SOFTBANK CORP.
CONSOLIDATED INTERIM FINANCIAL REPORTFor the six months ended September 30, 2000

FINANCIAL HIGHLIGHTS

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

Revenues
Operating income
Ordinary income (loss)
Net income (loss)
Net income (loss) per share—
primary (yen)Net income (loss) per share—
diluted (yen)

FY2001 interim(April 2000 throughSeptember 2000)
180,236
4,703
1,037
36,310Year-onyearchange–10.6%+27.6%———

109.79108.61—

FY2000 interim(April 1999 throughSeptember 1999)
201,579
3,685△11,298△3,517Year-onyearchange–18.1%–41.1%——△32.93—△31.35—

Notes:
1. Equity in earnings (losses) of affiliates
Six months ended September 30, 2000:△6,847 million yen

Six months ended September 30, 1999:△4,221

Year ended March 31, 2000:

4,744

2. Evaluation loss on derivatives transactions
Six months ended September 30, 2000:△254

3. There is accounting change during the period under review.
4. Percentage changes for revenues, operating income, ordinary income and net income are compared with the corresponding period of the previous
fiscal year.

2. Financial Condition(Million yen; amounts less than one million yen are omitted.)

Total assets
Shareholders’ equity
Equity ratio (%)
Shareholders’ equity per share (yen)3.

FY2001 interim(April 2000 throughSeptember 2000)
1,078,146
383,94435.6
1,159.73

FY2000 interim(April 1999 throughSeptember 1999)
1,065,342
330,76231.0
3,035.43

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

Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Cash and cash equivalents at end of year

SOFTBANK CORP.

FY2001 interim(April 2000 throughSeptember 2000)△79,217△31,501
41,138
177,759

FY2000 interim(April 1999 throughSeptember 1999)
—
—
—
—

1

4. Scope of Consolidation
Consolidated subsidiaries:

187

Equity-method non-consolidated subsidiaries:

2

Equity-method affiliates:

85

5. Changes in Scope of Consolidation
Consolidated subsidiaries:
Newly added:

68

Newly deleted:

24

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

46

Newly deleted:

12(Reference)

The following table shows fiscal 1999, 2000,and 2001 first-half and full-term net income per share and shareholders’ equity per share
figures adjusted retroactively to account for the impact of a three-for-one share split implemented on June 24, 2000.

Consolidated( yen )
FY2001 interim(April 2000
through
September 2000)

Net income pershare
Net income per
share
Shareholders’equity per
share

FY2000(April 1999
through
March 2000)

109.79FY2000 interim(April 1999
through
September 1999)

FY1999 interim(April 1998
through
September 1998)
10.72△10.9826.02

1,159.73

FY1999(April 1998
through
March 1999)

1,152.18

121.79
1,011.81

906.45756.00Note:
Net income per share figures are calculated based on the average number of shares issued during each respective period, while
shareholders’ equity per share figures are calculated based on the number of shares issued at year-end.

SOFTBANK CORP.

2

THE SOFTBANK GROUP
As of September 30, 2000, the SOFTBANK Group comprised 274 companies with operations in 10 segments.
Equity-method nonconsolidated subsidiaries
and affiliates (includes
partnerships)

Consolidated subsidiaries(includes partnerships)

Business segment

Principal businesses

1. e-Commerce

29

2

Distribution of PC software, PCs and peripheral equipment;
e-commerce (online merchandise sales, brokerage)

2. e-Finance

77

17Comprehensive Internet-based financial operations, including securities
brokerage and mutual fund rating services; management of domestic
venture capital fund and comprehensive support for venture companies

3. Media & Marketing

37

8

Publishing (PC magazines, books, amusement magazines);
management of computer-related exhibitions; Internet-based
information services

4. Broadmedia

3

1

Satellite broadcasting; management of membership system service

5. Internet Culture

27Internet search services; Internet-based information services; Internet
community services

6. Technology Services

65

Systems integration; technology development and support for ecommerce business7. Internet Infrastructure

4

1

Broadband infrastructure business using fiber optics and wireless

8. Foreign Investment Funds

1027Internet-related venture capital operations in the United States and othercountries

9. Services

2

4Personnel and administrative support; temporary staff services

10. Others

17

15

Total

187

87

e -Financ e
InsWeb Corp.

e -Co mme rce
E*TRADE Group Inc.

Morningstar Inc.
SophiaBank Limited
SOFTBANK Capital Partners LP Morningstar Japan K.K.
SB Europe Ventures Limited
E*TRADE Japan K.K.
SB UK Ventures Limited

Glo bal Operatio ns
eVentures@VISO Limited

SOFTBANK Technology Ventures V L.P.
SOFTBANK Latin America Ventures LP［ Ove rse as ］*

WEB-Lease Co., Ltd.

NIHON ARIBA K.K.
CarPoint K.K.
SOFTBANK MOBILE CORP.

INSWEB Japan K.K.
e-Shopping! Books CORP.
Vector Inc.
SOFTBANK COMMERCE CORP.
Cognotec Japan K.K.
VerticalNet Japan Corp.
Me dia & Marke ting
SOFTBANK INVESTMENT CORPORATION*
AllAdvantage Japan Corporation
SOFTBANKSOFTBANK
cyber communications inc.
FINANCE
E-COMMERCESOFTBANK Publishing Inc.
Key3Media Group, Inc.
CORPORATIONCORP.
SOFTBANK Media &MarketingCorp. SOFTBANK Forums Japan, Inc.

E*TRADE Securities Co., LTD.

［ Dom e sti c ］（ Ope r at ion Hol din g
C om pan ie s）

SOFTBANK CORP.
（ Pu r e Holdin g C om pan y）
SOFTBANK Holdings Inc.
SB Holdings(Europe)Ltd.

Yahoo Japan Corporation
Yahoo!Inc.
Internet Research Institute, Inc.

In terne t Cu lture

SOFTBANK
Broadmedia
Corporation

SOFTBANK
Networks Inc.

SOFTBANKTECHNOLOGYHOLDINGS
CORP.

［ Ove rse as ］

［ Dom e sti c ］*
Tec hn ology Se rvice

SOFTBANKTECHNOLOGY CORP.
AtWork Corporation
Nasdaq Japan, Inc.

Digital Club Corporation
Computer Channel Corporation

SOFTBANK ZDNet Inc.

（ Ope r at ion Hol din g
C om pan ie s）

SpeedNet Inc.
IP REVOLUTION, INC.

The Nippon Credit Bank, Ltd.

UTStarcom, Inc.
SOFTBANK Korea Co., Ltd.

SOFTBANK Ventures Korea Inc.
SB CHINA HOLDINGS PTE LTD.

Broadme dia

Oth ers
In terne t I nf rastruc tu re・ ・ ・ ・ Segm ent
・ ・ ・ ・ C ons olidated subs idiary・ ・ ・ ・ Equity-m ethod s ubs idiary or affiliate
・ ・ ・ ・・ ・ ・*・ ・ ・ ・・ ・ ・ ・ ・ ・ Equity s take ac quired after O ctober 1, 2000

SOFTBANK CORP.

3

MANAGEMENT POLICY AND RESULTS OF OPERATIONS

1.

Management Policy――Leading the Digital Information Revolution

The SOFTBANK Group’s efforts to expand its operations reflect its belief that the digital information revolution will contributesignificantly to the progress of humankind and that its ongoing commitment to drive the revolution will ensure its own future growth.
The digital information industry is growing and evolving rapidly, while fragmenting into a myriad of business segments. To assert its
position as a leader in the digital information revolution, SOFTBANK has implemented a three-tiered business structure comprising apure holding company, operation holding companies and operating companies. The SOFTBANK Group is capitalizing on this structure,
which seeks to maximize Group synergies while enabling each operating company to take responsibility for is own future, to achieve
growth.
In Japan, operation holding companies have been given responsibility for cultivating new businesses and formulating strategies fortheir respective segments. In the six months ended September 30, 2000, alone, these operation holding companies established morethan 30 new companies, all of which have set clear goals for achieving profitability and listing their shares publicly at the earliest
possible date. During the period, four of these new companies made initial public offerings (IPOs): Vector Inc., Morningstar Japan K.K.,
E*TRADE Japan K.K. and cyber communications inc.
SOFTBANK takes advantage of the different phase of the Internet’s evolution in the world to implement one of its key strategies,
called “time machine management,” which fosters the worldwide incubation of superior business models in one country. Accordingly,
the Company is stepping up its venture capital operations, a crucial component of this strategy. Currently, the SOFTBANK Group’s
venture capital funds—including the SOFTBANK INTERNET TECHNOLOGY FUND, established in spring 2000 and one of Japan’slargest venture capital funds—command total assets in excess of ¥900 billion worldwide.
With Japanese Internet stocks beginning to feel the impact of the down turn in the overheated U.S. NASDAQ market since spring
2000, the outlook for Internet-related businesses is far from optimistic. However, Japan, which lags behind the United States and theSouth Korea in terms of Internet penetration, is only now facing the real Internet age. Through his participation in the Japanese
government’s IT Strategy Council and other key initiatives, SOFTBANK’s president and chief executive officer, Masayoshi Son,continues to champion the cause of deregulation in the information technology (IT) industry. The expected elimination in the next few
years of growth-hindering rules that have kept transmission speeds low and user costs high is expected to accelerate the Internet’s
penetration into every aspect of life in Japan.
SOFTBANK has identified broadband and business-to-business (B2B) services as its core growth sectors. In the United States andKorea, the growth of broadband access is giving rise to an exciting range of new services and markets. Through its Internet
infrastructure businesses, SOFTBANK is promoting the expansion of broadband access, expected to take off in 2001, and iscultivating related operations with a view to capitalize on emerging markets and services.
In the United States, many major corporations have achieved significant cost reductions through the use of Internet-based B2B
services. Driven by the need to strengthen global competitiveness, Japanese corporations are taking decisive steps to replace
conventional transaction scheme with B2B in such crucial areas as procurement. As a consequence, according to a survey by the
Ministry of International Trade and Industry (MITI) and Andersen Consulting, Japan’s B2B market will soar to ¥68 trillion in 2003, from
¥12 trillion in 1999. In a move aimed at carving out a prime position for itself in this growing market, SOFTBANK and leading U.S. B2B
services provider Ariba, Inc., announced the launch of a joint venture, NIHON ARIBA K.K., in October 2000.

SOFTBANK CORP.

4

In September 2000, a consortium consisting of SOFTBANK, ORIX Corporation, the Tokio Marine and Fire Insurance Co., Ltd., andseveral other shareholders completed its acquisition of the Nippon Credit Bank, Ltd. (NCB). SOFTBANK’s stake in the bank is 48.9%.
As NCB’s largest shareholder, SOFTBANK pledges to support efforts to recreate the bank in a manner that will help revolutionize
Japan’s bank loan market. SOFTBANK has already wrought change on Japan’s equity finance market with the announcement of
Nasdaq Japan in June 1999. Between the commencement of trading in June 2000 and the end of the period under review, a total of 28
companies had listed their shares on Nasdaq Japan.
To facilitate the implementation of Group strategies and reinforce its management capabilities as the pure holding company for theGroup, on October 1, SOFTBANK pulled formerly out-sourced accounting, finance, legal and investor relations functions in- house.
With the aim of enhancing corporate value throughout the SOFTBANK Group, SOFTBANK is striving to ensure effective corporate
governance by delineating the function of the Board of Directors as high-level decision making and supervision, and the Group CEO
Council and chief executive officers, who are responsible for overseeing operations.

2.

Results of Operations

Consolidated revenues of SOFTBANK amounted to ¥180,236 million in the first half of fiscal 2001, ended September 30, 2000, a
10.6% decrease from the corresponding period in fiscal 2000. This result is largely attributable to the absence of approximately ¥47
billion in sales from the publishing and ZDNet businesses of Ziff-Davis Inc., owing to restructuring; and a change in the scope of
consolidation for UTStarcom, Inc., from a consolidated subsidiary to an equity-method affiliate, reflecting the dilutive effect of thecompany’s IPO on SOFTBANK’s ownership. Despite an increase in expenses related to the start-up of new businesses, the divestitureof loss-maker ZDTV and other factors led to a 27.6% gain in operating income, to ¥4,703 million.
A decline in interest expense, owing to the restructuring of Ziff-Davis and other factors, and exchange gain of ¥6,590 million,
reflecting an exchange translation gain on an intercompany loan to U.S. subsidiary SOFTBANK Holdings, Inc., contributed to arecovery in ordinary income, to ¥1,037 million. This was a sharp increase from the ordinary loss of ¥11,298 million recorded in the firsthalf of fiscal 2000.
SOFTBANK recorded net income of ¥36,310 million, compared with a net loss of ¥3,517 million in the same period a year earlier, as
IPO-led dilution, sales of stock in companies making IPOs and the strategic restructuring of its business portfolio contributed to gain on
sales of investment securities and gains on sales of stocks by investees.
Net cash provided by financing activities during the period was exceeded by net cash used in operating and investing activities,
resulting in a net decrease in cash and cash equivalents of ¥61,266 million. Due to these changes and efforts to promote more efficientfinancing, cash and cash equivalents at the end of the period amounted to ¥177,759 million.
Net cash used in operating activities amounted to ¥79,217 million. This reflected ¥30,750 million in gain on sales of stock byinvestees and ¥48,156 million in gain on sales of investment securities; and ¥64,481 million in payment for income taxes, countering¥68,298 million in income before income taxes and minority interest.
Net cash used in investing activities totaled ¥31,501 million, as ¥146,927 million in payments for purchase of investment securities,
resulting from the acquisition of equity stakes in several companies, including NCB, offset ¥82,906 million in proceeds from sales ofoperations and ¥38,015 million in proceeds from sales of investment securities.
Owing to ¥24,351 million in proceeds from issuance of subsidiaries’ stock to minority shareholders and ¥13,266 million in proceedsfrom issuance of bonds by subsidiaries, net cash provided by financing activities reached ¥41,138 million.
In line with the launch of Groupwide cash management approach, in October 2000 SOFTBANK established a ¥145 billion
commitment line with banks. SOFTBANK will continue to step up efforts to ensure the efficiency of financing throughout the
SOFTBANK Group.

SOFTBANK CORP.

5

3.

Segment Performance and Strategies

e-Commerce ― Launching new businesses designed to capture the growing e-commerce market(Results for the period: revenue: ¥116,710 million; operating income: ¥1,162 million)
With improvements in Japan’s telecommunications environment expected to spur a sharp rise in corporate and individual e-commerce
users, SOFTBANK is increasing efforts to launch B2B and business-to-consumer (B2C) services companies. During the period underreview, a total of 20 new companies were established, including VerticalNet Japan Corp., a B2B provider of industry-specificcommunity services, and B2C services firm eselect Corp.
Recognizing that commercial practices differ between Japan and the United States, SOFTBANK is working with leading firms in avariety of industries to provide B2C platforms suited to the domestic markets. Four e-shopping companies, which offer online sales ofbooks, automotive components and parts, toys and other products, operate in partnership with such firms as Seven-Eleven Japan Co.,
Ltd., Tohan Corporation and Nippon Mitsubishi Oil Corporation. This approach has generated considerable synergies: the capabilities
of its partners lower inventory costs, while offering a common platform to these companies significantly reduces each company’s initialinvestment. With the number of Internet users in Japan expected to expand rapidly, SOFTBANK expects to secure profitability in its
B2C businesses in the years ahead.
Given the global nature of competition among corporations, in the B2B sector SOFTBANK opted for a different strategy, which was
to introduce a highly successful overseas model into the Japanese market. To create an efficient B2B transaction system in advanceof attempts to launch industry-specific transactions, SOFTBANK has teamed up with Ariba to launch full-scale operations at NIHONARIBA, which provides Ariba’s B2B platform, the standard model in the United States.
In the period under review, start-up costs for new businesses pushed up operating expenses, restraining growth in operating income.
In IT product distribution, a sector in which subsidiary SOFTBANK COMMERCE CORP. has long been active, firm demand from
corporate clients contributed to stable sales and income in the absence of major hit products.

e-Finance ― Establishing the Group’s operating foundation as a comprehensive financial services provider(Results for the period: revenue: ¥10,824 million, operating income: ¥2,064 million)
The realization of SOFTBANK’s new buyer-centered Three “One” Services during the period under review marked a milestone for thee-Finance segment. To facilitate these services—so named because they comprise One-Stop comprehensive financial services; One
Table services, which provide sites enabling customers to compare various services; and One-to-One services, which are counselingservices for individual customers—SOFTBANK established four new companies. As of September 30, 2000, the e-Finance segment
encompassed 25 companies operating as a single large financial services group.
The operating companies under the umbrella of SOFTBANK FINANCE CORPORATION, the segment’s operation holding company,
have taken decisive steps to achieve their primary goals of becoming profitable and listing their shares publicly at the earliest possible
date. During the period, two of these companies made IPOs: Morningstar Japan in June and E*TRADE Japan in September. Venture
capital and IPO consulting firm SOFTBANK INVESTMENT CORPORATION is scheduled to follow suit on December 15, 2000.
With individual companies in this segment starting to register favorable performances, SOFTBANK is also promoting alliances andmaximizing synergies. Because the financial services industry is closely linked to a variety of other industries, SOFTBANK also
recognizes the importance of seeking alliances with companies in other industries and outside the Group to respond to the needs of its

SOFTBANK CORP.

6

clients for higher-value-added services. SophiaBank Limited, an incubation-oriented think tank, has formed a consortium comprising of
more than 50 major corporations in different industries. By cooperating with companies in a variety of other industries, the consortium
will promote the development of innovative financial services and the expansion of Group operations into such new markets as
business-to-business-to-employees (B2B2E).
Segment sales during the period were bolstered by the contributions of E*TRADE Japan, which saw its revenues double from thefirst half of fiscal 2000; higher advertising revenues at Morningstar Japan, which provides an Internet-based mutual fund rating service;and solid gains posted by other operating companies. Operating income declined, however, because of the relative smallness of carryfees from venture capital funds under SOFTBANK INVESTMENT, which were concentrated in first-half operating income in fiscal 2000.

Media & Marketing ― Developing highly sophisticated Internet content with the goal of becoming a comprehensive
information services provider(Results for the period: revenue: ¥23,835 million; operating income: ¥1,758 million)
The operations of the Media & Marketing segment have traditionally centered on IT-related information services, but SOFTBANK is
now shifting its focus to comprehensive Internet-based information services. During the period, SOFTBANK launched several newcontent development companies, including music community provider LAUNCH Japan K.K., WebMD Japan Corp., which operates a
medical and health-care site for doctors; and sports community provider Rivals Japan Corporation. Recognizing that excellence isessential to success in the content development business, SOFTBANK is taking steps to raise the quality of its content, including
asking customers to serve as product monitors.
Efforts to attract new customers are spearheaded by subsidiaries SOFTBANK Publishing Inc., which publishes 18 information
magazines, and SOFTBANK ZDNet Inc., which provides a comprehensive IT information site accessed by approximately two million
visitors monthly. When promotion conducted through these media succeeds in raising the number of page hits for SOFTBANK’scontent services page, the sale of advertising is taken over of by affiliate cyber communications. All Advantage Japan Corporation, in
which SOFTBANK took an equity stake in October 2000, is in charge of data mining and other efforts aimed at enhancing theeffectiveness of advertising.
With the IT sector attracting more and more attention from all parts of society, SOFTBANK Publishing and IT-related exposition
management company SOFTBANK Forums Japan, Inc., are seeing improvements in their performances. During the period,
SOFTBANK completed the sale of assets in Ziff-Davis, the primary factor behind the segment’s operating loss in fiscal 2000. As aconsequence, only the results of Key3Media Group, Inc., an exhibition management firm that spun off from Ziff-Davis in fiscal 2001,
are included in SOFTBANK’s consolidated results. Key3Media Group is seeing steady growth in the number of exhibitors andattendees at its exhibitions and conferences, bolstering revenues from exhibitors and participants. Growth in operating income in thesegment was also supported by an increase in advertising revenues.

Broadmedia ― Capitalizing on the future convergence of communications and broadcasting services(Results for the period: revenue: ¥7,285 million; operating income: ¥1,133 million.)With the realization of broadband connectivity in Japan expected within a few years, the Broadmedia segment is focusing on helping
infrastructure providers and other media service companies to promote broadband infrastructure and applications, including content,
thereby enabling them to enhance services for end-users.

SOFTBANK CORP.

7

The spread of broadband networks will lower the barriers that have traditionally separated broadcasting and communications, atrend that is pushing the market toward services that unite the two to allow the transmission of a wide range of content via the mosteffective routes.
Digital Club Corporation (DC) is playing a crucial role in the growth of communications satellite (CS) broadcasting in Japan bypromoting subscriptions, thus resolving the challenge of a limited number of viewers—a challenge that faces any newly introduced
infrastructure or application service. To reinforce their business basis in preparation to expand, DC reduced the number of its sales
agencies in which joint-venture partner Hikari Tsushin, Inc., has a stake to 12, from 270, and restructured its sales network. DC
terminated businesses with Hikari Tsushin in August 2000. While this initially had a negative impact on membership, the decline
bottomed out in September, after which subscriptions picked up once again. As a consequence, DC’s membership scheme will bereestablished in December under a new brand name, “Club iT.”The Broadmedia segment’s operations encompass a second domain: applications. In a move aimed at strengthening its operations,subsidiary Computer Channel Corporation accepted equity investments from Yahoo Japan Corporation and SOFTBANK Media &Marketing Corp.

Internet Culture ― Expanding rapidly in tandem with the growth of the Internet advertising market(Results for the period: revenue: ¥5,464 million; operating income: ¥1,779 million.)
According to a survey by Nippon Research Center, the number of Internet users in Japan has soared to 19 million, resulting in an
increase in the value and impact of Internet advertising. A survey by Dentsu Inc. estimates that the market for Internet advertising,worth approximately ¥24.1 billion in 1999, will rise to ¥50 billion in 2000 and balloon to ¥200 billion in 2005—comparable to the market
for radio advertising.
An estimated 87.2% of Japan’s Internet users access the Yahoo! Japan site more than once in four weeks, a significantly higher rate
than the country’s second-largest Web portal site. During the period under review, Yahoo! Japan had more than 100 million page hits
per day, making it by far the most frequently accessed Japanese-language service site in Japan. Expanding use of Yahoo! Japan alsobrought an increase in advertising revenues during the period, which contributed to solid growth in segment results.
Yahoo! Auctions, which commenced in September 1999, boasts a higher number of bids per day than any of its competitors inJapan. In the near future, the company will also reinforce its mobile Internet services.
Until fiscal 2000, the Internet Culture segment included the operations of Ziff-Davis’s subsidiary ZDNet. As part of its reorganizationof Ziff-Davis, however, SOFTBANK sold its stake in ZDNet. Accordingly, segment results no longer reflect ZDNet’s results.

Technology Services ― Building on network infrastructure construction capabilities(Results for the period: revenue: ¥6,937 million; operating income: ¥247 million.)
The Technology Services segment is spearheaded by SOFTBANK TECHNOLOGY CORP. This company’s biggest strength is its
ability to provide comprehensive systems solutions for Japan’s rapidly growing number of Internet businesses. Of SOFTBANKTECHNOLOGY’s approximately 220 employees, 10 boast Cisco Systems, Inc.’s Cisco Certified Internetwork Expert (CCIE)
qualification. With sales of systems integration services up 130% from the first half of fiscal 2000, and in line with its goal of building up
its broadband operations in this segment, SOFTBANK announced a tie-up with Cisco subsidiary Cisco Systems K.K. of Japan inNovember 2000.

SOFTBANK CORP.

8

SOFTBANK was involved in e-commerce well before the e-commerce boom, and continues to work to expand sales in this sector.
The Company is using its accumulated know-how to assist other companies in the construction of their systems. This organic
combination of e-commerce expertise and network infrastructure technologies is enabling the Company to provide comprehensive
system construction services.
To facilitate the undertaking of major projects with a minimal staff, SOFTBANK out-sources programming and systems engineering
services to a number of companies established as joint ventures with leading names in pertinent businesses. Since many of thesecompanies are just starting up, however, the cost benefits of this approach have yet to be materialized, and these companies continue
to restrain growth in segment operating income.
In October 2000, SOFTBANK established SOFTBANK TECHNOLOGY HOLDING CORP., an operation holding company for theTechnology Services segment. The Company will invest in overseas companies with promising technologies to strengthen its
capabilities in this area.

Internet Infrastructure ― Creating a high-speed Internet environment in Japan immediately
Slow access speeds and high communications fees have been significant barriers to the spread of the Internet in Japan. Using stateof-the-art fiber optics, wireless and digital subscriber line technologies, SOFTBANK is working toward the creation of a fast andinexpensive Internet environment.
With the aim of introducing ultrahigh-speed Internet protocol (IP) access service, IP REVOLUTION, INC., obtained a Type I
telecommunications carrier license in September 2000. Currently, the company is in negotiations with Tokyo Electric Power Company
and Nippon Telegraph and Telephone Corporation regarding the installation of fiber-optic cables in electricity poles. Negotiations areproceeding smoothly in the company’s preparations to introduce a low-cost, ultrahigh-speed (10Mbps+) service, initially in the Tokyo
metropolitan area, in spring 2001. SpeedNet Inc., which plans to offer Internet connection services using 2.4GHz wireless technology,
is currently conducting tests in a broad area of Saitama Prefecture, near Tokyo, with a view to commercialization.
Creating a high-speed Internet environment in Japan demands efficient connections between Japan and other countries.
Accordingly, SOFTBANK has taken an equity stake in cable-laying firm Asia Global Crossing, Ltd., a joint venture that is building ahigh-capacity fiber optic submarine cable system in the Asia-Pacific region. SOFTBANK is also preparing to launch operations in thehighly promising data center business.

Foreign Investment Funds ― Creating a high-speed Internet environment in Japan as soon as possible(Results for the period: revenue: ¥—; operating loss: ¥111 million)
In its global venture capital operations, SOFTBANK has applied the concept of time machine management, or the worldwide
application of superior business models developed in one country, and incubation programs for promising start-up companies.
SOFTBANK’s global network, centered on the United States, is one of its biggest strengths in this field.
During the period under review, SOFTBANK launched SOFTBANK Technology Ventures VI, its largest U.S. fund, SOFTBANKEurope Ventures and SOFTBANK UK Ventures, bringing total assets in overseas funds to over ¥700 billion.
A decline in the prices of Internet stocks, triggered by movements in the United States has created a harsh environment for venture
capital. To ensure success in this market, SOFTBANK is structuring its operations to facilitate the identification of investees byemphasizing on business plans, technologies and human resources, and the provision of long-term, post-investment support for thesecompanies.

SOFTBANK CORP.

9

Until fiscal 2000, the results of this segment included those of SOFTBANK Capital Partners, which focuses on investment in latestage companies. However, according to an accounting change resulting from a legal reorganization of SOFTBANK Capital Partners,
the company’s fund is now accounted for using the equity method or stated at cost.

SOFTBANK CORP.

10

CONSOLIDATED BALANCE SHEETS

FY2001 interim(As of September 30,2000)
Amount%(Million yen; amounts less than one million yen are omitted.)
FY2000 interim
FY2000
Increase(As of September 30, 1999)(As of March 31,2000)（△Decrease）
Amount%Amount%((ASSETS
Current assets
Cash
Notes and accounts receivable
Marketable securities
Inventories
Deferred tax assets
Assets held for sale
Other current assets
Less: Allowance for doubtful accounts

Non-current assets

366,693 )(34.0 )

430,562 )

170,880
71,147
14,82919,503
10,620△(80,459747

710,985 )△(65.9 )((

40.4 )( △ 63,868 )

174,188
102,449
65,635
18,4997,375△ 3,307△ 31,301△ 50,805
1,004
3,244

69,691
7,276

10,7686,529

634,077 )(59.5 )(

76,907 )(516,458 )(44.2 )(

55.8 )

254,708
92,454
17,848
16,954
6,340
79,87251,507△3,227(

651,412 )Property, Plant and Equipment

11,3001.0

16,166

1.5

△

4,865

8,243

0.7

Intangible fixed assets

111,049

10.3

365,39334.3△ 254,343

131,784

11.3

Goodwill
Trademarks
SoftwareAdvertiser lists
Consolidation adjustment
Other intangible assets

39,63738,3264,311△ 129,728△ 43,991
4,311△ 97,224
14,789△ 2,500

56,66438,4384,819
2,514
15,94013,405Investments and other assets

588,635

336,117511,384

231,061△ 1,976△ 27,242
136,156△ 1,030△
850

398,270
2,634
2,261
94,727
14,604△
1,113

97,224
14,78913,985Investments in securities
Long-term loans
Deferred income taxes
Investments in partnership
Other assets
Less: Allowance for doubtful accounts

Deferred charges

TOTAL ASSETSSOFTBANK CORP.

169,365
82,317

16,48654.6

252,517434,207
3,001
476
136,156
16,740
△
1,947

(

467 )

1,078,146

23.7

203,145
4,978
27,719

△

(

0.1 )

100.0

(

17,770
1,097

702 )

1,065,342

(

0.1 )

100.0

(△

235 )

12,804(436 )

1,168,308

43.8

(

0.0 )

100.0

11

CONSOLIDATED BALANCE SHEETS

FY2001 interim(As of September 30,2000)
Amount%(Million yen; amounts less than one million yen are omitted.)
FY2000 interim
FY2000
Increase(As of September 30, 1999)(As of March 31,2000)（△Decrease）
Amount%Amount%((LIABILITIESCurrent liabilities

360,683 )Notes and accounts payable
Short-term borrowings
Current portion of long-term borrowings
Current portion of bonds
Current portion of convertible bonds
Commercial paper
Income taxes payable
Deferred tax liabilities
Accrued expenses
Advance received
Allowance for sales returns
Other current liabilities

Long-term liabilities(

33.5 )

213,242 )53,391
108,861
3,748
32,385

270,597 )Bonds
Convertible bonds
Long-term loan payable
Allowance for retirement benefits
Deferred tax liabilities
Other long-term liabilities
Consolidation adjustment

20.0 )(

147,441 )

39,28950,26850,00028,063
5,713
6,937
14,111
1,212
56,259((15,90033△

14,825
11,836
23,466

△
△
△

6,557
51,065(25.1 )(

426,686 )

183,164
6,669
51,004576
26,0033,179(

40.1 )

344,767 )

14,101
58,592
3,748
16,48533
50,00013,2386,122
16,52914,1115,345
5,194( △ 156,088 )

23,751
27,146291(

29.5 )(

28.8 )

55,82886,3532,531
26,30057,74328,56523,681
2,259
61,503(

336,463 )△ 16,819△ 10,795△ 107,044
576
2,252△ 23,967△
291

199,984
17,464
158,048

Translation adjustments(

169,089
8,182
126,248
76
3,764
29,102

7,503

0.7

△

7,503

2,051

0.2

TOTAL LIABILITIES

631,28158.6

647,432

60.8△ 16,151

683,283

58.5

MINORITY INTEREST

62,9205.8

87,146

8.2△ 24,226

104,284

8.9

Common stock

125,88111.7

120,216

11.3

5,665

124,957

10.7

Additional paid-in capital

150,200

13.9

144,386

13.5

5,814

149,211

12.8

Retained earnings

93,177

8.7

46,887

4.4

46,29059,091

5.0

Net unrealized gains on securities
available-for-sale15,292

1.4

19,427

1.8

△

4,135

47,546

4.1

△

602
66

△ 0.0

SHAREHOLDERS' EQUITY

Translation adjustments

△

602

△ 0.1

Less: Treasury stock

△

4

△ 0.0

TOTAL SHAREHOLDERS' EQUITY

383,944TOTAL LIABILITIES , MINORITY
INTEREST AND SHAREHOLDERS'EQUITY

1,078,146

SOFTBANK CORP.

△

154

△ 0.0

150

△

35.6

330,76231.0

53,181

380,740

32.6

100.0

1,065,342

100.0

12,804

1,168,308

100.0

12

CONSOLIDATED STATEMENTS OF INCOME
FY2001 interim( April 2000 throughSeptember 2000 )%Amount(Million yen; amounts less than one million yen are omitted.)
FY2000 interim
FY2000
Increase( April 1999 through( April 1999 throughMarch 2000 )（△Decrease)
September 1999 )%%AmountAmountRevenue from non-Finance business

169,87894.3

201,579

100.0△ 31,700

404,635

95.6

Cost of sales

137,84576.5

130,863

64.9

6,981

280,780

66.3

Gross profit

32,03317.8

70,71535.1△ 38,682

123,854

29.3

Selling, general and administrative expenses

29,27816.3

67,02933.3△ 37,751

125,201

29.6

Operating income (△loss) from non-Financebusiness

2,755

1.5

3,685

1.8

△

1,346

△ 0.3

Operating revenue from Finance business

10,358

5.7

10,35818,585

4.4

Cost from Finance business

8,410

4.6

8,410

8,861

2.1

Operating income from Finance business

1,948

1.1

1,948

9,724

2.3

Total operating income

4,703

2.6

1,017

8,377

2.0

5,777 ) (36
4,627

17,571 )2,779

Non-operating income
Interest income
Exchange gain
Equity in earnings of affiliates
Other non-operating income(

Non-operating expenses
Interest expenses
Exchange loss
Equity in losses of affiliates
Other non-operating expenses(

11,883 )
1,092
6,590

15,548 )4,155(

79,551 )(

6,105 )
1,129
1,962

(

3.0 )

(
△

(

8.6 )

(

21,089 )10,727(

10.4 )

4,221
6,140
△

0.6
(

44.1 )((

77,881 )20,15344,3702,625△ 1,594△ 5.6

11,29890,793 )( △ 5,541 )△ 6,572(

45.0 )

12,336△

289,072 )

83,609△ 35,266

218,207

6,232

24,77540,072

201

951

750

29,001
1,791

6.8 )

(

86,732 )(43.0 )

1,606
84,457

7,952
256
4,081

667

(

18.5 )△ 12.351,93231,007(

4.2 )

13,357( △ 11,241 ) (

△

(

4,744
10,046

1,186

48,342

12,290 )Income before income taxes and minority
interest( △ 74,441 ) (204,971 )△ 1,606△ 76,505

602
3,662
77,043

256

3,236

3,413

119,1261,300(

68.3 )(

48.4 )

68,298

37.9

△

7,237

△ 3.6

75,53632,168

7.6△

13,37014,686

6.6△ 7.3

22,01010,85352,722
62

12.5
0.0

2,404

1.2

△ 2,845

29,063

6.9

3,517

△ 1.7

39,8288,446

2.0

Income taxes -current
Income taxes -deferred△

35,381
3,833

19.6
△ 2.1

Minority interest

△

440

△ 0.3

36,31020.1

SOFTBANK CORP.

1.8

3,013

1,037

Loss on sales of investment securities
Evaluation loss on investment securities
Loss on discontinued operations
Loss on sales of stock by investees (Dilution
loss)
Write down of intangible assets
Other extraordinary losses

Net income (△loss)

(

6,847
4,546

Gain on sales of investment securities
Gain on sales of stock by investees (Dilution
gain)
Gain on sales of operations
Other extraordinary gains
Extraordinary losses

6.6 )

4,199

Ordinary income (△loss)
Extraordinary gains

(

3,685

△

930

△

13

CONSOLIDATED STATEMENTS OF RETAINED EARNINGS

FY2001 interim(April 2000 throughSeptember 2000 )Retained earnings at beginning of period

Increase in retained earnings

59,091(

Increase resulting from merger
Increase resulting from increase in affiliates
accounted for under the equity method
Other increases in retained earnings
Decrease in retained earnings
Cash dividends
Director's bonus
Other decreases in retained earnings

88 )52,556

(

5 )

6,535

(

82 )

52,556

(

256 )
256

△

5
88
(

2,312 )

36,310Retained earnings at end of period

93,177588(

2,157 )

2,203
102
7

Net income（△loss）

SOFTBANK CORP.

(Million yen; amounts less than one million yen are omitted.)
FY2000 interim
FY2000
Increase(April 1999 through(April 1999 through（ △ Decrease ）September 1999 )March 2000 )

△

(

155 )

(

2,168 )

2,095
61

107
40
7

2,095
72

3,517

39,8288,446

46,887

46,29059,091

14

CONSOLIDATED STATEMENTS OF CASH FLOWS(Million yen; amounts less than one million yen are omitted.)
FY2001 interim
FY2000(April 2000 through(April 1999 throughSeptember 2000 )March 2000 )Ⅰ Cash flows from operating activities
Income before income taxes and minority interest
Depreciation expenses
Equity in earnings (losses) of affiliates
Gain on sales of stock by investees
Write down of intangible assets
Evaluation loss on investment securities
Gain on sales of investment securities
Exchange gain and loss
Interest and dividends income
Interest expenses
Loss on discontinued operations
Decrease (△Increase) in notes and account receivable
Increase (△Decrease) in notes and accounts payable
Increase in other assets
Increase in other liabilities
Other cash flows from operating activities
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Net cash used in (provided by) operating activities
Ⅱ Cash flows from investing activities
Payments for acquisition of property, plant and equipment
Payments for purchase of investment securities
Proceeds from sales of investment securities
Proceeds from sales of subsidiaries' stock with change in scope of consolidation
Payments for acquisition of subsidiaries' stock with change in scope of consolidation
Proceeds from sales of subsidiaries' stock
Payments on lending
Proceeds from repayments of lending
Proceeds from sales of operations
Other cash flows from investing activities
Net cash used in investing activities
Ⅲ Cash flows from financing activities
Proceeds from issuance of subsidiaries' stock to minority shareholders
Proceeds from sales of subsidiaries' stock to minority shareholders
Net increase in short-term borrowings
Proceeds from issuance of commercial paper
Payments for redemption of commercial paper
Proceeds for origination of long-term borrowings
Payments for repayment of long-term borrowings
Proceeds from issuance of bonds
Payments for redemption of bonds
Proceeds from other members in partnerships
Dividends paid
Other cash flows from financing activities

△

△
△
△

△
△
△
△
△
△
△

△
△

Ⅶ Decrease in cash and cash equivalents due to decrease of consolidated
subsidiaries
Ⅷ Decrease in cash and cash equivalents due to offset of anonymous investment
association
Ⅸ Cash and cash equivalents at beginning of period
Ⅹ Cash and cash equivalents at end of period

SOFTBANK CORP.

48,156
6,457
1,108
4,155
7,952
7,563
458
20,6802,785
4,855
11,395966
4,306
64,481
79,2178,201
146,927
38,015
57

△
△
△
△
△

△
△

△
△

△
△

△
△

△
△

13,106
5,024
1,188
82,906
6,622
31,501△△

2,067
60,341

67,46583,43868,199
△

△

△
△

△

△

2,193
6,979
41,138△△8,314
61,266△517△△

11,637
299,091
159,905
104,724
11,6108,172
7,608

23,63050,00061,983
136,878
13,26632,16832,6594,744
36,835
119,126
3,028
218,677
44,3702,779
20,15348,041
26,21422,721
32,65038,523
3,454
36,291
2,938
20,882
17,997349△

24,351

Net cash 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 increase of consolidated subsidiaries

68,2983,470
6,847
30,75020,0007,034
46,73861,84335,33344,485
2,095
7,385
220,914307
160,615
1,558

18,724
10,827
268,060
177,759

105,886
268,060

15

Basis of Presentation of Consolidated Financial Statements

1. Scope of Consolidation
The consolidated financial statements include the accounts of 187 of the Company’s subsidiaries.
The accounts of 15 subsidiaries are excluded due to insignificant influence brought to the consolidated financial statements in the
aspects of total assets, sales, net income and retained earnings.
Changes in scope of consolidation are followings.
<Increase>
1. Key3Media Group, Inc.
2. CreariveBank Inc.

Newly established resulting from spin-off from Ziff-Davis Inc.
Newly established

Other 66 companies<Decrease>
1. UTStarcom, Inc.

Transfer to affiliates accounted for under the equity method due todilution of the interest by stock issuance

Other 23 companies

2. Application of the Equity Method
There are 85 affiliates and 2 non-consolidated subsidiaries to be applied for the equity method.
Changes in application of the equity method are followings.
<Increase>
1. The Nippon Credit Bank, Ltd.
2. UTStarcom, Inc.
3. SOFTBANK Latin America Ventures LP

Newly invested
Transfer from consolidated subsidiary
Newly established

Other 43 companies<Decrease>
1. HeyAnita.com, Inc.

Stock sellout

Other 11 companies

3. Fiscal Year End of Subsidiary Companies
The fiscal year end of consolidated subsidiary companies, both domestic and foreign, are followings.

<Fiscal year end>
March end
June end
September end
December end<Domestic >
62
1
6
12

<Foreign>
347
56

4. Summary of Significant Accounting Policies(1)

Main asset evaluation(a) Marketable securities and investments in securities
Securities available-for-sale with fair value:
Stated at fair value based on market prices, etc. at end of the interim period.
(Both unrealized gains and losses are included in “Net unrealized gains on securities available-for-sale”, acomponent of shareholder’s equity; cost of sales is mainly determined using the moving average methods.)
Securities with no market prices:
Mainly stated at cost determined using the moving average method(b) Inventories
SOFTBANK CORP.

16

Inventories held by the domestic consolidated subsidiaries are stated at cost, as determined using the moving-averagemethod. Inventories held by the foreign consolidated subsidiaries are valued at lower of cost, as determined by the first-in
first-out method, or market.

(2)

Depreciation methods for main assets(a) Tangible fixed assets
The Company and domestic consolidated subsidiaries:
Computed using the declining balance method
Foreign consolidated subsidiaries
Computed using straight-line method(b) Intangible fixed assets
Computed using the straight-line method
Goodwill is amortized over the period of 5 to 40 years.

(3)

Recording basis of main allowances and accrual(a) Allowance for doubtful accounts
To prepare for losses from bad debts, allowance for doubtful accounts is provided in the higher of an amount computed
using the historical loss experience or equivalent amount to the maximum limit deductible for tax purposes which isdetermined by the Corporate Tax Laws as a general reserve, and an amount determined by considering the collectibility of
specific bad debts.

(b) Allowance for sales returns
Allowance for sales returns is provided based on the estimated losses resulting from possible future returns.

(c) Allowance for retirement benefits
The Company and domestic consolidated subsidiaries:
To provide for the employees’ retirement benefits, allowance for retirement benefits is provided the deemed retirement
obligations at the end of this period, based on the net amount of estimated retirement obligations less estimated plan
assets at the end of this fiscal year. Yen 382 million retirement benefit expense resulting from the adoption of theaccounting standards for retirement benefits is charged to the statements of income for the interim.

The effect of the

adoption of the accounting standards is immaterial compared to the previous method.

(4)

Method of accounting for lease transactions
Finance lease transactions, other than those which are deemed to transfer ownership of the leased assets to the lessee, areaccounted for as operating lease transactions.

(5)

Method of accounting for Anonymous Investment Association
Assets and liabilities of an anonymous investment association were reported as assets and liabilities of the consolidated
subsidiaries and noted on the financial statements for FY2000.
For FY2001 interim financial statements, assets and liabilities of an anonymous investment association not belonged to theconsolidated Group, are offset due to significant influence to total consolidated assets resulting from increased assets of an

SOFTBANK CORP.

17

anonymous investment association.
Cash and cash equivalents at beginning of period for an anonymous investment association of Yen 10,827 million is describedas “Decrease in cash and cash equivalents due to offset of anonymous investment association”.

(6)

Other
Method of accounting for consumption taxes:
Consumption tax is excluded from the amounts of items in the statements of income.

5. The Scope of Assets Represented in the Consolidated Statements of Cash Flows
Cash and cash equivalents in the consolidated statements of cash flows includes petty cash, deposits available for withdrawal on
demand and short-term financial instruments with original maturities of three months or less, which are readily convertible to known
amount and which represent a minor risk of fluctuations in value.

6. Items Regarding Finance Business
Finance business includes e-Finance business and Foreign Investment Funds business.
Due to the reorganization of SOFTBANK Capital Partners (Cap Funds), which belongs to Foreign Investment Funds business,investment of Cap Funds is either stated at cost or accounted for under the equity method.

As a result of this change, Foreign

Investment Funds business does not earn any Revenue from Finance business and only incurs Cost from Finance business such asadministrative expenses for funds.
(cf: Business Segment Information)

SOFTBANK CORP.

18

NOTES
1 Accumulated Depreciation of Property and Equipment(FY2001 interim)
5,127 million yen(FY2000 interim)
12,269 million yen(FY2000)
6,953 million yen

2 Number of Treasury Stock Held by the Company(FY2001 interim)
330 shares(FY2000 interim)
3,929 shares(FY2000)
720 shares

3 Assets and Liabilities Held by the Anonymous Investment Association
Assets and liabilities of an anonymous investment association were reported as assets and liabilities of the consolidated
subsidiaries in FY2000.
To properly state the consolidated assets and liabilities belonged to the Group, for 2001 interim financial statements,
assets and liabilities not belonged to the Group are excluded from the consolidated balance sheets.
The amount excluded from the consolidated balance sheets for 2001 interim is as follows.

Cash and Deposit
Marketable securities
Other current assets
Investments in securities
Investments in partnership
Other current liabilities
Other non-current liabilities(FY2001 interim)
35,259 million yen
13,061 million yen
10,744 million yen
5,647 million yen
1,419 million yen
1,033 million yen
65,099 million yen(Yen 10,359 million for investments of business purposes)(Deposit of an anonymous investment association)

4 Assets Pledged as Collateral and Secured Liabilities(1) Assets pledged as collateral related to lease contracts(Million yen; amounts less than one million yen are omitted.)
Assets pledged as collateral
Secured liabilities
Carrying
Carrying
Type of
Account
Account
amountamountcollateral
Notes and accounts
Notes and accounts
1,010
481
MortgagereceivablepayableOther current assets(Accounts receivable
15
Mortgage-other)
Total
1,026
Total
481
Note

Future receivable under membership contracts and marketing contracts (include the above 1,026 million yen
accounts receivable) are secured for the lease payable of 12,682 million yen ( include the above 481 million yen
notes and accounts payable).

(2) Assets pledged as collateral related to deposits received for securities loaned(Million yen; amounts less than one million yen are omitted.)
Secured liabilities
Assets pledged as collateral
Carrying
Carrying
Type of
Account
Account
amountamountcollateral
Other current assets
Other current liabilities(Marketable(Deposits received for
1,104
6,281
Mortgagesecurities in custody)
securities loaned)Note

In additions to the above, collateral securities received from customers on margin transactions (1,695 million yen)
have been provided to Japan Securities Finance Company as collateral for securities borrowed.

(3) Collateral for loan
Assets and subsidiary stocks of Key3Media, which is consolidated subsidiary of the Company, are pledged as collateralfor borrowings of 330 million dollar.

5 Notes Receivable Endorsed for Notes Receivable TrustNote:4,351 million yen

The 1,584 million yen of notes receivable which maturity date is at end of period is included above.

SOFTBANK CORP.

19

6 Accounting for Notes Receivable Which Maturity Date is at End of Period
Notes receivable which maturity date is at end of period is recorded on actual settlement date.
Amount described below is included the balance sheets at end of period because the period end of FY2001 interim is on holiday.
Notes receivable

938 million yen

7 Notes to Consolidated Statements of Cash Flows(1) Reconciliation of cash and cash equivalents and accounts on the consolidated balance sheet at end of FY2001 interim

Cash and deposits
Marketable securities
Time deposits with original maturity exceeding a threemonth period
Stocks and Bonds with original maturity exceeding a threemonth period
Cash and cash equivalents(FY2001 interim)
170,880 million yen
14,829(FY2000)
254,708 million yen
17,848△ 4,410△ 7,874△ 86△
76
177,759

268,060

1,513

40,327(2) Significant transaction without cash flows
Transfer to capital stock from convertible bonds

8 Lease Transaction
1. Finance leases in which the ownership of leased assets are not transferred to lessees(as a lessee)(FY2001 interim) (FY2000 interim) (FY2000)
million yen
million yen
million yen(a) Amount equivalent to acquisition costs, accumulated depreciation and costs less accumulated depreciation at end of period
Property, plant and equipment
Amount equivalent to acquisition costs
Amount equivalent to accumulated depreciation
Amount equivalent to costs, less accumulated
depreciation at end of period
Software (Intangible assets)
Amount equivalent to acquisition costs
Amount equivalent to accumulated depreciation
Amount equivalent to costs, less accumulated
depreciation at end of period
Total
Amount equivalent to acquisition costs
Amount equivalent to accumulated depreciation
Amount equivalent to costs, less accumulated
depreciation at end of period

16,225
2,808

1,029
599

12,401
1,595

13,417429

10,805

1,206
205

45
31

406
65

1,000

13

341

17,431
3,014

1,074
631

12,808
1,661

14,417443

11,146

3,514
11,255
14,770

212
252
465

2,405
8,938
11,344

149
125
7

1,407
1,203
385

(b) Amount equivalent to finance lease obligation at end of period
One year or lessOver a year
Total(c) Lease payments, amount equivalent to depreciation expenses and interest expenses
Lease payments
Amount equivalent to depreciation
Amount equivalent to interest expenses

2,058
1,729
538

(d) Calculation method of amount equivalent to depreciation expenses and interest expenses
The amount equivalent to depreciation expenses is computed using the straight line method based on the lease term
and no remaining amount.
The amount equivalent to interest expenses, which is calculated by subtracting acquisition costs from total lease
payments, is allocated over fiscal years based on the interest method.

SOFTBANK CORP.

20

(as a lessor)(FY2001 interim)(a) Amount equivalent to acquisition costs, accumulated depreciation and costs less accumulated depreciation at end of period
Property, plant and equipment
Acquisition costs
Accumulated depreciation
Costs, less accumulated depreciation at end of
period

260 million yen
23
237

Software (Intangible assets)
Acquisition costs
Accumulated depreciation
Costs, less accumulated depreciation at end of
period

221
20
200

Total
Acquisition costs
Accumulated depreciation
Costs, less accumulated depreciation at end of
period48143437(b) Amount equivalent to finance lease obligation at end of period
One year or lessOver a year

84
358
443

Total

(c) Lease premiums, depreciation expenses and amount equivalent to interest income
Lease premiums
Depreciation expenses
Amount equivalent to interest income

45
38
11

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

2. Non-cancelable operating lease transactions(as a lessee)
Future lease payments
One year or lessOver a year
Total

(FY2001 interim)
million yen
696
1,394
2,091

(FY2000 interim)
million yen
5,284
43,07648,361(FY2000)
million yen
57,629355,178
412,808(as a lessor)
N/A

9 Gain on Sales of Stock by Investees
During the current period, as a result of capital transactions at the investee level, the Company's interest in certain investments
was diluted.
The major investments of dilution gain (total 30,750 million yen) consisted of the following:

E*TRADE Japan K.K.
Yahoo! Inc.
E*TRADE Group, Inc.
Morningstar Japan K.K.
cyber communications inc.
Ziff-Davis Inc.
UTStarcom, Inc.

SOFTBANK CORP.

(Gain)
5,055 million yen
10,904
7,145
1,354
1,079
1,446
2,314

21

10. Accounting Change Related Reorganization of SOFTBANK Capital Partners
For FY2000, SOFTBANK Capital Partners (Cap Fund) was stated at fair value based on its portfolio and gain and loss onrevaluation of Cap Fund was included as operating income from Finance business on the statements of income under the
US GAAP.
In FY 2001, Cap Fund is divided to Softbank side fund (SB side Fund) and Non-Softbank side fund that is consist of external
investments, that is for the purpose of strengthening internal control over the fund and reflection of management result tofund. SB side Fund is accounted for under either the consolidation, the equity method or cost based on its percentage ofshares.
For FY2001 SB side Fund is accounted for under equity method and stated at cost.
Income before income taxes for FY2001 interim had been decreased of 64.3 million dollar, if SB side Fund was accounted
for same methodology as FY 2000.
Adjustment of retained earnings at beginning of period related to this reorganization (2,754 million yen) is reported as
extraordinary losses.

11. Spin-off and Initial Public Offering of Key3Media Group, Inc.
On August 21, 2000, Key3Media Group, Inc. (KME), the Company’s consolidated subsidiary, completed the initial public
offering to the New York Stock Exchange.
Before IPO, Ziff-Davis Inc., consolidated subsidiary owned by SOFTBANK America Inc. (SBA), determined to spin-off theTechnology Event business to KME. At IPO, KME issued 11,641,950 new shares (6 dollar per share) for gross proceeds of
69.8 million dollar, and issued 72.9 million dollar of zero-coupon bonds.
As a result of this transaction, shares of the Group, which is owed by SBA, became 54.99%.

12. Losses on Discontinued Operations
The Company recognized losses on discontinued operations related to Ziff-Davis Inc. and Kingston Technology Company.
Losses on discontinued operations are expressed apart from continued operations under US GAAP.

Losses on

discontinued operations are expressed as total amount of losses on sales of operations and operating losses on businessbefore transaction date, though operating losses should be included in the continuing operation under Japan GAAP.

(1)

Ziff-Davis Inc. (ZD)

After sales of Publishing division in April 2000, ZD is consisting of ZDNet and ZD Events. Technology Event business was
spin-off to Key3Media and continued as a consolidated subsidiary.
On the other hand, as the merger of ZDNet, ZD and CNET Network, Inc. (CNET) was announced in July 2000, they became
discontinued operation. 4,239 million yen losses on discontinued operations of ZD and ZDNet (excludes spin-off technology
event business) are charged to statements of income for FY2001 interim. Net amount of assets and liabilities for ZD and
ZDNet is included in “other current assets” as discontinued operation assets.

(2)

Kingston Technology Company (Kingston)

As a result of closure of SOFTBANK Kingston Inc. which is used to own Kingston, and settlement of Kingston relating assets
and liabilities, the losses of 3,714 million yen is reported as a loss on discontinued operations in statements of income.

SOFTBANK CORP.

22

13. Subsequent Events(1)

Merger of ZD and CNET

ZD was merged with CNET on October 17, 2000. The Company had held 62.1% interest of ZD through SOFTBANK
Holdings Inc. (SBH) and SBA, and received 0.3397 share of CNET per share of ZD at the merger. As a result, the ownership
percentage became 18.1% of the interest of CNET.
Due to this transaction, the gain on sales will be reported on statements of income for FY2001.

(2)

Sale of ABLE INC. shares

The Company sold its 33.2% interest in ABLE INC. on October 6, 2000, which was held by Softbank Finance Corporation,
the Company’s consolidated subsidiary.
As a result, the loss on sale of 19,277 million yen will be reported as a “Loss on sales of investments in securities” instatements of income for FY2001.

SOFTBANK CORP.

23

SEGMENT INFORMATION
1. Business Segment Information(1) FY2001 interim (April 2000 through September 2000)(Million yen; amounts less than one million yen are omitted.)Media &
eBroadmedia
e-Finance
MarketingCommerce

Ⅰ. Net sales andoperating income/loss
Net sales(1) Sales to externalcustomers(2) Inter-segment sales
and transfers

114,905

10,35823,194

7,284Internet
CultureForeignTechnolog
Investmenty Services
Funds

5,072

5,832

Other

13,589Total

Elimination Consolidated

180,236

180,236

1,805

466

640

1

391

1,104

369

4,778 △

4,778

Total

116,710

10,824

23,835

7,285

5,464

6,937

13,958185,015 △

4,778

180,236

Operating expenses

115,547

8,759

22,077

6,151

3,684

6,690

111

17,422

180,445 △

4,912

175,533

Operating income(△loss)

1,162

2,064

1,758

1,133

1,779

111 △

3,464

4,569

133

4,703

247 △

(2) FY2000 interim (April 1999 through September 1999)(Million yen; amounts less than one million yen are omitted.)
Software &Network

Ⅰ. Net sales andoperating income/loss
Net sales(1) Sales to externalcustomers(2) Inter-segment sales
and transfers

FinanceTechnology
EventsMedia

Internet

Other

Total

Elimination Consolidated

115,193

6,900

47,18012,480

8,042

11,782201,579

201,579

1,770

877

65

25

316

1,113

4,168 △

4,168

Total

116,964

7,777

47,245

12,505

8,358

12,896

205,748 △4,168

201,579

Operating expenses

113,762

2,916

50,166

11,941

7,680

12,806

199,274 △

1,381

197,893

Operating income(△loss)3,201

4,860 △

2,921

564

677

90

6,473 △

2,787

3,685

(3)FY2000 (April 1999 through March 2000)(Million yen; amounts less than one million yen are omitted.)eMedia &e-Finance
Commerce
Marketing

Ⅰ. Net sales andoperating income/loss
Net sales(1) Sales to externalcustomers(2) Inter-segment sales
and transfers

15,981

227,897

118,441

ForeignInvestment
Funds

Internet
Culture2,604

17,255

Other

41,040Total

Elimination Consolidated

423,220423,220

2,668

3,630

443

655

2,893

10,289 △10,289Total

18,649231,527

118,884

2,604

17,911

43,934

433,509 △10,289423,220

Operating expenses

9,278

224,430

120,806589

15,67253,897424,675 △

9,832

414,843

Operating income(△loss)

9,371

1,921

2,014

2,238 △

9,963

8,834 △

457

8,377

7,097 △Note
1. Business segments are determined according to the responsibility of each officer of the segment operation holding company.
2. The Company operates principally in the following business segments. (based on FY2001 interim)(1) e-commerce
Distribution of PC software, PCs and peripheral equipment; e-commerce (online merchandise sales, brokerage)(2) e-FinanceComprehensive Internet-based financial operations, including securities brokerage and mutual fund rating services;management of domestic venture capital fund and comprehensive support for venture companies(3) Media & Marketing
Publishing (PC magazines, books, amusement magazines); management of computer-related exhibitions;Internet-based information services(4) Broadmedia
Satellite broadcasting; management of membership system service(5) Internet Culture
Internet search services; Internet-based information services; Internet community services(6) Technology Services
Systems integration; technology development and support for e-commerce business(7) Foreign Investment Funds
Internet-related venture capital operations in the United States and other countries(8) Other
Holding company function in foreign countries, Infrastructure business of broadband, back-office services business

SOFTBANK CORP.

24

2. Geographical Segment Information(1) FY2001 interim (April 2000 through September 2000)(Million yen; amounts less than one million yen are omitted.)
North
AmericaJapan

Ⅰ. Net sales andoperating income/loss
Net sales(1) Sales to externalcustomers(2) Inter-segment sales
and transfers

153,867

Europe12,108

Korea

92

Other

13,412Elimination Consolidated

Total

755

180,23693

180,236

93 △

93

Total

153,867

12,201

92

13,412755

180,330 △93

180,236

Operating expenses

149,342

11,587273

13,442

1,151

175,798 △264

175,533

Operating income(△loss)

4,525

395

4,532

171

4,703

614 △

△30 △

181

(2) FY2000 interim (April 1999 through September 1999)(Million yen; amounts less than one million yen are omitted.)
North
AmericaJapan

Ⅰ. Net sales andoperating income/loss
Net sales(1) Sales to externalcustomers(2) Inter-segment sales
and transfers

132,781

52,670Other

Elimination Consolidated

Total

16,127

201,579

201,579

13

139

153 △

153

Total

132,795

52,80916,127201,732 △153

201,579

Operating expenses

122,224

57,116

16,270195,611

2,281

197,893

Operating income(△loss)

10,570 △4,306 △

2,434

3,685

6,120 △

142

(3)FY2000 (April 1999 through March 2000)(Million yen; amounts less than one million yen are omitted.)
North
AmericaJapan

Ⅰ. Net sales andoperating income/loss
Net sales(1) Sales to externalcustomers(2) Inter-segment sales
and transfers

289,458

EuropeOther

111,229

11,126

11,406

Total

Elimination Consolidated

423,220423,220

11,644

11,717 △

11,717

Total

289,531111,229

11,12623,050434,937 △

11,717423,220

Operating expenses

275,240

105,020

11,21927,982

419,462 △4,619

414,843

Operating income(△loss)

14,291

4,932

15,475 △

7,097

8,377

72

6,209 △

93 △Note 1: Geographical segmentation policy and major countries of each area is as followings. (based on FY2001 interim)
1. Geographical segmentation policybased on geographical location
2. Major countries of each area
North America
U.S.A. and Canada
EuropeU.K., Germany and France
Other
Singapore, Hong Kong and China

SOFTBANK CORP.

25

3. Overseas Sales(1) FY2001 interim (April 2000 through September 2000)(Million yen; amounts less than one million yen are omitted.)
North
AmericaⅠ. Overseas sales

Europe12,47992

Korea

13,412

Other

755

Ⅱ. Consolidated sales
Ⅲ.

Ratio of overseas sales toconsolidated sales

Total

26,739180,236

7%

0%

7%

1%

15 %

(2) FY2000 interim (April 1999 through September 1999)(Million yen; amounts less than one million yen are omitted.)
North
AmericaⅠ. Overseas sales

52,414

Other

Total

16,60469,018

Ⅱ. Consolidated sales
Ⅲ.

Ratio of overseas sales toconsolidated sales

201,579
26 %

8%

34 %

(3)FY2000 (April 1999 through March 2000)(Million yen; amounts less than one million yen are omitted.)
North
AmericaⅠ. Overseas sales

96,774

Europe12,330Other26,275

Ⅱ. Consolidated sales
Ⅲ.

Ratio of overseas sales toconsolidated sales

Total

135,380423,220

23 %

3%

6%

32 %

Note 1: Segmentation policy of overseas sales and major countries of each area is as followings.
(based on FY2001 interim)
1. Segmentation policy of overseas salesbased on geographical location
2. Major countries of each area
North America
U.S.A., Canada
EuropeU.K., Germany, France
Other
Singapore, Hong Kong, China

SOFTBANK CORP.

26

MARKETABLE SECURITIESFY2001 Interim (As of September 30, 2000)
1.Securities available-for-sale with fair value(Million yen; amounts less than one million yen are omitted.)(1) Stock(2) Bonds
Government andmunicipal bonds, etc.
Corporate bonds
Other bonds(3) Other
Total

Cost

Carrying amount

Difference

36,79653,317

16,521

0

0

―

―
6,761
―
43,558―10,363―
63,681―
3,601―
20,122

2. Major contents and carrying amount of securities not practicable to fair value(Million yen; amounts less than one million yen are omitted.)
Carrying
amount(1) Held-to-maturity debts securities
Unlisted bonds(2) Other securities
Unlisted stocks (excluding stocks
traded over the counter)
Unlisted foreign bonds
Unlisted bonds
Money management fundMid-range government bonds fund
Other
Total

34
63,996
1,694
7,775
12,2662,486
73
88,326

Note:Fair value information is described "other securities" for FY2001 interim but included both "other securities" and"Subsidiary and affiliated securities" for FY2000.
FY2000 (As of March 31, 2000)(Million yen; amounts less than one million yen are omitted.)
FY2000 (As of March 31, 2000)
Fair value

Unrealized gainor loss

5,029
0
―
5,030

56,7200―56,72051,690――51,690255,391
3,984―
259,376
264,406

3,115,210
3,790―
3,119,000
3,175,721

2,859,818
194△―
2,859,624
2,911,315

Carrying amount① Items in current assets
Stocks
Bonds
OthersSub-total② Items in non-current assets
Stocks
Bonds
OthersSub-total
Total

Note 1: Fair values are based on the following prices.
(1) Listed securities: closing prices on the Tokyo Stock Exchange and Luxemburg Stock Exchange(2) Securities traded over the counter: mainly final prices published by the Japan Securities Dealers Association.
(3) Securities traded over the foreign: closing prices on the Nasdaq
counter(4) Beneficiary certificates of unlisted: standard prices
securities investment trust(5) Securities held by Overseas Fund
: prices after interest rate adjustment made on the closing price of Nasdaq
Note 2: Carrying amount of securities excluded from above disclosure(Carrying amount as of March 31, 2000)
Current assets
14,108 million yen
Money management fundMid-term government bonds fund3,653 million yen
Investment securities for
11,585 million yen
business purposes
Fixed assets

SOFTBANK CORP.

Unlisted securities
131,544 million yen(excluding securities traded over the counter)
Unlisted foreign bonds
7,350 million yen

27

CONTRACT AND OTHER AMOUNTS, FAIR VALUE AND UNREALIZED GAIN
OR LOSS ON DERIVATIVE TRANSACTIONSCurrency Related(Million yen; amounts less than one million yen are omitted.)
FY2001 Interim (As of September 30, 2000)

Nature of transaction

Contract and other amounts

Fair valueOver 1 year

FY2000 (As of March 31, 2000)

Unrealized Contract and other amounts
Unrealized
Fair value
gain or loss
loss
Over 1 year

Swap transactions
Off-markets
transactions

・Australia dollars
receiver, JPY payer

1,000

1,000

△ 190

△

190

1,000

1,000

△

23

△

23

Total

1,000

1,000

△ 190

△

190

1,000

1,000

△

23

△

23

Interest Related(Million yen; amounts less than one million yen are omitted.)
FY2001 Interim (As of September 30, 2000)

Nature of transaction

Notional and other amounts

Fair valueOver 1 year

FY2001 Interim (As of September 30, 2000)

Unrealized Notional and other amounts
Unrealized
Fair value
gain or loss
gain or loss
Over 1 year

Swap transactions
・

Fixed rate receiver,floating rate payer

6,014

5,771

384

8,157

7,485

△ 516

Fixed rate receiver・ (receipt later), fixed rate
payer (pre payment)

2,000

2,000

68

Total

16,171

15,257Off-markets
Floating rate receiver,transactions ・
fixed rate payer

△

63

△

△

384

6,257

6,257

439

516

8,828

8,828

△ 624

68

2,000

1,000

68

63

17,08516,085

△ 117

439
△

624

68

△

117

Notes 1 Certain derivative transactions such as those assigned to foreign assets and liabilities in accordance with
"Accounting Standards for Foreign Currency Transactions, etc.” are excluded from above disclosure.
2 Description of narrative information for derivative transaction is omitted.

SOFTBANK CORP.

28