began the demonstration experiments of TV
Bank, an Internet-based video service in October 2005. In December 2005, the Company established TV Bank Corp.
(hereafter TV Bank) as a joint venture with Yahoo Japan Corporation (hereafter “Yahoo Japan”) and started its
operation. Going forward, the Group will bring together the human resources and know-how related to video content
services in the new company and will work to further expand and improve its video content.
JAPAN TELECOM CO., LTD. (hereafter “JAPAN TELECOM”) aims to transform itself as an ICT*1 solutions
provider offering a wide range of solutions to corporate customers. In December 2005, JAPAN TELECOM
introduced a next-generation ICT platform service, IRIS, which aims to integrate the next-generation ubiquitous
networking services with content and applications. JAPAN TELECOM has continuously provided a range of network
solutions based on this platform service. Moreover, to meet the needs of corporate customers for voice network
services, JAPAN TELECOM is working to provide optimal business solutions for companies by combining its Otoku
Line direct connection voice service with other services. The accumulated number of lines installed for the Otoku Line
increased to 760 thousand as of December 31, 2005. By providing solutions such as those mentioned, JAPANTELECOM is aiming to show a profit in its Fixed-line Telecommunication business at an early date.
The application submitted by BB Mobile Corp. to Japan’s Ministry of Internal Affairs and Communications to enable
the Group to establish specified base stations for operating in the 1.7GHz frequency band was approved in November
2005. The Group is conducting R&D in preparation for entering this field and in October 2005 became the first in theworld to link third-generation mobile communications (Wideband-Code Division Multiple Access, W-CDMA), theYahoo! BB ADSL wireless LAN, and Worldwide Interoperability for Microwave Access (WiMAX) network inhandover*2 experiments. The Group is working toward the realization of a truly ubiquitous society through the entry
into the mobile phone business and the creation of revolutionary services based on a broadband environment that will
enable anyone to communicate with anyone else wherever they may be.
*1 ICT: Information & Communications Technology*2 Handover: Switching over the connections between base stations without breakups in voice and graphic communications.

32. Medium- and Long-Term Strategies(1) Becoming a Comprehensive Telecommunications Provider
The Group aims to become a comprehensive telecommunications provider capable of offering a broad range ofcommunication modes, by effectively utilizing the customer base, technology, and services it has developed in its
Broadband Infrastructure and Fixed-line Telecommunications businesses. Having been granted a license for entering
into the mobile phone market, the Group will enter this business as quickly as possible and seek to achieve stable andsustained expansion in the mobile phone business.
(2) Establishing a Unique Business Model
The Group has established a foundation as a comprehensive telecommunications group, and it is also a corporate groupbased on the Internet-related business. The Group includes many companies that use the broadband infrastructures toprovide a diverse range of services and content in such areas as music, broadcasting, games, sports, and e-commerce.
The Group will seek to maximize its profits and corporate value by drawing on the comprehensive strengths developedby the Group in its Internet-related activities to establish a unique business model for the broadband era that will
generate long-term, stable profits from its infrastructure business, increase returns from its portal business, and diversify
sources of income from its services and content.
3. Important Management Issues(1) Expanding Services and Content
The Group is taking steps to further expand the services and content available on the broadband infrastructure. Alongwith the growth in the household penetration rate of access to broadband services, we believe it will be more important
to offer video and other attractive services and content. In addition to substantially improving the services and content
available under the Group’s brand, the Group will work to offer a wide range of services and content by arranging
tie-ups with leading content providers in Japan and overseas.
(2) Achieving Consolidated Operating Profit for the Fiscal YearOne of the issues the Company has been addressing is how to achieve consolidated operating profit. This objective
has been achieved for the first half of the current fiscal year, and initiatives are in under progress for further expansionof consolidated operating profit for the full fiscal year. Especially in order to attain operating profit at an early date in
the Otoku Line business, JAPAN TELECOM has been continuously making efforts since the previous quarter tostrengthen its direct marketing channels and to create a more efficient agency sales system. In addition, JAPANTELECOM attempts to result in higher profitability by shortening the time between the receipt of orders and connectionof lines.
(3) Strengthening the Corporate Governance and Compliance Systems
In December 2005, the Company revised its SOFTBANK Group Charter, with the aim to improve the governance andcompliance systems of the Group as a whole. Along with this revision, the Company prepared guidelines containing
specific compliance items and is working to strengthen governance within the Group. In addition, the Company
prepared the SOFTBANK Group Officers & Employees Code of Conduct comprising 10 items that all Group
employees are expected to comply with at all times. Moreover, a Group Hot-Line was established to enable Group
personnel to receive advice on compliance matters. Through these measures to strengthen governance and compliancesystems, the Group is committed to ensure its thorough risk management.

4

Results of Operations and Financial Position
1. Consolidated Results of Operations<Overview of Results for nine-month period ended December 31, 2005>
Net sales increased ¥248,464 million, or 44% over the same period of the previous fiscal year, to ¥810,258 million. In
current fiscal year, the financial results of JAPAN TELECOM are reflected on full year-to-date basis, while recorded only
for the third and fourth quarters in the previous fiscal year. Net sales in the Fixed-line Telecommunications segment were¥262,161 million, which was ¥82,075 million in the same period of the previous fiscal year. In the Broadband
Infrastructure segment, sales increased ¥48,743 million, or 33%, to ¥197,188 million, as a result of increases in thenumber of paying customers and ARPU (Average Revenue Per User). Sales of the Internet Culture segment also
continued to be robust and reported a ¥42,961 million increase, or 61%, to ¥113,746 million.
As SOFTBANK INVESTMENT CORPORATION*3 was changed to an equity-method affiliate from a consolidated
subsidiary on March 31, 2005, sales were not recorded in the e-Finance segment compared with ¥56,064 million in sales
recorded in the same segment for the same period of the previous fiscal year.
Operating income of ¥27,912 million was reported, while the operating loss of ¥14,326 million was reported for thesame period of the previous fiscal year. In the Broadband Infrastructure segment, operating loss improved ¥55,503
million to a profit of ¥8,350 million as a consequence of steady increases in sales and efforts to reduce costs, including
customer acquisition cost. In the Internet Culture segment, operating income increased ¥17,846 million, or 51%, to¥52,893 million, due to the continued robustness of advertising-related business. On the other hand, the Fixed-line
Telecommunications segment reported an operating loss of ¥28,087 million, owing to a delay in the installation of lines
for the Otoku Line service of JAPAN TELECOM. The operating income of the e-Finance segment for the same period of
the previous fiscal year was ¥12,772 million.
Ordinary loss decreased ¥31,687 million from the same period of the previous fiscal year, to ¥2,255 million. This result
is attributed to an improvement in operating profit and equity in earnings under the equity method of ¥6,214 million,
which improved from equity in loss under the equity method by ¥9,107 million due to the transition of SOFTBANKINVESTMENT CORPORATION to an equity-method affiliate from a consolidated subsidiary. On the other hand, in
despite of decrease in interest-bearing debt, interest expense increased by ¥4,013 million to ¥20,510 million due to thereflection of the financial results in the Fixed-line Telecommunications segment on a full year-to-date basis. Foreignexchange loss amounted to ¥7,126 million.
Net income of ¥17,819 million was reported, while the net loss of ¥32,605 million was reported for the same period of theprevious fiscal year. In special income, the Company recorded a gain on sales of investment securities of ¥146,080
million on the sale of shares in four Yahoo group companies in Europe and Korea, Tao Bao Holding Limited and others.
Dilution gain from changes in equity interest accompanied by mainly SBI Holdings, Inc. reported ¥9,509 million. In
special loss, the Company reported ¥26,429 million in loss on contract revision relating to sales operation change
following a review of the sales systems for the Otoku Line service, ¥14,749 million in restructuring charge related to therestructuring of the Group’s video service business, ¥4,699 million from the valuation loss on investment securities.
Current income taxes of ¥29,548 million were recorded by mainly Yahoo Japan and deferred income taxes of ¥17,204
million were recorded by mainly the Company. In addition, minority interest of ¥21,015 million was recorded.
*3 Current SBI Holdings, Inc.

5

<Results for nine-month period ended December 31, 2005 by Business Segments>
Broadband Infrastructure
Segment sales increased ¥48,743 million, or 33% compared with the same period of the previous fiscal year, to ¥197,188
million. Operating income of ¥8,350 million was recorded, while operating loss of ¥47,152 million was recorded for thesame period of the previous fiscal year.
(Quarterly trends of the Segment）(Millions of yen; amounts less than one million yen are omitted)
FY2006

Sales
Operating income(loss)

FY2005

2006/Q3

2006/Q2

2006/Q1

2005/Q4

2005/Q3

2005/Q2

2005/Q1¥ 71,543¥ 64,439¥ 61,205¥ 56,861¥ 52,450¥ 49,819¥ 46,175

9,361

3,483

(4,494)(6,594)(12,474)(16,340)(18,337)ADSL Business
The Yahoo! BB ADSL, the driving force for expanding the usage of broadband internet services, reported 5 million
accumulated lines installed as of December 31, 2005, which was achieved just over four years after the beginning ofcommercial services in September 2001. In addition, the churn rate remained a bit over 1%. Since the commencement ofservice, the Yahoo! BB ADSL has maintained a net increase in the number of paying customers.
ARPU of the ADSL business continued to increase as a result of a growth in the number of users of high-value-added
services such as higher-speed service plans and in-house wireless LAN services. The percentage of Yahoo! BB 50M users
continued to increase, and reached approximately 20% of the total accumulated subscribers. The number of in-house
wireless LAN users also has been increasing to exceed 1.26 million, which surpassed 25% of the total accumulated
subscribers. The accumulated lines installed of the BB Phone, the IP telephony service, totaled 4.77 million as ofDecember 31, 2005, and the BB Phone retained its No.1 share position in Japan.
In October 2005, BB Mobile Point, the public wireless LAN service, began to offer paid services at a competitive price of¥304 per month. The service area has been expanded since December 2005, to cover the nationwide outlets of
McDonald’s Company (Japan), Ltd. and has been exceeded 3,200 spots, making it one of the largest nationwide service
networks in Japan.
Regarding costs, customer acquisition costs have been substantially reduced. This is attributed to the decline of incentive
costs due to a more moderate increase in the number of new customers, and more efficient customer-acquisition based oncollaboration with large appliance discount stores.
With the objective of restructuring its broadband business, in December 2005, SOFTBANK BB Corp. (hereafter“SOFTBANK BB”) was split into BB TECHNOLOGY Corp. (hereafter “BB TECHNOLOGY”), which focuses on the
ADSL business, and (new) SOFTBANK BB Corp., which assumes the businesses other than ADSL. Furthermore, withan aim to concentrate management resources on its core broadband business, BB TECHNOLOGY sold its modem rental
business. After the conclusion of a service agreement, BB TECHNOLOGY receives incentives, loyalties, andsubcontracting fees after the sale of its modem rental business in proportion to actual business performance such as thenumber of paying subscribers and other factors in the ADSL business. Following this sale of business, BB
TECHNOLOGY received ¥45 billion on the sale of modem rental business and ¥40 billion as an advance royalty totaling¥85 billion (see chart in the next page for details).
FTTH BusinessIn the FTTH business, a strategy focusing on cost efficiency has been adopted. While aggressive marketing for customer
acquisition is now restrained, the Group are making effort to activities to expand the service lineup in preparation for
full-fledged services, such as Yahoo! BB hikari TV Package and Wireless TVBOX, which enable users to watch TV
broadcasts from terrestrial stations on their PCs, and the BB Phone hikari, a fiber optic telephony service.

6

Video Content Delivery Business
The Group began the demonstration experiments of TV Bank, an Internet-based video service in October 2005. In
December 2005, the Company established TV Bank Corp. as a joint venture with Yahoo Japan and started its operation.
The Group will bring together its human resources and know-how related to video services in the new company, forprocurement of video content, development and operation of a system for the video content delivery and retrieval, anddesign and operation of a service interface. As a result of this effort, Yahoo! Streaming, provided by Yahoo Japan, hasbeen enhanced as a video content portal offering nearly 100,000 titles, and most of them are free of charge. TV Bank is in
the process of building up its revenue model by providing free contents with advertising income in addition to
pay-per-view model. The financial results of TV Bank are reflected in the Other segment.
In the Broadband TV Broadcasting (BBTV) service business, the Yahoo! BB hikari TV Package and full-scale Yahoo! BB
ADSL services were introduced nationwide in July 2005. Following the start-up of the new video services such as TV
Bank and Yahoo! Streaming, the Company reconsidered the future revenue generated from the use of the assets solely usedin the BBTV business and revaluated those assets. As a result, restructuring charge relating to BBTV business of ¥14,749
million was recognized as a special loss.
The financial results of the Broadband Infrastructure business of Yahoo Japan and JAPAN TELECOM such as ISP
revenues and others are reflected in this segment, as well as the results of BB Mobile Corp., which plans to enter themobile telephone market in the near future.

Broadband Business Restructuring

Post-Spin-Off

Pre-Spin off

SOFTBANK GROUPSOFTBANK GROUPSOFTBANKCORPORATION.

SOFTBANKCORPORATION.

Wholly Owned

Wholly Owned

Wholly Owned(NEW)
SOFTBANK BBSOFTBANK BB

OtherBusinesses

ADSL
Business

Modem
RentalBusiness(newly established)

BB TECHNOLOGY(surviving company)

Other
Businesses

ADSL
Business

Sell to Outside

Commission Contract

BB Modem Rental(newly established)
Modem Rental
Business

7

Incentives,
Loyalties,
Subcontracting fees etc.

Fixed-line Telecommunications
Segment sales were ¥262,161 million and operating loss was ¥28,087 million.
(Quarterly trends of the Segment）
FY2006

Sales
Operating income(loss)(Millions of yen; amounts less than one million yen are omitted)
FY2005

2006/Q3

2006/Q2

2006/Q1

2005/Q4

2005/Q3

2005/Q2

2005/Q1¥ 90,256¥ 83,300¥ 88,604¥ 84,803¥ 82,075(1,787)(12,209)(14,089)(21,767)(14,297)

Newly established on
September 30, 2004

The cumulative number of lines installed for JAPAN TELECOM’s Otoku Line, direct connection voice service, reached
760 thousand as of December 31, 2005. As a result of improved Otoku Line operating revenue, operating loss in the
Fixed-line Telecommunications segment was substantially reduced. Following the start-up of JAPANTELECOM
INVOICE Co., Ltd. (hereafter “JAPANTELECOM INVOICE”, a joint venture with INVOICE INC.), in October 2005,
agency management and other responsibilities related to the Otoku Line business, which until now had been the sole
responsibility of JAPAN TELECOM, were transferred to JAPANTELECOM INVOICE, which resulted in a substantial
reduction in agency administration expenses. JAPAN TELECOM focuses on corporate customers that have highrevenue-generating potential by bolstering its sales force. It is fully leveraging the Otoku Line service for the voice
network needs of its corporate customers, combining it with VOICE-NET, a virtual extension for a corporate-wide
telephone network, thereby providing an optimum communications infrastructure for businesses.
This segment recorded a ¥26,429 million of loss following the reconsideration of the Otoku Line sales organization.
JAPAN TELECOM aims to transform itself to an ICT solutions provider offering a wide range of solutions to corporate
customers. In December 2005, a concept of next-generation ICT platform service, IRIS, was introduced, which aims tointegrate the broadband-based ubiquitous networking services of next-generation with content and applications, and toprovide as an optimum infrastructure for business use. Following the announcement KeyPlat (Ultina on-Demand
Platform) was launched in January 2006 as the first service to realize this concept. The integration of “service” and“network”, which heretofore was provided separately, shall be realized with IRIS to meet the diversifying demands ofcorporate customers toward the ubiquitous society, and thus assist to improve their competency.
E-Commerce
Segment sales increased ¥16,614 million, or 9%, to ¥199,613 million. Operating income decreased ¥1,055 million, or26%, to ¥3,017 million.
(Quarterly trends of the Segment）(Millions of yen; amounts less than one million yen are omitted)
FY2006

Sales
Operating income

FY2005

2006/Q3

2006/Q2

2006/Q1

2005/Q4

2005/Q3

2005/Q2

2005/Q1¥ 71,456¥ 67,688¥ 60,469¥ 71,922¥ 63,388¥ 61,574¥ 58,035

1,473

817

726

1,168

1,491

1,039

1,540

As the result of brisk sales due to the year-end holiday sales season for PC and peripheral equipment through large
appliance discount stores and the enhancement of the sales of PC servers and software to corporate users, sales of
SOFTBANK BB continued to be strong. Operating income remained the same level compared to the corresponding
period of the previous fiscal year, whereas the decreasing trend of the gross margin, due to enhancement of the salesorganization.

8

Internet Culture
Segment sales increased ¥42,961 million, or 61%, to ¥113,746 million. Operating income increased ¥17,846 million, or51%, to ¥52,893 million.
(Quarterly trends of the Segment）(Millions of yen; amounts less than one million yen are omitted)
FY2006

FY2005

2006/Q3

2006/Q2

2006/Q1

2005/Q4

2005/Q3

2005/Q2

2005/Q1

Sales¥ 42,214¥ 36,896¥ 34,635¥ 31,663¥ 26,989¥ 22,725¥ 21,070

Operating income

19,256

17,167

16,46915,033

12,849

11,093

11,103Advertising sales of Yahoo Japan continued to be strong. Other than advertising service, the employment information
service was also strong in business services, and the transaction volumes at Yahoo! Auctions steadily increased in the
personal services.
Other Segments
The result of this segment includes the performance of Broadmedia businesses (mainly Club iT Corporation), Technology
Services businesses (mainly SOFTBANK TECHNOLOGY CORP.), Media & Marketing Businesses (mainly
SOFTBANK Creative Corp.), and Others (mainly Fukuoka Softbank Hawks Corp.).

2. Financial Position<Balance Sheet Analysis>
Current assets increased ¥26,834 million, to ¥632,952 million. The principal reasons were an increase in cash anddeposits of ¥48,463 million and a decrease in marketable securities of ¥29,185 million.
Property and equipment decreased ¥18,907 million, to ¥432,809 million. This was primarily due to the divestiture andsale of the modem rental business in the Broadband Infrastructure segment.
Intangible assets decreased ¥109 million, to ¥103,431 million. Other intangibles, such as software, increased ¥2,529
million, while goodwill decreased ¥2,638 million due to amortization.
Investments and other assets increased ¥36,275 million, to ¥578,248 million. This mainly reflected a ¥63,424 million
increase in investment securities due to the increase in market value of Yahoo! Inc. and a ¥18,149 million decrease indeferred tax assets.
Current liabilities decreased ¥151,597 million, to ¥539,199 million. Accounts payable - other and accrued expenses
decreased ¥63,208 million, due to the completion of payments made against the initial investment in new businesses suchas FTTH business and the Otoku Line Business, which increased accounts payable temporarily. The principal reasons forthe decrease are the decrease of ¥68,703 million in short-term borrowings and ¥37,051 million in the current portion of
corporate bonds.
Long-term liabilities increased ¥132,533 million, to ¥899,629 million. The principal reasons were an increase of¥76,720 million in corporate bonds as a result of the Company’s domestic straight bonds issuance (20th-23rd unsecured
bonds) and deferred revenue of ¥45,156 million resulting from the sale of the modem rental business.
Shareholders’ equity increased ¥41,094 million, to ¥219,110 million. This mainly reflected a decrease in accumulated
deficit of ¥15,095 million from recording net income, an increase in net unrealized gain on other securities of ¥32,146
million following an increase in the value of securities holdings in Yahoo! Inc. and other companies, and an increase inforeign currency translation adjustments of ¥12,216 million. Meanwhile, as a deduction of shareholders’ equity, net
unrealized loss on derivative instruments increased ¥18,646 million. As a result, the equity ratio was 12.5%, compared to
10.4% at March 31, 2005.

9

<Cash Flow Analysis>
During the first three quarters, cash provided by operating activities was ¥43,968 million and cash provided by investing
activities was ¥12,331 million, while cash used in financing activities amounted to ¥44,885 million. As a result, cash andcash equivalents at the end of the period totaled ¥337,122 million, an increase of ¥16,928 million compared to March 31,
2005.
Net cash provided by operating activities was ¥43,968 million. Income before income taxes and minority interest
amounted to ¥85,589 million, depreciation and amortization totaled ¥62,106 million, and royalties received in advancefollowing the sale of the modem rental business came to ¥40 billion. However, there was ¥145,853 million of gain on
sales of marketable and investment securities to be recorded as an adjustment item (affecting special income and loss inthe consolidated statements of operations). Other factors affecting net cash used in operating activities were interest paidof ¥15,127 million and payment of ¥31,441 million in corporate income taxes by Yahoo Japan and others.
Net cash provided by investing activities was ¥12,331 million. The Company recorded proceeds of ¥161,019 million
from the sale of investment securities following the sale of shares in four Yahoo group companies in Europe and Korea,¥40,442 million from the sale of interests in subsidiaries previously consolidated resulting from the sale of shares ofmainly Tao Bao Holding Limited, and ¥45 billion from the sale of the modem rental business. However, cash outflows of¥177,052 million for the purchase of property and equipment, and intangibles were recorded mainly in connection with
the Broadband Infrastructure and Fixed-line Telecommunications segments. The sale of marketable and investment
securities of ¥69,392 million was recorded.
Net cash used in financing activities was ¥44,885 million. The principal reasons were ¥91,878 million in proceeds fromissuance of bonds, decrease in short-term borrowings of ¥80,701 million, and cash outflows of ¥53,515 million which wasreported for the redemption of bonds.

10

The SOFTBANK GroupAs of December 31, 2005, the SOFTBANK Group included 244 companies with operations in nine business segments as follows.
Consolidated
subsidiaries

Equity-method
non-consolidated
subsidiaries andaffiliates(Note 1)

18

7

ADSL and fiber-optic high-speed Internet connection service, IP telephonyservice, provision of content and other operations(Note 2)11

2

Fixed-line telecommunications such as voice transmission service, datatransmission service, private leased circuit and data center service

3. e-Commerce(Note 2)18

11

4. Internet Culture(Note 2)

25

7

Broadmedia

103

Promoting the spread of broadband service such as broadcasting andcommunications; support for procurement of content

Technology Services

73

System solution business and business solution businessMedia & Marketing8

5Book and magazine publication in such areas as PCs, the Internet,
entertainment, etc., and development of web content specializing in IT

Overseas Funds

33

46

U.S.- and Asia-focused global venture capital business principally focused on
Internet-related companies

Others22

8

Leisure and service business, holding company functions for overseas
operations, and back-office services in Japan

152

92

Business segment

Broadband
Infrastructure
Fixed-line
2.
Telecommunications
1.

Principal products and operational content of each businessDistribution of PC software and such hardware as PCs and peripherals,
enterprise solutions, and diversified e-commerce businesses, including
business transaction platform (B2B) and consumer-related e-commerce (B2C)
Internet-based advertising operations, broadband portal business, andInternet-based auction business

5 Others:

Total

Note: 1. On December 1, 2005, SOFTBANK BB Corp. was split into BB TECHNOLOGY Corp.,(the surviving company; the name of
SOFTBANK BB Corp. was changed to this name.), which focuses on ADSL business and SOFTBANK BB Corp. (newly
established company; hereafter “New SOFTBANK BB Corp.”), which assumes the businesses other than ADSL business suchas FTTH business and e-Commerce business. BB TECHNOLOGY Corp. is included in Broadband Infrastructure segment.
2. New SOFTBANK BB Corp., JAPAN TELECOM CO., LTD. and Yahoo Japan Corporation are included in the consolidated
subsidiaries of the e-Commerce, Fixed-line Telecommunications and Internet Culture segments, respectively, while New
SOFTBANK BB Corp., JAPAN TELECOM CO., LTD. and Yahoo Japan Corporation operate multiple businesses and theiroperating results are allocated to multiple business segments.
3. The former e-Finance business segment ended as SOFTBANK INVESTMENT CORPORATION (current SBI Holdings, Inc.)changed to an equity-method affiliate from a consolidated subsidiary on March 31, 2005.
Broadband Infrastructure

Inte rne t Cu lture

BB Cable Corporation

Fixed-line
Te lecommu nications

IP Revolution, Inc.

SOFTBANK BB Corp.
Yahoo Japan Corporation

JAPAN TELECOM CO., LTD

BB TECHNOLOGY Corp.

Tavigator, Inc.
［ Overseas ］

SOFTBANK IDC Corp.

［ Ove rseas ］

Seven & Y Corp.

［ Domestic ］

Club iT Corporation

Broadmedia［ Do mestic ］
Vector Inc.

（Ope rating Holdin g
Compan ies）
SOFTBANK Broadmedia
Corporation（Ope rating Holdin g
Co mpanies）

SOFTBANK CORP.
（Pure Holding Company）

DeeCorp Limitede -Commerc e

SOFTBANK BB Corp.
Carview Corporation
SOFTBANKMedia Marketing
Holdings Corp.

（Operatin g Holding
Compan ies）
SOFTBANKTECHNOLOGY CORP.

Techn ology Services

SOFTBANK
Holdings Inc.

SBI Holdings, Inc.

SOFTBANK Creative Corp.
Itmedia Inc.

cyber communications inc.

［ Do mestic ］
Media & Marketing

Fukuoka Softbank Hawks
Marketing Corp.
SOFTBANK Korea Co., Ltd.

［ Ove rseas ］ SB CHINA HOLDINGS PTE LTD
SOFTBANK US Ventures VI LP

OthersOve rseas Fun ds

・・・・ Segment・・・・ Consolidated subsidiary・・・・ Equity-method subsidiaryor affiliates

11

CONSOLIDATED BALANCE SHEETS(Millions of yen; amounts less than one million yen are omitted.)
As of December 31, 2005

As of March 31, 2005

AmountAmount%%Increase(Decrease)

As of December 31, 2004
Amount%ASSETS
Current assets:
Cash and deposits
Notes and accounts receivable –tradeMarketable securities¥336,442¥287,978¥48,463¥352,316

177,678

168,262

9,415

146,656

10,21839,403(29,185)

48,086Inventories

57,31247,224

10,08747,598Deferred tax assets
Cash segregated as deposits
related to securities business
Receivables related tomargin transactions
Other current assets
Less:
Allowance for doubtful accounts
Total current assets

3,132

3,025

107

4,571

-

-

-

148,663---

229,029

55,44567,542(12,096)

107,716(7,278)(7,319)41(7,269)26,834

1,077,370

632,952

36.2

606,117

35.5

51.5

Non-current assets:
Property and equipment, net
Buildings and structures

57,60356,860743

50,253

Telecommunications equipment

203,602

198,598

5,003

192,672

Telecommunications service lines

93,061

99,133(6,071)

98,983

Land

19,396

19,396-

15,725Construction-in-progress

32,72149,354(16,633)

35,058Others26,42328,373(1,950)28,737

Total tangible assets

432,809(18,907)421,43124.7

451,717

26.5

20.2

Intangible assets, net:
Goodwill

45,674

48,313(2,638)39,588Other intangibles

57,75655,2272,529

44,310Total intangible assets

103,431(109)

83,898Investments and other assets:
Investment securities andinvestments in partnerships
Other investments

5.9

103,540

6.1

497,866

434,441

63,424

331,526---

87,730

Deferred tax assets

22,32240,472(18,149)

40,528Other assets
Less:
Allowance for doubtful accounts
Total investments
and other assets

67,33075,728(8,398)56,746(9,270)(8,669)(600)(11,351)

4.0

578,24833.1

541,972

31.8

36,275505,180

24.2

Deferred charges

1,163

0.1

1,504

0.1

(341)

2,162

0.1

Total assets¥1,748,605

100.0¥1,704,853

100.0¥ 43,751¥2,090,043

100.0

12

CONSOLIDATED BALANCE SHEETS(Millions of yen; amounts less than one million yen are omitted.)
As of December 31, 2005

As of March 31, 2005

AmountAmount%%Increase(Decrease)

As of December 31, 2004

AmountLIABILITIES ANDSHAREHOLDERS' EQUITYCurrent liabilities:
Accounts payable - trade¥50,956¥63,684¥(12,728)¥46,981

Short-term borrowings

112,483

181,186(68,703)

149,613

Commercial paper
Current portionof corporate bonds
Accounts payable - otherand accrued expenses
Income taxes payable

16,50015,5001,000

15,00011,094

48,145(37,051)

48,145

165,056

228,264(63,208)

165,397

18,264

21,600(3,336)

16,986

-

527

(527)

1,755

-

-

-

185,147---

132,713

Deferred tax liabilities
Payables related tomargin transactions
Guarantee deposits received from
customers related to securities
business
Cash receipts as collateral

120,000

100,000

20,000100,000

Other current liabilities

44,84531,887

12,95886,451

Total current liabilities

539,199(151,597)

948,19430.8

690,796

40.5

%

45.4

Long-term liabilities:
Corporate bonds

454,968

378,248

76,720366,944

Long-term debt

215,730

230,837(15,106)

250,067

Deferred revenue

45,156-45,156-

Deferred tax liabilities

52,57957,419(4,840)58,540Accrued retirement benefits

17,121

17,359(238)

15,389Other liabilities

114,075

83,23230,84398,331

Total long-term liabilities

899,62951.5

767,09645.1

132,533

789,273

37.7

Total liabilities
Minority interestin consolidated subsidiaries
Shareholders' equity:

1,438,829

82.3

1,457,893

85.6(19,063)

1,737,467

83.1

90,665

5.2

68,943

4.0

21,721

147,890

7.1

Common stock

162,566

9.3

162,397

9.5

168

162,390

7.8

Additional paid-in capital

186,952

10.7

186,78310.9

168

186,777

8.9

Accumulated deficit
Net unrealized gain on othersecurities
Net unrealized loss on derivative
instruments
Foreign currency translation
adjustments
Less: Treasury stock(258,266)(14.8)(273,362) (16.0)

15,095(246,006)(11.8)

168,8089.6

136,662

8.0

32,146

149,9127.2(59,702)(3.4)(41,056)(2.4)(18,646)(51,158)(2.4)

18,914

1.1

6,697

0.4

12,216

2,867

0.1

(162)

(0.0)

(106)

(0.0)

(56)

(97)

(0.0)

Total shareholders' equity
Total liabilities andshareholders' equity

219,11012.5

178,016

10.4

41,094

204,685

9.8¥1,748,605

100.0¥1,704,853

100.0¥43,751¥2,090,043

100.0

13

CONSOLIDATED STATEMENTS OF OPERATIONS(Millions of yen; amounts less than one million yen are omitted.)
Nine-month period ended Nine-month period ended
December 31, 2005
December 31, 2004

Net sales
Cost of sales
Gross Profit

Amount%Amount%¥810,258
538,801

100.0
66.5

¥561,793
362,967

100.0
64.6

Increase(Decrease)

Fiscal year ended
March 31, 2005

Amount%¥248,464
175,834¥837,018
547,402

100.0
65.4

271,457

33.5

198,82635.4

72,630289,615

34.6

Selling, general and administrative expenses

243,54430.1

213,15237.9

30,391

314,975

37.6

Operating income (loss)

27,912

3.4(14,326)(2.5)

42,238(25,359)(3.0)

Interest income
Equity in earnings under the equity method
Income from investments in partnerships

1,150
6,214
739

1,812
3,868

(662)
6,214
(3,128)

2,398
5,425
3,711

Other non-operating income

2,230

3,129

(899)

4,931

1,523

16,466

Non-operating income

10,334

Interest expense

20,51016,496

4,013

22,971

Foreign exchange loss

7,126

920

6,205

4,040

-

2,892

(2,892)-

12,865

8,117

4,748

9,343

Equity in loss under the equity method
Other non-operating expenses

1.3

8,811

1.6

2.0

Non-operating expenses

40,5025.0

28,427

5.1

12,07536,356

4.4

Ordinary loss

(2,255)(0.3)(33,942)(6.0)

31,687(45,248)(5.4)

93,430(1,435)(1,348)59,121
26,2693,969

90,64689,360Gain on sales of investment securities
Dilution gain from changes in equity interest
Other special income

146,080
9,509
2,176

Special income
Loss on contract revision relating to sales
operation change
Restructuring charge relating to BBTV
business
Valuation loss on investment securities
Penalty for unfulfilled contract commitment
Refinance arrangement fee
Other special loss
Special loss
Income (loss) before income taxes andminority interest
Income taxes:

157,766

Current

52,65010,944
3,524
19.5

67,11911.9

10.7

26,429-26,429-14,749-14,749

-

4,699
3,653
3,153
17,23569,921

8.6

5,189
23,97529,164

5.2

(489)
3,653
3,153
(6,739)40,757

8,840
6,147
38,67253,6606.4

85,589

10.6

4,012

0.7

81,576(9,548)(1.1)

29,548

3.7

22,2693.9

7,279

34,740

4.2

Refunded

-

(2.8)
5.4
(5.8)

2,897

0.3

17,204(15,941)
30,290¥(32,605)-

Deferred

2.1
2.6
2.2

33,145(21,963)(2.6)(9,274)¥50,425

40,444¥(59,871)

4.8
(7.2)

Minority interest
Net income (loss)

21,015¥17,819

14

CONSOLIDATED STATEMENTS OF ADDITIONAL PAID-IN CAPITALAND RETAINED EARNINGS(Millions of yen; amounts less than one million yen are omitted.)
Nine-month period ended
December 31, 2005

Nine-month period ended
December 31, 2004

Fiscal year ended
March 31, 2005

¥186,783¥186,690¥186,690

168

87

93

¥186,952¥186,777¥186,783

ADDITIONAL PAID-IN CAPITAL
Additional paid-in capitalat the beginning of the period
Increase due to issuance of shares
Additional paid-in capitalat the end of the period(Millions of yen; amounts less than one million yen are omitted.)
Nine-month period ended
December 31, 2005

Nine-month period ended
December 31, 2004

Fiscal year ended
March 31, 2005¥(273,362)¥(210,625)¥(210,625)

17,819(32,605)(59,871)(2,460)(2,459)(2,459)Bonuses to directors

(86)

(176)

(176)

Net adjustments to accumulated deficit due tochange in scope of the consolidation

38

(145)

(98)

Increase due to merger

-

14

17

(215)

(7)

(147)

¥(258,266)¥(246,006)¥(273,362)

ACCUMULATED DEFICIT
Accumulated deficit
at the beginning of the period
Net income (loss)
Cash dividends

Decrease due to merger
Accumulated deficit
at the end of the period

Note: In accordance with accounting principles generally accepted in Japan, the cumulative effect arising from any changes in thescope of consolidation is treated as an adjustment to accumulated deficit in the consolidated statements of additional paid-in capital andretained earnings.

15

CONSOLIDATED STATEMENTS OF CASH FLOWS(Millions of yen; amounts less than one million yen are omitted.)
Nine-month period ended Nine-month period ended
December 31, 2005
December 31, 2004

Fiscal year ended
March 31, 2005

Ⅰ. Cash flows from operating activities:
Income (loss) before income taxes and minority interest¥85,589¥4,012¥(9,548)

Adjustments to reconcile income (loss) before income taxes
and minority interest to net cash provided by (used in) operating
activities:
Depreciation and amortization

62,106

41,654

66,417

Equity in (earnings) loss under the equity method, net(6,214)

2,892(5,425)

Dilution gain from changes in equity interest, net(9,488)(10,861)(25,200)

Valuation loss on investment securities

4,699

6,477

8,840

(145,853)(49,670)(56,049)

Foreign exchange loss, net

6,319

2,518

5,324

Interest and dividend income(1,384)(2,126)(2,862)

Interest expense

20,51016,49622,971Gain on sales of marketable and investment securities, net

Changes in operating assets, liabilities and others(Increase) in receivables - trade(12,386)(761)(15,854)(Decrease) increase in payables - trade(7,166)(11,509)

2,371

Increase in deferred revenue

40,000--

Increase in other receivables(12,818)(27,990)(70,813)

Increase in other payables

21,206

61,766

97,095

Others, net

39,889(24,466)(17,519)85,007

8,432

(251)

2,501

2,218

2,506

Interest paid

(15,127)(11,198)(17,924)

Income taxes paid

(31,441)(31,382)(31,533)

3,028

1,221

1,213

¥43,968¥(30,709)¥(45,989)

Sub-totalInterest and dividends received

Refund of income taxes
Net cash provided by (used in) operating activities- Continued -16

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)(Millions of yen; amounts less than one million yen are omitted.)
Nine-month period ended Nine-month period ended
December 31, 2005
December 31, 2004

Fiscal year ended
March 31, 2005

Ⅱ. Cash flows from investing activities:
Purchase of property and equipment and intangibles¥(177,052)¥(52,731)¥ (90,943)

Purchase of marketable and investment securities(69,392)(21,790)(29,582)

161,019

39,00157,099(3,464)(159,337)(172,320)

40,442

38,912

34,840

5,853

7,552

8,110

Increase in loan receivables(14,550)(9,916)(21,387)

Collection of loans

13,435

5,955

9,105

-

-

(13,113)

Proceeds from sales of marketable and investment securities
Acquisition of interests in subsidiaries newly consolidated,
net of cash acquired
Sales of interests in subsidiaries previously consolidated
Proceeds from sales of interests in consolidated subsidiaries

Purchase of business rights and others
Proceeds from sale of modem rental business

45,000--11,039(25,210)(24,753)

12,331(177,564)(242,944)(80,701)

22,66853,468

Increase in commercial paper

1,000

4,000

4,500

Proceeds from long-term debt

120,350

166,400

166,400

Repayment of long-term debt

(139,554)(191,151)(192,836)

Proceeds from issuance of bonds

91,878112,184

153,378

Redemption of bonds(53,515)(36,124)(36,124)

Proceeds from issuance of shares

337

174

187

Proceeds from issuance of shares to minority shareholders

871

28,75730,298Proceeds from issuance of shares through public offering andallocation to a third party in SOFTBANK INVESTMENTCORPORATION--

51,362

Redemption of preferred shares held by minority shareholder-(33,908)(33,908)

Cash dividends paid

(2,452)(2,452)(2,457)

Cash dividends paid to minority shareholders(2,497)(2,057)(2,160)

Increase in cash receipt as collateral

20,00090,00090,000(602)(4,765)(4,336)(44,885)

153,724

277,770

5,656

(608)

1,474

17,070(55,157)(9,688)

-

12

12

(142)

(45)

(107,529)

-

6

267

Ⅸ. Cash and cash equivalents at the beginning of the period

320,194

437,132

437,132

Ⅹ. Cash and cash equivalents at the end of the period¥337,122¥381,948¥320,194

Others, net
Net cash provided by (used in) investing activities
Ⅲ. Cash flows from financing activities:(Decrease) increase in short-term borrowings, net

Others, net
Net cash (used in) provided by financing activities
Ⅳ. Effect of exchange rate changes on cash and cash
equivalents
Ⅴ. Net increase (decrease) in cash and cash equivalents
Ⅵ. Increase in cash and cash equivalents due to
newly consolidated companies
Ⅶ. Decrease in cash and cash equivalents due to exclusion ofpreviously consolidated entities
Ⅷ. Increase in cash and cash equivalents due to merger

17CONDENSED QUARTERLY FINANCIAL INFORMATION
Condensed Statement of Income(Millions of yen; amounts less than one million yen are omitted.)
Third quarter

Second quarter

First quarter

Fourth quarter

Third quarter

Second quarter

First quarter

October 1, 2005 to
December 31, 2005

July 1, 2005 to
September 30, 2005

April 1, 2005 toJune 30, 2005

January 1, 2005 to
March 31, 2005

October 1, 2004 to
December 31, 2004

July 1, 2004 to
September 30, 2004

April 1, 2004 toJune 30, 2004

AmountAmountAmountAmountAmountAmountAmountNet sales¥287,471¥264,149¥258,637¥275,224¥258,087¥156,395¥147,311
Cost of sales
184,551
178,575
175,674
184,434
170,489
99,707
92,770Gross profit
102,920
85,57382,96290,78987,59756,68754,540
Selling, general and administrative
79,407
77,98386,153
101,822
95,13459,65858,359expenses
Operating income (loss)
23,512
7,590(3,190)(11,032)(7,536)(2,970)(3,819)Non-operating income (Note)
2,784
4,442
3,122
10,704
10,465
1,846
3,068
Non-operating expenses (Note)
15,06812,49912,95010,978
10,963
13,114
10,918
Ordinary income (loss)
11,228(466)(13,017)(11,306)(8,034)(14,239)(11,669)
Special income
98,93435,916
22,914
22,24016,66540,6909,763
Special loss
50,475
10,3099,136
24,496
18,2728,526
2,365
Income (loss) before income
59,68725,141760(13,561)(9,641)
17,925(4,271)
taxes and minority interest
Income taxes - Current
9,695
11,6238,230
12,470
9,524
3,817
8,927
Income taxes - Refunded
2,897
Income taxes - Deferred
20,171(187)(2,779)(6,022)(7,449)(4,542)(3,949)Minority interest
7,817
6,734
6,463
10,153
14,8436,819
8,626
Net income (loss)¥22,002¥6,971¥(11,153)¥(27,266)¥(26,560)¥11,830¥(17,876)
Note: Exchange gain (loss), equity in earnings (loss) under the equity method, and income (expenses) from investments in partnerships were
included in “Non-operating income” and “Non-operating expenses” and were netted on quarterly basis for presentation purposes.
Condensed Statement of Cash Flows(Millions of yen; amounts less than one million yen are omitted.)
Third quarter

Ⅰ
Ⅱ
Ⅲ
Ⅳ
Ⅴ
Ⅵ
Ⅶ
Ⅷ
Ⅸ
Ⅹ

Net cash provided by (used in)operating activities
Net cash provided by (used in)investing activities
Net cash (used in) provided byfinancing activities
Effect of exchange rate changes
on cash and cash equivalents
Net increase (decrease) in cash
and cash equivalents
Increase in cash and cash
equivalents due to newly
consolidated companies
Decrease in cash and cash
equivalents due to exclusion ofpreviously consolidated
entities
Increase in cash and cash
equivalents due to merger
Cash and cash equivalents at the
beginning of the period
Cash and cash equivalents at theend of the period

Note:
Depreciation and amortization included in
net cash provided by operating activities

Second quarter

First quarter

Fourth quarter

Third quarter

Second quarter

First quarter

October 1, 2005 toJuly 1, 2005 to
December 31, 2005 September 30, 2005

April 1, 2005 toJune 30, 2005

January 1, 2005 to
March 31, 2005

October 1, 2004 to
December 31, 2004

July 1, 2004 to
September 30, 2004

April 1, 2004 toJune 30, 2004

AmountAmountAmountAmountAmountAmountAmount¥61,949¥232¥(18,213)¥(15,280)¥(25,416)¥6,644¥(11,937)

86,627(45,593)(28,703)(65,379)(17,352)(136,910)(23,301)(46,728)(11,081)

12,925

124,046

34,503

20,46998,752

3,866

639

1,150

2,082

(7,364)

2,977

3,778

105,714(55,802)(32,840)

45,468(15,630)(106,819)

67,291

-

-

-

-

-

1

10

-

-

(142)

(107,483)

-

-

(45)

-

-

-

261

-

-

6

231,408

287,211

320,194

381,948397,578

504,395

437,132¥337,122¥231,408¥287,211¥320,194¥381,948¥397,578¥504,395¥19,519¥21,643¥20,942¥24,763¥22,847¥8,956¥9,85018

Basis of Presentation of Consolidated Financial Statements
1. Changes in scope of consolidation
As of December 31, 2005, SOFTBANK CORP．
（the “Company”）consolidated 152 subsidiaries. Nine subsidiaries were
not consolidated as the individual and aggregate amounts were not considered material in relation to the consolidated total
assets, net sales, net income (loss) and retained earnings (accumulated deficit) of the SOFTBANK consolidated financial
statements.
Changes in the scope of the consolidation were as follows:<Increase>
Softbank Media Marketing Holdings Corp.
Newly established
SOFTBANK BB Corp.
Newly established due to spin-off
Please refer to Note.1 of the business segment chart
Eighteen other companies<Decrease>
Tao Bao Holding Limited
Sale of shares
SOFTBANK Publishing Inc.
MergerNineteen other companies
2. Changes in scope of equity method
As of December 31, 2005, the Company held five non-consolidated subsidiaries and 87 affiliates, all of which were
accounted for under the equity method.
Main changes in application of the equity method were as follows:<Increase>
ValueCommerce Co., Ltd.
Newly acquired
Twelve other companies<Decrease>
Sale of shares
Morningstar, Inc.
Yahoo! UK Limited
Yahoo! France, SARLYahoo! Deutschland GmbHYahoo! Korea Corporation
Twenty-four other companies

Sale of shares
Sale of shares
Sale of shares
Sale of shares

3. Summary of significant accounting policies[1] Evaluation standards and methods for major assets(1) Marketable securities and investment securities
Held-to-maturity debt securities: Stated at amortized cost
Other securities:
With market quotations:
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 oftax, while cost is primarily determined using the moving-average method)
Without market quotations:
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 method19[2] Depreciation and amortization(1) Property and equipment
Buildings and structures:
Telecommunications equipment:
Telecommunications service lines:
Others:Computed primarily using the straight line method
Computed using the straight line method
Computed using the straight line method
Computed primarily using the straight line method for Broadband Infrastructure andFixed-line Telecommunications segments and computed primarily using the decliningbalance method for other segments<Additional information for change of estimated useful life>
Transmitters, exchangers and power supply facilities of JAPAN TELECOM CO., LTD. had primarily been depreciatedover a period of six years. Effective from April 1, 2005, the Company changed the estimated useful life of a portion of
the equipment, which is included in “Telecommunications equipment” in the Company’s consolidated balance sheets, toten years based on a reassessment of the assets’ operational lives taking into consideration of years of service provided by
the equipment, technological innovation cycles in the telecommunications industry and other relevant factors.
As a result, the depreciation expense included in cost of sales decreased by ¥10,706 million. Operating income
increased, ordinary loss decreased and income before income taxes and minority interest increased by the same amountfor the nine-month period ended December 31, 2005 as compared with the amounts which would have been recognized
if the previous estimated useful life had not been changed.
<Change in method of depreciation>
The depreciation method of assets used internally by SOFTBANK BB Corp. and another subsidiary (mainly fixturesand equipment presented as “Buildings and structures” and “others” in “Property and equipment, net”) has been changed
from the declining balance method to the straight-line method.
The Company relocated its headquarters to the Tokyo Shiodome Building in fiscal year 2005 and purchased a large
number of assets internally used in SOFTBANK BB Corp. and other subsidiaries. Based on a reassessment of expense
allocation, the change of the depreciation method has been made because the straight line method represents a more
appropriate allocation of expenses, while equally recording the depreciation expense for each period to reflect the decline
in usefulness of property and equipment from period to period.
As a result, for the nine-month period ended December 31, 2005, cost of goods sold and selling, general andadministrative expense decreased by ¥262 million and ¥318 million, respectively. Operating income and income
before income taxes increased by ¥581 million and ordinary loss decreased by the same amount as compared to theamounts that would have been recognized if the declining balance method had been applied.
(2) Intangible assets:

Computed using the straight-line method<Change in accounting policy for network line construction expenses>
Beginning April 1, 2005, the accounting policy for network line construction expenses has been changed to capitalize theexpenses as non-current assets which were previously recognized as selling, general and administrative expense. The
capitalized network line construction expenses relate to cost incurred for each individual network set up prior to network
activation. This change in accounting policy is considered a more appropriate way to reflect the allocation of suchnetwork line construction costs over the period of future economic benefit.
As a result, for the nine-month period ended December 31, 2005, cost of goods sold decreased by ¥1 million and selling,
general and administrative expense decreased by ¥2,426 million. Operating income increased by ¥2,428 million,
ordinary loss decreased and income before income taxes increased by the same amount as compared to the amounts thatwould have been recognized under the original method.

20

[3] Accounting principles for major allowances and accruals(1) <Allowance for doubtful accounts>
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.
(2) <Accrued retirement benefits>
JAPAN TELECOM CO., LTD. and certain other subsidiaries have defined benefit pension plans for their employees.
Those companies account for the obligation for retirement benefits based on the projected benefit obligations as ofDecember 31, 2005.
[4] Translation of foreign currency transactions and accounts
All assets and liabilities in foreign currencies are translated at the foreign currency exchange rates prevailing at the respectivebalance sheet dates. Foreign currency exchange gain or loss are charged to net income when incurred.
The translation of foreign currency denominated revenues and expenses in the financial statements of foreign consolidated
subsidiaries into Japanese yen is performed by using the average exchange rate for the period. Assets and liabilities aretranslated using the foreign currency exchange rates prevailing at the balance sheet dates, and capital stock is translated using
the historical foreign currency exchange rates. Foreign currency financial statement translation differences are presented asa separate component of “Shareholders' equity,” except for the portion pertaining to minority shareholders, which is includedin “Minority interest in consolidated subsidiaries.”[5] Capital lease
Under the Japanese accounting standards, capital leases, as defined therein, other than those whereby the ownership of theassets is transferred to the lessee at the end of the lease term, are permitted to be accounted for as operating leases with afootnote disclosure of the estimated acquisition cost, estimated accumulated depreciation and future lease payments orreceipts.
[6] Accounting for significant hedge transactions(1) Collar transaction① <Hedge accounting>Unrealized gains and losses, net of tax, on the collar transaction that qualifies as an effective cash flow hedge at
consolidated subsidiaries in the United States of America are reported as a separate component of “Shareholders’ equity”
in the Company’s consolidated balance sheets. As such, unrealized gains and losses associated with the collartransaction will be recognized into earnings in the same period during which the hedged assets and liabilities arerecognized in earnings.
② <Derivative instruments for hedging and hedged items>
Derivative instruments for hedging:
Prepaid variable share forward contract (the collar transaction)
Hedged items:
Equity security③ <Hedging policy>
The purpose of the collar transaction is to hedge the variability of cash flows associated with the future market price of
the underlying equity security.
(2) Interest rate swap
① <Hedge accounting>
For interest rate swaps whose amounts, index and periods are same as the conditions for hedged items, the “exceptional
method” is adopted. Under this method, a certain domestic consolidated subsidiary does not account for gains and lossesof those interest rate swaps on a fair value basis and recognizes swap interest on an accrual basis.
② <Derivative instruments for hedging and hedged items>
Derivative instruments for hedging:Interest rate swap contracts
Hedged items:
Interest expense on borrowings21

③ <Hedging policy>
The domestic consolidated subsidiaries use derivative financial instruments to hedge the risk of exposures to fluctuationsin interest rates in accordance with its internal policies, regarding the authorization and credit limit amount.
[7] Accounting method for consumption taxes
Consumption taxes are accounted for using the net method of reporting.
4. Scope of cash and cash equivalents in the consolidated statements of cash flows“Cash and cash equivalents” are comprised of 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.
5. Change in presentation
Following the application of a partial revision to the Japanese securities and exchange laws effective from December 1, 2004,
and the release of revised practical guidelines for financial instruments accounting on February 15, 2005, investments in limited
partnerships and similar investments have been classified as investment securities since the fiscal year ended March 31, 2005.
The amounts of applicable investments in partnerships which are included in “Investment securities and investments inpartnerships” balance within the consolidated balance sheets were ¥45,831 million and ¥101,020 million as of December 31,
2005 and March 31, 2005, respectively.
As a result, there were “Other investments” of ¥187 million and ¥40 million as of December 31, 2005 and March 31, 2005,
respectively. Due to the decrease in materiality, other investments are included in “Other assets” as of December 31, 2005
and March 31, 2005.

22

Additional Information
1. Sale of modem rental business relating to reorganization of the broadband business
On November 1, 2005, the Company’s wholly-owned subsidiary, SOFTBANK BB Corp. (hereafter "SOFTBANK BB"), spun off
its modem rental business and established BB Modem Rental Yugen Kaisha. (hereafter "BB Modem Rental"). Furthermore, on
December 1, 2005, SOFTBANK BB was split into BB TECHNOLOGY Corp. (the surviving company; the name of SOFTBANK
BB was changed to this name; hereafter "BB TECHNOLOGY") to focus on the ADSL business while all other businesses
remained with SOFTBANK BB Corp. (newly established company; hereafter "(new) SOFTBANK BB"), such as FTTH businessand e-Commerce business.
On December 8, 2005, BB TECHNOLOGY sold its modem rental business for cash (sale of all BB Modem Rental’s ownershipinterest) to Yugen Kaisha Gemini BB for ¥45 billion and recognized a gain on the sale of the business of ¥21.5 billion. The gain
was deferred and will be amortized over five years, which is the estimated economic useful life of modem equipment, which wasrevenue source of the modem rental operations. For the three-month period ended December 31, 2005, revenue earned andattributed to recognition of deferred revenue was ¥0.3 billion (a).
At the time of the sale, BB TECHNOLOGY also entered into a service agreement with Yugen Kaisha Gemini BB to receive
royalties relating to future revenue from the modem rental business. An advance payment for future royalties was made by Yugen
Kaisha Gemini BB totaling ¥40 billion and was recorded as deferred revenue. The deferred revenue will be recognized in future
periods in proportion to the actual business performance of the ADSL business, such as the number of paying customers. For thethree-month period ended December 31, 2005, royalty fees totaling ¥1.5 billion (b) was recorded as revenue.
Current portion of the total amount of the deferred gain on the sale of the modem rental business and advance royalty amounting to¥14.3 billion was included in “Other current liabilities” and non-current portion of the total amount amounting to ¥45.1 billion wasreported as “Deferred revenue” in the consolidated balance sheet as of December 31, 2005.
BB TECHNOLOGY received ¥45 billion on the sale of the modem rental business and ¥40 billion in advance royalties, totaling¥85 billion. In the consolidated cash flow statement, those amounts are presented as “Proceeds from sale of modem rental
business” and “Increase in deferred revenue,” respectively.
BB TECHNOLOGY will continue to offer services to Yugen Kaisha Gemini BB in accordance with the service agreement
following the sale of the modem rental business. For the three-month period ended December 31, 2005, servicing fees of ¥1.6
billion (c), incentive fees for retaining ADSL service users of ¥5.5 billion (d), and incentive fees for new subscribers based on
applications for new subscribing, the subscription ratio of Wireless LAN card applicants, and the number of paying customers of ¥5billion (e) were recognized as revenue. As a result, BB TECHNOLOGY recorded revenue of ¥14.1 billion (the sum of (a) through(e)) relating to the modem rental business after its sale and incidental expenses relating to the sale of ¥0.5 billion are included inselling, general and administrative expenses for the three-month period ended December 31, 2005.

23

2. Share split
Based on the resolution of the Company’s Board of Directors on November 10, 2005, the Company conducted the three-for-one
split of the Company’s common stock on January 5, 2006.
Per share information for December 31, 2005, assuming that the share split was conducted at the beginning of the FY2006 and pershare information for December 31, 2004 and March 31, 2005, assuming that the share split was conducted at the beginning of the
FY2005 is as follows:(1) December 31, 2005
Shareholders’ equity per share
Net income per share
Diluted net income per share¥207.77¥16.90¥15.77(2) December 31, 2004
Shareholders’ equity per share
Net loss per share¥194.13¥30.93(3) March 31, 2005
Shareholders’ equity per share
Net loss per share¥168.62¥57.01

For December 31, 2004 and March 31, 2005, diluted net income per share were not disclosed due to the loss position.
Note: The share splits the Company conducted in the past are as follows:
July, 1994
Over-the-counter issues
May 19, 1995
November 20, 1995
May 20, 1996
November 20, 1996
May 20, 1997

1 : 1.4
1 : 1.4
1 : 1.4
1 : 1.4
1 : 1.3

January, 1998

Listed on the first section of the Tokyo Stock Exchange

June 23, 2000
January 5, 2006

1:3
1:3

24

Notes
1. Accumulated depreciation of property and equipment
As of December 31, 2005

As of March 31, 2005

As of December 31, 2004

¥597,632 million¥625,280 million¥576,282 million

As of December 31, 2005

As of March 31, 2005

As of December 31, 2004

¥10,867 million¥11,247 million¥10,621 million

3 million

7 million

12 million¥0 million¥5 million¥6 million

2. Assets pledged as collateral(1) For future lease liabilities
Assets pledged as collateral:
Notes and accounts receivable - trade
Other current assets(accounts receivable – other)
Secured liabilities:
Accounts payable - trade

Note: The collateral for future lease liabilities was provided by mortgaging the aggregate of the current and future
receivables due from customers of certain consolidated subsidiaries and a broadcasting company, based onmarketing agreements, etc. The future lease liabilities at the end of periods are as follows:
As of December 31, 2005

As of March 31, 2005

As of December 31, 2004

¥20,841 million¥37,263 million¥34,289 million

As of December 31, 2005

As of March 31, 2005

As of December 31, 2004

Cash and deposits¥491 million¥446 million¥3,264 million

Future lease liabilities (including the above“Accounts payable-trade”)(2) For short-term borrowings and long-term debt
Assets pledged as collateral:
Notes and accounts receivable - trade

1,056

1,120

1,118

Buildings and structures

878

6,660

6,391

Telecommunications equipment

1,767

14,172

15,545

Telecommunications service lines
Land
Property and equipment- others-

13,68914,224

5,001

5,582

732

0

0

-

Investment securities

245,680

193,398

211,989

Total¥254,876 million¥235,070 million¥253,266 million

Notes and accounts payable - trade¥561 million¥493 million¥478 million

Short-term borrowings

16,25625,882

22,401

Secured liabilities:

Accounts payable- other and accrued expenses
Long-term debt
Other long-term liabilities
Total

26

18

20

122,261

212,119

216,998

211

289

373

¥139,316 million¥238,804 million¥240,272 million

Note: In connection with JAPAN TELECOM CO., LTD’s loan refinancing on April 27, 2005, assets pledged as factory foundation

collateral and investment securities in JAPAN TELECOM CO., LTD. held by the Company and three consolidated subsidiaries
of JAPAN TELECOM CO., LTD. as of March 31, 2005 were released.

3. Securities loaned
Certain consolidated subsidiaries lent a portion of investment securities to financial institutions according to stock lending
agreements. The amounts of applicable investment securities recorded in the Company’s consolidated balance sheets are as
follows:
Investment securities

As of December 31, 2005

As of March 31, 2005

As of December 31, 2004

¥357 million

¥-

¥-

25

millionmillion4. Cash receipts as collateral
Cash receipts as collateral from financial institutions, to whom the Company has lent shares of its subsidiary under security
deposit agreements, is presented as follows:
Cash receipts as collateral

As of December 31, 2005

As of March 31, 2005

As of December 31, 2004

¥120,000 million¥100,000 million¥100,000 million

According to the security deposit agreements, the Company paid a fixed rate amount as stock bailment fees and other fees totaling ¥1,953
million, ¥1,692 million and ¥1,179 million for the nine-month period ended December 31, 2005, the year ended March 31, 2005 and thenine-month ended December 31, 2004, respectively, and recorded the fees as other non-operating expenses in the consolidated statements ofoperations.

5. Net unrealized gains/losses on derivative instruments
Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities”(“SFAS 133”) is adopted on derivative instruments which the Company’s consolidated subsidiary in the United States ofAmerica utilized.
The consolidated subsidiary in the United States of America has entered into a variable share prepaid forward contract (the“collar transaction”) utilizing its shares of an equity security. The purpose of this collar transaction is to hedge the variabilityof cash flows associated with the future market price of the underlying security, which is used for the settlement of the loans.
According to SFAS 133, unrealized gains and losses, net of tax, on the effective portion of the cash flow hedge as defined arereported as a separate component of “Shareholders’ equity”, until gains and losses on the hedged item are recognized inearnings.
6. Line of credit as a creditor (not used)

7

As of December 31, 2005

As of March 31, 2005

As of December 31, 2004

¥15,361 million¥200 million

As of December 31, 2005

As of March 31, 2005

As of December 31, 2004

¥8,943 million¥7,855 million¥6,697 million¥785 million

Balance of accounts receivable sold

8. Selling, general and administrative expenses
Payroll and bonuses

Nine-month period ended Nine-month period ended
December 31, 2005
December 31, 2004
¥32,324 million¥51,683 million

Fiscal year ended
March 31, 2005
¥45,550 million

Sales promotion expense

44,38472,366

95,131Fees for outsourced services

30,467

23,341

37,665

Allowance for doubtful accounts

3,487

3,283

3,720

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

Cash and deposits
Marketable securities
Time deposits with original maturity
over three months
Deposits received from customers
in the commodities businessTransfer to escrow accounts
Stocks and bonds with original
maturity over three months
Cash and cash equivalents

As of December 31, 2005

As of December 31, 2004

As of March 31, 2005

¥336,442 million¥352,316 million¥287,978 million

10,21848,08639,403(1,839)(4,387)(1,455)

-

(923)

-

-

(12,338)-(7,698)(804)(5,732)¥337,122 million

26¥381,948 million¥320,194 million

Segment Information
1. Business segment information(1) For the nine-month period ended December 31, 2005
(Millions of yen; amounts less than one million yen are omitted.)
Broadband

Fixed-line

Infrastructure

Telecommunications

e-Commerce

Internet
Culturee-Finance

OthersTotal

Elimination
or Corporate

Consolidated（Note 5）Net sales(1) Customers(2) Inter-segment
Total¥196,310¥257,656¥192,132¥113,305¥-¥50,854¥810,258

878

4,504

7,481

440

-

10,41023,715¥-¥810,258(23,715)-

197,188

262,161

199,613

113,746-

61,264

833,974(23,715)810,258

Operating expenses

188,838

290,249

196,596

60,852-

66,034

802,570(20,224)

782,346

Operating income (loss)¥8,350¥(28,087)¥3,017¥52,893¥-¥(4,769)¥31,404¥ (3,491)¥27,912(2) For the nine-month period ended December 31, 2004
(Millions of yen; amounts less than one million yen are omitted.)
Broadband

Fixed-line

Infrastructure

Telecommunications

Net sales

e-Commerce

Internet
Culturee-Finance

OthersTotal

Elimination

Consolidated

or Corporate(Note 4)

(1) Customers(2) Inter-segment
Total¥148,241¥81,600¥175,756¥70,371¥51,830¥33,993¥561,793

203

474

7,242

413

4,234

13,842

26,411¥-¥561,793(26,411)-

148,445

82,075

182,999

70,78456,06447,835588,205(26,411)561,793

Operating expenses

195,597

96,372

178,926

35,73743,292

51,244

601,171(25,051)

576,120

Operating income (loss)¥(47,152)¥(14,297)¥4,072¥35,046¥12,772¥(3,408)¥(12,966)¥ (1,359)¥(14,326)(3) For the fiscal year ended March 31, 2005
(Millions of yen; amounts less than one million yen are omitted.)
Broadband

Fixed-line

Infrastructure

Telecommunications¥204,974¥165,969

e-Commerce

Internet
Culturee-Finance

OthersTotal¥73,235¥45,954¥837,018

Elimination

Consolidated

or Corporate

Net sales(1) Customers(2) Inter-segment
Total¥244,971¥101,913¥-¥837,018

331

909

9,950

534

5,562

18,22135,510(35,510)-205,306

166,878

254,921

102,448

78,79764,175872,528(35,510)

837,018

Operating expenses

259,054

202,944249,681

52,36859,08370,060893,192(30,815)

862,377

Operating income (loss)¥(53,747)¥(36,065)¥5,240¥50,079¥19,714¥(5,885)¥(20,663)¥ (4,695)¥(25,359)

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 segments.
3. Unallocated operating expenses for the nine-month period ended December 31, 2005, and December 31, 2004, and for the year
ended March 31, 2005 in the column "Elimination or Corporate", mainly represents expenses of the corporate division of theCompany, totaled ¥3,445 million, ¥3,402 million and ¥6,867 million, respectively.
4. The “Fixed-line Telecommunications” business segment was established as of September 30, 2004, consequently, this segment
included only three-month result for the nine-month period ended December 31, 2004 and only six-month result for the fiscal year
ended March 31, 2005.
5. The former “e-Finance” business segment ended as SOFTBANK INVESTMENT CORPORATION (current SBI Holdings, Inc.)changed to an equity-method affiliate from a consolidated subsidiary on March 31, 2005.
<Change in presentation>
In fiscal year 2005, segment information for net sales and operating income (loss) of Broadmedia, Technology Services, Media &Marketing, and Overseas Funds segments were presented although the portions of net sales and operating income (loss) were lessthan 10% of consolidated net sales and operating income (loss). Due to the relative significance of these businesses, beginningwith the six-month period ended September 30, 2005, they are included in the “Others” segment. This change in presentation ofbusiness segment information is due to increase in importance on the Broadband Infrastructure, Fixed-line Telecommunications,e-Commerce, and Internet Culture operations.

27

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
As of December 31, 2005
Telecommunications equipment andtelecommunications service lines
Equivalent to acquisition costs
Less:
Amount equivalent to accumulated depreciation
Amount equivalent to accumulated impairment loss
Net book value

As of March 31, 2005

As of December 31, 2004

¥201,765¥195,681¥115,987(62,854)(45,685)(29,865)(3,198)--¥135,712 million¥149,996 million¥86,122 million¥46,991¥47,056

Buildings and structures
Equivalent to acquisition costs

¥-

Less:
Amount equivalent to accumulated depreciation(2,079)(349)-

Amount equivalent to accumulated impairment loss

-

-

-

Net book value¥44,911 million¥46,706 million¥11,961¥15,938¥16,617(5,931)(10,293)(9,382)(1,500)--¥4,529 million¥5,644 million¥7,234 million¥2,656¥2,727¥2,975(1,372)(1,076)

(887)

(373)

-

-

¥1,651 million¥2,087 million¥- million

Property and equipment - others
Equivalent to acquisition costs
Less:
Amount equivalent to accumulated depreciation
Amount equivalent to accumulated impairment loss
Net book value
Intangible assets
Equivalent to acquisition costs
Less:
Amount equivalent to accumulated amortization
Amount equivalent to accumulated impairment loss
Net book value¥910 million

Total
Equivalent to acquisition costs
Less:
Amount equivalent to accumulated depreciation
Amount equivalent to accumulated impairment loss
Net book value¥263,375¥261,404¥135,579(72,238)(57,404)(40,135)(5,072)--¥203,999 million¥95,444 million

As of March 31, 2005

As of December 31, 2004

¥186,064 million(2) The future lease payments for capital lease at the end of the periods
As of December 31, 2005
Due within one year

¥38,065¥40,342¥27,405

Due after one year

159,759

167,676

72,838¥197,824 million¥208,018 million¥100,244 million¥5,013 million¥- million¥- million

Total
Balance of impairment loss on leased assets

28

(3) Lease payments, amounts equivalent to depreciation and interest expense
Nine-month period ended
December 31, 2005

Fiscal year ended
March 31,2005

Nine-month period ended
December 31, 2004

¥42,425 million¥27,366 million¥15,776 million

-

-

-

Amount equivalent to depreciation expense

33,70824,20914,297

Amount equivalent to interest expense

12,070

5,179

2,254

Impairment losses

5,013

-

-

Lease payments
Reversal of balance of impairment loss on leased assets

Note: Impairment losses above mentioned are included in “Restructuring charge relating to BBTV business” and “Other special
loss.”(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 each capital lease,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, isallocated over the lease periods based on the interest method.
(as a lessor)(1) Acquisition costs, accumulated depreciation and net book value at the end of the periods
As of December 31, 2005

As of March 31, 2005

As of December 31, 2004

Property and equipment - others
Acquisition costs¥164¥2,644¥3,215

Less: accumulated depreciation(127)(2,576)(2,755)Net book value¥36 million¥67 million¥460 million

Acquisition costs

¥-

¥-

¥317

Less: accumulated amortization

-

-

(65)

Intangible assets

Net book value¥-

million¥-million¥251 million

Total
Acquisition costs¥164¥2,644¥3,533

Less: accumulated depreciation(127)(2,576)(2,821)

Net book value¥36 million¥67 million¥711 million

As of March 31, 2005

As of December 31, 2004

(2) The future lease receivables for capital leases at the end of the periods
As of December 31, 2005
Due within one year
Due after one year

¥43

¥40
-

Total

¥40

million

¥397

29

342

¥72 million¥739 million

Fiscal year ended
March 31, 2005

Nine-month period ended
December 31, 2004

(3) Lease income, depreciation and amount equivalent to interest income
Nine-month period ended
December 31, 2005
Lease income¥35

Depreciation expense

30

211

309

Amount equivalent to interest income

2

3

31

million¥349

million¥405 million(4) Calculation method of amount equivalent to interest income
The amount equivalent to interest income is calculated by subtracting acquisition costs from total lease income and estimatedresidual value and allocated over the lease periods based on the interest method.

29

2. Non-cancelable operating lease transactions(as a lessee)
The future lease payments for non-cancelable operating leases
As of December 31, 2005
Due within one year
Due after one year
Total

¥6,264¥9,012

15,551

9,203¥18,215

As of March 31, 2005

million

As of December 31, 2004
¥588
520

¥21,815 million¥1,108 million

As of March 31, 2005

As of December 31, 2004

(as a lessor)
The future lease receivables for non-cancelable operating leases
As of December 31, 2005
Due within one year

¥1,151¥972¥871

Due after one year

1,965

1,816

1,565

¥2,789 million¥2,437 million

Total¥3,11630

millionInvestment in Debt and Equity Securities
1. Other securities at fair value(Millions of yen; amounts less than one million yen are omitted.)

As of March 31, 2005

As of December 31, 2005
Investment

Carrying

costs

amounts¥37,709¥281,059

5,023

5,023

1. Equity securities
2. Debt securities:
Corporate bonds
3. Others
Total

Investment

Carrying

costs

amounts¥243,349¥29,924¥229,412

0

5,134

5,141

Differences

As of December 31, 2004
Investment

Carrying

costs

amounts¥199,488¥45,059¥281,674¥236,614

7

5,180

5,187

7

Differences

Differences

18

28

9

18

18

0

627

615

(12)

¥42,751¥286,111¥243,359¥35,077¥234,572¥199,495¥50,868¥287,477¥236,609

2. Carrying amounts of unlisted investment securities(Millions of yen; amounts less than one million yen are omitted.)

As of December 31, 2005

As of March 31, 2005

As of December 31, 2004

Carrying amounts

Carrying amounts

Carrying amounts

Other securities
Unlisted equity securities

21,17816,466

19,654

Investments in limited partnerships (see Note)

5,962

63,373-

Money Management Fund

2,372

1,836

2,681

Preferred fund certificate

2,000

2,000

2,000

Designated money trust

2,000

3,000

-

Mid-term government bond funds

191

191

191

Unlisted foreign debt securities

104

1,108

1,123
46,600Investment trust without market quotations-

30,388Others

329

10

44

Total

¥34,137¥118,374¥72,296

Note:
With respect to “Investments in limited partnerships,” the difference between cost and fair value of limited partnerships, net of tax, isrecorded in “Net unrealized gain on other securities” in the consolidated balance sheets.

31