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Scope of Consolidation

As of March 31, 2009, the SOFTBANK Group comprised SOFTBANK CORP. (a pure holding company) and the following business segments. The numbers of consolidated subsidiaries and equity method companies in each business segment are as follows:

Business Segments	Consolidated Subsidiaries	Equity Method Non-consolidated Subsidiaries and Affiliates
Mobile Communications	6	2
Broadband Infrastructure	6	3
Fixed-line Telecommunications	3	-
Internet Culture	17	18
e-Commerce	7	4
Others*3	69	47
Total	108	74

Analysis of Consolidated Operating Results in Fiscal 2009

1. Overview

The Group designated 2008 as the “Year of the Internet Machine,” and strove to further pursue and popularize the possibilities of mobile Internet. Main initiatives undertaken during fiscal 2009 (April 1, 2008 – March 31, 2009) included the release of the iPhone 3G and other attractive handsets, and the launch of FMC^*2 services including White Call 24, White Line 24, and White Office, by the Group's three telecommunications companies—SOFTBANK MOBILE Corp. (hereafter “SOFTBANK MOBILE”), SOFTBANK BB Corp. (hereafter “SOFTBANK BB”), and SOFTBANK TELECOM Corp. (hereafter “SOFTBANK TELECOM”). In addition, efficient sales promotions were carried out in the peak sales seasons, proactive efforts were made to acquire corporate subscriptions, and SOFTBANK MOBILE launched attractive mobile phone services including MOBILE WIDGET and S-1 BATTLE.

This has led to SOFTBANK MOBILE being No. 1 in monthly net subscriber additions^*3 —new subscriptions minus cancellations— for the 23 consecutive months since May 2007. Net subscriber additions for fiscal 2009 totaled 2,046,700, which was also No. 1 on an annual basis for the second consecutive year^*3. The total number of subscribers as of March 31, 2009, stood at 20,632,900, with more than 90% of these being 3G handset subscriptions.

As a result, the Group's net sales totaled 2,673,035 million yen, with operating income of 359,121 million yen, marking the fourth consecutive year of record operating income. The Group also began announcing forecasts for consolidated operating income and consolidated free cash flow with the announcement of fiscal 2009 second-quarter results (on October 29, 2008), and fiscal 2009 results exceeded those forecasts.

2. Net sales

3. Operating income

4. Income before income taxes and minority interests

Income before income taxes and minority interests totaled 107,338 million yen, a decrease of 118,549 million yen (52.5%) year-on-year.

A 55,411 million yen gain from equity in earnings of affiliated companies was recorded in fiscal 2008, but in fiscal 2009, 13,760 million yen equity in losses of affiliated companies was recorded. The main component of the equity in earnings recorded in fiscal 2008 was 57,223 million yen from the new listing of Alibaba.com Limited, a subsidiary of the Group's equity method affiliate Alibaba Group Holding Limited, on the Hong Kong Stock Exchange on November 6, 2007. The deterioration in equity markets during fiscal 2009 led to weaker investment performance at funds operated by equity method affiliates, resulting in a 13,760 million yen equity method investment loss.

Interest expenses totaled 112,346 million, a decrease of 2,518 million yen year-on-year.

A gain on the sale of investment securities of 3,228 million yen and a 2,972 million yen gain on the liquidation of a subsidiary were recorded. On the other hand, loss on additional entrustment for debt assumption of 75,000 million yen was recognized in relation to in-substance redemption before maturity (debt assumption) executed in the past for the outstanding bonds of SOFTBANK MOBILE. In addition, an impairment loss of 29,479 million yen, the main component of which was a 28,999 million yen write-off of the entire book value and removal costs for assets related to the Yahoo! BB hikari service operated by the Broadband Infrastructure segment, was recorded. This was coincident with the launch of the new fiber-optic Internet connection service Yahoo! BB hikari with FLET'S in this segment.

5. Income taxes and others

Current income taxes totaled 39,390 million yen, at the same time deferred income taxes of 19,674 million yen were recorded as credit. Current income taxes declined as a result of the transfer and the utilization of loss carryforwards held by SOFTBANK IDC Solutions Corp. (hereafter “SOFTBANK IDC Solutions”) to Yahoo Japan along with the merger of Yahoo Japan and SOFTBANK IDC Solutions on March 30, 2009. Taking the earnings stability and the lesser importance of the balance of loss carryforwards at SOFTBANK BB into consideration, deferred income taxes were recorded as a credit, reflecting the improved collectability of the deferred tax assets. In addition, 44,450 million yen was recorded as minority interests in net income.

As a result, net income for fiscal 2009 came to 43,172 million yen, a decrease of 65,453 million yen year-on-year.