SOFTBANK CORP.
CONSOLIDATED FINANCIAL RESULTS
For the three-month period ended June 30, 2005
Tokyo, August 10, 2005
FINANCIAL HIGHLIGHTS
1. Results of Operations(Millions of yen; amounts less than one million yen are omitted.)
Net Sales

Operating loss

Ordinary loss

Net lossAmount%Amount%Amount%Amount%Three-month period ended
June 30, 2005

¥258,637

75.6¥(3,190)-¥(13,017)-¥(11,153)-

Three-month period ended
June 30, 2004

¥147,311

41.8¥(3,819)-¥(11,669)-¥(17,876)-

FY2005
April 2004 through March 2005

¥837,018¥(25,359)

Net loss per sharebasic (yen)Net loss per sharediluted (yen)Three-month period ended
June 30, 2005
Three-month period ended
June 30, 2004
FY2005
April 2004 through March 2005¥(31.73)-¥(50.87)-¥(171.03)-¥(45,248)¥(59,871)

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

12.

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

3.

Shareholders’equityEquity ratio (%)

Shareholders’ equity
per share (yen)June 30, 2005

¥1,620,882¥167,345

10.3¥476.15

June 30, 2004

¥1,667,303¥230,64513.8¥656.36

FY2005
March 31, 2005

¥1,704,853¥178,016

10.4¥505.86

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

Operating activities

Three-month period ended
June 30, 2005¥(18,213)¥(28,703)¥12,925¥287,211

Three-month period ended
June 30, 2004¥(11,937)¥(23,301)¥98,752¥504,395

FY2004
April 2004 through March 2005¥(45,989)¥(242,944)¥277,770¥320,194

4.

Scope of Consolidation at June 30, 2005

Consolidated subsidiaries:
Equity-method non-consolidated subsidiaries:
Equity-method affiliates:

5.

149
8
95

Changes in Scope of Consolidation
Consolidated subsidiaries:

Newly added:
Excluded:37Equity-method non-consolidated subsidiaries and affiliates:
Newly added:
Excluded:272

Management Policies

1. Fundamental Management Policies
The core management philosophy of the SOFTBANK CORP (hereafter “the Company”) and the
SOFTBANK Group (hereafter “the Group”) is “Endeavoring to benefit society and the economy by
fostering the sharing of wisdom and knowledge gained through the IT revolution.”

By conducting

business activities in a creative manner, the Group focuses its energy on both contributing to thedevelopment of society and increasing its corporate value.
The household penetration rate of broadband connections in Japan is already more than 39%.

The

rising use of broadband connections along with rapid advances in data communications technology
is steadily bringing the world closer to the advent of the ubiquitous information age.

As a 21st

century lifestyle company that uses broadband technologies to make people's lifestyles richer andmore fun, the Group aims to be the number one broadband corporate group in Japan, providing
comprehensive telecommunications infrastructure as well as the portals and content that are
deployed over such infrastructure. The Group is creating more affluent and enjoyable 21st century
lifestyles whereby people can easily communicate anytime, anywhere, and with anyone.

The Group acquired JAPAN TELECOM CO., LTD. in July 2004, and Cable & Wireless IDC Inc.
in February 2005, thereby establishing a strong base for operations as a comprehensive
telecommunications company.

JAPAN TELECOM CO., LTD. merged with JAPAN TELECOM

IDC INC., which had inherited the telecommunications operations of Cable & Wireless IDC Inc.,
to strengthen the foundations of its international telecommunications business, optimize
management resources and fasten decision making process by management.

Moreover,SOFTBANK BB Corp. and JAPAN TELECOM CO., LTD. are pursuing synergies among theirtechnical, corporate sales and marketing, and consumer sales and marketing departments.
At the end of June 2005, the cumulative number of lines installed in the Group’s Yahoo! BB ADSL
service stood at 4.88 million and the steadily rising cumulative number of lines in the BB Phone IP
telephony service reached 4.63 million.

The profitability of the ADSL business is dramatically

improving due to growth in the number of subscribers and in average revenue per user (ARPU) as
well as to efforts to cut customer acquisition costs and other costs.
In the FTTH (fiber-to-the-home) business, the Group worked to further expand and strengthen its
lineup of offerings, which include the BBTV broadband TV broadcasting service; Wireless TV box,
which enables people to watch terrestrial TV broadcasts on a computer; and BB Phone hikari, a3

fiberoptic IP telephony service.

Having launched Yahoo! BB hikari TV packages in July 2005, theGroup is now undertaking the full-scale development of FTTH operations.
In December 2004, the Group launched a new fixed-line telephone service called Otoku Line, andthe cumulative number of lines installed for this service had reached 540 thousand at the end ofJune 2005.

JAPAN TELECOM CO., LTD. has established direct marketing channels for Otoku

Line and is promoting growth in sales of Otoku Line to enterprise customers by expanding theservice menu.
Entering the mobile business, the Group plans to apply for a license to operate on the 1.7GHz
frequency band.

The Group obtained an experimental license to operate a W-CDMA system from

the Ministry of Internal Affairs and Communications in April 2005 and has subsequently begun test
operations using that technology.
The Group is aiming to be a comprehensive telecommunications service provider offering mobile
phone, fixed-line telephone, ADSL, FTTH, and diverse other services.

The Group intends to be

the only corporate group that provides a seamless broadband environment while also supplying
broadband infrastructure as well as portals and content, thereby contributing to the realization of
the ubiquitous information society.

2. Medium- and Long-Term Strategies(1) Becoming a Comprehensive Telecommunications GroupThe Group is sustaining its efforts to further expand its customer base for broadband infrastructureand fixed-line telecommunications businesses with the goals of obtaining sustainable profits andmaximizing

cash

flow.

The

Group

is

working

tostrengthenitscomprehensive

telecommunications operations so that it will be able to seamlessly provide diverse
telecommunications services that meet a wide range of market needs.

(2) Establishing a Unique Business Model
The Group has established a foundation as a comprehensive telecommunications group, and it isalso a corporate group based on the Internet related business.

The Group includes many

companies that are using the Yahoo! BB broadband infrastructure to provide a diverse range ofservices and content in such areas as music, broadcasting, games, sports, and e-commerce.

The

Group will establish a unique business model for the broadband era that will generate long-term,
stable profits from its infrastructure business, increasing returns from its portal business, anddiverse sources of income from its services and content, thereby maximizing Group profits.

43. Important Management Issues(1) Achieving Consolidated Operating Profit for the Fiscal Year as a Whole
The Company is seeking to achieve consolidated operating profit for the fiscal year as a whole.

In

the Otoku Line business which is still in the stage of initial investments, the Company is focusing
on generating profit on a monthly basis ahead of schedule by continuing to bolster the marketing ofhighly profitable services to corporate customers while shortening the waiting time from the receipt
of orders to the start of service.

Aiming to enhance the profitability of ADSL business, theCompany is sustaining efforts to expand the customer base and boost ARPU through the provisionof BBTV and other new services.

Moreover, the Company is striving to rigorously undertake

profit management and profit generation activities throughout its operations to generateconsolidated operating profit for the fiscal year as a whole.

(2) Preventing the Recurrence of Inappropriate Marketing Activities for Otoku Line
JAPAN TELECOM CO., LTD. received a reprimand from the Ministry of Internal Affairs andCommunications in June 2005 due to behavior of certain secondary marketing agencies selling the
Otoku Line service. These agencies were found to have completed application forms on behalf ofcertain customers without authorization from those customers.

To prevent the recurrence of thisproblem, JAPAN TELECOM CO., LTD. is carefully investigating the circumstances of all existingback orders for Otoku Line while fundamentally reevaluating its marketing systems.

In addition,

JAPAN TELECOM CO., LTD. is taking steps to ensure that all agencies engaged in direct
marketing activities establish departments separate from their marketing departments with the
responsibility of confirming customer agreements.

Through these initiatives, the Company isdoing its utmost to restore public trust.

(3) Strengthening the Internal Management Systems
To respond to needs associated with growth in the scale of its operations, in the number of
employees and in the size of the organizational structure, the Company is reassessing its
organizational systems while also taking steps to enhance its internal management systems
employing internal auditing functions. The reassessment of organizational systems is designed toestablish appropriate management systems.

5(4) Enhancement of Information Security Management Systems
As a part of its corporate social responsibility (CSR) programs, the Group is continuing to build
and maintain top-level Groupwide information security management systems while maintaining
existing Privacy Mark and Information Security Management System (ISMS) certifications andobtaining such certifications for additional Group units.

In addition, the Group has launched a

project aimed at developing a common platform for information security and is working to achievea unified across-the-board rise in the level of information security through the implementation of
measures such as those involving the construction of portal sites, the establishment of guidelines,
the distribution of handbooks, and the creation of e-learning programs.

6

Results of Operations and Financial Position

1. Consolidated Results of Operations<Overview of Results for the three-month period ended June 30, 2005>

Net sales increased ¥111,326 million, or 76% compared with the same period of the previous fiscal
year, to ¥258,637 million. Sales in the Fixed-line Telecommunications segment newly created in
the latter half of the previous fiscal year due to the acquisition of JAPAN TELECOM CO., LTD.
amounted to ¥88,604 million.

A continued rise in the number of paying customers and in ARPU

supported a ¥15,030 million increase, to ¥61,205 million in sales in the Broadband Infrastructure
segment, as well as a ¥13,565 million increase, to ¥34,635 million in sales in the Internet Culture
segment.

As SOFTBANK INVESTMENT CORPORATION*1 changed to an equity-method

affiliate from a consolidated subsidiary at March 31, 2005, no sales were recorded in the e-Financesegment, compared with ¥15,906 million in sales recorded in that segment during the same periodof the previous fiscal year.

Operating loss decreased ¥629 million to ¥3,190 million.

In the Broadband Infrastructure

segment, the steady increase in sales and efforts to lower costs, including new customer acquisition
related costs, reduced the operating loss by ¥13,843 million, to ¥4,494 million. In the Internet
Culture segment, the continued robustness of advertising-related businesses contributed to boosting
operating income by ¥5,365 million, to ¥16,469 million.

In contrast, in the Fixed-line

Telecommunications segment, the cost of initial investments related to the Otoku Line services ofJAPAN TELECOM CO., LTD. led to the recording of a ¥14,089 million operating loss.

In the e-

Finance segment, ¥3,970 million in operating income was recorded during the same period of theprevious fiscal year.

Ordinary loss increased ¥1,348 million, to ¥13,017 million.

The shift of SOFTBANKINVESTMENT CORPORATION to the equity method affiliate and other factors caused net equity
in earnings under the equity method to rise ¥3,906 million, to ¥1,610 million.

However, an

increase in interest-bearing debt caused interest expense to increase ¥1,806 million, to ¥6,806
million, and the effect of the depreciation of the yen against the dollar on the value of foreign
currency denominated debt and other factors resulted in the foreign exchange loss increasing¥1,178 million, to ¥2,874 million.

7

Net loss shrank ¥6,722 million, to ¥11,153 million. The Company recorded a gain on sales ofinvestment securities of ¥21,827 million as special income in relation primarily to the sale ofinvestments in IT Fund*2 and Morningstar, Inc., while a refinance arrangement fee of ¥3,153
million was recorded as a special loss.

Mainly due to the performance of Yahoo Japan

Corporation, income taxes of ¥5,450 million (after refunds and adjustments) were recorded.

In

addition, minority interest of ¥6,463 million was recorded.

<Results for the Three-Month Period Ended June 30, 2005 by Business Segment>

Broadband Infrastructure—Segment sales increased ¥15,030 million, or 33%, to ¥61,205 million.
The number of paying customers in the Yahoo! BB ADSL service continued to grow steadily, as did
the related ARPU figure, supporting strong sales by SOFTBANK BB Corp.
decreased ¥13,843 million, to ¥4,494 million.

The operating loss

The large improvement in operating profitability

reflected the rise in sales from ADSL operations as well as efforts made to reduce customer
acquisition costs and other costs.

Fixed-line Telecommunications—Segment sales totaled ¥88,604 million and the operating loss
was ¥14,089 million due to the burden of initial investments associated with the start of Otoku Lineservices.

Regarding that company's traditional operations, sales declined in operations related tovoice transmission services, data transmission and dedicated line services.

Since the three-month

period ended June 30, 2005, this segment reflected the results of JAPAN TELECOM IDC INC. and
SOFTBANK IDC Corp.

e-Commerce—Segment sales increased ¥2,433 million, or 4%, to ¥60,469 million.

SOFTBANKBB Corp. maintained robust sales of personal computers and related products to major homeelectronics retailers and enhanced license sales to corporate customers.

Operating income

decreased ¥814 million, or 53%, to ¥726 million, reflecting such factors as a decline in sales ofhighly profitable software products and a rise in personnel costs associated with efforts to bolster
marketing capabilities.

Internet Culture—Segment sales increased ¥13,565 million, or 64%, to ¥34,635 million.
Advertising sales by Yahoo Japan Corporation surged substantially, reflecting national clients'

8

increasing recognition of Internet advertising’s value and a concomitant general trend toward larger
Internet advertising budgets as well as Yahoo Japan Corporation's proactive marketing efforts.
Regarding non-advertising businesses, the number of Yahoo! Shopping stores grew, and strong
performance was sustained by Yahoo! Premium and Yahoo! Auctions operations.

Operatingincome increased ¥5,365 million, or 48%, to ¥16,469 million.

Broadmedia—Segment sales increased ¥554 million, or 18%, to ¥3,631 million.

This wasmainly the result of higher sales at Broadmedia Studios Corporation, to which the operations of
MOVIE TELEVISION INC. were transferred during the second quarter of the previous fiscal year.
Operating results improved ¥1,473 million, to ¥634 million of operating income.

Profitability inthis segment was considerably improved by the shift of BB Cable Corporation to the Broadband
Infrastructure segment from the third quarter of the previous fiscal year.

Technology Services—Segment sales decreased ¥90 million, or 2%, to ¥5,451 million.
SOFTBANK TECHNOLOGY CORP. recorded robust sales in its business providing integrated
back-office operations services for e-commerce sites, but its sales involving commissioned
settlement and credit collection services for e-businesses were down. Operating income decreased¥78 million, or 49%, to ¥81 million, reflecting such factors as rises in personnel expense andadvertising and promotional expenses.

Media & Marketing—Segment sales decreased ¥367 million, or 12%, to ¥2,653 million, andoperating loss increased ¥88 million to ¥415 million. This performance mainly reflects declining
sales of magazines and books by SOFTBANK Publishing Inc. which continues to be impacted by
the contraction of the market for IT publications.

Other—Segment sales increased ¥5,983 million, or 273%, to ¥8,175 million, and operating loss
increased ¥270 million to ¥1,052 million.

This segment reflects the performance of Fukuoka

Softbank Hawks related business.

92. Financial Position<Balance Sheet Analysis>

Current assets decreased ¥52,446 million, to ¥553,671 million.

The primary factors behind thedecrease were a ¥32,518 million decrease in marketable securities and a ¥15,288 million decreasein notes and accounts receivable-trade, mainly a drop in e-commerce operations.

Property and equipment increased ¥5,926 million, to ¥457,644 million.

The rate of increase

was only 1% owing to the completion of proactive investment by SOFTBANK BB Corp. andJAPAN TELECOM CO., LTD.

Intangible assets decreased ¥102 million, to ¥103,438 million.

Other intangibles, such assoftware, increased ¥1,326 million, but goodwill decreased ¥1,429 million due to amortization.

Investments and other assets decreased ¥37,400 million, to ¥504,571 million.

This mainlyreflected a ¥37,107 million drop in investment securities due to the sale of shares in IT Fund andother securities.

Current liabilities decreased ¥74,597 million, to ¥616,198 million.
¥28,058 million.

Short-term borrowings rose

However, accounts payable-other and accrued expenses decreased ¥65,764

million and accounts payable-trade, primarily for e-commerce operations, fell ¥19,098 million, andincome taxes payable dropped ¥12,014 million.

Long-term liabilities decreased ¥3,850 million, to ¥763,246 million.

Although straight corporate

bonds increased ¥5,104 million principally due to the issuance of “Fukuoka Softbank Hawks Bond”
by the Company, the decrease in long-term liabilities mainly reflected a ¥3,935 million fall in longterm debt and a ¥5,340 million drop in deferred tax liabilities.

Shareholders’ equity decreased ¥10,670 million, to ¥167,345 million, mainly because
accumulated deficit grew due to the recording of a net loss.

10

<Cash Flow Analysis>
During the three-month period ended June 30, 2005, cash was used in operating and investing
activities, while cash was provided by financing activities.

As a result, cash and cash equivalents

at the end of the period amounted to ¥287,211 million, a decrease of ¥32,983 million from the endof the previous fiscal year.

Net cash used in operating activities was ¥18,213 million.

Income before income taxes andminority interest amounted to ¥760 million, and depreciation and amortization totaled ¥20,942
million.

However, the sale of shares in IT Fund and other factors caused a gain on sale ofmarketable and investment securities of ¥21,699 million to be posted as an adjustment item
(affecting special income in the consolidated statements of operations).

Another major factor

affecting net cash used in operating activities was the payment of ¥18,867 million in corporate
income taxes by Yahoo Japan Corporation and others.

Net cash used in investing activities was ¥28,703 million.

This mainly reflected the payment ofaccounts payable-other associated with capital investments in broadband infrastructure and fixedline telecommunications businesses, causing ¥90,147 million in cash outflow for the purchase ofproperty and equipment and intangibles.

However, ¥69,922 million in proceeds from the sale ofmarketable and investment securities were recorded in connection with the sale of shares in IT
Fund and other securities.

Net cash provided by financing activities was ¥12,925 million.

This mainly reflected ¥12,252

million in proceeds from the issuance of bonds.

Notes:*1 Currently SBI Holdings Inc.
*2 SOFTBANK INTERNET TECHNOLOGY FUND No.1 and No.2

11

The SOFTBANK GroupAs of June 30, 2005, the SOFTBANK Group included 252 companies with operations in nine business segments as follows.
Business segment

Consolidated
subsidiaries

Equity-method
non-consolidated
subsidiaries andaffiliates

Principal products and operational content of each business1.

Broadband
Infrastructure(Note 1)

17

6

ADSL and fiber-optic high-speed Internet connection service, IP telephonyservice, provision of content and other operations

2.

Fixed-line
Telecommunications(Note 1)

13

2

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

3. e-Commerce(Note 1)18

10

Distribution of PC software and such hardware as PCs and peripherals,
enterprise solutions, and diversified e-commerce businesses, including
business transaction platform (B2B) and consumer-related e-commerce (B2C)

4. Internet Culture(Note 1)22

10Internet-based advertising operations, broadband portal business, andInternet-based auction business5. Broadmedia

102

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

6. Technology Services

63

System solution business and business solution business7. Media & Marketing8

6Book and magazine publication in such areas as PCs, the Internet,
entertainment, etc., and development of web content specializing in IT

8. Overseas Funds

34

57

U.S.- and Asia-focused global venture capital business with a main focus on
Internet-related companies

9. Others

21

7

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

149

103

Total
Notes:1.

SOFTBANK BB Corp., JAPAN TELECOM CO., LTD. and Yahoo Japan Corporation are included in consolidated
subsidiaries of the Broadband Infrastructure, Fixed-line Telecommunications and Internet Culture segments, respectively,
while SOFTBANK BB Corp., JAPAN TELECOM CO., LTD. and Yahoo Japan Corporation operate multiple businesses andtheir operating results are allocated to multiple business segments.
2. An e-Finance business segment ended as SOFTBANK INVESTMENT CORPORATION changed to an equity-method
affiliate from a consolidated subsidiary at March 31, 2005.
Broadband Infrastructure

BB Cable Corporation

Intern et Culture

Fixed-line
Telecommunications

SOFTBANK BB Corp.
IP Revolution, Inc.

JAPAN TELECOM CO., LTD.

Yahoo Japan Corporation

SOFTBANK IDC Corp.

Tavigator, Inc.
［ Overseas ］［ Overse as ］

Seven and Y Corp.

［ Domestic］［ Domestic ］

Vector Inc.

Broadmedia（Operating Holding
Companies）
Club iT Corporation

SOFTBANK Broadmedia
Corporation(Operating Holding
Companies）

SOBTBANK CORP.
（Pu re Holding Compan y）

DeeCorp Limited

e-Commerce

SOFTBANK BB Corp.
Carview Corporation
SOFTBANKMedia & Marketing Corp.

SOFTBANK
Holdings Inc.
SOFTBANKTECHNOLOGY CORP.

SOFTBANK Publishing Inc.
Itmedia Inc.

(Operating Holding Companies）

cyber communications inc.

Technology Services

SOFTBANK INVESTMENTCORPORATION［ Domestic］

Media & Marketing

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

［ Overseas ］

SB CHINA HOLDINGS PTE LTD
SOFTBANK US Ventures VI LP

Others

Notes 1.

2.

Overseas Funds

JAPAN TELECOM IDC INC. separated to form SOFTBANK IDC Corp. and JAPANTELECOM IDC INC. on May 1, 2005. JAPAN TELECOM IDC INC. merged with
JAPAN TELECOM CO., LTD. on July 1, 2005.
SOFTBANK INVESTMENT CORPORATION renamed the company SBI Holdings,
Inc. and established a holding company structure on July 1, 2005.

12

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

CONSOLIDATED BALANCE SHEETS(Millions of yen; amounts less than one million yen are omitted.)
June 30, 2005
Amount%March 31, 2005
Amount%Increase(Decrease)

June 30, 2004
Amount%¥288,119
152,974
6,885
61,1682,326¥287,978168,262
39,40347,2243,025¥140(15,288)(32,518)
13,943(698)¥372,413
82,191
135,399
31,755
3,989

-

-

-

128,21149,558(7,362)

67,542(7,319)(17,983)(42)

221,669
70,608(7,489)35.5(52,446)

1,038,749

62.3

26.5

512
16,329(2,258)(7,167)(1,489)
5,926

4,086
91,984
691
2,269
3,022
14,829116,885

7.0

6.1(1,429)
1,326
(102)

18,582
18,582

1.1

ASSETS
Current assets:
Cash and deposits
Notes and accounts receivable - tradeMarketable securities
Inventories
Deferred tax assets
Cash segregated as deposits
related to securities business
Receivables related to margin transactions
Other current assets
Less : Allowance for doubtful accounts
Total current assets
Non-current assets:
Property and equipment, net
Buildings and structures
Telecommunications equipment
Telecommunications service lines
Land
Construction-in-progress
OthersTotal property and equipment
Intangible assets, net:
Goodwill
Other intangibles
Total intangible assets
Investments and other assets:
Investment securities andinvestments in partnerships
Other investments
Deferred tax assets
Other assets
Less : Allowance for doubtful accounts
Total investments and other assets
Deferred charges
Total assets

553,671

57,372214,928
96,874
19,39642,187
26,884
457,644

46,88456,553
103,43834.2

606,11728.2

56,860
198,598
99,133
19,39649,35428,373451,717

6.4

48,31355,227
103,540

397,333

434,441(37,107)344,740

42,28273,655(8,700)40,47275,728(8,669)1,810(2,073)(30)

92,75932,05926,075(4,345)504,57131.1

541,97231.8(37,400)

491,288

29.5

1,557

0.1

1,504

0.1

53

1,797

0.1

¥1,620,882

100.0¥1,704,853

100.0

13

¥(83,970) ¥1,667,303 100.0

CONSOLIDATED BALANCE SHEETS(Millions of yen; amounts less than one million yen are omitted.)
June 30, 2005
Amount%March 31, 2005
Amount%Increase(Decrease)

June 30, 2004
Amount%¥44,585
209,245
8,500
48,145¥63,684
181,186
15,50048,145¥(19,098)
28,058(7,000)-¥39,066
103,421
10,00036,154

162,500

228,264(65,764)

63,815

9,585
145
-

21,600527-(12,014)
(381)
-

9,688
1,056
199,785---

118,853

100,000
33,489100,000
31,887

1,602

70,00047,831(74,597)

699,674

5,104(3,935)(5,340)248
73

317,939
152,489
60,703
101
102,765

LIABILITIES ANDSHAREHOLDERS' EQUITYCurrent liabilities:
Accounts payable - trade
Short-term borrowings
Commercial paper
Current portion of corporate bonds
Accounts payable - otherand accrued expenses
Income taxes payable
Deferred tax liabilities
Payables related to margin transactions
Guarantee deposits received from customers
related to securities business
Cash receipts as collateral
Other current liabilities
Total current liabilities

616,198

Long-term liabilities:
Corporate bonds
Long-term debt
Deferred tax liabilities
Accrued retirement benefits
Other liabilities

383,352
226,90252,07817,60883,305

Total long-term liabilities
Total liabilities
Minority interestin consolidated subsidiaries
Shareholders' equity:
Common stock
Additional paid-in capital
Accumulated deficit
Net unrealized gain on other securities
Net unrealized loss on derivative instruments
Foreign currency translation adjustments
Less: Treasury stock
Total shareholders' equity
Total liabilities andshareholders' equity

38.0

690,79640.5

378,248
230,837
57,41917,35983,23242.0

763,246
1,379,444

47.1
85.1

767,096
1,457,893

45.1
85.6

(3,850)(78,448)

633,999
1,333,673

38.0
80.0

74,092

4.6

68,943

4.0

5,148

102,985

6.2

162,397 10.0
186,783 11.5
(287,201) (17.7)
135,942
8.4(41,582) (2.6)
11,1150.7(109) (0.0)

162,3979.5
186,783 10.9
(273,362) (16.0)
136,662
8.0(41,056) (2.4)
6,697
0.4
(106) (0.0)(13,838)
(719)
(526)
4,417
(3)

162,303
9.7
186,690 11.2
(231,100) (13.8)
158,538
9.5(52,983) (3.2)
7,272
0.4
(75) (0.0)

167,345

178,016(10,670)

230,645

10.3¥1,620,882 100.0

14

10.4

¥1,704,853 100.0

13.8¥(83,970) ¥1,667,303 100.0

CONSOLIDATED STATEMENTS OF OPERATIONS(Millions of yen; amounts less than one million yen are omitted.)
FY2005Three-month period Three-month period
April 2004 through
Increase
ended June 30, 2005 ended June 30, 2004
March 2005
(Decrease)
Amount%Amount%Amount%Net sales
Cost of sales
Gross profit¥258,637 100.0
175,674 67.9
82,962 32.1

¥147,311 100.0
92,770 63.0
54,540 37.0

¥111,326
82,90328,422¥837,018 100.0
547,402 65.4
289,615 34.6

Selling, general and administrative expenses

86,15333.3

58,35939.6

27,793314,975

37.6

Operating loss

(3,190)(1.2)(3,819)

(2.6)

629

(25,359)(3.0)

Interest income
Equity in earnings under the equity method
Income from investments in partnerships
Other non-operating income

326
1,610
1,185

(224)
1,610
(1,260)
(71)

2,398
5,425
3,711
4,931

Non-operating income

3,122

54

16,466

Interest expense
Foreign exchange loss
Equity in loss under the equity method
Other non-operating expenses

6,806
2,874
3,269

1,806
1,178
(2,295)
1,343

22,971
4,040
9,343

550
1,260
1,257
1.2

3,068

2.1

5,000
1,696
2,295
1,926

2.0

Non-operating expenses

12,9505.0

10,9187.4

2,032

36,356

4.4

Ordinary loss

(13,017)(5.0)(11,669)(7.9)(1,348)(45,248)(5.4)

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

21,827

6,302

15,524

59,121

829

450

378

26,269258

3,009(2,751)

3,969

Special income

22,914

6.6

13,15189,360

10.7

Valuation loss on investment securities
Refinance arrangement fee
Penalty for unfulfilled contract commitment
Bond covenant amendment fee
Other special loss

8,840
6,147
4,071
34,60153,660

6.4

Special loss
Income (loss) before income taxes
and minority interest
Income taxes:
Current
RefundedDeferred
Minority interest
Net loss

8.9

9,763

1,682
3,153
2,304
1,995
9,136

3.6

27
2,338
2,365

1.6

1,655
3,153
2,304
(342)
6,771

760

0.3

(4,271)

(2.9)

5,031

(9,548)

(1.1)

8,230
(2,779)6,463¥(11,153)

3.2
(1.1)
2.5
(4.3)

8,927
6.1
(3,949) (2.7)
8,626
5.8
¥(17,876) (12.1)

(697)
1,169
(2,163)¥6,722

34,7402,897(21,963)
40,444¥(59,871)

4.2
0.3
(2.6)
4.8
(7.2)

15

CONSOLIDATED STATEMENTS OF ADDITIONAL PAID-IN CAPITAL AND RETAINED EARNINGS(Millions of yen; amounts less than one million yen are omitted.)
FY2005Three-month period
Three-month period
April 2004 throughended June 30, 2005
ended June 30, 2004
March 2005
ADDITIONAL PAID-IN CAPITAL
Additional paid-in capitalat the beginning of the period¥186,783¥186,690¥186,690

Increase due to issuance of shares

-

-

93

Additional paid-in capitalat the end of the period¥186,783¥186,690¥186,783

Three-month period
ended June 30, 2005

Three-month period
ended June 30, 2004

FY2005
April 2004 throughMarch 2005¥(273,362)¥(210,625)¥(210,625)(11,153)(2,460)(86)(17,876)(2,459)(172)(59,871)(2,459)
(176)

-

42

(98)

(138)

(7)

17
(147)

¥(287,201)¥(231,100)¥(273,362)

ACCUMULATED DEFICIT
Accumulated deficit
at the beginning of the period
Net loss
Cash dividends
Bonuses to directors
Net adjustments to accumulated deficit due tochange in scope of consolidation
Increase due to merger
Decrease due to merger
Accumulated deficit
at the end of the period

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

16

CONSOLIDATED STATEMENTS OF CASH FLOWS(Millions of yen; amounts less than one million yen are omitted.)
FY2005Three-month period Three-month period
April 2004 throughended June 30, 2005 ended June 30, 2004
March 2005
Ⅰ.Cash flows from operating activities:
Income (loss) before income taxes and minority interest
Adjustments to reconcile income (loss) before income taxes andminority interest to net cash used in operating activities:
Depreciation and amortization
Equity in (earnings) loss under the equity method, net
Dilution gain from changes in equity interest, net
Valuation loss on investment securities
Gain on sale of marketable and investment securities, net
Foreign exchange loss, net
Interest and dividend income
Interest expense
Changes in operating assets, liabilities and others
Decrease (increase) in receivables- trade(Decrease) increase in payables-trade
Increase in other receivables(Decrease) increase in other payables
Other, net¥760¥(4,271)¥(9,548)

20,942(1,610)(826)
1,682(21,699)
2,657
(524)
6,806

9,850
2,295
(439)
27
(6,289)
1,506
(836)
5,000

66,417(5,425)(25,200)
8,840(56,049)
5,324(2,862)
22,971

14,628(18,724)(5,741)(5,650)
7,007

5,508
(7,832)(33,483)
39,830(4,073)(15,854)
2,371(70,813)
97,095(17,519)

(291)

6,792

(251)

1,775
(3,745)(18,867)
2,915

1,080
(1,373)(19,663)
1,227

2,506
(17,924)(31,533)
1,213(18,213)(11,937)(45,989)

Sub-totalInterest and dividends received
Interest paid
Income taxes paid
Refund of income taxes
Net cash used in operating activities-

Continued -17

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)(Millions of yen; amounts less than one million yen are omitted.)
FY2005Three-month period Three-month period
April 2004 throughended June 30, 2005 ended June 30, 2004
March 2005
Ⅱ.Cash flows from investing activities:
Purchase of property and equipment and intangibles
Purchase of marketable and investment securities
Proceeds from sale of marketable and investment securities
Acquisition of interests in subsidiaries newly consolidated,
net of cash acquired
Sale of interests in subsidiaries previously consolidated, net
Proceeds from sale of interests in consolidated subsidiaries
Increase in loan receivables
Collection of loans
Purchase of business rights and others
Other, net
Net cash used in investing activities
Ⅲ.Cash flows from financing activities:
Increase in short-term borrowings, net(Decrease) increase in commercial paper
Proceeds from long-term debt
Repayment of long-term debt
Proceeds from issuance of bonds
Redemption of bonds
Proceeds from issuance of shares
Proceeds from issuance of shares to minority shareholders
Proceeds from issuance of shares through public offering andallocation to a third party in
SOFTBANK INVESTMENT CORPORATION
Redemption of preferred shares held by minority shareholder
Cash dividends paid
Cash dividends paid to minority shareholders
Increase in cash receipt as collateral
Other, net
Net cash provided by financing activities
Ⅳ. Effect of exchange rate changes
on cash and cash equivalents
Ⅴ. Net (decrease) increase in cash and cash equivalents
Ⅵ.Increase in cash and cash equivalents due to newly
consolidated companies
Ⅶ.Decrease in cash and cash equivalents due to exclusion ofpreviously consolidated entities
Ⅷ.Increase in cash and cash equivalents due to merger
Ⅸ.Cash and cash equivalents
at the beginning of the period
Ⅹ.Cash and cash equivalents at the end of the period

18(90,147)(14,409)69,922(16,762)(8,343)
6,048(90,943)(29,582)
57,099-(822)(172,320)(109)
1(3,780)
5,401
4,417

4,939
(3,923)
2,191(6,628)34,8408,110(21,387)
9,105(13,113)(24,753)(28,703)(23,301)(242,944)

19,058(7,000)110,020(110,198)
12,252(5,400)160

11,966(1,000)10,000(2,028)19,995360

53,4684,500
166,400(192,836)
153,378(36,124)
187
30,298--51,362(1,816)(2,256)(1,892)
12,925(1,729)(1,664)60,0002,852
98,752(33,908)(2,457)(2,160)90,000(4,336)
277,770

1,150

3,778

1,474

(32,840)

67,291(9,688)

-

10

12

(142)

(45)

(107,529)

-

6

267

320,194

437,132

437,132¥287,211¥504,395¥320,194

CONDENSED QUARTERLY FINANCIAL INFORMATION
Condensed Statements of Operations(Millions of yen; amounts less than one million yen are omitted.)

Net sales
Cost of sales
Gross profit
Selling, general andadministrative expenses
Operating loss
Non-operating income(Note)
Non-operating expenses(Note)
Ordinary loss
Special income
Special loss
(Loss) income before income taxes
and minority interest
Income taxes - Current
Income taxes - Refunded
Income taxes - Deferred
Minority interest
Net (loss) income

First quarter

Second quarter

Third quarter

Fourth quarter

First quarter

April 1, 2004 toJune 30, 2004

July 1, 2004 to
September 30, 2004

October 1, 2004 to
December 31, 2004

January 1, 2005 to
March 31, 2005

April 1, 2005 toJune 30, 2005

AmountAmountAmountAmountAmount¥147,311
92,77054,540¥156,395
99,70756,687¥258,087
170,489
87,597¥275,224
184,434
90,789¥258,637
175,674
82,96258,35959,658

95,134

101,822

86,153(3,819)3,068
10,918(11,669)
9,763
2,365

(2,970)1,846
13,114(14,239)
40,6908,526(7,536)
10,465
10,963(8,034)
16,665
18,272(11,032)
10,704
10,978(11,306)
22,24024,496(3,190)3,122
12,950(13,017)
22,9149,136(4,271)

17,925(9,641)(13,561)

760

8,927
3,817
9,524
12,4708,230
2,897(3,949)(4,542)(7,449)(6,022)(2,779)8,626
6,819
14,843
10,153
6,463¥(17,876)¥11,830¥(26,560)¥(27,266)¥(11,153)
Note: Foreign exchange gain (loss), equity in earnings (loss) under the equity method, and income (expenses) from investments inpartnerships were netted on quarterly basis.

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

Ⅰ Net cash (used in) provided by operating

activities
Ⅱ Net cash used in investing activities
Ⅲ Net cash provided by financing activities
Ⅳ Effect of exchange rate changes
Ⅴ Net increase (decrease) in cash and cash

equivalents
Ⅵ Increase in cash and cash equivalents
due to newly consolidated companies
Ⅶ Decrease in cash and cash equivalents
due to exclusion of previously
consolidated entities
Ⅷ Increase in cash and cash equivalents
due to merger
Ⅸ Cash and cash equivalents at the
beginning of the period
Ⅹ Cash and cash equivalents at the end of
the period
Note:
Depreciation and amortization included in
net cash (used in) provided by operating
activities

First quarter

Second quarter

Third quarter

Fourth quarter

First quarter

April 1, 2004 toJune 30, 2004

July 1, 2004 to
September 30, 2004

October 1, 2004 to
December 31, 2004

January 1, 2005 to
March 31, 2005

April 1, 2005 toJune 30, 2005

AmountAmountAmountAmountAmount¥(11,937)¥6,644¥(25,416)¥(15,280)¥(18,213)(23,301)
98,752
3,778(136,910)
20,4692,977(17,352)
34,503(7,364)(65,379)
124,046
2,082(28,703)
12,925
1,150

67,291(106,819)(15,630)

45,468(32,840)

10

1

-

-

-

(45)

-

-

(107,483)

(142)

6

-

-

261

-

437,132

504,395

397,578

381,948

320,194¥504,395¥397,578¥381,948¥320,194¥287,211¥9,850¥8,956¥22,847¥24,763¥20,94219

Basis of Presentation of Consolidated Financial Statements
1. Changes in scope of consolidation
As of June 30, 2005, SOFTBANK CORP．
（the “Company”）consolidated 149 subsidiaries. Fourteen subsidiaries were
not consolidated as the individual and aggregate amounts were not considered material in relation to the consolidated total
assets, net sales, net income (loss) and retained earnings (accumulated deficit) of the SOFTBANK consolidated financial
statements.
Changes in the scope of the consolidation were as follows:<Increase>
Three companies<Decrease>
Seven companies

2. Changes in scope of equity method
As of June 30, 2005, the Company held eight non-consolidated subsidiaries and 95 affiliates, all of which were accounted forunder the equity method.
Main changes in application of the equity method were as follows:<Increase>
ValueCommerce Co., Ltd.
Newly invested
One company<Decrease>Morningstar, Inc.
Six companies

Sale of all shares

3. Summary of significant accounting policies[1] Valuation standards and methods for major assets(1) Marketable securities and investment securities
Held-to-maturity debt securities: Stated at amortized cost
Other securities:
With market quotations:
Stated at fair value, which represents the market prices at the balance sheet date(unrealized gain/loss is included as a separate component in shareholders' equity, netof tax, while cost is primarily determined using the moving-average method)
Without market quotations:
Carried at cost, primarily based on the moving-average method(2) Derivative instruments:
Stated at fair value(3) Inventories:
Carried at cost, primarily based on the moving-average 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 declining balance method<Additional information for change of estimated useful life>
Transmitters, exchangers and power supply facilities of JAPAN TELECOM CO., LTD. had been depreciated overprimarily six years. Effective from April 1, 2005, the Company changed the estimated useful life of a portion of theequipment, which is included in “Telecommunications equipment” in the Company’s consolidated balance sheets, to ten
years based on a reassessment of the assets’ operational lives taking into consideration of years of service provided by theequipment, technological innovation cycles in the telecommunications industry and other relevant factors.
As a result, depreciation expense included in cost of sales decreased by ¥2,922 million. Operating loss and ordinary loss

20

decreased by the same amount and income before income taxes and minority interest increased by the same amount for
the three-month period ended June 30, 2005 as compared with the amounts which would have been recognized if theprevious estimated useful life had not been changed.
(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 specific doubtful receivables calculated using historical write-off
experience ratios from certain prior periods.
(2) Accrued retirement benefits:
JAPAN TELECOM CO., LTD., SOFTBANK IDC Corp., and certain other subsidiaries have defined benefit pension
plans for their employees. Those companies accounted for the liability for retirement benefits based on the projected
benefit obligations at June 30, 2005.
[4] Translation of foreign currency transactions and accounts
All assets and liabilities denominated in foreign currencies are translated at the foreign exchange rates prevailing at therespective balance sheet dates. Foreign exchange gains or losses are charged to operations when incurred.
The translation of revenues and expenses in the financial statements of foreign consolidated subsidiaries into Japanese yen is
performed by using the average foreign currency exchange rate for the period. Assets and liabilities are translated using theforeign currency exchange rates prevailing at the balance sheet dates, and capital stock is translated using historical rates.
Foreign currency financial statement translation differences are presented as a separate component of “Shareholders' equity,”
except for the portion pertaining to minority shareholders, which is included in “Minority interest in consolidated
subsidiaries.”[5] Capital leases
Under accounting principles generally accepted in Japan, capital leases, as defined therein, other than those whereby theownership of the assets is transferred to the lessee at the end of the lease term, are permitted to be accounted for as operatingleases with a footnote disclosure that includes the estimated acquisition cost, estimated accumulated depreciation and futurelease payments or receipts.
[6] Accounting for significant hedge transactions(1) Collar transaction① Hedge accounting
Unrealized gains and losses, net of tax, on the collar transaction that qualifies as an effective cash flow hedge at aconsolidated subsidiary in the United States of America are reported as a separate component of “Shareholders’ equity”
in the Company’s consolidated balance sheets. As such, unrealized gains and losses associated with the collartransaction will be recognized in earnings in the same period in which the hedged assets and liabilities are recognized inearnings.
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 pricefluctuations of the underlying equity security.

21

(2) Interest rate swap
① Hedge accounting
For interest rate swaps whose amounts, index and period meet with 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 contract
Hedged items:
Interest expense on borrowings③ Hedging policy
The domestic consolidated subsidiary uses derivative financial instruments to hedge the risk of exposures to fluctuationsin interest rates in accordance with its internal policies regarding the authorization and credit limit amount.
[7] Accounting method for consumption taxes
Consumption taxes are accounted for using net-of-tax method.

4. Scope of cash and cash equivalents in the consolidated statements of cash flows“Cash and cash equivalents” comprises cash on-hand, demand deposits at banks and highly liquid investments with initial
maturities of three months or less and with a low risk of fluctuation in value.

5. Impairment on fixed assets
The Company applied “Accounting Standards for Impairment on Fixed Assets” (“Opinions Concerning Establishment of
Accounting Standards for Impairment of Fixed Assets” issued on August 9, 2002 by the Business Accounting Council inJapan), and “Application Guideline for Accounting Standards for Impairment of Fixed Assets” (Financial AccountingStandards Implementation Guideline No.6 issued on October 31, 2003) from this fiscal year.
The effect of the application of these standards and guideline on the consolidated statements of operations is immaterial.

6. Change in presentation
Following the application of a partial revision to the Japanese securities and exchange laws effective from December 1, 2004,
and the release of revised practical guidelines for financial instruments accounting on February 15, 2005, investments in limited
partnerships and similar investments have been classified as investment securities since the fiscal year ended March 31, 2005.
The amounts of applicable investments in partnerships which are included in “Investment securities and investments inpartnerships” on the consolidated balance sheets are ¥44,506 million and ¥ 101,020 million as of June 30, 2005 and March 31,
2005, respectively.
As a result, there were “Other investments” of ¥83 million and ¥40 million as of June 30, 2005 and March 31, 2005,
respectively. Due to the decrease in materiality, other investments are included in “Other assets” as of June 30, 2005 andMarch 31, 2005.

22

Notes
1. Accumulated depreciation of property and equipment
June 30, 2005
639,531 million yen

March 31, 2005
625,280 million yen

June 30, 2004
57,721 million yen

June 30, 2005

March 31, 2005

June 30, 2004

11,463 million yen
5

11,247 million yen
79,350 million yen
25

3 million yen

5 million yen

12 million yen

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

Note: The collateral for the future lease liabilities was provided by mortgaging against the aggregate of the current andfuture receivables due from customers of certain consolidated subsidiaries and a broadcasting company, based onmarketing agreements, etc. The future lease liabilities at the end of periods are as follows:
June 30, 2005

March 31, 2005

June 30, 2004

32,481 million yen

37,263 million yen

31,554 million yen

June 30, 2005

March 31, 2005

June 30, 2004

Investment securities

476 million yen
1,100
520
2,549
5,001
0
203,621446 million yen
1,120
6,660
14,172
13,6895,582
0193,398

994 million yen
1,109
4,748
209,996

Total

213,270 million yen

235,070 million yen

216,848 million yen

Other long-term liabilities

544 million yen
18,662
17
116,778204

493 million yen
25,882
18
212,119289

662 million yen
11,674355
121,099-

Total

136,207 million yen

238,804 million yen

133,791 million yen

Future lease liabilities (including the above“Accounts payable-trade”)(2) For short-term borrowings and long-term debt
Assets pledged as collateral:
Cash and deposits
Notes and accounts receivable - trade
Buildings and structures
Telecommunications equipment
Telecommunications service lines
Land
Property and equipment- others

Secured liabilities:
Accounts payable - trade
Short-term borrowings
Accounts payable – other and accrued expenses
Other current liabilities
Long-term debt

Note: In connection with JAPAN TELECOM CO., LTD’s loan refinancing on April 27, 2005, assets pledged as factory foundation
collateral and investment securities in JAPAN TELECOM CO., LTD. held by the Company and three consolidated subsidiaries ofJAPAN TELECOM CO., LTD. as of March 31, 2005 were released.

23

3. Securities loaned
Certain consolidated subsidiaries lent a portion of investment securities to financial institutions according to stock lending
agreements, and the amounts of applicable investment securities recorded in the Company’s consolidated balance sheets are as
follows:
March 31, 2005
June 30, 2004
June 30, 2005
- million yen
Investment securities
225 million yen
1,836 million yen
4. Cash receipts as collateral
Cash receipts as collateral from financial institutions, to whom the Company lent shares of one of its subsidiaries under security
deposit agreements, is presented as follows:
Cash receipts as collateral

June 30, 2005

March 31, 2005

June 30, 2004

100,000 million yen

100,000 million yen

70,000 million yen

According to the security deposit agreements, the Company paid a fixed rate amount as stock bailment fees and other fees totaling ¥ 472 million,¥ 1,692 million and ¥ 300 million for the periods ended June 30, 2005, March 31, 2005 and June 30, 2004, respectively, and recorded the fees
as other non-operating expenses in the consolidated statements of operations.

5. Net unrealized gains/losses on derivative instruments
Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities”(“SFAS 133”) has been adopted for derivative instruments transacted by the Company’s consolidated subsidiary in the UnitedStates of America.
The consolidated subsidiary in the United States of America has entered into a variable share prepaid forward contract (the“collar transaction”) utilizing its shares of an equity security. The purpose of this collar transaction is to hedge the variabilityof cash flows from a sale of an equity security associated with the future market price fluctuations of the underlying security,
which is used for the settlement of certain loans.
According to SFAS 133, unrealized gains and losses, net of tax, on the effective portion of the cash flow hedge, as defined, arereported as a separate component of “Shareholders’ equity”, until gains and losses on the hedged item are recognized inearnings.
6. Line of credit as a creditor (not used)
June 30, 2005
528 million yen

March 31, 2005
200 million yen

June 30, 2004
220 million yen

June 30, 2005
5,553 million yen

March 31, 2005
7,855 million yen

June 30, 2004
3,408 million yen

7. Balance of accounts receivable sold8. Consolidated statements of cash flows
Reconciliation of cash and cash equivalents to the amounts presented in the accompanying consolidated balance sheets
June 30, 2005
288,119 million yen
6,885

June 30, 2004
372,413 million yen
135,399

March 31, 2005
287,978 million yen
39,403(1,481)(2,581)(1,455)

-

(72)

-

Stocks and bonds with original
maturities over three months(6,311)(763)(5,732)

Cash and cash equivalents

287,211 million yen

Cash and deposits
Marketable securities
Time deposits with original maturities
over three months
Deposits received from customers
in the commodities business

24

504,395 million yen

320,194 million yen

Significant Subsequent Events
Sale of all shares held in Advanced Media, Inc.
SOFTBANK BB Corp. and SOFTBANK AM CORPORATION (wholly-owned consolidated subsidiaries of the Company)
sold 5,700 shares held in Advanced Media, Inc for approximately ¥6.1 billion in July, 2005. A gain on sale of investment
securities of approximately ¥6.0 billion will be recorded in the Company’s consolidated financial statements for thethree-month period ending September 30, 2005.

25

26

88,604¥(4,494)¥(14,089)

102,694

61,20565,7001,210¥87,393200¥61,005

Operating income (loss)

Operating expenses

Total(2) Inter-segment(1) Customers

Net sales¥(18,337)

64,513

46,17542¥46,132(Note 4)

-

-

-

-

-

Fixed-line

Telecommunications

Broadband

Infrastructure(2) For the three-month period ended June 30, 2004

Operating income (loss)

Operating expenses

Total(2) Inter-segment(1) Customers

Net sales

Fixed-line

Telecommunications

Broadband

Infrastructure

1. Business segment information(1) For the three-month period ended June 30, 2005

¥1,54056,49458,0352,439¥55,595

e-Commerce¥726

59,74260,4691,933¥58,535

e-Commerce¥11,103

9,966

21,070130¥20,939

CultureInternet¥16,469

18,16534,635

141¥34,493

CultureInternet

-

-

-

-

-

¥3,97011,936

15,906

1,432¥14,474

e-Finance(Note 5)e-Finance¥(838)

3,915

3,077

1,225

¥1,852

Broadmedia

¥634

2,996

3,631

1,097

¥2,534

Broadmedia

¥160

5,381

5,541

2,134

¥3,406

ServicesTechnology

¥81

5,369

5,451

1,274

¥4,176

ServicesTechnology

Segment Information

Media &¥(327)

3,348

3,021

315

¥2,705MarketingMedia &¥(415)

3,068

2,653

254

¥2,399Marketing¥(1,052)

9,227

8,175

424

¥7,750

Others¥(1,988)

267,164

265,175

6,537¥258,637

Total

Elimination¥(1,201)(5,336)(6,537)(6,537)¥-or corporate¥(3,190)

261,827

258,637-¥258,637

Consolidated

¥407

161

569

-

¥569

Funds

Overseas¥(781)

2,973

2,191

557

¥1,634

Others¥(3,101)

158,691

155,5908,278¥147,311

Total¥(717)(7,560)(8,278)(8,278)¥-or corporate

Elimination¥(3,819)

151,130

147,311-¥147,311

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

¥150

198

348

-

¥348

Funds

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

27¥(53,747)¥(36,065)

202,944

166,878

205,306

259,054909¥165,969

331¥204,974¥5,240249,681

254,9219,950¥244,971

e-Commerce¥50,079

52,368102,448534¥101,913

CultureInternet¥19,71459,08378,797

5,562¥73,235

e-Finance¥(1,019)

16,682

15,663

5,623¥10,039

Broadmedia¥1,14524,36525,510

9,478¥16,032

ServicesTechnology

Media &¥(1,064)

13,544

12,4791,427¥11,052

Marketing¥1,313

739

2,052

-

¥2,052

Funds

Overseas¥(6,260)

14,730

8,469

1,692

¥6,777

Others¥(20,663)

893,192

872,528

35,510¥837,018

Total¥(4,695)(30,815)(35,510)(35,510)¥-or corporate

Elimination¥(25,359)

862,377

837,018-¥837,018

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

Notes: 1. Business segments are categorized primarily based on the nature of business operations, type of services, 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 a description of the main business segments.
3. Unallocated operating expenses for the periods ended June 30, 2005, June 30, 2004 and March 31, 2005 in the column "Elimination or corporate", which mainly represent
expenses of the corporate division of the Company, were ¥977 million, ¥757million and ¥6,867 million respectively.
4. The “Fixed-line Telecommunications” business segment was established as of September 30, 2005, and there were no transactions in this segment for the three-month period
ended June 30, 2004
5. The “e-Finance” business segment ended as SOFTBANK INVESTMENT CORPORATION (current SBI Holdings, Inc.) changed to an equity-method affiliate from a
consolidated subsidiary at March 31, 2005.

Operating income (loss)

Operating expenses

Total(2) Inter-segment(1) Customers

Fixed-line

Telecommunications

Broadband

Infrastructure

FY2005 (for the year ended March 31, 2005)

Net sales(3)

Business segment information (continued)

Leases
1. Capital leases in which the ownership of leased assets is not transferred to the lessee at the end of lease periods(as a lessee)(1) Amounts equivalent to acquisition costs, accumulated depreciation and net book value at the end of each period are as
follows:
March 31, 2005
June 30, 2004
June 30, 2005
Telecommunications equipment andtelecommunications service lines
Equivalent to acquisition costs
195,681 million yen
51,847 million yen
195,443 million yen
Less:(45,685)(20,976)(55,141)
amount equivalent to accumulated depreciation
Net book value
149,996 million yen
30,870 million yen
140,302 million yen
Buildings and structures
Equivalent to acquisition costsLess:amount equivalent to accumulated depreciation
Net book value
Property and equipment - others
Equivalent to acquisition costsLess:amount equivalent to accumulated depreciation
Net book value
Intangible assets
Equivalent to acquisition costsLess:amount equivalent to accumulated amortization
Net book value
Total
Equivalent to acquisition costsLess:amount equivalent to accumulated depreciation
Net book value

46,988 million yen

47,056 million yen

25 million yen(899)
46,089 million yen(349)
46,706 million yen(10)
15 million yen

13,562 million yen

15,938 million yen

7,904 million yen(7,574)
5,988 million yen(10,293)5,644 million yen(3,492)
4,412 million yen

2,575 million yen

2,727 million yen

1,325 million yen(1,119)1,456 million yen(1,076)
1,651 million yen(387)
937 million yen

258,570 million yen

261,404 million yen

61,102 million yen(64,734)
193,836 million yen(57,404)
203,999 million yen(24,867)
36,235 million yen(2) The future lease payments for capital leases at the end of each period are as follows:
March 31, 2005
June 30, 2005
Due within one year
Due after one year
Total

40,294 million yen
158,495
198,790 million yen

40,342 million yen
167,676
208,018 million yen

June 30, 2004
15,066 million yen
24,74639,813 million yen(3) Lease payments and amounts equivalent to depreciation and interest expense for each period are as follows:
FY2005Three-month period
Three-month period
April 2004 throughended June 30, 2004
ended June 30, 2005
March 2005
Lease payments
27,366 million yen
4,081 million yen
14,233 million yen
Amount equivalent to depreciation expense
24,2093,600
11,254
Amount equivalent to interest expense
5,179
568
4,108
(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.

28

1.

Capital leases in which the ownership of leased assets is not transferred to the lessee at the end of lease periods(continued)(as a lessor)(1) Acquisition costs, accumulated depreciation and net book value at the end of each period are as follows:
March 31, 2005
June 30, 2005
Property and equipment - others
2,644 million yen
Acquisition costs
164 million yen
Less: accumulated depreciation(2,576)(103)
67 million yen
Net book value
60 million yen

June 30, 2004
637 million yen(323)
313 million yen

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

181 million yen(48)
133 million yen

Total
Acquisition costs
Less: accumulated depreciation
Net book value

164 million yen(103)
60 million yen

2,644 million yen(2,576)67 million yen

818 million yen(371)
447 million yen(2) The future lease receivables for capital leases at the end of each period are as follows:
March 31, 2005
June 30, 2005
43 million yen
Due within one year
44 million yen
Due after one year
29
21
72 million yen
Total
65 million yen

June 30, 2004
184 million yen
286
470 million yen(3) Lease income, depreciation and amount equivalent to interest income for each period are as follows:
FY2005Three-month period
April
2004 throughended June 30, 2005
March 2005

Three-month period
ended June 30, 2004

Lease income
Depreciation expense
Amount equivalent to interest income

11 million yen
101

349 million yen
2113

54 million yen
478(4) Calculation method used to determine the amount equivalent to interest income
The amount equivalent to interest income is calculated by subtracting acquisition costs from the total of lease income andestimated residual value and allocated over the lease periods based on the interest method.
2. Non-cancelable operating lease transactions(as a lessee)
The future lease payments for non-cancelable operating leases at the end of each period are as follows:

Due within one year
Due after one year
Total

June 30, 2005
8,380 million yen
13,556
21,937 million yen

March 31, 2005
6,264 million yen
15,551
21,815 million yen

June 30, 2004
338 million yen
119
457 million yen(as a lessor)
The future lease receivables for non-cancelable operating leases at the end of each period are as follows:

Due within one year
Due after one year
Total

June 30, 2005
1,275 million yen
1,994
3,269 million yen

29

March 31, 2005
972 million yen
1,816
2,789 million yen

June 30, 2004
- million yen- million yen

INVESTMENT IN DEBT AND EQUITY SECURITIES
1. Other securities at fair value(Millions of yen; amounts less than one million yen are omitted.)

March 31, 2005

June 30, 2005

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

Investment

Carrying

costs

amounts

Differences

Investment

Carrying

costs

amounts

June 30, 2004

Differences

Investment

Carrying

costs

amounts

Differences¥30,630 ¥243,264 ¥212,633¥29,924 ¥229,412¥199,488¥40,113 ¥289,965 ¥249,852

5,097
5,100
3
18
18
0
¥35,746 ¥248,383 ¥212,637

5,134
5,141
18
18
¥35,077 ¥234,572

7
0¥199,495

5,344
5,330
(14)
385
399
13
¥45,843 ¥295,695 ¥249,851

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

June 30, 2005
Carrying amounts

March 31, 2005
Carrying amounts

June 30, 2004
Carrying amounts¥16,871
6,686
2,000
1,184
428
191
10
¥27,372¥16,466
63,373
2,000
1,836
1,108
191
3,000
30,38810¥118,374¥19,708
2,000
2,669
1,088
261
9,998
5,600
118,443
10¥159,780

Other securities
Unlisted equity securities
Investments in limited partnerships (see Note)
Preferred fund certificate
Money Management Fund
Unlisted foreign debt securities
Mid-term government bond funds
Commercial paper
Designated money trust
Investment trust without market quotations
OthersTotal

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

30