SOFTBANK CORP.
CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008
Tokyo, May 8, 2008

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

Net income

Amount%Amount%Amount%Amount%Fiscal year ended
March 31, 2008

¥2,776,168

9.1¥324,287

19.6¥258,614

68.6¥108,624

277.0

Fiscal year ended
March 31, 2007

¥2,544,219

129.5¥271,065

335.1¥153,423

458.1¥28,815(49.9)Net income
per share−basic(yen)

Net income
per share−diluted(yen)

Fiscal year ended
March 31, 2008

¥101.68

Fiscal year ended
March 31, 2007¥27.31

Note: Equity in earnings of affiliated companies :Fiscal Year ended March 31, 2008:
Fiscal Year ended March 31, 2007:

2.

Ordinary income

Return on Equity(%)

Ordinary income /Total assets (%)

Operating income /Net sales (%)¥95.90

32.6

5.8

11.7

¥26.62

11.0

5.0

10.7

¥55,411million¥2,130 million

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

Total assets

Net assets

Equity ratio (%)

Shareholders' equity
per share (yen)As of March 31, 2008

¥4,558,901¥848,725

8.4¥355.15

As of March 31, 2007

¥4,310,852¥716,237

6.6¥268.02

Note: Shareholders’equity (consolidated)
As of March 31, 2008:
As of March 31, 2007:¥383,742 million¥282,949 million

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 year

Fiscal year ended
March 31, 2008

¥158,257¥(322,461)¥284,727¥490,266

Fiscal year ended
March 31, 2007

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

1

4. Dividends

Total Amountof dividends(Annual)Dividends per share
Interim period（Recorded date）
ended September 30
FY 2007
FY 2008
FY 2009（Forecasted）

Fiscal year
ended March 31

Payout ratio（Consolidated）

Dividends onequity（Consolidated）

Total

(yen)

(yen)

(yen)

(millions of yen)

％

％

-

2.50
2.50

2.50
2.50

2,639
2,701

9.2
2.5

1.0
0.8

To be
determined

To bedetermined

To bedetermined

To bedetermined

5. Earnings forecast for the fiscal year ending in March 2009 (April 1, 2008 – March 31, 2009)(Millions of yen; amounts less than one million yen are omitted.)

Net sales

Operating income

Ordinary income

Net income

Net income
per share (yen)Six-month period ending
September 30, 2008

¥-

¥-

¥-

¥-

¥-

Fiscal year ending
March 31, 2009

¥-

¥-

¥-

¥-

¥-

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 2009 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: 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 41.
8.

Number of shares issued (Common stock)(1) Number of shares issued (including treasury stock):
As of March 31, 2008:
As of March 31, 2007:

1,080,664,578 shares
1,055,862,978 shares(2) Number of treasury stock at the fiscal year end:
As of March 31, 2008:
As of March 31, 2007:

163,811 shares
158,611 shares

Note: For basic data for computation of the per share data, please refer to the following page 64.

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

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

Net sales

2.

Operating income(loss)

Ordinary loss

Net income (loss)

Amount%Amount%Amount%Amount%Fiscal year ended
March 31, 2008

¥12,817-¥4,857-¥(15,388)-¥6,474-

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

Net income(loss)
per share−basic(yen)

Net income
per share−diluted(yen)

Fiscal year ended
March 31, 2008

¥6.06

¥ 6.03Fiscal year ended
March 31, 2007¥(3.13)¥-

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

Total assets

Net Assets

Equity ratio (%)

Shareholders' equity
per share (yen)As of March 31, 2008

¥1,336,787¥415,403

31.1¥384.45

As of March 31, 2007

¥1,347,019¥372,81027.4¥350.15

Note: Shareholders’equity (non-consolidated)
As of March 31, 2008:
As of March 31, 2007:¥415,403 million¥369,660 million

3

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

Qualitative Information / Financial Statements
1. Results of Operations(1) Analysis of Results of Operations<<Summary of Results of Operations>>
Net sales¥2,776,168 million (9.1% increase year-on-year)

Operating income¥324,287 million (19.6% increase year-on-year)

Ordinary income¥258,614 million (68.6% increase year-on-year)

Net income¥108,624 million (277.0% increase year-on-year)[Overview of results for the fiscal year ended March 31, 2008]
Immediately following its full-fledged entry into the mobile communications market, the SOFTBANK Group(hereinafter ‘the Group’), identified four key initiatives – 3G network enhancement, 3G handset lineup enrichment,
mobile content enhancement, and enhancement of the sales structure & branding – and has worked to expand its
customer base and further establish the SoftBank brand.

As a result, SOFTBANK MOBILE Corp. (hereinafter‘SOFTBANK MOBILE’) has achieved the industry’s highest monthly net additions in number of subscribers (newsubscribers minus cancellations) for the 11 consecutive months since May 2007. SOFTBANK MOBILE also
recorded the industry’s highest net subscriber additions on a full-year basis for the fiscal year ended March 31, 2008
(hereinafter ‘this fiscal year’), with a net addition of 2,676,500 subscribers*1.
Supported by the strong performance of the Mobile Communications segment, net sales for this fiscal year totaled¥2,776,168 million, operating income came to ¥324,287 million, ordinary income to ¥258,614 million, and net
income to ¥108,624 million – all record levels for the Group.
SOFTBANK MOBILE was included in the scope of consolidation from the end of April 2006, meaning that
consolidated results for the previous fiscal year ended March 31, 2007 included an 11-month contribution from May
2006 in the Mobile Communications segment, which was newly established.
*1. Source: Telecommunications Carriers Association

1. Net sales
Net sales grew ¥231,949 million, or 9.1% year-on-year, to ¥2,776,168 million, with the Mobile Communications
segment posting 13.1% net sales growth to ¥1,630,851 million. The increase came primarily from increased handset
sales accompanying the mobile phone subscriber growth, and the fact that this fiscal year’s results include a full-year
contribution from the Mobile Communications segment.

2. Operating income
Operating income rose ¥53,221 million, 19.6% year-on-year, to ¥324,287 million. The Mobile Communications
segment recorded operating income of ¥174,570 million, a 12.1% increase. In addition to a strong performance by
the Mobile Communications segment, this reflected a full-year contribution from SOFTBANK MOBILE.
The cost of sales for this fiscal year increased by ¥57,843 million year-on-year, to ¥1,467,363 million.
general and administrative expenses came to ¥984,517 million, an increase of ¥120,884 million.

4

Selling,SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

3. Non-operating income
Non-operating income rose ¥55,856 million year-on-year, to ¥69,387 million, the largest component of which was a¥55,411 million increase in equity in earnings of affiliated companies.
Alibaba.com Limited (hereinafter ‘Alibaba.com’), a subsidiary of SOFTBANK CORP.’s (hereinafter ‘theCompany’) equity-method affiliate Alibaba Group Holding Limited (hereinafter ‘Alibaba Group’), was newly listedon the Main Board of the Stock Exchange of Hong Kong Limited on November 6, 2007. Alibaba Group recorded
gain on sale of shares in a subsidiary and dilution gain from changes in equity interest due to the issue of new sharesaccompanying the listing, and also from the sale of shares held in Alibaba.com.

The Group’s share of these gains

totaled ¥57,223 million, which was recorded as equity in earnings of affiliated companies.

4. Non-operating expenses
Non-operating expenses came to ¥135,060 million, marking a ¥3,887 million increase year-on-year. Despite a¥35,342 million increase in interest expense, the previous year also had financing-related commissions of ¥28,715
million that did not occur this fiscal year.
Following the release of revised practical guidelines for financial instrument accounting on March 25, 2008, fixed
rate amount of stock bailment fees based on security deposit agreements that was previously included in “others” isincluded in “interest expense” from this fiscal year. (Refer to “Change in presentation related to marketable security
lending transactions” on the following page 41.)

5. Special income
Special income totaled ¥29,785 million. Unrealized appreciation on investments and gain on sale of investments at
subsidiaries in the U.S., net of ¥12,967 million and gain on sale of investment securities of ¥6,432 million wererecorded.

Accompanying the listing of consolidated subsidiaries, ITmedia Inc. and Carview Corporation, ¥3,765

million was recorded as dilution gain from changes in equity interest.

6. Special loss
Special losses came to ¥62,511 million, and included a ¥21,855 million valuation loss on the Group’s shareholding in
UTStarcom, Inc. and other entities, a ¥12,006 million loss on unused telecommunications supplies, impairment lossesof ¥10,644 million, and a ¥10,438 million loss from the disposal of fixed assets.
As SOFTBANK TELECOM Corp.’s (hereinafter ‘SOFTBANK TELECOM’) Otoku Line direct connection
fixed-line voice service has experienced increasing demand for its digital lines from corporate customers,
SOFTBANK TELECOM recorded a special loss of ¥26,250 million in the third quarter related to telecommunications
equipment for analog lines.

This included a ¥12,006 million loss on unused telecommunications supplies, ¥8,818

million in impairment losses on leased assets, and a ¥5,425 million loss from the disposal of fixed assets.

7. Income taxes
Current income taxes totaled ¥48,649 million and deferred income taxes came to ¥29,533 million.

5

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

Current income taxes, primarily for Yahoo Japan Corporation and other subsidiaries, totaled ¥53,620 million, while
income taxes payable at SOFTBANK Holdings Inc. that no longer needed to be recognized were reversed and current
income taxes were credited by ¥4,970 million.
Deferred income tax was recorded mainly ¥77,535 million for SOFTBANK MOBILE, while ¥39,831 million for
BB Mobile Corp. (hereinafter ‘BB Mobile’) was recorded on the credit side. BB Mobile, SOFTBANK MOBILE
and its 5 subsidiaries, all of which are subsidiaries of the Company, are approved to adopt the consolidated taxation
system by the administrator of the National Tax Agency for the fiscal year beginning from April 1, 2008.
Accordingly, BB Mobile recorded deferred income taxes on loss carryforwards at the end of this fiscal year based on
the consolidated taxation group’s profitability.

Results by business segment are as follows:[Mobile Communications]<<Summary of Segment Results>>
Net sales¥1,630,851 million (13.1% increase year-on-year)

Operating income¥174,570 million (12.1% increase year-on-year)

First time to lead in full-year net subscriber additions with 2,676,500
Total subscribers surpassed 18 million, 3G subscribers exceeded 14 million<Analysis of Results>
Net sales increased by ¥188,811 million year-on-year, or 13.1%, to ¥1,630,851 million. Operating income increasedby ¥18,826 million, or 12.1% year-on-year, to ¥174,570 million.

This increase was primarily due to a full-year

contribution from SOFTBANK MOBILE from this fiscal year, as well as strong growth in mobile handset sales
accompanying a steady increase in new subscribers and handset upgrades.
The number of net additions for March 2008, which is the peak month for the spring sales, exceeded 500,000, thebest monthly performance to date. On the other hand, operating income in the fourth quarter fell to a low levelcompared to the first, second and third quarters along with the increase of operating expenses from sales commission
cost and others.

<Quarterly Results>
Fiscal year ended March 31,2007
Q1
Q2
Q3
Q4

(Millions of yen)
Fiscal year ended March 31,2008
Q1
Q2
Q3
Q4

Sales

232,467

351,991

430,328

427,252

391,668

422,841

406,081410,260

Operatingincome27,29329,341

56,90642,202

43,52850,69153,76026,5896

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

<Number of Subscribers>
The number of SOFTBANK MOBILE subscribers totaled 18,586,200*2 as of this fiscal year end, marking an increaseof 2,676,500 subscribers for the year and a 1.7 percentage point increase in market share to 18.1%. SOFTBANKMOBILE has also recorded the industry’s highest monthly net additions in subscribers for the 11 consecutive months
since May 2007, and this fiscal year was the first time SOFTBANK MOBILE posted the highest net additions on afull-year basis.

The number of 3G subscribers totaled 14,047,900, representing more than three-fourths of all

subscribers.
In order to further promote the migration to 3G, SOFTBANK MOBILE stopped accepting new contract
applications for its 2G service, including its prepaid service, on March 31, 2008.

Fiscal year ended March 31,2007
Q1
Q2
Q3
Q4
Net additions
Total(Thousands of lines)
Fiscal year ended March 31,2008
Q1
Q2
Q3
Q4

30.3

66.8

189.5

412.0

530.8

612.0

561.0

972.7

15,240.2

15,307.0

15,496.5

15,908.5

16,440.5

17,052.5

17,613.5

18,586.2*2. The total number of subscribers for SOFTBANK MOBILE includes communication module service subscribers from thisfiscal year. The number of communication module service subscribers at the end of this fiscal year was 1,600.

<Churn Rate and Upgrade Rate>
Quarterly churn rates were 1.46% in the first quarter, 1.42% in the second quarter, 1.21% in the third quarter, and1.19% in the fourth quarter.

The steady decline in the churn rate was the result of the release of an enhanced 3G

handset lineup, attractive price plans and services, and the success of installment sales for handsets.

The churn rate

for 3G subscribers fell below the 1% level from the third quarter.
Upgrade rates were 2.25% in the first quarter, 2.67% in the second quarter, 2.00% in the third quarter, and 1.93% in
the fourth quarter.

These rates were lower than in the previous fiscal year when the upgrade rate increased

temporarily due to enhancement of the 3G handset lineup in response to Mobile Number Portability.

Q1

Fiscal year ended March 31,2007
Q2
Q3
Q4

(%/month)
Fiscal year ended March 31,2008
Q1
Q2
Q3
Q4

Churn rate

1.50

1.27

1.60

1.63

1.46

1.42

1.21

1.19

(3G only)

1.73

1.50

1.66

1.37

1.07

1.05

0.88

0.85

Upgrade rate

1.99

2.53

3.02

2.89

2.25

2.67

2.00

1.93

<ARPU and Average Acquisition Commission per User>
Total ARPU*3 by quarter was ¥5,000 in the first quarter, ¥4,800 in the second quarter, ¥4,520 in the third quarter, and¥4,310 in the fourth quarter. This decline in total ARPU was a reflection of steady growth in the number ofsubscribers to White Plan, which has a basic monthly charge of ¥980 (including tax), and a special discount for
subscribers to New Super Bonus. On the other hand, data ARPU rose from ¥1,410 in the first quarter to ¥1,470 in
the second quarter, to ¥1,490 in the third quarter, and to ¥1,600 in the fourth quarter. As a result of changes to the7

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

special benefits for New Super Bonus subscribers implemented on January 15, 2008, which ended the offer to waive
the fixed monthly charge of the Unlimited Packet Use Discount, for up to two months, the fourth quarter data ARPU
rose ¥110 relative to the third quarter, and accounted for 37.1% of total ARPU.
The average acquisition commission per user was ¥30,700 in the first quarter, ¥31,400 in the second quarter,¥33,900 in the third quarter, and ¥33,200 in the fourth quarter.

Fiscal year ended March 31,2007
Q1
Q2
Q3
Q4

（Yen per month）
Fiscal year ended March 31,2008
Q1
Q2
Q3
Q4

Total

5,590

5,700

5,560

5,210

5,000

4,800

4,520

4,310

(Voice)

4,230

4,320

4,230

3,830

3,590

3,340

3,040

2,710

(Data)

1,350

1,380

1,330

1,380

1,410

1,470

1,490

1,600

*3. Average Revenue Per User<<Summary of Initiatives to Address Key Challenges>>
Number of 3G base stations at the fiscal year end reached 51,320
36 3G handset models in 172 colors released during the year
Number of SoftBank shops at the fiscal year end reached 2,653
White Plan applications exceeded 12 million<Enhanced 3G Network>
The number of 3G base stations was increased during the year and the network was enhanced to address increases in
the number of subscribers.

Capital investment (actual base) by the Mobile Communications segment totaled¥235,396 million, and the number of 3G base stations as of this fiscal year end stood at 51,320, an increase of 22,000
from 29,404 at the end of the previous year. SOFTBANK MOBILE will continue to “enhance the 3G network”
going forward.

<Enhanced Lineup of 3G Handsets>
A total of 36 3G handset models in 172 colors was released during the year, compared with 32 (3G) models in 152
colors during the previous year, further enhancing the 3G handset lineup.
The Group has identified 2008 as the “Year of the Internet Machine,” and will pursue advances in “Internet
Machines” that focus on the use of data telecommunications through mobile handsets. The first handset within thisconcept – the new “Internet Machine SoftBank 922SH” – was released in March 2008.

<Enhanced Sales Structure and Branding>
SOFTBANK MOBILE continued to build on the previous year’s efforts to increase the number of SoftBank shops,
enhance the sales structure, and expand sales channels. As a result, the number of SoftBank shops increased by 578
from the previous year end, to 2,653 at the end of this year. In addition, advertising to raise the level of recognitionof the SoftBank brand and enhance brand strength paid off, with SoftBank winning the “triple crown” of first place inthe three categories of company, production and brand, in a monthly survey of consumer preference of TV

8

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

commercials*4 for seven months between August 2007 and March 2008 (every month except December 2007).
*4. Source: CM Databank<White Plan Applications Exceeded 12 Million>
With steady growth in the number of applications for White Plan, the number of applications surpassed the 12 million
mark on March 20, 2008, an increase of roughly 9 million over the course of this fiscal year after exceeding 3 million
at the end of the previous fiscal year.

This plan is a simple price plan with a basic monthly charge of ¥980

(including tax) and it offers free domestic on-net voice calls between SoftBank users from 1:00 to 21:00*5, and fordomestic voice calls other than those it offers a flat fee of ¥21 (including tax) per 30 seconds*5. In addition, thenumber of Double White discount service applications reached 4.14 million.

This discount service, available to

White Plan subscribers, halves the ¥21 rate to ¥10.5 (including tax) per 30 seconds with an additional fixed charge of¥980 (including tax).
*5. Not applicable to Video Call, 64K Digital Data Communication and Global Services[Broadband Infrastructure]<<Summary of Segment Results>>
Net sales¥258,069 million (2.3% decrease year-on-year)

Operating income¥39,700 million (48.1% increase year-on-year)

Total installed lines for Yahoo! BB ADSL: 4,809,000 (at the end of March 2008)<Analysis of Results>
Net sales decreased by ¥6,158 million year-on-year, or 2.3%, to ¥258,069 million.

Operating income increased by¥12,890 million, or 48.1%, to ¥39,700 million. Revenue from ADSL business in SOFTBANK BB is showing adeclining trend due to ARPU decline and others, however, profit increase trend is maintained mainly due to decreaseof access charge and lease cost for telecommunications equipment.

<Quarterly Results>
Fiscal year ended March 31,2007
Q1
Q2
Q3
Q4

（Millions of yen）
Fiscal year ended March 31,2008
Q1
Q2
Q3
Q4

Net sales

63,32265,72867,266

67,91065,74764,07264,34063,908Operatingincome

5,479

6,189

7,747

7,393

8,665

10,32011,3099,404<Overview of Operations>
The number of installed lines for Yahoo! BB ADSL, the comprehensive broadband service provided by SOFTBANKBB Corp. (hereinafter ‘SOFTBANK BB’), totaled 4,809,000 lines at the fiscal year end. On a customer payment
basis, ARPU was ¥4,358 in the first quarter, ¥4,341 in the second quarter, ¥4,316 in the third quarter, and ¥4,292 in

9SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

the fourth quarter.

Moreover, the ratio of subscribers to faster services, such as Yahoo! BB 50M, was 30.7 % andfor Wireless LAN Pack was 30.2% at this fiscal year end.

Efforts to raise efficiency at the ADSL business led to anincrease in operating income.

[Fixed-Line Telecommunications]<<Summary of Segment Results >>Net sales¥370,740 million (0.9% decrease year-on-year)

Operating income¥3,340 million

Total installed lines for the Otoku Line service: 1,401,000 (at the end of March 2008)<Analysis of Results>
Net sales decreased by ¥3,389 million year-on-year, or 0.9%, to ¥370,740 million. Operating income totaled ¥3,340
million, marking a turnaround from the previous year’s ¥2,965 million operating loss. This segment was establishedin the fiscal year ended March 31, 2005, and this fiscal year’s result marks its first operating profit on a full-yearbasis.

<Quarterly Results>
Fiscal year ended March 31,2007
Q1
Q2
Q3
Q4

（Millions of yen）
Fiscal year ended March 31,2008
Q1
Q2
Q3
Q4

Net sales

88,673

93,276

93,712

98,46690,486

90,98689,97999,288Operatingincome (loss)

1,212

(916)

(2,603)

(656)

(111)

460

1,375

1,615

<Overview of Operations>
SOFTBANK TELECOM is utilizing its core Otoku Line direct connection fixed-line voice service to expand its
corporate customer base. The number of Otoku Line installed lines steadily increased, growing by 180,000 from theend of the previous fiscal year to reach 1,401,000 as of this fiscal year end. Corporate customers constituted 70.4%of the total number of lines, which was 10.4 percentage points higher than in the previous year. SOFTBANKTELECOM will continue to focus its efforts on direct marketing to major corporate clients, which generate higher
profitability.
Due to the increasing demand for Otoku Line digital lines for corporate customers, SOFTBANK TELECOM
recorded a special loss of ¥26,250 million in the third quarter related to telecommunications equipment for analog
lines.

10

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

[Internet Culture]<<Summary of Segment Results>>
Net sales¥247,642 million (27.5% increase year-on-year)

Operating income¥115,237 million (19.4% increase year-on-year)

Number of stores on Yahoo! Shopping and Yahoo! Auctions totaled 31,289<Analysis of Results>
Net sales increased by ¥53,430 million year-on-year, or 27.5%, to ¥247,642 million. Operating income increased by¥18,692 million, or 19.4%, to ¥115,237 million.

<Quarterly Results>
Fiscal year ended March 31,2007
Q1
Q2
Q3
Q4

(Millions of yen)
Fiscal year ended March 31,2008
Q1
Q2
Q3
Q4

Net sales

44,642

46,67650,04952,842

52,796

57,623

66,50570,717

Operatingincome21,63022,71225,011

27,18927,14827,76628,864

31,457<Overview of Operations>
In the advertising business, sales of advertising products with high branding impact expanded. These products
included the Prime Display launched in October 2007 and Brand Panel in January, the size of which was expanded
along with the overall renewal of Yahoo! JAPAN’s top page in January. Use of behavioral advertising also grew,
supporting a firm increase in display advertising compared with the previous fiscal year. Paid listing advertising sales
surged ahead from the previous fiscal year because of the further expansion of this advertising market and increased
use of search services. The start in July of a new system for paid listing advertising service that takes into
consideration a quality index and the bidding price and other factors were contributed to the sales surge in paid listing
advertising.
In business services other than advertising, sales of information listing grew steadily. In particular, sales of Yahoo!
Real Estate increased sharply, reflecting the large growth in the number of listings and the site renewal. Yahoo!
Shopping and Yahoo! Auctions made further progress with increasing the number of the merchant stores, efforts toacquire new stores were also continued. As a result, at the end of March, the number of merchant stores registered on
Yahoo! Shopping and Yahoo! Auctions totaled 31,289, expanding by 4,245 stores. In addition, tenant and commission
fees for Yahoo! Shopping and Yahoo! Auctions expanded favorably.

11

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

[e-Commerce]<<Summary of Segment Results>>
Net sales¥270,723 million (0.3% decrease year-on-year)

Operating income¥3,156 million (52.8% decrease year-on-year)

Launch the new SoftBank SELECTION brand; 393 items released during the year
<Analysis of Results>
Net sales decreased by ¥846 million year-on-year, or 0.3%, to ¥270,723 million.

Operating income decreased by¥3,524 million, or 52.8%, to ¥3,156 million.

<Quarterly Results>
Fiscal year ended March 31,2007
Q1
Q2
Q3
Q4

（Millions of yen）
Fiscal year ended March 31,2008
Q1
Q2
Q3
Q4

Net sales

59,14265,03765,36982,021

61,66063,812

69,63475,615

Operatingincome

1,461

1,399

2,010

1,809

1,167

933

809

246

<Overview of Operations>
Distribution business of SOFTBANK BB posted strong sales of network equipment including routers and switching
devices, and of IT equipment for corporate customers including servers and client PCs. Although hardware products
sales to mass appliance retailers increased, operating income decreased compared to the previous year due to sluggish
sales of high-margin software, valuation loss on products, and upfront investments in the new business such as thecorporate mobile solutions business and the new SaaS*6 business.
SOFTBANK BB launched a new brand, SoftBank SELECTION, in November 2007. This brand incorporates arange of specially selected mobile handset accessories and personal computer software, which are sold at certain
SoftBank shops, mass appliance retailers, and other outlets. SoftBank SELECTION released 393 different items
during the year, of which 22 were software titles.
*6. Software as a Service: A service in which the customer utilizes the application on the vendor’s server on a pay-for-use basis,
rather than make an outright purchase of the software from a vendor.

[Others]<Analysis of Results>
Net sales increased by ¥9,088 million year-on-year, or 10.0%, to ¥99,873 million. The operating loss was ¥5,121
million, compared with the previous year’s operating loss of ¥4,730 million.
This segment includes the Broadmedia business (mainly Broadmedia Corporation), the Technology Services
business (SOFTBANK TECHNOLOGY CORP.), the Media & Marketing business (mainly SOFTBANK CreativeCorp. and ITmedia Inc.), the Overseas Funds business, and Other businesses (mainly TV Bank Corporation andFukuoka Softbank Hawks Corp.).

12

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

<Quarterly Results>
Fiscal year ended March 31,2007
Q1
Q2
Q3
Q4

（Millions of yen）
Fiscal year ended March 31,2008
Q1
Q2
Q3
Q4

Net sales

20,28923,785

21,62825,082

24,871

26,90723,18424,909Operatingincome (loss)

(717)

547

(4,002)

(557)

(689)

38

(2,617)(1,852)[Forecasts for the fiscal year ending in March 2009]
In the Group’s core telecommunications 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 logical estimates are possible.

(2) Analysis of Financial Position<<Summary of the Consolidated Financial Position>>
Total assets¥4,558,901 million(5.8% increase year-on-year)

Total liabilities¥3,710,176 million(3.2% increase year-on-year)¥848,725 million(18.5% increase year-on-year)

EquityCash flows from operating activities¥158,257million increase

Cash flows from investing activities¥322,461 million decrease

Cash flows from financial activities¥284,727 million increase

Balance of cash and cash equivalents¥490,266 million(¥112,745 million increase from theend of March 2007)

1. Assets, Liabilities and Equity
Assets, liabilities, and equity at the end of this fiscal year were as follows:[Current Assets]
Current assets increased by ¥335,311 million from the end of the previous fiscal year, to ¥1,582,744 million.

This

was mainly because of a ¥303,750 million increase in notes and accounts receivable-trade accompanying the strong
installment sales of mobile handsets at SOFTBANK MOBILE. In addition, SOFTBANK MOBILE’s securitizationof a portion of these installment sales receivables led to a ¥113,495 million increase in cash and deposits.

13

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

Furthermore, funds procured through the securitization of installment sales receivables were recorded as
borrowings, and entrusted installment sales receivables were recorded as accounts receivable-trade.

[Fixed Assets]<Property and equipment, net>
Property and equipment, net, totaled ¥1,029,265 million, roughly flat with the ¥1,029,852 million as of the previous
fiscal year end. This was primarily from a ¥49,252 million increase in telecommunications equipment assets,consisting of a ¥175,577 million increase from newly acquired base stations, switching equipment and other mobile
telecommunications equipment, ¥112,711 million in depreciation and ¥12,178 million in disposals. On the other
hand, construction completions resulted in a ¥26,201 million decrease in construction in progress.

<Intangible assets>
Intangible assets decreased by ¥41,401 million from the end of the previous fiscal year, to ¥1,238,309 million.

This

was primarily the result of a decrease of ¥58,491 million in amortization of goodwill, while software increased by¥23,564 million.

<Investments and other assets>
Investments and other assets decreased by ¥43,914 million from the end of the previous fiscal year, to ¥705,763
million.

This was primarily the result of a ¥22,423 million decrease in investment securities, and the reversal of¥30,895 million in deferred tax assets from the utilization of loss carryforwards at SOFTBANK MOBILE.

[Current Liabilities]
Current liabilities increased by ¥97,801 million from the end of the previous fiscal year, to ¥1,240,704 million.

This

was primarily the result of increases of ¥254,915 million in short-term borrowings and ¥51,721million in the current
portion of lease obligations, which offset a ¥51,110 million decrease in accounts payable-other and accrued expenses.
Following the release of revised practical guidelines for financial instrument accounting on March 25, 2008, items
previously included in “cash receipts as collateral” are included in “short-term borrowings” from this fiscal year.
(Refer to “Change in presentation related to marketable security lending transactions” on the following page 41.) The
increase in short-term borrowings consisted primarily of ¥165,872 million procured by SOFTBANK MOBILE via
the securitization of installment sales receivables, while on the other hand borrowings by SOFTBANK CORP.
declined by ¥70,111 million, which included a ¥20,000 million decrease in cash receipts as collateral, previously
presented as “cash receipts as collateral.”[Long-term liabilities]
Long-term liabilities increased by ¥17,759 million from the end of the previous fiscal year, to ¥2,469,472 million.
Lease obligations increased by ¥166,531 million and corporate bonds increased by ¥ 22,611 million, while long-term
debt decreased by ¥142,537 million.
The balance of long-term debt procured by SOFTBANK MOBILE through the whole business securitization

14

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

(WBS) financing scheme decreased by ¥78,602 million from the end of the previous fiscal year, to ¥1,276,488
million.

[Equity]
Equity increased by ¥132,487 million from the end of the previous fiscal year, to ¥848,725 million, and net income
for the year was ¥108,624 million. However, the adoption of new accounting standards at a U.S. subsidiary resulted
in a ¥5,150 million reduction in retained earnings, and ¥2,639 million in dividends was paid from retained earnings.
As a result, accumulated deficit improved by ¥100,527 million. In addition, the execution of stock acquisition rights
and stock subscription rights led to increases of ¥24,113 million in common stock and ¥24,071 million in additional
paid-in capital.

Moreover, minority interests increased ¥34,755 million, and the deferred loss on derivatives underhedge accounting improved by ¥15,172 million. There were decreases, however, of ¥41,704 million in unrealized
gain on available-for-sale securities and ¥21,372 million in foreign currency translation adjustments.

2. Cash FlowsNet cash provided by operating activities was ¥158,257 million, net cash used in investing activities was ¥322,461
million, and net cash provided by financing activities was ¥284,727 million. As a result, cash and cash equivalents
at the end of this fiscal year amounted to ¥490,266 million, an increase of ¥112,745 million from the end of theprevious fiscal year.

[Cash Flow from Operating Activities]
Net cash provided by operating activities was ¥158,257 million.

Income before income taxes and minority interests

for this fiscal year amounted to ¥225,887 million. As non-cash items, depreciation and amortization of ¥220,254
million and amortization of goodwill of ¥59,050 million were recorded. Other adjustment items included equity inearnings of affiliated companies of ¥55,411 million and unrealized appreciation on investments and gain on sale ofinvestments at subsidiaries in the U.S. of ¥12,967 million, which were subtracted from income before income taxes
and minority interests. On the other hand, interest expenses of ¥114,863 million, valuation loss on investment
securities of ¥21,855 million, and impairment losses of ¥10,644 million were added. Operating cash flow was also
negatively impacted by a ¥309,196 million increase in receivables.

Interest paid was ¥103,467 million, andincome taxes paid by Yahoo Japan Corporation and other entities were ¥52,815 million.

[Cash Flow from Investing Activities]
Net cash used in investing activities was ¥322,461 million. As a result of capital investment, mainly in thetelecommunications segments, purchase of property and equipment and intangibles totaled ¥345,677 million. In
addition, purchase of marketable and investment securities was ¥45,576 million, while proceeds from sale ofmarketable and investment securities were ¥44,175 million.

[Cash Flow from Financing Activities]
Net cash provided by financing activities was ¥284,727 million. In the Mobile Communications segment, proceeds

15SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008of ¥297,922 million were recorded from the sale and lease back of equipment newly acquired, and the securitizationof mobile handset installment sales receivables resulted in proceeds from long-term debt of ¥280,716 million. In
addition, proceeds from issuance of bonds by the Company were ¥89,462 million, and from execution of warrants
was ¥44,846 million. On the other hand, short-term borrowings decreased by ¥69,530 million, and repayment oflong-term debt, payment for bond redemptions, and repayment of lease obligations were ¥234,874 million, ¥58,038
million, and ¥49,901 million, respectively.

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

Fiscal year ended

Fiscal year ended

Fiscal year ended

March 31, 2006

March 31, 2007

March 31, 2008

Equity ratio

13.4

%

6.6

%

8.4

%

Equity ratio (Market cap.)

201.3

%

74.2

%

42.8

%

Debt repayment period

6.0

years

4.5

years

4.0

years

Interest coverage ratio

5.5

6.6

5.4

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
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 borrowing, commercial paper, and bonds on the Consolidated Balance
Sheets for the end of the fiscal year.
5. Interest expense is the corresponding figure on the Consolidated Statements of income for the fiscal year.

[Reference]
A summary of cash flow related indicators excluding the Mobile Communications Segment is presented below.

Fiscal year ended

Fiscal year ended

March 31, 2007

March 31, 2008

Debt repayment period

4.6

3.6

Interest coverage ratio

6.8

years

7.7

16

years

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

3. Major Financing Activities
The major financing activities in this fiscal year 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 Bond)

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

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)
Procurement of funds
totaling ¥71,518 million
accompanying
securitization of mobile
phone installment salesreceivables (recorded as
borrowings)
Procurement of funds
totaling ¥56,174 million
accompanying
securitization of mobile
phone installment salesreceivables (recorded as
borrowings)

17

Procurement date:
September 28, 2007
Redemption method:monthly pass-through repayment
Use: capital investment andrepayment of funds raised via WBS
Procurement date:
December 26, 2007
Redemption method:monthly pass-through repayment
Use: capital investment andrepayment of funds raised via WBS
Procurement date:
March 28, 2008
Redemption method:monthly pass-through repayment
Use: capital investment andrepayment of funds raised via WBS

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

Item
Increase or decreaseof debt and others

Bond redemption

Company NameSOFTBANKCORP.

SOFTBANKMOBILE Corp.
SOFTBANKTELECOM Corp.
Yahoo Japan
Corporation
SOFTBANK
CORP.

Details

Summary

Increase ¥26,888 million

Increase in borrowing by ¥130,000
million:
The Company has received ¥130,000
million as of March 31, 2008 as
collateral from financial institution,
to whom the Company has lentshares in its subsidiaries under
security deposit agreement. The cash
receipts as collateral under thisagreement are included in“Short-term borrowings” from thisfiscal year, which was included in“Cash receipts as collateral” for theprevious fiscal year, due to following
the release of revised practicalguidelines for financial instrument
accounting on March 25, 2008:

Decrease ¥78,602 million
Decrease ¥23,200 million
Decrease ¥20,000 million
2nd Unsecured Straight
Bond

18th Unsecured Straight
Bond

Implementation ofcapital investment
through financelease agreementswith ownershiptransfer

SOFTBANKMOBILE Corp.

Other than above:
Decrease in borrowings by ¥98,112
million (net) and decrease incommercial paper by ¥5,000 million
Repayment of funds raised via WBS

Implementation of capital
investment for mobile
communications utilizing
lease agreements

Date of redemption:
September 27, 2007
Aggregate amount of redemption:¥23,900 million
Date of redemption:
January 29, 2008
Aggregate amount of redemption:¥20,000 million
Funds procured during this fiscal
year: ¥297,922 million(3) Basic Policies for Profit Distribution, and Dividends for the fiscal year ended March 31, 2008 and the fiscal
year ending March 31, 2009
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 proposed dividend for the fiscal year ended March 31, 2008 is the same as last fiscal
year at ¥2.5 per share.

The dividend from the current fiscal year onwards is undecided at this time.

18

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

(4) Risk Factors
With a diverse range of businesses centered on Internet-related operations, the SOFTBANK Group faces a variety ofrisks in its operations, and these risk factors have the potential to affect the Group’s operating activities, earnings andfinancial position, share price, and the Group’s reputation and brand image. The major risks envisioned by theGroup as of the release of this report that could affect investors’ investment decisions are outlined below.
The Group is working to reduce these risks and minimize their effects, but cannot necessarily guarantee that all
risks can be completely avoided. This summary may not necessarily include all risks that could arise with regard to
the Group’s operations in the future.

I. Market-Related Risks
1. Risks Related to Economic Conditions and Market Trends
The Group operates in a wide range of markets including mobile communications, with a focus on Internet-related
operations. Demand for these businesses’ products and services are dependent on economic conditions and market
trends, which therefore could have an impact on the Group’s performance.
The Group’s market competitiveness could also be weakened if competitors are deemed to have stronger capitalstrength, services, price competitiveness, customer bases, sales structures, and brand or name recognition. As aresult, products and services may not prove to be as successful as anticipated, and customer acquisition and retention
may fall short of targets, thereby impacting the Group’s results.

2. Risks Related to Foreign Exchange, Interest Rate and Stock Markets
The value of listed (investment) securities held by the Group depends on economic conditions and trends in stock andforeign exchange markets in Japan and overseas, and import of telecommunications equipment is influenced by trend
in the foreign exchange market.
The Group has a substantial amount of interest-bearing debt and holds large amounts of assets and liabilities
denominated in foreign currencies.

The Group considers interest rate and foreign exchange rate risks to besignificant risks. The Group strives to minimize the risks it faces, utilizing long-term fixed rates and other means tominimize interest rate risks and currency hedges on major assets and liabilities denominated in foreign currencies.
However, depending on market trends, it my not be possible to completely avoid these risks.
Shares of Internet-related companies in Japan, the U.S., China and other countries constitute the majority of theGroup’s investments, and these activities are one of the core sources of cash flows for the Group. Share prices forInternet-related investments are subject to drastic fluctuations, and the Group’s fundraising capacity could be severely
impacted by a significant drop in these values.

3. Risks Related to Technological Innovation
The fields of the Internet and telecommunications experience a rapid pace of technological innovation, in theindustries overall as well as in the area of telecommunications systems technology, and the Group needs to respondflexibly to the developments that result. If for whatever reason, however, the Group is unable to appropriately
respond to these technological advances, it runs the risk of losing competitiveness because of outdated services or

19

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

technology. Even when the Group is able to respond to these advances, there is a possibility of unexpected cost
increases for new equipment introduction or the updating of existing equipment, and this could affect the Group’s
performance.

II. Risks Related to Laws and Regulations
1. Laws and regulations related to telecommunications operations
The Group’s telecommunications business is regulated by a number of laws and regulations, including the
Telecommunications Business Law and the Radio Law. Revisions to these laws and regulations, or the enactment of
new laws and regulations, could therefore prevent the Group from developing businesses as expected.
Telecommunications-related policy changes at the Ministry of Internal Affairs and Communications (MIC) covering
items like bandwidth allocation and fiber-optic access fees could also have a major impact on the Group’s operations.

2. Laws and Regulations Related to Intellectual Property
The Group strives to ensure that the video content handled in the Group’s video distribution operations, including
Yahoo! Streaming, and BBTV, does not infringe on any rights or interests, including those of the holders of various
intellectual property rights. It is possible, however, that the Group’s actions will somehow infringe on intellectual
property rights held by third parties, and that the Group will be subject to demands that it stop using video content orthat it pay compensatory damages.
Because of the large number of companies aggressively developing Internet technologies and business models
including broadband, the possibility exists that the Group could be sued by a third party for compensatory damages
for patent infringement and that, in the future, the Group’s business activities may be restricted with regard toproviding content and/or the use of technologies.
Furthermore, the revision of other laws and regulations related to intellectual property rights could have asignificant impact on the Group’s business activities in the future.

3. Laws and Regulations Related to the Protection of Personal Information
The Group pays careful attention to the protection of personal information through measures including thestrengthening of the Group’s customer information management system and by restricting access to personal
information obtained and maintained by the Group. In particular, SOFTBANK MOBILE and the Group’s othertelecommunications businesses appropriately manage personal information in compliance with the Act on theProtection of Personal Information and the MIC’s Guidelines on the Protection of Personal Data in
Telecommunications Business.

Nevertheless, the possibility exists that personal information could be either

intentionally or accidentally leaked externally by a Group affiliate, business partner or subcontractor and misused.
If such a situation were to occur, the Group’s credibility could suffer serious damage and operations could besignificantly impacted.

4. Potential Litigation
With its wide variety of operations such as the mobile communications business and other Internet-related businesses,

20

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

the Group faces the possibility of lawsuits by third parties claiming compensatory damages for the infringement ofrights or benefits, regardless of whether or not the Group is responsible. Furthermore, while the Group currently
maintains amicable labor-management relations, future developments could change this relationship and there is apossibility of lawsuits emerging as a result. Lawsuits could therefore impact the Group’s performance in ways
including financial liability and a weakening of the brand image.

III. Risks Related to Natural Disasters and Accidents
The Group constructs and maintains telecommunications networks and information systems required by the mobile
telecommunications and other businesses to provide telecommunications services. There is a danger that natural
disasters including earthquakes, typhoons or tsunami, fires, power outages or shortages, terrorist attacks, computerviruses or other external attacks could damage the Group’s telecommunications systems and disrupt its ability toprovide telecommunications services.
If these disruptions were to become widespread and/or significant time were required to restore services, not only
could the Group’s earnings be affected, but there is also a possibility that customer trust and satisfaction, and thebrand image, could be adversely impacted, making it difficult to acquire and retain customers.
The head offices and business offices of the Company and the Group companies are concentrated in the greater
Tokyo metropolitan area. The possibility therefore exists that a major earthquake or other force majeure in Tokyo
could paralyze the Head Office’s functionality and impede the continuity of the Group’s operations.

IV. Risks Related to Operations
1. Reliance on Management Resources of Other Companies
The Group makes use of certain telecommunications lines and facilities owned by other telecom operators whenconstructing and maintaining the telecommunications networks required for providing telecommunications services.
The Group’s performance could therefore be impacted if for some reason it became difficult to continue to use thosefacilities, or if utilization or connection rates for those facilities were to be increased.
The Group also relies on other companies to provide mobile phone handsets and other types oftelecommunications equipment required for providing telecommunications services. If for some reason in the futurechanges were to arise in the relationship between the Group and these suppliers, or at suppliers themselves, and these
suppliers were to cease to supply, or inspect and service, the telecommunications equipment, or if a major defect inthe telecommunications equipment were to be discovered, the Group could become unable to continue providing
services and the brand image could suffer.
The Group uses subcontractors to sell mobile handsets and other products and services, to acquire and retain
customers, and to carry out certain other related operations.

The Group’s performance and market share could

therefore be affected by changes in subcontractor relationships or by the public image and credibility of thosesubcontractors.
In addition, several of the Group’s services including Yahoo! JAPAN, Yahoo! BB and Yahoo! Keitai make use of theYahoo! brand of Yahoo! Inc. The Group currently has an amicable relationship with Yahoo! Inc., but a significant
change in this relationship in the future could prevent the Group from developing its business as planned.

21

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

2. Risks Related to the Group’s Services and Operations
The Group must continuously invest in facilities and equipment in order to provide attractive services and maintain
service quality. At the telecommunications businesses in particular, the capital investment required to increase thecapacity of our telecommunications network if customer growth were to exceed projections could lead to a temporary
deterioration in cash flow and profitability.
Furthermore, the Group strives to maintain its telecommunications network and information systems in order toprovide stable telecommunications services, but there is a possibility that human error or the emergence of unforeseen
problems could disrupt the Group’s ability to provide telecommunications services. If these disruptions were to
become widespread and/or significant time were required to restore services, not only could the Group’s earnings beaffected, but there is also a possibility that customer trust and satisfaction, and the brand image, could be adversely
impacted, making it difficult to acquire and retain customers.
The Group introduced installment sales for mobile phone handsets in September 2006, and more than 10 million
installment sales contracts were concluded during this fiscal year. Although installment sales have contributed to a
decline in churn rates, this has also led to an increase in accounts receivable from a large number of individual
customers. The resulting increased risk of credit defaults and increased collection costs could therefore impact theGroup’s performance.
Were the Group to become unable to recover investments in its fixed assets because of a decline in asset
profitability, an impairment loss as stipulated in the Accounting Standards for Impairment of Fixed Assets may need
to be recognized, and this could have an impact on the Group’s results or financial position.

3. Risks Related to Compliance and Internal Controls
Because of its wide range of businesses, the Group must comply with a variety of laws including the
Telecommunications Business Law, the Radio Law and the Law on the Prevention of Unauthorized Use of Cellular
Phones at the telecommunications businesses, as well as the Act on the Protection of Personal Information, theFinancial Instruments and Exchange Law, the Act on the Prohibition of Private Monopolization and Maintenance ofFair Trade, and the Act Against Unjustifiable Premiums and Misleading Representation.
The Group is continuously working to strengthen its compliance structure, and has established the SOFTBANKGroup Officer and Employee Code of Conduct, a code of conduct related to compliance that is to be followed by all
directors and employees, and holds training programs at various levels to ensure that this code is thoroughly
understood throughout the Group. Nevertheless, there is a possibility that compliance risks cannot be completely
avoided, and the Group’s results could be affected if laws or other regulations were to be violated.
Furthermore, in the event an illegal act were to occur at a SoftBank shop or sales agent handling the Group’s
products and services, the Group could receive a warning or administrative guidance from the regulatory authorities,
or be investigated for non-fulfillment of its supervisory responsibility, and there is a possibility that the Group’s
credibility or brand image could suffer as a result.

22

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

4. Risks Related to Fund Procurement and Financial Covenants
The cost of procuring funds required for the development of the Group’s businesses is affected by interest rates andratings received by rating agencies.

The Group’s profitability could therefore deteriorate if those costs were toincrease because of an increase in interest rates or a decline in the Group’s creditworthiness.
The Group’s interest-bearing debt includes financial covenants that the Group must comply with in its operations.
Please refer to Page 45 for the details of these financial covenants. In the event, however, that these covenants were
to be breached and requests were to be made for the immediate repayment of the affected interest-bearing debt, theGroup’s financing could be adversely impacted.
Certain financial and operating performance standards have been established for the ¥1,366 billion raised through
SOFTBANK MOBILE’s whole business securitization. In the event SOFTBANK MOBILE’s performance were to
fall short of these standards, outlays for capital investment would be restricted and the development of new services
would require the prior approval of the lenders, and this could impact SOFTBANK MOBILE’s business development.
Furthermore, in the event SOFTBANK MOBILE were not able to meet these standards on a cumulative basis, thelenders could appoint a majority of the board of directors and might exercise their collateral rights for assets provided
as collateral, including shares of SOFTBANK MOBILE.

5. Risks Related to Mergers and Acquisitions
The Group has expanded its fields of business through acquisitions and business alliances. When entering intoacquisitions or business alliances, the Group works to understand risks by conducting due diligence regarding thefinancial position and business operations of the counterparty company. There is a risk, however, that unanticipatedobligations will arise after an acquisition.

Furthermore, changes in the business environment or competitive

conditions could also prevent the implementation of initial operating plans.

Moreover, there is also a risk that theGroup will not be able to realize initially anticipated synergies for reasons including a loss of customers or humanresources, and therefore will not adequately recover investments that have already been made. As a result, theGroup may not be able to develop its operations as planned.
In addition, the Company and the Group companies establish joint ventures and enter into business alliances with avariety of business partners. There is therefore a possibility that the Group will not be able to develop its businesses
as planned if it becomes unable to effectively control the acquired company or to effect important decisions.

6. Reliance on Management TeamThe planning and administration of the Group’s businesses are carried out by the Group’s officers and employees.
Unforeseen situations concerning senior management – especially President and Chief Executive Officer Masayoshi
Son – could create an obstacle to smooth operational progress and impact the Group’s operations.

23

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

2. The SOFTBANK GroupAs of March 31, 2008, 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

4-

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

19Internet-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)

73

39

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.)

109

67

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.

24

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

[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 March 31, 2008:
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.

25

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

3. Management Policies(1) Fundamental Management Policies
Since its establishment, the SOFTBANK Group has followed the core management philosophy of “Endeavoring tobenefit society and the economy and to maximize enterprise value by fostering the sharing of wisdom and knowledge
gained through the IT revolution.” The Group is working to facilitate the realization of a true ubiquitous society,where broadband will enable anyone to access all kinds of information at any time and anywhere.
As a corporate group based on Internet-related businesses, the Group will not limit itself to its existing role of atelecommunications carrier. Rather, by providing both information infrastructure and content as a comprehensive
digital information company, the Group aims to make people’s lifestyles and business styles more affluent andenjoyable, and to be the global No. 1 corporate group in the broadband era.

(2) Target Management Indices
The Group places great importance on results and rates of change in the principal management indices – net sales,
operating income, ordinary income, net income, cash flows and EBITDA*1 – for each of our internal management
segments.

The Group also attaches great importance to indices that track user trends, particularly intelecommunications businesses, such as the number of subscribers, market share, churn rate, and ARPU. The Groupis also working to maximize its cash flow and further strengthen its financial position.
*1

EBITDA: Operating income/loss + depreciation and loss from disposal of fixed assets (which are included in operating expenses)(3) Medium-and-Long-Term Strategies
As a comprehensive digital information company in the ubiquitous society, the Group aims to integrate fixed-line andmobile telecommunications broadband services and to seamlessly develop a range of broadband content over that
infrastructure. In this way, the Group will work to maximize Group revenues and enterprise value through theestablishment of unique business models for the broadband era that will generate long-term, stable income from its
infrastructure businesses, increasing returns from its portal businesses, and diversified sources of profit from its
content businesses. In addition, the Group will work to establish a base as an Internet company in Asia, primarily
through the Alibaba Group, our strategic partner in China, and Yahoo Japan Corporation in Japan, and use this as afoothold to further expand globally.

(4) Important Management Issues for the Company
1. Mobile communications initiatives
Immediately following its full-fledged entry into the mobile communications market, the Group identified four key
initiatives – 3G network enhancement, 3G handset lineup enrichment, mobile content enhancement, and enhancementof sales structure & branding – and has worked to expand the customer base and further establish the SoftBank brand.
The Group will continue to work on the implementation of these initiatives.
In particular, the Group has positioned the Year 2008 as the “Year of the Internet Machine,” and will pursue
advances in “Internet Machines” which focus on the use of data telecommunications through mobile handsets. In

26

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

order to achieve this evolution and increase data ARPU, the Group believes that it is important to expand thecoverage area and handset lineup for the 3G High-Speed service that is compatible with HSDPA, reinforce the
network, lay the groundwork for the full-scale introduction of femtocell*2, and provide broadband content.
*2

Micromini base stations for mobile phone which can be installed in small spaces such as homes and offices to improve thecoverage with in a limited area.

2. Broadband infrastructure initiatives
The Group’s comprehensive broadband service, Yahoo! BB has the largest share of the market for ADSL services.
Nevertheless, the broadband market is experiencing a shift to FTTH services using optical fiber, which can provide
even higher speed, as a result, the number of installed ADSL lines is declining. A fair competitive market for FTTH
services has yet to be established, therefore, the Group remains unable to fully develop this business, and the Group
is urging the MIC and others to improve the situation. At the same time, the Group is providing the Yahoo! BB
hikari Installation Free service in some areas utilizing optical fiber and existing telephone lines for transmission, and
the Group is working towards putting the alternative technology, which provides the same service quality as FTTH,
but more economically and effectively, to practical use.

3. Fixed line telecommunications initiatives
In fixed-line telecommunications operations, the scale of the consumer market continues to shrink due to thepenetration of mobile phones and IP phone services, but demand remains firm in the corporate market.

In such anenvironment, SOFTBANK TELECOM Corp. continues to directly market fixed-line services to corporations, with anemphasis on the Otoku Line, a direct connection fixed-line voice service.

SOFTBANK TELECOM has also beendeveloping and providing mobile solutions for corporate customers utilizing the services of SOFTBANK MOBILE,
and is aggressively working to provide data services to corporate customers.
In addition, SOFTBANK TELECOM and SOFTBANK IDC Corp., the Group’s subsidiary specializing in data
centers are working to meet increasing demand for data center operations accompanying the growth of video andother broadband content.

4. Pursuing synergies among Group companies
The Group considers the further achievement of group synergies in the telecommunications businesses to be an
important issue.

This includes cost reductions through the integration of the backbone network, and the expansionof the customer base and sales channels among the three telecommunication companies of the Group – SOFTBANKMOBILE, which has now been part of the Group for two full years, SOFTBANK BB and SOFTBANK TELECOM.
In particular, the mobile telecommunications business is working to differentiate itself from its competitors byfurther strengthening the relationship between SOFTBANK MOBILE and Yahoo Japan Corporation, and by taking
advantage of the services and content owned by the SOFTBANK Group companies.

5. Initiatives to become a comprehensive digital information company
As a corporate group, based on Internet-related businesses, the Group will not limit itself to its existing role as a27

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

comprehensive communications carrier.

Rather, the Group will further enhance its appealing broadband content,such as through the Yahoo! Streaming video portal site. As a comprehensive digital information company in the
broadband era, the Group will work to develop innovative services in infrastructure, portals, and content and strive toclearly differentiate itself from competitors.

28

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

4. Consolidated Financial Statements
Consolidated Balance Sheets(Millions of yen; amounts less than one million yen are omitted.)
As ofMarch 31, 2007

AmountAs ofMarch 31, 2008%

AmountIncrease(Decrease)%

AmountASSETS
Current assets:
Cash and deposits
Notes and accounts receivable - tradeMarketable securities¥377,666¥491,161¥113,495

583,972

887,723

303,750

8,588

4,928

(3,660)Inventories

76,89872,150(4,747)

Deferred tax assets

108,994

105,850(3,144)

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

119,250

89,319(29,930)(27,936)
1,247,433(68,388)28.9

1,582,744(40,452)
34.7

335,311

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

89,44475,781(13,663)

Telecommunications equipment

694,785744,037

49,252

Telecommunications service lines

92,23586,062(6,172)

Land

27,74723,442(4,304)

Construction in progress

71,77745,576(26,201)

Other

53,86154,364502

Total property and equipment

1,029,852

23.9

1,029,265

22.6

(587)

Intangible assets, net:
Goodwill

1,032,927

974,435(58,491)

Software200,615

224,180

23,564

Other intangibles

46,16839,693(6,474)

Total intangible assets

1,279,710

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

29.7

1,238,309

27.2(41,401)

487,421464,997(22,423)

157,783

126,887(30,895)

113,877

118,491

4,613(9,405)
749,677
3,059,240

17.4
71.0

(4,613)705,763
2,973,337

15.4
65.2

4,791
(43,914)(85,903)

4,178

0.1

2,818

0.1

(1,359)¥4,310,852

100.0¥4,558,901

100.0¥248,048

29

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

Consolidated Balance Sheets(Millions of yen; amounts less than one million yen are omitted.)
As ofMarch 31, 2007

AmountAs ofMarch 31, 2008%

AmountIncrease(Decrease)%

AmountLIABILITIES AND EQUITYCurrent liabilities:
Accounts payable - trade
Short-term borrowings¥195,167¥187,279¥(7,888)

193,656448,571

254,915

Commercial paper

5,000

-

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

43,96452,5408,576

415,561

364,450(51,110)

Income taxes payable

33,07035,0792,009

Current portion of lease obligations

18,04969,77051,721

Cash receipts as collateral

150,000-(150,000)

Other current liabilities

88,433

83,012(5,421)

Total current liabilities

1,142,903

26.5

1,240,704

27.2

97,801Long-term liabilities:
Corporate bonds

422,599445,211

22,611Long-term debt

1,729,183

1,586,645(142,537)

Deferred revenue

26,392

15,922(10,469)

Deferred tax liabilities

50,136

41,977(8,158)

Liability for retirement benefits

16,701

16,158(542)

Allowance for point mileage

43,78743,80922

Lease obligations

74,964

241,496

166,531

Other liabilities

87,947

78,249(9,697)

Total long-term liabilities

2,451,712

56.9

2,469,472

54.2

17,759Total liabilities

3,594,615

83.4

3,710,176

81.4

115,560

163,309

3.8

187,422

4.1

24,113Equity:Common stock
Cash receipts for new stock subscriptions

1

0.0

-

-

(1)

Additional paid-in capital

187,669

4.3

211,740

4.6

24,071

Accumulated deficit(192,271)(4.5)(91,744)(2.0)

100,527

Less: Treasury stock

(193)

(0.0)

(206)

(0.0)

(12)

Total shareholders’ equity

158,515

3.6

307,2136.7

148,697

Unrealized gain on available-for-sale securities

122,6192.8

80,914

1.8(41,704)

Deferred loss on derivatives under hedge accounting(26,995)(0.6)(11,823)(0.3)

15,172Foreign currency translation adjustments

28,810

0.7

7,437

0.2

(21,372)

Total valuation and translation adjustments

124,434

2.9

76,5291.7(47,904)

3,180

0.1

120

0.0

(3,060)Minority interests

430,106

10.0

464,862

10.2

34,755

Total equity

716,237

16.6

848,725

18.6

132,487¥4,310,852

100.0¥4,558,901

100.0¥248,048

Stock acquisition rights

Total liabilities and equity

30

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

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

Fiscal year ended
March 31, 2007
AmountNet sales
Cost of sales
Gross Profit
Selling, general and administrative expenses
Operating income

Fiscal year ended
March 31, 2008

Increase(Decrease)%

Amount%Amount¥2,544,219

100.0¥2,776,168

100.0¥231,949

1,409,520

55.4

1,467,363

52.9

57,843

1,134,698

44.6

1,308,805

47.1

174,106

863,63333.9

984,51735.4

120,884

271,06510.7

324,287

11.7

53,221

Interest income
Foreign exchange gain, net

3,394

3,137

(256)

-

4,981

4,981

Equity in earnings of affiliated companies

2,130

55,41153,280

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

8,006
13,5315,857
0.5

79,521

69,387(2,148)2.5

114,863

55,85635,342

834

-

(834)

28,715-(28,715)

22,101

20,197(1,904)

131,173

5.2

135,060

4.9

3,887

Ordinary income

153,423

6.0

258,6149.3

105,190

Gain on sale of investment securities

83,1606,432(76,727)

2,598

3,765

1,166

2,253

12,967

10,713

4,641

6,619

1,978

Dilution gain from changes in equity interest
Unrealized appreciation on investments and gain onsale of investments at subsidiaries in the U.S. , net
Other special income
Special income

92,653

Valuation loss on investment securities
Loss on disposal of fixed assets
Impairment loss
Loss on unused telecommunications supplies
Loss on redemption of bonds
Other special losses
Special loss

3.6

29,785

1.1(62,868)

5,351

21,855

16,504

7,695

10,4382,743-

10,644

10,644-12,006

12,006

10,42930(10,398)

14,0287,534(6,493)37,503

1.5

62,511

2.3

25,008208,5738.2

225,887

8.1

17,313

Income taxes:
Current

48,726

1.9

48,6491.7(76)

Deferred

93,676

3.7

29,5331.1(64,142)

Income before income taxes and minority interests

Minority interests in net income
Net income

37,355

1.5

39,0791.4

1,723¥28,815

1.1¥108,624

3.9¥79,80931

Consolidated Statements of Changes in Equity
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

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

Balance at April 1, 2006

Total

Total

Changes of items during the year
Exercise of warrants

-

-

-

28,815-28,815

-

-

-

-

-

-

28,815Purchase of treasury stock

-

-

-

-

(23)

(23)

-

-

-

-

-

-

(23)

Items other than changes in shareholders’equity, net

-

-

-

-

-

-

(6,432)

9,845

9,747

13,16030

328,760

341,951

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

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.

32

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

Net income

Fiscal year from April 1, 2007 to March 31, 2008:(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

Minority
interests

Total equity¥124,434¥3,180¥430,106¥716,237

-

-

-

-

(5,150)

-

-

-

-

-

48,183

-

-

-

-

-

-

(2,639)

(307)

-

-

-

-

-

-

(307)

-

108,624

-

-

-

-

-

-

108,624

-

(12)

(12)

-

-

-

-

-

-

(12)

-

-

-

-

(41,704)

15,172(21,372)(47,904)(3,060)34,755(16,209)(1)

24,071

100,527(12)

148,697(41,704)

15,172(21,372)(47,904)(3,060)34,755

132,487¥-¥211,740¥(91,744)¥(206)¥307,213¥80,914¥ (11,823)¥7,437¥76,529¥120¥464,862¥848,725

Additional
paid-in
capitalAccumulated
deficit

Treasurystock¥163,309¥1¥187,669¥(192,271)¥(193)¥158,515¥122,619¥(26,995)¥28,810---(5,150)-(5,150)--24,113(1)

24,071--

48,183-

Cash dividends

-

-

-

(2,639)-(2,639)Adjustments of accumulated deficit due tochange in scope of the consolidation

-

-

-

(307)

-

Net income

-

-

-

108,624

Purchase of treasury stock

-

-

-

Items other than changes in shareholders’equity, net--

Total changes in the year

24,113

Balance at March 31, 2008

¥187,422

Balance at April 1, 2007
Changes of items during the year
Increase in accumulated deficit due to adoptionof new accounting standards at a subsidiaryin the U.S.
Exercise of warrants

Total

33

Total

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

StockacquisitionrightsCommon Cash receipts for
new stockstock
subscriptions

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

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

Fiscal year ended
March 31, 2007

Fiscal year ended
March 31, 2008

¥208,573¥225,887

Depreciation and amortization

189,092

220,254

Amortization of goodwill

53,59559,050Equity in earnings of affiliated companies(2,130)(55,411)

Dilution gain from changes in equity interest, net(2,484)(1,570)-10,644

5,351

21,855(2,253)(12,967)

Foreign exchange (gain) loss, net(82,567)
1,136(7,569)(4,431)

Interest and dividend income(3,713)(3,754)

Interest expense

79,521

114,863(225,489)(309,196)

91,184(7,508)103,91360,917413,729

311,066

5,519

3,473

Interest paid

(62,081)(103,467)

Income taxes paid

(45,964)(52,815)

311,201

158,257

Cash flows from operating activities:
Income before income taxes and minority interests
Adjustments for:

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

Changes in operating assets, and liabilities
Increase in receivables – trade
Increase (decrease) in payables - trade
Other, net
Sub-totalInterest and dividends received

Net cash provided by operating activities- Continued -34

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

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

Fiscal year ended
March 31, 2007

Fiscal year ended
March 31, 2008

Purchase of property and equipment, and intangibles¥(297,764)¥ (345,677)

Purchase of marketable and investment securities
Proceeds from sale of marketable and investment securities(114,022)(45,576)

168,354

44,175(1,844,849)

1,207

Increase in loan receivables(89)
10(16,519)

(257)
1,012
(32,613)

Collection of loan receivables

15,74930,709Other, net(8,805)24,558(2,097,937)(322,461)

Decrease in short-term borrowings, net(8,848)(69,530)

Decrease in commercial paper, net(5,400)(5,000)

Proceeds from long-term debt

1,586,970

280,716

Repayment of long-term debt

(98,151)(234,874)

Cash flows from investing activities:

Acquisition of interests in subsidiaries newly consolidated, net of cash
acquiredSale 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:

Proceeds from issuance of bonds

72,55889,462

Redemption of bonds(205,334)(58,038)

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

786
300,378(2,640)44,846
9,127(2,640)Cash dividends paid to minority shareholders(3,143)(3,549)Proceeds from sale and lease back of equipment newly acquired

65,818297,922

Increase in cash receipts as collateral, net

50,000-

Repayment of lease obligations(2,595)(49,901)

Other, net(32,011)(13,812)

1,718,384

284,727

3,073(7,006)(65,277)

113,516

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 of previously
consolidated subsidiaries
Cash and cash equivalents, beginning of the year

(3,896)(771)

446,694

377,520

Cash and cash equivalents, end of the year

¥377,520¥490,266

35

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

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

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 (Note)
Special loss (Note)
Income before income taxes andminority interests
Income taxes - Current
Income taxes - Deferred
Minority interests in net income
Net income

Second quarter

Third quarter

Fourth quarter

First quarter

Second quarter

Third quarter

Fourth quarter

April 1, 2006 to

July 1, 2006 to

October 1, 2006 to

January1, 2007 to

April 1, 2007 to

July 1, 2007 to

October1, 2007 to

January1, 2008 toJune 30, 2006

September 30, 2006

December 31 2006

March 31, 2007

June 30, 2007

September 30, 2007

December 31, 2007

March 31, 2008

AmountAmountAmountAmountAmountAmountAmountAmount¥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¥694,020
367,244326,775¥717,402
381,254
336,148

165,978

226,303

227,304

244,045

231,442

246,691

234,333

272,049

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
5,617
15,77578,746
4,531
32,12351,1549,514
2,266

89,0005,654
34,64360,01019,312
14,79692,441
61,231
32,840120,833
4,525
31,02464,0984,129
41,612
26,6152,289
20,282

29,30289,59658,02431,65058,40364,527

94,334

8,622

10,146
9,224
8,514

70,826(3,182)
8,930

12,552
27,211
10,765(44,798)
60,4239,145

2,826
20,065
10,38013,982
19,00910,203

13,45824,8009,341

18,382(34,342)
9,153¥1,418¥13,021¥7,494¥6,881¥25,130¥21,331¥46,734¥15,427

Note: Foreign exchange gain (loss), equity in earnings (loss) of affiliated companies, income (expenses) from investments in partnerships, andunrealized appreciation on investments and gain on sale of investments at subsidiaries in the U.S. are netted on quarterly basis forpresentation purposes. Unrealized appreciation on investments and gain on sale of investments at subsidiaries in the U.S., net of prioryear is reclassified retroactively.
Condensed Statements of Cash Flows(Millions of yen; amounts less than one million yen are omitted.)First quarter

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 andcash equivalents
Decrease in cash and cash equivalents
due to exclusion of previously
consolidated subsidiaries
Cash and cash equivalents, beginningof the period
Cash and cash equivalents, end of theperiodNote:“Depreciation and amortization” and“amortization of goodwill” included in
net cash provided by operating
activities

Second quarter

Third quarter

Fourth quarter

First quarter

Second quarter

Third quarter

Fourth quarter

April 1, 2006 to

July 1, 2006 to

October 1, 2006 to

January 1, 2007 to

April 1, 2007 to

July 1, 2007 to

October 1, 2007 to

January 1, 2008 toJune 30, 2006

September 30, 2006

December 31, 2006

March 31, 2007

June 30, 2007

September 30, 2007

December 31, 2007

March 31, 2009

AmountAmountAmountAmountAmountAmountAmountAmount¥64,675¥122,464¥71,193¥52,868¥(27,478)¥27,922¥56,812¥101,001(1,965,832)

8,847(71,675)(69,276)(111,519)(115,766)(46,349)(48,826)

1,743,429(144,656)

124,058(4,446)

218,480

85,045(2,311)(16,487)134

703(2,716)

4,951

1,495

(2,158)(644)(5,699)(157,593)(12,641)

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

7,506

29,987(3,886)

-

(9)

-

(771)

-

-

-

446,694285,214272,572

393,423

377,520457,727452,771

460,278

285,214272,572

393,423

377,520457,727452,771

460,278490,266¥48,989¥62,424¥66,271¥65,001¥67,960¥69,259¥70,319¥71,766

36

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

Basis of Presentation of Consolidated Financial Statements
1. Changes in scope of consolidation
As of March 31, 2008, SOFTBANK CORP. (the “Company”) consolidated 109 subsidiaries (together, the “Group”). 78
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>
4 companies
Significant changes:
Overture K.K.
Newly acquired<Decrease>
13 companies
2. Changes in scope of equity method
As of March 31, 2008, the Company held 3 non-consolidated subsidiaries and 64 affiliates, all of which were accounted forunder the equity method. 75 non-consolidated subsidiaries and 25 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>
13 companies<Decrease>
12 companies
3. Fiscal year end
Fiscal year ends of consolidated subsidiaries for both domestic and overseas entities are as follows:<Fiscal year end>
March end
(same as the consolidated balance sheet date)June end
July end
December end
January end
February end<Domestic><Overseas>

49
1
3
1
3

32
2
16
2
-

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 method37

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

Certain subsidiaries of the Company in the United States of America qualify as investment companies under theprovisions of “American Institute of Certified Public Accountants Audit and Accounting Guide” 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.
(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. did not occur for the fiscal year ended March 31, 2008.
(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.”

38

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

[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.
[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.

39

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

④ < Effectiveness of hedge transactions >Effectiveness of the hedge transaction is omitted due to qualifying for hedge accounting.
[7] Other(1) Accounting method for consumption taxes
Consumption taxes are accounted for using the net method of reporting.
(2) Consolidated taxation system
BB Mobile Corp., SOFTBANK MOBILE Corp., and its 5 subsidiaries, all of which are subsidiaries of the Company,
are approved to adopt the consolidated taxation system by the administrator of the National Tax Agency for the fiscal
year beginning from April 1, 2008. Accordingly, income taxes for the year ended March 31, 2008 are accounted forbased on the adoption of the consolidated taxation system for the fiscal year beginning from April 1, 2008 in accordancewith ASBJ Practical Issues Task Force No. 5 and No. 7 issued on October 9, 2002 and February 6, 2003 (Accounting
for income taxes in the adoption of consolidated taxation system), respectively.

5. Accounting for business combinations
All assets and liabilities of acquired entities are revalued at the respective fair market value at the combination date.
6. 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 a
20-year-period.
7. 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.

40

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

Change in accounting policies
1. 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 fiscal year ended March 31, 2008.
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 fiscal year ended March31, 2008.
The adjustment was not considered material to income before income taxes and minority interests of the consolidated
statements of income.
2. Change in presentation related to marketable security lending transactions
Following the release of revised practical guidelines for financial instrument accounting on March 25, 2008, the Company
reclassified its consolidated financial statements for the fiscal year ended March 31, 2008 as follows:(Consolidated balance sheets)
Cash receipts as collateral of ¥130,000 million is included in “Short-term borrowings” in the consolidated balance sheets as ofMarch 31, 2008, and cash receipt as collateral of ¥150,000 million was separately presented in the consolidated balance sheets
as of March, 31 2007.
(Consolidated statements of income)
Fixed rate amount of stock bailment fees of ¥3,576 million is included in “Interest expenses” in the consolidated statements ofincome for the fiscal year ended March 31, 2008, and fixed rate amount of stock bailment fees of ¥3,239 million was included
in “Other non-operating expenses” in the consolidated statements of income for the fiscal year ended March 31, 2007.
(Consolidated statements of cash flows)
Fixed rate amount of stock bailment fees of ¥3,397 million is included in “ Interest paid” in the consolidated statements of cash
flows for the fiscal year ended March 31,2008, and fixed rate amount of stock bailment fees of ¥3,317 million was included in“ Other, net” in the consolidated statements of cash flows for the fiscal year ended March 31,2007.
Decrease in cash receipts as collateral, net of ¥20,000 million is included in “Increase (decrease) in short-term borrowings, net”
in the consolidated statements of cash flows for the fiscal year ended March 31, 2008, and increased in cash receipts as
collateral, net of ¥50,000 million was separately presented in the consolidated statements of cash flows for the fiscal year ended
March 31, 2007.

41

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

Notes
(Consolidated Balance Sheets)
1. Accumulated depreciation of property and equipment
As of March 31, 2007
719,297

As of March 31, 2008

million yen

837,286

million yen

2. Investments in non-consolidated subsidiaries and affiliates
As of March 31, 2007
Investment securities and investments in partnerships

105,536

As of March 31, 2008

million yen

167,111

million yen

3. 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 March 31, 2007

As of March 31, 2008

First Series Unsecured Bond

25,000 million yen

25,000 million yen

Third Series Unsecured Bond

25,000 million yen

25,000 million yen

Fifth Series Unsecured Bond

25,000 million yen

25,000 million yen

Seventh Series Unsecured Bond

25,000 million yen

25,000 million yen

Total

100,000 million yen

100,000 million yen

Note: First Series Unsecured Bond was redeemed on April 28, 2008.
4. Assets pledged as collateral(1) For future lease liabilities
As of March 31, 2007

As of March 31, 2008

Assets pledged as collateral:
Notes and accounts receivable – trade

10,877

million yen

10,181

million yen

In addition to above, amounts eliminated in the consolidated balance sheets as an intercompany balance:
14,029 million yen

Notes and accounts receivable – trade

13,787 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 year are as follows:
As of March 31, 2007

As of March 31, 2008

Future lease liabilities(finance lease accounted for as operating lease

13,026transactions)

42

million yen

8,121

million yen

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

(2) For short-term borrowings and long-term debt
Assets pledged as collateral and secured liabilities by consolidated subsidiaries are as follows:
As of March 31, 2007

As of March 31, 2008

Assets pledged as collateral:
Cash and deposits

70,897

220,801

Notes and accounts receivable – trade

303,486

330,157-

10

Buildings and structures

13,986

13,872

Telecommunications equipment

362,644

268,494

Telecommunications service lines

226

170

15,566

15,576

Other current assets

Land
Property and equipment, net -other
Investment securities andinvestments in unconsolidated subsidiaries andaffiliated companies
Investments and other assets – other assets

0-

196,552

152,638

Total

963,475

115

240
million yen

As of March 31, 2007

1,001,961

million yen

As of March 31, 2008

Secured liabilities:
Accounts payable - trade

1,246

1,447

Short-term borrowings

5,373

4,724

Accounts payable – other and accrued expenses

123-

1,474,523

1,378,900

Long-term debt
Total

1,481,267

million yen

1,385,072

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 ¥1,276,488 million) resulted from the refinancing theloan accompanying the acquisition of SOFTBANK MOBILE Corp., in addition to the assets pledged as collateral above.
The funds procured through the securitization of installment sales receivables of SOFTBANK Mobile Corp., in theamount of ¥165,872 million and ¥53,146 million, were recorded as “Short-term borrowings” and “Long-term debt,”
respectively, as of March 31, 2008. The installment sales receivables, equivalent to ¥219,018 million which is theamount of senior trust certificate of the securitized installment sales receivables for this procurement, was included in“Notes and account receivable-trade,” along with the amount of trust beneficial certificate held by the SOFTBANKMOBILE Corp. Trustee procured the funds through asset backed loans which were backed by these installment salesreceivables.
5. 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 March 31, 2007
193 million yen

Investment securities

43

As of March 31, 200885

million yen

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

6. 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 March 31, 2007
Cash receipts as collateral

As of March 31, 2008

150,000 million yen- million yen- million yen

130,000 million yen

Short-term borrowings

Cash receipts as collateral, which was separately presented in the consolidated balance sheets as of March 31, 2007, is included
in “Short-term borrowings” in the consolidated balance sheets as of March 31, 2008.
In accordance with the security deposit agreements, the Company paid fixed rate amounts of stock bailment fees as follows:
As of March 31, 2007
Other non-operating expenses

As of March 31, 2008

3,239 million yen- million yen- million yen

3,576 million yen

Interest expense

Fixed rate amount of stock bailment fees, which was included in “Other non-operating expenses in the consolidated statements
of income for the fiscal year ended March 31, 2007, is included in “Interest expenses” in the consolidated statements of income
for the fiscal year ended March 31, 2008.

7. Deferred revenue
SOFTBANK BB Corp. sold its ADSL modem rental business for the fiscal year ended March 31, 2006 and March 31, 2008.
The gain on sale of the business was deferred and is being amortized over five years, which is the estimated economic usefullife of modem equipment as a revenue source of the modem rental operations. For the fiscal year ended March 31, 2007, andMarch 31, 2008 the Company recorded operating income of ¥4,311 million, and ¥4,648 million, respectively, as a result ofamortization.
Based on the service agreement with BB Modem Rental Yugen Kaisha, SOFTBANK BB Corp. 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 ¥9,721 million, and ¥9,497 million for the fiscal year ended March 31,
2007, and March 31, 2008 respectively were recorded as revenue. Ending balances of deferred revenue as of March 31, 2007
and March 31, 2008 were as follows:
As of March 31, 2007

As of March 31, 2008

Other current liabilities (deferred revenue)

15,025 million yen

14,804

million yen

Deferred revenue

26,392 million yen

15,922

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.

8. Line of credit as a creditor (not used)
As of March 31, 2007
7,708

44

million yen

As of March 31, 2008
14,676

million yen

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

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.

45

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

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 March 31, 2008, 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.

46

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

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

Sales commission

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

Fiscal year ended
March 31, 2008
290,289
million yen

Sales promotion expense

145,382

160,369

Payroll and bonuses

94,723

106,560

Allowance for doubtful accounts

16,614

46,109

2. Unrealized appreciation on investments and gain on sale of investments at subsidiaries in the United States of America, net
Certain subsidiaries of the Company in the United States of America qualify as investment companies under the provisions of“American Institute of Certified Public Accountants Audit and Accounting Guide” investment companies (the AICPA Guide)
and account for the investment securities in accordance with the AICPA Guide.
The net changes in the fair value of the investments are recorded as “Unrealized appreciation on investments and gain on sale ofinvestments at subsidiaries in the U.S., net” and gain or loss on sale of investments, computed based on the acquisition cost, isalso included in such account. The unrealized appreciation on investments and gain or loss on sale of investments included in“Unrealized appreciation on investments and gain on sale of investments at subsidiaries in the U.S., net” are as follows:
Fiscal year ended
March 31, 2007
Unrealized appreciation on investment

4,935

at subsidiaries in the U.S.,net
Gain or loss on sale of investments
at subsidiaries in the U.S.,net
Total

million yen

Fiscal year ended
March 31, 2008
171

(2,682)

12,795

2,253

12,967

million yen

3. Impairment loss
Segment

Fixed-line Telecommunications

Internet Culture

Use

Access gateway switch (AGW)

OtherType of Assets

Finance lease assets

Goodwill

Impairment loss

¥8,818 million¥1,826 million(1) Method used to determine assets grouping
When reviewing for impairment, assets are grouped based on the business unit conducted by the Group. Moreover, assets
related to disposition or restructuring of business, idled assets, and assets leased to others are grouped individually.
(2)Details of Impairment loss
[1] Impairment loss of leased access gateway switch (AGW)
Impairment loss is recorded for certain unused access gateway switch (AGW) which were reserved for the analog lines
customers of otoku line direct connection fixed-line voice service. The present values of future lease payment, which areconsidered as the carrying value of lease assets, are recorded in the consolidated statement of income.
[2] The goodwill related to the subsidiaries of the internet culture segment is recorded as impairment loss in the consolidated
statement of income.

47

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

4. Loss on unused telecommunications supplies and loss on disposal of fixed assets
In addition to the above impairment loss, loss on unused telecommunications supplies of ¥12,006 million and loss on disposalof fixed assets of ¥5,425 million are recorded for the unused analog lines assets which are reserved for the analog line customersof the direct connection fixed-line voice service.

48

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

(Consolidated Statements of Changes in Equity)
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 ofyenMarch 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

49

Retainedearnings¥2.50

Record date

Effective date

March 31, 2007

June 25, 2007

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

Fiscal year from April 1, 2007 to March 31, 2008:
1. Class and number of outstanding shares:(shares in thousands)

March 31, 2007

Increase

Decrease

March 31, 2008

1,055,862

24,801-

1,080,664

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, 2007

Increase

Decrease

158

5

-

Number of common stocks

March 31, 2008
163

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
Decrease2008
2007
24,000-Total

24,000Millions ofyenMarch 31,
2008
-

-

-

120

-

120

Note: Decrease resulted from the exercise of warrants.
4. Dividends:(1) 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

(2) Dividends which recorded date is in the fiscal year 2008 and effective date for payment is in the fiscal year 2009.
Resolution

Class ofAmount of dividend

Source ofDividend

shares(Millions of yen)

dividend

per share

Ordinary general meeting ofCommonshareholders, June 25, 2008

stocks2,701

Retainedearnings¥2.50

Record date

Effective date

March 31, 2008

June 26, 2008

5. Adoption of new accounting standards at a subsidiary in the United States of America
Please see “Accounting for Uncertainty in Income Taxes, Change in accounting policies” in details on page 41.

50

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

(Consolidated Statements of Cash Flows)
1. Reconciliation of cash and cash equivalents to the amounts presented in the accompanying consolidated balance sheets
As of March 31, 2007
Cash and deposits

377,666

million yen

As of March 31, 2008
491,161 million yen

Marketable securities

8,588

4,928

Time deposits with original maturity over three months(1,989)(2,145)

Stocks and bonds with original maturity over three months(6,744)(3,678)Cash and cash equivalents

377,520

million yen

490,266 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 and equipment,
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.”51

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

(Segment Information)
1. Business segment information(1) 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

e-Commerce

OthersTotal¥256,923¥74,003¥2,544,219

Elimination

Consolidated

or Corporate

Net sales(1) Customers¥191,509¥-¥2,544,219(2) Inter-segment

11,218

5,402

41,993

2,702

14,647

16,781

92,746(92,746)-

Total

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)96,5446,680(4,730)278,082(7,017)

271,065

Identifiable assets

2,691,192

200,288522,256442,219

79,514

290,8114,226,283

84,5694,310,852

156,166

27,311

44,933

9,662

1,083

3,083

242,241446

242,687¥2,000,212¥20,050¥42,524¥16,370¥2,857¥3,288¥2,085,306¥581¥2,085,887

Depreciation
and amortization
Capital expenditures(2) For the fiscal year ended March 31, 2008
(Millions of yen; amounts less than one million yen are omitted.)
MobileBroadband

Communications Infrastructure

Fixed-line

Internet

Telecommunications

Culturee-Commerce

OthersTotal

Elimination
or Corporate

Consolidated

Net sales(1) Customers(2) Inter-segment
Total¥1,618,935¥251,309¥324,722¥243,849¥255,690¥81,660¥2,776,168¥-¥2,776,168

11,916

6,759

46,017

3,792

15,033

18,212

101,733(101,733)-

1,630,851

258,069

370,740

247,642

270,723

99,8732,877,902(101,733)

2,776,168

Operating expenses

1,456,281

218,369

367,400

132,405

267,567

104,9942,547,018(95,137)

2,451,881

Operating income (loss)

174,570

39,7003,340

115,237

3,156(5,121)

330,883(6,595)324,287

Identifiable assets

3,041,749

165,971440,414506,430

88,047259,101

4,501,713

57,1884,558,901

193,196

26,55043,351

11,221

1,117

3,398

278,835

469

279,304

-

-

8,818

1,826

-

-

10,644-

10,644¥235,547¥21,543¥13,853¥12,975¥2,436¥2,677¥289,033¥586¥289,619

Depreciation
and amortization
Impairment loss
Capital expenditures

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 25.
3. 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.
4. Unallocated operating expenses for the fiscal year ended March 31, 2007 and March 31, 2008 in the column “Elimination or
Corporate,” mainly represent expenses of the corporate division of the Company, which totaled ¥8,481 million and ¥7,959 million,
respectively.
5. Corporate assets at March 31, 2007 and 2008 in the column “Elimination or corporate” were ¥120,675 million and ¥87,251 million,
respectively. Corporate assets represent mainly surplus operating funds (cash and marketable securities), long-term investment
securities of the Company and assets held by the corporate division of the Company.
6. “Depreciation and amortization” includes depreciated amount of long-term prepaid expenses
7. “Capital expenditures” include increase in “Property and equipment, net,” “Intangible assets, net,” and long-term prepaid expenseon the consolidated balance sheet, and increase in “goodwill” and each asset in the acquisition of newly consolidated subsidiary.

52

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

2. Geographic segment information(1) For the fiscal year ended March 31, 2007
(Millions of yen; amounts less than one million yen are omitted.)
Japan

North

OthersAmerica

Total

Elimination

Consolidated

or corporate

Net sales(1)Customers¥2,532,359¥1,861¥9,997¥2,544,219¥-¥2,544,219

2,979

-

266

3,245

(3,245)-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¥3,757,765¥282,558¥153,692¥4,194,016¥116,836¥4,310,852(2)Inter-segment
Total

Identifiable assets(2) For the fiscal year ended March 31, 2008
(Millions of yen; amounts less than one million yen are omitted.)
Japan

North

OthersAmerica

Total

Eliminationor corporate

Consolidated

Net sales(1)Customers(2)Inter-segment
Total¥2,760,397¥1,342¥14,428¥2,776,168¥-¥2,776,168

2,739

-

221

2,961

(2,961)-

2,763,136

1,342

14,6502,779,129(2,961)2,776,168

Operating expenses

2,429,573

3,022

15,4632,448,059

3,821

2,451,881

Operating income (loss)

333,562(1,679)(813)

331,070(6,782)324,287¥4,057,935¥219,004¥194,711¥4,471,651¥87,250¥4,558,901

Identifiable assets

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 fiscal years ended March 31, 2007 and 2008 in the column “Elimination or corporate,”
which mainly represent expenses of the corporate division of the Company, were ¥8,481 million and ¥7,959 million, respectively.
3. Corporate assets at March 31, 2007 and 2008 in the column “Elimination or corporate” were ¥120,675 million and ¥87,251 million,
respectively. Corporate assets represent mainly surplus operating funds (cash and marketable securities), long-term investment
securities of the Company and assets held by the corporate division of the Company.
3. Overseas sales
Disclosure of overseas sales was omitted because the total overseas sales were less than 10% of total consolidated sales.

53

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

(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 eachyear:
As of March 31, 2007

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

185,251(60,294)

Net leased property(21,703)103,252

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

48,237(6,127)
42,109Property and equipment - others
Acquisition cost
Accumulated depreciation
Accumulated impairment loss
Net leased property

20,187(6,168)(1,388)
12,630Intangible assets
Acquisition cost
Accumulated depreciation
Accumulated impairment loss
Net leased property

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

As of March 31, 2008

179,479(66,202)
million yen(30,521)82,755

million yen

million yen

47,005(7,429)39,575

million yen

million yen

17,979(6,302)(1,253)
10,423

million yen

million yen

9,373(3,353)
(169)
5,851

million yen

million yen

253,838(83,288)(31,943)
138,606

million yen

Total
Acquisition cost
Accumulated depreciation
Accumulated impairment loss
Net leased property

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

Long-term prepaid expenses relating to a lease contract, in which the contract term and payment term are different, for the
fiscal year ended March 31, 2007 and March 31,2008 were ¥7,848 million and ¥15,053 million, respectively and areincluded in “Other assets” of investments and other assets in the consolidated balance sheets.

(2) Obligations under finance lease at the end of each year:
As of March 31, 2007

Due within one year
Due after one year
Total

33,088
165,966
199,055

Balance of allowance for impairment loss on
leased property

18,17054

As of March 31, 2008

million yen

32,482
141,179
173,662

million yen

million yen

21,601

million yen

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

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

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

Fiscal year ended

Fiscal year ended

March 31, 2007

March 31, 2008

52,87544,329million yen

5,256

5,387

41,52914,086-30,917
12,788
8,818

million yen(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 finance 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.
(as a lessor)(1) Acquisition cost and accumulated depreciation at the end of each year:
As of March 31, 2007

As of March 31, 2008--

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

million yen

million yen(2) The future lease receivables under finance lease at the end of each year:
As of March 31, 2007

As of March 31, 2008--

Due within one year
Due after one year
Total

million yen

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

Lease income
Depreciation expense
Interest income

Fiscal year ended

Fiscal year ended

March 31, 2007

March 31, 2008

29
29
0

-

million yen

million yen(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.

55

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

2. Non-cancelable operating lease transactions(as a lessee)
The future lease payments under non-cancelable operating leases at the end of each year:
As of March 31, 2007

Due within one year
Due after one year
Total

9,898
4,386
14,284

million yen

As of March 31, 2008

2,959
13,126
16,086

million yen(as a lessor)
The future lease receivables under non-cancelable operating leases at the end of each year:
As of March 31, 2007

Due within one year
Due after one year
Total

1,258
1,700
2,958

56

million yen

As of March 31, 2008

1,371
1,996
3,367

million yen

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

(Related Party Transactions with the Company)
1. Parent Company and Major Corporate Shareholders
N/A
2. Directors and Major Individual Shareholders(Millions of yen; amounts less than one million yen are omitted.)Category

Director andshareholder

Name

Masayoshi
Son

Address-

Amount ofcapital-Nature ofbusiness or
occupation

Son Assets
Management,
LLC

Relationship
Proportionate
interest

Concurrent
directors

29%-

Nature of transaction

Amount oftransaction

Cash paid on behalfof Son Assets
Management, LLC

209

Facility use fee

64Businessrelationship-Account

Balance at
March 31,
2008

Other current
asset

25

Other liabilities

169

President
Deposits received

27

Note: Consumption taxes are included in the amount of the year end balance, but not in the amount of the transaction.
The terms of transactions and the policies“Facility use fee” and “Deposits received” are determined based on the percentage of facility used as with the case of affiliates.
3. Subsidiaries
N/A
4. Affiliates
N/A

57

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

(Tax Effect Accounting)
For the fiscal year ended March 31, 2007

For the fiscal year ended March 31, 2008

1. Significant components of deferred tax assets and liabilities

1.

Significant components of deferred tax assets and liabilities(Million yen)

(Million yen)

Deferred tax assets
Loss carryforwards
Revaluation of acquired consolidated subsidiaryat the respective fair market value

Deferred tax assets¥219,224

Loss carryforwards
Revaluation of acquired consolidated subsidiaryat the respective fair market value

96,971¥180,330
74,443

Depreciation / Amortization

71,044

Depreciation / Amortization

Investment securities

69,460Investment securities

54,211

Allowances for doubtful accounts

24,238

Allowances for doubtful accounts

32,556

Deferred revenue

18,970

Deferred revenue

13,472

Allowances for point mileage

18,567

Allowances for point mileage

17,826

Deferred losses on hedges

14,363

Deferred losses on hedges

8,308

Others73,245

Others82,20578,921Gross deferred tax assets

606,084

Gross deferred tax assets

542,274

Less: valuation allowance(317,231)

Less: valuation allowance(286,137)

Total deferred tax assets

288,852

Total deferred tax assets

256,137

Deferred tax liabilities

Deferred tax liabilities

Unrealized gains on other securities(65,809)

Unrealized gains on other securities

Others(6,400)

Others(58,666)(6,710)Total deferred tax liabilities(72,210)

Total deferred tax liabilities(65,376)

Net deferred tax assets¥216,641

Net deferred tax assets¥190,760

2. Reconciliation between the statutory income tax rate2.

and effective income tax rate:
Statutory tax rate

Reconciliation between the statutory income tax rateand effective income tax rate:

40.69 %

Statutory tax rate

(Reconciliation)

40.69 %

(Reconciliation)
Change in valuation allowance due to adoption

Consolidation adjustments resulting from gain onsale of investments in affiliates under equity method

13.21 %

Amortization of goodwill

10.38

Other changes in valuation allowance

7.28

Consolidation adjustments resulting from gain andloss on sale of investments in consolidated subsidiaries

7.85

Amortization of goodwill

10.74

Equity in earnings of affiliated companies(7.71)

Others(0.05)Tax rate differential(2.31)

Change in valuation allowance(2.48)

Others0.93

Income tax rate per statements of incomeof consolidated taxation system in subsidiaries

68.27 %

Income tax rate per statements of income

58(16.34) %34.61 %

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

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

Carrying Amount

Differences¥39,163¥230,903¥191,740

1,100

1,100

0

Sub-total

40,263232,003

191,740

905

886

(18)

Sub-total

905

886

(18)

¥41,168¥232,890¥191,721

Carrying Amount > Investment Cost
(1)Equity securities(2)Others

Carrying Amount≦Investment Cost
Equity securities
Total

2. Marketable and investment securities sold during the fiscal year ended March 31, 2007
(Millions of yen; amounts less than one million yen are omitted.)
Sales Price

Gain on sales

Loss on sales(1)Equity securities¥10,812¥7,704(2)Debt securities

22

4

-

7,111

155

311

¥17,946¥7,865¥4,254(3)Others
Total¥3,943

3. Carrying amounts of the unlisted investment securities(Millions of yen; amounts less than one million yen are omitted.)
Carrying Amounts(1)Held-to-maturity debt securities
Unlisted debt securities¥170(2)Available-for-sale and other securities
Unlisted equity securities, excluding over-the-counter stocks

141,790

Money Management Fund

6,053

Investments in limited partnerships

5,802

Preferred fund certificate

2,000

Designated Money Trust

1,000

Mid-term government bond funds

171

Unlisted foreign debt securities

148

Others446

Total¥157,583

4. The redemption schedule for “held-to-maturity debt securities” and “available-for-sale and other securities” withmaturity date subsequent to the consolidated balance sheet date(Millions of yen; amounts less than one million yen are omitted.)
April 1, 2007 to

April 1, 2008 to

April 1, 2012 toApril 1, 2017

March 31, 2008

March 31, 2012

March 31, 2017

and thereafter

Corporate bonds

248

70

-

-

Total

248

70

-

-

Debt securities

59

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

As of March 31, 2008
1. Marketable and investment securities at fair value(Millions of yen; amounts less than one million yen are omitted.)
As of March 31, 2008
Investment Cost

Carrying Amount

Differences¥17,893¥162,793¥144,900

1,101

1,108

6

18,995

163,901

144,906

11,3258,882(2,443)Carrying Amount > Investment Cost
(1)Equity securities(2)Others
Sub-total
Carrying Amount≦Investment Cost
(1)Equity securities(2)Corporate bonds

218

210

(8)

Sub-total

11,5449,093(2,451)

Total¥30,540¥172,994¥142,454

2. Marketable and investment securities sold during the fiscal year ended March 31, 2008
(Millions of yen; amounts less than one million yen are omitted.)
Sales Price(1)Equity securities

Gain on sales¥18,832

Loss on sales¥6,304¥133(2)Debt securities

177

13

-

(3)Others

9,864

292

2

¥28,874¥6,611

¥136

Total

3. Carrying amounts of the unlisted investment securities(Millions of yen; amounts less than one million yen are omitted.)
Carrying Amounts(1)Held-to-maturity debt securities
Unlisted foreign debt securities¥700

Unlisted debt securities

368(2)Available-for-sale and other securities
Unlisted equity securities, excluding over-the-counter stocks

91,446

Investments in limited partnerships

6,725

Money Management Fund

2,519

Unlisted foreign debt securities

958

Others

1,058

Total

¥103,777

4. The redemption schedule for “held-to-maturity debt securities” and “available-for-sale and other securities” with maturity
date subsequent to the consolidated balance sheet date(Millions of yen; amounts less than one million yen are omitted.)
April 1, 2008 to

April 1, 2009 to

April 1, 2013to

April 1, 2018

March 31, 2009

March 31, 2013

March 31, 2018

and thereafter

300

600

-

Held to maturity-debt securities
Corporate bonds

70

Local bonds

100

-

-

-

170

300

600

-

Corporate bonds

124

958

-

-

Sub-total

124

958

-

-

Total

294

1,258

600

-

Sub-total
Other debt securities

60

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

5. Investment securities evaluated at fair value under the provisions of “American Institute of Certified Public Accountants
Audit and Accounting Guide” Investment Companies
Certain subsidiaries of the Company in the United States of America qualify as investment companies under the provisions of“American Institute of Certified Public Accountants Audit and Accounting Guide” investment companies (the AICPA Guide) andaccount for the investment securities in accordance with the AICPA Guide.
Proceeds from sales and the carrying amounts of the investment securities at fair value recorded in the consolidated balance sheets at
March 31, 2008 are as follows:
As of March 31, 2008
Proceeds from sales:
Carrying amounts of investment securities at fair value recorded in consolidated balance sheets:

15,000 million yen
26,042 million yen

Regarding net changes in fair value of the investment securities and gain on sale of the investment securities, please see “Notes
Consolidated Statements of Income 2. Unrealized appreciation on investments and gain on sale of investments at subsidiaries in the
United States of America, net” in details on page 47.
These investment securities were included in equity securities in “2. Marketable and investment securities sold during the fiscal year
ended March 31, 2007” and “3. 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 of clearly disclosing the investment securities
evaluated at fair value, these investments are separately disclosed as “5. Investment securities evaluated at fair value under theprovisions of AICPA Audit and Accounting Guide on Investment Companies.”(For reference)
Proceeds from sales included in equity securities in “2. Marketable and investment securities sold during the fiscal year ended March
31, 2007”, carrying amounts of the investment securities at fair value included in equity securities in “3. Carrying amounts of theunlisted investments securities, (2) Available-for-sale securities” as of March 31, 2007 are as follows:
As of March 31, 2007
Proceeds from sales:
Carrying amounts of investment securities at fair value recorded in consolidated balance sheets:

2,834 million yen
33,256 million yen

Regarding net changes in fair value of the investment securities and gain on sale of the investment securities, please see “Notes
Consolidated Statements of Income 2. Unrealized appreciation on investments and gain on sale of investments at subsidiaries in the
United States of America, net” in details on page 47.

61

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

(Derivative Transactions)
1. Currency Related(Millions of yen; amounts less than one million yen are omitted.)
March 31, 2007
Contract amounts
Over 1Nature of transaction

year

March 31, 2008

Fair

Unrealizedvalue

gain(loss)

Contract amounts
Over 1year

Fair

Unrealized

value

gain (loss)

Option transactions to・Purchase U.S dollar call option and Japanese
Off-market
transactions¥5,900

-

¥(41)

¥(41)

¥-

-

¥-

¥-

・Purchase U.S. dollars and sell Japanese yen

70,890-70,866(23)

86,218-85,324(893)

・ Purchase Euro and sell Japanese yen

9,045

-

9,130

85

3,034

-

3,082

yen put option
Forward exchange contracts to-

Total

¥20

Notes: 1. Fair value is based on information provided by financial institutions at the end of each fiscal year.
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.

6248¥(845)

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

(Pension and Severance Plans)
1. Pension Plans
Employees of the Company and most of its domestic consolidated subsidiaries participate in defined contribution pension plans
and the contributory defined benefit welfare pension plans.
Funded status and the Group employees’ percentages of total participants in the plan under a multi-employer contributory defined
benefit welfare pension plan are as follows:(The Pension Fund of Kanto IT Software)(1) Funded status (as of March 31, 2007)
Plan assets at fair value

146,083

million yen

Benefit obligation under pension financing

112,700

Net asset

33,382

million yen

Plan assets at fair value

207,901

million yen

Benefit obligation under pension financing

209,884

Net liability(1,983)(2) The Group employees’ percentages of total participants in the plan (as of March 31, 2008)
12.4％(The Pension Fund of Japan Electronics Information Technology Industry)(1) Funded status (as of March 31, 2007)

million yen(2) The Group employees’ percentages of total participants in the plan (as of March 31, 2008)
0.2％(Additional information)
The company applied “Partial Amendments to Accounting Standard for Retirement Benefits (Part 2) issued on May 15, 2007”
from the fiscal year ended March 31,2008.

2. Projected Benefit Obligation
Projected benefit obligation (PBO)
Plan assets at fair value

March 31, 2007

March 31, 2008

16,701 million yen

16,158 million yen--

Unfunded PBO

16,701

Unrecognized actuarial losses
Net liability for retirement benefits
Prepaid pension costs--

16,701

16,158--

Accrued retirement benefits

16,701 million yen

63

16,15816,158 million yen

SOFTBANK CORP. CONSOLIDATED FINANCIAL REPORTFor the fiscal year ended March 31, 2008

3. Pension and Severance Costs
March 31, 2007

March 31, 2008

Service costs (Note 1)

1,568 million yen

1,063 million yen

Interest costs

368
-

349
-

29

466

Expected return on plan assets
Recognized actuarial losses
Amortization of prior service obligations (Note 2)(2,838)-Contributions

2,127

2,048

Net pension and severance costs

1,254 million yen

3,926 million yen

Notes:
1. Service costs include ¥1,024 million for FY2007 and ¥1,060 million for FY2008 of contributions to multi-employer
contributory defined benefit welfare pension plans.
2. This resulted from the revision of the pension plans of SOFTBANK TELECOM Corp. and SOFTBANK MOBILE Corp.

(Stock Option)
There are no significant stock option transactions as of March 31, 2007 and March 31, 2008.

(Per Share Data)

Shareholders’ equity per share (yen)Net income per share - primary (yen)Net income per share - diluted

Fiscal year ended

Fiscal year ended

March 31, 2007

March 31, 2008

¥268.02
27.31
26.62

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 year (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

Fiscal year ended

March 31, 2007

March 31, 2008

28,815

108,624

28,815

108,624--

1,055,264,814

1,068,291,756

1,520

1,508

84,391,085

80,134,671

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

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

64¥355.15101.6895.90

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