SOFTBANK CORP.
CONSOLIDATED FINANCIAL REPORTFor the Fiscal Year Ended March 31, 2003
FINANCIAL HILIGHTS
1.

Results of Operations(Million yen; amounts less than one million yen are omitted.)
FY2003(April 2002
through March
2003)

Revenues
Operating loss
Ordinary loss
Net loss
Net loss per share— primary (yen)Net loss per share—diluted (yen)Return on Equity (%)
Ordinary loss / Total assets (%)
Ordinary loss / Revenues (%)¥406,892(91,997)(109,808)(99,989)(296.94)
−
-27.7
-10.4
-27.0

Year-on-yearchangeFY2002(April 2001
through March
2002)

+0.4%
−
−
−
−
−
−
−
−

¥405,315(23,901)(33,302)(88,755)(263.53)
−
-20.0
-2.9
-8.2

Year-on-yearchange

+2.1%
−
−
−
−
−
−
−
−

Notes:
1.

Equity in gains (losses) under the equity method, net:
Fiscal Year ended March 31, 2003:
Fiscal Year ended March 31, 2002:¥11,107 million¥(17,575) million

2.

Average number of shares issued and outstanding during the year (consolidated)Year ended March 31, 2003:
336,857,133 sharesYear ended March 31, 2002:
336,798,168 shares

3.

Changes in accounting methods were applicable to the period under review.

4.

Percentage changes for revenues, operating loss, ordinary loss and net loss are compared with thecorresponding 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)Note: Number of shares outstanding (consolidated)
As of March 31, 2003:
As of March 31, 2002:

SOFTBANK CORP.

FY2003(As of March 31, 2003)

FY2002(As of March 31, 2002)¥946,331
257,39627.2¥767.56¥1,163,678
465,32640.0¥1,381.31

335,293,326 shares
336,872,342 shares

1

3.

Cash Flows(Million yen; amounts less than one million yen are omitted.)
FY2003(April 2002 throughMarch 2003)

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

4.

5.

Scope of Consolidation
Consolidated subsidiaries:
Equity-method non-consolidated subsidiaries:
Equity-method affiliates:¥(68,600)
119,749(17,615)¥147,526

FY2002(April 2001 throughMarch 2002)¥(79,123)
39,751
1,313¥119,855

269
3
113

Changes in Scope of Consolidation
Consolidated subsidiaries:
Newly included:
38
Newly excluded:
54
Equity-method non-consolidated subsidiaries and affiliates:
Newly included:
24
Newly excluded:
21

SOFTBANK CORP.

2

The SOFTBANK GroupAs of March 31, 2003, the SOFTBANK Group comprised 385 companies with operation in 8 segments as follows.
Business segment

Consolidated
subsidiaries (includes
partnerships)

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

1.

Broadband
Infrastructure

14

8

2.

e-Commerce

19

10

3.

e-Finance

133

15

4.

Media & Marketing

13

7

5.

Broadmedia

14

2

6.

Internet Culture

16

6

7.

Technology Services

7

4

8.

Overseas Funds

42

54

9.

Others

11

10

269

116

Total

Principal products and operational content of each business
ADSL high-speed Internet connection service and IP telephony service;
fiber-optic ultra-high-speed Internet connection service and otheroperations
Sales of PC software and such hardware as PCs and peripherals;
enterprise solutions; diversified e-commerce business, including
e-commerce between business and consumer
All inclusive Web-based financial operations, including Internet
securities operations; management of domestic venture capital funds;
incubation of portfolio corporations
Book and magazine publication in such areas as PCs, the Internet,
entertainment, etc.; exhibition management; web content development
Provision of applications and content for broadband broadcasting andcommunications and promoting the spread of such operations
Internet-based advertising operations; broadband portal business;
Internet-based auction business
Systems solutions business; business solutions business
U.S.- and Asia-focused global private equity operations inInternet-related companies
Holding company functions for overseas operations; back-officeservices in Japan

Note: SOFTBANK BB Corp., which is engaged in the Broadband Infrastructure and e-Commerce segments, isincluded in the Broadband Infrastructure segment; Yahoo Japan Corporation, which is engaged in the Internet Cultureand Broadband Infrastructure segments, is included in the Internet Culture segment. Both of them are consolidated
subsidiaries.
B ro adban d
In f rastru c tu ree - Co mme rc e

Dee Corp.
Vector Inc.

IP REVOLUTION, INC.

CarPoint K.K.

SOFTBANK BB Corp.

Yahoo Japan Corporation
Morningstar Japan K.K.

I n te rn e t Cu ltu ree - Fin an c e

SOFTBANK INVESTMENTCORPORATION

Tavigator, Inc.

E*TRADE Japan K.K.

e-Shopping! Books CORP.

[Overseas][Domestic]

SOFTBANKFINANCECORPORATION[Operation Holding
Companies]S OFTBANK C ORP.
SOFTBANK
Broadmedia
Corporation

Club iT Corporation(Pure Holding Company)

E*TRADE SECURITIES, CO., LTD.

SOFTBANK FRONTIERSECURITIES CO., LTD[Operation Holding
Companie s][Domestic]

SOFTBANK
Holdings Inc.

[Overseas]
SOFTBANK Korea Co., Ltd.

SB CHINA HOLDINGS PTE LTD

BB Cable Corporation

O ve rse as Fu n ds

SOFTBANKTECHNOLOGYHOLDINGS CORP.

B ro adme dia

Morningstar, Inc.

SOFTBANK Media &Marketing Corp.

SOFTBANK US Ventures VI L.P.
SB Life Science Ventures I, L.P.

SOFTBANK Publishing Inc.

SOFTBANKTECHNOLOGYCORP.

SOFTBANK ZDNet Inc.
Aozora Bank, Ltd.

T e c h n o lo gy
Se rvic e s

UTStarcom, Inc.

cyber communications inc.

Me dia &Marke tin g

O th e rs･･･ Segment･･･ Consolidated subsidiary･･･ Equity-method subsidiary or affiliate
SOFTBANK CORP.

3

SOFTBANK subsidiaries listed on domestic stock exchanges as of March 31, 2003:
Subsidiary

Listed exchange

1.Yahoo Japan Corporation

JASDAQ

2.SOFTBANK TECHNOLOGY CORP.

JASDAQ

3.Morningstar Japan K.K.

Hercules

4.Vector Inc.

Hercules

5.E*TRADE Japan K.K.

Hercules6.SOFTBANK INVESTMENT CORPORATIONTokyo Stock Exchange 1st section
Osaka Securities Exchange 1st section

7.SOFTBANK FRONTIER SECURITIES Co., Ltd.

Hercules8.Club iT Corporation

Hercules(Reference)
Subsidiaries listed on overseas stock exchanges:
Subsidiary
SOFTBANK INVESTMENT INTERNATIONAL(STRATEGIC) LIMITEDSOFTBANK CORP.

Listed exchange
Hong Kong Stock Exchange

4Management Policies
1. Fundamental Management Policy
The core management philosophy of the SOFTBANK Group (hereafter the “Group”) is“Endeavoring to benefit society and the economy by fostering the sharing of wisdom and knowledge
gained through the IT revolution.” By conducting business activities in a creative manner, the Groupfocuses its energy on both benefiting society and increasing its corporate value.

Since fiscal 2001, the Group has been guided by a management vision to use broadband to accelerate
the pace of the IT revolution in the 21st century. Accordingly, the Group’s resources are being
concentrated on the broadband business, with a particular focus on the broadband infrastructurebusiness.

This management policy remained unchanged in fiscal 2003, as the entire Group continued to direct
its resources and efforts to the broadband business. To create a solid platform for the promotion of its
broadband business, the Group merged four consolidated subsidiaries in January 2003 to create
SOFTBANK BB Corp., the Group’s largest operating company. This new company is clearly
positioned as the nucleus of the Group. The Group’s commitment to focusing on the broadband
business in order to maximize corporate value is firmly established.

2. Policy Regarding Allocation of Earnings
SOFTBANK CORP. (hereafter the “Company”) has followed a policy of distributing earnings in astable and proper manner to shareholders and all other stakeholders. In fiscal 2003, consolidated
retained earnings declined resulting from start-up costs in the broadband infrastructure business.
However, in consideration of our corporate policy to pay a stable dividend to shareholders, as well as
the Group’s medium to long-term outlook, the Company intends to pay a dividend of ¥7 per share, as
in fiscal 2002. As evidenced by the growing number of customers and other positive factors, theGroup is seeing concrete results in terms of earnings and cash flows from the broadband
infrastructure business, which will become the primary source of sales and earnings for the Groupover the medium and long term.

3. Medium and Long-Term Strategies and Key Performance Indicators
The Group’s management strategies over the medium and long-term are as stated:
1. Generate and maximize stable earnings and cash flows by succeeding in the broadband
infrastructure business. In this endeavor, the current goals are to continue to expand the customer
base and to quickly achieve profitability in the broadband infrastructure business.

SOFTBANK CORP.

5

2. Concurrently, the Group aims to develop a broad array of opportunities to generate earnings andcash flows by leveraging synergies between Group companies and the broadband infrastructurebusiness.

These two strategies are integral elements of the Group’s management strategy.
Strategy 1 – Success in the Broadband Infrastructure Business- The Group is currently placing the highest priority on developing the broadband infrastructurebusiness.
- During fiscal 2003, the first step in this direction was taken by successfully achieving the goal of
expanding the customer base for the Yahoo! BB comprehensive broadband service jointly operated
by SOFTBANK BB Corp. and Yahoo Japan Corporation.
- In early February 2003, Yahoo! BB became the first DSL communications carrier and ISP in Japan
to exceed 2 million lines installed on a cumulative basis (according to data compiled by the Ministryof Public Management, Home Affairs, Posts and Telecommunications), ranking solidly in first placein Japan as both a communications carrier and ISP.
- Yahoo! BB has ranked first in Japan in the number of new lines installed every month as of June
2002.
- The Group’s ability to marshal its collective strengths to offer a variety of services and conduct aneffective and innovative sales promotion has been key to expanding the customer base.
- The most distinguishing feature of Yahoo! BB is a nationwide pure-IP broadband network that isnearly complete. This network was designed from the outset to support the bundling of IP telephonyand other types of broadband services.
Strategy 2 – Realize Synergies Between SOFTBANK Group Companies via the Broadband
Infrastructure Business
The Group’s operations and businesses in total exceed the business domains of other existing
communications carriers. Remaining firmly based on the infrastructure network, but providing agreater scope, the Group’s business activities can further expand the breadth of the broadband
market.
The following are some specific illustrations.
- Yahoo Japan Corporation, Japan’s largest Internet portal, made a significant contribution to theGroup’s consolidated earnings in fiscal 2003 with the success of its Internet auction business andother services.

Over the medium and long-term, Yahoo! Japan’s brand can be further leveraged tooffer a variety of contents and services via the Group’s broadband infrastructure.
- SOFTBANK BB Corp., which is Japan’s leading distributor of IT products, has vendor and reseller
relationships built up over more than two decades, and has developed considerable businessexpertise. Expectations are therefore high for rapid growth in the development and introduction of

SOFTBANK CORP.

6

broadband-related products and services.
- BB Cable Corporation, which is part of the Broadmedia segment, launched its BB Cable TV service
by using the ADSL network of Yahoo! BB. The Group’s objective is to create a new market in whichbroadcasting and communications converge.

4. Important Management Issues
Achieve Profitability in the Broadband Infrastructure Business
As is true of most infrastructure businesses, the Group’s broadband infrastructure business requires
substantial start-up costs such as depreciation expenses for transmission equipment, etc., customer
acquisition costs and others. Expansion of the Yahoo! BB customer base was therefore a primary
goal in fiscal 2003 in order to rapidly increase the number oflines installed to a level at whichstart-up costs can be recovered. As the cumulative lines installed have topped 2 million,
SOFTBANK BB Corp. is projected to achieve profitability on a monthly basis with its broadband
infrastructure business at the operating level. Plans call for the continued expansion of lines installed
to broaden the customer base and concurrently achieve profitability in the shortest time possible.

Growth and Stability in Other Group Segments
For e-Commerce, Media & Marketing, Broadmedia, Internet Culture, Technology Services and othersegments, the Group’s objective is to promote growth by channeling management resources into
activities offering the greatest potential for synergies with the strategic broadband infrastructurebusiness.

In the case of e-Finance and Overseas Funds, the nature of their business activities makes themsusceptible to volatile equity markets and related factors, which have adversely impacted theirbusiness results.

The Group intends to recover operating profitability by effectively managing

these businesses in accordance with market trends.

Diversifying Funding Channels
The Group primarily utilized cash and cash equivalents, proceeds from the sale of investment
securities, proceeds from the sale of stock in affiliated companies, and other measures to finance thebroadband infrastructure business and redeem maturing bonds. In segments other than the broadband
infrastructure, the Group businesses are projected to be self-funding. Funds required for the
Broadband Infrastructure segment’s capital expenditures, marketing programs and other activities
are to be procured through a variety of channels. In particular, funds for the procurement oftransmission equipment related to the increase of lines installed will be funded through lease financeand so-called “securitization” . Additionally, the Group will effectively manage its finances in

SOFTBANK CORP.

7

consideration of appropriate leverage levels and optimal capitalization composition, a process that
includes reducing the cost of capital.

5. Fundamental Policy and Measures Regarding Corporate GovernanceFundamental Policy for Corporate Governance
The Group believes that effective corporate governance is essential to conducting management witha priority on shareholders and cash flows. The management organization is structured to divide
authority among relevant parties and create autonomous units. This approach has been beneficial as
the Group entered new business areas during the development of the Internet era. The Group’s
structure is composed of a pure holding company, operation holding companies and operatingcompanies to facilitate decision-making based on the specialized knowledge required by each of theGroup’s business segments. The pure holding company manages and coordinates all matters
involving businesses that span the entire Group, maximizing synergies generated by the Group andmaking substantial contributions to increasing the Group’s corporate value. Maintaining the balance
between the division of responsibilities and integration of management functions, in accordance withmarket conditions, is carefully considered.

For example, SOFTBANK BB Corp., which wasformed through a merger of four Group’s consolidated companies, was recently established.

Enactment of Measures Regarding Corporate Governance(1) Management organization and other corporate governance items related to management
decision-making and the execution and supervision of business operations
The nucleus of the Group’s corporate governance is a nine-member board of directors at the pureholding company level. The board is structured to ensure that all issues are fully debated and thatdecisions can be made accurately and efficiently.

Thus, the board is enabled to effectively fulfill its

role to conduct strategic decision-making of Group-wide issues and overseeing operating results. A
certain proportion of board members (currently three of the nine members) are external directors.
The role of the external directors is to supervise the performance of the CEO. The Group continues
to adopt a corporate auditor system whereby the auditors monitor the directors and their performanceof duties. The majority of the corporate auditors are from outside the Group, ensuring fairness andtransparency.

To efficiently and cohesively manage the business segments, each of which is delegated considerable
autonomy, a CEO Conference composed of the Company’s CEO and representatives from eachbusiness segment is held monthly. The Conference coordinates management policies, monitors
operating results of Group companies and performs various other tasks. In line with the Group’s
policy of focusing resources on carefully selected businesses, the CEO Conference is currently

SOFTBANK CORP.

8

conducting a bold rationalization of unprofitable businesses and realigning its business portfolio.

Regarding internal controls, the Group has a system of operational audits to evaluate and verify
compliance by the Company and the Group with management policies, laws, articles ofincorporation, regulations, guidelines and other applicable rules.

Furthermore, the Group is distinguished by its various measures to strengthen corporate governancefunctions, such as the extensive use of IT to facilitate efficient management and the attendance by an
external corporate lawyer at all board and CEO Conference meetings to provide guidance andadvice.

(2) Significant personal, financial, business or other relationships between the Group and external
directors and external corporate auditors
There are no applicable items.

(3) Measures taken during the past year to improve corporate governanceDuring the past year, there were organizational enhancements in the Group management and public
relations functions undertaken by the pure holding company. The Internal Audit Department wasestablished at the holding company in January 2002 and is responsible for monitoring the activities
ofthe Company and each Group companies to ensure compliance with management policies. To

confirm and maintain fairness and transparency of all business practices, the Group consistently
strives to enhance disclosure of relevant information. By holding meetings to report on operations,informational meetings for securities analysts and others, placing news releases and otherinformation on its Web site, and conducting other related activities, the Group is taking prudent steps
to enhance its IR activities.

6. Other items
Fundamental Policy Regarding Relationships with Related Parties
There are no applicable items.

Important Items Regarding the Company’s Management
There are no applicable items.

SOFTBANK CORP.

9

Results of Operations and Financial Position
1. Results of Operations
Summary
Revenues increased ¥1,576 million, or 0.4%, to ¥406,892 million. Comparing with fiscal 2002,
revenues increased in the Broadband Infrastructure and Internet Culture segments and decreased in
the Media & Marketing and e-Commerce segments, respectively.

The operating loss increased ¥68,096 million to ¥91,997 million. The primary factor for this loss was
the increase in costs accompanying the expansion of operations in the Broadband Infrastructure
segment, which remains in the start-up phase. Excluding that segment, the other segments in total
achieved profitability at the operating level.

The ordinary loss increased ¥76,506 million to ¥109,808 million. This was the result of the operating
loss mentioned above and an increase of ¥8,410 million in net non-operating expenses to ¥17,811
million. Non-operating items included net equity in gains under the equity method of ¥11,107
million, compared to a net equity in losses under the equity method in fiscal 2002. However, there
was a net loss of ¥12,832 million on distributions from partnerships and a net exchange loss of¥7,704 million because of the yen’s appreciation, as compared to the net exchange gains of ¥24,939
million in fiscal 2002. Net interest expenses decreased ¥5,925 million to ¥7,648 million due to the
reduction in interest-bearing debt.

The net loss increased ¥11,234 million to ¥99,989 million. There was a net special gain of ¥38,333
million, which was the result of special income of ¥134,405 million and special losses of ¥96,071
million. The loss before income taxes and minority interest decreased ¥48,465 million to ¥71,474
million. The largest component of special income was a gain on sale of investment securities of¥127,607 million, representing the partial sale of stock held in Yahoo! Inc., Yahoo Japan Corporationand UTStarcom, Inc. The major components of special losses were a loss on sale of investment
securities of ¥10,846 million, attributed to the sale of stock held in E*TRADE Group, Inc. and
CNET Networks, Inc., a valuation loss on investment securities of ¥33,848 million, derived
principally from the revaluation of stock held in CNET Networks, Inc. and E*TRADE Group, Inc.,and a valuation loss on investments in affiliates of ¥32,323 million, primarily due to the revaluationof stock held in Key3Media Group, Inc.

Results of Operations by Business Segment
SOFTBANK BB Corp. was established in January 2003, and since then the operations of

SOFTBANK CORP.

10SOFTBANK BB Corp. were apportioned into the Broadband Infrastructure segment (for operations
formerly conducted mainly by BB Technologies Corporation and SOFTBANK Networks Inc.) andthe e-Commerce segment (for operations formerly conducted mainly by SOFTBANK ECHOLDINGS CORP. and SOFTBANK COMMERCE CORP.). Furthermore, operating results of theYahoo! BB business ascribed to Yahoo Japan Corporation and those attributed to the Yahoo! BB
sales activities conducted by the former SOFTBANK COMMERCE CORP. for the April throughDecember period of fiscal 2003 were included in the Broadband Infrastructure segment’s fiscal 2003
results in order to accurately present the Group’s activities.

Broadband Infrastructure−Segment sales increased ¥30,839 million, or 336.3%, to ¥40,007
million. This was mainly attributable to the sharp growth in revenues for the Yahoo! BB business
when the number of lines installed surged from approx. 490,000 at the end of fiscal 2002 to approx.
2,360,000 at the end of fiscal 2003 and the service lineup was expanded. The growth in lines
installed increased customer acquisition costs related to incentive payments to sales agents and othermarketing expenses, as well as associated equipment depreciation expenses and lease payments, etc.
The operating loss increased ¥78,252 million to ¥96,204 million. For activities other than the Yahoo!
BB business, IP REVOLUTION, INC. (a wholly owned subsidiary of SOFTBANK BB Corp.), as aprovider of an ultra-high-speed, fiber-optic Internet connection services, realized steady growth insales throughout the fiscal year and achieved profitability on a monthly basis in the second half offiscal 2003.

To enhance its equity and strengthen its financial base, SOFTBANK BB Corp. procured ¥120,000
million through the issuance of common stock to SOFTBANK CORP. As half of this amount wasallocated to common stock, SOFTBANK BB Corp.’s common stock stood at ¥63,000 million at theend of fiscal 2003.

e-Commerce−Segment sales decreased ¥18,109 million, or 6.4%, to ¥266,086 million. In fiscal
2002, this segment had benefited from the distribution of a major product from MICROSOFT CORP.
and the strong demand for anti-virus software sparked by widely publicized Internet viruses. Absent
such factors, SOFTBANK BB Corp. (formerly SOFTBANK COMMERCE CORP.) recorded a
decline in sales for fiscal 2003. The operating income decreased ¥739 million, or 23.1%, to ¥2,466
million, due to lower sales and competitive pressure on operating margins.

Among other e-Commerce segment companies, Vector Inc. continued to post growth in sales andoperating income in fiscal 2003, while CarPoint K.K. and e-Career CORP. both became profitable atthe operating level. Additionally, Dee Corp. and e-Shopping! Toys CORP. have progressed fromSOFTBANK CORP.

11start-up to growth stages.

e-Finance−Segment revenue increased ¥3,906 million, or 16.1%, to ¥28,167 million. A major
contributor to this growth was increased brokerage commissions and financial income from interestand dividends at E*TRADE SECURITIES, CO., LTD. The operating loss increased ¥903 million to¥5,823 million, mainly due to an increase in valuation loss on operational investment securities of
SOFTBANK INVESTMENT CORPORATION attributed to adverse trends in the global financial
markets. In non-operating income and expenses, the segment posted a net loss of ¥12,583 million on
distributions from partnerships. Special losses of ¥4,246 million on the revaluation of affiliatedcompanies recorded by a consolidated subsidiary in Hong Kong and ¥2,541 million (other special
losses) due to a refund of success fees by SOFTBANK Ventures, Inc.

Media & Marketing−Segment sales decreased ¥31,526 million, or 65.1%, to ¥16,912 million andthe operating income decreased ¥3,085 million to a loss of ¥523 million. The exclusion fromconsolidation of Key3Media Group, Inc. was the primary cause for the decline in both sales andoperating income. Also, the market for IT-related magazines and books faced contraction as
individuals increasingly used the Internet to acquire information. Due to this trend, both sales andoperating income declined at SOFTBANK Publishing Inc. Nevertheless, improvements in
SOFTBANK Publishing Inc.’s operating income were achieved in the second half of fiscal 2003, ascompared to the second half of fiscal 2002, through cost reductions and other measures.
Improvements in profitability were also realized at the operating level for SOFTBANK ZDNet Inc.
and other Media & Marketing segment companies.

Broadmedia−Segment sales decreased ¥182 million, or 1.5%, to ¥11,944 million. This wasprincipally the result of a marginal decline in sales at Club iT Corporation. Although sales fromservices provided to existing CS subscribers remained solid, the company was no longer acquiring
new subscribers. Revenue increases were posted by BB Factory Corporation, which operates“chBB”, a CS channel devoted exclusively to games-related programs, and CDN Solutions K.K.
(formerly Akamai Technologies Japan K.K.), which steadily acquired clients from among major
media firms and other companies. The operating loss increased ¥1,576 million to ¥1,615 million.
The primary factors were start-up expenses at CDN Solutions K.K. and development-related
expenses at BB Cable Corporation, which launched the “BB Cable TV” service via the ADSL
network. A consolidated adjustment of ¥3,295 million was amortized in fiscal 2003 as the special
loss (valuation loss on investment in affiliates) relating to the tender offer for Club iT Corporation.

Internet Culture−Segment sales increased ¥6,185 million, or 19.3%, to ¥38,200 million. The main

SOFTBANK CORP.

12sources of growth were Yahoo Japan Corporation’s advertising revenues, which achieved an all-time
high, its introduction of system utilization fees and increased volume in its auction business.
Tavigator, Inc. also posted higher sales. Operating income for the segment increased ¥6,945 million,or 69.9%, to ¥16,881 million, resulting from the income growth posted by the aforementioned Yahoo
Japan Corporation’s businesses.

Technology Services−Segment sales increased ¥7,201 million, or 38.9%, to ¥25,728 million. The
main contributor was SOFTBANK TECHNOLOGY CORP., specifically its e-business services suchas PC software and settlement and collection services and the ADSL sales support service of its
broadband solutions business. Operating income decreased ¥22 million, or 1.9%, to ¥1,113 million,
impacted by declines in the gross margin for the business solution and broadband solution businesses,
as well as increased personnel expenses, at SOFTBANK TECHNOLOGY CORP.

Overseas Funds−Segment revenue increased ¥796 million, or 32.1%, to ¥3,277 million, primarilyreflecting growth in fund management fees at SOFTBANK Holdings Inc. Operating income rose
¥2,218 million to ¥1,991 million as cost reductions from restructuring restored the segment
profitability.

Others−Segment sales decreased ¥4,941 million, or 23.8%, to ¥15,862 million. The operating loss
decreased ¥271 million to ¥6,383 million.

Results of Operations by Geographic Segment
Japan−Sales increased ¥33,311 million, or 9.4%, to ¥387,033 million, as revenues rose in the
Broadband Infrastructure, Internet Culture and other segments. The operating loss increased ¥66,263
million to ¥82,255 million. This was chiefly the result of increased up-front costs in the Broadband
Infrastructure segment associated with the Yahoo! BB business expansion.

North America−Sales decreased ¥26,589 million, or 87.3%, to ¥3,864 million and the operating
loss was ¥617 million, a difference of ¥2,472 million compared with fiscal 2002’s operating income.
The main reason for these changes was the exclusion of Key3Media Group, Inc. from consolidation.

Europe− Sales decreased ¥2,508 million, or 94.0%, to ¥160 million. The operating loss was ¥573
million, an improvement of ¥687 million over fiscal 2002’s operating loss. The main reason for thesechanges was the exclusion of Key3Media Group, Inc. from consolidation.

Korea−Sales decreased ¥5,546 million, or 28.4%, to ¥13,973 million. The operating loss increased

SOFTBANK CORP.

13¥1,240 million to ¥2,817 million.

2. Financial Position

Balance Sheet Analysis
Current assets increased ¥12,989 million to ¥407,437 million. Cash and deposits increased ¥33,922
million, which was attributable mainly to the sales of investment securities and partial sales ofinvestments in subsidiaries. However, there was a ¥17,000 million decrease in other current assets
because temporary payments by SOFTBANK BB Corp. (formerly BB Technologies Corporation),that had been placed in other current assets, were transferred to property and equipment.

Property and equipment increased ¥73,840 million to ¥102,249 million. The main contributors
were the above mentioned transfer from other current assets and the purchase of transmission
equipment by SOFTBANK BB Corp., (formerly BB Technologies Corporation), including
equipment for installation in NTT central offices and modems for use in the homes of Yahoo! BB
subscribers.

Investments and other assets decreased ¥296,186 million to ¥412,346 million. As a result of thepartial sale of investments in Yahoo! Inc., UTStarcom, Inc. and other companies, investment
securities declined ¥253,735 million. Furthermore, investments in partnerships declined ¥43,849
million, which resulted primarily from the sale of investments in KFB Newbridge Investment, L.P.
and the revaluation of the carrying value of the SOFTBANK INTERNET TECHNOLOGY FUNDs.

Liabilities decreased ¥8,289 million to ¥642,929 million. Accounts payables – other increased¥38,054 million, which reflected the purchase of transmission equipment by SOFTBANK BB Corp.
Interest-bearing debt declined ¥24,849 million due to bond redemptions and other factors. In
addition, long-term deferred tax liabilities decreased ¥37,676 million due to sales of investment
securities and other actions.

Shareholders’ equity decreased ¥207,929 million to ¥257,396 million. In addition to the ¥105,066
million decline in retained earnings caused by the net loss, the sale of investments in Yahoo! Inc. andcertain other factors resulted in a ¥87,029 million decline in net unrealized gain on other securities,
and there was a ¥13,644 million decline in translation adjustments.

Cash Flows Analysis
In fiscal 2003, cash was provided by investing activities, while used for operating and financing

SOFTBANK CORP.

14

activities. As a result, cash and cash equivalents increased to ¥147,526 million at the end of fiscal
2003., as compared to ¥119,855 million at the end of fiscal 2002.

Net cash used for operating activities was ¥68,600 million, ¥10,522 million less than cash used infiscal 2002. The loss before income taxes and minority interest was ¥71,474 million, but this waspartially offset by depreciation and amortization of ¥20,904 million and a valuation loss on
investment securities of ¥66,172 million and other non-cash expenses, while gains on sale ofmarketable and investment securities of ¥116,839 million, equity in gains under the equity method of¥11,107 million, and other non-cash income were negative factors. Another positive factor was the¥11,977 million year-on-year decrease in cash payments for income taxes to ¥13,202 million.

Net cash provided by investing activities increased ¥79,998 million to ¥119,749 million. Purchasesof property and equipment and intangibles were ¥64,500 million (mainly transmission equipment
purchased by SOFTBANK BB Corp.) and purchase of marketable and investment securities was¥33,413 million (mainly in the e-Finance segment). On the other hand, proceeds from sale ofmarketable and investment securities, including Yahoo! Inc. stock, were ¥171,350 million andproceeds from sale of interests in consolidated subsidiaries, including the partial sale of Yahoo Japan
Corporation stock, were ¥56,356 million.

Net cash used for financing activities was ¥17,615 million, a ¥18,929 million decrease from fiscal
2002. There was a ¥44,104 million increase in short-term borrowings, but repayment of bonds was¥52,223 million. Furthermore, proceeds from issuance of bonds fell from ¥126,393 million to ¥2,496
million as measures were taken to reduce interest-bearing debts.
<Factors That May Have a Material Impact on Cash Flows in the Following Fiscal Year>
Sale of investment in Aozora Bank, Ltd.
The Company is currently conducting negotiations to sell its investment in Aozora Bank, Ltd. andplans to complete all necessary procedures before the semi-annual closing ending September 2003.
The Company expects that the sale of these shares will generate a suitable amount of proceeds. The
purchaser, timing of the sale, price and other matters will be disclosed when appropriate.

Redemption of Bonds
The Group had ¥178,087 million of bonds outstanding as of the end of fiscal 2003. Of this amount,¥56,279 million is scheduled for redemption during fiscal 2004.

Commitment-line Contract
On October 24, 2002, the Company made a ¥86.0 billion commitment-line contract with eight banks

SOFTBANK CORP.

15

that was arranged by Mizuho Corporate Bank, Ltd. No decision has been reached at this time
regarding the extension of this contract in fiscal 2004.
【Equity ratio, Market cap equity ratio, Debt repayment period and Interest coverage ratio】
Years ended March 31

2003

2002

Equity ratio

27.2％

40.0%

Market cap equity ratio

48.9％

68.8%

Debt repayment period

6.7 years−

Interest coverage ratio

5.9−

Equity ratio:

Total shareholders’ equity / Total assets

Market cap equity ratio:

Market capitalization / Total assets

Debt repayment period:

Interest-bearing debt / Free cash flow

Interest coverage ratio:

Free cash flow / Interest expenses* All figures are computed from the Company’s consolidated financial statements.
* Market capitalization is calculated by multiplying the closing price of the Company’s shares by the
total number of shares outstanding at the end of fiscal 2003.
* Free cash flow represents the sum of operating and investing cash flows.
* Interest-bearing debt is the sum of liabilities on the consolidated balance sheets on which interest
must be paid.
* Negative figures are indicated by a “—“ sign.
* Interest expenses are the interest expense provided on the consolidated statements of income.

SOFTBANK CORP.

16

CONSOLIDATED BALANCE SHEETS(Millions of yen; amounts less than one million yen are omitted.
FY2002
FY2003
Increase
As of March 31, 2002
As of March 31, 2003
（Decrease）
Amount%Amount%ASSETS
Current assets
Cash and deposits
Notes and accounts receivable - tradeMarketable securities
Inventories
Deferred tax assets
Receivables related to margin transactions
Other current assets
Less : Allowance for doubtful accounts (current)
Total current assets

43.1¥113,580
62,047
9,545
36,312
15,43042,316
116,802(1,586)394,447

33.9¥33,922
2,207(4,485)
5,889(8,394)
6,531(17,000)(5,681)
12,98910.8

11,464
16,94328,408

2.4

67,8196,021
73,8402.5

8,741
16,1906,600
31,531

2.7

2,453(6,360)(3,786)(7,693)

267,414
97,606780
32,701
15,637(1,794)412,34643.6

521,150
141,456
1,287
35,832
10,313(1,506)
708,53360.9(253,735)(43,849)(506)(3,130)5,323(287)(296,186)

459

0.0

757

0.1

(298)

¥946,331

100.0¥1,163,678

100.0¥(217,347)¥147,503
64,255
5,059
42,201
7,035
48,84799,802(7,268)407,437

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

79,28422,964102,249

Intangible assets, net
SoftwareConsolidation adjustment
Other intangibles
Total intangible assets

11,1949,830
2,814
23,838Investments and other assets
Investment securities
Investments in partnerships
Long-term loans
Deferred tax assets
Other assets
Less : Allowance for doubtful accounts
Total investments and other assets

Deferred charges

TOTAL ASSETSSOFTBANK CORP.

17

CONSOLIDATED BALANCE SHEETS(Millions of yen; amounts less than one million yen are omitted.)
FY2002
FY2003
Increase(As of March 31, 2002)(As of March 31, 2003)（Decrease）
Amount%Amount%LIABILITIESCurrent liabilities
Notes and accounts payable - trade
Short-term borrowings
Commercial paper
Current portion of corporate bonds
Current portion of convertible bonds
Accounts payable - otherAccrued expenses
Income taxes payable
Deferred tax liabilities
Payables related to margin transactions
Allowance for sales returns
Other current liabilities
Total current liabilities¥58,534
150,557
4,000
56,21960
60,243
14,576
10,912
5,97844,458
1,269
51,695458,504¥56,742
114,190
10,00048,84130.8¥1,79236,366(6,000)7,378
60
38,054
4,400
1,318
5,930
7,040
(74)
3,260
99,528

25.1(57,602)(80)(4,971)(37,676)(281)(7,205)(107,817)-

48.5

22,188
10,1769,593
47
37,417
1,343
48,434358,976

Long-term liabilities
Corporate bonds
Convertible bonds
Long-term debt
Deferred tax liabilities
Accrued retirement benefits
Other Liabilities
Total long-term liabilities

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

19.4

179,365
125
13,12170,962331
28,335292,241

TOTAL LIABILITIES

642,92967.9

651,21855.9(8,289)46,005

4.9

47,1344.1(1,129)Common stock

137,867

14.6

137,867

11.9-

Additional paid-in capital

162,23117.1

162,231

13.9-

Retained earnings (deficits)(101,031)(10.7)

4,035

0.3(105,066)

Net unrealized gain on other securities

39,595

4.2

126,62510.9(87,030)

Translation adjustments

20,932

2.2

34,577

3.0(13,645)

Less: Treasury stock(2,199)

(0.2)

(10)

(0.0)

(2,189)TOTAL SHAREHOLDERS' EQUITY

257,39627.2

465,32640.0(207,930)¥946,331

100.0¥1,163,678

100.0¥(217,347)

MINORITY INTEREST
IN CONSOLIDATED SUBSIDIARIESSHAREHOLDERS' EQUITYTOTAL LIABILITIES ANDSHAREHOLDERS' EQUITYSOFTBANK CORP.

18

CONSOLIDATED STATEMENTS OF INCOME(Millions of yen; amounts less than one million yen are omitted.)
FY2003
FY2002
Increase(April 2001 through(April 2002 through(Decrease)
March 2002)
March 2003)
Amount%Amount%Net sales from non-financing business¥379,998

93.4¥381,532

94.1¥(1,533)

Cost of sales

347,88985.5

319,32878.8

28,561Gross profit

32,1097.962,20415.3(30,094)

Selling, general and administrative expenses

120,186

29.5

81,311

20.0

38,875

Operating loss from non-financing business(88,076)(21.6)(19,107)(4.7)(68,969)

Revenue from financing business

26,893

6.6

23,782

5.9

3,110

Financing business expenses

30,813

7.6

28,576

7.1

2,236

Operating loss from financing business(3,920)(1.0)(4,794)

(1.2)

873

Total operating loss

(91,997)(22.6)(23,901)(5.9)(68,096)

8.0

(973)
(24,939)
11,10727(14,777)

10.3(6,899)7,704(17,575)
10,404(6,366)(8.2)(76,506)

22.5

60,538(17,214)(117)
43,206

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

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

2,065
24,939

1,092--

11,107
5,553
17,753

4.4

5,526
32,53015,640

8,741
7,704

-

19,11935,564

8.8

17,575
8,715
41,931

Ordinary loss

(109,808)(27.0)(33,302)

Gain on sale of investment securities
Dilution gains from changes in equity interest
Other special income
Special income

127,607
2,138
4,659
134,405

33.0

67,06819,353
4,776
91,198Loss on sale of investment securities
Valuation loss on investment securities
Valuation loss on investment in affiliates
Valuation loss on goodwill and other intangible assets
Dilution loss from changes in equity interest
Other special losses
Special loss

10,84633,84832,323
1,393
17,65896,071

23.6

15,673
99,046
19,413
19,9783,761
19,963
177,83643.9(4,826)(65,197)
12,910(19,978)(2,367)(2,305)(81,765)

Loss before income taxes and minority interest(71,474)(17.6)(119,939)(29.6)

48,465

Income taxes -current
Income tax refunds
Income taxes -deferred

14,84911,12527,350

3.6
2.7
6.7

8,378

2.0

(36,219)

(8.9)

6,471
11,12563,569Minority interest

2,560

0.6

3,343

0.8

(783)

¥(99,989)(24.6)¥(88,755)(21.9)¥(11,234)

Net loss

SOFTBANK CORP.

-

-

19

CONSOLIDATED STATEMENTS OF
ADDITIONAL PAID-IN CAPITAL AND RETAINED EARNINGS(Millions of yen; amounts less than one million yen are omitted.)
FY2003(April 2002 throughMarch 2003)
ADDITIONAL PAID-IN CAPITAL
Additional paid-in capitalat the beginning of the year

¥162,231

Increase
Decrease
Additional paid-in capitalat the end of the year

¥162,231(Millions of yen; amounts less than one million yen are omitted.)
FY2002
FY2003(April 2001 through(April 2002 throughMarch 2002)
March 2003)
RETAINED EARNINGS (DEFICITS)
Retained earnings at the beginning of the year

¥4,035¥94,803

Net loss
Cash dividends
Bonuses to directors(99,989)(2,358)(75)(88,755)(2,356)(142)

Adjustment to retained earnings due tochanges in investment in affiliates underthe equity method, net(2,636)487

Increase in retained earnings of consolidated
subsidiaries excluded from consolidation
Decrease in retained earnings of subsidiaries
included into consolidation
Decrease due to merger
Retained earnings (deficits)at the end of the year

SOFTBANK CORP.

11

-

(2)

(0)

(17)

-

¥(101,031)¥4,03520

CONSOLIDATED STATEMENTS OF CASH FLOWS(Millions of yen; amounts less than one million yen are omitted.)
FY2002
FY2003(April 2001 through(April 2002 throughMarch 2002)
March 2003)
I

Cash flows from operating activities:
Loss before income taxes and minority interest¥(71,474)¥(119,939)

20,904(11,107)(744)
66,172(116,839)
8,626(1,311)
8,741(3,522)
3,172
8,576
2,208
33,537(53,061)

11,74917,575(15,591)
118,459(51,490)(20,311)(2,129)15,64019,978
16,684(10,533)(37,474)
9,785
8,613
(38,983)

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

2,320(17,281)(25,180)(79,123)

Cash flows from investing activities:
Purchases of property and equipment and intangibles
Purchase of marketable and investment securities
Proceeds from sale of marketable and investment securities
Additional investments in newly consolidated entities
Proceeds from sale of interests in previously consolidated subsidiaries
Proceeds from sale of interests in consolidated subsidiaries
Increase in loan receivables
Collections of loans
Others, net
Net cash provided by investing activities(64,500)(33,413)
171,350(591)(23)
56,356(5,211)
1,975(6,191)
119,749(30,272)(71,426)
157,985(18,263)(33)
10,554(12,803)
8,294(4,283)39,751

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

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

11,039(29,226)
71,400(91,400)
15,630(43,531)
126,393(53,597)(2,346)(336)(2,712)
1,313(5,728)3,578

27,805(34,479)

60

2

(194)

(4,772)

119,855

159,105¥147,526¥119,855

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

Interest and dividends received
Interest paid
Income taxes paid
Refunds of income taxes
Net cash used for operating activities
IIIII

IV Effect of exchange rate changes
V Net increase (decrease) in cash and cash equivalents
VI Increase in cash and cash equivalents due to companies newly
consolidated
VII Decrease in cash and cash equivalents due to exclusion of previously
consolidated entities
VIII Cash and cash equivalents at the beginning of the year
IX Cash and cash equivalents at the end of the year

SOFTBANK CORP.

21

Basis of Presentation of Consolidated Financial Statements
1 Changes in scope of consolidationa) As of March 31, 2003, SOFTBANK ＣＯＲＰ．（the "Company") consolidated 269 subsidiaries. 12 subsidiaries were not consolidated
due to their immateriality in terms of the consolidated total assets, sales and revenues, net income and retained earnings of the SOFTBANK
consolidated financial statements.
Main changes in the scope of the consolidation for the year ended March 31, 2003 were as follows;<Increase；including partnerships>
1 BB SHOP! CORP.
2 BIOVISION CAPITAL CORP

Newly established
Newly established

Other 36 companies<Decrease；including partnerships>
1 SOFTBANK EC HOLDINGS CORP.
2 SOFTBANK COMMERCE CORP.
3 SOFTBANK Networks Inc.
4 Tokyo Metallic Communications Corp.
5 e-Shopping! Wine CORP.

MergerMergerMergerMergerDecrease in shareholding percentage due to sale of shares

Other 49 companiesb) As of March 31, 2003, the Company held 3 non-consolidated subsidiaries and 113 affiliates, all of which were accounted for under the equity method.
Main changes in application of the equity method for the year ended March 31, 2003 were as follows;<Increase；including partnerships>
1 BEST BroadBand Corp.
2 YAMADA BroadBand Corp.
3 INTAGE Interactive Inc.

Newly established
Newly established
Newly established

Other 21 companies<Decrease；including partnerships>
1 InsWeb Corporation
2 Key3Media Group, Inc.

Decrease in the shareholding percentage
Sale of all shares

Other 19 companies

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

98

28

2
1
4
16
3

5
112
-

22
SOFTBANK CORP.

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 :Other securities:
With market quotations:Without market quotations:

Stated at amortized cost

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

Stated at fair value(3) Inventories

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

Computed using the straight-line method.

Others:Computed primarily using the declining-balance method.

(2) Intangible assets:

Computed using the straight-line method.

[3] Accounting principles for major allowances and accruals(1) Allowance for doubtful accounts:
Allowance for doubtful accounts is calculated based on the aggregate amount of estimated credit losses on doubtful receivables, plus
an amount for receivables other than doubtful receivables calculated using historical write-off experience ratios from certain priorperiods.
(2) Allowance for sales returns:
Allowance for sales returns is calculated for the gross margin of future sales returns expected subsequent to the balance sheet dates
on an accrual basis.
(3) Accrued retirement benefits:Some domestic consolidated subsidiaries use the simplified method to calculate their accrued retirement benefits based on the
projected benefit obligation as of the end of the consolidated fiscal year.
Starting on July 1, 2002, the Company and most of its domestic consolidated subsidiaries transferred their non-contributory defined
benefit pension plans to the defined contribution pension plans, and reversed accrued retirement benefits at the time of the transfer.

[4] Translation of foreign currency transactions and accounts
All assets and liabilities in foreign currencies are translated at the foreign exchange rates prevailing at the respective balance sheet
dates. Exchange gains or losses are charged in the net income when incurred.
The translation of 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 are translated using the foreign exchange rates
prevailing at the balance sheet date, and capital stock is translated using the historical rates. Foreign currency financial statementtranslation differences are presented as a separate component of "Shareholders' equity", except for the portion pertaining to minority
shareholders, which is included in "Minority interest in consolidated subsidiaries".
[5] Finance lease
Finance leases other than those whereby the ownership of the assets would be transferred to lessees at the end of the lease periods
are accounted for as operating leases.

[6] Accounting method for consumption taxes
Consumption taxes are accounted for using net-of-tax method.

4 Accounting for business combinations
All assets and liabilities of an acquired entity are revalued at the respective fair market value at the combination date.

5 Amortization of consolidation adjustment"Consolidation adjustment" is amortized on a straight- line basis over five to seven years. An immaterial consolidation adjustment isexpensed as incurred.

.

6 Appropriation of retained earnings
The consolidated statement of retained earnings reflects the appropriation of retained earnings approved during the fiscal year.

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

23

8 Other basis of presentation of consolidated financial statements[1] Accounting method for treasury stock and reduction of legal reserves
Effective from the fiscal year beginning April 1, 2002, the Company adopted Financial Accounting Standards No.1: "Accounting Standards for Treasury
Stock and Reduction of Legal Reserves". Adoption of this new standard had an immaterial impact on the Company's results of operations and financial
position.
In addition, consolidated statements of additional paid-in capital and retained earnings have been prepared in accordance with the amended "Regulations
Concerning Consolidated Financial Statements", effective from the fiscal year beginning April 1, 2002.

[2] Per share information
Effective from the fiscal year beginning April 1, 2002, the Company and its consolidated subsidiaries adopted Financial Accounting Standards No.2:"Accounting Standards for Earnings per Share" and Financial Accounting Standards Implementation Guidance No.4: "Implementation Guidance for
Accounting Standards for Earnings per Share", issued by the Accounting Standards Board of Japan on September 25, 2002.
Retroactive per share information is described in the "PER SHARE DATA" section.

[3] Defined contribution pension plan
Following the enactment of the Act for Defined Contribution Pension, the Company and most of its domestic consolidated subsidiaries transferred their
non-contributory defined benefit pension plans to the defined contribution pension plans on July 1, 2002, and adopted Financial Accounting Standards
Implementation Guidance No.1: "Accounting for Transfers between Retirement Benefit Plans", issued by Accounting Standards Board of Japan on
January 31, 2002.
The related transition obligation of ¥297 million was recognized as "Other special losses" in the consolidated statement of income for the period ended
March 31, 2003.

SOFTBANK CORP.

24

NOTES
1 Accumulated depreciation of property and equipment
As of March 31, 2003

As of March 31, 2002

27,417 million yen

10,756 million yen

2 Number of treasury stock held by the Company and its subsidiaries
As of March 31, 2003

As of March 31, 2002

Held by the Company

common stock

24,781 shares

4,484 shares

Held by consolidated subsidiaries

common stock

1,558,719 shares- shares

Number of shares issued

common stock

336,876,826 shares

336,876,826 shares

3 Assets and liabilities of the silent investment association
The assets and liabilities belonging to the silent investment association, net of deposits from the association members, at the end of
the years are as follows:

Cash and deposits
Other current assets (Operational investment securities)
Other current assets (Others)
Investment securities
Investments in partnerships
Accounts payable-other
Other current liabilities (Others)
Other non-current liabilities

As of March 31, 2003

As of March 31, 2002

1,956 million yen
23
763
2,903
0
5,647

6,804 million yen
11,936
232
1,491
2,726
163
0
23,0284 Receivables and payables related to margin transactions
Receivables and payables at each year end relating to margin transactions in securities businesses engaged by certain consolidated
subsidiaries are as follows:

Receivables related to margin transactions Loans receivable from customers for
margin transactions
Cash deposits as collateral for securities
borrowed from securities financecompanies
Payables related to margin transactions Loans from securities finance companies
for margin transactions
Proceeds from securities sold for margintransactions

SOFTBANK CORP.

As of March 31, 2003

As of March 31, 2002

42,457 million yen

37,881 million yen

6,389

4,434

27,906

24,37916,552

13,03825

5 Assets pledged as collateral(1) For future lease liabilities
FY 2003 (as of March 31, 2003)
Assets pledged as collateralType of collateral(Millions of yen; amounts less than one million yen are omitted.)
Secured liabilities

Carrying amountNotes and accounts receivable - trade

9,450

Other current assets(accounts receivable -other)81

Account

Carrying amountNotes and accounts payable - trade

251

Note : The collateral for the future lease liabilities of ¥32,732 million, of which ¥251 million was for "Notes and accounts
payable-trade", was provided by mortgaging against the aggregate of the current and future receivables due from
customers of certain consolidated subsidiaries and a broadcasting company, based on marketing agreements, etc.
The current receivables at March 31, 2003, held as the collateral for the above future lease liabilities, consisted of"Notes and accounts receivable-trade" of ¥9,450 million and "Other current assets" of ¥81 million, respectively.
FY 2002 (as of March 31, 2002)
Assets pledged as collateralType of collateral(Millions of yen; amounts less than one million yen are omitted.)
Secured liabilities
Carrying amountAccount

Carrying amountNotes and accounts receivable - trade3,592

Notes and accounts payable - trade319

Other current assets(accounts receivable - other)

53

Other current liabilities(accounts payable -other)96

Note : The collateral for the future lease liabilities of ¥33,902 million, of which ¥319 million was for "Notes and accounts payabletrade" and ¥96 million was for "Other current liabilities", was provided by mortgaging against the aggregate of the current andfuture receivables due from customers of certain consolidated subsidiaries and a broadcasting company, based on marketing
agreements, etc.
The current receivables at March 31, 2002, held as the collateral for the above future lease liabilities, consisted of "Notes andaccounts receivable-trade" of ¥3,592 million and "Other current assets" of ¥53 million, respectively.
(2) For short-term borrowings and long-term debt
FY2003 (as of March 31, 2003)
Assets pledged as collateralType of collateral(Millions of yen; amounts less than one million yen are omitted.)
Secured liabilities

Carrying amount

Other current assets(real property for sale)

1,704

Property and equipment

195

Investment securities

55,711

Account

Carrying amount

Short-term borrowings

87

Short-term borrowings

19,833($165 million)

Other current liabilities(interest payable)

58

Long-term debt

1,350

Note : SOFTBANK America Inc. ("SBA"), a wholly-owned subsidiary of the Company, pledged and delivered investment
securities amounting to ¥55,711 million into a collateral securities account.
SBA is able to release the excess amount over 142.875% of the secured liabilities, consisting of ¥19,833 million as"Short-term borrowings" and ¥58 million as "Other current liabilities (Accrued interest)".
As of March 31, 2003, the fair market value of the pledged and delivered investment securities was ¥63,175 million, of
which ¥34,755 million representing the excess over the 142.875% collateral required is able to be released.
FY2002 (as of March 31, 2002)
Assets pledged as collateralType of collateral(Millions of yen; amounts less than one million yen are omitted.)
Secured liabilities
Carrying amount

Property and equipment

1,262

Account

Carrying amount

Short-term borrowings

163

Long-term debt

275(3)For long-term debt owed by the third party
FY 2003 (as of March 31, 2003)
Assets pledged as collateralType of collateral
Investments in partnerships(Millions of yen; amounts less than one million yen are omitted.)
Secured liabilities

Carrying amount
2,229

Account
Long-term debt in the third party

Carrying amount
2,388

FY2002 (as of March 31, 2002)
No transactions applicable.
SOFTBANK CORP.

26

6 Line of credit as a creditor (not used)
As of March 31, 2003
51 million yen

As of March 31, 2002
24 million yen

7 Balance of accounts receivable sold
As of March 31, 2003
7,466 million yen

As of March 31, 2002
11,825 million yen

8 Notes receivable discounted
As of March 31, 2003
- million yen

As of March 31, 2002
40 million yen

9 Notes receivable maturing at year-end
Notes receivable are settled on the date of clearance. Since the year end date of March 31, 2002 was a non-business day, the following balanceof notes receivable maturing on that date was not settled and was included in the closing balances of "Notes and accounts receivable-trade".
As of March 31, 2003
Notes receivable- million yen

As of March 31, 2002
98 million yen

10 Dilution gain (loss) from changes in equity interest
Dilution gains (losses) were recognized from changes in the Company's equity interest as a result of capital transactions by investees including
an initial public offering.
The major dilution gain (loss) from changes in equity interest for the year ended March 31, 2003 are as follows:

UTStarcom, Inc.
E*TRADE Japan K.K .

SOFTBANL CORP.

Gain
875 million yen
851(Loss)
695 million yen
5227

11 Valuation loss on investments in subsidiaries and affiliates"Valuation loss on investments in affiliates" recognized as a special loss in the consolidated statements of income are as follows.

(1) Valuation loss on investment in consolidated subsidiaries
As of March 31, 2003
10,610 million yen

As of March 31, 2002
331 million yen(2) Valuation loss on investment in affiliates accounted for under the equity method
As of March 31, 2003
21,713 million yen

As of March 31, 2002
19,082 million yen

12 Consolidated statements of cash flows(1) Reconciliation of cash and cash equivalents to the amounts included in the accompanying consolidated balance sheets
As of March 31, 2003
Cash and deposits

147,503 million yen

As of March 31, 2002
113,580 million yen

Marketable securities

5,059

9,545

Time deposits with original
maturity over three months(2,866)(1,065)

(29)

(31)

(2,140)(2,173)

147,526 million yen

119,855 million yen- million yen

146 million yen

Deposits received from customers
in commodities business
Stocks and bonds with original
maturity over three months
Cash and cash equivalents(2) Significant non-cash transactions
Conversion of convertible bonds
to shareholders' equity

SOFTBANK CORP.

28

13 Leases
13-1. Finance 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 year
As of March 31, 2003
Property and equipment
Equivalent to acquisition costs
Less: Amount equivalent to accumulated
depreciation
Net book value

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

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

As of March 31, 2002

52,311

42,315(17,328)
34,982 million yen(8,872)33,442 million yen

1,105

1,358

(261)
844 million yen(353)
1,004 million yen

53,41743,673(17,589)
35,827 million yen(9,226)34,447 million yen(2) The future lease payments for finance lease at the end of the years
As of March 31, 2003
Due within one year
Due after one year
Total

12,43425,70838,143 million yen

As of March 31, 2002
8,780
27,56536,346 million yen(3) Lease payments, amounts equivalent to depreciation and interest expense for the period
For the year ended
March 31, 2003

For the year ended
March 31, 2002

Lease payments

12,021 million yen

6,370 million yen

Amount equivalent to depreciation expense

10,062

5,366

Amount equivalent to interest expense

2,142

1,263

(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 lease periods, 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.

SOFTBANK CORP.

29

13 Leases transaction (continued)
13-1. Finance leases in which the ownership of leased assets is not transferred to lessees at the end of lease periods(as a lessor)(1) Acquisition costs, accumulated depreciation and net book value at the end of the years
As of March 31, 2003

As of March 31, 2002

Property and equipment
Acquisition costs
Less: Accumulated depreciation
Net Book value

613
(262)
350 million yen

1,004
(231)
773 million yen

Software (Intangible assets)
Acquisition costs
Less: Accumulated amortization
Net Book value

295
(141)
154 million yen

511
(134)
377 million yen

Total
Acquisition costs
Less: Accumulated depreciation
Net Book value

909
(404)
504 million yen

1,516
(365)
1,150 million yen(2) The future lease receivables for finance leases at the end of the years
As of March 31, 2003
Due within one year
Due after one year
Total

188
348
536 million yen

As of March 31, 2002
286
902
1,189 million yen(3) Lease income, depreciation and amount equivalent to interest income for the years
For the year ended
March 31, 2003

For the year ended
March 31, 2002

Lease income

333 million yen

307 million yen

Depreciation expenses

286

262

Amount equivalent to interest income

6371(4) Calculation method of amount equivalent to interest income
The amount equivalent to interest income, which is calculated by subtracting acquisition costs from total oflease income and estimated residual value, is allocated over the lease periods based on the interest method.

13-2. Non-cancelable operating lease transactions(as a lessee)
The future lease payments for non-cancelable operating lease
As of March 31, 2003
Due within one year
Due after one year
Total

(as a lessor)
No transactions applicable.
SOFTBANK CORP.

210
240
451 million yen

As of March 31, 2002
253
1,723
1,977 million yen

30

14 Significant subsequent events(1) Sale of partial shareholdings of UTStarcom, Inc.
In April 2003, the Company sold 8,000,000 shares of UTStarcom, Inc. through SOFTBANK America Inc., a whollyowned subsidiary of the Company, for approximately $139 million (approximately ¥16.6 billion at the rate of ¥119 per
U.S. dollar). A capital gain of approximately ¥9.0 billion on this sale will be recorded in the Company's consolidated
financial statements for the year ending March 2004.

(2) Refinancing and change of collateralIn April 2003, SOFTBANK America Inc. ("SBA") repaid short-term borrowings of $165 million (¥19,833 million),
which were originally borrowed in February 2003, and entered into the new agreement of $380 million long-termborrowings bearing interest at 7.75% per annum from Citibank N.A., repayable in September 2004.
In connection with this refinancing, the collateral for the original $165 million loan was released, and SBA pledged anddelivered its investment securities amounting to ¥87,781 million ($920 million at market value) into a collateral
securities account. But, SBA is able to release $374 million at market value, representing the excess amount over
142.875% of the secured liabilities.
(The market value was calculated based on the share price as of the contract date of the loan agreement.)(3) SOFTBANK INVESTMENT CORP. - E*TRADE Japan K.K. Merger
On March 7, 2003, SOFTBANK INVESTMENT CORPORATION ("SBIV") and E*TRADE Japan K.K.("ETRJ"),
consolidated subsidiaries of the Company, entered into a merger agreement, which was approval at the extra-ordinary
shareholders' meetings of both companies held on March 28, 2003. The merger will be effective on June 2, 2003.
As part of the merger, SBIV, a surviving company, will issue 0.63 shares of its common stock for a share of common
stock of ETRJ to the shareholders of ETRJ on register as of June 1, 2003, the previous date of the merger date of June 2,
2003.
An aim of the merger is to establish an entity group which will be able to offer "Comprehensive Financial Services" tocustomers, such as asset management services, brokerage services, investment banking services, etc. This aim is achievedby the merger between SBIV managing a significant amount of venture capital funds in Japan, and ETRJ holding
E*TRADE SECURITIES CO., LTD., which has a large number of customer accounts as an online securities broker.

SOFTBANK CORP.

31

SEGMENT INFORMATION
1. Business Segment Information(1) FY2003 (for the year ended March 2003)
Broadband
e-Commerce
Infrastructure

e-Finance

Media &
MarketingBroadmedia

Internet
CultureTechnology
Services(Millions of yen; amounts less than one million yen are omitted
Elimination
orConsolidated
OthersTotal
corporate

OverseasFunds

Net Sales(1) Customers¥39,945¥250,782¥23,615¥15,916¥10,442¥37,740¥10,91262

15,304

4,551

996

1,502

459

14,81540,007

266,086

28,167

16,912

11,94438,20025,728Operating expenses

136,212263,620

33,99017,436

13,56021,31924,615

1,286

Operating income (loss)¥(96,204)¥2,466¥(5,823)¥(523)¥(1,615)¥16,881¥1,113¥1,991

Identifiable assets(2) Inter-segment
Total¥3,277
3,277¥14,258¥406,892

¥-

1,603

39,296(39,296)¥406,892

15,862446,188(39,296)

22,246534,286(35,397)498,889¥(6,383)¥(88,098)¥(3,899)¥(91,997)¥946,331

406,892¥136,625¥82,518¥221,646¥14,514¥12,442¥124,573¥14,757¥105,752¥140,712¥853,544¥92,787

Depreciation and amortization

12,033

1,157

5,752

324

364

2,249

173

444

1,434

23,932229

24,161

Capital expenditures

76,928

4,187

4,427

191

4,442

3,147

365

20

316

94,028(99)

93,928(2) FY2002 (for the year ended March 2002)
Media &
MarketingInternet
CultureTechnology
Services

Broadband
Infrastructure

e-Commerce(1) Customers¥7,386¥265,107¥21,301¥47,553¥11,795¥20,152¥9,955(2) Inter-segment

1,781

19,087

2,959

885

331

11,862

8,571

9,168

284,195

24,26048,43912,12732,015

18,527e-Finance

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

OverseasFunds

Net Sales

Total
Operating expenses¥2,481
2,481¥19,581¥405,315

¥-

1,222

46,703(46,703)

20,803452,018(46,703)¥405,315
405,315

27,121

280,989

29,18145,877

12,16622,07817,391

2,708

27,458464,972(35,756)

429,216

Operating income (loss)¥(17,952)¥3,206¥(4,920)¥2,561¥(39)¥9,936¥1,135¥(226)¥(6,654)¥(12,953)¥(10,947)¥(23,901)

Identifiable assets¥1,163,678¥77,298¥83,060¥298,496¥26,494¥16,259¥279,657¥8,134¥134,016¥184,476¥1,107,894¥55,784

Depreciation and amortization

1,913

1,152

4,377

3,478

238

2,065

174

85

1,942

15,428197

15,625

Capital expenditures

10,4102,431

16,501

2,962

2,749

3,439

262

66

1,302

40,127560

40,687

Notes:[1] 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 from the current fiscal year.
2. Main businesses by segment (based on the current fiscal year)(1) Broadband Infrastructure

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

Sales of PC software and such hardware as PCs and peripherals; enterprise solutions; diversified e-commerce business, including e-commerce between business and consumer(3) e-Finance

All inclusive Web-based financial operations, including Internet securities operations; management of domestic venture capital funds; incubation of portfolio corporations(4) Media & MarketingBook and magazine publication in such areas as PCs, the Internet, entertainment, etc.; exhibition management; Web content development(5) Broadmedia

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

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

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

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

Holding company functions for overseas operations; back-office services in Japan[2] The amount of corporate assets included in the column "Elimination or corporate" was ¥111,078 million, which were mainly surplus operating funds (cash and marketable securities), long-term investment securities ofCompany and assets held by the corporate division of the Company.
[3] "Capital expenditures" include acquisition of long-term prepaid expenses and deferred assets. "Depreciation and amortization" includes amortization of the long-term prepaid expenses and deferred char

(Change in business segmentation)
Effective from the fiscal year beginning April 1, 2002, the SOFTBANK Group changed its method for dividing the Group’s overall business into segments from a method primarily based on the roles and responsibilities of each
operation holding company to a new method, which is used for internal management reporting purposes from the current fiscal year, based on the nature of business operations, type of services, and the similarity of sales channels,
etc.
The reason for this change is that the SOFTBANK Group intends from now on to focus on the broadband infrastructure business as the most important core business, and would therefore like to disclose the Group’s activities more
appropriately by integrating all broadband infrastructure-related business into one segment, rather than having such business, as before, spread across various segments.
The following shows the impact on the consolidated statement of income and balance sheets for the year ended March 31, 2003 as compared with the amounts which would have been recognized if the previous allocation had been
applied consistently
1 Broadband Infrastructure Segment"Net sales" increased by ¥3,056 million and "Operating expenses" increased by ¥301million. As a result, "Operating loss" decreased by ¥2,755 million.
"Identifiable assets" decreased by ¥2,341 million and "Depreciation and amortization" decreased by￥9 million.

2 e-Commerce Segment"Net sales" decreased by ¥3,743 million and "Operating expenses" decreased by ¥9,018 million. As a result, "Operating income" increased by ¥5,275 million.

3 Internet Culture Segment"Net sales" decreased by ¥22,245 million and "Operating expenses" decreased by ¥15,393 million. As a result, "Operating income" decreased by ¥6,851 million.
"Identifiable assets" decreased by￥3,765million and "Depreciation and amortization" decreased by￥325 million.

4 Elimination or corporate"Net sales" increased by ¥22,932 million and "Operating expenses" increased by ¥24,111 million. As a result, "Operating loss" increased by ¥1,179 million.
"Identifiable assets" increased by￥6,107 million and "Depreciation and amortization" increased by￥334 million.

SOFTBANK CORP.

32

SEGMENT INFORMATION
2. Geographic Segment Information(1) FY2003 (for the year ended March 31, 2003)
North
AmericaJapan

Europe(Millions of yen; amounts less than one million yen are omitted.)
Elimination
OthersTotal
orConsolidated
corporate

Korea

Net Sales(1) Customers¥386,477¥2,992

¥-

555

872

160

387,033

3,864

160

(2) Inter-segment
Total¥13,973¥3,448¥406,892

¥-

26

1,615

(1,615)

3,475

408,507(1,615)

13,973¥406,892
406,892

Operating expenses

469,288

4,482

734

16,7905,283

496,578

2,310

498,889

Operating loss¥(82,255)¥(617)¥(573)¥(2,817)¥(1,807)¥(88,071)¥(3,925)¥(91,997)

Identifiable Assets¥617,742¥131,911¥46,994¥20,816¥18,648¥836,112¥110,218¥946,331(2) FY2002 (ｆor the year ended March 31, 2002)
North
AmericaJapan

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

Korea

Net Sales(1) Customers(2) Inter-segment
Total
Operating expenses¥352,044¥28,947¥1,575¥19,520¥3,227-¥405,315-¥-¥405,315

1,677

1,505

1,094

4,277

(4,277)353,72130,453

2,669

19,5203,227

409,592(4,277)405,315-369,71428,5993,930

21,097

5,497

428,838377

429,216

Operating income (loss)¥(15,992)¥1,854¥(1,260)¥(1,576)¥(2,270)¥(19,245)¥(4,655)¥(23,901)

Identifiable Assets¥567,478¥398,053¥44,059¥29,565¥63,799¥1,102,956¥60,721¥1,163,678

Notes:[1] Net sales by geographic region were recognized based on geographic location.
Significant countries in each region are shown below:
North America: U.S.A. and Canada
Europe: U.K., Germany and France
Others: China, Hong Kong and Singapore[2] The amount of corporate assets included in the column "Elimination or corporate" was ¥111,078 million, which were mainly surplus operating
funds (cash and marketable securities) and long-term investment securities of the Company, and assets held by the corporate division of theCompany.
3. Overseas Sales(1) FY2003 (for the year ended March 31, 2003)
Overseas sales for the year ended March 31, 2003 were omitted because the total overseas sales were less than 10% of total consolidated sales.
(2) FY2002 (for the year ended March 31, 2002)(Millions of yen; amounts less than one million yen are omitted.
North
AmericaI. Overseas sales¥29,323

EuropeKorea¥1,944

Other¥19,532

Total¥3,597

II. Total consolidated sales
Overseas sales as aIII. percentage of total
consolidated sales¥54,398¥405,315

7%

0%

5%

1%

13 %

Note:
Net sales by geographic region were recognized based on geographic location.
Significant countries in each region are shown below:
North America: U.S.A. and Canada
Europe: U.K., Germany and France
Others: China, Hong Kong and Singapore
SOFTBANK CORP.

33

PER SHARE DATA
Effective from the fiscal year beginning April 1, 2002, the Company and its consolidated subsidiaries adopted Financial Accounting Standards No.2:"Accounting Standards for Earnings per Share" and Financial Accounting Standards Implementation Guidance No.4: "Implementation Guidance for
Accounting Standards for Earnings per Share", which was issued by Accounting Standards Board of Japan on September 25,2002.
Retroactive per share information is as follows.
FY2003Calculation
under
new standards
Net loss per share - primary (yen)Net loss per share - diluted
Shareholders' equity per share (yen)

FY2002
Calculation
Calculation
under
under
new standards previous standards(note 1)¥(296.94)
767.56¥(264.04)
1,380.80¥(263.53)
1,381.31

1.

Average number of common stock outstanding
during each fiscal year (unit: shares)(note 2)336,857,133

336,798,168

336,798,168

2.

Net loss allocated to common stock outstanding(in millions of yen)¥(100,027)¥(88,926)¥(88,755)

3.

Net loss not allocated to common stock holders(in millions of yen)(note 3)

38

171

N/A

Basic data for computation of the per share data

Notes:
1. Diluted net income per share is not disclosed due to the loss position.
2. There were no potential dilutive securities in respect of the common stock outstanding at each fiscal year end.
3. The component is "Bonuses to Directors".

SOFTBANK CORP.

34

TAX EFFECT ACCOUNTING

FY2002 (For the year ended March 31, 2002)

FY2003 (For the year ended March 31, 2003)

1. Significant components of deferred tax assets and liabilities

1. Significant components of deferred tax assets and liabilities

Deferred tax assets

Deferred tax assets
Loss carry-forwards
Valuation loss on investment securities
Allowances for doubtful accounts
Unrealized profit
Depreciation/Amortization
Enterprise tax payable
OthersGross deferred tax assets
Less: valuation allowance
Total deferred tax assets(Million yen)
¥116,452
66,015
4,480
3,656
1,519
1,029
3,573
196,726(141,061)
55,664(30,870)(22,897)
(742)
(680)
(55,191)¥473

2. Reconciliation between the statutory income tax rate and effective
income tax rate:
Statutory tax rate
(Reconciliation)
Differences related to investments inaffiliates
Change in valuation allowance
Tax rate differential
Change in statutory tax rate
OthersIncome tax rate per statement of income(Million yen)
¥79,151
60,247
3,506
1,771
1,483
841
4,225
151,228(79,393)
71,834

Deferred tax liabilities

Deferred tax liabilities
Unrealized gains on other securities
Valuation gain on investment securities
Exchange gains on long-term receivables
OthersTotal deferred tax liabilities
Net amount of deferred tax assets

Valuation loss on investment securities
Loss carry-forwards
Unrealized profit
Allowances for doubtful accounts
Valuation loss on inventories
Enterprise tax payable
OthersGross deferred tax assets
Less: valuation allowance
Total deferred tax assets

42.05 %

10.01 %
(86.90)(6.95)(1.43)(0.26)(43.48) %Unrealized gains on other securities
Valuation gain on investment securities
Exchange gain on long-term receivables
OthersTotal deferred tax liabilities
Net amount of deferred tax liabilities(66,785)(16,815)(3,185)(4,796)(91,581)¥(19,747)

2. Reconciliation between the statutory income tax rate and effective income
tax rate:
Statutory tax rate
(Reconciliation)
Differences related to investments inaffiliates
Change in valuation allowance
Tax rate differential
OthersIncome tax rate per statement of income

42.05 %

30.32 %
(32.44)(15.09)(1.63)
23.21 %

3. Due to an amendment to the local tax law, effective from the fiscal
year beginning April 1, 2004, the statutory tax rate used for the
calculation of deferred tax assets and liabilities has been changed.
The Company has therefore applied the statutory tax rate prior to theamendment to temporary differences which will be resolved on or
before March 31, 2004 and has applied the new rate to those which
will be resolved on or after April 1, 2004.
Due to the change in the statutory tax rate, "Deferred tax assets", netof "Deferred tax liabilities", at March 31, 2003 decreased by ¥1,013
million, and "Income taxes-deferred" for the year ended March 31,
2003 increased by ¥1,022 million, as compared with the amounts
which would have been calculated if the tax rate prior to theamendment had been applied consistently to all temporary
differences.

SOFTBANK CORP.

35

INVESTMENT IN DEBT AND EQUITY SECURITIESFY2003 (as of March 31, 2003)
1. Available-for-sale and other securities at fair value(Millions of yen; amounts less than one million yen are omitted.)
FY2003 (as of March 31, 2003)
Investment
Cost
Carrying Amount > Investment Cost
(1) Equity securities(2) Debt securities
Government bonds(3) Others
Sub-total
Carrying Amount≦Investment Cost
(1) Equity securities(2) Debt securities
Government bonds(3) Others
Sub-total
Total

Carrying Amount

Differences¥16,312¥78,934¥62,6219
0
16,322

9
0
78,9440062,622

7,094

4,444

(2,649)

100
469
7,664
¥23,987

100
297
4,842
¥83,787(0)(172)(2,822)¥59,800

2. Available-for-sale and other securities sold during the year ended March 31, 2003
(Millions of yen; amounts less than one million yen are omitted.)
Sales Price(1) Equity securities(2) Debt securities(3) Others¥122,598
5,610
100¥128,309

Total

Gain on sales

Loss on sales¥65,163
1,726¥66,889¥(10,348)(173)¥(10,521)

3. The carrying amounts of the unlisted investment securities(Millions of yen; amounts less than one million yen are omitted.)
Carrying Amounts(1) Held-to-maturity securities
Unlisted debt securities
Unlisted foreign debt securities(2) Available-for-sale and other securities
Unlisted equity securities (w/o OTC stocks)
Unlisted debt securities
Unlisted foreign debt securities
MMF
Mid-term government bond funds
Commercial paper
Preferred fund certificate
Others
Total

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

4. Redemption schedule for "held-to-maturity securities" and "available-for-sale and other securities" with maturity date
subsequent to the consolidated balance sheet date(Million yen; amounts less than one million yen are omitted.)
Within one year
Held-to-maturity securities
Corporate bonds
Sub-total
Available-for-sale and other securities
Debt securities
Government bonds
Corporate bonds
OthersSub-total
Total
SOFTBANK CORP.

More than one year,
less than five years

More than five years,
less than ten years

More that ten years

¥199
199

¥-

¥-

¥-

1,999
1,999
¥2,199

110
818
928
¥928

192
192
¥192

1,006
1,006
¥1,00636

INVESTMENT IN DEBT AND EQUITY SECURITIES (Continued)
FY2002 (as of March 31, 2002)
1. Available-for-sale and other securities at fair value(Millions of yen; amounts less than one million yen are omitted.)
FY2002 (as of March 31, 2002)
Investment
Cost
Carrying Amount > Investment Cost
(1) Equity securities
Sub-total
Carrying Amount≦Investment Cost
(1) Equity securities(2) Debt securities
Government bonds(3) Others
Sub-total
Total

Carrying Amount

Differences¥79,171
79,171¥268,420
268,420¥189,249
189,249

27,93525,530(2,405)301
228,239¥107,410300
225,833¥294,254(0)(2,405)¥186,843

2. Available-for-sale and other securities sold during the year ended March 31, 2002
(Millions of yen; amounts less than one million yen are omitted.)
Sales Price(1) Equity securities(2) Debt securities(3) Others¥48,068
6,044
236¥54,348

Total

Gain on sales

Loss on sales¥9,4967
0¥9,505¥11,357
39¥11,396

3. The carrying amounts of the unlisted investment securities(Millions of yen; amounts less than one million yen are omitted.)
Carrying Amounts(1) Held-to-maturity securities
Unlisted debt securities
Unlisted foreign debt securities(2) Available-for-sale and other securities
Unlisted equity securities (w/o OTC stocks)
Unlisted debt securities
Unlisted foreign debt securities
MMF
Mid-term government bond funds
Beneficial interest in trusts
Preferred fund certificate
OthersTotal¥099
42,375
1,742
2,797
11,520
323
1,000
2,000
30
¥61,889

4. Redemption schedule for "held-to-maturity securities" and "available-for-sale and other securities" with maturity date
subsequent to the consolidated balance sheet date(Million yen; amounts less than one million yen are omitted.)

Held-to-maturity securities
Corporate bonds
Sub-total
Available-for-sale and other securities(1) Debt securities
Government bonds
Corporate bonds(2) Others
Sub-total
Total

Within one year

More than one year,
less than five years

¥100
100

¥-

¥-

300
1,772
30
2,102
¥2,203

12
1,645
1,657
¥1,6571,109
1,109¥1,109More than five years,
less than ten years

37

DERIVATIVE TRANSACTIONSCurrency Related(Millions of yen; amounts less than one million yen are omitted.)
FY2002 (as of March 31, 2002)

FY2003 (as of March 31, 2003)

Nature of transaction

Contract amounts

Fair
value

Over 1 year

Unrealized gainContract amounts

Fair
value

Over 1 year

Unrealized gain

Swap Transactions
・Australia dollars receiver,Japanese yen Payer¥1,000¥1,000¥15¥1549,124-

50,105980¥1,000¥1,000¥10¥10Off-market
transactions
Forward exchange contracts
・

U.S. dollars purchased,
Japanese yen sold
Total

-

-

-

¥10

¥996

Notes:[1][2]

Fair value is based on information from financial institutions.
The Company and some consolidated subsidiaries entered into forward exchange contracts in order to manage the risk of foreign exchange rate fluctuations relating
to the value of assets and liabilities denominated in foreign currency. As a hedge accounting has not been applied to those forward exchange contracts, the disclosure
thereof is required .

Interest Related(Millions of yen; amounts less than one million yen are omitted.)
FY2002 (as of March 31, 2002)

FY2003 (as of March 31, 2003)

Nature of transaction

Notional amounts
Over 1 year

Fair
value

Unrealized
gain/(loss)

Notional amounts
Over 1 year

Fair
value

Unrealized
gain/(loss)

Swap Transactions

Off-market
transactions

・

Fix Rate Receiver,
Floating Rate Payer¥1,528¥1,285¥121¥121¥5,771¥1,771

¥248

¥248

・

Floating Rate Receiver,
Fix Rate Payer

2,814

2,142

(198)

(198)

7,485

3,485

(366)

(366)

・

Fix Rate Receiver (receipt later),Fix Rate Payer (pre payment)

1,000

1,000

36

36

1,000

1,000

36

36

Total

¥(81)

¥(40)

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

SOFTBANK CORP.

38

RELATED PARTY TRANSACTIONS
1. Parent Company and Major Corporate Shareholders
N/A
2. Directors and Major Individual Shareholders
N/A
3. Subsidiaries
N/A
4. Affiliates
N/A

PENSION AND SEVERANCE PLANS
1. Pension Plans
Starting on July 1, 2002, the Company and most of its domestic consolidated subsidiaries transferred their non-contributory defined benefit pension plans to the defined
contribution pension plans. To supplement these defined contribution plans, the Company and most of its domestic consolidated subsidiaries participate in a multi-employer
contributory defined benefit welfare pension plan.

2. Projected Benefit Obligation
The following shows the impact on the transfer from the non-contributory defined benefit pension plans to the defined contribution pension plans.
As of March 31, 2003a) Decrease in projected benefit obligation (PBO)b) Decrease in plan assets at fair valuec) Unrecognized actuarial lossesd) Reversal of accrued retirement benefits

1,525 million yen
1,14112
371 million yen

The Company and most of its domestic consolidated subsidiaries will transfer the total plan assets of ¥1,238 million to the defined contribution pension plans over three years.

As of March 31, 2003a) Projected benefit obligation (PBO)b) Plan assets at fair valuec) Unfunded PBOd) Unrecognized actuarial lossese) Accrued retirement benefits

As of March 31, 2002

131 million yen
81
49
49 million yen

1,567 million yen
1218
348
(17)
331 million yen

531 million yen
9
5
4
160
297
996 million yen

688 million yen
32
15
143
849 million yen

3. Pension and Severance Costsa) Service costs (notes 1and 2)b) Interest costsc) Expected return on plan assetsd) Recognized actuarial lossese) Contributionsf) Losses on transfer of pension plansg) Net pension and severance costs

Notes
1. The service cost includes a contribution of 416 million yen to a synthetic-type welfare pension plan.
2. The service cost includes the pension costs of subsidiaries adopting the simplified pension accounting method.

4. Actuarial Computation of the Retirement Benefit Obligation
For the year ended
March 31, 2003a) Allocation of projected benefit obligationsb) Discount ratec) Expected return on plan assetse) Actuarial gains/losses

SOFTBANK CORP.

N/A
-%
-%
N/A

For the year ended
March 31, 2002
Project unit-credit method
2.5% (excluding some subsidiaries/affiliates)
2.2% (excluding some subsidiaries/affiliates)
Expensed out in the year
subsequent to the fiscal year ofoccurrence39