SOFTBANK CORP.
CONSOLIDATED FINANCIAL REPORTFor the six-month period ended September 30, 2007
Tokyo, November 6, 2007

FINANCIAL HIGHLIGHTS(Percentages are shown as year-on-year changes)

1.

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

Net sales

Operating income

Ordinary income

Net income

Amount%Amount%Amount%Amount%Six-month period ended
September 30, 2007

¥1,364,745

21.8¥167,74649.0¥111,165

77.3¥46,462221.8

Six-month period ended
September 30, 2006

¥1,120,173

114.3¥112,552-¥62,690-¥14,439-

Fiscal year ended
March 31, 2007

¥2,544,219-¥271,065-¥153,423-¥28,815-

Net income
per share - basic(yen)

Net income
per share - diluted(yen)

Six-month period ended
September 30, 2007¥43.99¥41.43Six-month period ended
September 30, 2006

¥13.68¥12.84

Fiscal year ended
March 31, 2007¥27.31¥26.62

Note: Equity in earnings of affiliated companies:
Six-month period ended September 30, 2007: ¥ 3,136 million
Six-month period ended September 30, 2006: ¥ 8,046 million
Fiscal year ended March 31, 2007:¥ 2,130 million

2.

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

Total assets

Total equity

Equity ratio (%)

Shareholders' equity
per share (yen)As of September 30, 2007

¥4,458,579¥797,752

7.9¥327.15

As of September 30, 2006

¥3,986,991¥665,696

6.2¥236.14

As of March 31, 2007

¥4,310,852¥716,237

6.6¥268.02

Note: Shareholders’ equity (consolidated)
As of September 30, 2007: ¥353,435 million
As of September 30, 2006: ¥249,162 million
As of March 31, 2007:¥282,949 million

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

Operating activities

Investing activities

Financing activities

Cash and cash
equivalents
at the end of the periods

Six-month period ended
September 30, 2007

¥443¥(227,285)¥303,526¥452,771

Six-month period ended
September 30, 2006

¥187,139¥(1,956,985)¥1,598,773¥272,572

Fiscal year ended
March 31, 2007

¥311,201¥(2,097,937)¥1,718,384¥377,520

4. Dividends（Recorded date）

Dividends per share
Fiscal year ended
March 31

Six-month period
ended September 30

Total

(yen)

(yen)

(yen)

-

2.50

2.50

Fiscal year ended March 31, 2007
Fiscal year ending March 31, 2008
Fiscal year ending March 31, 2008
（Forecasted）

To be
determined

To bedetermined

5. Earnings Forecast for the Fiscal Year Ending in March 2008 (April 1, 2007 - March 31, 2008)(Millions of yen; amounts less than one million yen are omitted.)

Fiscal year ending
March 31, 2008

Net sales

Operating income

Ordinary income

Net income

¥-

¥-

¥-

¥-

Due to the introduction of unprecedented new sales and pricing methods in our main telecommunications business, especially in the Mobile
Communications business, forecasting the consolidated business results for the fiscal year ending March 2008 is difficult. A forecast of theconsolidated business results will therefore be announced as soon as a logical estimate can be made.

6. Significant Changes in Scope of Consolidation
Significant Consolidated subsidiaries: None
7. Accounting Policies
Changes in accounting principles, procedures, disclosure methods, etc., used in the presentation of the consolidated financial
statements(1) Changes due to revisions in accounting standards: Yes(2) Changes other than those in (1): None
Note: Refer to “4. Consolidated Financial Statements, Changes in accounting policies” on the following page 34.
8.

Number of Shares Issued (Common stock)(1) Number of shares issued (including treasury stock):
As of September 30, 2007: 1,080,518,778 shares
As of September 30, 2006: 1,055,323,578 shares
As of March 31, 2007:
1,055,862,978 shares(2) Number of treasury stock at the fiscal year end:
As of September 30, 2007: 161,698 shares
As of September 30, 2006: 153,076 shares
As of March 31, 2007:
158,611 shares

Note: For basic data for computation of the per share data, please refer to the following page 51.

2[For Reference]
FINANCIAL HIGHLIGHTS (Non-Consolidated)1.

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

Net sales

Operating income (loss)

Ordinary loss

Net lossAmount%Amount%Amount%Amount%Six-month period ended
September 30, 2007

¥6,328-¥3,525-¥(4,515)-¥(5,179)-

Six-month period ended
September 30, 2006¥--¥(2,826)-¥(13,815)-¥(17,614)-

Fiscal year ended
March 31, 2007¥--¥(8,481)-¥(30,766)-¥(3,305)-

Net income(loss) per
share - basic (yen)2.

Six-month period ended
September 30, 2007¥(4.90)Six-month period ended
September 30, 2006¥(16.69)

Fiscal year ended
March 31, 2007¥(3.13)

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

Total assets

Total equity

Equity ratio (%)

Shareholders' equity
per share (yen)As of September 30, 2007

¥1,366,744¥408,986

29.9¥378.57

As of September 30, 2006

¥1,367,127¥355,587

25.8¥334.01

As of March 31, 2007

¥1,347,019¥372,81027.4¥350.15

Note: Shareholders’ equity (non-consolidated)
As of September 30, 2007: ¥408,986 million
As of September 30, 2006: ¥352,437 million
As of March 31, 2007:¥369,660 million

3Qualitative Information / Financial Statements
1. Results of Operations(1) Analysis of Operation Results<<Summary of the Consolidated Results of Operations>>
Net sales¥1,364,745 million(a 21.8% increase year-on-year)

Operating income¥167,746 million(a 49.0% increase year-on-year)

Ordinary income¥111,165 million(a 77.3% increase year-on-year)

Interim net income¥46,462 million(a 221.8% increase year-on-year)[Overview of Results for the six-month period from April 1, 2007 to September 30, 2007]
The SOFTBANK Group (hereafter “the Group”) is in the second fiscal year since its full-fledged entry into themobile communications market through the acquisition of Vodafone K.K. in April 2006. Approximately one year
ago, on October 1, 2006, the corporate name of Vodafone K.K. was changed to SOFTBANK MOBILE Corp.,(hereafter “SOFTBANK MOBILE”), and the brand name was also changed to “SoftBank” at the same time.
During the interim period, the Group continued to put efforts into its four key initiatives—3G network
enhancement, 3G handset lineup enrichment, content enhancement, and enhancement of sales structure—in order toachieve its targets of increasing subscriber numbers, expanding market share, and further establishing the SoftBankbrand. As a result, in May 2007, SOFTBANK MOBILE recorded the highest monthly net additions in subscribers(new subscribers minus cancellations) in the industry for the first time.

Moreover, since May, SOFTBANKMOBILE has retained the top position in monthly net additions for five consecutive months, and was also number
one in net additions during the six-month interim period.
SOFTBANK MOBILE was included in the scope of consolidation from the end of April 2006. Accordingly,
the results for the interim period of the previous fiscal year (April 1, 2006 to September 30, 2006) include fivemonths of SOFTBANK MOBILE’s results.

1. Net sales
In the interim period, net sales increased by ¥244,571 million, or 21.8 % year-on-year, to ¥1,364,745 million.
This increase was primarily due to the steady increase of mobile phone subscribers and the reflection of six monthsof results from the Mobile Communications segment from this interim period. The Mobile Communications
segment recorded net sales of ¥814,509 million, an increase of 39.4% year-on-year.

2. Operating income
In the interim period, operating income increased by ¥55,194 million, or 49.0 % year-on-year, to ¥167,746 million.
The Mobile Communications segment recorded operating income of ¥94,219 million, a 66.4% increase.
Cost of sales in the interim period increased by ¥103,525 million year-on-year, to ¥718,864 million. Selling,
general and administrative expenses rose by ¥85,851 million year-on-year, to ¥478,134 million.

These increases

were primarily due to higher sales of mobile handsets and the reflection of six months of results from the Mobile
Communications segment from this interim period.

43. Non-operating income
Non-operating income in the interim period decreased by ¥5,445 million year-on-year to ¥10,185 million.

This

was principally the result of a decrease of ¥4,909 million in equity in earnings of affiliate companies due to the
exclusion from affiliate companies following the sale of all shares held in SBI Holdings, Inc. in August 2006.

4. Non-operating expenses
Non-operating expenses were ¥66,767 million in the interim period. Although interest expense increased by¥22,829 million, the year-on-year increase in non-operating expenses for the interim period was limited to ¥1,274
million because financing-related expenses totaling ¥19,954 million were recorded in the interim period of theprevious fiscal year.

5. Special income
Special income in the interim period totaled ¥29,863 million.

Unrealized appreciation on investments at

subsidiaries in the U.S. of ¥14,126 million and a gain on sale of investment securities of ¥10,440 million wererecorded. Accompanying the listing of consolidated subsidiaries ITmedia Inc. and Carview Corporation, ¥3,089
million was recorded as dilution gain from changes in equity interest.

6. Special loss
Special loss totaled ¥18,098 million in the interim period.

The primary reasons were a valuation loss on

investment securities of ¥10,165 million and a loss on disposal of fixed assets of ¥3,993 million.

7. Income taxes
Current income taxes totaled ¥16,808 million, deferred income taxes amounted to ¥39,075 million, and minority
interests in net income was ¥20,583 million.
Current income taxes, primarily for Yahoo Japan Corporation and other subsidiaries, totaled ¥25,265 million,
while ¥8,457 million income tax payable for SOFTBANK Holdings Inc. was reversed as it became unnecessary torecognize; as a result, current income taxes were credited.

5

Results by business segment are as follows:[Mobile Communications]<<Summary of Segment Results for the Interim Period>>
Net sales¥814,509 million (a 39.4% increase year-on-year)

Operating income¥94,219 million (a 66.4% increase year-on-year)

No. 1 in net subscriber additions during the six-month interim period with 1,142,800 net adds
Total subscribers exceeded 17 million
Churn rate was 1.42%, upgrade rate was 2.67%, total ARPU amounted to ¥4,800/month for the second quarter<Analysis of Interim Results>
Net sales increased by ¥230,050 million, or 39.4 % year-on-year, to ¥814,509 million. Operating income increasedby ¥37,584 million year-on-year, or 66.4%, to ¥94,219 million. This increase was primarily due to the reflection of
six months of results from the Mobile Communications segment from this interim period, and to a substantial
increase in sales of mobile handsets accompanying the steady increase in mobile phone subscribers and handset
upgrades.

<Results for the Second Quarter>(Millions of yen)
Fiscal year ended March 31, 2007

Fiscal year ending March 31, 2008

Q1

Q2

Q3

Q4

Q1

Q2

Sales

232,467

351,991

430,328

427,252

391,668

422,841

Operatingincome27,29329,341

56,90642,202

43,52850,691<Number of Subscribers>
As of the end of the interim period, the number of SOFTBANK MOBILE subscribers had reached 17,052,500*1, an
increase of approximately 1.75 million subscribers year-on-year. In May 2007, for the first time SOFTBANKMOBILE recorded the highest monthly net addition in subscribers (new subscribers minus cancellations) in theindustry.

Since May, it has retained the top position in monthly net additions for five consecutive months.

Furthermore, its net addition from April to September 2007—1,142,800 subscribers—was also the highest during thesix-month interim period. Moreover, the number of 3G subscribers exceeded 10 million on August 11, reaching
10,916,500 at the end of the interim period. As a result, the ratio of 3G subscribers to total number of subscribers
reached 64.0%.
(Lines)Fiscal year ended March 31, 2007

Net additions
Total

Fiscal year ending March 31, 2008

Q1

Q2

Q3

Q4

Q1

Q2

30,30066,800189,500

412,000

530,800

612,000

15,240,200

15,307,000

15,496,500

15,908,500

16,440,500

17,052,500*1. The total number of subscribers for SOFTBANK MOBILE includes communication module service subscribers
from this fiscal year. The number of communication module service subscribers at the end of the interim period
was 1,600.
6

<Churn Rate and Upgrade Rate>
The churn rate for the second quarter was 1.42%, while the churn rate for 3G handsets was 1.05%. As a result of therelease of appealing handsets and the enhancement of services as well as the effect of installment sales for handsets,
the churn rate for 3G handsets remained lower than the overall churn rate.
The upgrade rate for the second quarter was 2.67%, an increase of 0.14 percentage point compared to the second
quarter of the previous fiscal year, due to the further enhancement of the 3G handset lineup for the summer sales
period.
(%/month)
Fiscal year ended March 31, 2007

Q1

Q2

Q3

Fiscal year ending March 31, 2008

Q4

Q1

Q2

Churn rate

1.50

1.27

1.60

1.63

1.46

1.42

(3G only)

1.73

1.50

1.66

1.37

1.07

1.05

Upgrade rate

1.99

2.53

3.02

2.89

2.25

2.67

<ARPU and Average Acquisition Commission per User>
Total ARPU*2 for the second quarter was ¥4,800 per month. ARPU decreased by ¥900 compared to the second
quarter of the previous fiscal year due to the effect of the steady growth in the number of subscribers to the White
Plan, which has a basic monthly charge of ¥980 (including tax) and exceeded 8 million subscribers during September
2007, as well as to the special discount for subscribers to the New Super Bonus plan. However, data ARPU
increased by ¥90 compared to the second quarter of the previous fiscal year, to ¥1,470, and constituted 30.6% of total
ARPU.
Average acquisition commission per user for the second quarter decreased to ¥31,400. This decline wasattributable to a decrease in sales subsidies, following the introduction of installment sales for handsets in September
2006, compared to the second quarter of the previous fiscal year.
（Yen/month）
Fiscal year ended March 31, 2007

Q1

Q2

Q3

Fiscal year ending March 31, 2008

Q4

Q1

Q2

Total

5,590

5,700

5,560

5,210

5,000

4,800

(Voice)

4,230

4,320

4,230

3,830

3,590

3,340

(Data)

1,350

1,380

1,330

1,380

1,410

1,470

*2. Average Revenue Per User7

<<Summary of Efforts Made During the Second Quarter Concerning Key Challenges>>
3G base stations exceeded 46,000
3G subscribers exceeded 10 million
Started provision of video content streaming service within the Yahoo! Streaming (beta version)
White Plan applications exceeded 8 million, Double White applications exceeded 2 million<3G Network Enhancement>
On August 1, 2007 SOFTBANK MOBILE reached its target of 46,000 3G base stations.

This target was scheduled

for completion during the first half of fiscal 2008. At the end of the interim period, the number of 3G base stations
was 47,439, an increase of approximately 1.8 thousand from 29,404 stations, at the end of the previous fiscal year.
In addition, the Group has commenced trials for new technologies to diversify its information transmission
services.

These include the wireless communication system using Femto-cell*3 for which the Group acquired alicense from the Ministry of Internal Affairs and Communications in June 2007 and FMC*4, a fusion of fixed andmobile lines.
*3. Small mobile phone base stations designed to increase call quality in interior locations, such as residential or
office environments*4. Fixed Mobile Convergence<3G Handset Lineup Enrichment>
Twelve new handsets, which were announced in May as the lineup for the summer 2007 sales period, revolving
around the keyword style, were launched successively during the interim period.

Moreover, the development of new

handsets for the winter sales period moved forward at the same time, and, on October 22, 10 new handsets in 49
colors were announced, revolving around the theme PREMIUM. Seven of the ten handsets are compatible with 3G
High Speed data transmission service based on HSDPA*5, enabling users to easily download large data, such as video
content.
*5. High Speed Downlink Packet Access: The high speed data transmission protocol standardized by “Release 5,” of the
3G mobile communications standardizing body, the Third Generation Partnership Project (3GPP)<Content Enhancement>
On August 30, 2007, SOFTBANK MOBILE started a video content streaming service at Yahoo! Streaming (betaversion), a video content portal for mobile users that had been launched in May 2007. The streaming method offers
users a more enjoyable viewing experience by reducing the wait time compared to the conventional download
method*6.

Yahoo! Streaming (beta version) is provided by three Group companies—SOFTBANK MOBILE, TV

Bank Corporation, and Yahoo Japan Corporation—via the Yahoo! Keitai portal for SOFTBANK MOBILE handsets.
Users can enjoy over 1,000 video content titles every month free of information charge*7 from a variety of genres, suchas news, sport, and cartoon.
*6. Some content continues to be provided through the download method*7. Separate communication charges apply for downloading content

8

<Enhancement of the Sales Structure>
To enhance the sales force, the SoftBank shop network was expanded further. As a result, the number of SoftBank
shops reached 2,417 at the end of the interim period, an increase of 342 from the end of the previous fiscal year.
Regarding pricing, there has been steady growth in the number of applications for the White Plan, which allows
users to make unlimited domestic on-net voice calls between 1:00am and 9:00pm for a basic monthly charge of ¥980
(including tax) and to make calls outside of this time range or to other operators’ users for a flat fee of ¥21 (includingtax) per 30 seconds.

The number of White Plan applications exceeded 8 million on September 17, 2007. In

addition, the number of applications to the Double White plan has exceeded 2 million.

This plan, which is available

to White Plan subscribers, halves the ¥21 flat fee to ¥10.5 (including tax) per 30 seconds for an additional ¥980
(including tax) per month. Moreover, the White Plan Family Discount 24 discount service, which offers White Plan
subscribers free domestic calls 24 hours a day between family members, was launched and applied from the June2007 billing month.

[Broadband Infrastructure]<<Summary of Segment Results for the Interim Period>>
Net sales¥129,819 million (a 0.6% increase year-on-year)

Operating income¥18,986 million (a 62.7% increase year-on-year)

Total installed lines for Yahoo! BB ADSL, 5,042,000 (at the end of September 2007)
Launch of integrated communication service, BB Communicator<Analysis of Interim Results>
Net sales increased by ¥768 million, or 0.6%, year-on-year, to ¥129,819 million. Operating income increased by¥7,317 million, or 62.7%, to ¥18,986 million.

<Results for the Second Quarter>（Millions of yen）
Fiscal year ended March 31, 2007

Fiscal year ending March 31, 2008

Q1

Q2

Q3

Q4

Q1

Q2

Net sales

63,32265,72867,266

67,91065,74764,072

Operatingincome

5,479

6,189

7,747

7,393

8,665

10,320<Operating Conditions>
The number of installed lines of Yahoo! BB ADSL, the comprehensive broadband service provided by SOFTBANKBB Corp. (hereafter “SOFTBANK BB”), was 5,042,000 lines at the end of the interim period. On a customer
payment basis, ARPU for the second quarter reached ¥4,341.
management efficiency resulted in increased operating income.

In ADSL operations, measures to improve

Moreover, the ratio of subscribers to faster services,such as Yahoo! BB 50M, and high value added services, such as Wireless LAN Pack, increased steadily, reaching
29.2% for faster services, including Yahoo! BB 50M, and 29.9% for Wireless LAN Pack.
In addition, on September 1, 2007 SOFTBANK BB launched an integrated communication service, BB
Communicator.

This service allows customers to use application tools—such as IP phone, mail, and phone9

book—regardless of their Internet service provider, as long as they have a broadband connection.

<FTTH>
Concerning FTTH connection service, SOFTBANK BB is maintaining a state of readiness that will enable it to startfull-fledged operations as soon as a fair competitive environment is established. SOFTBANK BB will continue to
implement R&D in technologies to succeed ADSL, such as trial services aimed at the commercialization of FTTR*8and R&D in high speed PLC*9.
*8. Fiber To The Remote terminal: transmission method using the optic fiber used for FTTH from NTT stations toequipment located near the user’s premises. Similar to ADSL for the last mile transmission from thistransmission equipment, typically installed on electrical poles etc. to the user copper cables are used.
*9. Power Line Communication: telecommunication that uses electrical power lines as a transmission medium.
[Fixed-line Telecommunications]<<Summary of Segment Results for the Interim Period >>Net sales¥181,473 million (a 0.3% decrease year-on-year)

Operating income¥349 million (a 18.2% increase year-on-year)

Recorded profit for first time in five quarters
Total installed lines for the Otoku Line service, 1,315,000 (at the end of September 2007)<Analysis of Interim Results>
Net sales decreased by ¥477 million, or 0.3% year-on-year, to ¥181,473 million.

Operating income amounted to¥349 million in the interim period, an increase of ¥53 million, or 18.2%, and the first quarterly operating profit in fivequarters.

<Results for the Second Quarter>（Millions of yen）
Fiscal year ended March 31, 2007

Fiscal year ending March 31, 2008

Q1

Q2

Q3

Q4

Q1

Q2

Net sales

88,673

93,276

93,712

98,46690,486

90,986

Operatingincome (loss)

1,212

(916)

(2,603)

(656)

(111)

460

<Operating Conditions>
SOFTBANK TELECOM Corp. (hereafter “SOFTBANK TELECOM”) is utilizing its core Otoku Line directconnection fixed-line voice service to expand its corporate customer base.

The number of installed for the Otoku

Line steadily increased, reaching a total of 1,315,000 by the end of the interim period, a year-on-year increase of
287,000.

Corporate customers constituted 65.9% of the total lines, an increase of 16.0 percentage points.

SOFTBANK TELECOM will continue to focus its efforts on direct marketing to major corporate clients, for whichmarketing efficiency is higher.

10[Internet Culture]<<Summary of Segment Results for the Interim Period>>
Net sales¥110,419 million (a 20.9% increase year-on-year)

Operating income¥54,915 million (a 23.8% increase year-on-year)

Number of stores on Yahoo! Shopping and Yahoo! Auctions reached 29,436<Analysis of Interim Results>
Net sales increased by ¥19,100 million, or 20.9%, year-on-year, to ¥110,419 million.

Operating income increasedby ¥10,571 million, or 23.8%, to ¥54,915 million.

<Results for the Second Quarter>(Millions of yen)
Fiscal year ended March 31, 2007

Fiscal year ending March 31, 2008

Q1

Q2

Q3

Q4

Q1

Q2

Net sales

44,642

46,67650,04952,842

52,796

57,623Operatingincome21,63022,71225,011

27,18927,14827,766<Operating Conditions>
In Internet advertising operations, Yahoo Japan Corporation focused on sales of products that meet the needs ofadvertisers, such as products with a high level of branding-related effects and advertising based on behavioral
targeting.

As a result, display advertising sales in the second quarter steadily increased.

Furthermore, in

non-advertising business services, the total number of stores on Yahoo! Shopping and Yahoo! Auctions was 29,436 at
the end of the interim period, a year-on-year increase of 7,132. Accordingly, tenant fees and commission revenues
increased substantially.

Moreover, sales from Yahoo! Real Estate grew significantly due to an enhanced productlineup and an increase in the number of properties listed.

[e-Commerce]<<Summary of Segment Results for the Interim Period>>
Net sales
Operating income¥125,473 million (a 1.0% increase year-on-year)¥2,100 million (a 26.6% decrease year-on-year)<Analysis of Interim Results>
Net sales increased by ¥1,293 million, or 1.0% year-on-year, to ¥125,473 million. Operating income decreased by¥759 million year-on-year, or 26.6%, to ¥2,100 million.

11

< Results for the Second Quarter >（Millions of yen）
Fiscal year ended March 31, 2007

Fiscal year ending March 31, 2008

Q1

Q2

Q3

Q4

Q1

Q2

Net sales

59,14265,03765,36982,021

61,66063,812

Operatingincome

1,461

1,399

2,010

1,809

1,167

933

<Operating Conditions>
In SOFTBANK BB’s distribution business, sales of security-related products and network peripherals, such as routers,
switching devices, servers, and PCs etc. to corporate customers were strong during the interim period. Althoughsales of hardware to mass appliance retailers increased, operating income decreased due to sluggish sales of highly
profitable software and initial investments in the corporate market.

[Others]<Analysis of Interim Results>
Net sales increased by ¥7,704 million, or 17.5% year-on-year, to ¥51,779 million. Operating loss was ¥650 million,
compared with an operating loss of ¥169 million in the interim period of the previous fiscal year.
The results of this segment include the performance of broadcast media business (mainly Broadmedia
Corporation), technology services business (SOFTBANK TECHNOLOGY CORP.), media & marketing business(mainly SOFTBANK Creative Corp. and ITmedia Inc.), overseas fund business, and other businesses (mainly TV
Bank Corp. and Fukuoka Softbank Hawks related businesses).

< Results for the Second Quarter >（Millions of yen）
Fiscal year ended March 31, 2007

Fiscal year ending March 31, 2008

Q1

Q2

Q3

Q4

Q1

Q2

Net sales

20,28923,785

21,62825,082

24,871

26,907

Operatingincome (loss)

(717)

547

(4,002)

(557)

(689)

38

[Forecasts for the full fiscal year]
In the Group’s core telecommunication businesses, especially the Mobile Communications business, the Group has
introduced the installment sales method for mobile handsets and is introducing a range of price plans and discountservices etc. to meet diverse customer needs.

These include sales and pricing methods that have no precedent in theindustry and it is difficult to estimate customer trends for them. At this point, we cannot make sound estimates, and it
is difficult to make performance forecasts.
To proactively provide enhanced information disclosure to shareholders and investors, consolidated performance
forecasts will be announced at the point when rational estimates are possible.

12(2) Financial Position<<Summary of the Consolidated Financial Position>>
Total assets¥4,458,579 million(a 3.4 % increase from the end of March 2007)

Total liabilities¥3,660,827 million(a 1.8 % increase from the end of March 2007)

Equity¥797,752 million(a 11.4 % increase from the end of March 2007)

Cash flows from operating activitiesa ¥ 443 million increase

Cash flows from investing activitiesa ¥ 227,285 million decrease

Cash flows from financial activitiesa ¥ 303,526 million increase

Balance of cash and cash equivalents¥452,771 million(a ¥75,251 million increase from the end of March 2007)

1. Assets, Liabilities and Equity
In the second quarter, SOFTBANK CORP. (hereafter “the Company”) issued 24,000,000 shares following theexecution of stock acquisition rights. As a result of the execution, the Company received payments totaling¥44,088 million, out of which ¥23,640 million was recorded as common stock. At the end of the interim period,
the equity ratio had increased by 1.3 percentage point, to 7.9%, from 6.6% at the end of the previous fiscal year,
due to the execution of stock acquisition rights and an improvement in accumulated deficit accompanying theCompany’s strong performance. Assets, liabilities, and equity at the end of the interim period were as follows:[Current Assets]
Current assets increased by ¥197,611 million from the end of the previous fiscal year, to ¥1,445,045 million.

This

was mainly due to an increase in notes and accounts receivable-trade of ¥142,652 million, resulting from afavorable trend in the installment sales of mobile handsets of SOFTBANK MOBILE. Also, as a consequence of
SOFTBANK MOBILE securitizing a portion of its installment sales receivables and payments received on theexecution of stock acquisition rights of the Company, cash and deposits increased by ¥95,072 million.
Furthermore, funds procured through the securitization of installment sales receivables were recorded as
borrowings, and the entrusted installment sales receivables were recorded as notes and accounts receivable-trade.

[Fixed Assets]<Property and equipment, net>
Property and equipment, net increased by ¥17,434 million to ¥1,047,287 million, from the end of the previous
fiscal year. This was primarily the result of an increase of ¥39,468 million in telecommunications equipment,such as base stations and switching equipment.

On the other hand, due to the completion of construction,

construction-in-progress decreased by ¥18,298 million.

<Intangible assets>
Intangible assets decreased by ¥22,574 million, to ¥1,257,136 million, from the end of the previous fiscal year.
This was primarily the result of a decrease of ¥27,755 million in goodwill, whereas software increased by ¥10,803
million.

13

<Investments and other assets>
Investments and other assets decreased by ¥44,487 million, to ¥705,189 million, from the end of the previous fiscal
year.

This was primarily the result of reversing ¥28,357 million in non-current deferred tax assets due toutilization of loss carry-forwards. The other factor was a decrease of ¥21,541 million in investment securities due
to a decline in stock prices of shares held, including Yahoo! Inc. of the U.S.

[Current Liabilities]
Current liabilities decreased by ¥32,626 million, to ¥1,110,276 million, from the end of the previous fiscal year.
This was primarily the result of decreases of ¥64,073 million in notes and accounts payable-trade, ¥54,700 million
in accounts payable-other and accrued expenses, and ¥20,000 million in cash receipts as collateral, which offset
increases of ¥82,497 million in short-term borrowing and ¥36,213 million in current portion of lease obligations.

[Long-term liabilities]
Long-term liabilities increased by ¥98,838 million, to ¥2,550,550 million from the end of the previous fiscal year.
Lease liabilities increased by ¥136,161 million and corporate bonds rose ¥58,102 million, while long-term debt
decreased by ¥62,260 million.
The balance of long-term borrowings procured by SOFTBANK MOBILE through the whole businesssecuritization (WBS) financing scheme decreased by ¥43,676 million, to ¥1,311,414 million from the end of theprevious fiscal year.

[Equity]
Equity increased by ¥81,514 million from the end of the previous fiscal year, to ¥797,752 million and net income in
the interim period was ¥46,462 million. However, due to the adoption of new accounting standards at a U.S.
subsidiary, a reduction in retained earnings of ¥5,150 million and payment of dividends from retained earnings of¥2,639 million were recorded. As a result, accumulated deficit improved by ¥38,347 million. In addition,
increases of ¥24,005 million in common stock and ¥23,963 million in additional paid-in capital were recorded due
to such factors as the execution of stock acquisition rights and stock subscription rights. Moreover, deferred loss
on derivatives under hedge accounting improved by ¥18,023 million, and minority interests in consolidated
subsidiaries increased ¥14,143 million. However, unrealized gain on available-for-sale securities decreased by¥35,676 million.
A subsidiary of the Company in the United States of America applied “Accounting for Uncertainty in Income
Taxes” (Financial Accounting Standard Board Interpretation No. 48), effective for fiscal years beginning after
December 15, 2006, from the six-month period ended at September 30, 2007.

The cumulative effect of applying

the provisions of this Interpretation was reported as an adjustment to the opening balance of accumulated deficit.

14

2. Cash Flow
During the interim period, net cash provided by operating activities was ¥443 million, net cash used in investing
activities was ¥227,285 million, and net cash provided by financing activities was ¥303,526 million.

As aresult, cash and cash equivalents at the end of the interim period amounted to ¥452,771 million, an increase of¥75,251 million from the end of the previous fiscal year.

[Cash Flow from Operating Activities]
Net cash provided by operating activities was ¥443 million.
Income before income taxes and minority interests amounted to ¥122,930 million.

As non-cash items,

depreciation and amortization of ¥107,762 million and amortization of goodwill of ¥29,456 million were recorded.
Other adjustment items included unrealized appreciation on investments at subsidiaries in the U.S. of ¥14,126 million
and gain on sales of marketable and investment securities, net of ¥10,632 million, which were subtracted from income
before income taxes and minority interest, and interest expense of ¥55,374 million, which was added. In addition, due
to an increase in receivables of ¥144,235 million and a decrease in payables of ¥64,734 million operating cash flow
was impacted negatively. Interest paid was ¥49,686 million, and income taxes paid for Yahoo Japan Corporationand others was ¥28,692 million.

[Cash Flow from Investing Activities]
Net cash used in investing activities was ¥227,285 million.
As a result of capital investment, mainly in the telecommunications segments, purchase of property andequipment and intangibles totaled ¥204,405 million. In addition, purchase of marketable and investment securitieswas ¥29,777 million, while proceeds from sales of marketable and investment securities were ¥21,787 million.

[Cash Flows from Financing Activities]
Net cash provided by financing activities was ¥303,526 million.
In the Mobile Communications segment, ¥220,816 million was recorded from the sale and lease back ofequipment newly acquired, and mobile handset installment sales receivables were securitized, which resulted inproceeds from long-term debt of ¥153,024 million. In addition, proceeds from issuance of bonds by the Company
were ¥89,471 million, and from exercise of warrants were ¥44,819 million. On the other hand, short-term debt
and cash receipts as collateral decreased by ¥46,160 million and ¥20,000 million, respectively. Repayment oflong-term debt was ¥86,438 million, and payment for the redemption of straight bonds was ¥23,932 million.

15

[Trends in Cash Flow Related Indicators]
A summary of trends in cash flow related indicators is presented below.

As of March 31,
2005

As of March 31,
2006

As of March 31,
2007

As of September
30, 2007

Equity ratio

10.4%

13.4%

6.6%

7.9%

Equity ratio (market cap.)

91.1%

201.3%

74.2%

51.4%

Debt repayment period

19.3 years

6.0 years

4.5 years

3.9 years

Interest coverage ratio

1.9

5.5

6.6

5.6

Notes:
1. The above indicators are calculated using the following formulas based on consolidated figures.
Equity ratio: Shareholders’ equity divided by total assets
Equity ratio (Market cap.): Market capitalization divided by total assets
Debt repayment period: Interest-bearing debt divided by EBITDA(EBITDA has been doubled for the interim period closing to annualize the figure.)Interest coverage ratio: EBITDA divided by interest expenses
2. EBITDA = Operating income (loss) + depreciation and amortization (including amortization of goodwill), andloss on disposal of fixed assets included in operating expenses.
3. Market capitalization is calculated based on the number of shares outstanding, net of treasury stock
4. Interest-bearing debt is the sum of all borrowings, commercial paper, and bonds on the consolidated balance
sheets for the end of the fiscal year or interim period.
5. Interest expense is the corresponding figure on the consolidated statements of income for the fiscal year orinterim period.

[Reference]
A summary of cash flow related indicators excluding the Mobile Communications Segment is presented below.
As of March 31, 2007

As of September 30,
2007

Debt repayment period

4.6 years

3.7 years

Interest coverage ratio

6.8

7.9

16

3. Major Financing Activities
The major financing activities in the interim period were as follows:
Item

Company Name

New stock issue

SOFTBANK
CORP.

Bond issue

SOFTBANK
CORP.

Details

Summary¥44,088 million procured
following the execution ofstock acquisition rights.
24th Unsecured Straight
Bond (Fukuoka SoftBank
Hawks Bonds)

Date of execution:
September 27, 2007
Funds procured: ¥44,088 million
Date of issue: April 26, 2007
Date of redemption: April 26, 2010
Aggregate amount of issue:¥20,000 million
Coupon: 2.72%
Use: mainly repayment of existing
interest-bearing debt
Date of issue: June 19, 2007
Date of redemption: June 17, 2011
Aggregate amount of issue:¥55,000 million
Coupon: 3.39%
Use: mainly repayment of debt
Date of issue: June 19, 2007
Date of redemption: June 19, 2014
Aggregate amount of issue:¥15,000 million
Coupon: 4.36%
Use: mainly repayment of debt
Procurement date: June 29, 2007
Redemption method: monthly
pass-through repayment
Use: capital investment andrepayment of funds raised via WBS

25th Unsecured Straight
Bond

26th Unsecured Straight
Bond

Securitization ofreceivables

Repayment of debt
and others

Bond redemption

Implementation ofcapital investment
through financelease agreementswith ownershiptransfer

SOFTBANKMOBILE Corp.

SOFTBANKCORP.
SOFTBANKMOBILE Corp.
SOFTBANKTELECOM Corp.
Yahoo Japan
Corporation
SOFTBANKCORP.

SOFTBANKMOBILE Corp.

Procurement of funds
totaling ¥88,161 million
accompanying
securitization of mobile
phone installment salesreceivables (recorded as
borrowings)
Procurement of funds
totaling ¥64,863 million
accompanying
securitization of mobile
phone installment salesreceivables (recorded as
borrowings)¥62,112 million¥43,676 million

Procurement date:
September 28, 2007
Redemption method:monthly pass-through repayment
Planned use: capital investment andrepayment of funds raised via WBS
Borrowings: ¥57,112 million (net)and 5,000 million commercial paper
Repayment of funds raised via WBS¥11,600 million¥10,000 million
2nd Unsecured Straight
Bond

Implementation of capital
investment for mobile
communications utilizing
lease agreements

17

Date of redemption:
September 27, 2007
Aggregate amount of redemption:¥23,900 million
Funds procured during the interim
period: ¥220,816 million

(3) Basic Policy for Profit Distribution and Dividends for Fiscal 2008
The Company strives to increase returns to shareholders by augmenting enterprise value. Our basic policy is toreturn our profits to all our stakeholder groups in a fair way.
The Company’s policy regarding dividends is to set dividend payments while taking into consideration the need tomaintain the proper balance between bolstering the operating base and preserving a stable dividend from a
medium-to-long-term perspective.

The dividend for the current fiscal year is undecided at this time, and there are noplans to pay an interim dividend.

18

2. The SOFTBANK GroupAs of September 30, 2007, the Group is comprised of the Company (pure holding company) and the following ten
business segments. The number of consolidated subsidiaries and equity-method companies in each business segment
is as follows.

Consolidated
subsidiaries

Equity-method
non-consolidated
subsidiaries andaffiliates

Main business of segment and name of business

Mobile Communications

5

2

Provision of mobile communication services and mobile
phones accompanying the services etc.
(Core company: SOFTBANK MOBILE Corp.)

Broadband Infrastructure

53Provision of ADSL and fiber-optic high-speed Internet
connection service, IP telephony service, etc.
(Core company: SOFTBANK BB Corp.(Note1))

Business segments

Fixed-line Telecommunications

5-

Fixed-line telecommunications such as voice
transmission service, data transmission service, private
leased circuit and data center service etc.
(Core companies: SOFTBANK IDC Corp.,
SOFTBANK TELECOM Corp. (Note1))

Internet Culture

15

18Internet-based advertising operations, portal businessand auction business etc.
(Core company: Yahoo Japan Corporation (Note1))

4

Distribution of PC software and such hardware as
PCs and peripherals, enterprise solutions, anddiversified e-commerce businesses, including
business transaction platform (B2B) andconsumer-related e-commerce (B2C) etc.
(Core companies: SOFTBANK BB Corp.(Note1)
Vector Inc., Carview Corporation)

75

47

Broadmedia, Technology Services, Media &Marketing, Overseas Funds, Others(Core companies: Broadmedia Corporation(Note2),
SOFTBANK TECHNOLOGY CORP., SOFTBANKCreative Corp., ITmedia Inc., Fukuoka Softbank
Hawks Marketing Corp.)

112

74

e-Commerce

7

Others

Total（Notes）
1. SOFTBANK BB Corp., SOFTBANK TELECOM Corp. and Yahoo Japan Corporation are included in
the consolidated subsidiaries of the Broadband Infrastructure, Fixed-line Telecommunications andInternet Culture segments, respectively, while SOFTBANK BB Corp., SOFTBANK TELECOM Corp.
and Yahoo Japan Corporation operate multiple businesses and their operating results are allocated tomultiple business segments.
2. Broadmedia Corporation changed its company name from Club iT Corporation on October 1, 2007.

19

[Segment Diagram]
The diagram of the Group’s segments is as follows:

Customers
Provision of ADSL, fiber-optic
high-speed Internet connection
service, IP telephony service, etc.

Provision of mobile communication
services, mobile phones, etc.

Broadband Infrastructure

Mobile Communications

Internet advertising, portal business,internet auction business, etc.

Provision of fixed-line telecommunications, data transmission
service, private leased circuit, data center services etc.

Internet Culture

Fixed-line Telecommunications

SOFTBANK CORP.
(Pure holding company)
Overseas Funds

e-Commerce

Investments in Internet-related companies, etc.

Distribution of PC software& peripherals, e-commerce business, etc.

Media & Marketing

Broadmedia

Publication business, web content business, etc.

Support for procurement of content etc.
Technology Services

OthersFukuoka Softbank Hawks related
business etc.

System solution business, etc.

Customers
Broadmedia, Technology Services, Media & Marketing, Overseas Funds, and other segments areincluded in the “Others” segment.

［Listed Companies］
The following SOFTBANK subsidiaries are listed on domestic stock exchanges as of September 30, 2007:
Company NameYahoo Japan Corporation

Listed ExchangeTokyo Stock Exchange 1st section
Jasdaq Securities Exchange

SOFTBANK TECHNOLOGY CORP.

Tokyo Stock Exchange 1st section

Vector Inc.

Osaka Securities Exchange Hercules

Broadmedia Corporation(Note3)

Osaka Securities Exchange Hercules

ITmedia Inc.

Tokyo Stock Exchange Mothers

Carview Corporation (Note3)

Tokyo Stock Exchange Mothers(Notes)3.

ITmedia Inc. and Carview Corporation listed their shares on the Tokyo Stock Exchange Mothers on
April 19 and June 12 of 2007 respectively

203. Management Policies
The following items have been omitted, as there have been no significant changes to the information disclosed in
the Consolidated Financial Report for the fiscal year ended March 31, 2007 (released on May 8, 2007): (1)Fundamental Management Policies, (2) Target Management Indices, (3) Medium-and-Long-Term Strategies, (4)Important Management Issues for the Company.
To view the aforementioned report, please refer to the following websites:<SOFTBANK CORP. website>
http://www.softbank.co.jp/en/irlibrary/results/en/<Tokyo Stock Exchange website (Company Search page)>
http://www.tse.or.jp/listing/compsearch/ (Japanese only)21

4. Consolidated Financial Statements
Consolidated Balance Sheets(Millions of yen; amounts less than one million yen are omitted.)
As of
September 30, 2006

As of
September 30, 2007

As ofMarch 31, 2007

AmountAmountAmount%%%Increase(Decrease)for six months

AmountASSETS
Current assets:
Cash and deposits
Notes and accounts receivable - tradeMarketable securities¥273,166¥472,738¥377,666¥95,072

349,211726,625

583,972

142,652

7,792

9,261

8,588

672

Inventories

74,45085,32576,898

8,427

Deferred tax assets

89,77497,451

108,994(11,542)

Other current assets
Less:
Allowance for doubtful accounts
Total current assets

163,91293,837

119,250(25,412)(16,024)(40,195)

942,283

23.6

1,445,045(27,936)32.4

1,247,433(12,258)
28.9

197,611

Fixed assets:
Property and equipment, net:
Buildings and structures

87,911

87,98689,444(1,457)

Telecommunications equipment

643,721734,253694,785

39,468

Telecommunications service lines

94,204

89,62392,235(2,611)

Land

30,117

27,77027,74722

Construction in progress

72,96853,47971,777(18,298)

Other

44,37054,17253,861

310

Total property and equipment

973,29324.4

1,047,287

23.5

1,029,852

23.9

17,434

Intangible assets, net:
Goodwill

1,152,108

1,005,172

1,032,927(27,755)

Software167,015

211,418

200,615

10,803

Other intangibles

51,67140,545

46,168(5,622)

Total intangible assets
Investments and other assets:
Investment securities andinvestments in unconsolidated subsidiaries
and affiliated companies
Deferred tax assets
Other assets
Less:
Allowance for doubtful accounts
Total investments and other assets
Total fixed assets
Deferred charges
Total assets

1,370,794

34.4

1,257,136

28.2

1,279,710

29.7(22,574)

440,549

465,879

487,421(21,541)

163,014129, 426

157,783(28,357)

103,369

118,203

113,877

4,325(9,415)697,517
3,041,605

17.5
76.3

(8,319)705,189
3,009,613

15.8
67.5

(9,405)
749,677
3,059,240

17.4
71.0

1,085
(44,487)(49,627)

3,101

0.1

3,920

0.1

4,178

0.1

(257)

¥3,986,991

100.0¥4,458,579

100.0¥4,310,852

100.0¥147,72622

Consolidated Balance Sheets(Millions of yen; amounts less than one million yen are omitted.)
As of
September 30, 2006

As of
September 30, 2007

As ofMarch 31, 2007

AmountAmountAmount%%%Increase(Decrease)for six months

AmountLIABILITIES AND EQUITYCurrent liabilities:
Accounts payable - trade
Short-term borrowings¥106,385¥131,093¥195,167¥(64,073)

1,422,194

276,154

193,656

82,497

Commercial paper

10,000-5,000(5,000)Current portion of corporate bonds
Accounts payable - otherand accrued expenses

94,231

52,572

43,964

8,608

299,557

360,861

415,561(54,700)

82,791

27,36033,070(5,709)-54,262

18,04936,213

Cash receipts as collateral

150,000

130,000

150,000(20,000)

Other current liabilities

86,91877,971

88,433(10,462)

Total current liabilities

2,252,078

Income taxes payable
Current portion of lease obligations

56.5

1,110,276

24.9

1,142,903

26.5(32,626)

Long-term liabilities:
Corporate bonds

473,712

480,702422,599

58,102Long-term debt

389,918

1,666,923

1,729,183(62,260)

Deferred revenue

33,86518,991

26,392(7,401)

Deferred tax liabilities

44,58849,86050,136(276)

Liability for retirement benefits

17,24816,232

16,701(468)

Allowance for point mileage

43,682

43,79643,787

8-

211,126

74,964

136,161

66,20062,91887,947(25,028)

Lease obligations
Other liabilities
Total long-term liabilities

1,069,21526.8

2,550,550

57.2

2,451,712

56.9

98,838

Total liabilities

3,321,294

83.3

3,660,827

82.1

3,594,615

83.4

66,211

162,983

4.1

187,315

4.2

163,309

3.8

24,005

-

-

-

-

1

0.0

(1)

Additional paid-in capital

187,3434.7

211,632

4.7

187,669

4.3

23,963

Accumulated deficit(206,373)(5.2)(153,924)(3.4)(192,271)(4.5)

38,347

Less: Treasury stock

(179)

(0.0)

(201)

(0.0)

(193)

(0.0)

(7)

143,774

3.6

244,8225.5

158,515

3.6

86,306

94,523

2.3

86,942

1.9

122,619

2.8(35,676)(12,427)(0.3)(8,972)(0.2)(26,995)(0.6)

18,023Foreign currency translation adjustments

23,2920.6

30,6430.7

28,8100.7

1,832

Total valuation and translation adjustments

105,3882.6

108,613

2.4

124,434

2.9(15,820)

3,154

0.1

66

0.0

3,180

0.1

(3,114)

Minority interests

413,379

10.4

444,250

10.0

430,106

10.0

14,143

Total equity

665,69616.7

797,75217.9

716,237

16.6

81,514¥3,986,991

100.0¥4,458,579

100.0¥4,310,852 100.0¥147,726

Equity:Common stock
Cash receipts for new stock subscriptions

Total shareholders’ equity
Unrealized gain on available-for-salesecurities
Deferred loss on derivatives under hedge
accounting

Stock acquisition rights

Total liabilities and equity

23Consolidated Statements of Income(Millions of yen; amounts less than one million yen are omitted.)Six-month period ended
September 30, 2006

Net sales
Cost of sales
Gross Profit
Selling, general and administrative expenses
Operating income

Six-month
period ended
September 30, 2007

Increase(Decrease)

Fiscal year ended
March 31, 2007

Amount%Amount%AmountAmount%¥1,120,173

100.0¥1,364,745

100.0¥244,571¥2,544,219

100.0

615,33954.9

718,86452.7

103,525

1,409,520

55.4

504,83445.1

645,88147.3

141,046

1,134,698

44.6

392,28235.0

478,13435.0

85,851

863,63333.9

112,552

10.1

167,746

12.3

55,194

271,065

10.7

(596)

3,394

Interest income
Foreign exchange gain, net

2,134
-

2,605

2,605

-

Equity in earnings of affiliated companies

8,046

3,136

(4,909)2,130

Income from investments in partnerships, net

1,758

-

(1,758)

1,726

3,693

2,905

(787)

6,280

(5,445)

13,531Other non-operating income
Non-operating income
Interest expense
Foreign exchange loss, net
Financing related expenses
Other non-operating expenses
Non-operating expenses

15,631

1,537

1.4

10,1850.7

32,54555,374

22,82979,521

1,841-(1,841)

834

19,954-(19,954)

28,715

11,151

11,392

241

22,101

0.5

65,493

5.9

66,7674.9

1,274

131,173

5.2

Ordinary income

62,6905.6

111,165

8.1

48,474

153,423

6.0

Gain on sale of investment securities

69,206

10,440(58,765)

84,106

995

3,089

2,094

2,598

-

14,126

14,126

4,935

1,266

2,206

940

4,641

(41,605)

96,282

8,073

5,351

Dilution gain from changes in equity interest
Unrealized appreciation on investments at
subsidiaries in the U.S.
Other special income
Special income
Valuation loss on investment securities
Loss on disposal of fixed assets
Loss on redemption of bonds
Loss on office relocation
Other special losses
Special loss
Income before income taxes and minority
interests
Income taxes:
Current
Deferred
Minority interests in net income
Net income

71,468

6.4

29,863

2,092

10,165

2.2

453

3,993

3,540

7,695

7,386

-

(7,386)

10,4291,853-(1,853)

2,642

3,475

3,939

464

15,013

3.8

15,2601.4

18,0981.3

2,837

41,132

1.6

118,898

10.6

122,930

9.0

4,031

208,573

8.2

80,972

7.2

16,8081.2(64,164)

48,726

1.9

6,041

0.5

39,075

2.9

33,03393,676

3.7

17,444

1.6

20,5831.5

3,139

37,355

1.5¥14,439

1.3¥46,4623.4¥32,022¥28,815

1.1

24

Consolidated Statements of Changes in Equity(Millions of yen, amounts less than one million yen are omitted)

Interim period from April 1, 2006 to September 30, 2006:
Shareholders’ equity
Common Cash receipts for
new stockstock
subscriptions

Balance at April 1, 2006

Additional
paid-in
capitalAccumulated
deficit

Treasurystock

Valuation and translation adjustments
Unrealized gain Deferred gain
Foreign currency(loss) on(loss) on
translation
available-for- derivatives underadjustments
hedgesale securities
accounting

Total

Total

Stock
acquisitionrightsMinority
interests

Total equity¥162,916¥5¥187,303¥(218,561)¥(169)¥131,494¥129,051¥(36,840)¥19,062¥111,273¥3,150¥101,346¥347,263

Exercise of warrants

67

(5)

67

-

-

128

-

-

-

-

-

-

128

Cash dividends (Note)

-

-

-

(2,637)-(2,637)

-

-

-

-

-

-

(2,637)

Changes of items during the period

Bonuses to directors (Note)

-

-

-

(90)

-

(90)

-

-

-

-

-

-

(90)

Adjustments of accumulated deficit due tochange in scope of the consolidation

-

-

(26)

476

-

449

-

-

-

-

-

-

449

Net income

-

-

-

14,439-14,439

-

-

-

-

-

-

14,439Purchase of treasury stock

-

-

-

-

(9)

(9)

-

-

-

-

-

-

(9)

Items other than changes in shareholders’equity

-

-

-

-

-

-

(34,527)

24,413

4,229(5,885)

4

312,033

306,152

67

(5)

40

12,187(9)12,280(34,527)

24,413

4,229(5,885)

4

312,033

318,432¥162,983¥-¥187,343¥(206,373)¥(179)¥143,774¥94,523¥ (12,427)¥23,292¥105,388¥3,154¥413,379¥665,696

Total changes in this period
Balance at September 30, 2006

Note: Appropriation of retained earnings resolved at the annual shareholders’ meeting held in June 2006.

25

Interim period from April 1, 2007 to September 30, 2007:(Millions of yen, amounts less than one million yen are omitted)
Shareholders’ equity

Common Cash receipts for
new stockstock
subscriptions

Balance at April 1, 2007

Additional
paid-in
capitalAccumulated
deficit

Treasurystock

Valuation and translation adjustments
Unrealized gain Deferred gain
Foreign currency(loss) on(loss) on
translation
available-for- derivatives underadjustments
hedgesale securities
accounting

Total

Total

Stock
acquisitionrightsMinority
interests

Total equity

163,309

1

187,669(192,271)(193)

158,515

122,619(26,995)

28,810124,434

3,180

430,106

716,237---(5,150)-(5,150)

-

-

-

-

-

-

(5,150)24,005(1)

23,963--47,967

-

-

-

-

-

-

47,967---(2,639)-(2,639)

-

-

-

-

-

-

(2,639)

-

-

-

(325)

-

(325)

-

-

-

-

-

-

(325)

-

-

-

46,462-

46,462

-

-

-

-

-

-

46,462

Purchase of treasury stock

-

-

-

-

(7)

(7)

-

-

-

-

-

-

(7)

Items other than changes in shareholders’equity

-

-

-

-

-

-

(35,676)

18,023

1,832(15,820)(3,114)14,143(4,791)

Total changes in this period

24,005(1)

23,96338,347(7)

86,306(35,676)

18,023

1,832(15,820)(3,114)14,14381,514

Balance at September 30, 2007

187,315-

211,632(153,924)(201)

244,82286,942(8,972)30,643

108,61366

444,250

797,752

Changes of items during the period
Increase in accumulated deficit due toadoption of new accounting standards at a
subsidiary in the U.S.
Exercise of warrants
Cash dividends
Adjustments of accumulated deficit due tochange in scope of the consolidation
Net income

26

Fiscal year from April 1, 2006 to March 31, 2007:(Millions of yen, amounts less than one million yen are omitted)
Shareholders’ equity

Valuation and translation adjustments
Unrealized gain Deferred gain
Foreign currency(loss) on(loss) on
translation
available-for- derivatives underadjustments
hedgesale securities
accounting

StockacquisitionrightsMinority
interests

Total equity¥111,273¥3,150¥101,346¥347,263

-

-

-

-

780

-

-

-

-

-

1

-

-

-

-

-

-

(2,637)

(90)

-

-

-

-

-

-

(90)

-

176

-

-

-

-

-

-

176

28,815-28,815

-

-

-

-

-

-

28,815

-

-

(23)

(23)

-

-

-

-

-

-

(23)

-

-

-

-

(6,432)

9,845

9,747

13,16030

328,760

341,951

Common Cash receipts for
new stockstock
subscriptions

Additional
paid-in
capitalAccumulated
deficit

Treasurystock¥162,916¥5¥187,303¥(218,561)¥(169)¥131,494¥129,051¥(36,840)¥19,062

393

(5)

393

-

-

780

-

-

Cash receipts for new stock subscriptions

-

1

-

-

-

1

-

Cash dividends (Note)

-

-

-

(2,637)-(2,637)

Bonuses to directors (Note)

-

-

-

(90)

-

Adjustments of accumulated deficit due tochange in scope of the consolidation

-

-

(26)

202

Net income

-

-

-

Purchase of treasury stock--

Items other than changes in shareholders’equity

-

-

393

(3)

366

26,289(23)

27,021(6,432)

9,845

9,747

13,16030

328,760

368,973¥163,309¥1¥187,669¥(192,271)¥(193)¥158,515¥122,619¥ (26,995)¥28,810¥124,434¥3,180¥430,106¥716,237

Balance at April 1, 2006

Total

Total

Changes of items during the year
Exercise of warrants

Total changes in the year
Balance at March 31, 2007

Note: Appropriation of retained earnings resolved at the annual shareholders’ meeting held in June 2006.

27

Consolidated Statements of Cash Flows(Millions of yen; amounts less than one million yen are omitted.)Six-month period
ended September 30,
2006

Six-month period
ended September 30,
2007

Fiscal year ended
March 31, 2007

Cash flows from operating activities:
Income before income taxes and minority interests¥118,898¥122,930¥208,573

Depreciation and amortization

84,542

107,762

189,092

Amortization of goodwill

26,871

29,45653,595Equity in earnings of affiliated companies(8,046)(3,136)(2,130)

Dilution gain from changes in equity interest, net(960)(1,463)(2,484)

Valuation loss on investment securities

2,092

10,165

5,351-(14,126)(4,935)

Foreign exchange (gain) loss, net(69,192)
1,749(10,632)(2,488)(79,885)
1,136Interest and dividend income(2,348)(1,871)(3,713)

Interest expense

32,54555,374

79,521

5,237(144,235)(225,489)

Adjustments for:

Unrealized appreciation on investments at subsidiaries in
the U.S.
Gain on sale of marketable and investment securities, net

Changes in operating assets, and liabilities
Decrease (increase) in receivables – trade
Increase (decrease) in payables - trade

6,797(64,734)

91,184

37,142(5,729)103,913235,330

77,270413,729

3,796

1,552

5,519

Interest paid

(24,551)(49,686)(62,081)

Income taxes paid

(27,436)(28,692)(45,964)

187,139443

311,201

Other, net
Sub-totalInterest and dividends received

Net cash provided by operating activities- Continued -28

Consolidated Statements of Cash Flows (Continued)(Millions of yen; amounts less than one million yen are omitted.)Six-month period
ended September 30,
2006

Six-month period
ended September 30,
2007

Fiscal year ended
March 31, 2007

Cash flows from investing activities:
Purchase of property and equipment, and intangibles¥(158,611)¥ (204,405)¥(297,764)

Purchase of marketable and investment securities
Proceeds from sale of marketable and investment securities(95,349)(29,777)(114,022)

145,434

21,787

168,354

Acquisition of interests in subsidiaries newly consolidated,
net of cash acquired(1,844,046)

2,674(1,844,849)

Increase in loan receivables

91
8(9,232)

1,012(18,078)(89)
10(16,519)

Collection of loan receivables

6,534

16,74015,749Other, net(1,815)(17,239)(8,805)(1,956,985)(227,285)(2,097,937)

1,183,612(46,160)(8,848)(400)(5,000)(5,400)

Proceeds from long-term debt

220,070

153,024

1,586,970

Repayment of long-term debt

(29,822)(86,438)(98,151)

Sale of interests in subsidiaries previously consolidated, net
Proceeds from sales of interests in consolidated subsidiaries

Net cash used in investing activities
Cash flows from financing activities:
Increase (decrease) in short-term borrowings, net
Decrease in commercial paper, net

Proceeds from issuance of bonds-

89,471

72,558

Redemption of bonds(26,931)(23,932)(205,334)

Exercise of warrants
Proceeds from issuance of shares to minority shareholders
Cash dividends paid

134
300,203(2,628)44,8196,039(2,628)786
300,378(2,640)Cash dividends paid to minority shareholders(3,045)(3,514)(3,143)-

220,816

65,818

Increase (decrease) in cash receipts as collateral, net

50,000(20,000)

50,000

Other, net(92,418)(22,970)(34,607)

1,598,773

303,526

1,718,384

838

(662)

3,073

(170,234)

76,022(65,277)(3,886)(771)(3,896)446,694

377,520446,694¥272,572¥452,771¥377,520

Proceeds from sale and lease back of equipment newly
acquired

Net cash provided by financing activities
Effect of exchange rate changes
on cash and cash equivalents
Net (decrease) increase in cash and cash equivalents
Decrease in cash and cash equivalents due to exclusion ofpreviously consolidated subsidiaries
Cash and cash equivalents, beginning of the period
Cash and cash equivalents, end of the period

29

Condensed Quarterly Financial Information
Condensed Statements of Income(Millions of yen; amounts less than one million yen are omitted.)

Net sales
Cost of sales
Gross profit
Selling, general andadministrative expenses
Operating income
Non-operating income (Note)
Non-operating expenses (Note)
Ordinary income
Special income
Special loss
Income before income taxes andminority interests
Income taxes - Current
Income taxes - Deferred
Minority interests in net income
Net income

First quarter

Second quarter

Third quarter

Fourth quarter

First quarter

Second quarter

April 1, 2006 toJune 30, 2006

July 1, 2006 to
September 30, 2006

October 1, 2006 to
December 31 2006

January1, 2007 to
March 31, 2007

April 1, 2007 toJune 30, 2007

July 1, 2007 to
September 30, 2007

AmountAmountAmountAmountAmountAmount¥494,231
273,895
220,336¥625,941
341,443
284,498¥702,195
390,157
312,037¥721,850
404,024
317,826¥663,084
352,896
310,188¥701,660
365,968
335,692

165,978

226,303

227,304

244,045

231,442

246,691

54,357
12,09640,45925,994
4,672
1,365

58,194
4,540
26,03936,696
66,795
13,89584,733
1,829
37,63748,924
15,788
6,688

73,7804,259
36,23141,808
9,024
19,18278,746
4,531
32,12351,1549,940
2,692

89,0005,654
34,64360,01019,922
15,40629,30289,59658,02431,65058,40364,527

10,146
9,224
8,514¥1,41870,826(3,182)
8,930¥13,021

12,552
27,211
10,765¥7,494(44,798)
60,4239,145¥6,881

2,826
20,065
10,380¥25,130

13,982
19,00910,203¥21,331

Note: Foreign exchange gain (loss), equity in earnings (loss) of affiliated companies, and income (expenses) from investments in partnerships
were included in “Non-operating income” and “Non-operating expenses” and were netted on quarterly basis for presentation purposes.
Condensed Statements of Cash Flows(Millions of yen; amounts less than one million yen are omitted.)

Net cash provided by (used in)operating activities
Net cash provided by (used in)investing activities
Net cash provided by (used in)financing activities
Effect of exchange rate changes
on cash and cash equivalents
Net increase (decrease) in cash
and cash equivalents
Decrease in cash and cash
equivalents due to exclusionof previously consolidated
subsidiaries
Cash and cash equivalents,
beginning of the period
Cash and cash equivalents, endof the period
Note:“Depreciation and amortization”
and “amortization of goodwill”
included in net cash provided byoperating activities

First quarter

Second quarter

Third quarter

Fourth quarter

First quarter

Second quarter

April 1, 2006 toJune 30, 2006

July 1, 2006 to
September 30, 2006

October 1, 2006 to
December 31, 2006

January 1, 2007 to
March 31, 2007

April 1, 2007 toJune 30, 2007

July 1, 2007 to
September 30, 2007

AmountAmountAmountAmountAmountAmount¥64,675¥122,464¥71,193¥52,868¥(27,478)¥27,922(1,965,832)

8,847(71,675)(69,276)(111,519)(115,766)

1,743,429(144,656)

124,058(4,446)

218,480

85,045134703(2,716)

4,951

1,495

(2,158)(157,593)(12,641)

120,859(15,902)80,978(4,955)(3,886)

-

(9)

-

(771)

-

446,694285,214272,572

393,423

377,520457,727¥285,214¥272,572¥393,423¥377,520

457,727452,771¥48,989¥62,424¥66,271¥65,001¥67,960¥69,25930

Basis of Presentation of Consolidated Financial Statements
1. Changes in scope of consolidation
As of September 30, 2007, SOFTBANK CORP. (the “Company”) consolidated 112 subsidiaries (together, the “Group”).
80 subsidiaries were not consolidated as the individual and aggregate amounts were not considered material in relation to theconsolidated total assets, net sales, net income and retained earnings (accumulated deficit) of the SOFTBANK Consolidated
Financial Statements.
Changes in scope of consolidation were as follows:<Increase>2 companies
Significant changes:
Overture K.K.
Newly acquired<Decrease>
8 companies
2. Changes in scope of equity method
As of September 30, 2007, the Company held 3 non-consolidated subsidiaries and 71 affiliates, all of which were accounted
for under the equity method. 77 non-consolidated subsidiaries and 24 affiliates were not accounted for under the equity
method, as the individual and aggregate amounts were not considered material in relation to the net income and retained
earnings (accumulated deficit) of the SOFTBANK Consolidated Financial Statements.
Changes in application of equity method were as follows:<Increase>
10 companies
Significant changes:
Open Wireless Network Corp.
New joint venture<Decrease>2 companies
3. Interim closing date of consolidated subsidiaries
Twenty seven companies have different fiscal year ends within three months from the Company’s fiscal year end, and theirfinancial statements are used for consolidation purposes with adjustments being made for significant transactions taking
place in the intervening period.
Three companies have different fiscal year ends over three months from the Company’s fiscal year end, and their financial
statements used for consolidation purposes are prepared based on the assumed interim closing date of September 30, 2007.
4. Summary of significant accounting policies[1] Evaluation standards and methods for major assets(1) Marketable securities and investment securities
Held-to-maturity debt securities: Stated at amortized cost
Available-for-sale securities:
With market quotations:
Stated at fair value, which represents the market prices at the balance sheet date(unrealized gain/loss is included as a separate component in equity, net of tax, while
cost is primarily determined using the moving-average method)
Without market quotations:
Carried at cost, primarily based on the moving-average method
Certain subsidiaries of the Company in the United States of America qualify as investment companies under theprovisions established by the American Institute of Certified Public Accountants (“AICPA”) Guide on Investment
Companies (the “AICPA Guide”) and account for the investment securities in accordance with the AICPA Guide. The
investment securities are carried at fair value, and net changes in fair value are recorded in the consolidated statements
of income under the application of the AICPA Guide.
31

(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
Buildings and structures:
Telecommunications equipment:
Telecommunications service lines:
Others:Computed primarily using the straight-line method
Computed using the straight-line method
Computed using the straight-line method
Computed primarily using the straight-line method(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 doubtfulreceivables, plus an amount for receivables other than doubtful receivables calculated using historical write-off
experience ratios from certain prior periods.
(2) <Accrued retirement benefits>
SOFTBANK MOBILE Corp., SOFTBANK TELECOM Corp., and certain other subsidiaries have defined benefit
pension plans for their employees. These companies account for the obligation for retirement benefits based on the
projected benefit obligations at the end of the fiscal year end.
SOFTBANK MOBILE Corp. and SOFTBANK TELECOM Corp. amended the pension plans by suspending thedefined benefit pension plans at the end of March 2007 and March 2006, respectively, and implementing defined
contribution pension plans. The retirement benefits existed and calculated under the benefit pension plan were fixed
and will be paid at the retirement of applicable employees, and the projected benefit obligations are calculated based onthese fixed retirement benefits. As a result, service cost under the defined benefit pension plans at SOFTBANKMOBILE Corp. and SOFTBANK TELECOM Corp. do not occur, but only interest cost occurred for the six-month
period ended September 30, 2007.
(3) <Allowance for point mileage >SOFTBANK MOBILE Corp. has an allowance for point mileage which is accrued based on the estimated future
obligation arising from point service, based on past experience.
[4] Translation of foreign currency transactions and accounts
All assets and liabilities in foreign currencies are translated at the foreign currency exchange rates prevailing at the respectivebalance sheet dates. Foreign currency exchange gains or losses are charged to net income when incurred.
The translation of foreign currency denominated revenues and expenses in the financial statements of foreign consolidated
subsidiaries into Japanese yen is performed by using the average exchange rate for the period. Assets and liabilities aretranslated using the foreign currency exchange rates prevailing at the balance sheet dates, and capital stock is translated using
the historical foreign currency exchange rates. Foreign currency financial statement translation differences are presented asa separate component of “Equity,” and the portion pertaining to minority shareholders, which is included in “Minority
interests.”[5] Lease
Under Japanese accounting standards for leases, finance leases that deem to transfer ownership of the leased property to thelessee are to be capitalized, while other finance leases are permitted to be accounted for as operating lease transactions if
certain “as if capitalized” information is disclosed in the notes to the lessee’s financial statements.
32

[6] Accounting for significant hedge transactions(1) Collar transaction① <Hedge accounting>Unrealized gains and losses, net of tax, on a collar transaction that qualifies as an effective cash flow hedge at
consolidated subsidiaries in the United States of America are reported as a separate component of “Equity” in the
Company’s consolidated balance sheets. As such, unrealized gains and losses associated with the collar transaction will
be recognized into earnings in the same period during which the hedged assets and liabilities are recognized in earnings.
② <Derivative instruments for hedging and hedged items>
Derivative instruments for hedging:
Prepaid variable share forward contract (the collar transaction)
Hedged items:
Equity security③ <Hedging policy>
The purpose of the collar transaction is to hedge the variability of cash flows associated with the future market price of
the underlying equity security, which is used for the settlement of loans at maturity.
④ <Effectiveness of hedge transactions>
The effectiveness of hedge transaction is assessed by measuring high correlation between the variability of cash flows
associated with the market price of hedged items and variability of cash flows of hedge instruments.
(2) Interest rate swap
① <Hedge accounting>
For interest rate swaps whose amounts, index and periods are same as the conditions for hedged items, the “exceptional
method” is adopted. Under this method, a certain domestic consolidated subsidiary does not account for gains and lossesof those interest rate swaps on a fair value basis and recognizes swap interest on an accrual basis.
② <Derivative instruments for hedging and hedged items>
Derivative instruments for hedging:Interest rate swap contracts
Hedged items:
Interest expense on borrowings③ <Hedging policy>
The domestic consolidated subsidiaries use derivative financial instruments to hedge the risk of exposures to fluctuationsin interest rates in accordance with its internal policies, regarding the authorization and credit limit amount.
④ < Effectiveness of hedge transactions >Effectiveness of the hedge transaction is omitted due to the adoption of “exceptional method.”(3) Forward-exchange contract① <Hedge accounting>Long-term debt denominated in foreign currencies for which foreign exchange forward contracts are used to hedge theforeign currency fluctuation are translated at the contracted rate, if the forward contracts qualify for hedge accounting.
② <Derivative instruments for hedging and hedged items>
Derivative instruments for hedging:
Forward-exchange contract
Hedged items:
Foreign currency-denominated bond
③ <Hedging policy>
In accordance with the Company’s policy, the Company uses derivatives to hedge foreign exchange risk associated withcertain assets and liabilities denominated in foreign currencies.
④ < Effectiveness of hedge transactions >Effectiveness of the hedge transaction is omitted due to qualifying for hedge accounting.
[7] Accounting method for consumption taxes
Consumption taxes are accounted for using the net method of reporting.
33

4. Accounting for business combinations
All assets and liabilities of acquired entities are revalued at the respective fair market value at the combination date.
5. Amortization of goodwill“Goodwill” is amortized on a straight-line basis over reasonably estimated periods in which economic benefits are expected tobe realized. Immaterial goodwill is expensed as incurred.
The goodwill resulted from acquisition of Vodafone K.K. (currently SOFTBANK MOBILE Corp.) is amortized over
20-year-period.
6. Scope of cash and cash equivalents in the consolidated statements of cash flows“Cash and cash equivalents” are comprised of cash on hand, bank deposits withdrawable on demand and highly liquid
investments with initial maturities of three months or less and a low risk of fluctuation in value.

Change in accounting policies
Accounting for Uncertainty in Income Taxes
A subsidiary of the Company in the United States of America applied “Accounting for Uncertainty in Income Taxes”(Financial Accounting Standard Board Interpretation No. 48), effective for fiscal years beginning after December 15, 2006,
from the six-month period ended September 30, 2007.
The cumulative effect of applying the provisions of this Interpretation was recorded as an adjustment to the opening balance ofaccumulated deficit, and accordingly, accumulated deficit increased by ¥5,150 million for the six-month period ended
September 30, 2007.

34

Notes(Consolidated Balance Sheets)
1. Accumulated depreciation of property and equipment
As of September 30, 2006
655,520

As of September 30, 2007

million yen

784,471

million yen

As of March 31, 2007
719,297 million yen

2. Contingent liability
Based on debt assumption agreements with financial institutions, SOFTBANK MOBILE Corp. has transferred its debt
repayment obligation for straight bonds previously issued to financial institutions. The bonds and payments to financial
institutions incurred from transferring its debt repayment obligation for the bonds are eliminated in the Company’s consolidatedbalance sheets.
However, under the terms of the indenture, SOFTBANK MOBILE Corp. will continue to be responsible for payments on thebonds until maturity or redemption of the bonds.
Subject Bonds

As of September 30, 2006

As of September 30, 2007

As of March 31, 2007

First Series Unsecured Bond

- million yen

25,000 million yen

25,000 million yen

Third Series Unsecured Bond

- million yen

25,000 million yen

25,000 million yen

Fifth Series Unsecured Bond

- million yen

25,000 million yen

25,000 million yen

Seventh Series Unsecured Bond

- million yen

25,000 million yen

25,000 million yen

Total- million yen

100,000 million yen

100,000 million yen

3. Assets pledged as collateral(1) For future lease liabilities
As of September 30, 2006

As of September 30, 2007

As of March 31, 2007

10,927 million yen

10,703 million yen

10,877 million yen

Assets pledged as collateral:
Notes and accounts receivable – trade

In addition to above, amounts eliminated in the consolidated balance sheets as an intercompany balance:
Notes and accounts receivable – trade

13,761 million yen

14,079 million yen

14,029 million yen

Note: The collateral for the future lease liabilities (finance lease accounted for as operating lease transactions) was
provided by mortgaging against the aggregate of the current and future receivables due from customers of certain
consolidated subsidiaries. The future lease liabilities at the end of periods are as follows:
As of September 30, 2006

As of September 30, 2007

As of March 31, 2007

17,300 million yen

9,957 million yen

13,026 million yen

Future lease liabilities(finance lease accounted for as operating leasetransactions)35

(2) For short-term borrowings and long-term debt
Assets pledged as collateral and secured liabilities by consolidated subsidiaries are as follows:
As of September 30, 2006

As of September 30, 2007

As of March 31, 2007

Assets pledged as collateral:
Cash and deposits

566

169,182

70,897

Notes and accounts receivable – trade949

292,995

303,486

Buildings and structures499

14,027

13,986

Telecommunications equipment

1,062

280,972

362,644

Telecommunications service lines
Land
Property and equipment- other

Investment securities andinvestments in unconsolidated
subsidiaries and affiliated companies
Investments and other assets – other assets
Total

-

163

226

5,001

15,594

15,5660-0

158,369

166,544

196,552

-

191

115

166,450 million yen

939,672 million yen

963,475 million yen

As of September 30, 2006

As of September 30, 2007

As of March 31, 2007

Secured liabilities:
Accounts payable - trade

854

1,109

1,246

Short-term borrowings

7,843

7,027

5,373

Accounts payable – other and accrued expenses
Long-term debt
Total

116

-

123

119,158

1,428,398

1,474,523

127,973 million yen

1,436,535 million yen

1,481,267 million yen

SOFTBANK MOBILE Corp. shares owned by BB Mobile Corp. and BB Mobile Corp. shares owned by Mobiletech
Corporation are pledged as collateral for long-term debt (totaled to ¥1,311,414 million) resulted from the refinancing theloan accompanying the acquisition of SOFTBANK MOBILE Corp., in addition to the assets pledged as collateral above.
The fund procured through the securitization of installment sales receivables of SOFTBANK Mobile Corp. in the amountof ¥89,233 million and ¥52,895 million were recorded as “Short-term borrowings” and “Long-term debt,” respectively,
as of September 30, 2007. The installment sales receivables, equivalent to ¥142,129 million which is the amount ofsenior trust certificate of the securitized installment sales receivables for this procurement, was included in “Notes andaccount receivable-trade,” along with the amount of trust beneficial certificate held by the SOFTBANK MOBILE Corp.
Trustee procured the fund through asset backed loans which were backed by these installment sales receivables.
4. Securities loaned
A portion of investment securities was lent to financial institutions according to stock lending agreements, and the amounts ofapplicable investment securities recorded in the Company’s consolidated balance sheets are as follows:
As of September 30, 2006
Investment securities

366 million yen

36

As of September 30, 2007
142 million yen

As of March 31, 2007
193 million yen

5. Cash receipts as collateral
Cash receipts as collateral from financial institutions, to whom the Company has lent shares in its subsidiary under security
deposit agreements, are presented as follows:
As of September 30, 2006
Cash receipts as collateral

150,000 million yen

As of September 30, 2007
130,000 million yen

As of March 31, 2007
150,000 million yen

According to the security deposit agreements, the Company paid a fixed rate amount as stock bailment fees and other fees
totaling ¥1,369 million, ¥1,786 million, and ¥3,539 million for the periods ended September 30, 2006, September 30, 2007,
and March 31, 2007, respectively, and recorded the fees as other non-operating expenses in the consolidated statements ofincome.
6. Deferred revenue
On December 8, 2005, BB TECHNOLOGY Corp. (currently SOFTBANK BB Corp.) sold its modem rental business. The
gain on sale of the business was deferred and is being amortized over five years, which is the estimated economic useful life ofmodem equipment as a revenue source of the modem rental operations. For the six-month periods ended September 30, 2006,
September 30, 2007 and for the fiscal year ended March 31, 2007, the Company recorded operating income of ¥2,155 million,¥2,155 million, and ¥4,311 million, respectively, as a result of amortization.
Based on the service agreement with BB Modem Rental Yugen Kaisha, BB TECHNOLOGY received royalties relating tofuture revenue from the modem rental business and recorded as deferred revenue. The deferred revenue will be reversed inconjunction with the recognition of revenue in proportion to the actual business performance of the ADSL business, such as thenumber of paying customers. Royalty fees totaling ¥4,821 million, ¥4,800 million, and ¥9,721 million for the six-month
periods ended September 30, 2006, September 30, 2007 and for the fiscal year ended March 31, 2007, respectively wererecorded as revenue. Ending balances of deferred revenue as of September 30, 2006, September 30, 2007and March 31,
2007 were as follows:
As of September 30, 2006

As of September 30, 2007

As of March 31, 2007

Other current liabilities (deferred revenue)

14,853 million yen

15,230

million yen

15,025 million yen

Deferred revenue

33,865 million yen

18,991

million yen

26,392 million yen

In accordance with the service agreement, SOFTBANK BB Corp. must refund a part of the above deferred revenue, which is
attributable to the service agreement, if its certain financial performance targets are not met.
7. Line of credit as a creditor (not used)
As of September 30, 2006
15,196 million yen

As of September 30, 2007
13,910 million yen

As of March 31, 2007
7,708

million yen

8. Notes receivable maturing at period-end
Notes receivable are settled on the date of clearance. Since the following closing dates of each period end were non-businessdays, the following balances of notes receivable maturing on those date were not settled and were included in the closingbalances of “Notes and accounts receivable-trade.”
As of September 30, 2006
Notes and accounts receivable-trade

41 million yen

37

As of September 30, 2007

356 million yen

As of March 31, 2007
173 million yen

9. Financial covenants
The Group's interest-bearing debt includes financial covenants, with which the Group is in compliance. The major financial
covenants are as follows. If the Group conflicts with the following covenants, creditors may require repayment of all debt. In
the events where the covenants set several conditions, the strictest condition is presented below.)
The amount of the Company's net assets at the end of each quarter must not fall below the larger of [1] or [2] below.
[1] 75% of the amount of the Company's net assets at the end of the most recent year.
[2] 60% of the amount of the Company's net assets at March 31, 2005.
At the end of the year and the first half of the year, balance sheets of SOFTBANK BB Corp. and SOFTBANK TELECOM
Corp. must not show excessive debt. The consolidated balance sheets of BB Mobile Corp. at the end of the year and the firsthalf of the year must not show excessive debt.
Other than the exceptions listed below, as a general rule, members of the following restricted group of companies (the“restricted group”), will not take on debt obligations* from any company not included in the restricted group or issue any
preferred stock after October 12, 2006, the issuance date of these Euro-denominated Senior Notes due 2013.
(Restricted group)(a) SOFTBANK CORP.
(b) SOFTBANK BB Corp.
(c) SOFTBANK TELECOM Corp.
(d) SOFTBANK MOBILE Corp.
(e) Mobiletech Corporation(f) BB Mobile Corp.
(g) TELECOM EXPRESS Co., Ltd.
(h) Japan System Solution Co., Ltd.
(i) SBBM Corporation(Exceptions)
The major exceptions are as follows:ⅰ. SOFTBANK CORP. is permitted to borrow up to ¥200 billion through its commitment line, etc.
ⅱ. Borrowing related to the acquisition of Vodafone K.K. (currently SOFTBANK MOBILE Corp.) (including refinancing) is
permitted up to a principal amount of ¥1,450 billion.
ⅲ. Among the restricted group, those involved in the Mobile Communications business segment (d, f, g, h) are permitted toincur capital expenditure related debt incurring activities* up to a principal amount of ¥400 billion.
ⅳ. SOFTBANK TELECOM Corp. is permitted to borrow up to a principal amount of ¥175 billion.
ⅴ. The refinancing of the outstanding debt of the restricted group as of October 12, 2006, the issuance date of those notes, ispermitted up to the same level of principal amount.
ⅵ. In the event that [1] a company in the restricted group incurs lease obligations or [2] a subsidiary of SOFTBANK CORP.
other than the members of the restricted group incur lease obligations, SOFTBANK CORP. is permitted to provide
guarantees to leasing companies up to a principal amount of ¥400 billion for the total of [1] and [2].
ⅶ. SOFTBANK CORP. is permitted to make security lending transactions using the stock of Yahoo Japan Corporation up to,
as a general rule, ¥200 billion.
ⅷ. Other than (ⅰ) to (ⅶ) above, debt-incurring activities* which are pari passu with those notes are permitted up to ¥150
billion.
*(Note) Debt-incurring activities include new borrowings, leasing, etc.

38

SOFTBANK MOBILE Corp. received a loan (the “SBM loan”) from Mizuho Trust & Banking Co., Ltd. (the “lender”), which,as the Tokutei Kingai Trust Trustee, was entrusted with the proceeds by WBS Funding*1. Under the terms of the SBM loan
agreement, SOFTBANK MOBILE Corp. is allowed a certain degree of flexibility in its business operations, as a general rule.
However, in the event that the loan agreement's financial performance targets (reduction in cumulative debt, adjusted
EBITDA*2, leverage ratio*3) or operational performance targets (number of subscribers) are not met, depending on theimportance and the timing of issue, the influence of the lender on the operations of SOFTBANK MOBILE Corp. might beincreased. It is possible that limits will be placed on capital investment, that prior approval will be required for development of
new services, that a majority of the board directors will be appointed, and that rights to assets pledged as collateral, including
shares of SOFTBANK MOBILE Corp., will be exercised. As of September 30, 2007, there is no infringement of the debt
covenants.
Note: *1. WBS Funding (Whole Business Securitization Funding)A special purpose company for the purpose of allocating the total amount raised from domestic and foreign
financial institutions--¥1,441.9 billion--under the WBS scheme through the Tokutei Kingai Trust Trustee for the
SBM loan to SOFTBANK MOBILE Corp. SOFTBANK MOBILE Corp. borrowed from Tokutei Kingai Trust
Trustee an amount of ¥1,366 billion, representing the total amount of ¥1,441.9 billion raised by WBS Funding lesssuch items as interest hedge costs and interest reserve.
*2. Adjusted EBITDA (Adjusted Earning Before Interests, Taxes, Depreciation, and Amortization)
Lease payments which are included in operating expenses are added back to EBITDA.
*3. Leverage ratio
Leverage ratio = Debt / Adjusted EBITDA. The balance of debt does not include capital financing,
subordinated loans from the SOFTBANK Group or Vodafone Oversea Financial Limited or existing bonds.
The amount of net assets shown in SOFTBANK TELECOM Corp.’s balance sheets for the end of each interim period and theend of each year must not fall below the larger of [1] or [2] below.
[1] 75% of the net assets shown in the consolidated balance sheets of SOFTBANK TELECOM Corp. at the end of themost recent year.
[2] 60% of the amount of net assets shown in the consolidated balance sheets of SOFTBANK TELECOM Corp. as ofMarch 31, 2005.

(Consolidated Statements of Income)
1. Selling, general and administrative expenses

Sales commission

Six-month period ended
September 30, 2006
125,794 million yen

Six-month period ended
September 30, 2007
144,058 million yen

Fiscal year ended
March 31, 2007
260,478 million yen

Sales promotion expense

60,55083,243

145,382

Payroll and bonuses

44,30051,42594,723

Allowance for doubtful accounts

2,052

15,138

16,614

2. Unrealized appreciation on investments at subsidiaries in the United States of America
Certain subsidiaries of the Company in the United States of America qualify as investment companies under the provisions
established by the AICPA Guide and account for the investment securities in accordance with the AICPA Guide.
“Unrealized appreciation on investments at subsidiaries in the U.S.” recognized in the consolidated statements of income inaccordance with the AICPA Guide is the net change in the fair value of the investments held by subsidiaries.

39

(Consolidated Statements of Changes in Equity)
Interim period from April 1, 2006 to September 30, 2006:
1. Class and number of outstanding shares:(shares in thousands)

March 31, 2006

Increase

Decrease

1,055,231

92-

Number of common stocks

September 30, 2006
1,055,323

Note: Increase resulted from the exercise of stock acquisition rights.
2. Class and number of treasury stocks:(shares in thousands)

March 31, 2006

Increase

Decrease

September 30, 2007

149

3

-

153

Number of common stocks

Note: Increase resulted from the acquisition of the fractional shares.
3. Stock acquisition rights:
Type

SOFTBANK,
Corp.
Consolidated
Subsidiaries

Detail of stock acquisitionrightsClass of shares

Stock acquisition rights
issued in 2004

CommonstocksNumber of shares for stock acquisition rights(in thousands)
September 30,
March 31,
Increase
Decrease
2006
2006
24,000

Total

-

-

24,000Millions of yen
September 30,
2006
3,150

-

4

-

3,154

4. Dividends:
Dividend paid
Resolution

Class ofAmount of dividend

Dividend pershares(Millions of yen)share

Ordinary general meeting ofCommonshareholders, June 23, 2006

stocks

2,637

40

¥2.50

Record date

Effective date

March 31, 2006

June 23, 2006

Interim period from April 1, 2007 to September 30, 2007:
1. Class and number of outstanding shares:(shares in thousands)

March 31, 2007

Increase

Decrease

1,055,862

24,655-

Number of common stocks

September 30, 2007
1,080,518

Note: Increase resulted from the exercise of stock acquisition rights.
2. Class and number of treasury stocks:(shares in thousands)

March 31, 2007

Increase

Decrease

158

3

-

Number of common stocks

September 30, 2007
161

Note: Increase resulted from the acquisition of the fractional shares.
3. Stock acquisition rights:
Type

SOFTBANK,
Corp.
Consolidated
Subsidiaries

Detail of stock acquisitionrightsClass of shares

Stock acquisition rights
issued in 2004

CommonstocksNumber of shares for stock acquisition rights(in thousands)
September 30,
March 31,
Increase
Decrease2007
2007
24,000Total-

24,000Millions ofyen
September 30,
2007

-

-

-

66

-

66

4. Dividends:
Dividend paid
Resolution

Class ofAmount of dividend

Dividend pershares(Millions of yen)share

Ordinary general meeting ofCommonshareholders, June 22, 2007

stocks

2,639

¥2.50

Record date

Effective date

March 31, 2007

June 25, 2007

5. Adoption of new accounting standards at a subsidiary in the United States of America
A subsidiary of the Company in the United States of America applied “Accounting for Uncertainty in Income Taxes”(Financial Accounting Standard Board Interpretation No. 48), effective for fiscal years beginning after December 15, 2006,
from the six-month period ended September 30, 2007. The cumulative effect of applying the provisions of this Interpretation
was reported as an adjustment to the opening balance of accumulated deficit, and accordingly, it is recorded as “Increase inaccumulated deficit due to adoption of new accounting standards at a subsidiary in the U.S.” in the consolidated statements ofchanges in equity.

41

Fiscal year from April 1, 2006 to March 31, 2007:
1. Class and number of outstanding shares:(shares in thousands)

March 31, 2006

Increase

Decrease

March 31, 2007

1,055,231

631-

1,055,862

Number of common stocks

Note: Increase resulted from the exercise of stock acquisition rights.
2. Class and number of treasury stocks:(shares in thousands)

March 31, 2006

Increase

Decrease

149

9

-

Number of common stocks

March 31, 2007
158

Note: Increase resulted from the acquisition of the fractional shares.
3. Stock acquisition rights:
Type

SOFTBANK,
Corp.
Consolidated
Subsidiaries

Detail of stock acquisitionrightsClass of shares

Stock acquisition rights
issued in 2004

CommonstocksNumber of shares for stock acquisition rights(in thousands)
March 31,
March 31,
Increase Decrease
2007
2006
24,000

-

Total

-

24,000Millions of yen
March 31, 2007
3,150

-

30

-

3,180

4. Dividends:(1) Dividend paid
Resolution

Class ofAmount of dividend

Dividend pershares(Millions of yen)share

Ordinary general meeting ofCommonshareholders, June 23, 2006

stocks2,637

Record date

¥2.50

March 31, 2006

Effective dateJune 23, 2006

(2) Dividends which recorded date is in the fiscal year 2007 and effective date for payment is in the fiscal year 2008.
Resolution

Class ofAmount of dividend

Source ofDividend

shares(Millions of yen)

dividend

per share

Ordinary general meeting ofCommonshareholders, June 22, 2007

stocks2,639

42

Retainedearnings¥2.50

Record date

Effective date

March 31, 2007

June 25, 2007

(Consolidated Statements of Cash Flows)
1. Reconciliation of cash and cash equivalents to the amounts presented in the accompanying consolidated balance sheets
As of September 30, 2006

As of September 30, 2007

As of March 31, 2007

Cash and deposits

273,166

472,738

377,666

Marketable securities

7,792

9,261

8,588

Time deposits with original maturity over three months（2,379）(21,839)(1,989)Stocks and bonds with original maturity over three months（6,006）(7,387)(6,744)

Cash and cash equivalents

272,572 million yen

452,771

million yen

377,520 million yen

2. Scope of Purchase of property and equipment, and intangibles in the consolidated statements of cash flows“Purchase of property and equipment, and intangibles” are comprised of cash outflows from purchasing property andequipment, and intangible assets (excluding goodwill) and long-term prepaid expenses.
3. Proceeds from sale and lease back of equipment newly acquired
Once SOFTBANK MOBILE Corp. purchases telecommunications equipment for the purpose of assembly, installation andinspection, SOFTBANK MOBILE Corp. sells the equipment to lease companies for sale and lease back purpose. The leased
asset and lease obligation are recorded in the consolidated balance sheets.
The cash outflows from the purchase of the equipment from vendors are included in “Purchase of property and equipment, andintangibles” and the cash inflows from the sale of the equipment to lease companies are included in “Proceeds from sale andlease back of equipment newly acquired.”43

(Segment Information)
1. Business segment information(1) For the six-month period ended September 30, 2006
(Millions of yen; amounts less than one million yen are omitted.)
MobileBroadband

Fixed-line

InternetCommunications

Infrastructure

Telecommunications

Culture¥581,884¥127,473¥166,234

Elimination

e-Commerce

OthersTotal¥117,080¥37,821¥1,120,173¥-

or Corporate

Consolidated

Net sales(1) Customers(2) Inter-segment
Total¥89,679¥1,120,173

2,575

1,577

15,715

1,640

7,099

6,253

34,861(34,861)-

584,459

129,050

181,950

91,319124,180

44,075

1,155,035(34,861)

1,120,173

Operating expenses

527,824

117,382

181,654

46,976

121,319

44,244

1,039,401(31,780)

1,007,621

Operating income (loss)¥56,635¥11,668¥295¥44,343¥2,860¥(169)¥115,633¥ (3,081)¥112,552(2) For the six-month period ended September 30, 2007
(Millions of yen; amounts less than one million yen are omitted.)
MobileBroadband

Fixed-line

InternetCommunications Infrastructure Telecommunications

Culturee-Commerce

OthersTotal¥118,511¥43,831¥1,364,745

Elimination
or Corporate

Consolidated

Net sales(1) Customers(2) Inter-segment
Total¥808,914¥126,750¥157,874¥108,862¥-¥1,364,745

5,595

3,068

23,598

1,557

6,962

7,947

48,729(48,729)-814,509

129,819

181,473

110,419

125,473

51,7791,413,474(48,729)

1,364,745

Operating expenses

720,289

110,832

181,123

55,504

123,372

52,4291,243,553(46,555)

1,196,998

Operating income (loss)¥94,219¥18,986¥349¥ 54,915¥2,100¥ (650)169,920¥ (2,173)¥167,746(3) For the fiscal year ended March 31, 2007
(Millions of yen; amounts less than one million yen are omitted.)
MobileBroadband

Fixed-line

InternetCommunications

Infrastructure

Telecommunications

Culture¥1,430,821¥258,824¥332,136

11,218

5,402

41,993Elimination

e-Commerce

OthersTotal¥191,509¥256,923¥74,003¥2,544,219¥-¥2,544,219

2,702

14,647

16,781

92,746(92,746)-or Corporate

Consolidated

Net sales(1) Customers(2) Inter-segment

1,442,040

264,227

374,129

194,212271,570

90,7852,636,966(92,746)2,544,219

Operating expenses

1,286,296

237,418

377,095

97,667

264,889

95,5152,358,883(85,729)

2,273,153

Operating income (loss)¥155,743¥26,809¥(2,965)¥96,544¥6,680¥(4,730)¥278,082¥(7,017)¥271,065

Total

Notes:
1. Business segments are categorized primarily based on the nature of business operations, type of services, and similarity of sales
channels, etc. which the SOFTBANK Group uses for its internal management purpose.
2. Please refer to the chart of “The SOFTBANK Group” for the main businesses segments on the page 19.
3. Unallocated operating expenses for the six-month periods ended September 30, 2006, September 30, 2007 and for the fiscal year
ended March 31, 2007 in the column “Elimination or Corporate,” mainly represent expenses of the corporate division of theCompany, were totaling ¥2,826 million, ¥2,802 million and ¥8,481 million, respectively.
4. In the Mobile Communications segment, which was established for the fiscal year ended March 31, 2007, net sales and operating
expenses of SOFTBANK MOBILE Corp. and its consolidated subsidiaries were consolidated from May 2006.

44

2. Geographic segment information(1) For the six-month period ended September 30, 2006
(Millions of yen; amounts less than one million yen are omitted.)
North
AmericaJapan

OthersEliminationorCorporate

Total

Consolidated

Net sales(1)(2)

Customers¥1,115,017¥4,487¥1,120,173¥-¥1,120,173

262

-

62

325

(325)

-

1,115,280

668

4,550

1,120,499(325)

1,120,173

Inter-segment
Total

¥668

Operating expenses

998,253

1,170

4,848

1,004,272

3,348

1,007,621

Operating income (loss)¥117,026¥(501)¥(298)¥116,226¥(3,674)¥112,552(2) For the six-month period ended September 30, 2007
(Millions of yen; amounts less than one million yen are omitted.)
North
AmericaJapan

OthersTotal

EliminationorCorporate

Consolidated¥-¥1,364,745

Net sales(1)

Customers(2)

Inter-segment¥1,356,729¥763¥7,251¥1,364,745

300

-

149

449

(449)

-

Total

1,357,029

763

7,401

1,365,195(449)

1,364,745

Operating expenses

1,185,954

1,172

7,628

1,194,754

2,243

1,196,998

Operating income (loss)¥171,075¥(408)¥(227)¥170,440¥(2,693)¥167,746(3) For the fiscal year ended March 31, 2007
(Millions of yen; amounts less than one million yen are omitted.)
Japan

North
America

OthersTotal

EliminationorCorporate

Consolidated

Net sales(1)

Customers(2)

Inter-segment¥2,532,359¥1,861¥9,997¥2,544,219¥-¥2,544,219

2,979

-

266

3,245

(3,245)-

Total

2,535,339

1,861

10,264

2,547,465(3,245)2,544,219

Operating expenses

2,254,378

2,793

11,0652,268,236

4,916

2,273,153

Operating income (loss)¥280,960¥(931)¥(801)¥279,228¥(8,162)¥271,065

Notes:
1. Net sales by geographic region are recognized based on geographic location of the operation.
Significant countries in each region are shown below:
North America : United States of America and Canada
Others: Europe, Korea, China, and Singapore
2. Unallocated operating expenses for the six-month periods ended September 30, 2006, September 30, 2007 and for the fiscal year
ended March 31, 2007 in the column “Elimination or Corporate,” mainly represent expenses of the corporate division of theCompany, were totaling ¥2,826 million, ¥2,802 million and ¥8,481 million, respectively.
3. Overseas sales
Disclosure of overseas sales was omitted because the total overseas sales were less than 10% of total consolidated sales for thesix-month periods ended September 30, 2006, September 30, 2007 and for the fiscal year ended March 31, 2007.

45

(Leases)
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 accumulated impairment loss of leased property for eachperiod:As of September 30, 2006

Telecommunications equipment andtelecommunications service lines
Acquisition cost
Accumulated depreciation
Accumulated impairment loss

As of September 30, 2007

As of March 31, 2007

212,080（81,206）

181,016(64,498)

185,251(60,294)（21,703）
109,170 million yen(21,703)
94,814 million yen(21,703)103,252 million yen

Buildings and structures
Acquisition cost
Accumulated depreciation
Accumulated impairment loss
Net leased property

48,237（4,804）43,432 million yen

48,237(7,451)40,786 million yen

48,237(6,127)
42,109 million yen

Property and equipment - others
Acquisition cost
Accumulated depreciation
Accumulated impairment loss
Net leased property

19,998（4,996）（1,656）
13,346 million yen

18,364(5,526)(1,284)
11,554 million yen

20,187(6,168)(1,388)
12,630 million yen

Intangible assets
Acquisition cost
Accumulated depreciation
Accumulated impairment loss
Net leased property

10,682（1,755）（287）
8,639 million yen

10,215(2,685)(208)
7,321 million yen

10,124(2,254)(234)
7,635 million yen

290,999（92,763）（23,647）
174,588 million yen

257,833(80,160)(23,196)
154,476 million yen

263,800(74,846)(23,326)
165,628 million yen

Net leased property

Total
Acquisition cost
Accumulated depreciation
Accumulated impairment loss
Net leased property(2) Obligations under finance lease at the end of each period:
As of September 30, 2006

As of September 30, 2007

As of March 31, 2007

Due within one year
Due after one year
Total

34,319171,834
206,153 million yen

32,621
154,660
187,282 million yen

33,088
165,966
199,055 million yen

Balance of allowance for impairment loss
on leased property

20,673 million yen

15,704 million yen

18,170 million yen

46

(3) Lease payments, reversal of allowance for impairment loss on leased property, amounts equivalent to depreciation andinterest expense for each period:

Lease payments
Reversal of allowance for impairment loss
on leased property
Depreciation expense
Interest expense

Six-month period ended

Six-month period ended As

Fiscal year ended

September 30, 2006of September 30, 2007

March 31, 2007

26,125 million yen

22,299 million yen

52,875 million yen

2,753

2,465

5,256

20,255
7,075

18,182
5,678

41,52914,086(4) Calculation method used to determine the amount equivalent to depreciation and interest expense:
The amount equivalent to depreciation is computed using the straight-line method over the period of the capital leases,
assuming no residual value except in cases where the residual value is guaranteed in the lease contract.
The amount equivalent to interest expense is calculated by subtracting acquisition costs from the total lease payments andallocated over the lease periods based on the interest method.
Long-term prepaid expenses relating to a lease contract, in which the contract term and payment term are different, for theperiod ended September 30, 2006, September 30, 2007 and for the fiscal year ended March 31, 2007 were ¥4,572 million,¥11,221 million and ¥7,848 million, respectively and are included in “other assets” of investments and other assets in the
consolidated balance sheets.
(as a lessor)(1) Acquisition cost and accumulated depreciation at the end of each period:
As of September 30, 2006

Property and equipment - others
Acquisition cost
Accumulated depreciation
Net leased property

115
(109)
6 million yen

As of September 30, 2007

- million yen

As of March 31, 2007

- million yen(2) The future lease receivables under finance lease at the end of each period:
As of September 30, 2006

Due within one year
Due after one year
Total

6
6 million yen

As of September 30, 2007

- million yen

As of March 31, 2007

- million yen(3) Lease income, depreciation and amount equivalent to interest income under finance lease for each period:

Lease income
Depreciation expense
Interest income

Six-month period ended

Six-month period ended

Fiscal year ended

September 30, 2006

September 30, 2007

March 31, 2007

23 million yen
220- million yen-

29 million yen
290(4) Calculation method of amount equivalent to interest income
The amount equivalent to interest income is calculated by subtracting acquisition costs from total lease income andestimated residual value and allocated over the lease periods based on the interest method.

47

2. Non-cancelable operating lease transactions(as a lessee)
The future lease payments under non-cancelable operating leases at the end of each period:
As of September 30, 2006

Due within one year
Due after one year
Total

12,776
6,887
19,663 million yen

As of September 30, 2007

4,651
3,803
8,455 million yen

As of March 31, 2007

9,898
4,386
14,284 million yen(as a lessor)
The future lease receivables under non-cancelable operating leases at the end of each period:
As of September 30, 2006

Due within one year
Due after one year
Total

1,836
2,897
4,734 million yen

48

As of September 30, 2007

1,481
2,253
3,735 million yen

As of March 31, 2007

1,258
1,700
2,958 million yen

(Investment in Debt and Equity Securities)
1. Marketable and investment securities at fair value(Millions of yen; amounts less than one million yen are omitted.)
As of September 30, 2007
As of March 31, 2007

As of September 30, 2006

(1)
(2)

Equity securities
Other
Total

Investment
Cost

Carrying
AmountDifferences

Investment
Cost

Carrying
AmountDifferences

Investment
Cost

Carrying
AmountDifferences

35,449146
35,596

187,859
146
188,006

152,410
152,410

32,1381,340
33,479182,359
1,349
183,709150,2219150,230

40,068
1,100
41,168

231,789
1,100
232,890

191,7210
191,721

2. Carrying amounts of the unlisted investment securities(Millions of yen; amounts less than one million yen are omitted.)
As of September 30, 2006
As of September 30,
As of March 31, 2007
2007

Carrying Amount

Carrying Amount

Carrying Amount(1)

Held-to-maturity debt securities:
Foreign debt securities
Debt securities(2) Available-for-sale securities:
Equity securities
Money Management Fund
Investments in limited partnerships
Foreign debt securities
Designated Money Trust
Preferred fund certificate
Other
Total

772

700
368

170

112,170
5,694
5,149
1,000
2,000
627
127,415

107,551
5,857
5,633
1,114
1,000
1,300
123,525

141,790
6,053
5,802
148
1,000
2,000
618
157,583

3. Investment securities evaluated at fair value under the application of American Institute of Certified Public Accountants(“AICPA”) Audit and Accounting Guide on Investment Companies
Certain subsidiaries of the Company in the United States of America qualify as investment companies under the provisions establishedby the AICPA Guide and account for the investment securities in accordance with the AICPA Guide.
The carrying amounts of the investment securities at fair value recorded in the consolidated balance sheets at September 30, 2007 andnet changes in fair value of those investment securities recorded in the consolidated statements of income for the six-month period
ended September 30, 2007 are as follows:
Six-month period ended September 30, 2007 (as of September 30, 2007)
Carrying amounts of investment securities at fair value recorded in consolidated balance sheets:
Net changes in fair value of investment securities recorded in consolidated statements of income:(Unrealized appreciation on investments at subsidiaries in the U.S.)

44,830 million yen
14,126 million yen

These investment securities were included in Equity securities in “2. Carrying amounts of the unlisted investments securities, (2)Available-for-sale securities” for the fiscal year ended March 31, 2007. Due to the materiality of the amount and for the purpose ofclearly disclosing the investment securities evaluated at fair value, these investments are separately disclosed as “Investment securities
evaluated at fair value under the application of AICPA audit and Accounting Guide on Investment Companies.”(For reference)
Carrying amounts of the investment securities at fair value included in equity securities in “2. Carrying amounts of the unlisted
investments securities, (2) Available-for-sale securities” and net changes in fair value of the investment securities recorded inconsolidated statements of income are as follows:
Six-month period ended September 30, 2006 (as of September 30, 2006)
Carrying amounts of investment securities at fair value recorded in consolidated balance sheets:
Net changes in fair value of investment securities recorded in consolidated statements of income:

5,345 million yen- million yen

Fiscal year ended March 31, 2007 (as of March 31, 2007)
Carrying amounts of investment securities at fair value recorded in consolidated balance sheets: 33,256 million yen
Net changes in fair value of investment securities recorded in consolidated statements of income: 4,935 million yen(Unrealized appreciation on investments at subsidiaries in the U.S.)
49

(Derivative Transactions)
1. Currency Related(Millions of yen; amounts less than one million yen are omitted.)
September 30, 2006
Contract amounts
Over 1Nature of transaction

Fair

Unrealizedvalue

March 31, 2007

September 30, 2007
Contract amounts
Over 1

gain (loss)

year

Fair

Unrealized

value

gain (loss)

Contract amounts
Over 1

Fair
value

Unrealized
gain (loss)

year

year

Off-market transactions
Option transactions to・ Purchase U.S dollars call option andJapanese yen put option¥5,873

-

¥63

¥63

¥5,900

-

¥(29)

¥(29)

¥5,900

-

¥(41)

¥(41)

68,753-70,255

1,502

70,936-70,96326

70,890- 70,866

(23)

-

-

-

-

9,045

-

9,629

584

9,045

-

9,130

85

50,662-

54,978(4,316)

-

-

-

-

-

-

-

-

Forward exchange contracts to・ Purchase U.S. dollars andsell Japanese yen
・ Purchase Euro and sell Japanese yen
・ Purchase Japanese yen andsell British pound
Total¥(2,750)¥580

Notes: 1. Fair value is based on information provided by financial institutions at the end of each period.
2. Derivative transactions to which the Company applied hedge accounting are excluded.
2. Interest Related
There are no applicable items.
Note: Derivative transactions to which the Company applied hedge accounting are excluded.
3. Securities Related
There are no applicable items.
Note: Derivative transactions to which the Company applied hedge accounting are excluded.

50

¥20

(Per Share Data)
Six-month period ended Six-month period ended
September 30, 2006
September 30, 2007

Shareholders’ equity per share (yen)Net income per share - primary (yen)Net income per share - diluted¥236.14
13.68
12.84

¥327.15
43.99
41.43

Six-month period ended Six-month period ended
September 30, 2006
September 30, 2007

Basic data for computation of the per share data
1. Net income (in millions of yen)
2. Net income allocated to common stock outstanding(in millions of yen)
3. Amounts not allocated to shareholders(in millions of yen)
4. Weighted average number of common stock outstanding
during each period (unit: shares)
5. Adjustment for net income used to calculate net income per share diluted (in millions of yen)
6. Increase of common stock used to calculate net income per share diluted (unit: shares)

Fiscal year ended
March 31, 2007

¥268.02
27.31
26.62
Fiscal year ended
March 31, 2007

14,43946,462

28,815

14,43946,462

28,815---

1,055,140,098

1,056,162,870

1,055,264,814

191

757

1,520

84,168,845

83,658,516

84,391,085

Stock acquisition rights
Stock acquisition rights
Stock acquisition rights
agreement on June 22,
agreement on June 22,
agreement on June 22,2005 in accordance with 2005 in accordance with 2005 in accordance withspecial resolution at general special resolution at general special resolution at generalshareholders’meetingshareholders’meetingshareholders’meeting

7. Residual securities which do not dilute net income per share

Note:
Notes for stock options and business combinations are not disclosed in the consolidated financial statements since those notes are
insignificant.

51