6-K 1 d858081d6k.htm FORM 6-K Form 6-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 under the

Securities Exchange Act of 1934

For the month of February, 2015

Commission File Number 1-8910

NIPPON TELEGRAPH AND TELEPHONE CORPORATION

(Translation of registrant’s name into English)

OTEMACHI FIRST SQUARE, EAST TOWER

5-1, OTEMACHI 1-CHOME

CHIYODA-KU, TOKYO 100-8116 JAPAN

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F  x    Form 40-F  ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):             

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):             


ANNOUNCEMENT OF FINANCIAL RESULTS FOR THE THREE AND NINE MONTHS ENDED DECEMBER 31, 2014

On February 6, 2015, the registrant filed with the Tokyo Stock Exchange information as to the registrant’s financial condition and results of operations at and for the three and nine months ended December 31, 2014. Attached hereto is a copy of the press release and supplementary data relating thereto, both dated February 6, 2015, pertaining to such financial condition and results of operations, as well as forecasts for the registrant’s operations for the fiscal year ending March 31, 2015. The consolidated financial information of the registrant and that of its subsidiary, NTT DOCOMO, INC., included in the press release and the supplementary data relating thereto were prepared on the basis of accounting principles generally accepted in the United States. The non-consolidated financial information of the registrant and that of each of the registrant’s three wholly-owned subsidiaries, Nippon Telegraph and Telephone East Corporation, Nippon Telegraph and Telephone West Corporation and NTT Communications Corporation, as well as the consolidated financial information of its subsidiary NTT DATA CORPORATION, included in the press release and the supplementary data relating thereto were prepared on the basis of accounting principles generally accepted in Japan. The consolidated financial information of the registrant’s subsidiary, Dimension Data Holdings plc, included in the supplementary data related to the press release was prepared on the basis of International Financial Reporting Standards (“IFRS”). The financial information for the three and nine months ended December 31, 2014 in the press release is unaudited.

The earnings projections of the registrant and its subsidiaries included in the press release contain forward-looking statements. The registrant desires to qualify for the “safe-harbor” provisions of the Private Securities Litigation Reform Act of 1995, and consequently is hereby filing cautionary statements identifying important factors that could cause the registrant’s actual results to differ materially from those set forth in the attachment.

The registrant’s forward-looking statements are based on a series of assumptions, projections, estimates, judgments and beliefs of the management of the registrant in light of information currently available to it regarding the registrant and its subsidiaries and affiliates, the economy and the telecommunications industry in Japan and overseas, and other factors. These projections and estimates may be affected by the future business operations of the registrant and its subsidiaries and affiliates, the state of the economy in Japan and abroad, possible fluctuations in the securities markets, the pricing of services, the effects of competition, the performance of new products, services and new businesses, changes to laws and regulations affecting the telecommunications industry in Japan and elsewhere, other changes in circumstances that could cause actual results to differ materially from any future results that may be derived from the forward-looking statements, as well as other risks included in the registrant’s most recent Annual Report on Form 20-F and other filings and submissions with the United States Securities and Exchange Commission.

No assurance can be given that the registrant’s actual results will not vary significantly from any expectation of future results that may be derived from the forward-looking statements included herein.

The information on any website referenced herein or in the attached material is not incorporated by reference herein or therein.

The attached material is a translation of the Japanese original. The Japanese original is authoritative.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

NIPPON TELEGRAPH AND TELEPHONE CORPORATION

By

 

  /s/ Yasutake Horinouchi

  Name:   Yasutake Horinouchi
  Title:   Vice President
    Investor Relations Office

Date: February 6, 2015


Financial Results Release

     February 6, 2015  

For the Nine Months Ended December 31, 2014

     [U.S. GAAP

Name of registrant : Nippon Telegraph and Telephone Corporation (“NTT”)

Code No. : 9432 (URL http://www.ntt.co.jp/ir/)

Stock exchanges on which the Company’s shares are listed : Tokyo

Representative : Hiroo Unoura, President and Chief Executive Officer

Contact : Yasutake Horinouchi, Head of IR, Finance and Accounting Department / TEL +81-3-6838-5481

Scheduled filing date of quarterly securities report : February 9, 2015

Scheduled date of dividend payments : -

Supplemental material on quarterly results : Yes

Presentation on quarterly results : Yes (for institutional investors and analysts)

 

1. Consolidated Financial Results for the Nine Months Ended December 31, 2014 (April 1, 2014 – December 31, 2014)

Amounts are rounded off to the nearest million yen.

(1) Consolidated Results of Operations

 

     (Millions of yen)  
     Operating Revenues     Operating Income     Income before
Income Taxes
    Net Income
Attributable to NTT
 

Nine months ended December 31, 2014

     8,182,527         2.0     910,947         (7.5 )%      910,182         (11.1 )%      449,941         (7.1 )% 

Nine months ended December 31, 2013

     8,025,184         1.3     985,120         (0.8 )%      1,024,103         3.9     484,304         8.4

Note: Percentages above represent changes from the corresponding period of the previous fiscal year.

 

     Basic Earnings per Share
Attributable to NTT
    Diluted Earnings per Share
Attributable to NTT
 

Nine months ended December 31, 2014

     407.69  (yen)      —  (yen) 

Nine months ended December 31, 2013

     418.78  (yen)      —  (yen) 

 

Notes:    Comprehensive income (loss) attributable to NTT:   For the nine months ended December 31, 2014: 507,664 million yen (23.7)%  
     For the nine months ended December 31, 2013: 665,709 million yen 35.9%    

(2) Consolidated Financial Position

 

     (Millions of yen, except per share amounts)  
     Total Assets      Total Equity      NTT  Shareholders’
Equity
     Equity Ratio
(Ratio of NTT Shareholders’
Equity to Total Assets)
    NTT
Shareholders’
Equity per Share
 

December 31, 2014

     20,642,277         10,999,979         8,578,734         41.6     8,014.20  (yen) 

March 31, 2014

     20,284,949         10,924,806         8,511,354         42.0     7,667.57  (yen) 

 

2. Dividends

 

     Annual Dividends  
   End of
the first quarter
     End of
the second quarter
    End of
the third quarter
     Year-end     Total  

Year Ended March 31, 2014

     —           80.00  (yen)      —           90.00  (yen)      170.00  (yen) 

Year Ending March 31, 2015

     —           90.00  (yen)      —           —          —     

Year Ending March 31, 2015 (Forecasts)

     —           —          —           90.00  (yen)      180.00  (yen) 

Note: Change in dividend forecasts during the nine months ended December 31, 2014: None

 

3. Consolidated Financial Results Forecasts for the Fiscal Year Ending March 31, 2015 (April 1, 2014 – March 31, 2015)

 

     (Millions of yen)  
     Operating Revenues     Operating Income     Income before
Income Taxes
    Net Income
Attributable to
NTT
    Basic Earnings per Share
Attributable to

NTT
 

Year Ending March 31, 2015

     11,010,000         0.8     1,095,000         (9.8 )%      1,075,000         (16.9 )%      529,000         (9.6 )%      479.00  (yen) 

 

Notes:    1.    Percentages above represent changes from the previous fiscal year.
   2.    Change in consolidated financial results forecasts for the fiscal year ending March 31, 2015 during the nine months ended December 31, 2014: None

 

- 1 -


*Notes:

 

  (1) Change in significant consolidated subsidiaries during the nine months ended December 31, 2014 that resulted in changes in the scope of consolidation: None

 

  (2) Adoption of accounting which is simplified or exceptional for quarterly consolidated financial statements: None

 

  (3) Change of accounting policy

 

  i. Change due to revision of accounting standards and other regulations: None

 

  ii. Other change: None
     (For further details, please see “Others” on page 9.)

 

  (4) Number of shares outstanding (common stock)

 

i.       Number of shares outstanding (including treasury stock):

 

December 31, 2014 : 1,136,697,235 shares

 

March 31, 2014 : 1,136,697,235 shares

ii.       Number of shares of treasury stock:

 

December 31, 2014 : 66,255,902 shares

 

March 31, 2014 : 26,650,807 shares

iii.       Weighted average number of shares outstanding:

 

For the nine months ended December 31, 2014 :

  1,103,621,904 shares
 

For the nine months ended December 31, 2013 :

  1,156,476,181 shares

 

  * The forecast for “Basic Earnings per Share Attributable to NTT” for the fiscal year ending March 31, 2015 is based on the assumption that NTT will repurchase 51 million shares or 350 billion yen of shares from November 10, 2014 through June 30, 2015, as resolved at the board of directors’ meeting held on November 7, 2014 authorizing repurchases up to these amounts, and retain these as treasury stock.

 

  * Presentation on the status of quarterly review process:

This earnings release is not subject to the quarterly review process as required by the Financial Instruments and Exchange Act of Japan. As of the date of issuance of this earnings release, the review process on quarterly financial statements required by the Financial Instruments and Exchange Act is still ongoing.

 

  * Explanation of earnings forecasts and other notes:

Forward-looking statements in this earnings release, such as forecasts of results of operations, are based on the information currently available to NTT and certain assumptions that we regard as reasonable and therefore actual results may differ materially from those contained in or suggested by any forward-looking statements. With regard to the assumptions and other related matters concerning forecasts for the fiscal year ending March 31, 2015, please refer to pages 8 and 24.

On Friday, February 6, 2015, NTT will hold a presentation on its financial results for institutional investors and analysts. Shortly thereafter, NTT plans to post on its website explanatory details, along with the materials used at the presentation.

 

- 2 -


1. Qualitative Information

(1) Qualitative Information Relating to Consolidated Business Results

 

i. Consolidated results

Nine-Month Period Ended December 31, 2014 (April 1, 2014 – December 31, 2014)

 

     (Billions of yen)  
     Nine Months  Ended
December 31, 2013
     Nine Months  Ended
December 31, 2014
     Change     Percent Change  

Operating revenues

     8,025.2         8,182.5         157.3        2.0

Operating expenses

     7,040.1         7,271.6         231.5        3.3

Operating income

     985.1         910.9         (74.2     (7.5 )% 

Income before income taxes and equity in earnings (losses) of affiliated companies

     1,024.1         910.2         (113.9     (11.1 )% 

Net income attributable to NTT

     484.3         449.9         (34.4     (7.1 )% 

During the nine months ended December 31, 2014, pursuant to its Medium-Term Management Strategy, adopted in November 2012, entitled “Towards the Next Stage,” NTT worked to expand its global cloud services and to strengthen its network service competitiveness in order to become a “Value Partner” that customers continue to select.

Expansion of Global Cloud Services:

NTT Group worked to expand its provision of global cloud services by taking advantage of its strengths as a corporate group to provide comprehensive cloud services from the information and telecommunications platforms stage, such as data centers and the IP backbone, to the information and communication technology (ICT) management and applications stage.

Specifically, in order to further promote its cloud business in the United States, NTT Group acquired 100% of the outstanding shares of U.S.-based Symphony Management Consulting, LLC, which has strengths in the cloud solutions business.

Furthermore, NTT Group commenced operations at its “Shanghai Pudong Data Center,” which will not only serve as a major center for colocation services in China, but also as a primary base for cloud services.

Strengthening Network Service Competitiveness:

In the fixed-line communications field, NTT Group continued to work to increase the number of new subscribers and improve long-term customer retention for its “FLET’S Hikari” services. In addition, NTT Group continued to move ahead with its “Hikari Collaboration Model,” the wholesaling of fiber-optic access services, and announced in January 2015 that it will begin providing services in February 2015.

In the mobile communications field, “Kake-hodai & Pake-aeru,” a new billing plan tailored to suit a customer’s stage of life that offer more affordable rates to long-term users, exceeded 13 million subscriptions. Further, NTT Group launched the sale of smartphones and other devices equipped with call functionality for VoLTE*1 call services, and also announced the development of a data communications handset compatible with “LTE-Advanced,” a mobile communication standard capable of high-speed transmissions of up to 225 Mbps. NTT Group also commenced sales of the “iPad Air 2”*2 and “iPad mini 3.”*2 In addition, NTT Group announced in January 2015 that it would begin accepting pre-orders in February 2015 for both its “Docomo Hikari” broadband service, which utilizes the “Hikari Collaboration Model,” and “Docomo Hikari Pack,” which provides “Docomo Hikari” in combination with mobile phone service at a reasonable price, and will commence these services in March 2015.

To cut costs in fixed-line and mobile communications services, NTT Group worked to further enhance infrastructure efficiency by introducing high-performance equipment and by making effective use of existing facilities, while cutting the cost of laying optical transmission lines by increasing construction projects that do not require the dispatch of NTT employees and working to further improve the efficiency of its maintenance and operations business.

 

- 3 -


NTT also entered into a partnership agreement with the Tokyo Organizing Committee of the Olympic and Paralympic Games in January 2015 relating to athletes representing Japan in the Olympics and Paralympics. The agreement has a six-year term, including the Tokyo 2020 Olympics and Paralympics. With this agreement, NTT became the first “Gold Partner,” the highest tier of the domestic corporate sponsorship program.

As a result of these efforts, NTT Group’s consolidated operating revenues for the nine months ended December 31, 2014 were ¥8,182.5 billion (an increase of 2.0% from the same period of the previous fiscal year) and consolidated operating expenses were ¥7,271.6 billion (an increase of 3.3% from the same period of the previous fiscal year). Consolidated operating income was ¥910.9 billion (a decrease of 7.5% from the same period of the previous fiscal year), consolidated income before income taxes and equity in earnings (losses) of affiliated companies was ¥910.2 billion (a decrease of 11.1% from the same period of the previous fiscal year), and net income attributable to NTT was ¥449.9 billion (a decrease of 7.1% from the same period of the previous fiscal year).

 

Note:

     The consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States.

(*1)

     Abbreviation for Voice over LTE, a call service that provides reliable and high-sound quality calls over NTT’s “Xi” service (LTE service) network.

(*2)

     TM and © 2015 Apple Inc. All rights reserved. iPad is a trademark of Apple Inc., registered in the United States and other countries.

 

- 4 -


ii. Segment results

Results by business segment are as follows.

 

 

Regional Communications Business Segment

Nine-Month Period Ended December 31, 2014 (April 1, 2014 – December 31, 2014)

 

     (Billions of yen)  
     Nine Months  Ended
December 31, 2013
     Nine Months  Ended
December 31, 2014
     Change     Percent Change  

Operating revenues

     2,626.4         2,579.2         (47.2     (1.8 )% 

Operating expenses

     2,525.9         2,447.7         (78.2     (3.1 )% 

Operating income

     100.5         131.5         31.0        30.9

Operating revenues in the regional communications business segment for the nine-month period ended December 31, 2014 decreased 1.8% from the same period of the previous fiscal year to ¥2,579.2 billion due to, among other things, a decrease in fixed voice-related revenues resulting from the decline in fixed-line telephone subscriptions, which was partially offset by an increase in IP/packet communications revenues. On the other hand, operating expenses fell by 3.1% from the same period of the previous fiscal year to ¥2,447.7 billion due to, among other factors, a decrease in personnel expenses and efforts to streamline operating expenses. As a result, segment operating income increased 30.9% from the same period of the previous fiscal year to ¥131.5 billion.

Number of subscriptions

 

    (Thousands of subscriptions)  
    As of March 31, 2014      As of December 31, 2014      Change      Percent Change  

FLET’S Hikari(1)

    18,050         18,617         567         3.1

NTT East

    10,187         10,397         210         2.1

NTT West

    7,863         8,220         357         4.5

Hikari Denwa(2)

    16,256         16,910         654         4.0

NTT East

    8,694         8,963         269         3.1

NTT West

    7,562         7,947         385         5.1

Notes:

(1) “FLET’S Hikari” includes “B FLET’S,” “FLET’S Hikari Next,” “FLET’S Hikari Light” and “FLET’S Hikari WiFi Access” provided by NTT East and “B FLET’S,” “FLET’S Hikari Premium,” “FLET’S Hikari Mytown,” “FLET’S Hikari Next,” “FLET’S Hikari Light” and “FLET’S Hikari WiFi Access” provided by NTT West.
(2) The figures for Hikari Denwa indicate the number of channels (in thousands).

 

- 5 -


 

Long Distance and International Communications Business Segment

Nine-Month Period Ended December 31, 2014 (April 1, 2014 – December 31, 2014)

 

     (Billions of yen)  
     Nine Months  Ended
December 31, 2013
     Nine Months  Ended
December 31, 2014
     Change     Percent Change  

Operating revenues

     1,312.7         1,447.3         134.7        10.3

Operating expenses

     1,212.3         1,359.4         147.1        12.1

Operating income

     100.4         88.0         (12.5     (12.4 )% 

Operating revenues in the long-distance and international communications business segment for the nine-month period ended December 31, 2014 increased 10.3% from the same period of the previous fiscal year to ¥1,447.3 billion. This increase was due to, among other things, an increase in system integration revenues associated with an increase in the number of overseas consolidated subsidiaries, partially offset by a decrease in domestic fixed voice-related revenues. Operating expenses increased 12.1% from the same period of the previous fiscal year to ¥1,359.4 billion due to, among other things, an increase in revenue-linked expenses. As a result, segment operating income for the nine-month period ended December 31, 2014 decreased 12.4% from the same period of the previous fiscal year to ¥88.0 billion.

 

 

Mobile Communications Business Segment

Nine-Month Period Ended December 31, 2014 (April 1, 2014 – December 31, 2014)

 

     (Billions of yen)  
     Nine Months  Ended
December 31, 2013
     Nine Months  Ended
December 31, 2014
     Change     Percent Change  

Operating revenues

     3,363.6         3,326.8         (36.8     (1.1 )% 

Operating expenses

     2,677.8         2,741.9         64.1        2.4

Operating income

     685.7         584.9         (100.9     (14.7 )% 

Despite an increase in revenues associated with NTT Group’s expanding “Smart Life” business, operating revenues for the mobile communications business segment for the nine-month period ended December 31, 2014 decreased 1.1% from the same period of the previous fiscal year to ¥3,326.8 billion due to, among other things, a decline in mobile voice-related revenues resulting from the impact of its “Monthly Support” discount programs and the new “Kake-hodai & Pake-aeru” billing plan. Further, despite the implementation of measures to reduce costs through structural changes, operating expenses for the nine-month period ended December 31, 2014 increased 2.4% from the same period of the previous fiscal year to ¥2,741.9 billion due to increases in cost of equipment sold and in revenue-linked expenses. As a result, segment operating income for the nine-month period ended December 31, 2014 decreased 14.7% from the same period of the previous fiscal year to ¥584.9 billion.

Number of subscriptions

 

     (Thousands of subscriptions)  
     As of March 31, 2014      As of December 31, 2014      Change     Percent Change  

Mobile phone services

     63,105         65,274         2,169        3.4

Xi

     21,965         28,298         6,332        28.8

FOMA

     41,140         36,976         (4,164     (10.1 )% 

sp-mode

     23,781         26,746         2,964        12.5

i-mode

     26,415         23,396         (3,019     (11.4 )% 

Notes:

(1) Numbers for Mobile phone services subscribers (including Xi and FOMA subscribers) include communication module service subscribers.
(2) Effective March 3, 2008, FOMA services became mandatory for subscription to “2in1” services. Such FOMA service subscriptions to “2in1” services are included in the number of FOMA service subscribers and, as a result, are also included in the number of Mobile phone services subscribers.

 

- 6 -


 

Data Communications Business Segment

Nine-Month Period Ended December 31, 2014 (April 1, 2014 – December 31, 2014)

 

     (Billions of yen)  
     Nine Months  Ended
December 31, 2013
     Nine Months  Ended
December 31, 2014
     Change      Percent Change  

Operating revenues

     943.1         1,066.4         123.4         13.1

Operating expenses

     908.2         1,009.7         101.5         11.2

Operating income

     34.9         56.7         21.9         62.7

Operating revenues in the data communications business segment for the nine-month period ended December 31, 2014 increased 13.1% from the same period of the previous fiscal year to ¥1,066.4 billion due to, among other things, an increase in the number of overseas consolidated subsidiaries, the cultivation of new customers and an increase in revenues resulting from the expansion of systems for existing customers. On the other hand, operating expenses for the nine-month period ended December 31, 2014 rose 11.2% from the same period of the previous fiscal year to ¥1,009.7 billion due to, among other things, an increase in revenue-linked expenses, despite a reduction in unprofitable transactions. As a result, segment operating income for the nine-month period ended December 31, 2014 increased 62.7% from the same period of the previous fiscal year to ¥56.7 billion.

 

 

Other Business Segment

Nine-Month Period Ended December 31, 2014 (April 1, 2014 – December 31, 2014)

 

     (Billions of yen)  
     Nine Months  Ended
December 31, 2013
     Nine Months  Ended
December 31, 2014
     Change     Percent Change  

Operating revenues

     936.4         894.1         (42.3     (4.5 )% 

Operating expenses

     884.8         853.8         (31.0     (3.5 )% 

Operating income

     51.6         40.3         (11.3     (21.9 )% 

Operating revenues in the other business segment for the nine-month period ended December 31, 2014 decreased 4.5% from the same period of the previous fiscal year to ¥894.1 billion due to, among other things, decreased revenues in NTT’s real estate and systems development businesses. On the other hand, operating expenses for the nine-month period ended December 31, 2014 decreased 3.5% from the same period of the previous fiscal year to ¥853.8 billion due to, among other things, a decrease in revenue-linked expenses in NTT’s real estate business. As a result, segment operating income for the nine-month period ended December 31, 2014 decreased 21.9% from the same period of the previous fiscal year to ¥40.3 billion.

 

- 7 -


(2) Qualitative Information Relating to Consolidated Financial Position

Net cash provided by operating activities for the nine-month period ended December 31, 2014 decreased ¥223.2 billion (13.8%) from the same period of the previous fiscal year to ¥1,399.7 billion. This decrease was due to, among other factors, a decrease in operating income as well as the effect of bank holidays.

Net cash used in investing activities decreased ¥79.7 billion (5.2%) from the same period of the previous fiscal year to ¥1,453.0 billion. This decrease was due to, among other factors, a decrease in capital investments and in payments for the purchase of non-current investments and other such investments.

Net cash used in financing activities decreased ¥60.9 billion (68.5%) from the same period of the previous fiscal year to ¥28.0 billion. This decrease was due to, among other factors, an increase in borrowings, which offset an increase in the payment of cash dividends.

As a result of the above, NTT Group’s consolidated cash and cash equivalents as of December 31, 2014 totaled ¥905.8 billion, a decrease of ¥78.7 billion (8.0%) from the end of the previous fiscal year.

 

     (Billions of yen)  
     Nine Months  Ended
December 31, 2013
    Nine Months  Ended
December 31, 2014
    Change     Percent Change  

Cash flows provided by operating activities

     1,623.0        1,399.7        (223.2     (13.8 )% 

Cash flows used in investing activities

     (1,532.7     (1,453.0     79.7        5.2

Cash flows used in financing activities

     (88.9     (28.0     60.9        68.5

(3) Qualitative Information Relating to Consolidated Results Forecasts

There are no changes to the consolidated results forecasts for the fiscal year ending March 31, 2015 announced on November 7, 2014. For the assumptions used in the consolidated results forecasts and other related matters, please see page 24.

 

- 8 -


2. OTHERS

 

(1) Change in significant consolidated subsidiaries during the nine months ended December 31, 2014 that resulted in changes in the scope of consolidation: None

 

(2) Adoption of accounting which is simplified or exceptional for quarterly consolidated financial statements: None

 

(3) Change of accounting policy: None

 

- 9 -


3. CONSOLIDATED FINANCIAL STATEMENTS

(1) Consolidated Balance Sheets

 

      Millions of yen  
     March 31,
2014
    December 31,
2014
    Increase
(Decrease)
 

ASSETS

      

Current assets:

      

Cash and cash equivalents

   ¥ 984,463      ¥ 905,796      ¥ (78,667

Short-term investments

     38,949        59,973        21,024   

Notes and accounts receivable, trade

     2,509,030        2,701,280        192,250   

Allowance for doubtful accounts

     (46,893     (48,390     (1,497

Accounts receivable, other

     345,197        413,843        68,646   

Inventories

     415,309        446,148        30,839   

Prepaid expenses and other current assets

     394,294        464,930        70,636   

Deferred income taxes

     220,662        198,671        (21,991
  

 

 

   

 

 

   

 

 

 

Total current assets

     4,861,011        5,142,251        281,240   
  

 

 

   

 

 

   

 

 

 

Property, plant and equipment:

      

Telecommunications equipment

     12,959,564        12,807,435        (152,129

Telecommunications service lines

     15,408,604        15,567,610        159,006   

Buildings and structures

     6,060,129        6,101,812        41,683   

Machinery, vessels and tools

     1,949,903        1,981,584        31,681   

Land

     1,238,742        1,287,071        48,329   

Construction in progress

     359,014        381,988        22,974   
  

 

 

   

 

 

   

 

 

 
     37,975,956        38,127,500        151,544   

Accumulated depreciation

     (28,136,268     (28,402,801     (266,533
  

 

 

   

 

 

   

 

 

 

Net property, plant and equipment

     9,839,688        9,724,699        (114,989
  

 

 

   

 

 

   

 

 

 

Investments and other assets:

      

Investments in affiliated companies

     521,634        521,328        (306

Marketable securities and other investments

     407,766        496,816        89,050   

Goodwill

     1,086,636        1,132,968        46,332   

Software

     1,309,912        1,245,843        (64,069

Other intangible assets

     401,194        380,456        (20,738

Other assets

     1,195,608        1,358,164        162,556   

Deferred income taxes

     661,500        639,752        (21,748
  

 

 

   

 

 

   

 

 

 

Total investments and other assets

     5,584,250        5,775,327        191,077   
  

 

 

   

 

 

   

 

 

 

Total assets

   ¥ 20,284,949      ¥ 20,642,277      ¥ 357,328   
  

 

 

   

 

 

   

 

 

 

 

- 10 -


      Millions of yen  
     March 31,
2014
    December 31,
2014
    Increase
(Decrease)
 

LIABILITIES AND EQUITY

      

Current liabilities:

      

Short-term borrowings

   ¥ 269,444      ¥ 760,434      ¥ 490,990   

Current portion of long-term debt

     425,351        418,767        (6,584

Accounts payable, trade

     1,540,249        1,249,304        (290,945

Current portion of obligations under capital leases

     16,929        17,437        508   

Accrued payroll

     448,061        381,663        (66,398

Accrued taxes on income

     256,994        77,195        (179,799

Accrued consumption tax

     47,376        139,748        92,372   

Advances received

     266,743        251,460        (15,283

Other

     405,677        444,652        38,975   
  

 

 

   

 

 

   

 

 

 

Total current liabilities

     3,676,824        3,740,660        63,836   
  

 

 

   

 

 

   

 

 

 

Long-term liabilities:

      

Long-term debt (excluding current portion)

     3,483,673        3,653,675        170,002   

Obligations under capital leases (excluding current portion)

     35,951        34,422        (1,529

Liability for employees’ retirement benefits

     1,327,873        1,365,851        37,978   

Accrued liabilities for point programs

     130,466        112,584        (17,882

Deferred income taxes

     233,151        217,189        (15,962

Other

     446,293        491,317        45,024   
  

 

 

   

 

 

   

 

 

 

Total long-term liabilities

     5,657,407        5,875,038        217,631   
  

 

 

   

 

 

   

 

 

 

Redeemable noncontrolling interests

     25,912        26,600        688   
  

 

 

   

 

 

   

 

 

 

Equity:

      

NTT shareholders’ equity

      

Common stock, no par value

     937,950        937,950        —     

Additional paid-in capital

     2,827,010        2,845,824        18,814   

Retained earnings

     4,808,361        5,058,382        250,021   

Accumulated other comprehensive income (loss)

     94,966        152,689        57,723   

Treasury stock, at cost

     (156,933     (416,111     (259,178
  

 

 

   

 

 

   

 

 

 

Total NTT shareholders’ equity

     8,511,354        8,578,734        67,380   
  

 

 

   

 

 

   

 

 

 

Noncontrolling interests

     2,413,452        2,421,245        7,793   
  

 

 

   

 

 

   

 

 

 

Total equity

     10,924,806        10,999,979        75,173   
  

 

 

   

 

 

   

 

 

 

Total liabilities and equity

   ¥ 20,284,949      ¥ 20,642,277      ¥ 357,328   
  

 

 

   

 

 

   

 

 

 

 

- 11 -


(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income

NINE-MONTH PERIOD ENDED DECEMBER 31

Consolidated Statements of Income

 

     Millions of yen  
     2013     2014     Increase
(Decrease)
 

Operating revenues:

      

Fixed voice related services

   ¥ 1,184,765      ¥ 1,087,270      ¥ (97,495

Mobile voice related services

     789,546        660,586        (128,960

IP / packet communications services

     2,789,563        2,750,096        (39,467

Sale of telecommunications equipment

     740,095        794,443        54,348   

System integration

     1,585,561        1,893,468        307,907   

Other

     935,654        996,664        61,010   
  

 

 

   

 

 

   

 

 

 
     8,025,184        8,182,527        157,343   
  

 

 

   

 

 

   

 

 

 

Operating expenses:

      

Cost of services (excluding items shown separately below)

     1,720,380        1,736,079        15,699   

Cost of equipment sold (excluding items shown separately below)

     646,856        706,803        59,947   

Cost of system integration (excluding items shown separately below)

     1,147,150        1,323,731        176,581   

Depreciation and amortization

     1,394,935        1,365,268        (29,667

Impairment loss

     166        1,604        1,438   

Selling, general and administrative expenses

     2,127,588        2,138,095        10,507   

Goodwill and other intangible asset impairments

     2,989        —          (2,989
  

 

 

   

 

 

   

 

 

 
     7,040,064        7,271,580        231,516   
  

 

 

   

 

 

   

 

 

 

Operating income

     985,120        910,947        (74,173
  

 

 

   

 

 

   

 

 

 

Other income (expenses):

      

Interest and amortization of bond discounts and issue costs

     (36,944     (33,155     3,789   

Interest income

     13,221        13,821        600   

Other, net

     62,706        18,569        (44,137
  

 

 

   

 

 

   

 

 

 
     38,983        (765     (39,748
  

 

 

   

 

 

   

 

 

 

Income before income taxes and equity in earnings (losses) of affiliated companies

     1,024,103        910,182        (113,921
  

 

 

   

 

 

   

 

 

 

Income tax expense (benefit):

      

Current

     389,174        298,193        (90,981

Deferred

     (6,527     17,544        24,071   
  

 

 

   

 

 

   

 

 

 
     382,647        315,737        (66,910
  

 

 

   

 

 

   

 

 

 

Income before equity in earnings (losses) of affiliated companies

     641,456        594,445        (47,011
  

 

 

   

 

 

   

 

 

 

Equity in earnings (losses) of affiliated companies

     (2,833     3,635        6,468   
  

 

 

   

 

 

   

 

 

 

Net income

     638,623        598,080        (40,543
  

 

 

   

 

 

   

 

 

 

Less – Net income attributable to noncontrolling interests

     154,319        148,139        (6,180
  

 

 

   

 

 

   

 

 

 

Net income attributable to NTT

   ¥ 484,304      ¥ 449,941      ¥ (34,363
  

 

 

   

 

 

   

 

 

 

Per share of common stock:

      

Weighted average number of shares outstanding (Shares)

     1,156,476,181        1,103,621,904     

Net income attributable to NTT (Yen)

   ¥ 418.78      ¥ 407.69     
  

 

 

   

 

 

   

Consolidated Statements of Comprehensive Income

 

     Millions of yen  
     2013     2014     Increase
(Decrease)
 

Net income

   ¥ 638,623      ¥ 598,080      ¥ (40,543

Other comprehensive income (loss), net of tax:

      

Unrealized gain (loss) on securities

     28,200        60,413        32,213   

Unrealized gain (loss) on derivative instruments

     (2,540     (301     2,239   

Foreign currency translation adjustments

     83,928        33,626        (50,302

Pension liability adjustments

     100,677        (2,552     (103,229

Total other comprehensive income (loss)

     210,265        91,186        (119,079

Total comprehensive income (loss)

     848,888        689,266        (159,622

Less – Comprehensive income attributable to noncontrolling interests

     183,179        181,602        (1,577
  

 

 

   

 

 

   

 

 

 

Total comprehensive income (loss) attributable to NTT

   ¥ 665,709      ¥ 507,664      ¥ (158,045
  

 

 

   

 

 

   

 

 

 

 

- 12 -


THREE-MONTH PERIOD ENDED DECEMBER 31

Consolidated Statements of Income

 

      Millions of yen  
     2013     2014     Increase
(Decrease)
 

Operating revenues:

      

Fixed voice related services

   ¥ 390,283      ¥ 356,893      ¥ (33,390

Mobile voice related services

     254,497        214,127        (40,370

IP / packet communications services

     925,755        911,726        (14,029

Sale of telecommunications equipment

     297,866        309,118        11,252   

System integration

     556,434        663,850        107,416   

Other

     334,279        353,145        18,866   
  

 

 

   

 

 

   

 

 

 
     2,759,114        2,808,859        49,745   
  

 

 

   

 

 

   

 

 

 

Operating expenses:

      

Cost of services (excluding items shown separately below)

     571,178        572,454        1,276   

Cost of equipment sold (excluding items shown separately below)

     276,160        280,122        3,962   

Cost of system integration (excluding items shown separately below)

     410,510        458,389        47,879   

Depreciation and amortization

     475,815        454,164        (21,651

Impairment loss

     4        1,394        1,390   

Selling, general and administrative expenses

     693,354        722,313        28,959   
  

 

 

   

 

 

   

 

 

 
     2,427,021        2,488,836        61,815   
  

 

 

   

 

 

   

 

 

 

Operating income

     332,093        320,023        (12,070
  

 

 

   

 

 

   

 

 

 

Other income (expenses):

      

Interest and amortization of bond discounts and issue costs

     (12,187     (10,569     1,618   

Interest income

     4,449        4,695        246   

Other, net

     23,970        3,876        (20,094
  

 

 

   

 

 

   

 

 

 
     16,232        (1,998     (18,230
  

 

 

   

 

 

   

 

 

 

Income before income taxes and equity in earnings (losses) of affiliated companies

     348,325        318,025        (30,300
  

 

 

   

 

 

   

 

 

 

Income tax expense (benefit):

      

Current

     123,311        104,222        (19,089

Deferred

     1,442        3,018        1,576   
  

 

 

   

 

 

   

 

 

 
     124,753        107,240        (17,513
  

 

 

   

 

 

   

 

 

 

Income before equity in earnings (losses) of affiliated companies

     223,572        210,785        (12,787
  

 

 

   

 

 

   

 

 

 

Equity in earnings (losses) of affiliated companies

     (8,947     1,177        10,124   
  

 

 

   

 

 

   

 

 

 

Net income

     214,625        211,962        (2,663
  

 

 

   

 

 

   

 

 

 

Less – Net income attributable to noncontrolling interests

     53,861        52,353        (1,508
  

 

 

   

 

 

   

 

 

 

Net income attributable to NTT

   ¥ 160,764      ¥ 159,609      ¥ (1,155
  

 

 

   

 

 

   

 

 

 

Per share of common stock:

      

Weighted average number of shares outstanding (Shares)

     1,137,382,961        1,091,484,931     

Net income attributable to NTT (Yen)

   ¥ 141.35      ¥ 146.23     
  

 

 

   

 

 

   

Consolidated Statements of Comprehensive Income

 

      Millions of yen  
     2013      2014     Increase
(Decrease)
 

Net income

   ¥ 214,625       ¥ 211,962      ¥ (2,663

Other comprehensive income (loss), net of tax:

       

Unrealized gain (loss) on securities

     11,023         50,947        39,924   

Unrealized gain (loss) on derivative instruments

     929         (12     (941

Foreign currency translation adjustments

     13,088         68,741        55,653   

Pension liability adjustments

     94,649         (1,457     (96,106

Total other comprehensive income (loss)

     119,689         118,219        (1,470

Total comprehensive income (loss)

     334,314         330,181        (4,133

Less – Comprehensive income attributable to noncontrolling interests

     67,249         84,768        17,519   
  

 

 

    

 

 

   

 

 

 

Total comprehensive income (loss) attributable to NTT

   ¥ 267,065       ¥ 245,413      ¥ (21,652
  

 

 

    

 

 

   

 

 

 

 

- 13 -


(3) Consolidated Statements of Cash Flows

NINE-MONTH PERIOD ENDED DECEMBER 31

 

     Millions of yen  
     2013     2014     Increase
(Decrease)
 

Cash flows from operating activities:

      

Net income

   ¥ 638,623      ¥ 598,080      ¥ (40,543

Adjustments to reconcile net income to net cash provided by operating activities  -

      

Depreciation and amortization

     1,394,935        1,365,268        (29,667

Impairment loss

     166        1,604        1,438   

Deferred taxes

     (6,527     17,544        24,071   

Goodwill and other intangible asset impairments

     2,989        —          (2,989

Losses on disposal of property, plant and equipment

     63,781        63,765        (16

Equity in (earnings) losses of affiliated companies

     2,833        (3,635     (6,468

(Increase) decrease in notes and accounts receivable, trade

     17,052        (179,956     (197,008

(Increase) decrease in inventories

     (126,609     (54,726     71,883   

(Increase) decrease in other current assets

     (91,842     (138,769     (46,927

Increase (decrease) in accounts payable, trade and

accrued payroll

     (250,095     (210,285     39,810   

Increase (decrease) in accrued consumption tax

     3,257        92,034        88,777   

Increase (decrease) in advances received

     3,861        (18,128     (21,989

Increase (decrease) in accrued taxes on income

     (67,341     (180,154     (112,813

Increase (decrease) in other current liabilities

     18,127        28,246        10,119   

Increase (decrease) in liability for employees’ retirement

benefits

     51,638        37,028        (14,610

Increase (decrease) in other long-term liabilities

     9,724        18,490        8,766   

Other

     (41,599     (36,677     4,922   
  

 

 

   

 

 

   

 

 

 

Net cash provided by operating activities

   ¥ 1,622,973      ¥ 1,399,729      ¥ (223,244
  

 

 

   

 

 

   

 

 

 

 

- 14 -


     Millions of yen  
     2013     2014     Increase
(Decrease)
 

Cash flows from investing activities:

      

Payments for property, plant and equipment

   ¥ (1,161,716   ¥ (1,108,674   ¥ 53,042   

Payments for intangibles

     (310,707     (260,862     49,845   

Proceeds from sales of property, plant and equipment

     40,694        19,097        (21,597

Payments for purchase of non-current investments

     (40,885     (18,824     22,061   

Proceeds from sales and redemptions of non-current investments

     12,788        17,897        5,109   

Acquisitions of subsidiaries, net of cash acquired

     (55,459     (21,949     33,510   

Payments for purchases of short-term investments

     (50,004     (55,937     (5,933

Proceeds from redemptions of short-term investments

     72,643        38,802        (33,841

Other

     (40,103     (62,580     (22,477
  

 

 

   

 

 

   

 

 

 

Net cash used in investing activities

     (1,532,749     (1,453,030     79,719   
  

 

 

   

 

 

   

 

 

 

Cash flows from financing activities:

      

Proceeds from issuance of long-term debt

     404,980        457,143        52,163   

Payments for settlement of long-term debt

     (582,565     (334,309     248,256   

Proceeds from issuance of short-term debt

     4,865,207        4,646,133        (219,074

Payments for settlement of short-term debt

     (4,255,747     (4,167,653     88,094   

Dividends paid

     (186,174     (199,769     (13,595

Proceeds from sale of (payments for acquisition of) treasury stock, net

     (250,130     (256,797     (6,667

Acquisition of treasury stock by subsidiaries

     (5,215     (70,798     (65,583

Other

     (79,277     (101,947     (22,670
  

 

 

   

 

 

   

 

 

 

Net cash used in financing activities

     (88,921     (27,997     60,924   
  

 

 

   

 

 

   

 

 

 

Effect of exchange rate changes on cash and cash equivalents

     10,918        2,631        (8,287
  

 

 

   

 

 

   

 

 

 

Net increase (decrease) in cash and cash equivalents

     12,221        (78,667     (90,888

Cash and cash equivalents at beginning of period

     961,433        984,463        23,030   
  

 

 

   

 

 

   

 

 

 

Cash and cash equivalents at end of period

   ¥ 973,654      ¥ 905,796      ¥ (67,858
  

 

 

   

 

 

   

 

 

 

Cash paid during the period for:

      

Interest

   ¥ 37,430      ¥ 32,446      ¥ (4,984

Income taxes, net

   ¥ 458,349      ¥ 532,984      ¥ 74,635   

 

- 15 -


(4) Going Concern Assumption

None

(5) Change in Accounting Estimate

Effective July 1, 2014, NTT Group revised its estimate of the expected useful life of a part of the software for telecommunications network and internal-use software based on the actual utilization of the software to reflect an extended expected useful life of up to 7 years. This modification complies with FASB Accounting Standards Codification Topic 250, Accounting Changes and Error Corrections, and will be applied prospectively as a change in accounting estimate. The financial impact from this change in accounting estimate on “Income before income taxes and equity in earnings (losses) of affiliated companies,” “Net income attributable to NTT” and “Per share of common stock” of “Net income attributable to NTT” is ¥35,505 million, ¥15,040 million, and ¥13.63, respectively, for the nine months ended December 31, 2014, and ¥17,057 million, ¥7,145 million, and ¥6.55, respectively, for the three months ended December 31, 2014.

 

- 16 -


(6) Business Segments

NINE-MONTH PERIOD ENDED DECEMBER 31

 

1. Operating revenues

 

     (Millions of yen)  
     Nine months  ended
December 31, 2013
    Nine months  ended
December 31, 2014
    Increase
(Decrease)
 

Regional communications business

      

External customers

     2,304,623        2,232,967        (71,656

Intersegment

     321,751        346,208        24,457   
  

 

 

   

 

 

   

 

 

 

Total

     2,626,374        2,579,175        (47,199
  

 

 

   

 

 

   

 

 

 

Long distance and international communications business

      

External customers

     1,241,488        1,382,470        140,982   

Intersegment

     71,181        64,878        (6,303
  

 

 

   

 

 

   

 

 

 

Total

     1,312,669        1,447,348        134,679   
  

 

 

   

 

 

   

 

 

 

Mobile communications business

      

External customers

     3,332,676        3,294,675        (38,001

Intersegment

     30,888        32,105        1,217   
  

 

 

   

 

 

   

 

 

 

Total

     3,363,564        3,326,780        (36,784
  

 

 

   

 

 

   

 

 

 

Data communications business

      

External customers

     853,675        995,658        141,983   

Intersegment

     89,379        70,789        (18,590
  

 

 

   

 

 

   

 

 

 

Total

     943,054        1,066,447        123,393   
  

 

 

   

 

 

   

 

 

 

Other business

      

External customers

     292,722        276,757        (15,965

Intersegment

     643,709        617,325        (26,384
  

 

 

   

 

 

   

 

 

 

Total

     936,431        894,082        (42,349
  

 

 

   

 

 

   

 

 

 

Elimination

     (1,156,908     (1,131,305     25,603   
  

 

 

   

 

 

   

 

 

 

Consolidated total

     8,025,184        8,182,527        157,343   
  

 

 

   

 

 

   

 

 

 

 

2. Segment profit

 

     (Millions of yen)  
     Nine months  ended
December 31, 2013
     Nine months  ended
December 31, 2014
     Increase
(Decrease)
 

Segment profit

        

Regional communications business

     100,453         131,482         31,029   

Long distance and international communications business

     100,419         87,954         (12,465

Mobile communications business

     685,723         584,858         (100,865

Data communications business

     34,856         56,715         21,859   

Other business

     51,633         40,302         (11,331
  

 

 

    

 

 

    

 

 

 

Total segment profit

     973,084         901,311         (71,773
  

 

 

    

 

 

    

 

 

 

Elimination

     12,036         9,636         (2,400
  

 

 

    

 

 

    

 

 

 

Consolidated total

     985,120         910,947         (74,173
  

 

 

    

 

 

    

 

 

 

 

- 17 -


THREE-MONTH PERIOD ENDED DECEMBER 31

 

1. Operating revenues

 

     (Millions of yen)  
     Three months  ended
December 31, 2013
    Three months  ended
December 31, 2014
    Increase
(Decrease)
 

Regional communications business

      

External customers

     766,214        747,032        (19,182

Intersegment

     111,008        117,715        6,707   
  

 

 

   

 

 

   

 

 

 

Total

     877,222        864,747        (12,475
  

 

 

   

 

 

   

 

 

 

Long distance and international communications business

      

External customers

     426,007        474,170        48,163   

Intersegment

     22,763        23,193        430   
  

 

 

   

 

 

   

 

 

 

Total

     448,770        497,363        48,593   
  

 

 

   

 

 

   

 

 

 

Mobile communications business

      

External customers

     1,153,619        1,141,218        (12,401

Intersegment

     10,974        12,586        1,612   
  

 

 

   

 

 

   

 

 

 

Total

     1,164,593        1,153,804        (10,789
  

 

 

   

 

 

   

 

 

 

Data communications business

      

External customers

     298,610        350,248        51,638   

Intersegment

     30,557        20,625        (9,932
  

 

 

   

 

 

   

 

 

 

Total

     329,167        370,873        41,706   
  

 

 

   

 

 

   

 

 

 

Other business

      

External customers

     114,664        96,191        (18,473

Intersegment

     219,134        206,310        (12,824
  

 

 

   

 

 

   

 

 

 

Total

     333,798        302,501        (31,297
  

 

 

   

 

 

   

 

 

 

Elimination

     (394,436     (380,429     14,007   
  

 

 

   

 

 

   

 

 

 

Consolidated total

     2,759,114        2,808,859        49,745   
  

 

 

   

 

 

   

 

 

 

 

2. Segment profit

 

     (Millions of yen)  
     Three months  ended
December 31, 2013
     Three months  ended
December 31, 2014
     Increase
(Decrease)
 

Segment profit

        

Regional communications business

     24,836         53,214         28,378   

Long distance and international communications business

     38,934         31,561         (7,373

Mobile communications business

     215,103         187,061         (28,042

Data communications business

     28,425         29,172         747   

Other business

     21,178         17,247         (3,931
  

 

 

    

 

 

    

 

 

 

Total segment profit

     328,476         318,255         (10,221
  

 

 

    

 

 

    

 

 

 

Elimination

     3,617         1,768         (1,849
  

 

 

    

 

 

    

 

 

 

Consolidated total

     332,093         320,023         (12,070
  

 

 

    

 

 

    

 

 

 

 

- 18 -


(7) NTT Shareholders’ Equity

1. Dividends

Cash dividends paid

 

Resolution

   The shareholders’ meeting on June 26, 2014

Class of shares

   Common stock

Source of dividends

   Retained earnings

Total cash dividends paid

   ¥99,904 million

Cash dividends per share

   ¥90

Record date

   March 31, 2014

Date of payment

   June 27, 2014
  

Resolution

   The Board of Directors’ meeting on November 7, 2014

Class of shares

   Common stock

Source of dividends

   Retained earnings

Total cash dividends paid

   ¥99,866 million

Cash dividends per share

   ¥90

Record date

   September 30, 2014

Date of payment

   December 8, 2014

2. Treasury stock

On May 13, 2014, the board of directors of NTT resolved that NTT may acquire up to 44 million shares of its outstanding common stock for an amount in total not exceeding ¥250 billion from July 1, 2014 through March 31, 2015.

On November 7, 2014, the board of directors revised its resolution above and resolved that NTT may acquire up to 51 million shares of its outstanding common stock for an amount in total not exceeding ¥350 billion from November 10, 2014 through June 30, 2015. Based on this resolution, NTT repurchased 38,000,000 shares of its common stock at a price of ¥249,166 million and 1,168,100 shares of its common stock at a price of ¥7,429 million on November 14, 2014 and November 28, 2014, respectively, using ToSTNeT-3.

NTT also repurchased 4,619,100 shares of its common stock for a total purchase price of ¥29,614 million in January 2015.

 

- 19 -


(8) Subsequent Events

Tata Teleservices Limited

Tata Teleservices Limited (“TTSL”) is a telecommunications operator in India and a privately held company.

As of December 31, 2013 and 2014, NTT Group held via NTT DOCOMO approximately 26.5% of the outstanding common shares of TTSL and has accounted for the investment under the equity method.

Under the shareholders agreement (the “Agreement”) entered into among TTSL, Tata Sons Limited (“Tata Sons”), the parent company of TTSL, and NTT DOCOMO, when NTT DOCOMO entered into a business alliance with TTSL in March 2009, NTT DOCOMO shall have certain shareholder rights including the right to require Tata Sons to find a suitable buyer for NTT DOCOMO’s entire stake (1,248,974,378 shares, or approximately 26.5% of outstanding shares) in TTSL for 50% of NTT DOCOMO’s acquisition price, which amounts to 72.5 billion Indian rupees (or ¥138.5 billion*) or at fair value, whichever is higher, in the event that TTSL fails to achieve certain specified performance targets by March 31, 2014. The right became exercisable on May 30, 2014, and NTT DOCOMO exercised the right on July 7, 2014.

The obligation of Tata Sons under the Agreement was not fulfilled, although NTT DOCOMO repeatedly held discussions with Tata Sons in regards to the sale of its entire stake in TTSL, pursuant to the Agreement. Accordingly, NTT DOCOMO submitted its request for arbitration to the London Court of International Arbitration on January 3, 2015.

The sale of NTT DOCOMO’s stake in TTSL has not been completed as Tata Sons has not fulfilled its obligation, and thus NTT DOCOMO has not accounted for the sales transaction for the year ending March 31, 2015. NTT DOCOMO continues to account for the investment in TTSL under the equity method as NTT DOCOMO continues to hold approximately 26.5% of the outstanding voting shares of TTSL and have representation on the board of directors of TTSL even after submitting the request for arbitration. The financial effect of this matter cannot be estimated at this time due to the aforementioned uncertainties surrounding this investment. NTT DOCOMO may recognize a gain or loss upon disposition of its TTSL shares or in the event that it becomes probable that the likelihood of the transaction as described above will not be carried out.

*1 rupee = ¥1.91 as of December 30, 2014

NTT DOCOMO’s repurchase of its common stock

On October 31, 2014, the board of directors of NTT DOCOMO resolved that NTT DOCOMO may repurchase up to 138,469,879 shares of its outstanding common stock for an amount in total not exceeding ¥192,306 million between November 1, 2014 and March 31, 2015.

Based on this resolution, in January 2015, NTT DOCOMO repurchased a total of 13,300,000 shares of its common stock for an aggregate of ¥25,312 million. Due to NTT DOCOMO’s additional repurchase transactions, NTT’s ownership interest in NTT DOCOMO further increased from 65.8% to 66.0%. NTT expects to recognize the difference between the consideration paid to the non-controlling interest holders and the decrease in the carrying value of such non-controlling interests resulting from this transaction as an adjustment to “Additional paid-in capital” in the consolidated balance sheet as of March 31, 2015.

NTT’s repurchase of its common stock

Please see note 7 for details.

 

- 20 -


4. (Reference)

NON-CONSOLIDATED FINANCIAL STATEMENTS

(1) Non-Consolidated Balance Sheets

(Based on accounting principles generally accepted in Japan)

 

     Millions of yen  
     March 31,
2014
     December 31,
2014
 

ASSETS

     

Current assets:

     

Cash and bank deposits

     10,308         12,054   

Accounts receivable, trade

     2,695         759   

Supplies

     220         216   

Subsidiary deposits

     2,340         2,384   

Other

     365,577         378,139   
  

 

 

    

 

 

 

Total current assets

     381,143         393,553   
  

 

 

    

 

 

 

Fixed assets:

     

Property, plant and equipment

     166,062         157,824   

Intangible fixed assets

     37,520         26,792   

Investments and other assets

     

Investments in subsidiaries and affiliated companies

     5,094,091         5,095,527   

Long-term loans receivable to subsidiaries

     1,579,922         1,442,022   

Other

     43,355         42,018   
  

 

 

    

 

 

 

Total investments and other assets

     6,717,369         6,579,568   
  

 

 

    

 

 

 

Total fixed assets

     6,920,952         6,764,185   
  

 

 

    

 

 

 

TOTAL ASSETS

     7,302,096         7,157,739   
  

 

 

    

 

 

 

 

Notes:    1.    The above non-consolidated quarterly financial statements are exempt from auditor review for purposes of legal disclosure.
   2.    The above non-consolidated quarterly financial statements are prepared based on the “Regulation for Terminology, Forms and Preparation of Quarterly Financial Statements.”

 

- 21 -


(Reference)

 

     Millions of yen  
     March 31,
2014
    December 31,
2014
 

LIABILITIES

    

Current liabilities:

    

Accounts payable, trade

     249        26   

Current portion of corporate bonds

     139,998        149,993   

Current portion of long-term borrowings

     138,150        56,950   

Current portion of long-term borrowings from subsidiaries

     —          80,000   

Short-term borrowings

     150,000        —     

Accrued taxes on income

     13,077        951   

Deposit received from subsidiaries

     82,698        43,124   

Other

     62,999        85,614   
  

 

 

   

 

 

 

Total current liabilities

     587,173        416,660   
  

 

 

   

 

 

 

Long-term liabilities:

    

Corporate bonds

     1,006,277        856,329   

Long-term borrowings

     1,104,380        1,257,480   

Long-term borrowings from subsidiaries

     240,000        160,000   

Liability for employees’ retirement benefits

     32,773        31,028   

Asset retirement obligations

     1,390        1,378   

Other

     1,096        3,356   
  

 

 

   

 

 

 

Total long-term liabilities

     2,385,918        2,309,572   
  

 

 

   

 

 

 

TOTAL LIABILITIES

     2,973,091        2,726,233   
  

 

 

   

 

 

 

NET ASSETS

    

Shareholders’ equity:

    

Common stock

     937,950        937,950   

Capital surplus

     2,672,826        2,672,826   

Earned surplus

     873,705        1,237,556   

Treasury stock

     (156,932     (416,110
  

 

 

   

 

 

 

Total shareholders’ equity

     4,327,549        4,432,222   
  

 

 

   

 

 

 

Unrealized gains (losses), translation adjustments, and others:

    

Net unrealized gains (losses) on securities

     1,455        (716
  

 

 

   

 

 

 

Total unrealized gains (losses), translation adjustments, and others

     1,455        (716
  

 

 

   

 

 

 

TOTAL NET ASSETS

     4,329,004        4,431,505   
  

 

 

   

 

 

 

TOTAL LIABILITIES AND NET ASSETS

     7,302,096        7,157,739   
  

 

 

   

 

 

 

 

Notes:

   1.    The above non-consolidated quarterly financial statements are exempt from auditor review for purposes of legal disclosure.
   2.    The above non-consolidated quarterly financial statements are prepared based on the “Regulation for Terminology, Forms and Preparation of Quarterly Financial Statements.”

 

- 22 -


(Reference)

(2) Non-Consolidated Statements of Income

NINE-MONTH PERIOD ENDED DECEMBER 31

(Based on accounting principles generally accepted in Japan)

 

     Millions of yen  
     2013      2014  

Operating revenues

     389,265         372,149   

Operating expenses

     100,206         95,312   
  

 

 

    

 

 

 

Operating income

     289,058         276,837   
  

 

 

    

 

 

 

Non-operating revenues:

     

Interest income

     16,351         14,165   

Lease and rental income

     8,428         7,981   

Miscellaneous income

     961         676   
  

 

 

    

 

 

 

Total non-operating revenues

     25,740         22,823   
  

 

 

    

 

 

 

Non-operating expenses:

     

Interest expenses

     11,423         10,688   

Corporate bond interest expenses

     11,842         10,705   

Miscellaneous expenses

     7,744         4,648   
  

 

 

    

 

 

 

Total non-operating expenses

     31,010         26,041   
  

 

 

    

 

 

 

Recurring profit

     283,789         273,619   
  

 

 

    

 

 

 

Special profits

     —           299,280   
  

 

 

    

 

 

 

Income before income taxes

     283,789         572,899   
  

 

 

    

 

 

 

Income taxes

     883         11,644   
  

 

 

    

 

 

 

Net income

     282,905         561,255   
  

 

 

    

 

 

 

(Reference) Major components of operating revenues

     

Dividends received

     284,394         272,159   

Revenues from group management

     13,875         13,876   

Revenues from basic R&D

     85,874         79,874   

 

Notes:    1.    The above non-consolidated quarterly financial statements are exempt from auditor review for purposes of legal disclosure.
   2.    The above non-consolidated quarterly financial statements are prepared based on the “Regulation for Terminology, Forms and Preparation of Quarterly Financial Statements.”

 

- 23 -


[Note]

 

 

 

The forward-looking statements and projected figures concerning the future performance of NTT and its subsidiaries and affiliates contained or referred to herein are based on a series of assumptions, projections, estimates, judgments and beliefs of the management of NTT in light of information currently available to it regarding NTT and its subsidiaries and affiliates, the economy and telecommunications industry in Japan and overseas, and other factors. These projections and estimates may be affected by the future business operations of NTT and its subsidiaries and affiliates, the state of the economy in Japan and abroad, possible fluctuations in the securities markets, the pricing of services, the effects of competition, the performance of new products, services and new businesses, changes to laws and regulations affecting the telecommunications industry in Japan and elsewhere, other changes in circumstances that could cause actual results to differ materially from the forecasts contained or referred to herein, as well as other risks included in NTT’s most recent Annual Report on Form 20-F and other filings and submissions with the United States Securities and Exchange Commission.

 

 

 

 

- 24 -


Attachment

Nippon Telegraph and Telephone Corporation

February 6, 2015

NTT’s Shares and Shareholders (as of December 31, 2014)

 

1. Classification of Shareholders

 

Details

  NTT’s Shares and Shareholders (1 unit = 100 shares)     Shares
Representing
Less Than
One Unit
 
  Government
and Public
Bodies
    Financial
Institutions
    Securities
Firms
    Other
Domestic
Corporations
    Foreign Corporations, etc.     Domestic
Individuals,
etc.
    Total    
          Non-
Individuals
    Individuals        

Total Holders

    4        253        80        6,208        1,248        837        763,664        772,294        —     

Total Shares (Units)

    3,690,741        1,645,964        75,135        143,728        3,290,854        5,058        2,500,306        11,351,786        1,518,635   

        %

    32.51        14.50        0.66        1.27        28.99        0.04        22.03        100.00        —     

 

Notes:

     (1)       “Domestic Individuals, etc.” includes 662,562 units of treasury stock, and “Shares Representing Less Than One Unit” includes 2 shares of treasury stock. 66,256,202 shares of treasury stock are recorded in the shareholders’ register; the actual number of treasury stock shares at the end of December 31, 2014 was 66,255,902.
     (2)       “Other Domestic Corporations” includes 147 units under the name of the Japan Securities Depository Center, and “Shares Representing Less Than One Unit” includes 72 shares under the name of the Japan Securities Depository Center.
     (3)       The number of shareholders who only own shares representing less than one unit is 186,334.

 

2. Classification by Number of Shares

 

Details

   NTT’s Shares and Shareholders (1 unit = 100 shares)      Shares
Representing
Less Than
One Unit
 
   At Least
1,000 Units
     At Least
500 Units
     At Least
100 Units
     At Least
50 Units
     At Least
10 Units
     At Least
5 Units
     At Least
1 Unit
     Total     

Number of Holders

     405         162         828         906         21,372         49,829         698,792         772,294         —     

%

     0.05         0.02         0.11         0.12         2.77         6.45         90.48         100.00         —     

Total Shares (Units)

     9,300,223         111,993         174,908         58,845         328,396         302,602         1,074,819         11,351,786         1,518,635   

%

     81.93         0.99         1.54         0.52         2.89         2.67         9.47         100.00         —     

 

Notes:

     (1)       “At Least 1,000 Units” includes 662,562 units of treasury stock, and “Shares Representing Less Than One Unit” includes 2 shares of treasury stock.
     (2)       “At Least 100 Units” includes 147 units under the name of the Japan Securities Depository Center, and “Shares Representing Less Than One Unit” includes 72 shares under the name of the Japan Securities Depository Center.

 

3. Principal Shareholders

 

Name

   Shareholdings
(in thousands
of shares)
     Percentage of
Total Shares
Issued (%)
 

The Minister of Finance

     369,063         32.47   

Japan Trustee Services Bank, Ltd. (Trust Account)

     34,911         3.07   

The Master Trust Bank of Japan, Ltd. (Trust Account)

     29,319         2.58   

Moxley and Co LLC

     17,655         1.55   

State Street Bank and Trust Company

     11,477         1.01   

JP Morgan Chase Bank 385632

     9,943         0.87   

NTT Employee Share-Holding Association

     9,241         0.81   

Japan Trustee Services Bank, Ltd. (Trust Account 9)

     8,774         0.77   

The Bank of New York Mellon SA/NV 10

     8,231         0.72   

Japan Trustee Services Bank, Ltd. (Trust Account 5)

     8,037         0.71   
  

 

 

    

 

 

 

Total

     506,656         44.57   
  

 

 

    

 

 

 

 

Note:

      The Company’s holdings of treasury stock (66,255,902 shares) are not included in the above table.

 

- 25 -


LOGO

 

Financial Results for the Nine Months

Ended December 31, 2014

February 6, 2015


LOGO

 

The forward-looking statements and projected figures concerning the future performance of NTT

and its subsidiaries and affiliates contained or referred to herein are based on a series of

assumptions, projections, estimates, judgments and beliefs of the management of NTT in light of

information currently available to it regarding NTT and its subsidiaries and affiliates, the economy

and telecommunications industry in Japan and overseas, and other factors. These projections

and estimates may be affected by the future business operations of NTT and its subsidiaries and

affiliates, the state of the economy in Japan and abroad, possible fluctuations in the securities

markets, the pricing of services, the effects of competition, the performance of new products,

services and new businesses, changes to laws and regulations affecting the telecommunications

industry in Japan and elsewhere, other changes in circumstances that could cause actual results

to differ materially from the forecasts contained or referred to herein, as well as other risks

included in NTT’s most recent Annual Report on Form 20-F and other filings and submissions

with the United States Securities and Exchange Commission.

_

1

 

_

*

 

“E” in this material represents that the figure is a plan or projection for operation.

** “FY” in this material indicates the fiscal year ending March 31 of the succeeding year.

*** “3Q” in this material represents the 9-month period beginning on April 1 and ending on December 31.

Copyright (c) 2015 Nippon Telegraph and Telephone Financial Results for the Nine Months Ended December 31, 2014 Corporation

—1—

 


LOGO

 

FY2014/3Q Highlights

FY2014/3Q Highlights

Operating Revenues increased for the fifth consecutive year

Expansion of global cloud services

Overseas sales: + Ą288.1 billion increase year-on-year; steadily progressing toward its annual target of $15.0 billion

Cross-selling order volume: approximately $146 million

Enhanced competitiveness of network services

Expansion of NTT’s user base

13.54 million new rate plan subscribers

65.27 million mobile phone subscribers (net increase of 2.17 million)

18.62 million FLET’S Hikari subscribers (net increase of 0.57 million)

4.28 million Hikari TV and FLET’S TV subscribers (net increase of 0.29 million)

Cost reductions

Fixed-line and mobile access cost reductions: NTT achieved cost reductions of Ą154.0 billion during FY2014/3Q, out of its annual target of Ą190.0 billion

Shareholder Returns

Completed Ą256.6 billion of share buybacks (mainly from the Japanese government), out of up to Ą350.0 billion in repurchases by the end of FY2015/1Q

Consolidated Operating Income

(Billions of yen)

3Q FY

1,213.7 1,095.0

[forecast]

985.1

910.9

FY2013 FY2014

Global Revenues

(Billions of yen)

3Q FY

1,530.0

($15.0 billion) 1,196.0 [forecast]

($12.2 billion)

1,149.1

861.0 ($11.2 billion)

($8.9 billion)

FY2013 FY2014

Financial Results for the Nine Months Ended December 31, 2014 Copyright (c) 2015 Nippon Telegraph and Telephone Corporation

—2—

 


LOGO

 

FY2FY2014/3Q Highlights

Operating Revenues increased for the fifth consecutive year due to the growth of overseas businesses.

Operating Income decreased but was in line with expectations.

(Billions of yen)

FY2014/3Q % progress

FY2014 compared to

FY2013/3Q Forecasts FY2014

% Year-on-Year

Change Forecasts

Increase

year-on-year (Decrease)

Operating

8,182.5 +157.3 +2.0% 8,025.2 11,010.0 74.3%

Revenues

Operating

7,271.6 +231.5 +3.3% 7,040.1 9,915.0 73.3%

Expenses

Operating

910.9 (74.2) (7.5)% 985.1 1,095.0 83.2%

Income

Net Income* 449.9 (34.4) (7.1)% 484.3 529.0 85.1%

*

 

Net income represents net income attributable to NTT, excluding noncontrolling interests.

Financial Results for the Nine Months Ended December 31, 2014 Copyright (c) 2015 Nippon Telegraph and Telephone Corporation

—3—


LOGO

 

Consolidated Results and Forecasts (U.S. GAAP)

FY2014/3Q Contributing Factors by Segment

Regional communications business: Operating Income increased as a result of vastly improved operational efficiency as well as the reduction of marketing costs.

Long distance and international communication business: Although intensifying domestic competition led to a decrease in Operating Income, overseas businesses experienced steady growth.

Mobile communications business: Operating Revenues decreased due to the increased impact of “Monthly Support” discount programs and the effect of new rate plans, which also resulted in a decrease in Operating Income.

Data communications business: Operating Income increased due to an improvement in gross margin in conjunction with an increase in sales, in addition to a reduction in unprofitable transactions.

Operating [year-on-year +157.3] Mobile Data Other (Billions of yen)

Revenues communications communications business

business business

123.4 42.3 25.6

134.7 36.8

47.2 Elimination of

8,025.2 intersegment/Others 8,182.5

Regional Long distance and

communications international

business communications

business

FY2013/3Q FY2014/3Q

Operating [year-on-year +231.5]

Expenses 101.5 31.0 28.0

64.1 Other Elimination of

147.1 Data

78.2 Mobile communications business intersegment/Others

communications business 7,271.6

7,040.1 Regional Long international distance and business

communications

business communications

business

FY2013/3Q FY2014/3Q

Operating

Income [year-on-year (74.2)]

Regional Long distance and Mobile Data Other business Elimination of

communications international communications communications intersegment/

FY2013/3Q business communications business business Others FY2014/3Q

business

985.1 31.0 12.5 100.9 21.9 11.3 2.4 910.9

Financial Results for the Nine Months Ended December 31, 2014 4 Copyright (c) 2015 Nippon Telegraph and Telephone Corporation

—4—


LOGO

 

Progress of Broadband Services


LOGO

 

Progress of Broadband Services

Number of Subscribers for Fixed Broadband Services

Number of subscribers

FLET’S ADSL

FLET’S Hikari

Hikari Denwa

(Thousands)

Changes from the preceding quarter

* 1

*2

*3

20,000 15,000 10,000 5,000 0

19,271 19,335 19,444 19,534 19,717 19,788 19,892 19,954

1,751 1,663 1,572 1,483 1,398 1,333 1,275 1,203

17,521 17,672 17,873 18,050 18,319 18,455 18,617 18,750

15,412 15,664 15,950 16,256 16,507 16,705 16,910 17,106

2013.6 2013.9 2013.12 2014.3 2014.6 2014.9 2014.12 2015.3E

FLET’S Hikari

Number of opened connections

FLET’S ADSL

Hikari Denwa

FY2013 FY2014 FY2013 FY2014E

4-6 7-9 10-12 1-3 4-6 7-9 10-12 4-12

220 152 200 178 269 136 162 567

870 707 743 811 879 683 684 2,246

(98)

 

(88) (91) (89) (85) (65) (58) (208)

242 252 287 305 251 199 204 654

* 1 Number of FLET’S Hikari subscribers includes B FLET’S, FLET’S Hikari Next, FLET’S Hikari Light and FLET’S Hikari WiFi Access provided by NTT East and B FLET’S, FLET’S Hikari Premium, FLET’S Hikari Mytown, FLET’S Hikari Next, FLET’S Hikari Light and FLET’S Hikari WiFi Access provided by NTT West.

2 Number of opened connections excludes openings due to relocations.

(Thousands)

750 700 3,131 3,000 (365) (280) 1,087 850

** 3 Number of Hikari Denwa subscribers is presented in thousands of channels.

Financial Results for the Nine Months Ended December 31, 2014 Copyright (c) 2015 Nippon Telegraph and Telephone Corporation

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Progress of Broadband Services

Number of Subscribers for Mobile Broadband Services

70,000 60,000 50,000 40,000 30,000 20,000 10,000 0

61,623 61,772 62,182 63,105 63,566 64,295 65,274 67,000

14,198 16,398 19,021 21,965 24,043 26,215 28,298 29,700

47,425 45,374 43,160 41,140 39,523 38,080 36,976 37,300

2013.6 2013.9 2013.12 2014.3 2014.6 2014.9 2014.12 2015.3E

FY2013 FY2014 FY2013 FY2014E

4-6 7-9 10-12 1-3 4-6 7-9 10-12 4-12

87 149 410 924 461 729 979 2,169 1,569 3,900

Changes from the preceding quarter

* The number of communication module service subscribers is included in mobile broadband subscribers.

Number of subscribers (Thousands) Xi FOMA Xi+FOMA (Thousands)

Financial Results for the Nine Months Ended December 31, 2014 Copyright (c) 2015 Nippon Telegraph and Telephone Corporation

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Progress of Broadband Services

ARPU of Fixed Broadband Services (FLET’S Hikari)*

NTT East (Yen) Optional Service

Basic Monthly Charge

6,000 4,000 2,000 0

5,750 5,680 5,650 5,570 5,460 5,450 5,490 5,660 5,500

1,760 1,760 1,790 1,770 1,770 1,750 1,760 1,770 1,800

3,990 3,920 3,860 3,800 3,690 3,700 3,730 3,890 3,700

FY2013 FY2014 FY2013 FY2014E

4-6 7-9 10-12 1-3 4-6 7-9 10-12

NTT West (Yen)

6,000 4,000 2,000 0

5,840 5,850 5,850 5,800 5,750 5,700 5,670 5,830 5,720

1,770 1,790 1,820 1,810 1,810 1,800 1,800 1,800 1,830

4,070 4,060 4,030 3,990 3,940 3,900 3,870 4,030 3,890

FY2013 FY2014 FY2013 FY2014E

4-6 7-9 10-12 1-3 4-6 7-9 10-12

* FLET’S Hikari includes B FLET’S, FLET’S Hikari Next, FLET’S Hikari Light and FLET’S Hikari WiFi Access provided by NTT East and B FLET’S, FLET’S Hikari Premium, FLET’S Hikari Mytown, FLET’S Hikari Next, FLET’S Hikari Light and FLET’S Hikari WiFi Access provided by NTT West. Please see page 22 regarding the calculation of ARPU.

Financial Results for the Nine Months Ended December 31, 2014 Copyright (c) 2015 Nippon Telegraph and Telephone Corporation

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Progress of Broadband Services

ARPU of Mobile Broadband Services (Xi, FOMA)*

Smart ARPU Packet ARPU Voice ARPU

5,000 4,000 3,000 2,000 1,000 0

4,680 4,680 4,610 4,460 4,450 4,370 4,340 4,610 4,350

470 500 510 520 530 560 620 500 570 (Yen)

2,720 2,720 2,700 2,680 2,670 2,620 2,560 2,700 2,600

1,490 1,460 1,400 1,260 1,250 1,190 1,160 1,410 1,180

FY2013 FY2014

4-6 7-9 10-12 1-3 4-6 7-9 10-12

FY2013 FY2014E

* NTT DOCOMO’s ARPU calculation methods have been changed from the second quarter of the fiscal year ending March 31, 2015. Accordingly, the ARPU data for the results for the three months ended Jun. 30, 2013 (from Apr. to Jun., 2013), the three months ended Sep. 30, 2013 (from Jul. to Sep., 2013), the three months ended Dec. 31, 2013 (from Oct. to Dec., 2013), the three months ended Mar. 31, 2014 (from Jan. to Mar., 2014), the year ended Mar. 31, 2014 and the three months ended Jun. 30, 2014 (from Apr. to Jun., 2014) presented above have also been changed.

Please see page 22 regarding the calculation of ARPU.

Financial Results for the Nine Months Ended December 31, 2014 Copyright (c) 2015 Nippon Telegraph and Telephone Corporation

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Progress of Broadband Services

Number of Subscribers for Video Services

5,000 4,000 3,000 2,000 1,000 0

3,552 3,692 3,841 3,984 4,086 4,183 4,275 4,546

1,032 1,067 1,113 1,161 1,209 1,256 1,304 1,346

2,520 2,625 2,727 2,823 2,877 2,927 2,971 3,200

2013.6 2013.9 2013.12 2014.3 2014.6 2014.9 2014.12 FY2014E

* “FLET’S TV” requires a subscription to “FLET’S TV Transmission Service,” provided by NTT East and NTT West, and a subscription to Opticast Inc.’s “Opticast Facility Use Services” broadcast service.

FLET’S TV* Hikari TV (Thousands)

Financial Results for the Nine Months Ended December 31, 2014 Copyright (c) 2015 Nippon Telegraph and Telephone Corporation

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Financial Information


LOGO

 

Subsidiaries’ Results (JPN GAAP Non-Consolidated)

NTT East Financial Results

(Billions of yen)

FY2014/3Q FY2014E

2.8

Operating 11.0 (0.2)% Revenues Progress

(0.8)% 73.9%

1,773.8 1,771.0

1,319.5 1,308.5 Voice Transmission Services (54.3) Voice Transmission Services (37.6) IP Services (1.3) IP Services (1.3) Others +52.8 Others +27.8

FY2013/3Q FY2014/3Q FY2013 FY2014E

Operating 36.9 26.0

Expenses (3.0)% (1.5)%

Progress

72.1%

1,707.0 Personnel expenses (4.9) 1,681.0 Personnel expenses (6.0) 1,249.5 1,212.5 Expenses for purchase of goods (24.2) Expenses for purchase of goods (30.7) and services and other expenses and services and other expenses Depreciation expenses and loss +3.1 Depreciation expenses and loss (0.1) on disposal of assets on disposal of assets

FY2013/3Q FY2014/3Q FY2013 FY2014E

Operating

Income Progress

25.9 106.6% 23.2

+37.0% +34.9%

70.0 95.9 66.7 90.0

Financial Results for the Nine Months Ended December 31, 2014 Copyright (c) 2015 Nippon Telegraph and Telephone Corporation

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Subsidiaries’ Results (JPN GAAP Non-Consolidated)

NTT West Financial Results

(Billions of yen)

FY2014/3Q FY2014E

7.6

Operating 8.6 (0.5)%

Progress

Revenues (0.7)%

73.5%

1,589.6 1,582.0

1,172.0 1,163.4 Voice Transmission Services (50.3) Voice Transmission Services (37.9) IP Services +13.3 IP Services +10.4 Others +29.3 Others +18.8

FY2013/3Q FY2014/3Q FY2013 FY2014E

Operating 26.2

20.6

Expenses (1.7)%

(1.8)% Progress

73.2%

1,573.2 Personnel expenses +0.5 1,547.0 Personnel expenses (1.9) Expenses for purchase of goods (27.8) 1,153.0 Expenses for purchase of goods (16.7) 1,132.4 and services and other expenses and services and other expenses Depreciation expenses and loss +1.1 Depreciation expenses and loss (1.9) on disposal of assets on disposal of assets

FY2013/3Q FY2014/3Q FY2013 FY2014E

Operating

Income Progress

11.9 88.5% 18.6

+63.2% +113.7%

18.9 30.9 16.3 35.0

Financial Results for the Nine Months Ended December 31, 2014 11 Copyright (c) 2015 Nippon Telegraph and Telephone Corporation

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Subsidiaries’ Results (JPN GAAP Non-Consolidated)

NTT Communications Financial Results

(Billions of yen)

FY2014/3Q FY2014E

34.0

Operating 24.7 (3.6)% Revenues (3.6)% Progress

72.6%

944.0 910.0

685.4 Cloud Computing Platforms +9.1 660.6 Cloud Computing Platforms +13.0 Data Networks (16.7) Data Networks (20.5) Voice Communications (19.0) Voice Communications (20.4) Solution Services +0.2 Solution Services (8.6) Others +1.6 Others +2.4

FY2013/3Q FY2014/3Q FY2013 FY2014E

Operating 23.5 Expenses 10.3 Progress (2.8)%

(1.7)% 73.0%

599.3 Personnel expenses (1.5) 589.0 830.5 Personnel expenses (2.3) 807.0 Expenses for purchase of goods (7.9) Expenses for purchase of goods (22.2) and services and other expenses and services and other expenses Depreciation expenses and loss (0.8) Depreciation expenses and loss +1.0 on disposal of assets on disposal of assets

FY2013/3Q FY2014/3Q FY2013 FY2014E

Operating

Income Progress

14.4 69.5% 10.4

(16.8)% (9.2)%

86.0 71.5 113.4 103.0

Financial Results for the Nine Months Ended December 31, 2014 Copyright (c) 2015 Nippon Telegraph and Telephone Corporation

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Subsidiaries’ Results (U.S. GAAP Consolidated)

NTT DOCOMO Financial Results

(Billions of yen)

FY2014/3Q FY2014E

61.2

Operating 36.8 (1.4)% Revenues Progress

(1.1)% 75.6%

4,461.2 4,400.0 3,363.6 3,326.8

FY2013/3Q FY2014/3Q FY2013 FY2014E

Operating 128.0 Expenses +3.5%

64.7 Progress

72.7%

+2.4%

3,642.0 3,770.0 2,674.9 2,739.6

FY2013/3Q FY2014/3Q FY2013 FY2014E

Operating

Income Progress

101.5 93.2% 189.2

(14.7)% (23.1)%

688.7 587.1 819.2 630.0

Financial Results for the Nine Months Ended December 31, 2014 Copyright (c) 2015 Nippon Telegraph and Telephone Corporation

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Subsidiaries’ Results (JPN GAAP Consolidated)

NTT DATA Financial Results

(Billions of yen)

FY2014/3Q FY2014E

116.2

Operating 124.5 Progress +8.6% Revenues 73.1%

+13.2%

1,343.7 1,460.0 942.5 1,067.0

FY2013/3Q FY2014/3Q FY2013 FY2014E

93.8

Operating

Expenses 101.6 Progress +7.3% +11.1% 74.1%

1,018.4 1,281.1 1,375.0 916.8

FY2013/3Q FY2014/3Q FY2013 FY2014E

Operating

Income Progress

22.8 57.2% 22.4

+89.0% +35.8%

25.7 48.5 62.5 85.0

Financial Results for the Nine Months Ended December 31, 2014 Copyright (c) 2015 Nippon Telegraph and Telephone Corporation

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Details of Difference Between Consolidated Operating Income and Total Operating Income of

5 Major Subsidiaries

FY2013/3Q

(Billions of yen)

19.8 75.8

Pension (actuarial difference, etc.): 22.1

889.4 NTT (Holding Company): 4.6 Depreciation of engineering facilities: (18.7) 985.1 NTT URBAN DEVELOPMENT (Consolidated): 25.9 Adjustments between operating and non-NTT COMWARE: 0.9 operating items, including eliminations, etc.

NTT FINANCE (Consolidated): 14.0 Outsourcing companies (East): 5.3 Outsourcing companies (West): (5.4) Other companies: 30.5

Total operating income Total operating income of subsidiaries other than Elimination and Consolidated operating the 5 major subsidiaries (excluding the effect of income of 5 major subsidiaries U.S. GAAP dividends received by NTT (Holding Company))

(JPN GAAP) adjustments (U.S. GAAP)

FY2014/3Q

12.2 88.9

Pension (actuarial difference, etc.): 14.2

Depreciation of engineering facilities: (15.6) 910.9 834.2 NTT (Holding Company): 4.6 NTT URBAN DEVELOPMENT (Consolidated): 17.3 Adjustments between operating and non-operating items, including eliminations, etc.

NTT COMWARE: 1.2

NTT FINANCE (Consolidated): 15.7 Outsourcing companies (East): 6.4 Outsourcing companies (West): 4.1 Other companies: 39.3

Total operating income Total operating income of subsidiaries other than Elimination and Consolidated operating the 5 major subsidiaries (excluding the effect of income of 5 major subsidiaries U.S. GAAP dividends received by NTT (Holding Company))

(JPN GAAP) adjustments (U.S. GAAP)

Financial Results for the Nine Months Ended December 31, 2014 Copyright (c) 2015 Nippon Telegraph and Telephone Corporation

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Details of Consolidated Cash Flows

Cash flows from Cash flows from FCF Cash flows from operating activities investing activities (A) + (B) financing activities (A) (B)

Billions of yen

(143.5)

+79.7

(223.2)

+60.9

2,000

1000

0

(1,000)

(2,000)

(1,532.7)

(1,453.0)

1,632.0

1,399.7

90.2

(53.3)

(88.9)

(28.0)

FY2013/3Q

FY2014/3Q

Increase/Decrease from the same period of the previous fiscal year

Financial Results for the Nine Months Ended December 31, 2014 Copyright (c) 2015 Nippon Telegraph and Telephone Corporation

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Appendices


LOGO

 

Appendices

Capital Investment

(Billions of yen)

1,907.5

[1,970.0]*

1,795.7

[1,892.8]* 1,750.0 [1,890.0]*

1,301.3

[1,342.2]*

1,235.8

[1,309.0]* 1,113.3 [1,197.3]*

FY2012/3Q FY2013/3Q FY2014/3Q

FY2012 FY2013 FY2014E

118.4

82.9

64.7

245.4

249.5

540.4

66.8

109.2

95.0

246.1

246.4

472.3

98.9

95.8

74.1

213.9

191.3

439.3

Other

NIT DATA (consolidated)

NIT communications

NIT West

NIT East

NIT DOCOMO (Consolidated)

* Figures in [ ] include investments related to real estate and solar power generation operations.

Financial Results for the Nine Months Ended December 31, 2014 Copyright (c) 2015 Nippon Telegraph and Telephone Corporation

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Shareholder Returns

406.5 (Billions of yen)

Share buybacks Up to

381.7 350.0

290.7

200.0

As of 150.0 Jan. 2015

94.4

FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 2014.11-2015.6

180 (yen)

Dividends per share

170 160

Payout ratio

140 110 120 120

90 38.2%

37.2% 37.6%

32.3% 33.4%

31.2%

19.5% 27.5%

FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014E

Financial Results for the Nine Months Ended December 31, 2014 Copyright (c) 2015 Nippon Telegraph and Telephone Corporation

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Appendices

FY2014/3Q Details of Financial Results (Per Item)

Operating Fixed IP/packet : (11.5) (Billions of yen) Revenues [year-on-year +157.3] Mobile IP/packet : (28.2)

SI revenues and sales

Other : +0.2 of telecommunications equipment

Other revenues Voice related 362.3 services revenues 39.5 61.0 226.5 Systems Integration IP/packet Fixed voice communications Telecommunications services revenues

8,025.2 Mobile voice equipment 8,182.5

Fixed voice : (97.5)

Systems Integration : +307.9 Mobile voice : (129.0) Telecommunications equipment (Fixed-line) : (1.6) Telecommunications equipment (Mobile) : +55.9

FY2013/3Q FY2014/3Q

Operating [year-on-year +231.5]

Expenses

89.8 2.0

Other expenses 177.0 Personnel expenses

33.4

Expenses for purchase Depreciation

7,040.1 of goods and services 7,271.6 expenses and loss on and other expenses disposal of assets

FY2013/3Q FY2014/3Q

Financial Results for the Nine Months Ended December 31, 2014 Copyright (c) 2015 Nippon Telegraph and Telephone Corporation

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Appendices

Details of Consolidated Balance Sheet

March 31, 2014 December 31, 2014

(Billions of yen)

20,284.9 20,642.3

Liabilities Liabilities Assets 9,615.7

Assets 9,334.2 [+281.5]

20,284.9 20,642.3

[+357.3] Interest-Bearing Interest-Bearing Debt Debt 4,862.4

4,200.0 [+662.4]

Liability for Employees’ Liability for Employees’ Depreciable Assets Retirement Benefits

Depreciable Assets Retirement Benefits (property, plant and 1,365.9

(property, plant and 1,327.9 [+38.0]

equipment)

equipment)

Other 8,055.6 Other

8,241.9 25.9

[(186.3)] 26.6[+0.7]

Equity Equity

11,000.0 10,924.8

[+75.2]

Deferred Tax Assets

Deferred Tax

(non-current) Treasury Stock

Assets Treasury Stock

639.8 (416.1) (non-current) (156.9)

[(21.7)] [(259.2)]

661.5

Financial Results for the Nine Months Ended December 31, 2014 Copyright (c) 2015 Nippon Telegraph and Telephone Corporation

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Appendices

Consolidated and Main Subsidiaries’ Financial Results for FY2014/3Q

(Billions of yen)

NTT (1)

NTT

NTT East NTT West NTT Com NTT DOCOMO NTT DATA Consolidated (Holding Company)

Non-Cons olidated Non-Cons olidate d Non-Consolidated Non-Cons olidate d Consolidated Cons olidate d

(U.S. GAAP) (JPN GAAP) (JPN GAAP) (JPN GAAP) (JPN GAAP) (U.S. GAAP) (JPN GAAP)

Operating Revenues 8,182.5 372.1 1,308.5 1,163.4 660.6 3,326.8 1,067.0

Change year-on-year 157.3 (17.1) (11.0) (8.6) (24.7) (36.8) 124.5 (% change) 2.0% (4.4)% (0.8)% (0.7)% (3.6)% (1.1)% 13.2% Forecasts for FY2014 11,010.0 412.0 1,771.0 1,582.0 910.0 4,400.0 1,460.0 (% progress) 74.3% 90.3% 73.9% 73.5% 72.6% 75.6% 73.1%

Operating Expenses 7,271.6 95.3 1,212.5 1,132.4 589.0 2,739.6 1,018.4

Change year-on-year 231.5 (4.8) (36.9) (20.6) (10.3) 64.7 101.6 (% change) 3.3% (4.9)% (3.0)% (1.8)% (1.7)% 2.4% 11.1% Forecasts for FY2014 9,915.0 140.0 1,681.0 1,547.0 807.0 3,770.0 1,375.0 (% progress) 73.3% 68.1% 72.1% 73.2% 73.0% 72.7% 74.1%

Operating Income 910.9 276.8 95.9 30.9 71.5 587.1 48.5

Change year-on-year (74.2) (12.2) 25.9 11.9 (14.4) (101.5) 22.8 (% change) (7.5)% (4.2)% 37.0% 63.2% (16.8)% (14.7)% 89.0% Forecasts for FY2014 1,095.0 272.0 90.0 35.0 103.0 630.0 85.0 (% progress) 83.2% 101.8% 106.6% 88.5% 69.5% 93.2% 57.2%

Income Before (2) 910.2 273.6 110.3 26.8 88.0 595.0 45.3

Income Taxes

Change year-on-year (113.9) (10.1) 20.4 (0.7) (14.3) (108.6) 16.9 (% change) (11.1)% (3.6)% 22.7% (2.8)% (14.0)% (15.4)% 59.5% Forecasts for FY2014 1,075.0 268.0 103.0 28.0 113.0 639.0 75.0 (% progress) 84.7% 102.1% 107.1% 96.0% 77.9% 93.1% 60.5%

(3) (4)

Net Income 449.9 561.2 70.7 16.6 57.6 381.9 21.7

Change year-on-year (34.4) 278.3 12.8 (1.8) (11.4) (48.3) 11.6 (% change) (7.1)% 98.4% 22.2% (9.8)% (16.5)% (11.2)% 114.6% Forecasts for FY2014 529.0 558.0 62.0 19.0 72.0 420.0 37.0 (% progress) 85.1% 100.6% 114.1% 87.6% 80.1% 90.9% 58.8%

(1) NTT has 920 consolidated subsidiaries and accounts for 122 companies under the equity method.

(2) “Income Before Income Taxes” for NTT (Holding Company), NTT East, NTT West, NTT Communications and NTT DATA represents their recurring profits. (3) “Net Income” for NTT Consolidated represents “Net income attributable to NTT, excluding noncontrolling interests.” (4) “Net Income” for NTT DOCOMO represents “Net income attributable to NTT DOCOMO, excluding noncontrolling interests.”

Financial Results for the Nine Months Ended December 31, 2014 Copyright (c) 2015 Nippon Telegraph and Telephone Corporation

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Appendices

Calculation of ARPU

Average monthly revenue per unit, or ARPU, is used to measure average monthly operating revenues attributable to each designated service on a per user basis. In the case of NTT Group’s fixed-line business, ARPU is calculated by dividing revenue items included in the operating revenues of NTT Group’s regional communications business segment, that is, FLET’S Hikari, by the number of Active Subscribers to the relevant services.

In the case of NTT Group’s mobile communications business, ARPU is calculated by dividing revenue items included in operating revenues from its mobile communications business segment, such as revenues from Xi mobile phone services and FOMA mobile phone services, that are incurred consistently each month (i.e., basic monthly charges and voice/packet transmission charges), by the number of Active Subscribers to the relevant services. The calculation of these figures excludes revenues that are not representative of monthly average usage, such as telecommunications equipment sales, activation fees and universal service charges.

NTT believes that its ARPU figures calculated in this way provide useful information regarding the monthly average usage of its subscribers. The revenue items included in the numerators of NTT Group’s ARPU figures are based on its financial results comprising its U.S. GAAP results of operations.

For a complete discussion on the calculation of ARPU, please see the “Supplementary Data for the Nine Months Ended December 31, 2014.”

Notes:

(1) FLET’S Hikari ARPU of NTT East and NTT West is calculated based on revenues from “FLET’S Hikari” (including “FLET’S Hikari” optional services), which are included in operating revenues from IP Services, revenues from monthly charges, call charges and connection device charges for “Hikari Denwa,” and revenues from “FLET’S Hikari” optional services, which are included in Supplementary Business revenues.

- “FLET’S Hikari” includes “B FLET’S,” “FLET’S Hikari Next,” “FLET’S Hikari Light” and “FLET’S Hikari WiFi Access” provided by NTT East, and “B FLET’S,” “FLET’S Hikari Premium,” “FLET’S Hikari Mytown,” “FLET’S Hikari Next,” “FLET’S Hikari Light” and “FLET’S Hikari WiFi Access” provided by NTT West.

(2) For purposes of calculating FLET’S Hikari ARPU, number of subscribers is determined based on the number of “FLET’S Hikari” subscribers, including subscribers to “B FLET’S,” “FLET’S Hikari Next,” “FLET’S Hikari Light” and “FLET’S Hikari WiFi Access” provided by NTT East, and subscribers to “B FLET’S,” “FLET’S Hikari Premium,” “FLET’S Hikari Mytown,” “FLET’S Hikari Next,” “FLET’S Hikari Light” and “FLET’S Hikari WiFi Access” provided by NTT West.

(3) The following is the formula we use to compute ARPU for mobile business conducted by NTT DOCOMO.

Mobile Aggregate ARPU (“Xi”+“FOMA”) = Voice ARPU (“Xi”+“FOMA”) + Packet ARPU (“Xi”+“FOMA”) + Smart ARPU (“Xi”+“FOMA”).

- NTT DOCOMO’s Voice ARPU (“Xi”+“FOMA”) is based on operating revenues related to voice services, such as basic monthly charges and voice communication charges attributable to our “Xi”+“FOMA” services, our Packet ARPU (“Xi”+“FOMA”) is based on operating revenues related to packet services, such as flat monthly fees and packet communication charges attributable to our “Xi”+“FOMA” services, and our Smart ARPU (“Xi”+“FOMA”) is based on operating revenues from a part of Other Operating Revenues attributable to “Xi”+“FOMA” wireless communications services (revenues from content, collection of charges, mobile phone insurance service, advertising and others).

(4) Subscriptions for and revenues from communication module services, “Phone Number Storage,” “Mail Address Storage,” “docomo Business Transceiver” and wholesale telecommunications services and interconnecting telecommunications facilities that are provided to Mobile Virtual Network Operators (MVNOs) are not included in the Mobile Aggregate ARPU calculation.

(5) NTT DOCOMO‘s ARPU calculation methods have been changed from the second quarter of the fiscal year ending March 31, 2015. Accordingly, the ARPU data for the results for the three months ended Jun. 30, 2013 (from Apr. to Jun., 2013), the three months ended Sep. 30, 2013 (from Jul. to Sep., 2013), the three months ended Dec. 31, 2013 (from Oct. to Dec., 2013), the three months ended Mar. 31, 2014 (from Jan. to Mar., 2014), the year ended Mar. 31, 2014 and the three months ended Jun. 30, 2014 (from Apr. to Jun., 2014) have also been changed.

(6) Numbers of active subscribers used in the ARPU calculation of NTT East and NTT West are as below.

- 1Q Results: Sum of number of active subscribers* for each month from April to June

- 2Q Results: Sum of number of active subscribers* for each month from July to September

- 3Q Results: Sum of number of active subscribers* for each month from October to December

- 4Q Results: Sum of number of active subscribers* for each month from January to March

- Nine Month Results: Sum of number of active subscribers* for each month from April to December

- FY Results: Sum of number of active subscribers* for each month from April to March

- FY (Forecast): Sum of the sum of actual number of active subscribers at the end of each month from April to September and the average expected active number of subscribers during the second half of the fiscal year ((number of subscribers at September 30, 2014 + number of expected subscribers at March 31, 2015)/2)x6.

(7)

 

Numbers of active subscribers used in the ARPU calculation of NTT DOCOMO are as below.

- 1Q Results: Sum of number of active subscribers* for each month from April to June

- 2Q Results: Sum of number of active subscribers* for each month from July to September

- 3Q Results: Sum of number of active subscribers* for each month from October to December

- 4Q Results: Sum of number of active subscribers* for each month from January to March

- Nine Month Results: Sum of number of active subscribers* for each month from April to December

- FY Results: Sum of number of active subscribers* for each month from April to March

- FY (Forecast): Sum of expected number of active subscribers* for each month from April to March

(8) Forecasts for the year ending March 31, 2015 have not been changed from those announced in the financial results for the six months ended September 30, 2014.

*Active subscribers = (number of subscribers at end of previous month + number of subscribers at end of the current month)/2

Financial Results for the Nine Months Ended December 31, 2014 Copyright (c) 2015 Nippon Telegraph and Telephone Corporation

—22—

(Billions of yen)


February 6, 2015

FOR IMMEDIATE RELEASE

Financial Statements for the Nine Months Ended December 31, 2014

The financial results of Nippon Telegraph and Telephone East Corporation (NTT East) for the nine months ended December 31, 2014 are presented in the following attachments.

(Attachments)

 

1.   Non-Consolidated Comparative Balance Sheets

 

2.   Non-Consolidated Comparative Statements of Income

 

3.   Business Results (Non-Consolidated Operating Revenues)

For inquiries, please contact:

Mr. Yasuhiro Kawamori or Mr. Chikashi Sakurai

Accounting Section, Finance Division

Nippon Telegraph and Telephone East Corporation

Tel: +81-3-5359-3331

E-mail: kessan_info@sinoa.east.ntt.co.jp


1. Non-Consolidated Comparative Balance Sheets

(Based on accounting principles generally accepted in Japan)

 

      (Millions of yen)  
     March 31, 2014     December 31, 2014     Increase
(Decrease)
 

ASSETS

      

Fixed assets:

      

Fixed assets - telecommunications businesses

      

Property, plant and equipment

      

Machinery and equipment

     474,554        439,305        (35,249

Antenna facilities

     4,325        4,104        (221

Terminal equipment

     45,756        39,394        (6,362

Local line facilities

     862,315        845,671        (16,643

Long-distance line facilities

     4,107        3,772        (335

Engineering facilities

     612,405        601,418        (10,986

Submarine line facilities

     1,421        1,186        (234

Buildings

     438,137        420,973        (17,163

Construction in progress

     19,885        19,660        (225

Other

     259,440        250,303        (9,136

Total property, plant and equipment

     2,722,349        2,625,791        (96,558

Intangible fixed assets

     88,386        82,491        (5,894

Total fixed assets - telecommunications businesses

     2,810,736        2,708,282        (102,453

Investments and other assets

      

Other investments and assets

     213,889        212,094        (1,795

Allowance for doubtful accounts

     (1,030     (956     74   

Total investments and other assets

     212,859        211,137        (1,721

Total fixed assets

     3,023,595        2,919,419        (104,175

Current assets:

      

Cash and bank deposits

     25,765        19,786        (5,978

Notes receivable

     171        15        (155

Accounts receivable, trade

     238,999        245,143        6,144   

Supplies

     33,852        36,157        2,304   

Other current assets

     233,804        245,785        11,981   

Allowance for doubtful accounts

     (622     (582     40   

Total current assets

     531,969        546,305        14,335   
  

 

 

   

 

 

   

 

 

 

TOTAL ASSETS

     3,555,565        3,465,725        (89,839
  

 

 

   

 

 

   

 

 

 

 

- 1 -


     (Millions of yen)  
     March 31, 2014      December 31, 2014     Increase
(Decrease)
 

LIABILITIES

       

Long-term liabilities:

       

Long-term borrowings from parent company

     548,775         545,355        (3,420

Liability for employees’ retirement benefits

     231,328         236,930        5,601   

Reserve for point services

     7,074         11,420        4,345   

Reserve for unused telephone cards

     11,082         10,086        (995

Allowance for environmental measures

     4,511         10,740        6,228   

Asset retirement obligations

     1,110         1,130        20   

Other long-term liabilities

     9,601         9,333        (268

Total long-term liabilities

     813,483         824,995        11,512   

Current liabilities:

       

Current portion of long-term borrowings from parent company

     127,420         7,130        (120,290

Accounts payable, trade

     77,246         40,496        (36,749

Accrued taxes on income

     5,746         7,654     1,908   

Allowance for environmental measures

     —           1,701        1,701   

Asset retirement obligations

     149         —          (149

Other current liabilities

     362,264         373,050        10,786   

Total current liabilities

     572,826         430,033        (142,793
  

 

 

    

 

 

   

 

 

 

TOTAL LIABILITIES

     1,386,310         1,255,029        (131,281
  

 

 

    

 

 

   

 

 

 

NET ASSETS

       

Shareholders’ equity:

       

Common stock

     335,000         335,000        —     

Capital surplus

     1,499,726         1,499,726        —     

Earned surplus

     333,740         373,082        39,341   

Total shareholders’ equity

     2,168,467         2,207,809        39,341   

Unrealized gains (losses), translation adjustments, and others:

       

Net unrealized gains (losses) on securities

     787         2,887        2,099   

Total unrealized gains (losses), translation adjustments, and others

     787         2,887        2,099   
  

 

 

    

 

 

   

 

 

 

TOTAL NET ASSETS

     2,169,255         2,210,696        41,441   
  

 

 

    

 

 

   

 

 

 

TOTAL LIABILITIES AND NET ASSETS

     3,555,565         3,465,725        (89,839
  

 

 

    

 

 

   

 

 

 

 

Note:   *NTT East participates in a consolidated tax return system, which has been adopted by NTT (Holding Company) and its wholly-owned subsidiaries in Japan. However, except for a portion of the calculation of taxes, income taxes have not been calculated on a consolidated basis in the quarterly financial statements.

 

- 2 -


2. Non-Consolidated Comparative Statements of Income

(Based on accounting principles generally accepted in Japan)

 

      (Millions of yen)  
     Nine months ended
December 31, 2013
    Nine months ended
December 31, 2014
    Increase
(Decrease)
    Year ended
March 31, 2014
 

Telecommunications businesses:

        

Operating revenues

     1,224,588        1,217,949 *1      (6,639     1,630,523   

Operating expenses

     1,164,766        1,133,901 *1      (30,864     1,577,823   

Operating income from telecommunications businesses

     59,822        84,047        24,225        52,699   

Supplementary businesses:

        

Operating revenues

     94,987        90,551        (4,436     143,286   

Operating expenses

     84,799        78,669        (6,130     129,271   

Operating income from supplementary businesses

     10,187        11,881        1,693        14,014   

Operating income

     70,009        95,928        25,919        66,714   

Non-operating revenues:

        

Interest income

     52        44        (8     77   

Dividends received

     3,674        6,396        2,722        3,690   

Lease and rental income

     33,331        —          (33,331     44,296   

Gains on sales of fixed assets

     2,486        8,390        5,904        5,973   

Miscellaneous income

     2,130        6,805        4,675        3,991   

Total non-operating revenues

     41,674        21,636        (20,037     58,027   

Non-operating expenses:

        

Interest expenses

     5,508        4,516        (992     7,203   

Lease and rental expenses

     15,532        —          (15,532     23,253   

Miscellaneous expenses

     724        2,705        1,981        2,536   

Total non-operating expenses

     21,765        7,221        (14,543     32,993   

Recurring profit

     89,918        110,343        20,425        91,749   

Special losses

     3,382        7,930        4,547        8,292   

Income before income taxes

     86,535        102,413        15,878        83,457   

Income taxes

     28,659 *2      31,664 *2      3,005        29,501   

Net income

     57,876        70,748        12,872        53,956   

 

Notes:

  *1 “Lease and rental income” and “lease and rental expenses,” which were previously included under non-operating revenues and non-operating expenses, respectively, in the fiscal year ended March 31, 2014, have been reclassified as telecommunications businesses operating revenues and operating expenses for the nine months ended December 31, 2014.
  Telecommunications operating revenues attributable to lease and rental income and operating expenses attributable to lease and rental expenses were 32,507 million yen and 13,770 million yen, respectively, for the nine months ended December 31, 2014.
  *2 NTT East participates in a consolidated tax return system, which has been adopted by NTT (Holding Company) and its wholly-owned subsidiaries in Japan. However, except for a portion of the calculation of taxes, income taxes have not been calculated on a consolidated basis in the quarterly financial statements.

 

- 3 -


3. Business Results (Non-Consolidated Operating Revenues)

(Based on accounting principles generally accepted in Japan)

 

     (Millions of yen)  
     Nine months ended
December 31, 2013
     Nine months ended
December 31, 2014
     Increase
(Decrease)
    Percent
Increase
(Decrease)
    Year ended
March 31, 2014
 

Voice transmission services revenues (excluding IP services revenues)

     393,909         356,307         (37,602     (9.5     518,346   

Monthly charge revenues*

     286,725         262,335         (24,390     (8.5     378,089   

Call rates revenues*

     32,244         27,410         (4,834     (15.0     42,044   

Interconnection call revenues*

     48,354         42,141         (6,213     (12.8     63,210   

IP services revenues

     630,705         629,333         (1,372     (0.2     841,334   

Leased circuit services revenues (excluding IP services revenues)

     88,803         84,746         (4,057     (4.6     117,286   

Telegram services revenues

     11,080         10,433         (647     (5.8     14,951   

Other telecommunications services revenues

     100,087         137,128         37,040        37.0        138,604   
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Telecommunications total revenues

     1,224,588         1,217,949         (6,639     (0.5     1,630,523   
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Supplementary business total revenues

     94,987         90,551         (4,436     (4.7     143,286   
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Total operating revenues

     1,319,575         1,308,500         (11,075     (0.8     1,773,809   
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

 

* Partial listing only

 

- 4 -


February 6, 2015

FOR IMMEDIATE RELEASE

Financial Statements for the Nine Months Ended December 31, 2014

The financial results of Nippon Telegraph and Telephone West Corporation (NTT West) for the nine months ended December 31, 2014 are presented in the following attachments.

(Attachments)

 

1. Non-Consolidated Comparative Balance Sheets

 

2. Non-Consolidated Comparative Statements of Income

 

3. Business Results (Non-Consolidated Operating Revenues)

For inquiries, please contact:

Takashi Sasaki or Ryosuke Yamashita

Accounting Section, Finance Division

Nippon Telegraph and Telephone West Corporation

Tel: +81-6-4793-3141

E-mail: kessan-info@west.ntt.co.jp


1. Non-Consolidated Comparative Balance Sheets

(Based on accounting principles generally accepted in Japan)

 

     (Millions of yen)  
     March 31, 2014     December 31, 2014     Increase
(Decrease)
 

ASSETS

      

Fixed assets:

      

Fixed assets - telecommunications businesses

      

Property, plant and equipment

      

Machinery and equipment

     446,003        415,061        (30,942

Antenna facilities

     6,212        6,158        (54

Terminal equipment

     18,194        17,833        (361

Local line facilities

     956,384        967,615        11,231   

Long-distance line facilities

     2,432        2,231        (201

Engineering facilities

     551,357        541,589        (9,768

Submarine line facilities

     3,067        3,427        359   

Buildings

     363,292        347,913        (15,378

Construction in progress

     17,498        18,419        920   

Other

     224,347        218,982        (5,365

Total property, plant and equipment

     2,588,791        2,539,231        (49,560

Intangible fixed assets

     74,244        69,690        (4,554

Total fixed assets - telecommunications businesses

     2,663,036        2,608,921        (54,114

Investments and other assets

      

Other investments and assets

     161,563        154,987        (6,576

Allowance for doubtful accounts

     (551     (575     (24

Total investments and other assets

     161,012        154,411        (6,600

Total fixed assets

     2,824,048        2,763,333        (60,715

Current assets:

      

Cash and bank deposits

     33,273        23,902        (9,371

Notes receivable

     443        126        (317

Accounts receivable, trade

     201,606        193,464        (8,141

Supplies

     35,234        32,766        (2,467

Other current assets

     170,958        146,697        (24,261

Allowance for doubtful accounts

     (518     (469     48   

Total current assets

     440,998        396,487        (44,510
  

 

 

   

 

 

   

 

 

 

TOTAL ASSETS

     3,265,047        3,159,820        (105,226
  

 

 

   

 

 

   

 

 

 

 

– 1 –


     (Millions of yen)  
     March 31, 2014      December 31, 2014     Increase
(Decrease)
 

LIABILITIES

       

Long-term liabilities:

       

Long-term borrowings from parent company

     884,427         801,627        (82,800

Liability for employees’ retirement benefits

     228,337         234,201        5,863   

Reserve for point services

     7,178         7,123        (54

Reserve for unused telephone cards

     10,480         9,538        (941

Allowance for environmental measures

     5,721         13,694        7,972