Rakuten, Inc. andConsolidated Subsidiaries
Consolidated Financial Statements for theYears Ended December 31, 2007 and 2006.

Rakuten, Inc. and Consolidated Subsidiaries
Consolidated Balance Sheets
December 31, 2007 and 2006
U

Thousands of
U.S. Dollars(Note 1)2007

ASSETS

Millions of Yen
2007
2006

CURRENT ASSETS:
Cash
Trade notes and accounts receivable
Installment accounts receivable
Installment accounts receivable, guarantee contracts
Beneficial interests in securitized assets
Trade loans receivable
Allowance for doubtful accounts
Securities
Deposits for security brokerage businessMargin transactions assets for security brokerage business
Short-term guarantee deposits for security brokerage business
Deferred tax assets (Note 13)
Other¥57,437
27,90470,7394,497
110,144
158,964(44,447)
26,380230,641
188,704
8,731
15,63547,872¥ 111,182
16,71563,356
5,053
73,214
186,794(31,083)
3,775
235,866
220,606
9,773
13,63856,009$ 473,905
230,233
583,655
37,103
908,780
1,311,585(366,722)
217,656
1,902,980
1,556,960
72,035129,006
394,977

Total current assets—(Carried forward)￥903,201¥ 964,898$ 7,452,153

LIABILITIES AND NET ASSETSUUMillions of Yen
2007
2006
U

U

CURRENT LIABILITIES:
Short-term debt (Note 3)¥ 140,475
Current portion of long-term debt (Note 3)
96,600Trade notes and accounts payable
16,668
Accounts payable, guarantee contracts
4,497
Advances received
23,177
Income taxes payable (Note 13)
17,075
Deferred installment income
694
Deposits received for security brokerage business
148,316
Margin transactions liabilities for security brokerage business
101,688
Guarantee deposits received for security brokerage business
104,929
Collateralized guarantee borrowings for security brokerage business
40,666
Allowances
7,144
Other
48,513
Total current liabilities—(Carried forward)

See notes to consolidated financial statements.

2¥750,442

U

U

Thousands of
U.S. Dollars(Note 1)
2007
UU

¥ 184,588
105,748
6,258
5,053
36,555
1,710
909
152,387
138,211
95,62732,6006,124
41,050$1,159,033
797,028
137,52137,104
191,227
140,882
5,726
1,223,729
839,013865,751
335,52958,947400,273¥ 806,820$ 6,191,763

Rakuten, Inc. and Consolidated Subsidiaries
Consolidated Balance Sheets
December 31, 2007 and 2006UASSETS

Millions of Yen
2007
2006

Thousands of
U.S. Dollars(Note 1)
2007

Total current assets—(Brought forward)¥ 903,201$ 7,452,153

FIXED ASSETS:PROPERTY, PLANT AND EQUIPMENT
Land
Other
Gross property, plant and equipment
Accumulated depreciation
Net property, plant and equipment¥964,898

9,167
43,422
52,589(28,561)

31,67744,29375,970(27,030 )

75,633358,265
433,898(235,654)

24,027

48,940198,244

64,46628,944
93,41064,795
18,294
83,089Total current liabilities—(Brought forward)
LONG-TERM LIABILITIES:Long-term debt (Note 3)
Allowance for retirement benefits (Note 12)
Allowance for directors' retirement benefits (Note 12)
Allowance for loss on interest repayments
Deferred tax liabilities (Note 13)
Other

STATUTORY RESERVE FOR SECURITY BROKERAGE
BUSINESS

531,894
238,819
770,713

Total fixed assets

104,070
18,713
20,609(5,107)138,285

169,776
14,077
16,318(1,035)
199,136

858,667
154,394
170,038(42,137)
1,140,962

255,722331,165

2,109,919

NET ASSETS :Common stock—authorized, 39,418,000 shares;
issued, 13,076,334 shares in 2007 and 13,013,493 shares in 2006
Capital surplus
Accumulated deficit
Less treasury stock—at cost, 977.30 shares in 2007 and 1,060
shares in 2006
Total shareholders’ equity
VALUATION, TRANSLATION ADJUSTMENTS AND OTHERS
Unrealized holding gain (loss) on investment securities
Unrealized gain on derivatives
Translation adjustments
Total valuation, translation adjustments and others
STOCK ACQUISITION RIGHTSMINORITY INTERESTS
Total net assets
COMMITMENTS AND CONTINGENCIES (Note 8)

TOTAL ASSETS¥ 1,158,923¥ 1,296,063¥ 806,820$ 6,191,763

181,083
180
32
20,075
5,838
3,530

256,163
146
22
3,548
22,303722

1,494,080
1,487
262
165,635
48,17029,125

210,738

282,904

1,738,759

3,920

3,142

32,346965,100

1,092,866

7,962,868

107,454

107,295

886,582

119,484(20,123)

116,639(56,895)

985,845(166,029)

(11)

(12)

(90)

206,804

167,027

1,706,308(21,077)27
81(20,969)

21,056137359
21,552(173,899)
219
672(173,008)

128

11

1,054

7,861

14,60764,850193,824

203,197

1,599,204－－－¥1,158,923¥ 1,296,063$ 9,562,072

U

Total liabilities
INVESTMENTS AND OTHER ASSETS:
Investment securities (Note 5)
Deferred tax assets (Note 13)
Other
Allowance for doubtful accounts
Total investments assets and other assets

750,442

LIABILITIES AND NET ASSETS
U

Total long-term liabilities
INTANGIBLE ASSETS:
Goodwill (Note 10)
Other
Total intangible assets

Millions of Yen
2007
2006

Thousands of
U.S. Dollars(Note 1)2007

$ 9,562,072

TOTAL LIABILITIES AND NET ASSETS

See notes to consolidated financial statements.

3

U

¥

U

U

U

U

U

Rakuten, Inc. and Consolidated Subsidiaries
Consolidated Statements of Income
Years Ended December 31, 2007 and 2006
U

Millions of Yen
2007
2006
NET SALESCOST OF SALES
Gross profit
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Operating income
OTHER INCOME (EXPENSES):Interest and dividend income
Gain on sales of securities
Foreign exchange gain
Equity in earnings of affiliates
Gain on sales of affiliates securities
Gain on sales of subsidiary securities
Gain on changes in equity interests of subsidiary and affiliates
Interest expenses
Commission expenses
Loss on restructuring business
Provision for allowance for doubtful accounts
Provision for allowance for loss on interest repayments
Special retirement benefits (Note 12)
Loss on sales or disposal of fixed assets
Stock issuance costs
Provision for statutory reserve for security brokerage business
Other—net
Other expenses—net
INCOME BEFORE INCOME TAXES AND MINORITY INTERESTSINCOME TAXES (Note 13):
Current
Deferred
Total income taxes
MINORITY INTERESTS IN NET LOSSNET INCOME

See notes to consolidated financial statements

4

Thousands of
U.S. Dollars(Note 1)2007

¥ 213,938¥ 203,272$ 1,765,168

39,48027,302

325,746

174,458

175,970

1,439,422

174,339

146,821

1,438,440

119

29,149

982

1,981
1,764
259
1,047
53,873
1,037
598(1,505)
(670)
(412)
－
－
(240)
(340)
－
(778)
(6,060)1,324
11,314
244
854
－
－
1,495
(1,616)(1,216)(20,766)(6,465)(3,005)(4,332)
(663)
(602)
(830)
(1,674)

16,346
14,5582,141
8,639
444,498
8,560
4,935(12,419)(5,528)(3,399)－－(1,980)(2,809)－(6,421)(50,011)50,554(25,938)

417,10950,673

3,211

418,091

20,942(5,971)

10,610(6,154)

172,788(49,264)

14,971

4,456

123,524(1,197)(3,948)(9,879)¥ 36,899¥ 2,703$ 304,446

Rakuten, Inc. and Consolidated Subsidiaries
Consolidated Statements of Changes in Net Assets
Year Ended December 31, 2007
U

Millions of yen
Changes in fiscal year 2007
As of

Dec. 31, 2006

Dec. 31, 2007

As restatedIssuance ofcommon stock

Stock issues under
exchange offering

Cash dividends
paid

Net income

Changesin the scopeof equity
methodNet changes in
items
other than thosein shareholders'equityTotal ofchangesin fiscal 2006

¥ 107,295
116,639(56,895)
(12)

¥ 159
159
－
－

－
2,686
－
1

－
－
(651)
－

－
－
36,899
－

－
－
524
0

－
－
－
－

¥ 159
2,845
36,772
1¥ 107,454
119,484(20,123)(11)

167,027

318

2,687

(651)

36,899524－

39,777

206,804

21,056
137

－
－

－
－

－
－

－
－

－
－

(42,133)(42,133)(21,077)

(110)

(110)

27

359

－

－

－

－

－

(277)

(277)

81

21,552

－

－

－

－

－

(42,520)(42,520)(20,968)

11

－

－

－

－

－

117

117

128

Minority interests

14,607

－

－

－

－

－

(6,747)(6,747)

7,860

Total net assets :¥ 203,197¥ 318¥ 2,687¥ (651)¥ 36,899¥ 524¥ (49,150)¥ (9,373)¥ 193,824$ 1,676,540$ 2,625$ 22,172$ (5,368)$ 304,446$ 4,320$ (405,531)$ (77,336)$ 1,599,204

Common stock
Capital surplus
Accumulated deficit
Treasury stock
Total shareholders' equity
Unrealized holding gain (loss) on
investment securities
Unrealized gain (loss) on
derivatives
Translation adjustments
Total valuation, translation
adjustments and others:
Stock acquisition rights

Total net assets, Dec.31, 2007
Thousands of U.S. dollars (Tote1):

See notes to consolidated financial statements.

5

Rakuten, Inc. and Consolidated Subsidiaries
Consolidated Statements of Cash Flows
Years Ended December 31, 2007 and 2006
U

Millions of Yen
2007
2006
OPERATING ACTIVITIES:
Income before income taxes and minority interests
Adjustments for:
Amortization of goodwill
Equity in earnings of affiliates
Depreciation and amortization
Loss on sales or disposal of fixed assets
Amortization of start-up costs
Gain on sales of securities
Increase in allowance for doubtful accounts
Gain on sales of affiliate stocks
Gain on sales of subsidiary stocks
Allowance for loss on interest repayments
Gain on changes in equity interests of subsidiary and affiliates
Interest and dividend income
Interest expenses
Other non-cash expenses
Decrease (increase) in accounts receivable
Increase in beneficial interests in securitized assets
Increase in accounts payable
Decrease in loan accounts payable, guarantee contracts
Increase in other accounts payable and accrued expenses
Decrease (increase) in advances received
Decrease in deferred installment income
Decrease in deposits for security brokerage business
Decrease increase in deposits received for security brokeragebusiness
Increase in statutory reserve for security brokerage business
Increase in advances received from borrowing for security
brokerage business
Decrease(increase) in trade loans receivable
Payments of income taxes
Refund of income taxes
Other-net
Net cash provided by (used in) operating activities—(Carried forward)

See notes to consolidated financial statements

6

Thousands of
U.S. Dollars(Note 1)
2007

¥ 50,673¥ 3,211$ 418,091

3,572(1,047 )
8,518
1,460
－
(1,835 )17,146(1,037)(53,873)
16,527(598 )(1,981 )
1,505
1,215
(10,970 )(36,931 )4,126(556 )
1,850(194 )(215 )
37,8063,012(854 )
6,951
663
13(11,314 )
15,099－－3,548(1,495 )(1,324 )
1,616
3,803
104,119(15,588 )
1,985(141,603 )
9,877
1,046
(308 )
86,81830,960(8,639)70,282
12,050－(15,140)
141,465(8,560)(444,498)
136,361(4,935)(16,346)
12,41910,019(90,514)(304,708)
34,047(4,584)
15,264(1,601)(1,774)
311,929(31,581 )778(93,465 )
830(260,573)
6,421

8,066
26,618(8,497 )
7,943
4,299

24,709(11,495 )(27,634 )－21,21366,553
219,617(70,105)
65,53635,474¥ 42,967¥ (16,567)$ 354,511

Rakuten, Inc. and Consolidated Subsidiaries
Consolidated Statements of Cash Flows
Years Ended December 31, 2007 and 2006
U

Millions of Yen
2007
2006

Thousands of
U.S. Dollars(Note 1)
2007

Net cash provided by (used in) operating activities—(Brought forward)¥ 42,967¥ (16,567)$ 354,511

INVESTING ACTIVITIES:Payments for time deposits
Proceeds from withdrawal from time deposits
Acquisition of securities
Proceeds from sales and redemption of securities
Acquisition of shares of consolidated subsidiaries
Acquisition of property, plant and equipment
Proceeds from sales of property, plant and equipment
Acquisition of intangible assets
Receipts of interest and dividends
Proceeds from sales of related company securities
Purchases of subsidiary company securities
Proceed from business transfer
Other
Net cash provided by (used in) investing activities(4,058)3,339(8,650)72,137(654)(5,259)1,818(11,371)
2,843
3,225
(712)
1,822
590
55,070(1,744)
3,856(20,506)
37,441(5,573)(33,316)
2,339(12,236)
1－－－(13,569)(41,735)(33,482)
27,554(71,373)595,186(5,394)(43,392)
14,996(93,820)
23,453
26,610(5,879)15,032
4,879
454,370

FINANCING ACTIVITIES:Net decrease in short-term debt
Proceeds from long-term debt
Repayments of long-term debt
Proceeds from investments of minority shareholders
Repayments of investments to minority shareholders
Proceeds from issuance of stock
Acquisition of treasury stock
Proceeds from minority shareholders pursuant to increase in capital
Payment of interest expenses
Cash dividends paid
Cash dividends paid to minority shareholders
Proceeds from sales and leaseback
Repayment of lease obligations
Net cash provided by (used in) financing activities(71,589)
40,004(83,105)
40
(85)
318
(0)
329
(1,483)
(648)
(315)
3,048
(142)
(113,628)(203,203)
184,844(14,483)
6,200
(794)
105,717－1,770(1,496)(585)(1,356)－－
76,614(590,670)
330,066(685,689)
330
(703)
2,624
(0)
2,710
(12,237)(5,349)(2,603)25,147(1,152)(937,525)

232

249

1,923

(15,359)

18,561(126,721)

EFFECT OF EXCHANGE RATE CHANGES ON CASH
AND CASH EQUIVALENTS
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
EFFECT OF CHANGE OF THE SCOPE OF CONSOLIDATION ON CASH
AND CASH EQUIVALENTS

－

(43）

－

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR

¥89,219¥70,701$736,133

CASH AND CASH EQUIVALENTS, END OF YEAR

¥73,861¥89,219$609,412

See notes to consolidated financial statements7

Rakuten, Inc. and Consolidated Subsidiaries
Notes to Consolidated Financial Statements
Years Ended December 31, 2007 and 2006
U

1. BASIS OF PRESENTING CONSOLIDATED FINANCIAL STATEMENTS
The accompanying consolidated financial statements have been prepared in accordance with accounting
principles generally accepted in Japan, which are different in certain respects as to application and disclosure
requirements of International Financial Reporting Standards, and have been compiled from the consolidated
financial statements prepared by Rakuten, Inc. (the "Company") and consolidated subsidiaries as required by
the Financial Instruments and Exchange Law of Japan.
The consolidated financial statements are stated in Japanese yen, the currency of the country in which theCompany is incorporated and operates. The translations of Japanese yen amounts into U.S. dollar amounts
are included solely for the convenience of readers outside Japan and have been made at the rate of ¥121.20
to $1, the approximate rate of exchange at December 31, 2007. Such translations should not be construed
as representations that the Japanese yen amounts could be converted into U.S. dollars at that or any otherrate.
Certain amounts in the prior years’ financial statements have been reclassified to conform to the current
year’s presentation.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESa.

Consolidation—The consolidated financial statements as of December 31, 2007 include theaccounts of the Company and its 46 (42 in 2006) significant subsidiaries (together, the "Group").
Under the control or influence concept, those companies in which the Company, directly or indirectly,
is able to exercise control over operations are fully consolidated.
Investments in 13 (12 in 2006) affiliates are accounted for by the equity method. Those companies
over which the Group has the ability to exercise significant influence in terms of their operating andfinancial policies are accounted for by the equity method.
Investments in the remaining 8 (unchanged since 2006) non-consolidated subsidiaries and affiliates
are stated at cost. If the equity method of accounting had been applied to the investments in thesecompanies, the effect on the accompanying consolidated financial statements would not be material.
All significant intercompany balances and transactions have been eliminated in consolidation. All
material unrealized profit included in assets resulting from transactions within the Group is eliminated.

b.

Cash and Cash Equivalents—Cash and cash equivalents as stated in the consolidated statementsof cash flows consist of cash on hand, securities and deposits that can be converted to cash at any
time, and short-term liquid investments with a maturity not exceeding three months at the time ofpurchase and whose value is not subject to significant fluctuation risk.
The reconciliation between the year-end balance of cash stated in the consolidated balance sheet
and cash and cash equivalents stated in the consolidated statement of cash flow is as follows:
Millions of Yen
December 31

2007

2006

Cash
Time deposit over three months’ maturity
Deposits separately kept
Deposits with restrictions
Securities¥ 57,437(3,973)(4,700)(1,284)
26,380¥ 111,182(3,337)(4,700)(13,926)0Cash and cash equivalents¥ 73,861¥ 89,2198c.

Securities—Marketable and investment securities are classified and accounted for, depending on
management's intent, as follows: (1) trading securities, which are held for the purpose of earning
capital gains in the near term are reported at fair value, and the related unrealized gains and losses
are included in earnings, (2) held-to-maturity debt securities, which are expected to be held tomaturity with the positive intent and ability to hold to maturity are reported at amortized cost,(3) available-for-sale securities, which are not classified as either of the aforementioned securities,
are reported at fair value with unrealized gains and losses, net of applicable taxes, reported in a
separate component of equity. The cost of available-for-sale securities sold is computed by themoving-average method and (4) non-marketable available-for-sale securities are stated at cost
determined by the moving-average method.

d.

Property, Plant and Equipment—Property, plant and equipment are stated at cost. Depreciation ofproperty, plant and equipment is computed substantially by the declining-balance method at rates
based on the estimated useful lives of the assets, while the straight-line method is applied tobuildings.

e.

Intangible Assets—Amortization on intangible assets is computed by the straight-line method.
Software for internal use is amortized by the straight-line method over its estimated useful life
(generally five years). Patents are amortized by the straight-line method over seven years.

f.

Stock Issuance Costs—Stock issuance costs are charged to income as incurred.

g.

Allowance for Doubtful Accounts—An allowance equal to estimated losses is established toprepare for losses from credit guarantees. The method of estimating the allowance is based on credit
loss ratio for general credit, and on likelihood of collection for doubtful accounts.

h.

Reserve for Loss on Restructuring Business—A reserve for loss on restructuring business of
Rakuten KC Co., Ltd. was recorded based on an estimate of future expenses.

i.

Allowance for Retirement Benefits—At certain consolidated subsidiaries, an allowance is made for
employees’ retirement benefits based on the estimated benefit obligation at the fiscal year-end.
Actuarial differences are recorded from the following fiscal year by a the straight-line method using afixed number of years (10 years) within the average remaining service period of employees.
At some consolidated subsidiaries, an allowance is posted at the fiscal year-end in accordance witheach company’s regulation to provide for directors’ retirement benefits.

j.

Allowance for Loss on Interest Repayments—Rakuten KC has calculated and recorded anallowance for losses on interest repayments based on factors such as the actual ratio of repayments
made and average amount of repayments over the reasonable estimate period. Having accumulated
data regarding interest repayment claims, Rakuten KC modified its method of estimating theallowance for interest repayments in 2007. As a result, compared with the amounts estimated under
the previous method, operating income and income before income taxes and minority interests havedecreased by ¥25,122 million. The expected loss of ¥18,042 million for write-offs of principals byinterest repayment claims was included in the allowance for doubtful accounts.

k.

Allowance for Debt Guarantee－At a certain consolidated subsidiary, an allowance equal toestimated loss has been established to prepare for contingencies from debt guarantee.

l.

Reserve for Points— An amount equivalent to points that are earned by customers and are
expected to be used in the future is recorded for the fiscal year.

m. Statutory Reserve for Security Brokerage Business—At a certain consolidated subsidiary,provision is made for possible loss resulting from securities transaction accidents. The amount of thereserve is computed based on Article 35 of the former Cabinet Office Ordinance Concerning
Securities Companies as stipulated by Article 51 of the former Securities and Exchange Law.
n.

Leases—All leases are accounted for as operating leases. Under Japanese accounting standards
for leases, finance leases that deem to transfer ownership of the leased property to the lessee are to
be capitalized, while other finance leases are permitted to be accounted for as operating leasetransactions if certain "as if capitalized" information is disclosed in the notes to the lessee's financial
statements.

9

o. Income Taxes—The provision for income taxes is computed based on the pretax income included in
the consolidated statements of income. The asset and liability approach is used to recognize
deferred tax assets and liabilities for the expected future tax consequences of temporary differences
between the carrying amounts and the tax bases of assets and liabilities. Deferred taxes aremeasured by applying currently enacted tax laws to the temporary differences.
p.

Foreign Currency Transactions—All short-term and long-term monetary receivables and payables
denominated in foreign currencies are translated into Japanese yen at the exchange rates at thebalance sheet date. The foreign exchange gains and losses from translation are recognized in the
consolidated statements of income to the extent that they are not hedged by forward exchange
contracts.

q.

Foreign Currency Financial Statements— The balance sheet accounts of the consolidated foreignsubsidiaries are translated into Japanese yen at the exchange rate as of the balance sheet date
except for net assets, which is translated at the historical rate. Revenue and expense accounts ofconsolidated foreign subsidiaries are also translated into Japanese yen at the exchange rate ofbalance sheet date.
Differences arising from such translation are shown as "Translation adjustments" in a separate
component of net assets.

r.

Derivatives and Hedging Accounting

Hedging policies:
The Group uses derivative financial instruments to manage its exposures to fluctuations in foreignexchange and interest rates. Foreign exchange forward contracts, interest rate swaps and interest
rate caps are utilized by the Group to reduce foreign currency exchange and interest rate risks. The
Group does not enter into derivatives for trading or speculative purposes.
Interest rate swaps and interest rate caps are used to establish hedges for exposure to interest rate
volatility risk associated with borrowings. Hedged items are identified by each individual contract.
Foreign exchange volatility risk associated with foreign currency-denominated guarantee deposits is,in accordance with the company rules, effectively hedged during the holding period by using currency
forward agreements.
Foreign exchange volatility risks associated with foreign currency-denominated receivables andpayables relating to business transactions are, in accordance with certain company rules, managedby using currency forward agreements to reduce foreign currency exchange risks in actual demand of
securities transactions.
Hedge accounting:
For interest rate swaps and some interest rate caps, deferred hedge accounting has been adopted.
However, a special method is used for interest rate swaps which meet certain conditions. For foreign
currency-denominated guarantee deposits with currency forward agreements, the appropriation
method has been adopted.
Hedging instruments and hedged items:
Hedging instruments comprise interest rate swaps, interest rate caps and currency forward
agreements. Hedged items comprise loans, foreign currency-denominated guarantee deposits andforeign currency-denominated receivables and payables relating to business transactions.
Method for evaluating effectiveness of hedging activities:
For interest rate swaps and interest rate caps, the company compares the cumulative changes incash flows of the hedged items and hedging instruments every six months. The effectiveness of thehedge is determined based on the cumulative changes of the hedged items and instruments, alongwith other items. However, this evaluation is not performed for interest rate swaps that use special
methods.
For currency forward agreements, the effectiveness is determined by the currency, amount andsettlement date of the hedged item based on the company management data.
s. Consumption Taxes－The tax-excluded method is used in consumption tax accounting for national
and local consumption taxes.

10

t.

Goodwill— The excess of the cost of an acquisition over the fair value of the net assets of theacquired subsidiary at the date of acquisition called goodwill. The goodwill is amortized over theperiod in which such action is deemed effective. However, if the amount is marginal, the entire
amount is amortized at the date of acquisition.

3. SHORT-TERM AND LONG-TERM DEBT
Short-term debt at December 31, 2007 and 2006 consisted of notes to banks, bank overdrafts, andcommercial paper and lease obligations. Long-term debt at December 31, 2007 and 2006 consisted of thefollowing:
Corporate bonds
Millions of Yen
2006
2007
Rakuten, Inc. (due 2010 with interest rate of 1.32%)
Rakuten Credit, Inc. (due 2010 with interest rate of 1.12%)
Total¥ 10,000
3,000
13,000¥ 10,000－
10,000

Annual maturities of corporate bonds at December 31, 2007 were as follows:Year Ending
December 31

2007
Millions of Yen

2008
2009
2010
2011

¥

4,990
4,990
3,020
－

Total

¥ 13,000

Borrowing and others
Millions of Yen
2007
2006
Short-term bank loans
Long-term bank loans, due within one year
Long-term bank loans, due after one year
Other debt with interest
Commercial paper
Margin transaction liabilities
Lease obligation, due within one year
Lease obligation, due after one year

¥ 134,175
91,023173,072¥ 173,089
105,748
246,163

6,300
84,410587
2,321

11,500110,183－－

Total¥ 491,888¥ 646,683

Weighted average interest rates of loans as of December 31, 2007 and 2006 are follows:
2007
Short-term bank loans
Long-term bank loans, due within one year
Long-term bank loans, due after one year
Commercial paper
Margin transaction liabilities
Lease obligation, due within one year
Lease obligation, due after one year

1.80%
2.15%
2.04%
1.44%
1.11%
3.21%
3.21%

11

2006
1.31%
2.10%
1.90%
0.80%
－
－
－

Annual maturities of corporate bank loans and lease obligations at December 31, 2007 were as follows:Year Ending
December 31

2007
Millions of Yen

2008
2009
2010
2011
2012

¥ 225,785
108,861
44,661
19,942
1,204

Total

¥ 440,453

Unused commitment lines for financing at December 31, 2007 and 2006 amounted to ¥61,050 millionand ¥80,600 million, respectively.

4.

PLEDGED ASSETS
Assets pledged as collateral:
The carrying amounts of assets pledged as collateral for short-term bank loans of ¥59,763 and ¥90,103
million and the above collateralized long-term debt at December 31, 2007 and 2006 were as follows:
Millions of Yen
2007
2006
Deposits
Installment accounts receivable and trade loans receivable
Receivable from lease contracts
Investment securities
Land and buildings
Other
Total

－

¥
760
155,188682
68,751
25,27620¥217,049¥250,677¥ 100
139,531444
76,974－

Securities in custody from customers in the amount of ¥18,385 million and ¥27,272 million ware pledged
as collateral for short-term bank loans at December 31, 2007 and 2006, respectively. Securities in theamount of ¥45,470 million and ¥67,921 million ware pledged as collateral for short term loans andborrowings related to margin transactions at December 31, 2007 and 2006, respectively. Securities
loaned were pledged as collateral for borrowings in the amount of ¥40,666 million and ¥32,599 million at
December 31, 2007 and 2006, respectively
Liabilities for which assets were pledged as collateral:
Millions of Yen
2007
2006
Short-term bank loans
Long-term bank loans, due within one year
Borrowings related to margin transactions
Long-term bank loans, due after one year
Accrued liabilities
Accounts payable
Total¥ 59,764
64,98384,409115,73971
1,780¥ 326,746

12¥ 90,104
79,276110,183
167,138－－¥ 446,701

Fair value of marketable securities pledged as collateral:
Millions of Yen
2007
2006
Securities loaned on margin transactions
Securities pledged for loans payable for margin transactions
Securities loaned by promissory note collateralized¥ 17,638
83,41240,007¥ 29,514
109,679
32,370Fair value of marketable securities received as collateral:
Millions of Yen
2007
2006
Securities pledged for loans receivable for margin transactions
Securities borrowed on margin transactions
Substitute securities for guarantee deposits received on futures5.

¥ 161,540
1,791
178,143¥ 204,571
4,039
208,428

SECURITIESThe costs, unrealized gains and losses and aggregate fair values of marketable securities at December
31, 2007 and 2006 were as follows:

December 31, 2007
Marketable securities classified as
Trading
Available-for-sale
Equity securities
Debt securities
Other

Millions of Yen
Unrealized
Unrealized
Gains
Losses

Cost

Fair
Value

－

－

－

－

¥ 122,527－－¥ 4,496－－¥28,014－－¥99,009
－
－

－

－

－

¥ 117,372
3,766
100

¥ 34,719
9
－

¥ 462
－
1

December 31, 2006
Marketable securities classified as
Trading
Available-for-sale
Equity securities
Debt securities
Other

¥

425
151,629
3,775
99

Available-for-sale securities for which fair value is not readily determinable as of December 31, 2007 and2006 were as follows:
Millions of Yen
2007
2006
Equity securities of unlisted corporations
Negotiable deposit
Open-end bond investment trust
Others¥ 3,753
22,5003,879
772¥ 5,541－－
2,051

Proceeds from sales of available-for-sale securities for the years ended December 31, 2007 and 2006
were ¥8,824 million and ¥24,261 million, respectively. Gross realized gains on these sales, computed on
the moving average cost basis, for the years ended December 31, 2007 and 2006 were ¥2,615 millionand ¥11,314 million, respectively. Gross realized losses on these sales were ¥236 million for the year
ended December 31, 2007.
The face values of debt securities by contractual maturities for securities classified as available-for-sale13

securities at December 31, 2007 and 2006, ware as follows:
Millions of Yen
2007
2006
－
¥ 22,500

Foreign debt securities (Due within one year)
Negotiable deposits (Due within one year)6.

¥ 3,811－LEASED ASSETS
Leased assets include furniture and fixtures and other assets which the company leases to its customers,
and the values of such leased assets as of December 31, 2007 and 2006 ware as follows:
Millions of Yen
2007
2006
Furniture and fixtures
Other
Total
Accumulated depreciation¥ 11,055
117
11,172(10,549)¥ 14,075
144
14,219(13,166)

Net leased assets¥¥ 1,053

623

The aggregate receivables from the lessees including equipment costs, unearned income and executory
costs, which were not recorded on the books of account, as of December 31, 2007 and 2006, were as
follows:
Millions of Yen
2007
2006
Due within one year
Due after one year

¥ 297
372

¥

423
693

Total

¥ 669

¥ 1,116

Receivables from unexpired leases related to subleased items other than which listed above amount to¥13,998 million.
Receivables lease fees, depreciation and deemed interest income as of December 31, 2007 and 2006
ware as follows:
Millions of Yen
2007
2006
Receivable lease fees
Depreciation
Deemed interest income

¥ 338
271
37

The amount of interest income booked is based on the interest method.

14

¥ 459
368
58

7.

LEASESThe Group leases buildings, machinery, furniture and fixtures and software.
Pro forma information regarding of leased properties such as acquisition cost, accumulated depreciation, obligations under finance lease, depreciation expense, interest expense and other information regarding of finance leases that do
not transfer ownership of the leased property to the lessee on an "as if capitalized" basis for the years ended December 31, 2007 and 2006 was as follows:
Millions of Yen
2007

2006
Furniture
andFixtures

Software

Total

¥ 87
9
－

¥14,641
4,778－¥ 5,918
1,853－¥ 20,646
6,640
－

¥ 78

¥ 9,863¥ 4,065¥ 14,006

Building

Furniture
andFixtures

Machinery

Software

Total

Building

Acquisition costLess: Accumulated depreciation
Imparement loss

¥21
7
－

¥ 12,506
4,746－¥11,825
6,417
199¥ 1,130763－¥ 25,482
11,933199

Net amounts¥14¥ 7,760¥ 5,209¥ 367¥ 13,350

Obligations under finance leases:
Millions of Yen
2007
2006
Due within one year
Due after one year

¥ 4,369
9,256¥ 3,668
10,573

Total¥ 13,625¥14,241

Lease payment depreciation expense, deemed interest expenses and other information under finance leases:
Millions of Yen
2007
2006
Depreciation expense
Deemed interest expense
Imparement loss

¥ 4,032345
198¥ 2,952
273
－

Total

¥ 4,575¥ 3,225

Lease payments¥ 4,352¥ 3,190

Depreciation expense and interest expense, which are not reflected in the accompanying consolidated statements of income, are computed by the straight-line method and the interest method, respectively.

Obligations under operation leases:

Millions of Yen
2007
2006

15

Due within one year
Due after one year

¥

181
1,581

－
－

Total

¥ 1,762－

8.

COMMITMENTS AND CONTINGENCIES
Installment accounts receivable, guarantee contracts and accounts receivable, guarantee contracts which the consolidated subsidiary does not provide certain service for collection are not recorded in the consolidated balance sheet.
Such balance as of December 31 2007 and 2006 are ¥38,505 million and ¥46,134 million respectively.
The Group had guarantees for customers in the amount of ¥231 million and ¥239 million at December 31, 2007 and 2006, respectively.

9.

LINE-OF-CREDIT AGREEMENTS
Certain subsidiaries make loans to customers who have credit card or loan card issued by subsidiaries. Unused lines of credit granted to customers amounted to ¥873,076 million and ¥852,057 million at December 31, 2007 and 2006,
respectively.

10. GOODWILL
The change in the carrying amount of goodwill for the years ended December 31, 2007 and 2006 is as follows:
Millions of Yen
Balance at December 31, 2005
Goodwill acquired during the year
Amortization
Balance at December 31, 2006
Goodwill acquired during the year
Amortization¥ 56,868
10,939(3,012)64,7953,423(3,752)

Balance at December 31, 2007

¥ 64,466

Goodwill acquired during fiscal 2006 mainly consisted of goodwill related to the acquisition of additional shares of Rakuten KC Co., Ltd. (formerly known as Kokusai Shinpan Co., Ltd.) and Rakuten Securities Holdings, Inc. Goodwill
acquired during fiscal 2007 mainly consisted of goodwill related to the acquisition of Fusion Communications Corp, and additional shares of Rakuten Securities Holdings, Inc.

11.

DERIVATIVESThe Group enters into foreign currency forward contracts to hedge foreign exchange risk associated with certain assets and liabilities denominated in foreign currencies. The consolidated subsidiaries also enter into interest rate swap
and interest rate cap contracts to manage their interest rate exposures on certain liabilities.
Derivatives will not be used for speculative purposes. For currencies, derivatives are used to hedge exposure to the effects of foreign exchange rate volatility on foreign currency-denominated receivables and payables for the purpose ofstabilizing earnings. For interest rates, derivatives are used to hedge exposure to the possibility of interest rate associated with loan increases.
Because the counterparties to these derivatives are limited to major international financial institutions, the Group views the likelihood of losses from credit risk as limited.
Derivative transactions are conducted by the consolidated subsidiaries under internal rules which regulate the authorization and credit limit amount.
Foreign exchange forward contracts are utilized by the Group but omitted from these notes, as they are subject to hedged accounting, and the therefore not required to be disclosed.

Fair value of interest rate caps as of December 31, 2007 is as follow:
Million of Yen
Contractprincipal

Unrealized
gain ( loss)

Fair value

Transactions other than market transactions
Interest rate caps
Bought

¥

25

¥

6

¥

(19)

Derivative transactions such as interest rate swaps subject to hedge accounting are not included.
The listed transactions are under non-hedge accounting that require disclosure though the intra-group elimination of hedged transactions.
The fair value is indicated by the financial institutions that are counterparties of the transactions.
16

12.

RETIREMENT AND PENSION PLANS
Employees with at least five years of service in certain consolidated subsidiaries are granted a tax-qualified pension plan. And those with less than five years of service are granted with a lump-sum retirement and pension plan.
Information concerning retirement benefit obligation:
Millions of Yen
2007
2006
Projected benefit obligation
Fair value of plan assets
Unfunded retirement benefit obligation
Unrecognized actuarial gain (loss)
Net retirement benefit obligation as shown on balance sheet
Allowance for retirement benefits¥ 4,276(4,155)
121
59
180
¥ 180

¥ (4,365）
4,357
（8 ）
（138 ）（146 ）¥ （146 ）Certain consolidated subsidiaries that have a retirement benefit plan use the simplified method for calculating retirement benefit obligations.
Retirement benefit expenses:
Millions of Yen
2007
2006
Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial gain (loss)
Special retirement benefit expenses
Total retirement benefit expenses

¥ 242
(89)
414
－
¥ 285

¥ 209
72
(72)
244
4,332
¥ 4,565

Retirement benefit expenses at consolidated subsidiaries using the simplified method are included in “Service cost.”
Basis for calculating retirement benefit obligations and others:
The retirement benefit obligation is attributed to each period by the straight-line method over the estimated years of service of employees.
2007
2006
Discount rate
Expected rate of return on plan assets
Amortization period of actuarial gain (loss)

2.00%
2.00%
10 years

17

2.00%
2.00%
10 years

13.

INCOME TAXESThe Company and its domestic subsidiaries are subject to Japanese national and local income taxes which, in the aggregate, resulted in a normal effective statutory tax rate of approximately 41% for the years ended December 31, 2007
and 2006.
The tax effects of significant temporary differences and tax loss carryforwards which resulted in deferred tax assets and liabilities at December 31, 2007 and 2006 are as follows:
Millions of Yen
2007
2006
Deferred tax assets:
Tax loss carryforwards
Excess of depreciation
Excess of allowance for doubtful accounts
Cancellation of allowance for points
Impairment loss
Allowance for interest repayment
Statutory reserve for security brokerage business
Other
Less valuation allowance
Total¥ 33,890
1,727
12,310
2,338
1,369
8,130
1,595
7,652
(33,038 )
35,973¥21,321
400
5,897
1,576
1,284
1,436
1,278
4,943
(9,841)
28,294

Deferred tax liabilities:
Refundable enterprise taxes
Tax-deductible loss due to transfer of shares
Unrealized holding gain on securities
Other
Total

－
¥ 8,465－
116
27,392¥

Net deferred tax assets¥ 27,392¥ 5,308

139
8,465
14,271
111
22,986

Reconciliation between the normal effective statutory tax rates and the actual effective tax rates reflected in the accompanying consolidated statements of income for the year ended December 31, 2007 and 2006 is as follows:
2007

2006

Normal effective statutory tax rate
Expenses not deductible for income tax purposesTax benefits on liquidation of subsidiary
Valuation allowance
Equity in earnings of affiliates
Amortization of goodwill
Unrealized loss
Other—net

41.00%
0.33(17.83)
26.82
－
2.80
(14.70 )(8.88)

41.00%
6.00(129.40 )172.20(10.90 )
38.50
－
21.40

Actual effective tax rate

29.54%

138.80%18

14.

SALES, GENERAL AND ADMINISTRATIVE EXPENSES
The breakdown of selling with the sales, general and administrative expenses is as follows:
Millions of Yen
2007
2006
Advertising and promotion expenses
Personnel expenses
Depreciation
Communication and maintenance expenses
Outsourcing expenses
Credit loss
Provision for allowance for doubtful accounts
Provision for allowance for interest repayments
Other
Total selling, general and administrative expenses¥ 12.827
26,603
7,886
10,792
20,798167
39,552
19,42336,291¥ 174,339¥ 14,911
26,806
6,049
9,384
18,5263,142
31,553
1,956
34,494¥ 146,821

Research and development cost in general administration expenses in the year ended December 31, 2007 ware ¥76 million

15. SUPPLEMENTARY INFORMATION TO THE CASH FLOW STATEMENTS
Assets and Liabilities of Newly Consolidated Subsidiaries Through Acquisition of Shares:
Assets and liabilities of Fusion Communication Corp. and the acquisition cost and net cash outflow of such acquisition on September 30, 2007 ware as follows:
Millions of Yen

Current assets
Fixed assets
Goodwill
Current liabilities
Minority interest
Acquisition cost
Cash and cash equivalents
Net cash used for acquisition¥ 10,268
2,744
(249)
(10,457)(1,235)
1,071(1,229)¥(158)

Material Non-financial Transactions:
Liabilities from finance lease contracts which were newly booked during the fiscal year ended December 31, 2007 amounted to 2,908 million yen.

19

16.

STOCK-BASED COMPENSATION PLANS
The Company has stock-based compensation plans as an incentive program for directors, auditors and employees of the Company, subsidiaries and affiliates.
From 2001, in accordance with approval at shareholders’ meetings, the Company has granted stock acquisition rights and stock options to directors, auditors and certain employees of the Company, subsidiaries and affiliates. These
options vest about over two years to four years and expire within ten years from the date of grant. Some subsidiaries have the same type plans. For the fiscal year ended December 31, 2007, the Company didn’t grant any stock
options.
A summary of information regarding the Company's stock-based compensation is as follows: Option
Exercisable
PeriodGrant Date

April 26, 2001
April 30, 2002
July 14, 2003
August 29, 2003
September 7, 2004
December 15, 2005
February 13, 2006
April 20, 2006
December 14, 2006

From March 30, 2003
to March 28, 2011
From March 29, 2006
to March 27, 2014
From March 28, 2007
to March 26, 2013
From March 28, 2007
to March 26, 2013
From March 31, 2008
to March 29, 2014
From March 31, 2009
to March 29, 2015
From March 31, 2009
to March 29, 2015
From March 31, 2010
to March 29, 2016
From March 31, 2010
to March 29, 2016

Exercise
Price

Number of outstanding
stock options
as of Dec.31 2007

¥ 11,210*

25,25011,000*9,435

19,300*38,78027,500*2,630

75,500*35,73091,30054,410103,8482,000

101,000

30,00055,90014,340* Exercise price has been adjusted to reflect the stock splits.
A summary of information regarding for the Rakuten Securities Holdings, Inc.'s stock-based compensation is as follows:

Grant Date

April 19, 2004
September 15, 2005

Exercisable
PeriodNumber of outstanding
stock options
as of Dec.31 2007

Exercise
Price

From April 20, 2006
to April 19, 2011
From September 19, 2007
to September 18, 2012¥

520,000

495

1,380,000

250

A summary of information regarding for the Rakuten KC Co., Ltd.'s stock-based compensation plans is as follows:
Number of unrealized
Exercisable
Exercise
Grant Datestock options
PeriodPrice
as of Dec.31 2007
June 17, 2005

From June 18, 2006
to June 17, 2015¥

256,000

880

A summary of information regarding for the Rakuten Travel, Inc.'s stock-based compensation is as follows:

Grant Date

July 22, 2003

Exercisable
PeriodExercise
Price

Number of outstanding
stock options
as of Dec.31 2007

From August 1, 2005
to July 31, 2008

¥ 320,000

195

20

A summary of information regarding for the Fusion Communications Corp.'s stock-based compensation is as follows:

Grant Date

November 20, 2000
July 12, 2001
July 12, 2001
July 12, 2001
June 29, 2002
June 30, 2003

Exercisable
PeriodFrom November 20, 2002
to November 20, 2010
From July 12 , 2001
to July 10, 2010
From July 12 , 2001
to July 10, 2010
From July 12 , 2001
to July 10, 2010
From June 29, 2004
To June 28, 2012
From July 1, 2005
To June 30, 2013

Number of outstanding
stock options
as of Dec.31 2007

ExercisePrice¥ 50,000¥

1,650

155,792555

155,792705

155,792310

219,388855

219,388

126

17. AMOUNTS PER SHAREYen

Net income
Basic
DilutedCash dividends applicable to the year

2007

2006

¥ 2,825.95
2,813.32
100.00¥ 212.03
193.0950.00
Yen

Net assets

2007

2006

¥ 14,212.68¥ 14,492.23

Basic net income per share is computed by dividing net income available to common shareholders by the weighted-average number of common shares outstanding for the period, retroactively adjusted for stock splits. Diluted net
income per share of common stock assumes full conversion of the dilutive stock options. Listed cash dividends per share applicable to the respective years include dividends to be paid after the end of the year.

18.

RELATED PARTY TRANSACTIONSTransactions during the years ended December 31, 2007 and 2006 with a professional football club operator, in which the Chairman and CEO owned 100% of voting shares indirectly, were as follows :Millions of Yen
2007
2006
Sponsor fee
Purchase of tickets

¥

171
－

¥

143
1

Sponsor fee and purchase amount of tickets are determined on arm’s length basis.
The balances payable due from the company at December 31, 2007 and 2006 were as follows:
Millions of Yen
2007
2006
Sponsor fee

¥

21

15

¥

15

19.

SUBSEQUENT EVENT
The following distributions of retained earnings at December 31, 2007 were approved at the Company's shareholders’ meeting held on March 27, 2008:
Millions of Yen
Year-end cash dividends, ¥100 per share¥1,307

20. BUSINESS COMBINATIONOn August 7, 2007, the Company acquired 54.27% of the issued common shares of Fusion Communications Corp (FCC) from The Tokyo Electric Power Company Incorporated (TEPCO) for cash.
Subsequently, the Company made additional purchases of FCC shares from its other shareholders to own 73.55%. The aggregate purchase cost of FCC shares was ¥1,071 million, of which ¥912 million is aggregate share price and¥159 million is a cost directly associated with the acquisition of shares. This acquisition also resulted in another acquisition of controlling interests in FCC’s three subsidiaries, Fusion Network Service K.K, Saga Fusion Service K.K., andT.T. Network Service K.K.
FCC is a telecommunications company known for technologies in IP telephony. In Japan, with the rapid development in broadband network, two-way real-time communication over the internet has emerged, such as IP telephony andinstant messaging service. The Company acquired FCC shares with an aim to enhance “Rakuten ecosystem” by introducing such new communication service to 37 million Rakuten Group members and the Company’s 270 thousandbusiness partners.
The balance sheets of FCC and its subsidiaries are included in the Company’s consolidated balance sheet as of September 30, 2007 and thereafter. The profit and losses of FCC and its subsidiaries are included in the Company’s
financial statements from October 1, 2007 and thereafter.
Assets and liabilities of FCC, as assumed on September 30, 2007 are as follows:
Million of Yen
Current assets¥10,764
Fixed assets
2,770
Assets total
13,534Current liabilities¥10,715

As a result of the acquisition, the Company recognized negative goodwill in the amount of \406 million, because the share price, based on the third-party valuation and agreed with TEPCO, was below the net asset revalued at the timeof acquisition. The Company amortizes the negative goodwill over 20 years using straight-line method.
The approximate effects on the Company’s financial statements, if the acquisition had taken place at the beginning of 2007, are as follows:
Million of Yen
Sales¥
43,443
Net operating losses
2,046
Net recurring loss
1,795
Net loss before taxes
3,070
Net loss
3,151
Net loss per share(Yen)¥16,054.64
The result from January 1, 2007 to September 30, 2007 has been derived using actual numbers and based on estimates where appropriate. This footnote is not audited.

21.

SEGMENT INFORMATIONThe Company operates in the following industries:
The E-Commerce Business segment consists mainly of Rakuten Ichiba, managed by Rakuten, Inc.: Rakuten Auction, Inc., and LinkShare Corporation. The business focuses on operating and providing services for websites related toretailing and other forms of e-commerce, as well as for entertainment-related websites.
The Credit and Payment Business segment consists mainly of Rakuten Credit, Inc.: Rakuten KC Co., Ltd. and Rakuten Financial Solution, Inc. The business is primarily concerned with the consumer credit card business and consumer
loan businesses, and provides banking services through alliance with Tokyo Tomin Bank.
The Portal and Media Business segment consists mainly of Infoseek, a portal site managed by Rakuten, Inc.: Rakuten TV Co., Ltd., Rakuten Research, Inc., and College Students' Portal Community, Inc. The segment focuses on theoperation of Internet portal sites and community networking sites, as well as Internet market research and distribution of broadband content.
The Travel Business segment consists of Rakuten Travel, Inc. and its subsidiaries and affiliates. It focuses on operating travel-related websites and services, such as hotel bookings.
The Securities Business segment mainly consists of Rakuten Securities Holdings, Inc. and its subsidiaries and affiliates. The business provides online securities brokerage and investment related business.
22

The Professional Sports Business segment consists of Rakuten Baseball, Inc., and Rakuten Sports Properties, Inc. It manages the Tohoku Rakuten Golden Eagles (“Rakuten Eagles”) professional baseball team, as well as planning andselling related goods.
The Telecommunication segment consists of Fusion Communications Corp. and its subsidiaries and affiliates. The business provides IP network services, IP telephony and other services. The segment is established in 2007 as
expansion of telecommunication businesses through the acquisition of Fusion Communication Corp.; Segment for 2006 is, therefore, not presented.
(1)a.

Industry Segments
Sales and Operating Income

E-Commerce
Business

Credit andPayment
Business

Portal andMedia
Business

TravelBusiness

Millions of Yen
2007
Professional
Securities
SportsBusiness
Business

Sales to customers¥ 75,512¥ 70,196¥ 7,511¥ 12,910¥ 30,556¥ 7,553

Intersegment sales

1,367

903

7,168

452

2

76,87971,09914,67913,362

Operating expenses

57,33896,274

15,042

Operating income (loss)¥ 19,541¥(25,175 )Total salesb.

(363 )

Corporate &Internal
Eliminations

Total

Consolidated

9,700¥ 213,938－¥ 213,938

693

0

10,585¥ (10,585)－

30,558

8,246

9,701

224,523(10,585)

213,938

7,358

24,812

9,083

10,095220,000(6,181)

213,819¥ 6,004¥ 5,746¥ (837 )4,523¥ (4,404)¥

Telecommunication

Total

Corporate &Internal
Eliminations

Consolidated¥17,975¥ 1,158,923

¥

¥

(394)

¥

119

Total Assets, Depreciation and Capital Expenditures

Total assets
Depreciation and amortization
Loss due to impairment
Capital expendituresa.

¥Telecommunication

E-Commerce
Business

Credit andPayment
Business

Portal andMedia
Business

TravelBusiness

Millions of Yen
2007
Professional
Securities
SportsBusiness
Business¥247,928¥383,853¥4,481¥ 10,218¥469,824¥12,314¥ 12,331¥1,140,949

4,159

1,581

557

549

632

830

215

8,523

116

398

－

－

23

－

213

749

9,219

4,284

83

935

4,239

549

52

19,361

－
－
－

8,523
749
19,361

Sales and Operating Income
Millions of Yen
2006
E-Commerce
Business

Credit andPayment
Business

Portal andMedia
Business

TravelBusiness

Securities
Business

ProfessionalSportsBusiness

Total

Sales to customers¥ 57,686¥ 79,538¥ 8,510¥10,465¥ 40,525¥ 6,548¥ 203,272－¥ 203,272

Intersegment sales

1,465

64

4,568

262

31

719

7,109

¥ (7,109)－

59,15179,602

13,078

10,72740,556

7,267

210,381(7,109)203,272

Operating expenses

41,49385,752

12,684

6,068

25,197

8,663

179,857(5,734)

174,123

Operating income (loss)¥ 17,658¥ (6,150)¥ 394¥ 4,659¥ 15,359¥(1,396 )¥ 30,524¥ (1,375)¥ 29,149

Total sales

23

Corporate &Internal
Eliminations

Consolidated

b.

Total Assets, Depreciation and Capital Expenditures

Total assets
Depreciation and amortization
Capital expenditures

E-Commerce
Business

Credit andPayment
Business

Portal andMedia
Business

TravelBusinessMillions of Yen
2006
Professional
Securities
SportsBusiness
Business¥ 257,887
2,956
7,986

¥ 416,692
1,651
3,611

¥ 4,466
358
1,323¥ 8,167440
1,367¥ 528,322
832
27,212(2) Geographical Segments
Disclosure of geographic segment information is omitted because domestic net sales and assets exceed 90% of total segment sales and assets.
(3) Sales to Foreign Customers
Disclosure of sales to foreign customers is omitted because such sales represent less than 10% of consolidated net sales.

******

24¥ 11,784
712
5,054

Total

Corporate &Internal
Eliminations

Consolidated¥ 1,227,318
6,949
46,553¥ 68,745
2
495¥ 1,296,063
6,951
47,048