FORM 6-K

The total number of units held by “Domestic Individuals, etc.” includes 614,411 units of treasury stock, and the number of “Shares Representing Less Than One Unit” includes 47 shares of treasury stock. 61,441,147 shares of treasury stock are recorded in the shareholders’ register; the actual number of shares of treasury stock as of December 31, 2016 was 61,440,547.

The total number of units held by “Other Domestic Corporations” includes 295 units held in the name of the Japan Securities Depository Center, and the number of “Shares Representing Less Than One Unit” includes 44 shares held in the name of the Japan Securities Depository Center.

There were 186,393 shareholders who only own shares representing less than one unit.

6-K 1 d300456d6k.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, 2017

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 ☒ 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, 2016

On February 10, 2017, 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, 2016. Attached hereto is a copy of the press release and supplementary data relating thereto, both dated February 10, 2017, 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, 2017. 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, 2016 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/ Takashi Ameshima
	Name:	Takashi Ameshima
	Title:	Vice President
		Investor Relations Office

Date: February 10, 2017


Financial Results Release	February 10, 2017
For the Nine Months Ended December 31, 2016	[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	:	Takashi Ameshima, Head of IR, Finance and Accounting Department / TEL +81-3-6838-5481
Scheduled filing date of quarterly securities report	:	February 13, 2017
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, 2016 (April 1, 2016 – December 31, 2016)

Amounts are rounded 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, 2016		8,360,497	(1.6	)%		1,318,554	17.0	%		1,307,197	16.6	%		668,728	10.7	%
Nine months ended December 31, 2015		8,495,360	3.8	%		1,126,582	23.7	%		1,121,168	23.2	%		604,064	34.3	%

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, 2016		325.64	(yen)		—	(yen)
Nine months ended December 31, 2015		286.43	(yen)		—	(yen)


Notes:	1.	Comprehensive income (loss) attributable to NTT:
		For the nine months ended December 31, 2016:	588,306 million yen 12.3%
		For the nine months ended December 31, 2015:	523,808 million yen 3.2%
	2.	NTT conducted a two-for-one stock split of its common stock, with an effective date of July 1, 2015. The figures for Basic Earnings per Share Attributable to NTT have been adjusted to reflect the impact of the stock split as if the stock split had occurred at the beginning of the prior fiscal year.

(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, 2016		21,024,242		11,278,532		8,883,338		42.3	%		4,365.38	(yen)
March 31, 2016		21,035,931		11,240,082		8,833,806		42.0	%		4,214.32	(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, 2016		—		50.00	(yen)		—		60.00	(yen)		110.00	(yen)
Year Ending March 31, 2017		—		60.00	(yen)		—		—			—
Year Ending March 31, 2017 (Forecasts)		—		—			—		60.00	(yen)		120.00	(yen)

Note: Change in dividend forecasts: None

3.	Consolidated Financial Results Forecasts for the Fiscal Year Ending March 31, 2017 (April 1, 2016 – March 31, 2017)


	(Millions of yen, except per share amount)
	Operating Revenues				Operating Income				Income before Income Taxes				Net Income Attributable to NTT				Basic Earnings per Share Attributable to NTT
Year Ending March 31, 2017		11,410,000	(1.1	)%		1,470,000	9.0	%		1,440,000	8.3	%		770,000	4.4	%		376.00	(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, 2017: None

– 1 –

*Notes:

(1)

Change in significant consolidated subsidiaries during the nine months ended December 31, 2016 that resulted in changes in the scope of consolidation: Yes

Newly added: One company (NTT Data Services, L.L.C.)

(For further details, please see “Others” on page 8.)

(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: Yes

(For further details, please see “Others” on page 8.)

(4)

Number of shares outstanding (common stock)


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

		December 31, 2016: 2,096,394,470 shares

		March 31, 2016 : 2,096,394,470 shares

ii. Number of shares of treasury stock:

		December 31, 2016: 61,440,547 shares

		March 31, 2016 : 255,269 shares

iii. Weighted average number of shares outstanding:

		For the nine months ended December 31, 2016 : 2,053,571,790 shares

		For the nine months ended December 31, 2015 : 2,108,972,712 shares



Note:		NTT conducted a two-for-one stock split of its common stock, with an effective date of July 1, 2015. The figures for “Number of shares outstanding (common stock)” have been adjusted to reflect the impact of the stock split as if the stock split had occurred at the beginning of the prior fiscal year.

*	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, 2017, please refer to pages 7 and 23.

On Friday, February 10, 2017, 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.

(Reference)

Non-consolidated Financial Results Forecasts for the Fiscal Year Ending March 31, 2017 (April 1, 2016 – March 31, 2017)


	(Millions of yen, except per share amount)
	Operating Revenues				Operating Income				Recurring Profit				Net Income				Earnings per Share
Year Ending March 31, 2017		475,000	(9.0	)%		341,000	(11.2	)%		337,000	(11.7	)%		290,000	(56.5	)%		142.00	(yen)


Note:	1.	Percentages above represent changes from the previous fiscal year.
	2.	Change in non-consolidated financial results forecasts for the fiscal year ending March 31, 2017: Yes

– 2 –

1. Qualitative Information

(1) Qualitative Information Relating to Consolidated Business Results

i.	Consolidated results

Nine-Month Period Ended December 31, 2016 (April 1, 2016 – December 31, 2016)


	(Billions of yen)
	Nine Months Ended December 31, 2015		Nine Months Ended December 31, 2016		Change			Percent Change
Operating revenues		8,495.4		8,360.5		(134.9	)		(1.6	)%
Operating expenses		7,368.8		7,041.9		(326.8	)		(4.4	)%
Operating income		1,126.6		1,318.6		192.0			17.0	%
Income before income taxes and equity in earnings (losses) of affiliated companies		1,121.2		1,307.2		186.0			16.6	%
Net income attributable to NTT		604.1		668.7		64.7			10.7	%

During the nine months ended December 31, 2016, pursuant to its Medium-Term Management Strategy, adopted in May 2015, entitled “Towards the Next Stage 2.0,” NTT implemented measures to embark on a profit growth track by accelerating its self-transformation towards becoming a “Value Partner.”

NTT Group seeks to expand and establish its global business as a cornerstone of its business operations and to accelerate profit generation through the following initiatives.

Specifically, NTT Group promoted cross-selling through collaboration among its group companies, including businesses related to global networks, cloud migration, and IT outsourcing, and received orders from California State Teachers’ Retirement System (CalSTRS) and others.

In addition, each NTT Group Company has been resolutely engaged in optimizing services and operations and reducing procurement costs by continuously implementing cost reduction measures and, in order to support the above measures, NTT Group aims to strengthen its group governance and risk management, by increasing the transparency of information regarding group management, further unifying group accounting standards and practices, bolstering cash management, and enhancing collaboration within NTT Group’s global subsidiaries.

Furthermore, in addition to the above measures, NTT Group completed the acquisition of over 98% (asset value base) of Dell Services and inherited their business operations. Through this acquisition, NTT intends to expand its business in each industry mainly in North America and enhance its cloud services and BPO services using cutting-edge technology.

NTT Group aimed to enhance profit generation of its domestic network businesses by optimizing capital investments and reducing costs. With regard to optimizing capital investments, NTT worked to improve the efficiency of its facility use and reduce procurement costs, in addition to simplifying and streamlining its network systems, and is in the process of reviewing various topics and initiatives aimed at generating profits.

In the regional communications business segment, NTT promoted initiatives for its “Hikari Collaboration Model” and subscriptions for Hikari access services for the “Hikari Collaboration Model” reached 7.85 million. In the mobile communications business segment, NTT launched the “docomo Child Raising Support Program,” a service which supports families with children. In addition, along with the sales of LTE compatible feature phones, NTT worked to enhance profitability by increasing the sales of its “Kake-hodai &Pake-aeru” billing plan through the launch of the “Kake-hodai Light (for feature phones)” and “Keitai Pack” services, for which subscriptions exceeded 35.0 million subscriptions. Through the above efforts, NTT worked to reduce costs beginning with controlling marketing costs.

The Japanese government has been developing and implementing a variety of policies centered on the Olympic and Paralympic Games Tokyo 2020 and the Japanese government’s “Vitalization of Local Economies” initiative. NTT Group plans to make use of these opportunities to accelerate migration to the B2B2X model and strengthen measures aimed at creating services that will become the standards of the next generation.

– 3 –

Specifically, through the application of “corevo ^TM,” NTT Group’s AI related technology, NTT and Seven and I Holdings Co., Ltd. began a joint experiment that readily offers product information in convenience stores to customers’ smartphones. In addition, NTT and the Kansai Economic Federation began conducting demonstration experiments on tourist information solutions through the combination of robots and digital signage.

As a result of these efforts, NTT Group’s consolidated operating revenues for the nine months ended December 31, 2016 were ¥8,360.5 billion (a decrease of 1.6% from the same period of the previous fiscal year), consolidated operating expenses were ¥7,041.9 billion (a decrease of 4.4% from the same period of the previous fiscal year), consolidated operating income was ¥1,318.6 billion (an increase of 17.0% from the same period of the previous fiscal year), consolidated income before income taxes and equity in earnings (losses) of affiliated companies was ¥1,307.2 billion (an increase of 16.6% from the same period of the previous fiscal year), and net income attributable to NTT was ¥668.7 billion (an increase of 10.7% from the same period of the previous fiscal year).


Notes:	(1)	The consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States.
	(2)	NTT, NTT East, NTT West, NTT Communications, and NTT DOCOMO are Gold Partners (Telecommunications Services) for the Olympic and Paralympic Games Tokyo 2020.

ii.

Segment results

Results by business segment are as follows.

Regional Communications Business Segment

Nine-Month Period Ended December 31, 2016 (April 1, 2016 – December 31, 2016)


	(Billions of yen)
	Nine Months Ended December 31, 2015		Nine Months Ended December 31, 2016		Change			Percent Change
Operating revenues		2,520.2		2,434.8		(85.4	)		(3.4	)%
Operating expenses		2,288.1		2,104.4		(183.7	)		(8.0	)%
Operating income		232.2		330.5		98.3			42.3	%

Operating revenues in the regional communications business segment for the nine-month period ended December 31, 2016 decreased 3.4% from the same period of the previous fiscal year to ¥2,434.8 billion due to, among other things, a decrease in fixed voice-related revenues. On the other hand, operating expenses for the nine-month period ended December 31, 2016 decreased 8.0% from the same period of the previous fiscal year to ¥2,104.4 billion due to efforts to streamline operating expenses, particularly with respect to sales-related expenses in connection with the expansion of the “Hikari Collaboration Model,” in addition to the effect of the change in the depreciation method of property, plant and equipment, among other factors. As a result, segment operating income for the nine-month period ended December 31, 2016 increased 42.3% from the same period of the previous fiscal year to ¥330.5 billion.

Number of subscriptions


	(Thousands of subscriptions)
	As of March 31, 2016		As of December 31, 2016		Change		Percent Change
FLET’S Hikari (including Hikari Collaboration Model)⁽¹⁾		19,259		19,903		644		3.3	%
NTT East		10,666		11,078		411		3.9	%
NTT West		8,593		8,825		233		2.7	%
Hikari Collaboration Model		4,691		7,854		3,163		67.4	%
NTT East		3,077		4,846		1,769		57.5	%
NTT West		1,615		3,008		1,394		86.3	%
Hikari Denwa⁽²⁾		17,374		17,655		281		1.6	%
NTT East		9,123		9,311		189		2.1	%
NTT West		8,252		8,344		92		1.1	%

– 4 –

Notes:

(1)

Number of FLET’S Hikari (including Hikari Collaboration Model) subscribers includes subscribers to “B FLET’S,” “FLET’S Hikari Next,” “FLET’S Hikari Light,” “FLET’S Hikari Lightplus” and “FLET’S Hikari WiFi Access” provided by NTT East, 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, and subscribers to the “Hikari Collaboration Model,” the wholesale provision of services by NTT East and NTT West to service providers.

(2)	Figures for “Hikari Denwa” indicate the number of channels (in thousands), and include wholesale services provided by NTT East and NTT West to service providers.

Long Distance and International Communications Business Segment

Nine-Month Period Ended December 31, 2016 (April 1, 2016 – December 31, 2016)


	(Billions of yen)
	Nine Months Ended December 31, 2015		Nine Months Ended December 31, 2016		Change			Percent Change
Operating revenues		1,675.5		1,570.6		(104.8	)		(6.3	)%
Operating expenses		1,593.2		1,551.9		(41.3	)		(2.6	)%
Operating income		82.2		18.7		(63.5	)		(77.3	)%

Operating revenues in the long distance and international communications business segment for the nine-month period ended December 31, 2016 decreased 6.3% from the same period of the previous fiscal year to ¥1,570.6 billion. This decrease was due to, among other things, a decrease in fixed voice-related revenues and the impact of exchange rate fluctuations on NTT’s overseas businesses, partially offset by an increase in IP/packet communications revenues due to the expansion of the “OCN Hikari” service. On the other hand, operating expenses for the nine-month period ended December 31, 2016 decreased 2.6% from the same period of the previous fiscal year to ¥1,551.9 billion due to efforts to streamline expenses such as sales-related expenses, which was partially offset by the recording of goodwill impairment losses of NTT Group’s global subsidiaries. As a result, segment operating income for the nine-month period ended December 31, 2016 decreased 77.3% from the same period of the previous fiscal year to ¥18.7 billion.

Mobile Communications Business Segment

Nine-Month Period Ended December 31, 2016 (April 1, 2016 – December 31, 2016)


	(Billions of yen)
	Nine Months Ended December 31, 2015		Nine Months Ended December 31, 2016		Change			Percent Change
Operating revenues		3,383.5		3,469.2		85.7			2.5	%
Operating expenses		2,700.5		2,629.9		(70.6	)		(2.6	)%
Operating income		683.0		839.3		156.3			22.9	%

Despite a decline in revenues from sales of equipment, operating revenues for the mobile communications business segment for the nine-month period ended December 31, 2016 increased 2.5% from the same period of the previous fiscal year to ¥3,469.2 billion due to a recovery in IP/packet communications revenues resulting from an increase in the number of subscribers to “Kake-hodai & Pake-aeru” and “docomo Hikari,” as well as an increase in revenues from “dmarket” services and from the Smart Life area. On the other hand, despite an increase in revenue-linked expenses in the “docomo Hikari” and Smart Life areas, operating expenses for the nine-month period ended December 31, 2016 decreased 2.6% from the same period of the previous fiscal year to ¥2,629.9 billion due to a decrease in the cost of equipment sold, efforts to streamline costs, and the effect of the change in depreciation method of property, plant and equipment. As a result, segment operating income for the nine-month period ended December 31, 2016 increased 22.9% from the same period of the previous fiscal year to ¥839.3 billion.

Number of subscriptions


	(Thousands of subscriptions)
	As of March 31, 2016		As of December 31, 2016		Change			Percent Change
Mobile phone services		70,964		73,588		2,624			3.7	%
“Kake-hodai & Pake-aeru”		29,704		35,198		5,494			18.5	%
LTE(Xi) services		38,679		42,671		3,992			10.3	%
FOMA services		32,285		30,917		(1,368	)		(4.2	)%

Note:

The number of Mobile phone services subscribers (including LTE (Xi) and FOMA services) includes subscriptions to communication module services.

– 5 –

Data Communications Business Segment

Nine-Month Period Ended December 31, 2016 (April 1, 2016 – December 31, 2016)


	(Billions of yen)
	Nine Months Ended December 31, 2015		Nine Months Ended December 31, 2016		Change			Percent Change
Operating revenues		1,147.8		1,164.6		16.9			1.5	%
Operating expenses		1,073.8		1,097.6		23.8			2.2	%
Operating income		74.0		67.1		(7.0	)		(9.4	)%

Despite the impact of exchange rate fluctuations on NTT’s overseas businesses, operating revenues in the data communications business segment for the nine-month period ended December 31, 2016 increased 1.5% from the same period of the previous fiscal year to ¥1,164.6 billion due to, among other things, expansion of NTT’s domestic businesses. On the other hand, operating expenses for the nine-month period ended December 31, 2016 increased 2.2% from the same period of the previous fiscal year to ¥1,097.6 billion due to, among other things, an increase in revenue-linked expenses and the temporary effect of M&A related expenses. As a result, segment operating income for the nine-month period ended December 31, 2016 decreased 9.4% from the same period of the previous fiscal year to ¥67.1 billion.

Other Business Segment

Nine-Month Period Ended December 31, 2016 (April 1, 2016 – December 31, 2016)


	(Billions of yen)
	Nine Months Ended December 31, 2015		Nine Months Ended December 31, 2016		Change		Percent Change
Operating revenues		872.7		889.9		17.2		2.0	%
Operating expenses		826.6		830.6		4.0		0.5	%
Operating income		46.2		59.3		13.1		28.5	%

Operating revenues in the other business segment for the nine-month period ended December 31, 2016 increased 2.0% from the same period of the previous fiscal year to ¥889.9 billion due to an increase in revenues of NTT Group’s real estate business, among other things. On the other hand, operating expenses for the nine-month period ended December 31, 2016 increased 0.5% from the same period of the previous fiscal year to ¥830.6 billion as a result of an increase in revenue-linked expenses. As a result, segment operating income for the nine-month period ended December 31, 2016 increased 28.5% from the same period of the previous fiscal year to ¥59.3 billion.

– 6 –

(2) Qualitative Information Relating to Consolidated Financial Position

Net cash provided by operating activities for the nine-month period ended December 31, 2016 increased ¥43.7 billion (2.6%) from the same period of the previous fiscal year to ¥1,715.8 billion. This increase was due to, among other factors, an increase in operating income.

Net cash used in investing activities increased ¥297.5 billion (22.3%) from the same period of the previous fiscal year to ¥1,630.9 billion. This increase was due to, among other factors, an increase in capital investments.

Net cash used in financing activities increased ¥39.2 billion (8.6%) from the same period of the previous fiscal year to ¥492.9 billion. This increase was due to, among other factors, an increase in stock repurchases by NTT and an increase in stock repurchases by NTT’s subsidiaries.

As a result of the above, NTT Group’s consolidated cash and cash equivalents as of December 31, 2016 totaled ¥664.8 billion, a decrease of ¥423.4 billion (38.9%) from the end of the previous fiscal year.


	(Billions of yen)
	Nine Months Ended December 31, 2015			Nine Months Ended December 31, 2016			Change			Percent Change
Cash flows provided by operating activities		1,672.1			1,715.8			43.7			2.6	%
Cash flows used in investing activities		(1,333.4	)		(1,630.9	)		(297.5	)		(22.3	)%
Cash flows used in financing activities		(453.8	)		(492.9	)		(39.2	)		(8.6	)%

(3) Qualitative Information Relating to Consolidated Results Forecasts

There are no changes to the consolidated results forecasts for the fiscal year ending March 31, 2017 announced on November 11, 2016. For the assumptions used in the consolidated results forecasts and other related matters, please see page 23.

– 7 –

2. OTHERS

(1)	Change in significant consolidated subsidiaries during the nine months ended December 31, 2016, that resulted in changes in the scope of consolidation: Yes

On November 2, 2016 (U.S. time), NTT Group completed the acquisition of over 98% (asset value base) of Dell Services and inherited their business operations. As a result, NTT DATA Services, L.L.C. became a specified subsidiary of NTT and was included in the scope of NTT’s consolidated subsidiaries beginning with the nine months ended December 31, 2016.

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

(3)	Change of accounting policy: Yes

Change in depreciation method

NTT and its subsidiaries in Japan traditionally used the declining-balance method for calculating depreciation of property, plant, and equipment. Effective April 1, 2016, NTT and its subsidiaries adopted the straight-line method of depreciation.

As NTT Group plans to complete the expansion of its service areas for fiber-optic services and LTE services in the network business, it has been shifting the focus of its capital investments to improving the efficiency in using facilities while maintaining the current functionality. With respect to network services, NTT has started providing the “Hikari Collaboration Model,” the wholesale provision of fiber-optic access services, which can be used by customers of both fixed-line communications services and mobile communications services in the long-term. Through these efforts, NTT expects the stable usage of property, plant, and equipment going forward.

For these reasons, NTT believes that the straight-line depreciation method better reflects the pattern of consumption of the future benefits to be derived from those assets being depreciated.

The effect of the change in the depreciation method is recognized prospectively as a change in the accounting estimate pursuant to FASB ASC-250, “Accounting Changes and Error Corrections.”

In line with the change in the depreciation method, NTT reviewed the residual carrying amount of property, plant, and equipment and other necessary items and made changes where necessary.

As a result of the change in the depreciation method, depreciation expenses on a consolidated basis for the nine and three months ended December 31, 2016 decreased by ¥185,322 million and ¥58,659 million, respectively. Consolidated net income attributable to NTT and consolidated basic net income attributable to NTT per share for the nine and three months ended December 31, 2016 increased by ¥101,854 million and ¥31,037 million, and ¥49.60 and ¥15.24, respectively.

Change in Fiscal Year End of Certain Subsidiaries

As of April 1, 2016, certain of NTT’s consolidated subsidiaries changed their fiscal year ends from December 31 to March 31, thereby eliminating a three-month discrepancy between their fiscal year ends and NTT’s fiscal year end in NTT’s quarterly financial statements. The elimination of this discrepancy was applied as a change in accounting policy. NTT did not make any retrospective adjustments to its financial statements as these changes did not have a material impact on the consolidated financial statements for the nine months ended December 31, 2015 or the year ended March 31, 2016. As a result of this change, NTT’s retained earnings, accumulated other comprehensive income (loss) and noncontrolling interests have decreased by ¥214 million, ¥1,454 million and ¥1,408 million, respectively, in each case as of the beginning of the current fiscal year. In addition, the change in cash and cash equivalents resulting from this change in fiscal year end is presented in the consolidated statements of cash flows under “Increase (decrease) in cash and cash equivalents due to change in fiscal year end of consolidated subsidiaries.”

– 8 –

3. CONSOLIDATED FINANCIAL STATEMENTS

(1) Consolidated Balance Sheets


	Millions of yen
	March 31, 2016			December 31, 2016			Increase (Decrease)
ASSETS
Current assets:
Cash and cash equivalents	¥	1,088,275		¥	664,835		¥	(423,440	)
Short-term investments		33,076			76,430			43,354
Notes and accounts receivable, trade		2,733,116			2,819,785			86,669
Allowance for doubtful accounts		(45,236	)		(51,995	)		(6,759	)
Accounts receivable, other		473,192			513,836			40,644
Inventories		414,581			436,893			22,312
Prepaid expenses and other current assets		469,529			669,999			200,470
Deferred income taxes		260,446			229,758			(30,688	)

Total current assets		5,426,979			5,359,541			(67,438	)

Property, plant and equipment:
Telecommunications equipment		11,586,812			11,339,964			(246,848	)
Telecommunications service lines		15,870,097			15,991,347			121,250
Buildings and structures		6,069,437			6,125,882			56,445
Machinery, vessels and tools		1,996,898			2,026,534			29,636
Land		1,273,209			1,283,818			10,609
Construction in progress		382,196			442,097			59,901

		37,178,649			37,209,642			30,993
Accumulated depreciation		(27,626,728	)		(27,666,193	)		(39,465	)

Net property, plant and equipment		9,551,921			9,543,449			(8,472	)


Investments and other assets:
Investments in affiliated companies		515,716			480,591			(35,125	)
Marketable securities and other investments		474,247			485,769			11,522
Goodwill		1,229,208			1,279,042			49,834
Software		1,212,482			1,182,624			(29,858	)
Other intangible assets		391,977			450,737			58,760
Other assets		1,486,840			1,481,073			(5,767	)
Deferred income taxes		746,561			761,416			14,855

Total investments and other assets		6,057,031			6,121,252			64,221

Total assets	¥	21,035,931		¥	21,024,242		¥	(11,689	)

– 9 –


	Millions of yen
	March 31, 2016			December 31, 2016			Increase (Decrease)
LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings	¥	129,656		¥	361,739		¥	232,083
Current portion of long-term debt		476,777			680,010			203,233
Accounts payable, trade		1,572,797			1,220,203			(352,594	)
Current portion of obligations under capital leases		14,711			15,081			370
Accrued payroll		430,248			387,734			(42,514	)
Accrued taxes on income		249,356			143,625			(105,731	)
Accrued consumption tax		83,481			100,796			17,315
Advances received		290,132			317,402			27,270
Deposits received		62,307			298,464			236,157
Other		431,663			431,511			(152	)

Total current liabilities		3,741,128			3,956,565			215,437

Long-term liabilities:
Long-term debt (excluding current portion)		3,546,203			3,249,438			(296,765	)
Obligations under capital leases (excluding current portion)		27,630			25,606			(2,024	)
Liability for employees’ retirement benefits		1,688,611			1,726,582			37,971
Accrued liabilities for point programs		89,003			85,438			(3,565	)
Deferred income taxes		166,547			164,794			(1,753	)
Other		491,630			480,596			(11,034	)

Total long-term liabilities		6,009,624			5,732,454			(277,170	)

Redeemable noncontrolling interests		45,097			56,691			11,594

Equity:
NTT shareholders’ equity
Common stock, no par value		937,950			937,950			—
Additional paid-in capital		2,879,560			2,868,399			(11,161	)
Retained earnings		5,074,234			5,494,755			420,521
Accumulated other comprehensive income (loss)		(57,055	)		(138,931	)		(81,876	)
Treasury stock, at cost		(883	)		(278,835	)		(277,952	)

Total NTT shareholders’ equity		8,833,806			8,883,338			49,532

Noncontrolling interests		2,406,276			2,395,194			(11,082	)

Total equity		11,240,082			11,278,532			38,450

Total liabilities and equity	¥	21,035,931		¥	21,024,242		¥	(11,689	)

– 10 –

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

NINE-MONTH PERIOD ENDED DECEMBER 31

Consolidated Statements of Income


	Millions of yen
	2015			2016			Increase (Decrease)
Operating revenues:
Fixed voice related services	¥	994,477		¥	919,161		¥	(75,316	)
Mobile voice related services		624,583			651,378			26,795
IP / packet communications services		2,819,532			2,842,376			22,844
Sale of telecommunications equipment		725,765			650,100			(75,665	)
System integration		2,212,240			2,123,736			(88,504	)
Other		1,118,763			1,173,746			54,983

		8,495,360			8,360,497			(134,863	)

Operating expenses:
Cost of services (excluding items shown separately below)		1,733,371			1,751,417			18,046
Cost of equipment sold (excluding items shown separately below)		699,493			654,772			(44,721	)
Cost of system integration (excluding items shown separately below)		1,577,673			1,496,570			(81,103	)
Depreciation and amortization		1,317,130			1,082,890			(234,240	)
Impairment losses
Goodwill		—			53,294			53,294
Other		6,001			12,698			6,697
Selling, general and administrative expenses		2,035,110			1,990,302			(44,808	)

		7,368,778			7,041,943			(326,835	)

Operating income		1,126,582			1,318,554			191,972

Other income (expenses):
Interest and amortization of bond discounts and issue costs		(32,759	)		(28,168	)		4,591
Interest income		13,253			13,176			(77	)
Other, net		14,092			3,635			(10,457	)

		(5,414	)		(11,357	)		(5,943	)

Income before income taxes and equity in earnings (losses) of affiliated companies		1,121,168			1,307,197			186,029

Income tax expense (benefit):
Current		361,071			369,479			8,408
Deferred		(44,969	)		55,362			100,331

		316,102			424,841			108,739

Income before equity in earnings (losses) of affiliated companies		805,066			882,356			77,290

Equity in earnings (losses) of affiliated companies		6,160			14,247			8,087

Net income		811,226			896,603			85,377

Less – Net income attributable to noncontrolling interests		207,162			227,875			20,713

Net income attributable to NTT	¥	604,064		¥	668,728		¥	64,664


*Per share of common stock:**
Weighted average number of shares outstanding (Shares)		2,108,972,712			2,053,571,790
Net income attributable to NTT (Yen)	¥	286.43		¥	325.64

*	“Per share of common stock” figures for the nine months ended December 31, 2015 have been adjusted to reflect the two-for-one stock split carried out on July 1, 2015.

– 11 –

Consolidated Statements of Comprehensive Income


	Millions of yen
	2015			2016			Increase (Decrease)
Net income	¥	811,226		¥	896,603		¥	85,377
Other comprehensive income (loss), net of tax:
Unrealized gain (loss) on securities		(21,679	)		1,117			22,796
Unrealized gain (loss) on derivative instruments		(2,714	)		(2,415	)		299
Foreign currency translation adjustments		(70,289	)		(97,527	)		(27,238	)
Pension liability adjustments		796			8,173			7,377
Total other comprehensive income (loss)		(93,886	)		(90,652	)		3,234
Total comprehensive income (loss)		717,340			805,951			88,611
Less – Comprehensive income attributable to noncontrolling interests		193,532			217,645			24,113

Total comprehensive income (loss) attributable to NTT	¥	523,808		¥	588,306		¥	64,498

– 12 –

THREE-MONTH PERIOD ENDED DECEMBER 31

Consolidated Statements of Income


	Millions of yen
	2015			2016			Increase (Decrease)
Operating revenues:
Fixed voice related services	¥	326,908		¥	299,845		¥	(27,063	)
Mobile voice related services		216,851			221,774			4,923
IP / packet communications services		944,229			941,008			(3,221	)
Sale of telecommunications equipment		261,967			227,026			(34,941	)
System integration		774,941			726,665			(48,276	)
Other		381,506			419,851			38,345

		2,906,402			2,836,169			(70,233	)

Operating expenses:
Cost of services (excluding items shown separately below)		584,265			598,020			13,755
Cost of equipment sold (excluding items shown separately below)		268,380			248,331			(20,049	)
Cost of system integration (excluding items shown separately below)		543,197			510,321			(32,876	)
Depreciation and amortization		445,491			366,417			(79,074	)
Impairment losses
Goodwill		—			48,823			48,823
Other		2,370			2,501			131
Selling, general and administrative expenses		669,581			669,686			105

		2,513,284			2,444,099			(69,185	)

Operating income		393,118			392,070			(1,048	)

Other income (expenses):
Interest and amortization of bond discounts and issue costs		(10,695	)		(8,388	)		2,307
Interest income		4,516			4,555			39
Other, net		16,810			22,055			5,245

		10,631			18,222			7,591

Income before income taxes and equity in earnings (losses) of affiliated companies		403,749			410,292			6,543

Income tax expense (benefit):
Current		121,805			122,801			996
Deferred		(33,008	)		20,596			53,604

		88,797			143,397			54,600

Income before equity in earnings (losses) of affiliated companies		314,952			266,895			(48,057	)

Equity in earnings (losses) of affiliated companies		(1,352	)		4,182			5,534

Net income		313,600			271,077			(42,523	)

Less – Net income attributable to noncontrolling interests		86,855			78,445			(8,410	)

Net income attributable to NTT	¥	226,745		¥	192,632		¥	(34,113	)


Per share of common stock:
Weighted average number of shares outstanding (Shares)		2,096,267,098			2,036,936,296
Net income attributable to NTT (Yen)	¥	108.17		¥	94.57

– 13 –

Consolidated Statements of Comprehensive Income


	Millions of yen
	2015			2016			Increase (Decrease)
Net income	¥	313,600		¥	271,077		¥	(42,523	)
Other comprehensive income (loss), net of tax:
Unrealized gain (loss) on securities		2,477			19,419			16,942
Unrealized gain (loss) on derivative instruments		(1,865	)		(406	)		1,459
Foreign currency translation adjustments		(38,129	)		81,346			119,475
Pension liability adjustments		(311	)		2,361			2,672
Total other comprehensive income (loss)		(37,828	)		102,720			140,548
Total comprehensive income (loss)		275,772			373,797			98,025
Less – Comprehensive income attributable to noncontrolling interests		80,919			104,680			23,761

Total comprehensive income (loss) attributable to NTT	¥	194,853		¥	269,117		¥	74,264

– 14 –

(3) Consolidated Statements of Cash Flows

NINE-MONTH PERIOD ENDED DECEMBER 31


	Millions of yen
	2015			2016			Increase (Decrease)
Cash flows from operating activities:
Net income	¥	811,226		¥	896,603		¥	85,377
Adjustments to reconcile net income to net cash provided by operating activities -
Depreciation and amortization		1,317,130			1,082,890			(234,240	)
Impairment losses		6,001			65,992			59,991
Deferred taxes		(44,969	)		55,362			100,331
Losses on disposals of property, plant and equipment		51,667			52,359			692
Gains on sales of property, plant and equipment		(10,734	)		(15,488	)		(4,754	)
Equity in (earnings) losses of affiliated companies		(6,160	)		(14,247	)		(8,087	)
(Increase) decrease in notes and accounts receivable, trade		(124,105	)		(73,928	)		50,177
(Increase) decrease in inventories		(109,244	)		(48,648	)		60,596
(Increase) decrease in other current assets		(82,661	)		(141,477	)		(58,816	)
Increase (decrease) in accounts payable, trade and accrued payroll		(272,498	)		(232,575	)		39,923
Increase (decrease) in accrued consumption tax		(42,449	)		19,917			62,366
Increase (decrease) in advances received		46,444			39,665			(6,779	)
Increase (decrease) in accrued taxes on income		59,632			(111,666	)		(171,298	)
Increase (decrease) in other current liabilities		41,649			34,197			(7,452	)
Increase (decrease) in liability for employees’ retirement benefits		45,775			38,421			(7,354	)
Increase (decrease) in other long-term liabilities		(13,680	)		14,007			27,687
Other		(963	)		54,387			55,350

Net cash provided by operating activities	¥	1,672,061		¥	1,715,771		¥	43,710

– 15 –


	Millions of yen
	2015			2016			Increase (Decrease)
Cash flows from investing activities:
Payments for property, plant and equipment	¥	(935,828	)	¥	(963,526	)	¥	(27,698	)
Payments for intangibles		(267,884	)		(289,330	)		(21,446	)
Proceeds from sales of property, plant and equipment		37,295			24,531			(12,764	)
Payments for purchases of non-current investments		(41,404	)		(37,325	)		4,079
Proceeds from sales and redemptions of non-current investments		46,312			47,739			1,427
Acquisitions of subsidiaries, net of cash acquired		(119,632	)		(318,334	)		(198,702	)
Payments for purchases of short-term investments		(18,380	)		(135,628	)		(117,248	)
Proceeds from redemptions of short-term investments		17,542			92,695			75,153
Other		(51,453	)		(51,735	)		(282	)

Net cash used in investing activities		(1,333,432	)		(1,630,913	)		(297,481	)


Cash flows from financing activities:
Proceeds from issuance of long-term debt		365,932			159,613			(206,319	)
Payments for settlement of long-term debt		(371,625	)		(271,613	)		100,012
Proceeds from issuance of short-term debt		3,512,490			3,499,192			(13,298	)
Payments for settlement of short-term debt		(3,609,513	)		(3,269,802	)		339,711
Dividends paid		(200,182	)		(247,993	)		(47,811	)
Proceeds from sale of (payments for acquisition of) treasury stock, net		(93,871	)		(278,028	)		(184,157	)
Acquisitions of shares of subsidiaries from noncontrolling interests		(7,710	)		(155,124	)		(147,414	)
Other		(49,313	)		70,810			120,123

Net cash used in financing activities		(453,792	)		(492,945	)		(39,153	)

Effect of exchange rate changes on cash and cash equivalents		(1,568	)		(12,715	)		(11,147	)

Net increase (decrease) in cash and cash equivalents		(116,731	)		(420,802	)		(304,071	)

Cash and cash equivalents at beginning of period		849,174			1,088,275			239,101

Increase (decrease) in cash and cash equivalents due to change in fiscal year end of consolidated subsidiaries		2,028			(2,638	)		(4,666	)

Cash and cash equivalents at end of period	¥	734,471		¥	664,835		¥	(69,636	)

– 16 –

(4) Going Concern Assumption

None

(5) Business Segments

NINE-MONTH PERIOD ENDED DECEMBER 31

1.	Operating revenues


	(Millions of yen)
	2015			2016			Increase (Decrease)
Regional communications business
External customers	¥	2,154,156		¥	2,019,725		¥	(134,431	)
Intersegment		366,079			415,117			49,038

Total		2,520,235			2,434,842			(85,393	)

Long distance and international communications business
External customers		1,612,558			1,500,011			(112,547	)
Intersegment		62,892			70,630			7,738

Total		1,675,450			1,570,641			(104,809	)

Mobile communications business
External customers		3,350,876			3,432,054			81,178
Intersegment		32,625			37,194			4,569

Total		3,383,501			3,469,248			85,747

Data communications business
External customers		1,076,347			1,088,781			12,434
Intersegment		71,441			75,857			4,416

Total		1,147,788			1,164,638			16,850

Other business
External customers		301,423			319,926			18,503
Intersegment		571,319			569,995			(1,324	)

Total		872,742			889,921			17,179

Elimination		(1,104,356	)		(1,168,793	)		(64,437	)

Consolidated total	¥	8,495,360		¥	8,360,497		¥	(134,863	)


2. Segment profit

	(Millions of yen)
	2015			2016			Increase (Decrease)
Segment profit
Regional communications business	¥	232,179		¥	330,463		¥	98,284
Long distance and international communications business		82,225			18,696			(63,529	)
Mobile communications business		683,021			839,336			156,315
Data communications business		74,032			67,063			(6,969	)
Other business		46,164			59,310			13,146

Total segment profit		1,117,621			1,314,868			197,247

Elimination		8,961			3,686			(5,275	)

Consolidated total	¥	1,126,582		¥	1,318,554		¥	191,972

– 17 –

THREE-MONTH PERIOD ENDED DECEMBER 31

1.	Operating revenues


	(Millions of yen)
	2015			2016			Increase (Decrease)
Regional communications business
External customers	¥	713,006		¥	667,608		¥	(45,398	)
Intersegment		126,659			146,801			20,142

Total		839,665			814,409			(25,256	)

Long distance and international communications business
External customers		555,991			504,408			(51,583	)
Intersegment		22,219			27,388			5,169

Total		578,210			531,796			(46,414	)

Mobile communications business
External customers		1,157,153			1,167,597			10,444
Intersegment		11,320			13,615			2,295

Total		1,168,473			1,181,212			12,739

Data communications business
External customers		375,703			375,191			(512	)
Intersegment		26,372			27,391			1,019

Total		402,075			402,582			507

Other business
External customers		104,549			121,365			16,816
Intersegment		200,433			200,948			515

Total		304,982			322,313			17,331

Elimination		(387,003	)		(416,143	)		(29,140	)

Consolidated total	¥	2,906,402		¥	2,836,169		¥	(70,233	)


2. Segment profit

	(Millions of yen)
	2015			2016			Increase (Decrease)
Segment profit
Regional communications business	¥	77,568		¥	98,216		¥	20,648
Long distance and international communications business		34,625			(23,484	)		(58,109	)
Mobile communications business		221,855			255,598			33,743
Data communications business		35,847			31,175			(4,672	)
Other business		18,529			29,619			11,090

Total segment profit		388,424			391,124			2,700

Elimination		4,694			946			(3,748	)

Consolidated total	¥	393,118		¥	392,070		¥	(1,048	)

As indicated in “2(3) Change of accounting policy,” effective April 1, 2016, NTT and its subsidiaries in Japan adopted the straight-line method of depreciation and made changes to the residual carrying amount of property, plant, and equipment where necessary.

As a result of the change in depreciation method, segment profit on a consolidated basis for the nine months ended December 31, 2016 increased by ¥66,632 million for “Regional communications business,” ¥5,788 million for “Long distance and international communications business,” ¥109,236 million for “Mobile communications business,” ¥3,977 million for “Other,” decreased by ¥311 million for “Data communications business,” and increased by ¥185,322 million for “total.” Segment profit on a consolidated basis for the three months ended December 31, 2016 increased by ¥15,411 million for “Regional communications business,” ¥1,434 million for “Long distance and international communications business,” ¥39,806 million for “Mobile communications business,” ¥218 million for “Data communications business,” ¥1,790 million for “Other,” and ¥58,659 million for “total.”

– 18 –

(6) NTT Shareholders’ Equity

1. Dividends

Cash dividends paid during the nine months ended December 31, 2016 were as follows:


Resolution		The shareholders’ meeting on June 24, 2016
Class of shares		Common stock
Source of dividends		Retained earnings
Total cash dividends paid		¥125,768 million
Cash dividends per share		¥60
Record date		March 31, 2016
Date of payment		June 27, 2016


Resolution		The Board of Directors’ meeting on November 11, 2016
Class of shares		Common stock
Source of dividends		Retained earnings
Total cash dividends paid		¥122,225 million
Cash dividends per share		¥60
Record date		September 30, 2016
Date of payment		December 12, 2016

2. Treasury stock

On May 13, 2016, the board of directors resolved that NTT may acquire up to 68 million shares of its outstanding common stock for an amount in total not exceeding ¥350 billion from May 16, 2016 through March 31, 2017. Based on this resolution, NTT repurchased 59,038,100 shares of its common stock at ¥267,384 million on June 14, 2016 using the ToSTNeT-3, and concluded the repurchase of its common stock authorized by board of directors’ resolution.

On December 12, 2016, the board of directors resolved that NTT may acquire up to 33 million shares of its outstanding common stock for an amount in total not exceeding ¥150 billion from December 13, 2016 through June 30, 2017. Based on this resolution, NTT repurchased 2,120,700 shares of its common stock for a total purchase price of ¥10,442 million in December 2016.

NTT also repurchased 7,861,900 shares of its common stock for a total purchase price of ¥39,558 million in January 2017.

(7) Additional Information

Goodwill impairment

As a result of the annual impairment test conducted for the fiscal year ending March 31, 2017, a goodwill impairment loss of ¥48,823 million was recognized during the nine months ended December 31, 2016 for goodwill attributable to the Dimension Data reporting unit in the long distance and international communications business segment. The fair value of the reporting unit was determined using the discount cashflow method.

(8) Subsequent events

For information on NTT’s repurchase of its common stock, see Note 6.

– 19 –

4. (Reference)

NON-CONSOLIDATED FINANCIAL STATEMENTS

(1) Non-Consolidated Balance Sheets

(Based on accounting principles generally accepted in Japan)


	Millions of yen
	March 31, 2016		December 31, 2016
ASSETS
Current assets:
Cash and bank deposits		119		1,700
Accounts receivable, trade		1,573		541
Supplies		337		291
Subsidiary deposits		177,796		—
Other		371,541		489,346

Total current assets		551,369		491,879

Fixed assets:
Property, plant and equipment		150,044		142,606
Intangible fixed assets		16,609		12,681
Investments and other assets
Investments in subsidiaries and affiliated companies		5,083,451		5,069,680
Long-term loans receivable to subsidiaries		1,211,416		1,080,894
Other		39,171		37,403

Total investments and other assets		6,334,039		6,187,977

Total fixed assets		6,500,693		6,343,266

TOTAL ASSETS		7,052,062		6,835,145


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.”

– 20 –

(Reference)


	Millions of yen
	March 31, 2016			December 31, 2016
LIABILITIES
Current liabilities:
Accounts payable, trade		709			36
Current portion of corporate bonds		170,000			229,722
Current portion of long-term borrowings		106,600			218,600
Short-term borrowings		—			3,243
Accrued taxes on income		601			17,745
Deposits received from subsidiaries		54,113			74,130
Other		24,669			33,740

Total current liabilities		356,693			577,218

Long-term liabilities:
Corporate bonds		686,391			556,706
Long-term borrowings		1,205,874			1,075,074
Long-term borrowings from subsidiaries		50,000			100,000
Liability for employees’ retirement benefits		31,233			32,833
Asset retirement obligations		1,405			1,426
Other		2,540			3,599

Total long-term liabilities		1,977,445			1,769,639

TOTAL LIABILITIES		2,334,138			2,346,857

NET ASSETS
Shareholders’ equity:
Common stock		937,950			937,950
Capital surplus		2,672,826			2,672,826
Earned surplus		1,108,698			1,157,723
Treasury stock		(883	)		(278,835	)

Total shareholders’ equity		4,718,591			4,489,664

Unrealized gains (losses), translation adjustments, and others:
Net unrealized gains (losses) on securities		(666	)		(1,376	)

Total unrealized gains (losses), translation adjustments, and others		(666	)		(1,376	)

TOTAL NET ASSETS		4,717,924			4,488,287

TOTAL LIABILITIES AND NET ASSETS		7,052,062			6,835,145


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)

(2) Non-Consolidated Statements of Income

NINE-MONTH PERIOD ENDED DECEMBER 31

(Based on accounting principles generally accepted in Japan)


	Millions of yen
	2015		2016
Operating revenues		386,749		440,604
Operating expenses		93,074		91,364

Operating income		293,675		349,239

Non-operating revenues:
Interest income		11,702		9,453
Lease and rental income		7,894		7,826
Miscellaneous income		890		829

Total non-operating revenues		20,487		18,108

Non-operating expenses:
Interest expenses		9,594		8,897
Corporate bond interest expenses		9,358		7,538
Miscellaneous expenses		4,008		4,921

Total non-operating expenses		22,960		21,356

Recurring profit		291,202		345,990

Special losses		—		48,310

Income before income taxes		291,202		297,680

Income taxes		748		661

Net income		290,454		297,018


(Reference) Major components of operating revenues
Dividends received		288,733		343,634
Revenues from group management		13,876		15,798
Revenues from basic R&D		76,499		74,999


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 –

[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.

– 23 –

Attachment

Nippon Telegraph and Telephone Corporation

February 10, 2017

NTT’s Shares and Shareholders (as of December 31, 2016)

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
	Government and Public Bodies		Financial Institutions		Securities Firms		Other Domestic Corporations		Non- Individuals		Individuals		Domestic Individuals, etc.		Total
Total Holders		4		261		70		5,562		1,512		751		680,540		688,700		—
Total Shares (Units)		6,791,445		3,609,154		79,990		238,572		6,486,588		8,747		3,722,781		20,937,277		2,666,770
%		32.44		17.24		0.38		1.14		30.98		0.04		17.78		100.00		—

2.	Classification by Number of Shares


Details	NTT’s Shares and Shareholders (1 unit = 100 shares)																Shares Representing Less Than One Unit
Details	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		Shares Representing Less Than One Unit
Number of Holders		573		256		1,318		2,038		57,864		82,360		544,291		688,700		—
%		0.08		0.04		0.19		0.30		8.40		11.96		79.03		100.00		—
Total Shares (Units)		17,557,394		183,123		264,119		131,027		918,123		544,455		1,339,036		20,937,277		2,666,770
%		83.86		0.87		1.26		0.63		4.39		2.60		6.40		100.00		—


Notes:	(1)	“At Least 1,000 Units” includes 614,411 units of treasury stock, and the number of “Shares Representing Less Than One Unit” includes 47 shares of treasury stock.
	(2)	“At Least 100 Units” includes 295 units held in the name of the Japan Securities Depository Center, and the number of “Shares Representing Less Than One Unit” includes 44 shares held in the name of the Japan Securities Depository Center.

3.	Principal Shareholders


Name	Share Holdings (in thousands of shares)		Percentage of Total Shares Issued (%)
The Minister of Finance		679,123		32.39
Japan Trustee Services Bank, Ltd. (Trust Account)		85,595		4.08
The Master Trust Bank of Japan, Ltd. (Trust Account)		62,597		2.99
JP Morgan Chase Bank 380055		42,166		2.01
Moxley and Co LLC		28,771		1.37
Japan Trustee Services Bank, Ltd. (Trust Account 9)		26,169		1.25
State Street Bank and Trust Company		24,482		1.17
State Street Bank and Trust Company 505202		20,373		0.97
JP Morgan Chase Bank 385632		19,522		0.93
The Bank of New York Mellon SA/NV 10		17,309		0.83

Total		1,006,110		47.99

LOGO

NTT Financial Results for the Nine Months Ended December 31, 2016 February 10, 2017

LOGO

FY2016/3Q Highlights Consolidated Results of Operations Operating Revenues : ¥8,360.5 billion (¥134.9 billion [1.6%] decrease year-on-year) Operating Income : ¥1,318.6 billion (¥192.0 billion [17.0%] increase year-on-year) Net Income *1 : ¥668.7 billion (¥64.7 billion [10.7%] increase year-on-year) Overseas Results of Operations Overseas Sales: Yen-based : ¥1,312.5 billion (¥110.2 billion [7.7%] decrease year-on-year) US dollar-based : US$12.18 billion (US$0.43 billion [3.6%] increase year-on-year) Overseas Operating Income*2: Yen-based : ¥58.9 billion (¥4.5 billion [7.1%] decrease year-on-year) US dollar-based : US$0.55 billion (US$0.02 billion [4.4%] increase year-on-year) *1 Net income represents net income attributable to NTT, excluding noncontrolling interests. *2 Operating Income excludes M&A-related temporary expenses, such as depreciation costs of intangible fixed assets. *3 In this document, unless otherwise noted, listed numbers are totals for the nine months (from April 1 to December 31). Financial Results for the Nine Months Ended December 31, 2016 —2— Copyright (c) 2017 Nippon Telegraph and Telephone Corporation NTT

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FY2016/3Q Topics Expansion of Global Cloud Services ? Cross-selling Order Volume : US$0.82 billion Enhanced Operating Revenues from Network Services ?Expansion of NTT’s user base 73.59 million mobile phone subscribers (net increase of 2.62 million subscribers), including 35.20 million subscribers to “Kake-hodai & Pake-aeru” (net increase of 5.49 million subscribers) 19.90 million FTTH subscribers (net increase of 0.64 million subscribers), including 7.85 million subscribers to the “Hikari Collaboration Model” (opened connections of 3.61 million subscribers (1.40 million new subscribers and 2.20 million subscribers who switched subscriptions from FLET’S Hikari to the Hikari Collaboration Model)) Growing number of Wi-Fi area owners*1: 494 (+101 increase compared to end of FY2015) *1 Total number of large-scale corporate or local government customers. Excludes small-scale restaurants, etc. Shareholder Returns ?Share buybacks (acquired in and after December 2016 *2 ) : ¥50 billion acquired as of the end of January 2017 *2 Aggregate amount: up to ¥150 billion; Total number of shares : up to 33 million shares; Period: December 13, 2016 ~ June 30, 2017 Aggregate amount of FY2016 share buybacks: ¥ 317.4 billion as of the end of January 2017 (¥277.8 billion as of the end of December 2016) Financial Results for the Nine Months Ended December 31, 2016 —3— Copyright (c) 2017 Nippon Telegraph and Telephone Corporation NTT

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FY2016 Contributing Factors by Segment Regional communications business: Operating income increased due to a reduction in the level of decreasing revenues from fixed voice services and cost efficiency improvement, among other things. Long distance and international communications business: Operating revenues decreased due to the impact of exchange rate fluctuations on NTT’s overseas businesses; operating income decreased due to impairment losses and other temporary expenses. Mobile communications business: Operating income increased due to an increase of revenues in the mobile communications and “Smart Life” areas and cost efficiency improvement. Data communications business: Operating income decreased due to temporary M&A-related expenses; sales increased due to overseas organic growth, among other things. Operating Revenues (Year-on-year: (134.9)) (Billions of yen) Regional Long distance and Data communications Mobile international communications Other business communications communications business business * 85.4 business business 47.3 8,495.4 104.8 85.7 16.9 8,360.5 ?FY2016 4-12? ?2,434.8? ?1,570.6? ?3,469.2? ?1,164.6? FY2015 4-12 FY2016 4-12 Operating Income (Year-on-year : +192.0) Mobile Data Long distance and Other Regional communications communications international business * communications business business communications business business 156.3 7.0 7.9 98.3 63.5 1,318.6 1,126.6 ?FY2016 4-12? ?330.5? ?18.7? ?839.3? ?67.1? FY2015 4-12 FY2016 4-12 *Includes adjustments such as elimination Financial Results for the Nine Months Ended December 31, 2016 —4— Copyright (c) 2017 Nippon Telegraph and Telephone Corporation NTT

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Progress of Broadband Services NTT

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Progress of Broadband Services Number of Subscribers for Fixed Broadband Services FLET’S FLET’S Hikari ADSL (including Hikari Number of Subscribers *1 * 2 Collaboration Model) (Thousands) Hikari Denwa 22,000 20,691 20,858 20,855 20,312 20,540 20,113 20,161 20,248 896 987 955 20,000 1,053 1,019 1,162 1,125 1,090 19,903 19,959 19,520 19,704 19,036 19,157 19,259 [7,854] [8,541] 18,951 [5,912] [6,917] 18,000 [2,348] [3,478] [4,691] [1,322] 17,574 17,655 16,000 17,545 17,335 17,374 17,451 17,243 17,293 14,000 12,000 2015.6 2015.9 2015.12 2016.3 2016.6 2016.9 2016.12 2017.3E Changes from the Preceding Quarter (Thousands) FY2015 FY2016 FY2015 FY2016E 4-6 7-9 10-12 1-3 4-6 7-9 10-12 4-12 FLET’S Hikari *1 235 85 121 102 261 183 199 644 543 700 Number of opened * 3 810 559 580 669 786 649 672 2,107 2,619 2,700 connections FLET’S ADSL (58) (37) (35) (37) (34) (32) (32) (98) (167) (157) Hikari Denwa *4 * 5 135 50 42 39 77 93 111 281 267 200 *1 Number of FLET’S Hikari (including Hikari Collaboration Model) subscribers includes B FLET’S, FLET’S Hikari Next, FLET’S Hikari Light, FLET’S Hikari Lightplus, and FLET’S Hikari WiFi Access provided by NTT East, 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, and wholesale services (Hikari Collaboration Model) provided by both NTT East and NTT West. *2 Figures in [ ] represent the number of subscribers to “Hikari Collaboration Model,” the wholesale provision of services by NTT East and NTT West to service providers. *3 Number of opened connections excludes openings as a result of relocations. *4 Numbers for Hikari Denwa include wholesale services provided to service providers by NTT East and NTT West. *5 Numbers of Hikari Denwa subscribers are presented in thousands of channels. Financial Results for the Nine Months Ended December 31, 2016 —5— Copyright (c) 2017 Nippon Telegraph and Telephone Corporation NTT

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Progress of Broadband Services Number of Subscribers for Mobile Broadband Services Number of Subscribers* (Thousands) LTE(“Xi”) 80,000 FOMA 72,943 73,588 74,800 70,964 71,614 68,494 69,602 70,000 67,532 60,000 32,609 34,504 36,293 38,679 39,893 41,281 42,671 45,100 50,000 40,000 30,000 20,000 34,923 33,989 33,309 32,285 31,721 31,662 30,917 29,700 10,000 0 2015.6 2015.9 2015.12 2016.3 2016.6 2016.9 2016.12 2017.3E Changes from the Preceding Quarter (Thousands) FY2015 FY2016 FY2015 FY2016E 4-6 7-9 10-12 1-3 4-6 7-9 10-12 4-12 LTE(“Xi”)+FOMA 936 962 1,108 1,362 650 1,330 645 2,624 4,368 3,800 * The number of subscribers for Mobile Broadband Services includes communications module service subscribers Financial Results for the Nine Months Ended December 31, 2016 —6— Copyright (c) 2017 Nippon Telegraph and Telephone Corporation NTT

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Progress of Broadband Services Number of Subscribers for Video Services FLET’S TV *1 *2 Hikari TV (Thousands) 5,000 4,416 4,442 4,464 4,484 4,492 4,505 4,521 4,516 4,000 1,464 1,489 1,456 1,378 1,398 1,417 1,432 1,445 3,000 2,000 3,038 3,043 3,047 3,052 3,047 3,041 3,032 3,060 1,000 0 2015.6 2015.9 2015.12 2016.3 2016.6 2016.9 2016.12 2017.3E *1 “FLET’S TV” requires a subscription to “FLET’S TV Transmission Services” provided by NTT East and NTT West, and a subscription to SKY Perfect JSAT’s “SKY Perfect JSAT Facility Use Services” broadcast service. *2 Numbers of subscribers to “FLET’S TV Transmission Services” include wholesale services provided to service providers by NTT East and NTT West. Financial Results for the Nine Months Ended December 31, 2016 —7— Copyright (c) 2017 Nippon Telegraph and Telephone Corporation NTT

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Financial Information NTT

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Details of Consolidated Statement of Income Operating (Billions of yen) Revenues (Year-on-year: (134.9)) services Voice related revenues SI revenues and sales of telecommunications IP/packet 48.5 equipment communications Other revenues services revenues Fixed voice : (75.3) 164.2 55.0 Mobile voice : + 26.8 22.8 8,495.4 Systems Integration: (88.5) Telecommunications 8,360.5 equipment: (75.7) FY2015 4-12 FY2016 4-12 Operating Expenses (Year-on-year: (326.8)) 232.9 Expenses of goods and for purchase services and other expenses 7,368.8 Personnel expenses Other expenses expenses Depreciation and loss on 106.8 disposal of assets 49.6 62.4 7,041.9 FY2015 4-12 FY2016 4-12 Financial Results for the Nine Months Ended December 31, 2016 —8— Copyright (c) 2017 Nippon Telegraph and Telephone Corporation NTT

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Details of Consolidated Balance Sheet March 31, 2016 December 31, 2016 (Billions of yen) 21,035.9 21,024.2 Assets Liabilities Assets Liabilities 9,750.8 21,024.2 9,689.0 21,035.9 [(11.7)] [(61.7)] Interest-Bearing Debt Interest-Bearing Debt Cash and Cash 4,163.3 Cash and Cash 4,497.1 Equivalents [+333.8] Equivalents 1,088.3 664.8 Accounts payable, trade [(423.4)] Accounts payable, trade 1,572.8 1,220.2 [(352.6)] Current Assets Other Current Assets Other (except Cash and Cash 45.1 (except Cash and Cash 56.7 [+11.6] Equivalents) Equivalents) 4,338.7 Equity 4,694.7 11,240.1 [+356.0] 11,278.5 Depreciable Assets [+38.5] (property, plant and Depreciable Assets Retained earnings Retained earnings equipment) (property, plant and 5,494.8 5,074.2 equipment) 7,896.5 [+420.5] 7,817.5 Treasury Stock [(79.0)] Treasury Stock (0.9) (278.8) [(278.0)] Financial Results for the Nine Months Ended December 31, 2016 —9— Copyright (c) 2017 Nippon Telegraph and Telephone Corporation NTT

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Details of Consolidated Cash Flows Cash flows from Cash flows from FCF Cash flows from operating investing (A) + (B) financing activities activities activities (A) (B) (Billions of yen) 2,000 1,672.1 1,715.8 (297.5) Acquisitions/Sales of property, plant, equipment (253.8) 1,000 and intangibles [(61.9)] Acquisitions of subsidiaries [(198.7)] 338.6 84.9 0 +43.7 (453.8) (492.9) Increase in net income [+85.4] (1,000) (39.2) (1,333.4) Increase/Decrease in debt [+220.1] Acquisition of treasury stock [(184.2)] (1,630.9) Acquisition of shares of subsidiaries [(147.4)] (2,000) Increase/Decrease period of the previous from fiscal the year same FY2015 4-12 FY2016 4-12 Financial Results for the Nine Months Ended December 31, 2016 —10— Copyright (c) 2017 Nippon Telegraph and Telephone Corporation NTT

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Details of Capital Investment (Billions of yen) 1,817.5 1,710.0 1,687.2 1,197.3 182.9 175.3 95.8 153.1 Other 74.1 105.6 88.1 NTT DATA (Consolidated) 83.6 91.5 NTT Communications 213.9 NTT West 164.8 189.9 NTT East 191.3 NTT DOCOMO 162.2 155.7 (Consolidated) 439.3 399.4 362.5 FY2014 4-12 FY2015 4-12 FY2016 4-12 FY2014 FY2015 FY2016E Financial Results for the Nine Months Ended December 31, 2016 —11— Copyright (c) 2017 Nippon Telegraph and Telephone Corporation 1,039.4 1,092.3 NTT

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Shareholder Returns Share Buybacks (Billions of yen) * 539.4 417.4 406.5 (Max) 366.5 381.7 338.1 ¥317.4 billion of buybacks as of the end 200.0 of Jan. 2017 120.0 100.0 150.0 86.2 94.4 FY 1999 FY 2002 FY 2003 FY 2004 FY 2005 FY 2007 FY 2008 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 June 2017 E * On December 12, 2016, NTT resolved to acquire up to ¥150 billion in share buybacks. Period of buybacks: December 13, 2016 through June 30, 2017 Dividends per 120 (Yen) Share Pay-out ratio 110 Note: Dividends have been adjusted to reflect the two-for-one stock split carried out on July 1, 2015 90 85 70 80 60 60 55 38.2% 37.2% 38.0% 40 45 32.3% 31.2% 33.4% 31.4% 31.9% 25 30 30 27.5% 23.0% 12.3% 13.0% 19.5% 17.1% FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 E Financial Results for the Nine Months Ended December 31, 2016 —12— NTT

February 10, 2017

FOR IMMEDIATE RELEASE

Financial Statements for the Nine Months Ended December 31, 2016

The financial results of Nippon Telegraph and Telephone East Corporation (NTT East) for the nine months ended December 31, 2016 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. Kenkichi Nakata or Mr. Masaki Akutsu

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, 2016			December 31, 2016			Increase (Decrease)
ASSETS
Fixed assets:
Fixed assets - telecommunications businesses
Property, plant and equipment
Machinery and equipment		395,419			346,814			(48,604	)
Antenna facilities		3,791			3,675			(116	)
Terminal equipment		31,807			24,639			(7,168	)
Local line facilities		835,446			847,870			12,424
Long-distance line facilities		3,353			3,029			(323	)
Engineering facilities		595,052			583,306			(11,745	)
Submarine line facilities		872			767			(105	)
Buildings		420,792			407,940			(12,851	)
Construction in progress		17,626			16,274			(1,351	)
Other		263,272			260,055			(3,217	)
Total property, plant and equipment		2,567,433			2,494,374			(73,059	)
Intangible fixed assets		84,019			80,749			(3,270	)
Total fixed assets - telecommunications businesses		2,651,453			2,575,123			(76,330	)
Investments and other assets
Other investments and assets		187,503			187,058			(444	)
Allowance for doubtful accounts		(913	)		(864	)		49
Total investments and other assets		186,589			186,194			(395	)
Total fixed assets		2,838,043			2,761,317			(76,725	)
Current assets:
Cash and bank deposits		8,675			4,326			(4,348	)
Notes receivable		—			38			38
Accounts receivable, trade		224,181			237,257			13,075
Supplies		26,221			24,427			(1,794	)
Other current assets		341,341			422,066			80,724
Allowance for doubtful accounts		(442	)		(387	)		55
Total current assets		599,977			687,729			87,751

TOTAL ASSETS		3,438,021			3,449,047			11,025

– 1 –


	(Millions of yen)
	March 31, 2016		December 31, 2016		Increase (Decrease)
LIABILITIES
Long-term liabilities:
Long-term borrowings from parent company		365,835		275,620		(90,215	)
Liability for employees’ retirement benefits		235,919		248,762		12,842
Reserve for point services		8,574		10,424		1,850
Reserve for unused telephone cards		8,671		7,890		(781	)
Allowance for environmental measures		5,289		5,289		—
Asset retirement obligations		1,092		922		(170	)
Other long-term liabilities		23,092		30,475		7,382
Total long-term liabilities		648,475		579,384		(69,090	)
Current liabilities:
Current portion of long-term borrowings from parent company		65,120		152,775		87,655
Accounts payable, trade		85,229		40,869		(44,360	)
Accrued taxes on income		11,793		8,722		(3,071	)
Allowance for environmental measures		2,601		2,600		(0	)
Other current liabilities		428,764		391,668		(37,095	)
Total current liabilities		593,508		596,635		3,127

TOTAL LIABILITIES		1,241,983		1,176,020		(65,963	)


NET ASSETS
Shareholders’ equity:
Common stock		335,000		335,000		—
Capital surplus		1,499,726		1,499,726		—
Earned surplus		357,191		434,341		77,150
Total shareholders’ equity		2,191,918		2,269,068		77,150
Unrealized gains (losses), translation adjustments, and others:
Net unrealized gains (losses) on securities		4,119		3,958		(160	)
Total unrealized gains (losses), translation adjustments, and others		4,119		3,958		(160	)

TOTAL NET ASSETS		2,196,037		2,273,027		76,989

TOTAL LIABILITIES AND NET ASSETS		3,438,021		3,449,047		11,025


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, 2015		Nine months ended December 31, 2016		Increase (Decrease)			Year ended March 31, 2016
Telecommunications businesses:
Operating revenues		1,194,499		1,149,281		(45,218	)		1,585,580
Operating expenses		1,056,798		989,295		(67,503	)		1,444,775
Operating income from telecommunications businesses		137,700		159,985		22,285			140,804

Supplementary businesses:
Operating revenues		92,586		87,407		(5,178	)		136,726
Operating expenses		78,208		73,617		(4,590	)		115,702
Operating income from supplementary businesses		14,378		13,790		(588	)		21,024
Operating income		152,079		173,775		21,696			161,828

Non-operating revenues:
Interest income		98		20		(78	)		138
Dividends received		3,134		3,222		88			3,169
Gains on sales of fixed assets		7,514		14,403		6,889			7,789
Miscellaneous income		2,145		1,816		(328	)		6,415
Total non-operating revenues		12,892		19,464		6,571			17,512

Non-operating expenses:
Interest expenses		3,756		3,547		(209	)		4,987
Miscellaneous expenses		515		199		(315	)		914
Total non-operating expenses		4,271		3,747		(524	)		5,901
Recurring profit		160,699		189,492		28,793			173,439
Special losses		3,758		—		(3,758	)		3,758
Income before income taxes		156,940		189,492		32,552			169,681
Income taxes		43,762		52,947		9,184			50,895
Net income		113,177		136,545		23,367			118,786


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.

– 3 –

3. Business Results (Non-Consolidated Operating Revenues)

(Based on accounting principles generally accepted in Japan)


	(Millions of yen)
	Nine months ended December 31, 2015		Nine months ended December 31, 2016		Increase (Decrease)			Percent Increase (Decrease)			Year ended March 31, 2016
Voice transmission services revenues (excluding IP services revenues)		324,683		300,683		(23,999	)		(7.4	)		427,802
Monthly charge revenues*		242,948		226,876		(16,072	)		(6.6	)		321,137
Call rates revenues*		23,254		20,181		(3,073	)		(13.2	)		30,319
Interconnection call revenues*		39,071		34,911		(4,159	)		(10.6	)		51,118
IP services revenues		646,012		637,542		(8,470	)		(1.3	)		855,444
Leased circuit services revenues (excluding IP services revenues)		79,845		70,680		(9,164	)		(11.5	)		103,761
Telegram services revenues		9,545		8,411		(1,134	)		(11.9	)		12,812
Other telecommunications services revenues		134,412		131,962		(2,449	)		(1.8	)		185,759

Telecommunications total revenues		1,194,499		1,149,281		(45,218	)		(3.8	)		1,585,580

Supplementary business total revenues		92,586		87,407		(5,178	)		(5.6	)		136,726

Total operating revenues		1,287,085		1,236,688		(50,397	)		(3.9	)		1,722,307

*	Partial listing only

– 4 –

February 10, 2017

FOR IMMEDIATE RELEASE

Financial Results for the Nine Months Ended December 31, 2016

The financial results of Nippon Telegraph and Telephone West Corporation (NTT West) for the nine months ended December 31, 2016 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:

Junichiro Maekawa 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, 2016			December 31, 2016			Increase (Decrease)
ASSETS
Fixed assets:
Fixed assets - telecommunications businesses
Property, plant and equipment
Machinery and equipment		371,004			310,245			(60,759	)
Antenna facilities		6,224			6,076			(148	)
Terminal equipment		17,166			12,921			(4,245	)
Local line facilities		993,040			1,021,196			28,155
Long-distance line facilities		2,138			1,786			(352	)
Engineering facilities		530,501			517,726			(12,774	)
Submarine line facilities		3,587			3,245			(342	)
Buildings		327,911			313,801			(14,110	)
Construction in progress		18,488			21,438			2,949
Other		220,696			218,338			(2,357	)
Total property, plant and equipment		2,490,761			2,426,777			(63,984	)
Intangible fixed assets		65,914			65,056			(858	)
Total fixed assets - telecommunications businesses		2,556,676			2,491,833			(64,842	)
Investments and other assets
Other investments and assets		170,251			173,511			3,259
Allowance for doubtful accounts		(638	)		(709	)		(71	)
Total investments and other assets		169,613			172,802			3,188
Total fixed assets		2,726,289			2,664,636			(61,653	)

Current assets:
Cash and bank deposits		21,765			12,816			(8,949	)
Notes receivable		—			25			25
Accounts receivable, trade		201,155			201,518			362
Supplies		34,656			31,411			(3,244	)
Other current assets		163,910			126,055			(37,854	)
Allowance for doubtful accounts		(514	)		(433	)		81
Total current assets		420,973			371,394			(49,579	)

TOTAL ASSETS		3,147,263			3,036,030			(111,233	)

– 1 –


	(Millions of yen)
	March 31, 2016		December 31, 2016		Increase (Decrease)
LIABILITIES
Long-term liabilities:
Long-term borrowings from parent company		651,707		611,400		(40,307	)
Liability for employees’ retirement benefits		233,574		243,143		9,569
Reserve for point services		4,672		2,310		(2,361	)
Reserve for unused telephone cards		8,200		7,461		(738	)
Allowance for environmental measures		9,074		9,074		—
Asset retirement obligations		361		361		(0	)
Other long-term liabilities		5,544		4,947		(597	)
Total long-term liabilities		913,134		878,698		(34,435	)
Current liabilities:
Current portion of long-term borrowings from parent company		127,120		132,867		5,747
Accounts payable, trade		70,067		39,524		(30,543	)
Short-term borrowings		142,465		84,241		(58,223	)
Accrued taxes on income		8,102		*5,036		(3,065	)
Allowance for loss on disaster		—		3,625		3,625
Allowance for environmental measures		2,467		2,423		(43	)
Asset retirement obligations		—		5		5
Other current liabilities		327,940		306,314		(21,625	)
Total current liabilities		678,163		574,039		(104,124	)

TOTAL LIABILITIES		1,591,297		1,452,737		(138,560	)


NET ASSETS
Shareholders’ equity:
Common stock		312,000		312,000		—
Capital surplus		1,170,054		1,170,054		—
Earned surplus		73,358		100,784		27,426
Total shareholders’ equity		1,555,412		1,582,838		27,426
Unrealized gains (losses), translation adjustments, and others:
Net unrealized gains (losses) on securities		553		454		(99	)
Total unrealized gains (losses), translation adjustments, and others		553		454		(99	)

TOTAL NET ASSETS		1,555,965		1,583,292		27,327

TOTAL LIABILITIES AND NET ASSETS		3,147,263		3,036,030		(111,233	)


Note:		*NTT West 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, 2015		Nine months ended December 31, 2016		Increase (Decrease)			Year ended March 31, 2016
Telecommunications businesses:
Operating revenues		1,030,033		993,893		(36,140	)		1,372,571
Operating expenses		971,660		904,627		(67,032	)		1,312,941
Operating income from telecommunications businesses		58,373		89,265		30,892			59,630

Supplementary businesses:
Operating revenues		99,106		99,331		225			155,452
Operating expenses		89,682		91,339		1,657			141,010
Operating income from supplementary businesses		9,424		7,992		(1,432	)		14,442
Operating income		67,797		97,257		29,460			74,072

Non-operating revenues:
Interest income		2		9		6			3
Dividends received		1,566		613		(952	)		1,568
Miscellaneous income		2,434		1,628		(806	)		4,203
Total non-operating revenues		4,004		2,252		(1,752	)		5,775

Non-operating expenses:
Interest expenses		7,265		5,477		(1,787	)		9,410
Miscellaneous expenses		1,618		132		(1,486	)		3,290
Total non-operating expenses		8,884		5,609		(3,274	)		12,701
Recurring profit		62,917		93,900		30,982			67,146
Special losses		—		6,055		6,055			—
Income before income taxes		62,917		87,844		24,926			67,146
Income taxes		*16,950		*24,201		7,251			(5,278	)
Net income		45,967		63,643		17,675			72,425


Note:		*NTT West 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, 2015		Nine months ended December 31, 2016		Increase (Decrease)			Percent Increase (Decrease)			Year ended March 31, 2016
Voice transmission services revenues (excluding IP services revenues)		325,471		300,613		(24,857	)		(7.6	)		428,645
Monthly charge revenues*		241,923		225,645		(16,278	)		(6.7	)		319,687
Call rates revenues*		21,682		18,877		(2,805	)		(12.9	)		28,259
Interconnection call revenues*		42,691		38,044		(4,647	)		(10.9	)		55,840
IP services revenues		526,823		523,275		(3,547	)		(0.7	)		702,712
Leased circuit services revenues (excluding IP services revenues)		71,209		65,194		(6,015	)		(8.4	)		93,383
Telegram services revenues		10,551		9,362		(1,189	)		(11.3	)		14,088
Other telecommunications services revenues		95,977		95,447		(529	)		(0.6	)		133,741

Telecommunications total revenues		1,030,033		993,893		(36,140	)		(3.5	)		1,372,571

Supplementary business total revenues		99,106		99,331		225			0.2			155,452

Total operating revenues		1,129,140		1,093,224		(35,915	)		(3.2	)		1,528,023

*	Partial listing only

– 4 –

February 10, 2017

FOR IMMEDIATE RELEASE

NTT Com Announces Financial Results for the Nine Months Ended December 31, 2016

TOKYO, JAPAN — NTT Communications Corporation (NTT Com) announced today its financial results for the nine months ended December 31, 2016. Please see the following attachments for further details:

I.	Financial Results of NTT Communications Group

II.	Non-Consolidated Comparative Balance Sheets

III.	Non-Consolidated Comparative Statements of Income

IV.	Business Results (Non-Consolidated Operating Revenues)

# # #

About NTT Communications Corporation

NTT Communications provides consultancy, architecture, security and cloud services to optimize the information and communications technology (ICT) environments of enterprises. These offerings are backed by the company’s worldwide infrastructure, including a leading global tier-1 IP network, the Arcstar Universal One™ VPN network, reaching 196 countries/regions, and 140 secure data centers worldwide. NTT Communications’ solutions leverage the global resources of NTT Group companies, including Dimension Data, NTT DOCOMO and NTT DATA.

www.ntt.com | Twitter@NTT Communications | Facebook@NTT Communications | LinkedIn@NTT

For more information

(Mr.) Akira Ito or (Mr.) Shinichi Shimizu

Accounting and Taxation, Finance, NTT Communications

Tel: +81 3 6700 4311

Email: info-af@ntt.com

I. Financial Results of NTT Communications Group


	(Millions of yen)
	Nine months ended December 31, 2015		Nine months ended December 31, 2016		Increase (Decrease)			Percent Increase (Decrease)
Operating revenues		971,795		937,331		(34,464	)		(3.5	)
Operating expenses		879,024		831,468		(47,556	)		(5.4	)
Operating income		92,771		105,863		13,092			14.1

– 1 –

II. Non-Consolidated Comparative Balance Sheets

(Based on accounting principles generally accepted in Japan)


	(Millions of yen)
	March 31, 2016			December 31, 2016			Increase (Decrease)

ASSETS
Fixed assets:
Fixed assets - telecommunications businesses
Property, plant and equipment
Machinery and equipment		134,315			139,774			5,458
Antenna facilities		1,707			1,641			(66	)
Terminal equipment		1,397			1,825			428
Local line facilities		730			1,063			332
Long-distance line facilities		5,759			5,250			(509	)
Engineering facilities		51,789			50,444			(1,345	)
Submarine line facilities		13,408			11,685			(1,722	)
Buildings		199,178			195,936			(3,241	)
Construction in progress		28,085			36,895			8,809
Other		91,332			96,975			5,642
Total property, plant and equipment		527,706			541,492			13,786
Intangible fixed assets		101,766			95,686			(6,079	)
Total fixed assets - telecommunications businesses		629,472			637,178			7,706
Investments and other assets
Investment securities		135,291			102,212			(33,078	)
Investments in subsidiaries and affiliated companies		381,949			388,031			6,082
Other investments and assets		53,283			62,200			8,916
Allowance for doubtful accounts		(207	)		(229	)		(21	)
Total investments and other assets		570,316			552,215			(18,100	)
Total fixed assets		1,199,789			1,189,394			(10,394	)
Current assets:
Cash and bank deposits		12,607			4,880			(7,727	)
Accounts receivable, trade		179,839			178,817			(1,021	)
Supplies		9,806			10,632			826
Other current assets		94,874			73,267			(21,607	)
Allowance for doubtful accounts		(1,017	)		(1,329	)		(312	)
Total current assets		296,110			266,268			(29,842	)

TOTAL ASSETS		1,495,899			1,455,662			(40,236	)

– 2 –


	(Millions of yen)
	March 31, 2016		December 31, 2016		Increase (Decrease)
LIABILITIES
Long-term liabilities:
Long-term borrowings from parent company and subsidiary		199,504		199,694		189
Liability for employees’ retirement benefits		86,722		91,562		4,840
Reserve for point services		547		424		(123	)
Reserve for unused telephone cards		3,628		3,301		(326	)
Asset retirement obligations		3,296		3,344		48
Other long-term liabilities		10,354		18,198		7,844
Total long-term liabilities		304,053		316,526		12,472
Current liabilities:
Current portion of long-term borrowings from parent company		43,360		41,680		(1,680	)
Accounts payable, trade		31,894		18,317		(13,577	)
Short-term borrowings		7,766		—		(7,766	)
Accrued taxes on income		6,968		*2,628		(4,339	)
Allowance for losses on construction		13		3		(10	)
Asset retirement obligations		—		1		1
Other current liabilities		179,304		153,497		(25,806	)
Total current liabilities		269,307		216,128		(53,179	)

TOTAL LIABILITIES		573,360		532,654		(40,706	)


NET ASSETS
Shareholders’ equity:
Common stock		211,763		211,763		—
Capital surplus		131,615		131,615		—
Earned surplus		517,436		540,374		22,938
Total shareholders’ equity		860,815		883,753		22,938
Unrealized gains (losses), translation adjustments, and others:
Net unrealized gains (losses) on securities		61,723		38,846		(22,876	)
Deferred gains or losses on hedges		—		408		408
Total unrealized gains (losses), translation adjustments, and others		61,723		39,254		(22,468	)

TOTAL NET ASSETS		922,538		923,008		469

TOTAL LIABILITIES AND NET ASSETS		1,495,899		1,455,662		(40,236	)

Note:

*NTT Com 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 –

III. Non-Consolidated Comparative Statements of Income

(Based on accounting principles generally accepted in Japan)


	(Millions of yen)
	Nine months ended December 31, 2015		Nine months ended December 31, 2016		Increase (Decrease)			Year ended March 31, 2016
Telecommunications businesses:
Operating revenues		515,907		522,293		6,386			691,290
Operating expenses		457,198		462,077		4,879			613,093
Operating income from telecommunications businesses		58,709		60,216		1,507			78,196

Supplementary businesses:
Operating revenues		152,314		151,884		(429	)		227,018
Operating expenses		144,241		139,001		(5,240	)		214,072
Operating income from supplementary businesses		8,072		12,883		4,811			12,946
Operating income		66,781		73,099		6,318			91,143

Non-operating revenues:
Interest income		200		52		(148	)		272
Dividends received		12,392		8,160		(4,231	)		12,486
Lease and rental income		8,739		8,456		(282	)		11,581
Miscellaneous income		856		491		(364	)		2,822
Total non-operating revenues		22,188		17,162		(5,026	)		27,163

Non-operating expenses:
Interest expenses		1,237		814		(423	)		1,514
Lease and rental expenses		4,114		4,111		(3	)		5,551
Miscellaneous expenses		530		401		(128	)		1,034
Total non-operating expenses		5,881		5,326		(555	)		8,100
Recurring profit		83,088		84,935		1,847			110,206
Special losses		—		—		—			5,847
Income before income taxes		83,088		84,935		1,847			104,359
Income taxes		*23,906		*23,555		(350	)		32,046
Net income		59,182		61,380		2,198			72,312

Note:

– 4 –

IV. Business Results (Non-Consolidated Operating Revenues)

(Based on accounting principles generally accepted in Japan)


	(Millions of yen)
	Nine months ended December 31, 2015		Nine months ended December 31, 2016		Increase (Decrease)			Percent Increase (Decrease)			Year ended March 31, 2016
Cloud Computing Platforms		51,252		52,435		1,182			2.3			70,029
Data Networks		275,565		286,327		10,762			3.9			369,871
Voice Communications		195,840		190,144		(5,696	)		(2.9	)		260,329
Applications & Content		28,834		28,037		(797	)		(2.8	)		38,729
Solution Services		105,119		105,907		787			0.7			162,352
Others		11,608		11,326		(281	)		(2.4	)		16,997

Total operating revenues		668,221		674,178		5,956			0.9			918,309

– 5 –

February 10, 2017

Nippon Telegraph and Telephone Corporation

Supplementary Data for

the Nine Months Ended December 31, 2016

Contents


	pages

1. Financial Results Summary (Consolidated)		1

2. Financial Results (Business Segments)		2

3. Financial Results (Holding Company and Subsidiaries)		3-5

4. Operating Data		6-8

The projected figures concerning the future performance of NTT and its subsidiaries and affiliates contained 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 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.	Financial Results Summary (Consolidated)


	(Billions of yen)
	A Nine Months Ended December 31, 2015			B Nine Months Ended December 31, 2016									C Year Ending March 31, 2017 (Forecast)⁽²⁾
							*Change*			*Progress*
							*B-A*			*B/C*
Consolidated (US GAAP)
Operating Revenues		8,495.4			8,360.5			(134.9	)		73.3	%		11,410.0
Fixed Voice Related Services		994.5			919.2			(75.3	)		—			—
Mobile Voice Related Services		624.6			651.4			26.8			—			—
IP/Packet Communications Services		2,819.5			2,842.4			22.8			—			—
Sales of Telecommunications Equipment		725.8			650.1			(75.7	)		—			—
System Integration		2,212.2			2,123.7			(88.5	)		—			—
Other		1,118.8			1,173.7			55.0			—			—
Operating Expenses		7,368.8			7,041.9			(326.8	)		70.8	%		9,940.0
Cost of Services (excluding items shown separately below)		1,733.4			1,751.4			18.0			—			—
Cost of Equipment Sold (excluding items shown separately below)		699.5			654.8			(44.7	)		—			—
Cost of System Integration (excluding items shown separately below)		1,577.7			1,496.6			(81.1	)		—			—
Depreciation and Amortization		1,317.1			1,082.9			(234.2	)		—			—
Impairment Losses		6.0			66.0			60.0			—			—
Goodwill		—			53.3			53.3			—			—
Other		6.0			12.7			6.7			—			—
Selling, General and Administrative Expenses		2,035.1			1,990.3			(44.8	)		—			—
Operating Income		1,126.6			1,318.6			192.0			89.7	%		1,470.0
Income Before Income Taxes		1,121.2			1,307.2			186.0			90.8	%		1,440.0
Net Income Attributable to NTT		604.1			668.7			64.7			86.8	%		770.0
(Ref.) Details of “Cost of Services,” “Cost of Equipment Sold,” “Cost of System Integration” and “Selling, General and Administrative Expenses”
Personnel		1,724.5			1,674.9			(49.6	)		—			—
Cost of Services and Equipment Sold, and Selling, General and Administrative Expenses		4,054.5			3,947.8			(106.8	)		—			—
Loss on Disposal of Property, Plant and Equipment		98.9			100.2			1.3			—			—
Other Expenses		167.8			170.3			2.5			—			—
Total		6,045.6			5,893.1			(152.6	)		—			—
EBITDA and EBITDA Margin with Reconciliation
EBITDA (a+b)		2,495.4			2,453.8			(41.6	)		79.0	%		3,108.0
a Operating Income		1,126.6			1,318.6			192.0			89.7	%		1,470.0
b Depreciation and Amortization, and Loss on Disposal of Property, Plant and Equipment		1,368.8			1,135.2			(233.5	)		69.3	%		1,638.0
EBITDA Margin [(c/d)X100]		29.4	%		29.3	%		(0.0) points			—			27.2	%
c EBITDA (a+b)		2,495.4			2,453.8			(41.6	)		79.0	%		3,108.0
d Operating Revenues		8,495.4			8,360.5			(134.9	)		73.3	%		11,410.0
Capital Investment⁽¹⁾
Capital Investment		1,039.4			1,092.3			52.9			63.9	%		1,710.0
Regional communications business		369.2			345.6			(23.6	)		58.9	%		587.0
Long distance and international communications business		154.9			168.3			13.4			69.0	%		244.0
Mobile communications business		362.5			399.4			36.9			68.3	%		585.0
Data communications business		88.1			105.6			17.5			69.0	%		153.0
Other business		64.7			73.3			8.6			52.0	%		141.0
(Ref.) Core Group Companies
NTT (Holding Company)		6.6			7.6			1.0			42.4	%		18.0
NTT East		162.2			155.7			(6.5	)		57.7	%		270.0
NTT West		189.9			164.8			(25.1	)		59.9	%		275.0
NTT Communications		83.6			91.5			7.8			71.0	%		129.0
NTT DOCOMO (Consolidated)		362.5			399.4			37.0			68.3	%		585.0
NTT DATA (Consolidated)		88.1			105.6			17.4			69.0	%		153.0

Interest-Bearing Liabilities
	As of March 31, 2016			As of December 31, 2016			As of March 31, 2017 (Forecast)⁽²⁾
Interest-Bearing Liabilities		4,163.3			4,497.1			4,300.0

-1-

2.	Financial Results (Business Segments)


	(Billions of yen)
	A Nine Months Ended December 31, 2015		B Nine Months Ended December 31, 2016								C Year Ending March 31, 2017 (Forecast)⁽²⁾
					*Change*			*Progress*
					*B-A*			*B/C*
Business segments⁽¹⁾
Regional communications business
Operating Revenues		2,520.2		2,434.8		(85.4	)		74.2	%		3,280.0
Operating Expenses		2,288.1		2,104.4		(183.7	)		71.1	%		2,960.0
Operating Income		232.2		330.5		98.3			103.3	%		320.0
Long distance and international communications business
Operating Revenues		1,675.5		1,570.6		(104.8	)		72.7	%		2,160.0
Operating Expenses		1,593.2		1,551.9		(41.3	)		75.3	%		2,060.0
Operating Income		82.2		18.7		(63.5	)		18.7	%		100.0
Mobile communications business
Operating Revenues		3,383.5		3,469.2		85.7			75.3	%		4,610.0
Operating Expenses		2,700.5		2,629.9		(70.6	)		71.6	%		3,675.0
Operating Income		683.0		839.3		156.3			89.8	%		935.0
Data communications business
Operating Revenues		1,147.8		1,164.6		16.9			70.6	%		1,650.0
Operating Expenses		1,073.8		1,097.6		23.8			70.8	%		1,550.0
Operating Income		74.0		67.1		(7.0	)		67.1	%		100.0
Other business
Operating Revenues		872.7		889.9		17.2			67.4	%		1,320.0
Operating Expenses		826.6		830.6		4.0			66.2	%		1,255.0
Operating Income		46.2		59.3		13.1			91.2	%		65.0


Notes:	(1)	Figures for each segment include inter-segment transactions.

	(2)	Forecasts for the year ending March 31, 2017 have not been changed from those announced in the financial results for the six months ended September 30, 2016.

-2-

3.	Financial Results (Holding Company and Subsidiaries)


	(Billions of yen)
	A				B						C		[Ref.]
	Nine Months Ended December 31, 2015		Nine Months Ended December 31, 2016								Year Ending March 31, 2017 (Forecast)		Year Ending March 31, 2017 (Forecast when previous 2Q results were announced)
					*Change*			*Progress*
					*B-A*			*B/C*
NTT (Holding Company) (JPN GAAP)
Operating Revenues		386.7		440.6		53.8			92.8	%		475.0		475.0
Operating Expenses		93.0		91.3		(1.7	)		68.2	%		134.0		134.0
Operating Income		293.6		349.2		55.5			102.4	%		341.0		341.0
Non-Operating Revenues		20.4		18.1		(2.3	)		72.4	%		25.0		25.0
Non-Operating Expenses		22.9		21.3		(1.6	)		73.6	%		29.0		29.0
Recurring Profit		291.2		345.9		54.7			102.7	%		337.0		337.0
Net Income		290.4		297.0		6.5			102.4	%		290.0		317.0
NTT East (JPN GAAP)
Operating Revenues		1,287.0		1,236.6		(50.3	)		74.8	%		1,653.0		1,653.0
Voice Transmission Services (excluding IP)⁽¹⁾		324.6		300.6		(23.9	)		76.5	%		393.0		393.0
IP Services		646.0		637.5		(8.4	)		76.0	%		839.0		839.0
Leased Circuit (excluding IP)		79.8		70.6		(9.1	)		72.9	%		97.0		97.0
Other		143.9		140.3		(3.5	)		70.3	%		324.0		324.0
Supplementary Business		92.5		87.4		(5.1	)		70.3	%		324.0		324.0
Operating Expenses		1,135.0		1,062.9		(72.0	)		71.9	%		1,478.0		1,478.0
Personnel		72.2		70.5		(1.6	)		74.3	%		95.0		95.0
Cost of Services and Equipment Sold, and Selling, General and Administrative Expenses		721.8		691.4		(30.3	)		71.7	%		964.0		964.0
Depreciation and Amortization		259.9		220.8		(39.1	)		74.9	%		295.0		295.0
Loss on Disposal of Property, Plant and Equipment		26.6		24.3		(2.2	)		47.8	%		51.0		51.0
Taxes and Public Dues		54.3		55.6		1.3			76.3	%		73.0		73.0
Operating Income		152.0		173.7		21.6			99.3	%		175.0		175.0
Non-Operating Revenues		12.8		19.4		6.5			108.1	%		18.0		18.0
Non-Operating Expenses		4.2		3.7		(0.5	)		74.9	%		5.0		5.0
Recurring Profit		160.6		189.4		28.7			100.8	%		188.0		188.0
Net Income		113.1		136.5		23.3			105.0	%		130.0		130.0
NTT West (JPN GAAP)
Operating Revenues		1,129.1		1,093.2		(35.9	)		73.8	%		1,481.0		1,481.0
Voice Transmission Services (excluding IP)⁽¹⁾		325.4		300.6		(24.8	)		76.3	%		394.0		394.0
IP Services		526.8		523.2		(3.5	)		75.3	%		695.0		695.0
Leased Circuit (excluding IP)		71.2		65.1		(6.0	)		77.6	%		84.0		84.0
Other		106.5		104.8		(1.7	)		66.3	%		308.0		308.0
Supplementary Business		99.1		99.3		0.2			66.3	%		308.0		308.0
Operating Expenses		1,061.3		995.9		(65.3	)		71.3	%		1,396.0		1,396.0
Personnel		67.2		60.3		(6.9	)		74.5	%		81.0		81.0
Cost of Services and Equipment Sold, and Selling, General and Administrative Expenses		674.0		640.9		(33.0	)		71.1	%		902.0		902.0
Depreciation and Amortization		239.3		215.4		(23.9	)		74.5	%		289.0		289.0
Loss on Disposal of Property, Plant and Equipment		31.1		29.1		(2.0	)		51.1	%		57.0		57.0
Taxes and Public Dues		49.5		50.0		0.5			74.7	%		67.0		67.0
Operating Income		67.7		97.2		29.4			114.4	%		85.0		85.0
Non-Operating Revenues		4.0		2.2		(1.7	)		37.5	%		6.0		6.0
Non-Operating Expenses		8.8		5.6		(3.2	)		51.0	%		11.0		11.0
Recurring Profit		62.9		93.9		30.9			117.4	%		80.0		80.0
Net Income		45.9		63.6		17.6			122.4	%		52.0		52.0


Note:		(1)		Operating Revenues from Voice Transmission Services (excluding IP) of NTT East and NTT West for the nine months ended December 31, 2016 include monthly charges, call charges and interconnection charges of 226.8 billion yen, 20.1 billion yen and 34.9 billion yen for NTT East, and 225.6 billion yen, 18.8 billion yen and 38.0 billion yen for NTT West, respectively.

-3-

3.	Financial Results (Holding Company and Subsidiaries)


	(Billions of yen)
	A Nine Months Ended December 31, 2015			B Nine Months Ended December 31, 2016									C Year Ending March 31, 2017 (Forecast)			C Year Ending March 31, 2017 (Forecast when previous 2Q results were announced)
							*Change*			*Progress*
							*B-A*			*B/C*
NTT Communications (JPN GAAP)
Operating Revenues⁽¹⁾		668.2			674.1			5.9			73.3	%		920.0			920.0
Cloud Computing Platforms		51.2			52.4			1.1			62.4	%		84.0			84.0
Data Networks		275.5			286.3			10.7			75.0	%		382.0			382.0
Voice Communications		195.8			190.1			(5.6	)		77.3	%		246.0			246.0
Applications & Content		28.8			28.0			(0.7	)		73.8	%		38.0			38.0
Solution Services		105.1			105.9			0.7			68.8	%		154.0			154.0
Others		11.6			11.3			(0.2	)		70.8	%		16.0			16.0
Operating Expenses		601.4			601.0			(0.3	)		72.2	%		832.0			832.0
Personnel		57.1			57.2			0.0			73.4	%		78.0			78.0
Cost of Services, Cost of Equipment Sold, and Selling, General and Administrative Expenses		301.0			284.8			(16.2	)		72.2	%		628.0			628.0
Communication Network Charges		153.0			168.6			15.6			72.2	%		628.0			628.0
Depreciation and Amortization		78.6			77.4			(1.2	)		73.7	%		105.0			105.0
Loss on Disposal of Property, Plant and Equipment		1.9			2.5			0.6			36.4	%		7.0			7.0
Taxes and Public Dues		9.5			10.2			0.7			73.5	%		14.0			14.0
Operating Income		66.7			73.0			6.3			83.1	%		88.0			88.0
Non-Operating Revenues		22.1			17.1			(5.0	)		78.0	%		22.0			22.0
Non-Operating Expenses		5.8			5.3			(0.5	)		66.6	%		8.0			8.0
Recurring Profit		83.0			84.9			1.8			83.3	%		102.0			102.0
Net Income		59.1			61.3			2.1			85.3	%		72.0			72.0
Dimension Data (IFRS)⁽²⁾⁽³⁾
Operating Revenues		700.5			601.7			(98.8	)		74.3	%		810.0			835.0
Operating Expenses		698.2			611.5			(86.7	)		74.6	%		820.0			831.0
Operating Income ⁽⁴⁾		2.3			(9.9	)		(12.1	)		—			(10.0	)		4.0
Net Income Attributable to Dimension Data		(1.5	)		(26.5	)		(25.0	)		—			—			—


Notes:	(1	)	The following are the main services included in each line item: — Cloud Computing Platforms: “Data center services” and “Private Cloud (Enterprise Cloud, etc.)” — Data Networks: “Closed network services (Arcstar Universal One, etc.)” and “Open network service (OCN, etc.)” — Voice Communications: “Telephone services” and “VoIP services (050 plus, etc.)” — Applications & Content: “Application services (Mail services, etc.)” — Solution Services: “System integration services”

	(2	)	Because Dimension Data’s statements of income from January 1 to December 31 are consolidated into NTT’s consolidated statements of income from April 1 to March 31, Dimension Data’s financial results for the nine months ended September 30, 2015 are stated under “A. Nine Months Ended December 31, 2015,” its financial results for the nine months ended September 30, 2016 are stated under “B. Nine Months Ended December 31, 2016” and its forecasts for the twelve months ended December 31, 2016 are stated under “C. Year Ending March 31, 2017.”

	(3	)	The conversion rate used for Dimension Data figures for the nine months ended December 31, 2016 is USD1.00 = JPY108.57

	(4	)	Operating Income for the nine months ended December 31, 2016 under US GAAP was (17.8) billion yen. This figure does not include Goodwill Impairment Losses because of the recorded period difference noted in (2) above.

-4-

3.	Financial Results (Holding Company and Subsidiaries)


	(Billions of yen)
	A Nine Months Ended December 31, 2015			B Nine Months Ended December 31, 2016									C Year Ending March 31, 2017 (Forecast) ⁽¹⁾
							*Change*			*Progress*
							*B-A*			*B/C*
NTT DOCOMO Consolidated (US GAAP)
Operating Revenues		3,383.5			3,469.6			86.1			75.3	%		4,610.0
Telecommunications Services		2,099.6			2,225.2			125.6			74.4	%		2,989.0
Mobile Communications Services		2,070.2			2,129.1			59.0			74.7	%		2,850.0
Voice Revenues		633.4			660.2			26.8			75.2	%		878.0
Packet Communications Revenues		1,436.7			1,468.9			32.2			74.5	%		1,972.0
Optical-fiber broadband services and other telecommunications services		29.5			96.1			66.6			69.1	%		139.0
Equipment Sales		657.8			586.3			(71.5	)		81.2	%		722.0
Other Operating Revenues		626.0			658.1			32.1			73.2	%		899.0
Operating Expenses		2,698.0			2,627.3			(70.7	)		71.6	%		3,670.0
Personnel		216.4			217.3			0.9			74.7	%		291.0
Cost of Services, Cost of Equipment Sold, and Selling, General and Administrative Expenses		1,754.7			1,754.8			0.1			71.2	%		2,463.0
Depreciation and Amortization		457.1			334.4			(122.7	)		74.5	%		449.0
Loss on Disposal of Property, Plant and Equipment		34.7			41.3			6.5			49.2	%		84.0
Communication Network Charges		204.7			247.6			42.9			72.4	%		342.0
Taxes and Public Dues		30.3			31.8			1.5			77.7	%		41.0
Operating Income		685.5			842.3			156.8			89.6	%		940.0
Non-Operating Income (Loss)		(8.1	)		3.8			12.0			—			(4.0	)
Income Before Income Taxes		677.4			846.2			168.8			90.4	%		936.0
Net Income Attributable to NTT DOCOMO		492.4			589.4			97.0			90.0	%		655.0
NTT DATA Consolidated (JPN GAAP)
Operating Revenues		1,145.3			1,180.8			35.5			70.7	%		1,670.0
Public & Social Infrastructure		277.5			296.3			18.8			69.6	%		426.0
Financial		372.7			370.7			(1.9	)		71.3	%		520.0
Enterprise & Solutions		280.6			304.0			23.3			74.9	%		406.0
Global		382.6			396.7			14.1			69.7	%		569.0
Elimination or Corporate		(168.1	)		(186.9	)		(18.7	)		74.5	%		(251.0	)
Cost of Sales		862.3			874.9			12.6			69.8	%		1,253.0
Gross Profit		282.9			305.8			22.9			73.4	%		417.0
Selling, General and Administrative Expenses		218.6			231.3			12.6			74.2	%		312.0
Operating Income		64.2			74.5			10.2			71.0	%		105.0
Non-Operating Income (Loss)		(3.3	)		(1.3	)		1.9			19.9	%		(7.0	)
Recurring Profit		60.9			73.1			12.1			74.6	%		98.0
Net Income Attributable to Owners of Parent		43.9			45.0			1.1			92.0	%		49.0


Note:			(1	)		Forecasts for the year ending March 31, 2017 have not been changed from those announced in the financial results for the six months ended September 30, 2016.

-5-

4.	Operating Data (Number of Subscribers)

Number of Subscribers


	(in thousands except for Public Telephones)
	A As of March 31, 2016		B As of June 30, 2016		C As of September 30, 2016		D As of December 31, 2016								E As of March 31, 2017 (Forecast)⁽⁹⁾
							F										G
									*Change*			*Progress*					*Change*
									*D-A*			*F/G*					*E-A*
Telephone Subscriber Lines⁽¹⁾		19,943		19,671		19,413		19,117		(826	)		74.4	%		18,833		(1,110	)
NTT East		9,875		9,740		9,617		9,471		(404	)		93.9	%		9,445		(430	)
NTT West		10,068		9,931		9,796		9,647		(422	)		62.0	%		9,388		(680	)
INS-Net⁽²⁾		2,776		2,719		2,661		2,602		(174	)		71.0	%		2,531		(245	)
NTT East		1,414		1,384		1,356		1,325		(89	)		74.2	%		1,294		(120	)
NTT West		1,361		1,334		1,305		1,276		(85	)		67.8	%		1,236		(125	)
Telephone Subscriber Lines + INS-Net		22,718		22,390		22,074		21,719		(999	)		73.8	%		21,363		(1,355	)
NTT East		11,289		11,125		10,973		10,796		(493	)		89.6	%		10,739		(550	)
NTT West		11,429		11,265		11,102		10,923		(506	)		62.9	%		10,624		(805	)
Public Telephones		171,179		168,673		166,120		163,921		(7,258	)		84.5	%		162,589		(8,590	)
NTT East		78,199		76,511		74,846		73,357		(4,842	)		69.2	%		71,199		(7,000	)
NTT West		92,980		92,162		91,274		90,564		(2,416	)		151.9	%		91,390		(1,590	)
FLET’S ISDN		85		83		81		79		(6	)		105.7	%		79		(6	)
NTT East		37		36		35		34		(3	)		282.0	%		36		(1	)
NTT West		48		47		46		45		(4	)		70.4	%		43		(5	)
FLET’S ADSL		1,053		1,019		987		955		(98	)		62.4	%		896		(157	)
NTT East		475		459		444		428		(47	)		78.6	%		415		(60	)
NTT West		577		560		543		527		(51	)		52.4	%		480		(97	)
FLET’S Hikari (including Hikari Collaboration Model)^(3)(4)(5)		19,259		19,520		19,704		19,903		644			92.0	%		19,959		700
NTT East		10,666		10,839		10,958		11,078		411			102.8	%		11,066		400
NTT West		8,593		8,681		8,746		8,825		233			77.5	%		8,893		300
(incl.) Hikari Collaboration Model		4,691		5,912		6,917		7,854		3,163			82.2	%		8,541		3,850
NTT East		3,077		3,781		4,337		4,846		1,769			82.3	%		5,227		2,150
NTT West		1,615		2,131		2,580		3,008		1,394			82.0	%		3,315		1,700
Hikari Denwa⁽⁶⁾		17,374		17,451		17,545		17,655		281			140.5	%		17,574		200
NTT East		9,123		9,180		9,242		9,311		189			94.3	%		9,323		200
NTT West		8,252		8,271		8,302		8,344		92			—			8,252		—
Conventional Leased Circuit Services		232		231		229		227		(6	)		71.3	%		224		(8	)
NTT East		113		112		111		110		(3	)		77.8	%		109		(4	)
NTT West		120		118		118		117		(3	)		64.8	%		116		(4	)
High Speed Digital Services		115		114		112		110		(5	)		33.4	%		99		(16	)
NTT East		59		58		57		56		(3	)		62.8	%		54		(5	)
NTT West		56		56		55		54		(2	)		20.1	%		45		(11	)
NTT Group Major ISPs⁽⁷⁾		11,411		11,360		11,328		11,303		(108	)		74.7	%		11,266		(145	)
(incl.) OCN		8,046		7,969		7,905		7,847		(199	)		86.9	%		7,817		(229	)
(incl.) Plala		3,005		3,024		3,047		3,075		70			128.1	%		3,060		55
Hikari TV		3,052		3,047		3,041		3,032		(20	)		—			3,060		8
FLET’S TV Transmission Services⁽⁶⁾		1,432		1,445		1,464		1,489		57			239.2	%		1,456		24
NTT East		910		917		926		939		29			288.6	%		920		10
NTT West		522		528		538		551		29			204.0	%		536		14
Mobile Telecommunications Services⁽⁸⁾		70,964		71,614		72,943		73,588		2,624			68.4	%		74,800		3,836
(incl.) “Kake-hodai & Pake-aeru” billing plan		29,704		31,586		33,416		35,198		5,494			—			—		—
Telecommunications Services (LTE (Xi))		38,679		39,893		41,281		42,671		3,992			62.2	%		45,100		6,421
Telecommunications Services (FOMA (3G))		32,285		31,721		31,662		30,917		(1,368	)		52.9	%		29,700		(2,585	)
sp-mode		32,463		33,082		33,809		34,749		2,286			66.5	%		35,900		3,437
i-mode		18,770		18,136		17,416		16,503		(2,267	)		67.3	%		15,400		(3,370	)


Notes:	(1	)	Number of Telephone Subscriber Lines is the total of individual lines and central station lines (Subscriber Telephone Light Plan is included).

	(2	)	“INS-Net” includes “INS-Net 64” and “INS-Net 1500.” In terms of number of channels, transmission rate, and line use rate (base rate), “INS-Net 1500” is in all cases roughly ten times greater than “INS-Net 64.” For this reason, one “INS-Net 1500” subscription is calculated as ten “INS-Net 64” subscriptions (including subscriptions to the “INS-Net 64 Lite Plan”).

	(3	)	Number of “FLET’S Hikari (including Hikari Collaboration Model)” subscribers includes subscribers to “B FLET’S,” “FLET’S Hikari Next,” “FLET’S Hikari Light,” “FLET’S Hikari Lightplus” and “FLET’S Hikari WiFi Access” provided by NTT East, 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 and subscribers to the “Hikari Collaboration Model,” the wholesale provision of services to service providers by NTT East and NTT West.

	(4	)	The comparative results for the nine months ended December 31, 2016 compared to the year ended March 31, 2016 for “FLET’S Hikari (including Hikari Collaboration Model)” are as follows: the numbers of new subscribers for NTT East and NTT West were 1,217 thousand lines and 890 thousand lines, respectively, for a total of 2,107 thousand lines; the numbers of new subscribers (excluding switchover lines) for the “Hikari Collaboration Model” for NTT East and NTT West were 826 thousand lines and 579 thousand lines, respectively, for a total of 1,405 thousand lines; and the numbers of switchover lines for NTT East and NTT West were 1,229 thousand lines and 974 thousand lines, respectively, for a total of 2,203 thousand lines.

	(5	)	The comparative forecast “As of March 31, 2017” for the year ending March 31, 2017 compared to the results for the year ended March 31, 2016 for “FLET’S Hikari (including Hikari Collaboration Model)” are as follows: the numbers of new subscribers for NTT East and NTT West are expected to be 1,550 thousand lines and 1,150 thousand lines, respectively, for a total of 2,700 thousand lines; the numbers of new subscribers (excluding switchover lines) for the “Hikari Collaboration Model” for NTT East and NTT West are expected to be 1,000 thousand lines and 700 thousand lines, respectively, for a total of 1,700 thousand lines; and the numbers of switchover lines for NTT East and NTT West are expected to be 1,500 thousand lines and 1,200 thousand lines, respectively, for a total of 2,700 thousand lines.

	(6	)	Numbers of subscribers for “Hikari Denwa” and “FLET’S TV Transmission Services” include wholesale services provided to service providers by NTT East and NTT West.

	(7	)	“NTT Group Major ISPs” includes “WAKWAK” and “InfoSphere,” in addition to “OCN” and “Plala.”

	(8	)	Number of Mobile Telecommunications Services (including “Telecommunications Services (LTE (Xi))” and “Telecommunications Services (FOMA (3G))”) includes Communication Module Services.

	(9	)	Forecasts for the year ending March 31, 2017 have not been changed from those announced in the financial results for the six months ended September 30, 2016.

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4.	Operating Data (ARPU)

Average Monthly Revenue per Unit (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, fixed-line (telephone subscriber lines and INS-NET) and 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 LTE(“Xi”) mobile phone services, FOMA mobile phone services and “docomo Hikari” services, that are incurred consistently each month, by the number of active users 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.


	(Yen)
	Three Months Ended June 30, 2016 (From April to June 2016)		Three Months Ended September 30, 2016 (From July to September 2016)		Three Months Ended December 31, 2016 (From October to December 2016)		Nine Months Ended December 31, 2015 (From April to December 2015)		Nine Months Ended December 31, 2016 (From April to December 2016)		Year Ended March 31, 2016		Year Ending March 31, 2017 (Forecast)⁽¹⁰⁾
NTT East ^{(1)(2)(3)(4)(5)}
Aggregate Fixed Line ARPU (Telephone Subscriber Lines + INS-NET Subscriber Lines)		2,620		2,620		2,620		2,660		2,620		2,650		2,600
FLET’S Hikari ARPU ⁽⁶⁾		5,340		5,280		5,230		5,550		5,280		5,510		5,270
Basic Monthly Charge		3,750		3,720		3,690		3,850		3,710		3,830		3,700
Optional Services		1,590		1,560		1,540		1,700		1,570		1,680		1,570
NTT West ^{(1)(2)(3)(4)(5)}
Aggregate Fixed Line ARPU (Telephone Subscriber Lines + INS-NET Subscriber Lines)		2,580		2,580		2,580		2,610		2,580		2,610		2,570
FLET’S Hikari ARPU ⁽⁶⁾		5,350		5,300		5,260		5,500		5,310		5,470		5,250
Basic Monthly Charge		3,640		3,620		3,590		3,740		3,620		3,720		3,580
Optional Services		1,710		1,680		1,670		1,760		1,690		1,750		1,670
NTT DOCOMO ^(7)(8)(9)
Aggregate ARPU		4,330		4,420		4,450		4,140		4,400		4,170		4,430
Voice ARPU (LTE(“Xi”)+FOMA)		1,240		1,250		1,280		1,200		1,250		1,210		1,250
Data ARPU		3,090		3,170		3,170		2,940		3,150		2,960		3,180
Packet ARPU (LTE(“Xi”)+FOMA)		2,960		2,990		2,960		2,900		2,970		2,910		2,980
“docomo Hikari” ARPU		130		180		210		40		180		50		200


Notes:	(1)	We compute the following two categories of ARPU for business conducted by each of NTT East and NTT West.

			•	Aggregate Fixed Line ARPU (Telephone Subscriber Lines + INS-NET Subscriber Lines): Calculated based on revenues from monthly charges and call charges for Telephone Subscriber Lines and INS-NET Subscriber Lines, which are included in operating revenues from Voice Transmission Services (excluding IP Services), and revenues from “FLET’S ADSL” and “FLET’S ISDN,” which are included in operating revenues from IP Services.

			•	FLET’S Hikari ARPU: 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,” “FLET’S Hikari Lightplus” 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. In addition, “FLET’S Hikari” also includes the “Hikari Collaboration Model,” the wholesale provision of services to service providers by NTT East and NTT West.

			—	“FLET’S Hikari” Optional Services includes wholesale services provided to service providers by NTT East and NTT West.

	(2)	Revenues from interconnection charges are excluded from the calculation of Aggregate Fixed Line ARPU (Telephone Subscriber Lines + INS-NET Subscriber Lines) and FLET’S Hikari ARPU.

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

			—	Quarterly Results: Sum of number of active subscribers* for each month in the relevant quarter

			—	Nine-month Results (from April to December): Sum of number of active users* 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 number of active subscribers* for each month from April to September and sum of the average expected active number of subscribers from October to March ((number of subscribers at September 30, 2016 + number of expected subscribers at March 31, 2017)/2)x6

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

	(4)	For purposes of calculating Aggregate Fixed Line ARPU (Telephone Subscriber Lines + INS-NET Subscriber Lines), the number of subscribers is determined based on the number of subscriptions for fixed-line services (Telephone Subscriber Lines + INS-NET Subscriber Lines).

	(5)	In terms of number of channels, transmission rate, and line use rate (base rate), INS-Net 1500 is in all cases roughly ten times greater than INS-Net 64. For this reason, for the purpose of calculating Aggregate Fixed Line ARPU (Telephone Subscriber Lines + INS-NET Subscriber Lines), one INS-Net 1500 subscription is calculated as ten INS-Net 64 subscriptions.

	(6)	For purposes of calculating FLET’S Hikari ARPU, the number of subscribers is determined based on the number of FLET’S Hikari subscribers, which includes subscribers to “B FLET’S,” “FLET’S Hikari Next,” “FLET’S Hikari Light,” “FLET’S Hikari Lightplus” and “FLET’S Hikari WiFi Access” provided by NTT East, 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, and the “Hikari Collaboration Model,” the wholesale provision of services to service providers by NTT East and NTT West.

	(7)	The following is the formula we use to compute ARPU for NTT DOCOMO.

			•	Aggregate ARPU = Voice ARPU + Packet ARPU + “docomo Hikari” ARPU

			—	Data ARPU= Packet ARPU + “docomo Hikari” ARPU

			—	Voice ARPU: Voice ARPU Related Revenues (basic monthly charges, voice communication charges) / No. of active users

			—	“docomo Hikari” ARPU: “docomo Hikari” ARPU Related Revenues (basic monthly charges, voice communication charges) / No. of active users

	(8)	Numbers of active users used in the ARPU calculation of NTT DOCOMO are as below.

			—	Quarterly Results: Sum of number of active users* for each month in the relevant quarter

			—	Nine-month Results (from April to December): Sum of number of active users* for each month from April to December

			—	FY Results/FY Forecast : Sum of number of active users/expected number of active users for each month from April to March

				*active users = (number of users at end of previous month + number of users at end of current month)/2

	(9)	The number of “users” used to calculate ARPU is the total number of subscriptions, excluding the subscriptions listed below:

		a.	Subscriptions to 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); and

		b.	Data Plan subscriptions which the customer contracting for such subscription in his/her name also has a subscription for “Xi” services in his/her name.

		Note that 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 ARPU calculations.

	(10)	Forecasts for the year ending March 31, 2017 have not been changed from those announced in the financial results for the six months ended September 30, 2016.

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4.	Operating Data (Number of Employees)

Number of Employees


	(Persons)
	A As of December 31, 2015		B As of December 31, 2016					C As of March 31, 2017 (Forecast)⁽²⁾
					*Change*
					*B-A*
NTT Consolidated⁽¹⁾		249,650		280,600		30,950			271,600
Regional communications business		72,500		73,700		1,200			62,250
Long distance and international communications business		44,200		44,050		(150	)		44,600
Mobile communications business		26,700		27,400		700			26,900
Data communications business		80,600		109,950		29,350			113,050
Other business		25,650		25,500		(150	)		24,800
Core Group Companies⁽¹⁾
NTT (Holding Company)		2,800		2,750		(50	)		2,750
NTT East		5,150		4,950		(200	)		4,750
NTT West		4,600		4,450		(150	)		4,400
NTT Communications		6,550		6,450		(100	)		6,350
NTT DOCOMO (Consolidated)		26,700		27,400		700			26,900
NTT DATA (Consolidated)		80,600		109,950		29,350			113,050


Notes:	(1	)	Starting from the nine-month period ended December 31, 2016, “Number of Employees” includes employees whose contracts were changed from fixed-term contracts to open-ended contracts.

	(2	)	Forecasts for the year ending March 31, 2017 have not been changed from those announced in the financial results for the six months ended September 30, 2016.

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