Report of Foreign Issuer (6-k)

Beginning with the three months ended March 31, 2017, the method for calculating EBITDA has been revised to add Loss on Sales of Property, Plant and Equipment and Impairment Loss.

EBITDA and EBITDA Margin, as calculated using the previous method including only Operating Income and Depreciation and Amortization, and Loss on Disposal of Property, Plant and Equipment, would have been 654.0 billion yen and 21.6%, respectively, for the three months ended March 31, 2017, and 3,107.8 billion yen and 27.3%, respectively, for the twelve months ended March 31, 2017. EBITDA and EBITDA Margin figures presented in the table above have been retroactively recalculated using the new calculation method.

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 May, 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 FISCAL YEAR ENDED MARCH 31, 2017

On May 15, 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 fiscal year ended March 31, 2017. Attached hereto is a copy of the press release and supplementary data relating thereto, both dated May 15, 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, 2018. 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 relating to the press release was prepared on the basis of International Financial Reporting Standards (“IFRS”). The financial results for the fiscal year ended March 31, 2017 are currently being audited, and the actual results could differ materially from those set forth in the press release.

The earnings projections of the registrant and its subsidiaries for the fiscal year ending March 31, 2018 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: May 15, 2017


Financial Results Release	May 15, 2017
For the Year Ended March 31, 2017	[U.S. GAAP	]


Name of registrant: Nippon Telegraph and Telephone Corporation (“NTT”) / URL http://www.ntt.co.jp/ir/
Code No.: 9432
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 / TEL +81-3-6838-5481
Scheduled date of the ordinary general meeting of shareholders: June 27, 2017
Scheduled date of dividend payments: June 28, 2017
Scheduled filing date of securities report: June 30, 2017
Supplemental material on financial results: Yes
Presentation on financial results: Yes (for institutional investors and analysts)

1.	Consolidated Financial Results for the Year Ended March 31, 2017 (April 1, 2016 – March 31, 2017)

Amounts are rounded to nearest million yen.

(1) Consolidated Results of Operations


	(Millions of yen)
	Operating Revenues				Operating Income				Income (Loss) before Income Taxes				Net Income (Loss) Attributable to NTT
Year ended March 31, 2017		11,391,016	(1.3	)%		1,539,789	14.2	%		1,527,769	14.9	%		800,129	8.5	%
Year ended March 31, 2016		11,540,997	4.0	%		1,348,149	24.3	%		1,329,259	24.6	%		737,738	42.4	%

Note: Percentages above represent changes from the previous year.


	Basic Earnings (Loss) per Share Attributable to NTT			Diluted Earnings per Share Attributable to NTT			ROE (Ratio of Net Income Attributable to NTT)			ROA (Ratio of Income (Loss) before Income Taxes to Total Assets)			Operating Income Margin (Ratio of Operating Income to Operating Revenues)
Year ended March 31, 2017		390.94	(yen)		—	(yen)		8.9	%		7.2	%		13.5	%
Year ended March 31, 2016		350.34	(yen)		—	(yen)		8.4	%		6.4	%		11.7	%


Notes:	1.	Comprehensive income (loss) attributable to NTT:
		For the year ended March 31, 2017: 860,200 million yen (103.8%)
		For the year ended March 31, 2016: 422,153 million yen ((38.9)%)
	2.	Equity in earnings (losses) of affiliated companies:
		For the year ended March 31, 2017: (21) million yen
		For the year ended March 31, 2016: 5,772 million yen
	3.	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 (Loss) 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 (Net Assets)		Shareholders’ Equity		Equity Ratio (Ratio of Shareholders’ Equity to Total Assets)			Shareholders’ Equity per Share
March 31, 2017		21,250,325		11,507,756		9,052,479		42.6	%		4,491.73	(yen)
March 31, 2016		21,035,931		11,240,082		8,833,806		42.0	%		4,214.32	(yen)

(3) Consolidated Cash Flows


	(Millions of yen)
	Cash Flows from Operating Activities		Cash Flows from Investing Activities			Cash Flows from Financing Activities			Cash and Cash Equivalents at End of Year
Year ended March 31, 2017		2,917,357		(2,089,311	)		(981,511	)		925,213
Year ended March 31, 2016		2,711,845		(1,759,778	)		(707,575	)		1,088,275

2. Dividends


	Dividends per Share
	End of the First Quarter		End of the Second Quarter			End of the Third Quarter		Year-end			Total			Total Annual Dividends			Payout Ratio (Consolidated)			Ratio of Dividends to Shareholders’ Equity (Consolidated)
Year ended March 31, 2016		—		50.00	(yen)		—		60.00	(yen)		110.00	(yen)		230,677	(millions of yen)		31.4	%		2.6	%
Year ended March 31, 2017		—		60.00	(yen)		—		60.00	(yen)		120.00	(yen)		243,147	(millions of yen)		30.7	%		2.7	%
Year ending March 31, 2018 (Forecasts)		—		75.00	(yen)		—		75.00	(yen)		150.00	(yen)		—			36.2	%		—

3. Consolidated Financial Results Forecasts for the Year Ending March 31, 2018 (April 1, 2017 – March 31, 2018)


	(Millions of yen)
	Operating Revenues				Operating Income				Income before Income Taxes				Net Income Attributable to NTT				Basic Earnings per Share Attributable to NTT
Year ending March 31, 2018		11,750,000	3.2	%		1,590,000	3.3	%		1,580,000	3.4	%		830,000	3.7	%		414.00	(yen)

Note: Percentages above represent changes from the previous year.

– 1 –

*Notes

(1)

Change in reporting entities (change in significant consolidated subsidiaries): Yes

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

(2)

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 “(7) Change in Significant Matters Serving as a Basis for the Preparation of Consolidated Financial Statements” on page 21.)

(3)

Number of shares outstanding (common stock)


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

		March 31, 2017: 2,096,394,470 shares

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

ii. Number of shares of treasury stock at end of year:

		March 31, 2017: 81,026,959 shares

		March 31, 2016: 255,269 shares

iii. Weighted average number of shares outstanding:

		For the year ended March 31, 2017: 2,046,678,144 shares

		For the year ended March 31, 2016: 2,105,782,828 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.

(Reference) Non-Consolidated Financial Results

For the Year Ended March 31, 2017

[Japanese GAAP]

1.	Non-consolidated Financial Results for the Year Ended March 31, 2017 (April 1, 2016 – March 31, 2017)

Amounts are rounded off per 1 million yen.

(1) Non-consolidated Results of Operations


	(Millions of yen, except per share amounts)
	Operating Revenues				Operating Income				Recurring Profit				Net Income
Year ended March 31, 2017		474,380	(9.1	)%		339,686	(11.6	)%		334,901	(12.2	)%		288,117	(56.8	)%
Year ended March 31, 2016		521,742	26.7	%		384,076	40.2	%		381,487	40.1	%		666,679	19.8	%

Note: Percentages above represent changes from the previous year.


	Earnings per Share			Diluted Earnings per Share
Year ended March 31, 2017		140.77	(yen)		—	(yen)
Year ended March 31, 2016		316.59	(yen)		—	(yen)



Note:		NTT conducted a two-for-one stock split of its common stock, with an effective date of July 1, 2015. The figures for Earnings per Share 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) Non-consolidated Financial Position


	(Millions of yen, except per share amounts)
	Total Assets		Net Assets		Equity Ratio (Ratio of Shareholders’ Equity to Total Assets)			Net Assets per Share
March 31, 2017		6,681,061		4,383,510		65.6	%		2,175.04	(yen)
March 31, 2016		7,052,062		4,717,924		66.9	%		2,250.77	(yen)


(Reference) Shareholders’ equity:		For the year ended March 31, 2017: 4,383,510 million yen
		For the year ended March 31, 2016: 4,717,924 million yen

2.	Non-consolidated Financial Results Forecasts for the Year Ending March 31, 2018 (April 1, 2017 – March 31, 2018)


	(Millions of yen, except per share amounts)
	Operating Revenues				Operating Income				Recurring Profit				Net Income				Earnings per Share
Year ending March 31, 2018		662,000	39.6	%		532,000	56.6	%		529,000	58.0	%		530,000	84.0	%		264.00	(yen)

Note: Percentages above represent changes from the previous year.

*	This financial results release is not subject to the audit process.

*	Explanation for financial results forecasts and other notes:

With regard to the assumptions and other related matters concerning the above estimated results, please refer to page 26.

As NTT evaluates its business performance on an annual basis, prospects on a semi-annual basis are not provided.

On Monday, May 15, 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.

– 2 –

1. BUSINESS RESULTS

(1) Summary of Business Results

Overview of Consolidated Business Results (April 1, 2016 – March 31, 2017)


	(Billions of yen)
	Fiscal Year Ended March 31, 2016 (April 1, 2015 – March 31, 2016)		Fiscal Year Ended March 31, 2017 (April 1, 2016 – March 31, 2017)		Change			Percent Change
Operating revenues		11,541.0		11,391.0		(150.0	)		(1.3	)%
Operating expenses		10,192.8		9,851.2		(341.6	)		(3.4	)%
Operating income		1,348.1		1,539.8		191.6			14.2	%
Income before income taxes		1,329.3		1,527.8		198.5			14.9	%
Net income attributable to NTT		737.7		800.1		62.4			8.5	%

(Note):

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

In the fiscal year ended March 31, 2017, a wide range of changes took place in the information and telecommunications market with the increased spread and market penetration of devices that utilize fixed-line and mobile broadband, and improved convenience in people’s everyday lives and productivity in various industries through the emergence of new services made possible by the evolution of technologies such as cloud services, AI, Big Data, and IoT. In addition, the role of information and telecommunications is becoming increasingly important, including strengthening security measures against increasingly sophisticated and complex cyberattacks, strengthening natural disaster countermeasures and managing safe and secure social systems. This change can be seen on a global scale.

In light of these circumstances, NTT Group accelerated its self-transformation as a “Value Partner” and worked to place the entire NTT Group towards a profit growth track based on the medium-term management strategy “Towards the Next Stage 2.0” formulated and announced in May 2015.

• Status of Initiatives to Expand Global Business and Increase Overseas Profit Generation

NTT Group seeks to establish and expand its global cloud service as a cornerstone of its business operations, and strengthened its efforts to accelerate overseas profit generation through the following initiatives.

•

In order to enhance NTT Group’s global provision of security services, NTT Group established NTT Security Corporation for the integration of NTT Group’s specialized security technologies and service platforms.

•

NTT Group promoted cross-selling through collaboration among group companies through its global network, cloud migration, and IT outsourcing projects and received orders from customers in a range of industries from various global regions, including Public Transport Victoria in Australia, as well as the finance, manufacturing, and shipping industries.

•

While streamlining and optimizing its services and operations in NTT Group’s global cloud business, in procurement, NTT Group has promoted the unified specifications of procured goods and narrowing down of models to cut procurement costs, working to reform its business structure to strengthen the competitiveness of the entire NTT Group.

• Status of Initiatives to Improve Efficiency and Enhance Profitability of Domestic Network Businesses

NTT Group worked to enhance profitability by creating high value-added services as well as optimizing capital investments and reducing costs for its domestic network businesses.

•

Through its efforts with the “Hikari Collaboration Model” and “+d” to promote collaboration among various businesses, NTT Group worked to create high value-added services.

•

In addition to simplifying and streamlining networks, NTT Group worked to increase the efficiency of capital investment by increasing the usage of existing facilities and reducing procurement costs.

•

NTT Group continued to work to reduce costs by controlling marketing costs through the development of the “Hikari Collaboration Model” and by increasing business efficiency.

– 3 –

In addition, in order to support the above initiatives, NTT Group worked to increase the transparency of information regarding group management, further standardize the group’s accounting principles, and bolster cash management including overseas subsidiaries. Furthermore, through project teams formed in FY2015, NTT Group reviewed initiatives aimed at cost reduction and generating profits.

• Status of Initiatives to Expand B2B2X Business

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” initiatives. NTT Group plans to make use of these opportunities to accelerate migration to the B2B2X model and, together with businesses in other fields and local governments, strengthen measures aimed at creating services that will become the standard of the next generation.

•

In the sports business, NTT Group developed its B2B2X business through collaborations with the J. League and the U.K.-based Perform Group. As a test case, at NACK5 Stadium Omiya, the home stadium of the J. League soccer club Omiya Ardija, NTT Group implemented the creation of smart stadiums, working to create a new way to enjoy the match through fans’ smartphones and to stimulate the local communities by mutually referring customers to nearby businesses.

NTT Group also began to roll out smart stadiums in J. League stadiums nationwide, establishing Wi-Fi access in Yurtec Stadium Sendai as the first project.

Additionally, NTT Group launched a new sports content distribution service including video from J. League matches. NTT Group made the “DAZN for docomo” service provided to smartphone users, and provided the “DAZN for docomo” and “DAZN” services for IP TV users through “Hikari-TV.”

•

NTT Group promoted collaboration in the entertainment field including traditional arts such as joint testing with SHOCHIKU Co., Ltd. on a collaboration between NTT Group’s cutting-edge audiovisual recognition technology and kabuki.

•

In addition to NTT Group’s agreement with FANUC CORPORATION, which involves collaborative projects in the area of making factories smarter by utilizing edge computing technology and application distribution technology, NTT Group promoted collaborations in a range of industrial fields, including initiatives to make agriculture smarter by monitoring crop-raising conditions through sensor information, aerial drone photography, and image analysis.

•

In July 2016, the “Sapporo City ICT Utilization Platform Study Panel” was established with the goal of utilizing Sapporo City’s ICT to resolve regional social issues using NTT Group’s ICT technology in fields starting with tourism and sports, and including traffic and snow control, health, and childcare. NTT Group promoted the utilization of ICT in the tourism field in Sapporo City by collecting and analyzing big data (the flow of people and purchasing data centered on tourists) from Sapporo City and regional commercial facilities. Additionally, to establish Sapporo’s brand as a tourism and sports city, at the 2017 Sapporo Asian Winter Games held in February 2017, NTT Group proposed a new way to watch sports using cutting-edge ICT, working to invigorate sports tourism.

(Note):

NTT, NTT East, NTT West, NTT Communications, and NTT DOCOMO are Gold Partners (Telecommunications Services) for the Olympic and Paralympic Games Tokyo 2020.

• Status of Fundamental Research & Development

NTT Group pursued a range of R&D pursuant to NTT Group’s Medium-Term Management Strategy “Towards the Next Stage 2.0.” NTT Group established the “corevo ^® ” brand, a collective term for NTT Group’s AI technology, and promoted collaboration with partners in various industries. Furthermore, in order to commercialize the results of development, NTT Group developed business plans tailored to market trends based on NTT Group’s Comprehensive Commercialization System and worked to promote development for practical use.

•

Initiatives to Expand B2B2X Business

•

In the area of edge computing technology, which accomplishes the real-time and wide-ranging processing of data in the IoT age, NTT Group agreed to collaborations with FANUC CORPORATION to further the optimization of the manufacturing field, and with TOYOTA MOTOR CORPORATION to further technological development and technological evaluation in the field of connected cars.

•

In partnership with Mitsubishi Heavy Industries, Ltd., NTT Group developed a prototype for a control system that automatically detects and defends against cyberattacks on industrial equipment including public infrastructure.

– 4 –

•

Utilizing the “angle-free object search technology (corevo ^® ),” which can recognize and search for objects photographed from any angle with a high level of precision, NTT Group implemented joint testing with Seven & i Holdings Co., Ltd. to search for and provide information on products in convenience stores, and with Tokyo Metro Co., Ltd. within subway stations to provide current location data with photos taken of station map signs and to provide limited-time offers through photos taken of advertising posters.

•

Aiming to increase manufacturing facility operating rate and product quality, NTT Group provided Hitachi Zosen Corporation with “abnormal sound detection technology (corevo ^® ),” which objectively visualizes and analyzes the characteristics of both operating sounds and malfunctions of manufacturing facility devices.

•

NTT Group implemented joint practical testing among six group companies to further the realization of services using a device coordination technology (corevo ^® ) centered on communication robots.

•

R&D to Improve Efficiency and Enhance Profitability of Domestic Network Businesses

•

NTT Group developed an “operation-collaboration function,” which facilitates cost reductions by service providers through the use of the “Hikari Collaboration Model” by cataloging the services of telecommunications operators and service providers, including competitors, and consolidating the management of multiple services from the point they are ordered through the start of service and maintenance.

•

NTT Group developed software which makes high-quality and low-cost network services possible by using general-purpose products utilized in data centers and other facilities.

•

NTT Group developed “malfunction source estimation technology (corevo ^® )” which largely reduces the time required to investigate the cause of a network malfunction by autonomously extracting the causal relationship between the network malfunction and the alarm sent from the device.

•

Research & Development that Enable Highly Immersive New Experiences

•

NTT Group developed a training system for professional baseball players using “athlete first-person vision synthesis technology,” which enables players to experience simulations of pitches with a high degree of realism, and carried out practical testing with RAKUTEN BASEBALL, INC. (Tohoku Rakuten Golden Eagles).

•

NTT Group developed MaPiece technology, which allows even those without specialized knowledge to easily collect accessibility information on steps and stairs required to provide directions to wheelchair users, as well as 2.5D map representation technology that realizes simple relief map display that is easy to understand even for foreign visitors to Japan.

•

Utilizing “Kirari! ^® ” technology, which provides ultra-high presence “as if you were there” experiences, NTT Group implemented practical testing of its overseas real-time broadcasting technology to broadcast video from a studio in Japan to the 2017 SXSW (South by Southwest) in Austin, Texas as well as broadcasting the “KABUKI LION SHI-SHI-O: The Adventures of the Mythical Lion show” performed in Las Vegas, Nevada by SHOCHIKU Co., Ltd. To Japan.

•

In order to be able to provide entirely new services that touch the senses and emotions of humans and create new awe-inspiring experiences in public spaces moving forward into 2020, NTT Group began joint research with the international media art research institute Ars Electronica Futurelab.

•

NTT Group conducted practical testing of digital signage which simultaneously delivers information at the time of disaster and provides information based on the language and location of foreign tourists to ensure that urban functions are comfortable and safe.

•

Promoting Cutting-edge Research

•

NTT Group developed a “Quantum Neural Network” calculator based on an entirely new principle of using light to quickly solve problems which are difficult for traditional computers, such as searching for chemical compounds in drug development.

•

NTT Group was the first in the world to solve the macroscopic realism problem of whether the quantum mechanical behavior of a single electron appears in the everyday macroscopic world.

•

To discover how the brains of superior athletes regulate their mental state and control their bodily movements to deliver top-level performance, NTT Group launched the “Sports Brain Science Project” to elucidate the brain’s information processing in order to “Train the Brain to Win,” and started R&D.

– 5 –

• Status of Initiatives for Sustained Improvement in Corporate Value

While working to minimize medium- to long-term business risks by appropriately responding to social and environmental issues at NTT Group, NTT Group is promoting initiatives toward sustained improvement in corporate value by making effective contributions to the resolution of social and environmental issues through NTT Group’s business activities. Taking into account the UN’s “Sustainable Development Goals: SDGs,” NTT Group has been engaged in various activities including modifying the “NTT Group CSR Charter” in May 2016 and affirming NTT Group’s agreement with the SDGs in September 2016.

•

Status of Initiatives for Cybersecurity

•

While promoting cutting-edge R&D and moving forward with the development of the latest R&D results, NTT Group promoted a group-wide initiative through the “Group CISO Committee.” Furthermore, through the newly established NTT Security Corporation, NTT Group has created a system to provide cutting-edge security technology to NTT Group’s customers. Additionally, in terms of the nationwide issue of developing IT security engineers, NTT Group promoted human resource development within NTT Group and participated in the study panel for inter-industry human resources development, contributing to security personnel development on a national level.

•

Status of Initiatives to Ensure Diverse Personnel Can Demonstrate their Talents

•

Recognizing diversity management as a key part of NTT Group’s management strategy, NTT Group has striven to ensure diverse personnel can demonstrate their talents. For example, in terms of sexual minorities such as LGBT persons, in addition to receiving the highest level “GOLD” evaluation in the “PRIDE Index,” which evaluates companies’ approaches to sexual minorities such as LGBT persons, NTT Group promoted initiatives such as clarifying that the systems including leave for marriage also apply to same-sex partners. Furthermore, in terms of NTT Group’s “Work Style Reform,” NTT Group is actively promoting the usage of the teleworking and flextime systems, regardless of rank or position, to create an easier working environment for all of NTT Group’s employees.

•

Status of Initiatives for the Environment

•

In September 2016, NTT Group announced the “NTT Group Environmental Statement” and “The Eco Strategy 2030,” pledging to contribute to lowering the environmental burden on society while contributing to adapting to climate change and preserving the ecosystem by providing ICT services and cutting-edge technology. While continuing to promote energy saving and cost cutting by introducing cutting-edge electrical power units, NTT Group is also contributing to energy saving in society through sales of these units.

In addition to the above, NTT Group has taken group-wide initiatives to ensure the high stability and reliability of NTT Group’s networks. While quickly and efficiently recovering networks following the 2016 Kumamoto Earthquake, NTT Group also provided support to those affected by the disaster by installing a temporary free Wi-Fi hotspot in the evacuation center.

As a result of the above efforts, NTT Group’s consolidated operating revenues for the fiscal year ended March 31, 2017 were 11,391.0 billion yen (a decrease of 1.3% from the previous fiscal year) and consolidated operating expenses were 9,851.2 billion yen (a decrease of 3.4% from the previous fiscal year). As a result, consolidated operating income was 1,539.8 billion yen (an increase of 14.2% from the previous fiscal year), consolidated income before income taxes was 1,527.8 billion yen (an increase of 14.9% from the previous fiscal year), and consolidated net income attributable to NTT was 800.1 billion yen (an increase of 8.5% from the previous fiscal year).

The forecast for the fiscal year ending March 31, 2018 is as follows: operating revenues of 11,750.0 billion yen (an increase of 3.2% year-over-year), operating income of 1,590.0 billion yen (an increase of 3.3% year -over-year), income before income taxes of 1,580.0 billion yen (an increase of 3.4% year-over-year), and net income attributable to NTT of 830.0 billion yen (an increase of 3.7% year-over-year).

The business results for each business segment for the consolidated fiscal year ended March 31, 2017 are as follows.

– 6 –

• Regional Communications Business Segment

Overview of Business Results by Business Segment (April 1, 2016 – March 31, 2017)


	(Billions of yen)
	Fiscal Year Ended March 31, 2016 (April 1, 2015 – March 31, 2016)		Fiscal Year Ended March 31, 2017 (April 1, 2016 – March 31, 2017)		Change			Percent Change
Operating revenues		3,407.9		3,308.2		(99.6	)		(2.9	)%
Operating expenses		3,142.9		2,948.7		(194.2	)		(6.2	)%
Operating income		265.0		359.5		94.5			35.7	%

Number of Subscriptions

	(Thousands of subscriptions)
	As of March 31, 2016		As of March 31, 2017		Change			Percent Change
FLET’S Hikari (including Hikari
Collaboration Model) ⁽¹⁾		19,259		20,053		794			4.1	%
NTT East		10,666		11,173		507			4.8	%
NTT West		8,593		8,880		287			3.3	%
Hikari Collaboration Model		4,691		8,744		4,053			86.4	%
NTT East		3,077		5,328		2,251			73.2	%
NTT West		1,615		3,416		1,801			111.6	%
Hikari Denwa		17,374		17,759		385			2.2	%
NTT East		9,123		9,369		246			2.7	%
NTT West		8,252		8,390		139			1.7	%

Notes:

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.

2.	The figures for Hikari Denwa indicate the number of channels (in thousands). Number of “Hikari Denwa” subscribers includes wholesale services provided to service providers by NTT East and NTT West.

In the Regional Communications Business Segment, NTT Group worked to develop its B2B2X business through the “Hikari Collaboration Model,” the wholesale provision of fiber-optic access infrastructure services, among other things, to various service providers.

• Details of Main Initiatives

•

With regard to the “Hikari Collaboration Model,” the number of service providers providing wholesale service was approximately 550 companies at the end of the fiscal year ended March 31, 2017, as NTT Group further expanded collaborative projects with not only business operators in the communications industry, energy industry, real estate industry, and security industry, but also business operators in diverse industries including the housing industry and media industry in the fiscal year ended March 31, 2017. Furthermore, in the housing industry, new use cases were born, including providing total lifestyle support after home purchases, which includes a combination of this model, Home Energy Management System (HEMS) service and lifestyle-related services. As a result of these initiatives, the number of fiber-optic access service subscriptions using this model was 8.74 million.

•

With the development of the “Hikari Collaboration Model,” NTT Group worked to continually reduce marketing costs. Furthermore, by simplifying and streamlining networks and further increasing the usage of existing facilities, NTT Group worked to make capital investment more efficient.

•

As companies and local governments are proactively promoting the use of Wi-Fi as a powerful information service tool, in various regions, NTT Group continually worked to improve convenience for the increasing number of visitors to Japan by expanding the coverage area of Wi-Fi, resulting in the number of Wi-Fi area owners reaching 557.

– 7 –

• Number of Subscriptions for Major Services

•

FLET’S Hikari: 20.05 million subscriptions (an increase of 0.79 million subscriptions from the previous fiscal year)

•

(Included in the above) “Hikari Collaboration Model”: 8.74 million subscriptions (an increase of 4.05 million subscriptions from the previous fiscal year)

•

Hikari Denwa: 17.76 million channels (an increase of 0.38 million channels from the previous fiscal year)

•

FLET’S TV: 1.52 million subscriptions (an increase of 0.09 million subscriptions from the previous fiscal year)

(Note):

The figures for “FLET’S Hikari,” “Hikari Denwa” and “FLET’S TV” include the number of subscriptions for wholesale services provided to service providers through the use of the “Hikari Collaboration Model“ by NTT East and NTT West.

As a result of the above, consolidated operating revenues in the Regional Communications Business Segment for the fiscal year ended March 31, 2017 were 3,308.2 billion yen (a decrease of 2.9% from the previous fiscal year). On the other hand, consolidated operating expenses were 2,948.7 billion yen (a decrease of 6.2% from the previous fiscal year). As a result, consolidated operating income was 359.5 billion yen (an increase of 35.7% from the previous fiscal year).

• Long Distance and International Communications Business Segment

Overview of Business Results by Business Segment (April 1, 2016 – March 31, 2017)


	(Billions of yen)
	Fiscal Year Ended March 31, 2016 (April 1, 2015 – March 31, 2016)		Fiscal Year Ended March 31, 2017 (April 1, 2016 – March 31, 2017)		Change			Percent Change
Operating revenues		2,250.9		2,129.3		(121.7	)		(5.4	)%
Operating expenses		2,154.2		2,088.4		(65.8	)		(3.1	)%
Operating income		96.7		40.8		(55.9	)		(57.8	)%

In the Long Distance and International Communications Business Segment, in addition to enhancing its provision of seamless ICT solutions combining network and security, etc., NTT Group worked to enhance its service provision in growth areas such as cloud services and IT outsourcing.

• Details of Main Initiatives

•

To provide an ICT solution based on a more highly reliable international network to NTT Group’s enterprise clients, in October 2016 NTT Group began operations of the “Asia Pacific Gateway,” its high-bandwidth optical submarine cable network. Additionally, to respond to demand for cloud services and data centers in various global regions, in the continually growing market of America, in addition to launching service at its “Virginia Ashburn 2 (VA2) Data Center,” NTT Group began construction on its “Virginia Ashburn 3 (VA3) Data Center,” designed to achieve strong security and high-level energy savings, thus proactively expanding NTT Group’s cloud platform by working to provide different variations of data centers. As a result of these initiatives, NTT Group’s data centers were ranked as top class in the world in terms of both total floor area and potential server installation floor area according to a report by U.S. TeleGeography (published in November 2016).

•

NTT Group received an IT outsourcing order from major U.K. insurance provider ReAssure UK Services Limited, and began providing infrastructure services including introduction of cloud services for the company’s servers and security oversight services.

• Number of Subscriptions for Major Services

•

Number of customers for Cloud services: 9,000 customers (an increase of 700 customers from the previous fiscal year)

•

Hikari TV: 3.02 million subscriptions (a decrease of 0.03 million subscriptions from the previous fiscal year)

As a result of the above, consolidated operating revenues in the Long Distance and International Communications Business Segment for the fiscal year ended March 31, 2017 were 2,129.3 billion yen (a decrease of 5.4% from the previous fiscal year). On the other hand, consolidated operating expenses were 2,088.4 billion yen (a decrease of 3.1% from the previous fiscal year). As a result, consolidated operating income was 40.8 billion yen (a decrease of 57.8% from the previous fiscal year).

– 8 –

• Mobile Communications Business Segment

Overview of Business Results by Business Segment (April 1, 2016 – March 31, 2017)


	(Billions of yen)
	Fiscal Year Ended March 31, 2016 (April 1, 2015 – March 31, 2016)		Fiscal Year Ended March 31, 2017 (April 1, 2016 – March 31, 2017)		Change			Percent Change
Operating revenues		4,527.1		4,584.6		57.4			1.3	%
Operating expenses		3,738.8		3,632.9		(105.8	)		(2.8	)%
Operating income		788.4		951.6		163.3			20.7	%

Number of Subscriptions

	(Thousands of subscriptions)
	As of March 31, 2016		As of March 31, 2017		Change			Percent Change
Mobile Telecommunications Services		70,964		74,880		3,916			5.5	%
“Kake-hodai & Pake-aeru” billing plan		29,704		37,066		7,362			24.8	%
Telecommunications Services (LTE (Xi))		38,679		44,544		5,865			15.2	%
Telecommunications Services (FOMA (3G))		32,285		30,336		(1,949	)		(6.0	)%

Notes:

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

In the Mobile Communications Business Segment, NTT Group has worked toward the promotion of sales of the billing plan, “Kake-hodai & Pake-aeru,” and “docomo Hikari,” promoting collaboration with various business partners and providing new value-added services to enhance profitability in the smart life area.

• Details of Main Initiatives

•

In addition to continuing to promote the sales of its “Kake-hodai & Pake-aeru,” as a billing plan tailored to suit a customer’s stage of life that offers more affordable rates to long-term users, in November 2016 NTT Group began offering its “docomo Child Raising Support Program” and other initiatives, working to enhance returns to NTT Group’s customers. As a result, the number of subscriptions to “Kake-hodai & Pake-aeru” reached 37.07 million.

•

By utilizing the “Hikari Collaboration Model” from the Regional Communications Business Segment, NTT Group promoted the sales of the “docomo Hikari Pack,” which bundles fiber-optic access infrastructure services, internet access service, and mobile service. As a result, the number of subscriptions to “docomo Hikari” reached 3.40 million.

•

In order to strengthen profitability in the Smart Life area, NTT Group pursued the “+d” initiative, which was aimed at creating new added value through collaboration with various business partners, and expanded its content, finance, and settlement services. Specifically, NTT Group collaborated with Perform Group to begin providing the sports streaming service “DAZN for docomo,” and worked to expand the number of member stores for NTT Group’s “d POINTs” loyalty point program.

As a result of the above, consolidated operating revenues in the Mobile Communications Business Segment for the fiscal year ended March 31, 2017 were 4,584.6 billion yen (an increase of 1.3% from the previous fiscal year). On the other hand, consolidated operating expenses were 3,632.9 billion yen (a decrease of 2.8% from the previous fiscal year). As a result, consolidated operating income was 951.6 billion yen (an increase of 20.7% from the previous fiscal year).

– 9 –

• Data Communications Business Segment

Overview of Business Results by Business Segment (April 1, 2016 – March 31, 2017)


	(Billions of yen)
	Fiscal Year Ended March 31, 2016 (April 1, 2015 – March 31, 2016)		Fiscal Year Ended March 31, 2017 (April 1, 2016 – March 31, 2017)		Change			Percent Change
Operating revenues		1,616.8		1,718.7		101.9			6.3	%
Operating expenses		1,504.1		1,610.8		106.7			7.1	%
Operating income		112.7		107.9		(4.9	)		(4.3	)%

In the Data Communications Business Segment, NTT Group responded to the acceleration of its customers’ expansion in the global market and the diversification and increased sophistication of their needs by working to expand NTT Group’s business in the global market and to expand and reliably provide a range of IT services, such as system integration, that are responsive to the changes in the market.

• Details of Main Initiatives

•

To increase NTT Group’s presence through the acquisition of a North America-focused operating base and to enhance cloud services and BPO services, NTT Group acquired the businesses of the Dell Services Division, which has been highly regarded by customers for providing digital solutions and BPO services tailored to the healthcare industry.

•

To create new finance-related services through Open Innovation, together with venture firms and regional banks, NTT Group established “BeSTA FinTech Lab,” working to provide new services utilizing FinTech including the implementation of practical testing of information distribution services with location data.

•

Aiming for the expanded use of global geospatial information, creation of new markets, and the stimulation of related industries, in April 2016 NTT Group began to offer the world’s highest-resolution “AW3D ^® Global High-resolution 3D Map” developed with the Remote Sensing Technology Center of Japan (RESTEC) to all global land spaces.

As a result of the above, consolidated operating revenues in the Data Communications Business Segment for the fiscal year ended March 31, 2017 were 1,718.7 billion yen (an increase of 6.3% from the previous fiscal year). On the other hand, consolidated operating expenses were 1,610.8 billion yen (an increase of 7.1% from the previous fiscal year). As a result, consolidated operating income was 107.9 billion yen (a decrease of 4.3% from the previous fiscal year).

• Other Business Segment

Overview of Business Results by Business Segment (April 1, 2016 – March 31, 2017)


	(Billions of yen)
	Fiscal Year Ended March 31, 2016 (April 1, 2015 – March 31, 2016)		Fiscal Year Ended March 31, 2017 (April 1, 2016 – March 31, 2017)		Change			Percent Change
Operating revenues		1,294.5		1,282.3		(12.2	)		(0.9	)%
Operating expenses		1,220.4		1,205.0		(15.5	)		(1.3	)%
Operating income		74.0		77.3		3.3			4.4	%

In the Other Business Segment, NTT Group mainly provided services related to the real estate business, finance business, construction and electric power business, and system development business.

• Details of Main Initiatives

•

Real Estate Business

NTT Group pursued its office and retail operations centered on office buildings and commercial facilities and its residential operations principally through the “Wellith” brand. Furthermore, NTT Group utilized its know-how developed in these operations to pursue global and hotels & resorts businesses.

– 10 –

•

Finance Business

NTT Group provided financial services such as leasing, installation payment, and other finance areas concentrating on information-related equipment, billing and collection services for telecommunication service bills, and credit card transaction settlement services.

•

Construction and Electric Power Business

By combining and utilizing NTT Group’s technology in “ICT, energy, and construction” to the fullest extent, NTT Group designed and built large-scale solar power generation systems and data centers.

•

System Development Business

To provide optimized, high-quality ICT services, NTT Group worked to develop network operation systems and application services.

As a result of the above, consolidated operating revenues in the Other Business Segment for the fiscal year ended March 31, 2017 were 1,282.3 billion yen (a decrease of 0.9% from the previous fiscal year). On the other hand, consolidated operating expenses were 1,205.0 billion yen (a decrease of 1.3% from the previous fiscal year). As a result, consolidated operating income was 77.3 billion yen (an increase of 4.4% from the previous fiscal year).

(2) Summary of Financial Position

Net cash provided by operating activities for the fiscal year ended March 31, 2017 increased by 205.5 billion yen (7.6%) from the previous fiscal year to 2,917.4 billion yen. This increase was due to, among other factors, an increase in collection of accounts receivable.

Net cash used in investing activities increased by 329.5 billion yen (18.7%) from the previous fiscal year to 2,089.3 billion yen. This increase was due to, among other factors, an increase in payments for capital investments.

Net cash used in financing activities increased by 273.9 billion yen (38.7%) from the previous fiscal year to 981.5 billion yen. 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 March 31, 2017 totaled 925.2 billion yen, a decrease of 163.1 billion yen (15.0%) from the end of the previous fiscal year.


	(Billions of yen)
	Fiscal Year Ended March 31, 2016 (April 1, 2015 – March 31, 2016)			Fiscal Year Ended March 31, 2017 (April 1, 2016 – March 31, 2017)			Change			Percent Change
Cash flows provided by operating activities		2,711.8			2,917.4			205.5			7.6	%
Cash flows used in investing activities		(1,759.8	)		(2,089.3	)		(329.5	)		(18.7	)%
Cash flows used in financing activities		(707.6	)		(981.5	)		(273.9	)		(38.7	)%
Cash and cash equivalents at the end of year		1,088.3			925.2			(163.1	)		(15.0	)%

2. BASIC APPROACH TO THE SELECTION OF ACCOUNTING STANDARDS

NTT Group is considering adopting International Financial Reporting Standards (“IFRS”) beginning with the three months ending June 30, 2018 in order to, among other things, improve the international comparability of its financial information in the capital markets and increase the efficiency of its financial reporting.

– 11 –

3. CONSOLIDATED FINANCIAL STATEMENTS

(1) CONSOLIDATED BALANCE SHEETS


	Millions of yen
	March 31, 2016			March 31, 2017			Increase (Decrease)
ASSETS
Current assets:
Cash and cash equivalents	¥	1,088,275		¥	925,213		¥	(163,062	)
Short-term investments		33,076			63,844			30,768
Notes and accounts receivable, trade		2,733,116			2,699,708			(33,408	)
Allowance for doubtful accounts		(45,236	)		(48,626	)		(3,390	)
Accounts receivable, other		473,192			505,145			31,953
Inventories		414,581			365,379			(49,202	)
Prepaid expenses and other current assets		469,529			573,170			103,641
Deferred income taxes		260,446			228,590			(31,856	)

Total current assets		5,426,979			5,312,423			(114,556	)

Property, plant and equipment:
Telecommunications equipment		11,586,812			11,046,115			(540,697	)
Telecommunications service lines		15,870,097			16,064,732			194,635
Buildings and structures		6,069,437			6,147,869			78,432
Machinery, vessels and tools		1,996,898			2,032,389			35,491
Land		1,273,209			1,292,685			19,476
Construction in progress		382,196			421,819			39,623

		37,178,649			37,005,609			(173,040	)
Accumulated depreciation		(27,626,728	)		(27,286,588	)		340,140

Net property, plant and equipment		9,551,921			9,719,021			167,100


Investments and other assets:
Investments in affiliated companies		515,716			484,596			(31,120	)
Marketable securities and other investments		474,247			495,290			21,043
Goodwill		1,229,208			1,314,645			85,437
Software		1,212,482			1,209,485			(2,997	)
Other intangible assets		391,977			453,918			61,941
Other assets		1,486,840			1,492,076			5,236
Deferred income taxes		746,561			768,871			22,310

Total investments and other assets		6,057,031			6,218,881			161,850

Total assets	¥	21,035,931		¥	21,250,325		¥	214,394

– 12 –


	Millions of yen
	March 31, 2016			March 31, 2017			Increase (Decrease)
LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings	¥	129,656		¥	227,207		¥	97,551
Current portion of long-term debt		476,777			681,904			205,127
Accounts payable, trade		1,572,797			1,612,996			40,199
Current portion of obligations under capital leases		14,711			14,430			(281	)
Accrued payroll		430,248			443,308			13,060
Accrued taxes on income		249,356			239,755			(9,601	)
Accrued consumption tax		83,481			75,083			(8,398	)
Advances received		290,132			324,342			34,210
Other		493,970			512,368			18,398

Total current liabilities		3,741,128			4,131,393			390,265

Long-term liabilities:
Long-term debt (excluding current portion)		3,546,203			3,168,478			(377,725	)
Obligations under capital leases (excluding current portion)		27,630			25,568			(2,062	)
Liability for employees’ retirement benefits		1,688,611			1,599,381			(89,230	)
Accrued liabilities for point programs		89,003			103,047			14,044
Deferred income taxes		166,547			166,751			204
Other		491,630			497,132			5,502

Total long-term liabilities		6,009,624			5,560,357			(449,267	)

Redeemable noncontrolling interests		45,097			50,819			5,722

Equity:
NTT shareholders’ equity
Common stock, no par value		937,950			937,950			—
Additional paid-in capital		2,879,560			2,862,035			(17,525	)
Retained earnings		5,074,234			5,626,155			551,921
Accumulated other comprehensive income (loss)		(57,055	)		1,562			58,617
Treasury stock, at cost		(883	)		(375,223	)		(374,340	)

Total NTT shareholders’ equity		8,833,806			9,052,479			218,673

Noncontrolling interests		2,406,276			2,455,277			49,001

Total equity		11,240,082			11,507,756			267,674

Total liabilities and equity	¥	21,035,931		¥	21,250,325		¥	214,394

– 13 –

(2) CONSOLIDATED STATEMENTS OF INCOME AND CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

YEAR ENDED MARCH 31

Consolidated Statements of Income


	Millions of yen
	2016			2017			Increase (Decrease)
Operating revenues:
Fixed voice related services	¥	1,329,963		¥	1,233,885		¥	(96,078	)
Mobile voice related services		837,818			865,293			27,475
IP / packet communications services		3,757,846			3,808,972			51,126
Sale of telecommunications equipment		953,022			806,493			(146,529	)
System integration		3,063,501			3,041,587			(21,914	)
Other		1,598,847			1,634,786			35,939

		11,540,997			11,391,016			(149,981	)

Operating expenses:
Cost of services (excluding items shown separately below)		2,458,057			2,487,588			29,531
Cost of equipment sold (excluding items shown separately below)		970,478			879,725			(90,753	)
Cost of system integration (excluding items shown separately below)		2,197,506			2,161,007			(36,499	)
Depreciation and amortization		1,766,325			1,462,235			(304,090	)
Impairment losses
Goodwill		4,719			53,294			48,575
Other		28,002			20,558			(7,444	)
Selling, general and administrative expenses		2,767,761			2,786,820			19,059

		10,192,848			9,851,227			(341,621	)

Operating income		1,348,149			1,539,789			191,640

Other income (expenses):
Interest and amortization of bond discounts and issue costs		(41,670	)		(37,761	)		3,909
Interest income		17,708			17,753			45
Other, net		5,072			7,988			2,916

		(18,890	)		(12,020	)		6,870

Income before income taxes and equity in earnings (losses) of affiliated companies		1,329,259			1,527,769			198,510

Income tax expense (benefit):
Current		457,674			472,711			15,037
Deferred		(102,849	)		(4,341	)		98,508

		354,825			468,370			113,545

Income before equity in earnings (losses) of affiliated companies		974,434			1,059,399			84,965

Equity in earnings (losses) of affiliated companies		5,772			(21	)		(5,793	)

Net income		980,206			1,059,378			79,172

Less – Net income attributable to noncontrolling interests		242,468			259,249			16,781

Net income attributable to NTT	¥	737,738		¥	800,129		¥	62,391


*Per share of common stock:**
Weighted average number of shares outstanding (Shares)		2,105,782,828			2,046,678,144
Net income attributable to NTT (Yen)	¥	350.34		¥	390.94

*	“Per share of common stock” figures for the fiscal year ended March 31, 2016 have been adjusted to reflect the two-for-one stock split.

– 14 –

Consolidated Statements of Comprehensive Income


	Millions of yen
	2016			2017			Increase (Decrease)
Net income	¥	980,206		¥	1,059,378		¥	79,172
Other comprehensive income (loss), net of tax:
Unrealized gain (loss) on securities		(32,960	)		12,308			45,268
Unrealized gain (loss) on derivative instruments		(4,079	)		495			4,574
Foreign currency translation adjustments		(115,599	)		(24,657	)		90,942
Pension liability adjustments		(208,644	)		91,034			299,678
Total other comprehensive income (loss)		(361,282	)		79,180			440,462
Total comprehensive income (loss)		618,924			1,138,558			519,634
Less – Comprehensive income attributable to noncontrolling interests		196,771			278,358			81,587

Total comprehensive income (loss) attributable to NTT	¥	422,153		¥	860,200		¥	438,047

– 15 –

(3) CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

YEAR ENDED MARCH 31, 2016


	Millions of yen
	NTT shareholders’ equity
	Common stock		Additional paid-in capital			Retained earnings			Accumulated other comprehensive income (loss)			Treasury stock, at cost			Total			Noncontrolling interests			Total Equity
At beginning of year	¥	937,950	¥	2,846,723		¥	5,126,657		¥	268,232		¥	(497,702	)	¥	8,681,860		¥	2,367,950		¥	11,049,810
Adjustments due to change in fiscal year end of consolidated subsidiaries							700			(9,702	)					(9,002	)		(595	)		(9,597	)
At beginning of year (as adjusted)		937,950		2,846,723			5,127,357			258,530			(497,702	)		8,672,858			2,367,355			11,040,213
Net income							737,738									737,738			241,075			978,813
Other comprehensive income (loss)										(315,585	)					(315,585	)		(44,749	)		(360,334	)
Cash dividends							(200,182	)								(200,182	)		(105,568	)		(305,750	)
Changes in NTT’s ownership interest in subsidiaries				28,666												28,666			(51,837	)		(23,171	)
Stock compensation transactions				4,171												4,171						4,171
Acquisition of treasury stock													(93,886	)		(93,886	)					(93,886	)
Resale of treasury stock				8									18			26						26
Cancellation of treasury stock				(8	)		(590,679	)					590,687			—						—
At end of year	¥	937,950	¥	2,879,560		¥	5,074,234		¥	(57,055	)	¥	(883	)	¥	8,833,806		¥	2,406,276		¥	11,240,082

– 16 –

YEAR ENDED MARCH 31, 2017


	Millions of yen
	NTT shareholders’ equity
	Common stock		Additional paid-in capital			Retained earnings			Accumulated other comprehensive income (loss)			Treasury stock, at cost			Total			Noncontrolling interests			Total Equity
At beginning of year	¥	937,950	¥	2,879,560		¥	5,074,234		¥	(57,055	)	¥	(883	)	¥	8,833,806		¥	2,406,276		¥	11,240,082
Adjustments due to change in fiscal year end of consolidated subsidiaries							(214	)		(1,454	)					(1,668	)		(1,408	)		(3,076	)
At beginning of year (as adjusted)		937,950		2,879,560			5,074,020			(58,509	)		(883	)		8,832,138			2,404,868			11,237,006
Net income							800,129									800,129			257,593			1,057,722
Other comprehensive income (loss)										60,071						60,071			20,389			80,460
Cash dividends							(247,994	)								(247,994	)		(113,167	)		(361,161	)
Changes in NTT’s ownership interest in subsidiaries				(18,700	)											(18,700	)		(114,406	)		(133,106	)
Stock compensation transactions				1,175												1,175						1,175
Acquisition of treasury stock													(374,348	)		(374,348	)					(374,348	)
Resale of treasury stock													8			8						8
At end of year	¥	937,950	¥	2,862,035		¥	5,626,155		¥	1,562		¥	(375,223	)	¥	9,052,479		¥	2,455,277		¥	11,507,756

– 17 –

(4) CONSOLIDATED STATEMENTS OF CASH FLOWS

YEAR ENDED MARCH 31


	Millions of yen
	2016			2017			Increase (Decrease)
Cash flows from operating activities:
Net income	¥	980,206		¥	1,059,378		¥	79,172
Adjustments to reconcile net income to net cash provided by operating activities -
Depreciation and amortization		1,766,325			1,462,235			(304,090	)
Impairment losses		32,721			73,852			41,131
Deferred taxes		(102,849	)		(4,341	)		98,508
Losses on disposals of property, plant and equipment		107,474			105,790			(1,684	)
Gains on sales of property, plant and equipment		(20,364	)		(15,633	)		4,731
Equity in (earnings) losses of affiliated companies		(5,772	)		21			5,793
(Increase) decrease in notes and accounts receivable, trade		(72,575	)		63,842			136,417
(Increase) decrease in inventories		(47,569	)		(731	)		46,838
(Increase) decrease in other current assets		(63,107	)		(30,143	)		32,964
Increase (decrease) in accounts payable, trade and accrued payroll		(34,539	)		52,872			87,411
Increase (decrease) in accrued consumption tax		(64,596	)		(7,258	)		57,338
Increase (decrease) in advances received		46,191			36,925			(9,266	)
Increase (decrease) in accrued taxes on income		124,905			(8,931	)		(133,836	)
Increase (decrease) in other current liabilities		8,198			8,934			736
Increase (decrease) in liability for employees’ retirement benefits		49,360			7,133			(42,227	)
Increase (decrease) in other long-term liabilities		(1,965	)		41,785			43,750
Other		9,801			71,627			61,826

Net cash provided by operating activities	¥	2,711,845		¥	2,917,357		¥	205,512

– 18 –


	Millions of yen
	2016			2017			Increase (Decrease)
Cash flows from investing activities:
Payments for property, plant and equipment	¥	(1,265,622	)	¥	(1,301,697	)	¥	(36,075	)
Payments for intangibles		(371,924	)		(400,110	)		(28,186	)
Proceeds from sales of property, plant and equipment		83,521			24,920			(58,601	)
Payments for purchases of non-current investments		(56,641	)		(40,344	)		16,297
Proceeds from sales and redemptions of non-current investments		57,173			58,835			1,662
Acquisitions of subsidiaries, net of cash acquired		(120,596	)		(329,005	)		(208,409	)
Payments for purchases of short-term investments		(26,521	)		(178,939	)		(152,418	)
Proceeds from redemptions of short-term investments		23,095			146,132			123,037
Other		(82,263	)		(69,103	)		13,160

Net cash used in investing activities		(1,759,778	)		(2,089,311	)		(329,533	)


Cash flows from financing activities:
Proceeds from issuance of long-term debt		398,348			320,464			(77,884	)
Payments for settlement of long-term debt		(449,025	)		(485,612	)		(36,587	)
Proceeds from issuance of short-term debt		4,460,110			4,987,795			527,685
Payments for settlement of short-term debt		(4,659,686	)		(4,897,024	)		(237,338	)
Dividends paid		(200,182	)		(247,994	)		(47,812	)
Proceeds from sale of (payments for acquisition of) treasury stock, net		(93,924	)		(374,436	)		(280,512	)
Acquisitions of shares of subsidiaries from noncontrolling interests		(15,718	)		(155,905	)		(140,187	)
Other		(147,498	)		(128,799	)		18,699

Net cash used in financing activities		(707,575	)		(981,511	)		(273,936	)

Effect of exchange rate changes on cash and cash equivalents		(7,419	)		(6,959	)		460

Net increase (decrease) in cash and cash equivalents		237,073			(160,424	)		(397,497	)

Cash and cash equivalents at beginning of year		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 year	¥	1,088,275		¥	925,213		¥	(163,062	)

– 19 –

(5) Going Concern Assumption

None

(6) Significant Matters Serving as a Basis for the Preparation of Consolidated Financial Statements

The consolidated financial statements of NTT have been prepared in conformity with accounting principles generally accepted in the United States of America (Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), etc.).

Principal Accounting Policies, etc.

Marketable Securities

ASC320, “Investments – Debt and Equity Securities” applies.

Inventories

Inventories are stated at the lower of cost or market. The cost of telecommunications equipment to be sold is determined by the first-in first-out method.

Property, Plant and Equipment

Property, plant and equipment are stated at cost. Depreciation is computed principally using the straight-line method.

Goodwill, Software and Other Intangible Assets

ASC350, “Intangibles – Goodwill and Other” applies.

Liability for Employees’ Retirement Benefits

ASC715, “Compensation – Retirement Benefits” applies.

Derivative Financial Instruments

ASC815, “Derivatives and Hedging” applies.

Income Taxes

Income taxes are computed based on income before income taxes in the consolidated statements of income. According to the asset and liability approach, the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities and of operating loss carryforwards are recognized as deferred tax assets or liabilities.

– 20 –

(7) Change in Significant Matters Serving as a Basis for the Preparation of Consolidated Financial Statements

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 fiscal year ended March 31, 2017 decreased by ¥244,177 million. Consolidated net income attributable to NTT and consolidated net income attributable to NTT per share for the fiscal year ended March 31, 2017 increased by ¥132,222 million and ¥64.60, 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 lag between their fiscal year ends and NTT’s fiscal year end in NTT’s consolidated financial statements. The elimination of this lag 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 fiscal 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.”

– 21 –

(8) Business Segments

1. Operating revenues


	(Millions of yen)
	Year ended March 31, 2016			Year ended March 31, 2017			Increase (Decrease)
Regional communications business
External customers	¥	2,908,249		¥	2,736,664		¥	(171,585	)
Intersegment		499,604			571,542			71,938

Total		3,407,853			3,308,206			(99,647	)

Long-distance and international communications business
External customers		2,161,391			2,040,209			(121,182	)
Intersegment		89,532			89,055			(477	)

Total		2,250,923			2,129,264			(121,659	)

Mobile communications business
External customers		4,483,666			4,535,829			52,163
Intersegment		43,459			48,723			5,264

Total		4,527,125			4,584,552			57,427

Data communications business
External customers		1,512,842			1,609,163			96,321
Intersegment		103,994			109,558			5,564

Total		1,616,836			1,718,721			101,885

Other
External customers		474,849			469,151			(5,698	)
Intersegment		819,617			813,120			(6,497	)

Total		1,294,466			1,282,271			(12,195	)

Elimination		(1,556,206	)		(1,631,998	)		(75,792	)

Consolidated total	¥	11,540,997		¥	11,391,016		¥	(149,981	)

– 22 –

2. Segment profit


	(Millions of yen)
	Year ended March 31, 2016		Year ended March 31, 2017		Increase (Decrease)
Segment profit
Regional communications business	¥	264,957	¥	359,491	¥	94,534
Long-distance and international communications business		96,688		40,836		(55,852	)
Mobile communications business		788,362		951,634		163,272
Data communications business		112,739		107,875		(4,864	)
Other		74,042		77,308		3,266

Total segment profit		1,336,788		1,537,144		200,356
Elimination		11,361		2,645		(8,716	)

Consolidated total	¥	1,348,149	¥	1,539,789	¥	191,640

3. Segment assets


	(Millions of yen)
	March 31, 2016			March 31, 2017			Increase (Decrease)
Segment assets
Regional communications business	¥	6,995,750		¥	7,027,689		¥	31,939
Long-distance and international communications business		2,762,138			2,772,961			10,823
Mobile communications business		7,341,102			7,599,619			258,517
Data communications business		1,981,578			2,364,387			382,809
Other		10,932,317			10,891,660			(40,657	)

Total segment assets		30,012,885			30,656,316			643,431
Elimination		(8,976,954	)		(9,405,991	)		(429,037	)

Consolidated total	¥	21,035,931		¥	21,250,325		¥	214,394

– 23 –

4. Other significant items


	(Millions of yen)
	Year ended March 31, 2016		Year ended March 31, 2017		Increase (Decrease)
Depreciation and amortization
Regional communications business	¥	699,686	¥	586,772	¥	(112,914	)
Long-distance and international communications business		177,818		171,670		(6,148	)
Mobile communications business		629,502		455,779		(173,723	)
Data communications business		150,242		155,352		5,110
Other		104,701		89,260		(15,441	)

Total segment		1,761,949		1,458,833		(303,116	)
Elimination		4,376		3,402		(974	)

Consolidated total	¥	1,766,325	¥	1,462,235	¥	(304,090	)


	(Millions of yen)
	Year ended March 31, 2016		Year ended March 31, 2017		Increase (Decrease)
Capital investments for segment assets (*)
Regional communications business	¥	622,131	¥	583,358	¥	(38,773	)
Long-distance and international communications business		227,564		244,859		17,295
Mobile communications business		595,264		597,078		1,814
Data communications business		134,030		158,140		24,110
Other		108,217		116,592		8,375

Consolidated total	¥	1,687,206	¥	1,700,027	¥	12,821

(*)

The figures for capital investments are the accrual-based amounts required for acquisition of property, plant and equipment, and intangibles. The differences from the figures for “Payments for property, plant and equipment” and “Payments for intangibles” in the consolidated statements of cash flows are as follows:


	Millions of yen
	Year ended March 31, 2016			Year ended March 31, 2017		Increase (Decrease)
Payments for property, plant and equipment	¥	1,265,622		¥	1,301,697	¥	36,075
Payments for intangibles		371,924			400,110		28,186

Total		1,637,546			1,701,807		64,261
Difference from the total of capital investments	¥	(49,660	)	¥	1,780	¥	51,440

As indicated in “3(7) Change in Significant Matters Serving as a Basis for the Preparation of Consolidated Financial Statements,” effective April 1, 2016, NTT and its subsidiaries in Japan adopted the straight-line method of depreciation and 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 depreciation method, segment profit on a consolidated basis for the fiscal year ended March 31, 2017 increased by ¥79,373 million for “Regional communications business,” ¥6,633 million for “Long distance and international communications business,” ¥154,050 million for “Mobile communications business,” and ¥5,072 million for “Other,” decreased by ¥951 million for “Data communications business,” and increased by ¥244,177 million for “Total segment” and “Consolidated total.”

– 24 –

(9) Subsequent Events

NTT’s repurchase of its common stock

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 21,693,800 shares of its common stock for a total purchase price of ¥106,763 million between December 2016 and March 2017.

NTT also repurchased 8,893,400 shares of its common stock for a total purchase price of ¥43,235 million in April 2017 and concluded the repurchase of its common stock authorized by Board of Directors’ resolution.

– 25 –

[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.

– 26 –

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Financial Results for the Fiscal Year Ended March 31, 2017 And Financial Forecasts for the Fiscal Year Ending March 31, 2018 May 15, 2017

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Table of Contents Fiscal Year ended March 31, 2017 Summary of Consolidated Financial Results Topics Contributing Factors by Segment Progress toward Medium-Term Financial Targets Strengthening NTT’s Global Business Fiscal Year ending March 31, 2018 Forecast Summary Forecast Summary by Segment Shareholder Returns (Reference) Major B2B2X Initiatives (Reference) Major R&D Initiatives Appendix Financial Results for the Fiscal Year Ended March 31, 2017 and Financial Forecasts for the Fiscal Year Ending March 31, 2018 —2— Copyright (c) 2017 Nippon Telegraph and Telephone Corporation

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FY2016 Summary of Consolidated Financial Results Operating Income increased by ¥191.6 billion [14.2%] Net Income reached new record levels EPS increased by ¥41 to ¥391 Status of Consolidated Financial Results Operating Revenues: ¥11,391.0 billion (decrease of ¥150.0 billion [(1.3)%] year-on-year) Operating Income: ¥1,539.8 billion (increase of ¥191.6 billion [14.2%] year-on-year) Net Income*: ¥800.1 billion (increase of ¥62.4 billion [8.5%] year-on-year) EPS: ¥390.94 (increase of ¥40.60 [11.6%] year-on-year) * Net income represents net income attributable to NTT, excluding noncontrolling interests. Financial Results for the Fiscal Year Ended March 31, 2017 and Financial Forecasts for the Fiscal Year Ending March 31, 2018 —3— Copyright (c) 2017 Nippon Telegraph and Telephone Corporation

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FY2016 Topics Increased Profitability of Network Services Expansion of NTT’s User Base Mobile Subscriptions: 74.88 million mobile subscriptions (net increase of 3.92 million) (Included in the above) Kake-hodai & Pake-aeru: 37.07 million subscriptions (net increase of 7.36 million) FTTH Subscriptions: 20.05 million subscribers (net increase of 0.79 million) (Included in the above) Hikari Collaboration: 8.74 million (4.74 million opened connections (1.93 million new subscribers and 2.82 million subscribers who switched subscriptions from FLET’S Hikari) Growing number of Wi-Fi area owners*: 557 (increase of 164 year-on-year) Expansion of Global Cloud Services Cross-Selling Order Volume: US$940 million Promotion of the B2B2X Model Expanded the scope of collaboration with other companies and local governments through the use of NTT Group’s latest cutting-edge technology in the fields of sports, traditional entertainment, manufacturing industry, connected cars, etc. * Total number of large-scale corporate or local government customers. Excludes small-scale restaurants, etc. Financial Results for the Fiscal Year Ended March 31, 2017 and Financial Forecasts for the Fiscal Year Ending March 31, 2018 —4— Copyright (c) 2017 Nippon Telegraph and Telephone Corporation

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FY2016 Contributing Factors by Segment Significant increase in Operating Income in the Regional communications business and Mobile communications business Operating Revenues (Year-on-year: (150.0)) (Billions of yen) Regional communications Long distance and Data international communications Other business communicationsMobilebusinessbusiness * 99.6 businesscommunications business101.988.0 11,541.0 121.757.411,391.0 kFY2016 l k3,308.2 l k2,129.3 l k4,584.6 l k1,718.7 l FY2015 FY2016 Operating Income (Year-on-year : +191.6) MobileData Long distance andcommunicationscommunicationsOther Regional internationalbusinessbusinessbusiness * communications communications business business163.34.95.5 94.5 55.91,539.8 1,348.1 kFY2016 l k359.5 l k40.8 l k951.6 l k107.9 l FY2015 FY2016 *Includes adjustments such as elimination Financial Results for the Fiscal Year Ended March 31, 2017 and Financial Forecasts for the Fiscal Year Ending March 31, 2018 —5— Copyright (c) 2017 Nippon Telegraph and Telephone Corporation

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FY2016 Progress toward Financial Targets Results Medium Term (FY2016)Targets (FY2017E) EPS Growth ¥390.94At least ¥400 Streamlining Capital Investment (Domestic Network Business*) [compared to FY2014] ¥136.4 billion At least ¥200 billion Cost Reductions** ¥654.0 billion At least ¥800 billion (in fixed-line/mobile access networks) [compared to FY2014] Overseas Sales/Operating Income*** $16.9B/$0.8B $22B/$1.5B * Excludes NTT Com’s data centers and certain other assets. ** Does not reflect the impact of the change in depreciation method. *** Operating Income excludes temporary expenses, such as M&A-related depreciation costs of intangible fixed assets Financial Results for the Fiscal Year Ended March 31, 2017 and Financial Forecasts for the Fiscal Year Ending March 31, 2018 —6— Copyright (c) 2017 Nippon Telegraph and Telephone Corporation

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Strengthening NTT’s Global Business FY2016 Initiatives Go-To-Market Achieved record TCV* of cross-selling Organized Go-to-Market account support team across NTT Group Established sales collaboration platform *Total Contract Value Services / Operations Established and launched NTT Security Offered packaged services and improved service collaboration across NTT Group companies Procurement Reduced costs by refining common specifications and leveraging volume to obtain better discounts FY2017 Initiatives Integrate management of the cloud IaaS platforms of NTT Com and Dimension Data to strengthen cloud offerings (Wholesale from NTT Com to Dimension Data) <Purpose> Secure, compliant enterprise-grade clouds Combination of public and private clouds for clients’ mission-critical IT systems Open cloud platform to support clients’ digital business with the latest innovation Hybrid IT managed services across full-stack IT Strengthen coordination of delivery processes across NTT Group companies Accelerate global account activities to win large-scale deals Financial Results for the Fiscal Year Ended March 31, 2017 and Financial Forecasts for the Fiscal Year Ending March 31, 2018 —7— Copyright (c) 2017 Nippon Telegraph and Telephone Corporation

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FY2017 Forecast Summary Operating Income expected to increase by ¥50.2 billion [3.3%] to ¥1,590.0 billion Operating Revenues, Operating Income and Net Income expected to reach record levels EPS expected to reach medium-term financial target (at least ¥400) Plan for Consolidated Revenues and Income Operating Revenues: ¥11,750.0 billion (increase of ¥359.0 billion [3.2%] year-on-year) Operating Income : ¥1,590.0 billion (increase of ¥50.2 billion [3.3%] year-on-year) Net Income* : ¥830.0 billion (increase of ¥29.9 billion [3.7%] year-on-year) EPS : ¥414.00 (increase of ¥23.06 [5.9%] year-on-year) * Net income represents net income attributable to NTT, excluding noncontrolling interests. Financial Results for the Fiscal Year Ended March 31, 2017 and Financial Forecasts for the Fiscal Year Ending March 31, 2018 —8— Copyright (c) 2017 Nippon Telegraph and Telephone Corporation

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FY2017 Forecast Summary by Segment Increase in both Operating Revenues and Operating Income in the Long distance and international communications business, Data communications business and Mobile communications business Operating Revenues (Year-on-year: +359.0) Data communications Other (Billions of yen) business business * Mobile 80.3 Long distance and communications 251.3 Regional international business communications communications business business 165.411,750.0 11,391.0 78.2100.7 [FY2017E] [3,230.0 ] [2,230.0] [4,750.0][1,970.0] FY2016 FY2017E Operating Income (Year-on-year : +50.2) Long distance and Data international Mobile communications Other Regional communications communications business business * communications business business 22.125.0 business 29.579.23.41,590.0 1,539.8[FY2017E] [330.0] [120.0] [955.0] [130.0] FY2016 FY2017E *Includes adjustments such as elimination Financial Results for the Fiscal Year Ended March 31, 2017 and Financial Forecasts for the Fiscal Year Ending March 31, 2018 — 9 — Copyright (c) 2017 Nippon Telegraph and Telephone Corporation

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Shareholder Returns Share Buybacks: Completed ¥374.1 billion of share buybacks from the government and on the open market during FY2016 (and completed ¥43.2 billion of share buybacks on the open market in April 2017) Dividends: Increase total annual dividend per share for FY2017 by ¥30 over the previous year to ¥150 Share Buybacks 539.4 (Billions of yen) 406.5 366.5 381.7 374.1 338.1 200.0 120.0 150.0 86.2 100.0 94.4 93.6 TBD FY1999 FY2002 FY2003 FY2004 FY2005 FY2007 FY2008 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017E Dividends per (Yen) Share Pay-out ratio 150 Note: Dividends have been adjusted to reflect the two-for-one stock split carried out on July 1, 2015 120 90 110 80 85 60 60 70 45 55 38.2% 37.2% 38.0% 36.2% 40 32.3% 31.2% 33.4% 31.4% 30.7% 25 30 30 27.5% 13.0% 23.0% 12.3% 19.5% 17.1% FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017E Financial Results for the Fiscal Year Ended March 31, 2017 and Financial Forecasts for the Fiscal Year Ending March 31, 2018—10— Copyright (c) 2017 Nippon Telegraph and Telephone Corporation

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(Reference) Major B2B2X Initiatives in FY2016 Entertainment April 2016- Providing amazing experiences through the integration of Kabuki and cutting-edge ICT Sports May 2016- Providing advanced sports-viewing experiences using ICT Agriculture June 2016- ICT solutions for agriculture and water infrastructure, combining AI and IoT Tourism July 2016- City of Sapporo Smart city project through Sapporo City’s ICT-utilizing platform Sports July 2016- DAZN Smart stadium project and providing advanced game-viewing experiences Manufacturing July 2016- Optimization of manufacturing/production processes with IoT Transport Jan. 2017- Offline-to-online linked ads, and navigation at metro stations Healthcare Feb. 2017- Improvement of rehabilitation efficiency through the use of wearable biosensors Transport Sept. 2016- Safe driving control solutions integrating biometric information Infrastructure Nov. 2016- Innovative cybersecurity solutions for secure operation of critical infrastructure Auto March 2017- Technological development and verification in the connected car field Financial Results for the Fiscal Year Ended March 31, 2017 and Financial Forecasts for the Fiscal Year Ending March 31, 2018 —11— Copyright (c) 2017 Nippon Telegraph and Telephone Corporation

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(Reference) Major R&D Initiatives in FY2016 Dialogue Technology Catching the World’s Attention Showcased “Natural Conversation among Multiple Persons and Robots” and other technology at SXSW2017 (3/10-19 in Austin, U.S.A.) Android (Osaka University) x Discussion Dialogue (NTT) Front-page news in USA TODAY and local newspapers The World’s Best Sound-Processing Technology Provided Hitachi Zosen with “Anomaly Noise Detection Technology” that objectively visualizes and analyzes the characteristics of both normal operating sounds and anomaly noises of manufacturing machines Recorded Operating Sounds 0 -500 8000 Reduction of -1000 6000 -1500 4000 Environmental Anomaly Sounds and -2000 Frequency 2000 Noise -2500 Level 0 (Hz) 0 Anomaly 0 20 40 60 Time (S) Time (S) Noise World-Leading Security Technology Developed “Secure Computation Technology,” which enables the accurate analysis of encrypted genome information, the most sensitive personal information, between multiple institutes together, without decrypting the data Medical Institutes Example of Medical Institutes Genome Analysis Encrypted Research Labs Calculation Engine Research Labs Realized “Fisher’s Encrypted exact test” by secure Data computation technology First in the World Unrecoverable Unauthorized Access Virtual Reality Baseball Coaching System Developed a coaching system for professional baseball players using “athlete first-person vision synthesis technology,” which enables players to experience simulations of pitches with immersive reality, and carried out practice testing with Tohoku Rakuten Golden Eagles (commercial launch in 2017) Diversity Navigation Developed “MaPiece” technology, which easily collects accessibility information, as well as “2.5D map representation technology,” which realizes easy-to-understand 3D map displays Support convenient and safe mobility of different types of people (seniors, people with baby strollers, foreign visitors, and others) Non-Conventional Computer Developed “Quantum Neural Network,” a new computer based on quantum optical technology. The use of quantum properties of optical signals enables us to find solutions to combinatorial optimization problems, which are extremely difficult for conventional Optical parametric oscillator computers to solve Information processing (Quantum analog device) (neuron) Parametric Degenerate Optical Pump Pulse Phase Sensitive Oscillator (DOPO) Amplification Approx. 50 times faster Optical Ring compared to current Resonator digital computers Coupler Coupler Posted in online version Optical modulator Measurement of the American scientific magazine, “Science” Digital Signal FPGA Digital Signal (Feedback Information) (OPO Pulse Information) Communication FPGA Measurement Feedback Circuit (Synaptic connection) (Legacy digital device) and Financial Financial Results Forecasts for the for Fiscal the Year Fiscal Ended Year Ending March 31, March 2017 31, 2018 —12— Copyright (c) 2017 Nippon Telegraph and Telephone Corporation

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Appendix

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Progress of Broadband Services

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Progress of Broadband Services Number of Subscribers for Fixed Broadband Services FLET’S ADSL FLET’S Hikari (including Hikari Number of Subscribers *1*2 Collaboration Model) Hikari Denwa (Thousands) 22,000 21,644 20,540 20,691 20,858 20,972 791 20,113 20,161 20,248 20,312 955 919 20,853 20,000 1,162 1,125 1,090 1,053 1,019 987 19,903 20,053 [11,894] 18,951 19,036 19,157 19,259 19,520 [5,912] 19,704 [6,917] [7,854] [8,744] 18,000 [1,322] [2,348] [3,478] [4,691] 17,988 17,759 16,000 17,545 17,655 17,243 17,293 17,335 17,374 17,451 14,000 12,000 00 2015.6 2015.9 2015.12 2016.3 2016.6 2016.9 2016.12 2017.3 2018.3E Changes from the Preceding Quarter (Thousands) FY2015 FY2016 FY2016 FY2017E 4-6 7-9 10-12 1-3 4-6 7-9 10-12 1-3 FLET’S Hikari *1 235 85 121 102 261 183 199 150 794 800 Number of opened *3 810 559 580 669 786 649 672 750 2,857 2,900 connections FLET’S ADSL (58) (37) (35) (37) (34) (32) (32) (36) (134) (128) Hikari Denwa *4 *5 135 50 42 39 77 93 111 104 385 229 *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 Forecasts for the for Fiscal the Year Fiscal Ended 31, March 2017 and Financial Year Ending March 31, 2018 Copyright (c) 2017 Nippon Telegraph and Telephone Corporation —13—

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Progress of Broadband Services Number of Subscribers for Mobile Broadband Services Number of Subscribers* LTE(“Xi”) (Thousands) FOMA 80,000 77,100 72,943 73,588 74,880 70,000 67,532 68,494 69,602 70,964 71,614 60,000 50,000 32,609 34,504 36,293 38,679 39,893 41,281 42,671 44,544 51,700 40,000 30,000 20,000 34,923 33,989 33,309 32,285 31,721 31,662 30,917 30,336 10,000 25,400 0 2015.6 2015.9 2015.12 2016.3 2016.6 2016.9 2016.12 2017.3 2018.3E Changes from the Preceding Quarter (Thousands) FY2015 FY2016 4-6 7-9 10-12 1-3 4-6 7-9 10-12 1-3 FY2016 FY2017E LTE(“Xi”)+FOMA 936 962 1,108 1,362 650 1,330 645 1,292 3,916 2,200 * The number of subscribers for Mobile Broadband Services includes communications module service subscribers Financial Results Forecasts for the for Fiscal the Year Fiscal Ended March 31, March 2017 and Financial Year Ending 31, 2018 Copyright (c) 2017 Nippon Telegraph and Telephone Corporation —14—

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Progress of Broadband Services Number of Subscribers for Video Services FLET’S TV *1 *2 Hikari TV (Thousands) 5,000 4,544 4,632 4,416 4,442 4,464 4,484 4,492 4,505 4,521 4,000 1,378 1,398 1,417 1,432 1,445 1,464 1,489 1,521 1,602 3,000 2,000 3,038 3,043 3,047 3,052 3,047 3,041 3,032 3,023 3,030 1,000 0 2015.6 2015.9 2015.12 2016.3 2016.6 2016.9 2016.12 2017.3 2018.3E *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 Forecasts for the for Fiscal the Year Fiscal Ended March 31, March 2017 and Financial Year Ending 31, 2018 Copyright (c) 2017 Nippon Telegraph and Telephone Corporation —15 —

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Financial Information

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Details of Consolidated Statement of Income Operating Revenues (Year-on-year: (150.0)) (Billions of yen) Voice related services revenues SI revenues and sale of telecommunications equipment IP/packet communications services revenues Other revenues 68.6 Fixed voice : (96.1) 168.4 11,541.0 Mobile voice: + 27.5 Systems Integration: (21.9) Telecommunications equipment: (146.5) 11,391.0 FY2016 4-12 Operating Expenses (Year-on-year: (341.6)) 10,192.8 FY2015 298.8 Depreciation expenses and loss on disposal of assets Expenses of goods and for purchase services and other expenses 63.9 Personnel expenses 22.9 Other expenses 43.9 9,851.2 FY2016 Financial Results Forecasts for the for Fiscal the Year Fiscal Ended March 31, March 2017 and Financial Year Ending 31, 2018 Copyright (c) 2017 Nippon Telegraph and Telephone Corporation -16-

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Details of Consolidated Balance Sheet March 31, 2016 21,035.9 Assets 21,035.9 Liabilities 9,750.8 Interest-Bearing Debt 4,163.3 Cash and Cash Equivalents 1,088.3 Other 45.1 Goodwill 1,229.2 Equity 11,240.1 Depreciable Assets (property, plant and Retained earnings equipment) 5,074.2 7,896.5 Treasury Stock (0.9) (Billions of yen) March 31, 2017 21,250.3 Assets 21,250.3 [+214.4] Cash and Cash Equivalents 925.2 [(163.1)] Goodwill 1,314.6 [+85.4] Depreciable Assets (property, plant and equipment) 8,004.5 [+108.0] Liabilities 9,691.8 [(59.0)] Interest-Bearing Debt 4,088.2 [(75.1)] Other 50.8 [+5.7] Equity 11,507.8 [+267.7] Retained earnings 5,626.2 [+551.9] Treasury Stock (375.2) [(374.3)] Financial Results Forecasts for the for Fiscal the Year Fiscal Ended March 31, March 2017 and Financial Year Ending 31, 2018 Copyright (c) 2017 Nippon Telegraph and Telephone Corporation -17-

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Details of Consolidated Cash Flows Cash flows from operating activities (A) Cash flows from investing activities (B) FCF (A) + (B) Cash flows from financing activities Interest-bearing debt 3,000 2,000 1,000 0 (1,000) (2,000) (3,000) 2,917.4 2,711.8 (329.5) (124.0) 952.1 828.0 Acquisitions/Sales of property, plant, equipment and intangibles [(122.9)] Acquisitions of subsidiaries [(208.4)] +205.5 Increase in accounts receivable [+136.4] (1,759.8) (2,089.3) (707.6) (981.5) (273.9) Increase/Decrease in debt [+175.9] Acquisition/Sales of treasury stock [(280.5)] Acquisition of shares of subsidiaries [(140.2)] 0 3,500 4,000 4,500 FY2015 4,163.3 FY2016 4,088.2 FY2015 FY2016 Increase/Decrease from the same period of the previous fiscal year Financial Results Forecasts for the for Fiscal the Year Fiscal Ended March 31, March 2017 and Financial Year Ending 31, 2018 Copyright (c) 2017 Nippon Telegraph and Telephone Corporation —18—

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Details of Capital Investment (Billions of yen) 12.8 0.0 1,687.2 [0.8%] 1,700.0 [0.0%] 1,700.0 243.8 261.8 317.0 134.0 158.1 192.0 130.8 135.1 111.0 289.4 274.1 260.0 294.0 273.8 250.0 595.2 597.1 570.0 FY2015 FY2016 FY2017E Other NTT DATA (Consolidated) NTT Communications NTT West NTT East NTT DOCOMO (Consolidated) Financial Results Forecasts for the for Fiscal the Year Fiscal Ended March 31, March 2017 and Financial Year Ending 31, 2018 Copyright (c) 2017 Nippon Telegraph and Telephone Corporation -19-

May 15, 2017

FOR IMMEDIATE RELEASE

Financial Results for Fiscal Year Ended March 31, 2017

The financial results of Nippon Telegraph and Telephone East Corporation (NTT East) for the fiscal year ended March 31, 2017 are presented in the following attachments.

(Attachments)

1.	Summary of Results for the Fiscal Year Ended March 31, 2017

2.	Non-Consolidated Comparative Balance Sheets

3.	Non-Consolidated Comparative Statements of Income

4.	Non-Consolidated Statements of Changes in Shareholders’ Equity and Other Net Assets

5.	Business Results (Non-Consolidated Operating Revenues)

6.	Non-Consolidated Comparative Statements of Cash Flows

7.	Changes in Board of Directors

For inquiries, please contact:

Mr. 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.	Summary of Results for the Fiscal Year Ended March 31, 2017

In the fiscal year ended March 31, 2017, a wide range of changes took place in the information and telecommunications market with the increased spread and market penetration of devices that utilize fixed-line and mobile broadband, and improved convenience in people’s everyday lives and productivity in various industries through the emergence of new services made possible by the evolution of technologies such as cloud services, AI (*1), Big Data (*2), and IoT (*3). In addition, the role of information and telecommunications is becoming increasingly important, including strengthening security measures against increasingly sophisticated and complex cyberattacks, strengthening natural disaster countermeasures and managing safe and secure social systems. This change can be seen on a global scale.

The regional telecommunications market is also changing dramatically, with intensifying competition in broadband services. In addition, new services that leverage a variety of wireless devices are also expanding, which in turn leads to diversification in the way that customers are using these devices, and offloading (*4) needs are increasing due to the expansion of the volume of data communications.

Amid such a difficult and volatile business environment, as a carrier with an important leadership role in the information and telecommunications industry, NTT East has endeavored to be thorough in its compliance regime and to abide by the requirements of fair competition. At the same time, NTT East has worked to secure a stable and solid foundation for its business, and to ensure its reliability as a social infrastructure, through the provision of high-quality, stable, universal services, construction of a telecommunications network that is resilient against disasters, and initiatives for prompt restoration of services in case of large-scale natural disasters and other calamities.

NTT East has also endeavored to enhance the broadband network environment and further expand its user base by offering new services and products, as well as offering customer-friendly pricing options with long-term appeal.

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1.	Efforts to Promote Fiber-Optic and IP Services

Amid intensifying competition with respect to broadband services, NTT East strengthened its “Hikari Collaboration Model” initiatives to expand and continue using “FLET’S Hikari” (*5) and to meet customers’ needs. Businesses receiving fiber-optic access services (FLET’S Hikari) from NTT East combine their own services with fiber-optic access services to create and provide their own new service. NTT East has been working to create new demand and to improve customer retention by supporting and actively developing new business partners for its “Hikari Collaboration Model.” NTT East has also been working to promote early stable operations and increased efficiency of related operations.

An example of “Hikari Collaboration Model” usage includes a collaboration with IIDA CABLE TELEVISION Co., Ltd. to launch the “IIDA CABLE TELEVISION & FLET’S Hikari” service on April 27, 2016. This service utilizes “FLET’S Hikari” provided by NTT East or fiber optic access services provided by Hikari Collaboration businesses and allows customers to watch and listen to broadcasting services provided by IIDA CABLE TELEVISION.

Similarly, NTT East started providing “Sayama Cable TV & FLET’S Hikari” in conjunction with Sayama Cable TV, as of March 25, 2017.

In addition, through home appliances control utilizing HEMS (*6), building a next generation security network that utilizes “FLET’S VPN GATE,” and collaborating with a variety of businesses such as private preparatory schools and care providers, NTT East aimed to promote ICT usage in a wide variety of fields. As a result, the “Hikari Collaboration Model” is being utilized by over 470 businesses, and the number of subscribers for “Hikari Collaboration Model” fiber-optic access services (Hikari Collaboration) exceeded five million as of January 29, 2017. The fiber-optic access services “FLET’S Hikari” and “Hikari Collaboration” exceeded the number of fixed telephone facilities, exceeding 11 million subscribers as of October 31, 2016.

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2.	Initiatives Relating to the Solutions Business

NTT East worked on providing new services and solutions that meet the needs and characteristics depending on the industry and business format of its corporate customers, expanding broadband services and promoting ICT utilization.

As part of its Wi-Fi services for corporate customers, NTT East is currently providing a simple Wi-Fi service “GigaRaku Wi-Fi,” including support services. From April 1, 2016, NTT East also began providing “Remote access option,” which includes remote access functions that enable access to the office LAN on the road and from home via a mobile device, combined with installation and operational support, and “LAN power supply option,” which supplies power to access points via LAN cables, together with support services.

ii.	For cloud services, on April 25, 2016, NTT East began providing “GigaRaku Camera,” a cloud-based camera monitoring and recording service, with which users can monitor a network camera in real-time and view recorded data anytime and from anywhere.

In addition, on September 1, 2016, NTT East began providing the “CloudGatewayAppliPackage,” a metered service for corporate customers who want to use cloud-based applications easily and securely. The service provides a function to allow cloud service connectivity without an internet connection and an application server as a package. NTT East also began providing a fixed-price network service, “CloudGatewayCrossConnect” from October 11, 2016, intended for customers who want to use cloud services via a high-reliability closed area network. The service enables access to cloud services from FLET’S VPN Service.

In addition, on June 28, 2016, NTT East began offering “KantanTablet service,” a cloud service for corporate customers that want to deploy their own services for elderly or similar customers who are unfamiliar with the internet. This service provides portal functions for beginners that enables more intuitive operations from a tablet device with large buttons, platforms that offer automatic log-on functions for online shopping and other sites, and telephone and other remote functions.

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iii.

NTT East launched “MaruRaku Office” on March 31, 2017 in response to requests for a basic ICT environment as a set package. This service offers internet lines, Wi-Fi environment, security measures, and a support menu including an ICT help desk and 24-hour/365-day malfunction response services as a bundle.

iv.

One industry-specific service includes “RoboConnect,” a cloud-based robot platform service launched on September 1, 2016 that offers application services such as dialog functions and camera image capture functions via cloud through the utilization of communication robots provided by various robot manufacturers for nursing care businesses.

In addition, in order to realize a service that enables users to utilize home electricity usage information, NTT East began offering a platform service, “HEMS information connect,” for HEMS information utilization businesses on October 14, 2016. This platform integrates HEMS information data collected from HEMS service providers into a unified data format.

As a measure to revitalize local communities through sports, NTT East launched the “Smart Stadium” service on July 2, 2016 to NACK5 Stadium Omiya in order to solve regional challenges through ICT use. This service utilizes cutting-edge technologies to provide a new type of visual experience and style for watching sports.

In addition, at the request of the Tokyo Metropolitan Government, NTT East started working in May 2016 on the installation of undersea fiber-optic cables and maintenance in order to connect the “5 villages and 6 islands of Tokyo Metropolis” that do not have access to fiber-optic connectivity. NTT East will be contributing to community development through ICT, utilizing fiber-optic broadband in “tourism,” “education,” “energy” and other fields.

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3. Status

of Business Operation Structure

NTT East has set up a Network Security Promotion Department within the Network Business Headquarters, a facilities division, in order to centrally respond to ordinary and extraordinary situations related to electrical and telecommunication facilities, as part of its effort to further strengthen countermeasures against cyber-attacks on electrical and telecommunication services.

4. Corporate

Social Responsibility Activities

NTT East considers Corporate Social Responsibility (“CSR”) activities to be one of the most important pillars of the management of the company, and recognizes that it is the social responsibility of a company to contribute to the environmentally friendly, healthy and sustainable development of society. In addition to the provision of various services and solutions in order to create a richer society, NTT East has directed its efforts to resolve various social challenges as follows: (i) ensuring a high degree of stability and reliability of vital infrastructure that is indispensable to the general public; (ii) complying with laws and regulations, including those that ensure fair competition, protect personal information, make accurate representations in advertising, and regulate the dispatch of workers; and (iii) providing information and telecommunications services that contribute to the reduction of the environmental impact of society as a whole, as well as taking measures to reduce its environmental impact by, among other things, reducing its consumption of energy, resources and electricity.

Having clearly defined the “Shape the NTT East Group is Aiming For,” NTT East has made an effort to realize CSR activities befitting its position as a leading company in information and telecommunication, such as working to widen the reach of the “NTT Group CSR Charter” (enacted in June 2006) and striving to set up specific practices for the PDCA cycle based on “KPIs” (*7) established for each important theme of CSR activities.

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For example, many fiber-optic cables were severed as a result of flooding rivers and fallen bridges due to the torrential rain caused by Typhoon Number 10 in August 2016. NTT East quickly restored such cables through the utilization of multi-helicopters and the prompt design and redirection of fiber-optic cabling routes.

In addition, in order to ensure the availability of a means of communication during disasters, NTT East worked on the pre-installation of “public telephones for disasters (special public telephones)” in collaboration with local governments. The number of facilities as the fiscal year ended March 31, 2017 reached 40,000 units, an increase of 9,000 units year on year. This enabled NTT East to provide its customers peace of mind and safety during the disaster caused by Typhoon Number 10. Further, NTT East is working to create a stronger community that can withstand disasters in conjunction with local governments through the provision of disaster prevention solutions and other measures.

In addition, NTT East worked on promoting activities to protect the environment, including signing a memorandum of understanding in connection with promoting the “Furusato-no mori regeneration project” run by Sendai city by donating a portion of NTT’s sales from pasteboards from its telegram services.

Furthermore, NTT East proactively endeavored to disclose relevant information to its stakeholders by issuing the “NTT East Group CSR Report 2016”.

5. Financial

Standing

As a result of these measures and cost reduction efforts, operating revenue totaled 1,672.2 billion yen (a decrease of 2.9% year on year), operating income totaled 189.1 billion yen (an increase of 16.9% year on year), ordinary income was 204.4 billion yen (an increase of 17.9% year on year), and net income totaled 149.6 billion yen (an increase of 26.0% year on year).

*1:	An abbreviation for Artificial Intelligence. Computer software and systems that mimic intelligent tasks carried out by human brains.

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*2:	A large volume of digital data that is produced with popularization of the internet and faster computer processing speeds

*3:	An abbreviation for Internet of Things. A concept in which things that were not connected to the Internet before can now be connected to the Internet.

*4:	Dispersing the load in order to eliminate reduction in transmission speed or connection difficulties that arise due to an increase in telecommunication traffic.

*5:	A collective name for “FLET’S Hikari Next”, “B FLET’S”, “FLET’S Hikari Light” and “FLET’S Hikari Wi-Fi Access” (including “Hikari Collaboration Model”).

*6:	An abbreviation for Home Energy Management System. An energy management system for the home which provides visualization and central management for energy.

*7:	An abbreviation for Key Performance Indicator. Key indicators for evaluating performance. This is a quantitative indicator that measures the degree to which goals have been achieved.

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2. Non-Consolidated Comparative Balance Sheets

(Based on accounting principles generally accepted in Japan)


	(Millions of yen)
	March 31, 2016			March 31, 2017			Increase (Decrease)
ASSETS
Fixed assets:
Fixed assets - telecommunications businesses
Property, plant and equipment
Machinery and equipment		395,419			339,631			(55,787	)
Antenna facilities		3,791			3,604			(187	)
Terminal equipment		31,807			22,947			(8,860	)
Local line facilities		835,446			866,722			31,276
Long-distance line facilities		3,353			2,843			(510	)
Engineering facilities		595,052			588,683			(6,368	)
Submarine line facilities		872			732			(140	)
Buildings		420,792			409,835			(10,956	)
Structures		16,964			16,038			(925	)
Other machinery and equipment		3,254			3,006			(248	)
Vehicles and vessels		528			642			114
Tools, furniture and fixtures		44,458			48,182			3,724
Land		197,315			197,249			(66	)
Lease assets		750			1,001			250
Construction in progress		17,626			19,988			2,362
Total property, plant and equipment		2,567,433			2,521,110			(46,323	)
Intangible fixed assets		84,019			84,120			100
Total fixed assets - telecommunications businesses		2,651,453			2,605,230			(46,223	)
Investments and other assets
Investment securities		13,016			12,581			(435	)
Investments in subsidiaries and affiliated companies		46,622			46,622			—
Other investments in subsidiaries and affiliated companies		3,712			3,705			(6	)
Investment in capital		473			452			(20	)
Long-term prepaid expenses		3,707			4,024			317
Prepaid pension costs		3,975			3,030			(944	)
Deferred income taxes		112,097			125,254			13,157
Other investments and assets		3,899			3,441			(457	)
Allowance for doubtful accounts		(913	)		(773	)		140
Total investments and other assets		186,589			198,338			11,749
Total fixed assets		2,838,043			2,803,569			(34,473	)
Current assets:
Cash and bank deposits		8,675			5,605			(3,069	)
Accounts receivable, trade		224,181			230,736			6,554
Accounts receivable, other		117,104			119,106			2,001
Supplies		26,221			26,005			(216	)
Advance payments		1,771			1,513			(258	)
Prepaid expenses		7,814			7,886			71
Deferred income taxes		7,178			6,674			(503	)
Deposits		196,532			288,468			91,935
Other current assets		10,939			11,853			914
Allowance for doubtful accounts		(442	)		(327	)		114
Total current assets		599,977			697,521			97,543

TOTAL ASSETS		3,438,021			3,501,091			63,069

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	(Millions of yen)
	March 31, 2016		March 31, 2017		Increase (Decrease)
LIABILITIES
Long-term liabilities:
Long-term borrowings from parent company		365,835		225,220		(140,615	)
Lease obligations		1,410		1,494		84
Liability for employees’ retirement benefits		235,919		247,366		11,446
Reserve for point services		8,574		4,145		(4,429	)
Reserve for unused telephone cards		8,671		8,460		(211	)
Allowance for environmental measures		5,289		3,637		(1,652	)
Asset retirement obligations		1,092		902		(189	)
Other long-term liabilities		21,682		34,672		12,989
Total long-term liabilities		648,475		525,898		(122,576	)
Current liabilities:
Current portion of long-term borrowings from parent company		65,120		140,615		75,495
Accounts payable, trade		85,229		89,029		3,799
Lease obligations		417		459		42
Accounts payable, other		198,765		198,620		(145	)
Accrued expenses		14,953		15,613		659
Accrued taxes on income		11,793		14,186		2,393
Advances received		7,657		9,185		1,528
Deposits received		203,983		215,758		11,774
Unearned revenues		106		91		(14	)
Allowance for environmental measures		2,601		2,285		(315	)
Asset retirement obligations		—		1		1
Other current liabilities		2,880		2,888		7
Total current liabilities		593,508		688,735		95,226

TOTAL LIABILITIES		1,241,983		1,214,633		(27,349	)


NET ASSETS
Shareholders’ equity:
Common stock		335,000		335,000		—
Capital surplus
Additional paid-in capital		1,499,726		1,499,726		—
Total capital surplus		1,499,726		1,499,726		—
Earned surplus
Other earned surplus
Reserve for special depreciation		1,657		1,092		(565	)
Reserve for reduction entry		13,197		13,197		(0	)
Accumulated earned surplus		342,336		433,169		90,833
Total earned surplus		357,191		447,459		90,267
Total shareholders’ equity		2,191,918		2,282,186		90,267
Unrealized gains (losses), translation adjustments, and others:
Net unrealized gains (losses) on securities		4,119		4,271		152
Total unrealized gains (losses), translation adjustments, and others		4,119		4,271		152

TOTAL NET ASSETS		2,196,037		2,286,457		90,419

TOTAL LIABILITIES AND NET ASSETS		3,438,021		3,501,091		63,069

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3. Non-Consolidated Comparative Statements of Income

(Based on accounting principles generally accepted in Japan)


	(Millions of yen)
	Year ended March 31, 2016		Year ended March 31, 2017			Increase (Decrease)
Telecommunications businesses:
Operating revenues		1,585,580		1,534,745			(50,834	)
Operating expenses
Business expenses		335,475		317,168			(18,307	)
Operations		8,189		7,869			(319	)
Maintenance expenses		391,871		383,994			(7,877	)
Overhead expenses		92,269		86,274			(5,994	)
Administration		84,482		86,732			2,250
Experiment and research		39,696		38,837			(859	)
Depreciation and amortization		337,474		290,191			(47,283	)
Retirement of fixed assets		54,569		55,725			1,155
Access charges		28,289		26,568			(1,721	)
Miscellaneous taxes		72,455		74,241			1,785
Total operating expenses		1,444,775		1,367,603			(77,172	)
Operating income from telecommunications businesses		140,804		167,142			26,337
Supplementary businesses:
Operating revenues		136,726		137,497			770
Operating expenses		115,702		115,534			(168	)
Operating income from supplementary businesses		21,024		21,962			938
Operating income		161,828		189,104			27,276
Non-operating revenues:
Interest income		138		26			(112	)
Dividends received		3,169		3,226			57
Gains on sales of fixed assets		7,789		14,363			6,574
Miscellaneous income		6,415		2,647			(3,767	)
Total non-operating revenues		17,512		20,263			2,750
Non-operating expenses:
Interest expenses		4,987		4,669			(317	)
Miscellaneous expenses		914		260			(653	)
Total non-operating expenses		5,901		4,930			(971	)
Recurring profit		173,439		204,438			30,998
Special losses:
Loss on transfer of business		3,758		—			(3,758	)
Total special losses		3,758		—			(3,758	)
Income before income taxes		169,681		204,438			34,756
Corporation, inhabitant, and enterprise taxes		45,582		67,461			21,878
Deferred tax expenses (benefits)		5,312		(12,686	)		(17,999	)
Net income		118,786		149,663			30,877

– 10 –

4. Non-Consolidated Statements of Changes in Shareholders’ Equity and Other Net Assets

(Based on accounting principles generally accepted in Japan)


Year ended March 31, 2016	(Millions of yen)
	Shareholders’ equity																					Unrealized gains (losses), translation adjustments, and others				Total net assets
	Common stock		Capital surplus				Earned surplus												Total shareholders’ equity			Net unrealized gains (losses) on securities		Total unrealized gains (losses), translation adjustments, and others
			Additional paid-in capital		Total capital surplus		Other earned surplus									Total earned surplus
			Additional paid-in capital		Total capital surplus		Reserve for special depreciation			Reserve for reduction entry			Accumulated earned surplus			Total earned surplus
April 1, 2015		335,000		1,499,726		1,499,726		2,241			12,890			356,773			371,905			2,206,632			3,305		3,305		2,209,938
Net change during the annual period
Cash dividends														(133,500	)		(133,500	)		(133,500	)						(133,500	)
Net income														118,786			118,786			118,786							118,786
Provision of reserve for special depreciation								67						(67	)		—			—							—
Return of reserve for special depreciation								(651	)					651			—			—							—
Provision of reserve for reduction entry											307			(307	)		—			—							—
Others, net																							813		813		813
Total net change during the annual period		—		—		—		(583	)		307			(14,437	)		(14,713	)		(14,713	)		813		813		(13,900	)
March 31, 2016		335,000		1,499,726		1,499,726		1,657			13,197			342,336			357,191			2,191,918			4,119		4,119		2,196,037

Year ended March 31, 2017	(Millions of yen)
	Shareholders’ equity																					Unrealized gains (losses), translation adjustments, and others				Total net assets
	Common stock		Capital surplus				Earned surplus												Total shareholders’ equity			Net unrealized gains (losses) on securities		Total unrealized gains (losses), translation adjustments, and others
			Additional paid-in capital		Total capital surplus		Other earned surplus									Total earned surplus
			Additional paid-in capital		Total capital surplus		Reserve for special depreciation			Reserve for reduction entry			Accumulated earned surplus			Total earned surplus
April 1, 2016		335,000		1,499,726		1,499,726		1,657			13,197			342,336			357,191			2,191,918			4,119		4,119		2,196,037
Net change during the annual period
Cash dividends														(59,395	)		(59,395	)		(59,395	)						(59,395	)
Net income														149,663			149,663			149,663							149,663
Provision of reserve for special depreciation								90						(90	)		—			—							—
Return of reserve for special depreciation								(655	)					655			—			—							—
Return of reserve for reduction entry											(0	)		0			—			—							—
Others, net																							152		152		152
Total net change during the annual period		—		—		—		(565	)		(0	)		90,833			90,267			90,267			152		152		90,419
March 31, 2017		335,000		1,499,726		1,499,726		1,092			13,197			433,169			447,459			2,282,186			4,271		4,271		2,286,457

– 11 –

5. Business Results (Non-Consolidated Operating Revenues)

(Based on accounting principles generally accepted in Japan)


	(Millions of yen)
	Year ended March 31, 2016		Year ended March 31, 2017		Increase (Decrease)			Percent Increase (Decrease)
Voice transmission services revenues (excluding IP services revenues)		427,802		396,519		(31,282	)		(7.3	)
Monthly charge revenues*		321,137		299,992		(21,144	)		(6.6	)
Call rates revenues*		30,319		26,272		(4,046	)		(13.3	)
Interconnection call revenues*		51,118		45,606		(5,511	)		(10.8	)
IP services revenues		855,444		850,388		(5,056	)		(0.6	)
Leased circuit services revenues (excluding IP services revenues)		103,761		93,307		(10,454	)		(10.1	)
Telegram services revenues		12,812		11,422		(1,389	)		(10.8	)
Other telecommunications services revenues		185,759		183,107		(2,651	)		(1.4	)

Telecommunications total revenues		1,585,580		1,534,745		(50,834	)		(3.2	)

Supplementary business total revenues		136,726		137,497		770			0.6

Total operating revenues		1,722,307		1,672,243		(50,064	)		(2.9	)

*	Partial listing only

– 12 –

6. Non-Consolidated Comparative Statements of Cash Flows

(Based on accounting principles generally accepted in Japan)


	(Millions of yen)
	Year ended March 31, 2016			Year ended March 31, 2017			Increase (Decrease)
Cash flows from operating activities:

Income before income taxes		169,681			204,438			34,756
Depreciation and amortization		342,744			295,200			(47,544	)
Loss on disposal of property, plant and equipment		20,330			21,416			1,086
Increase (decrease) in liability for employees’ retirement benefits		3,300			11,446			8,145
(Increase) decrease in accounts receivable		14,232			(8,552	)		(22,784	)
(Increase) decrease in inventories		4,671			252			(4,418	)
Increase (decrease) in accounts payable and accrued expenses		19,826			(5,419	)		(25,245	)
Increase (decrease) in accrued consumption tax		(5,860	)		(5,229	)		631
Other		15,479			8,147			(7,332	)

Sub-total		584,406			521,702			(62,704	)
Interest and dividends received		3,276			3,252			(23	)
Interest paid		(4,997	)		(4,705	)		291
Income taxes received (paid)		(36,236	)		(47,742	)		(11,506	)

Net cash provided by (used in) operating activities		546,449			472,506			(73,942	)

Cash flows from investing activities:

Payments for property, plant and equipment		(288,142	)		(274,177	)		13,965
Proceeds from sale of property, plant and equipment		8,886			15,821			6,935
Payments for purchase of investment securities		(385	)		—			385
Proceeds from sale of investment securities		1,429			847			(581	)
Other		633			(86	)		(719	)

Net cash provided by (used in) investing activities		(277,578	)		(257,594	)		19,984

Cash flows from financing activities:

Payments for settlement of long-term debt		(66,220	)		(65,120	)		1,100
Payments for settlement of lease obligations		(541	)		(544	)		(3	)
Dividends paid		(133,500	)		(59,395	)		74,104

Net cash provided by (used in) financing activities		(200,261	)		(125,059	)		75,201
Net increase (decrease) in cash and cash equivalents		68,609			89,852			21,243
Cash and cash equivalents at beginning of year		138,672			207,281			68,609

Cash and cash equivalents at end of year		207,281			297,134			89,852

– 13 –

Changes in Board of Directors

Scheduled Appointment or Resignation Date: June 23, 2017

(1) Candidates for Senior Vice President

Koji Nakae (Executive Manager, General Affairs and Personnel Department; General Manager, Medical and Health Administration Center)

Takashi Torigoe (General Manager, Chiba Division; General Manager, Chiba Branch, Chiba Division)

Koichi Takami (Vice President, Corporate Strategy Planning Department, NTT)

(2) Candidate for Audit & Supervisory Board Member

Kiyoshi Kobayashi (Executive Director, Yu-cho Foundation)

(3) Senior Vice Presidents Scheduled to Resign from Office

Senior Vice President Motoyasu Shibata (Scheduled to take office at NTT Solco & Hokkaido Telemart Corporation)

Senior Vice President Kenji Asano (Scheduled to take office at NTT INFRASTRUCTURE NETWORK CORPORATION)

(4) Audit & Supervisory Board Member Scheduled to Resign from Office

Full-time Auditor Hideharu Sasaki

(5) New Executive Positions and Organizational Responsibilities

Scheduled Appointment Date: June 23, 2017


New Position(s) and Organizational Responsibilities	Name	Current Position(s) and Organizational Responsibilities
Senior Executive Vice President, Representative Director; Senior Executive Manager, New Business Development Headquarters in charge of Risk Management; in charge of Corporate Strategy Planning; in charge of General Affairs and Personnel; in charge of Accounts and Finance; in charge of Information Security	Fukuzo Inoue	Senior Executive Vice President, Representative Director; Senior Executive Manager, New Business Development Headquarters in charge of Risk Management; in charge of Corporate Strategy Planning; in charge of General Affairs and Personnel; in charge of Accounts and Finance

Senior Vice President; Deputy Senior Executive Manager, Corporate Sales Promotion Headquarters	Shinji Yano	Senior Vice President; Executive Manager, Corporate Strategy Planning Department; in charge of Information Security

Senior Vice President; General Manager, Miyagi Division; General Manager, Miyagi Branch, Miyagi Division; Executive Manager, Tohoku Future Network Design and Reconstruction Office	Hiroshi Nakamura	Senior Vice President; Deputy Senior Executive Manager, New Business Development Headquarters; Executive Manager, First Group, New Business Development Headquarters

Senior Vice President; General Manager, Tokyo Division	Hideyuki Noike	Senior Vice President; General Manager, Hokkaido Division; General Manager, Hokkaido Branch, Hokkaido Division

Senior Vice President; Executive Manager, General Affairs and Personnel Department; General Manager, Medical and Health Administration Center	Koji Nakae

Executive Manager, Sales Planning Department, Sales Promotion Headquarters; Executive Manager, Customer Service Department, Sales Promotion Headquarters	Takashi Torigoe

Senior Vice President; Executive Manager, Corporate Strategy Planning Department	Koichi Takami

– 14 –

Scheduled Appointment Date: July 1, 2017


New Position(s) and Organizational Responsibilities	Name	Current Position(s) and Organizational Responsibilities
Senior Executive Vice President, Representative Director; Senior Executive Manager, Business Innovation Headquarters	Motoyuki Ii	Senior Executive Vice President, Representative Director; Senior Executive Manager, Corporate Sales Promotion Headquarters

Senior Vice President; Deputy Senior Executive Manager, Business Innovation Headquarters	Shinji Yano	Senior Vice President; Deputy Senior Executive Manager, Corporate Sales Promotion Headquarters

Senior Vice President; Executive Manager, Plant Planning Department, Network Business Headquarters; Executive Manager Tokyo Olympic & Paralympic Promotion Office	Naoki Shibutani	Senior Vice President; Executive Manager, Plant Planning Department, Network Business Headquarters; in charge of 2020 Project

Senior Vice President; Deputy Senior Executive Manager, Business Innovation Headquarters; General Manager, Value Create Department, Business Innovation Headquarters	Kiyoshi Harada	Senior Vice President; Deputy Senior Executive Manager, Corporate Sales Promotion Headquarters; Executive Manager, Office Users Business Department, Corporate Sales Promotion Headquarters

Senior Vice President; General Manager, Tokyo Division; Executive Manager, Tokyo Olympic & Paralympic Promotion Office, Tokyo Division	Hideyuki Noike	Senior Vice President; General Manager, Tokyo Division

– 15 –

Note:

•

Kiyoshi Kobayashi, who is a candidate for the new Auditor & Supervisory Board Member, is a candidate for Outside Audit & Supervisory Board Member.

•

Senior Vice Presidents scheduled to resign from the office are expected to resign at the conclusion of the 18 ^th Ordinary General Meeting of Shareholders to be held on June 23, 2017.

•

Auditor & Supervisory Board Member scheduled to resign from the office is expected to resign at the conclusion of the 18 ^th Ordinary General Meeting of Shareholders to be held on June 23, 2017.

– 16 –

May 15, 2017

FOR IMMEDIATE RELEASE

Financial Results for the Fiscal Year Ended March 31, 2017

The financial results of Nippon Telegraph and Telephone West Corporation (NTT West) for the fiscal year ended March 31, 2017 are presented in the following attachments.

(Attachments)

1.	Summary of Results for Fiscal Year Ended March 31, 2017

2.	Non-Consolidated Comparative Balance Sheets

3.	Non-Consolidated Comparative Statements of Income

4.	Non-Consolidated Statements of Changes in Shareholders’ Equity and Other Net Assets

5.	Business Results (Non-Consolidated Operating Revenues)

6.	Non-Consolidated Comparative Statements of Cash Flows

7.	Changes in Board of Directors

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. Summary of Results for the Fiscal Year Ended March 31, 2017

Information and communications services are expected to make significant contributions to invigorating and increasing the efficiency of social and economic activities, improving lifestyle convenience and vitalizing local economies through advances in the development of new technologies such as AI, Big Data, and IoT. Accordingly, the government and the private sector are working in partnership to achieve the development of a new ICT-oriented society.

Moreover, the information and telecommunications market is undergoing structural changes as a result of the shift to broadband and globalization, as well as the spread of smart devices and social media, leading to increasingly sophisticated and diversified needs and patterns of usage. There have also been changes in market structure, including an increase in the utilization of Big Data and IoT as well as an expansion of platform services and cloud services. Regional telecommunications markets are also undergoing significant changes due to competition between the providers of fiber-optic access-based line services and cable television-based broadband services, competition between the various services made available by faster mobile connections, the convergence of fixed and mobile services and of telecommunications and broadcasting, and the convergence of services through the use of a diverse range of wireless devices.

Within this challenging and dramatically changing business environment, NTT West strove to ensure its reliability and fairness in telecommunications by, for example, promoting the smooth migration to optical, IP-based networks and enhancing the fiber-optic access network that is the base of broadband services, while continuing to provide high-quality, stable universal services.

NTT West also aimed to realize a broadband network environment that enables customers to connect ¥anytime, anywhere, and with anyone or anything, in comfort, safety, and with peace of mind, and to provide various reasonably priced calling plans that match each customer’s patterns of usage, and a wide range of services.

<1>

Efforts to Promote Fiber-optic and IP services

In relation to the promotion of fiber-optic and IP services, NTT West worked to provide a more comfortable, safer, and more secure next generation network (NGN). NTT West was committed to expanding its services that make use of fiber-optic access lines, such as Hikari Denwa and video distribution services. NTT West also aimed to develop services for businesses, further deliver appropriate and fair provision of the Hikari Collaboration Model to various service providers, and create new services by promoting business alliances, while at the same time also improving on its services and quality.

– 1 –

For Hikari access services, as with the previous period, with respect to the “Hikari Collaboration Model,” the wholesale provision of “FLET’S Hikari” and other services to various service providers, NTT West worked to further expand its services by proactively cultivating new service providers while also engaging in support activities for existing service providers.

As of the fiscal year ended March 31, 2017, the number of service providers of the model exceeded 380, and the number of subscriptions exceeded 3 million.

In addition, NTT West worked to smoothly transition its customers from “B FLET’S (for Condominium Type, Family 100 Type, Business Type, and Basic Type)” and “FLET’S Hikari Premium” to the high-performing “FLET’S Hikari Next” in order to ensure that they are able to have a more comfortable internet experience.

For “FLET’S Hikari” services, NTT West made efforts to improve its membership program, “CLUB NTT-West,” aimed at retaining its customers, by, among other things, providing a wider range of products for which membership program points can be redeemed.

As a result, the number of subscriptions for Hikari access services as a whole exceeded 8.8 million as of the fiscal year ended March 31, 2017.

In the area of optical IP telephone services, the total number of corporate IP telephone customers, which include “Hikari Denwa Office A (Ace)” and “Hikari Denwa Office Type,” exceeded the 2 million channel level on September 5, 2016.

In the area of Wi-Fi services, NTT West worked to expand the coverage area of “Gotouchi Free Wi-Fi” in collaboration with local governments in an effort to contribute to the revitalization of local governments by establishing a foundation for ICT. As of March 31, 2017, more than 80 local governments in 29 different prefectures utilized the Wi-Fi network.

<2>

Initiatives in the Solutions Business

NTT West continued to proactively offer alliances and solution proposals to companies and local governments as it did in the previous year, and has been deploying “Smart Hikari Solutions” to satisfy regional customers’ needs through the utilization of ICT.

Some of the new service developments through alliances included collaborating with Sekisui Chemical Co., Ltd, to carry out a field trial of remote operations on water supply management, water levels, and temperature control in agricultural settings to test the utilization of LPWA (low-power, wide area) networks that can cover a wide area at low power consumption, as required for IoT, which aims to connect everything through the internet. In addition, in collaboration with Daikin Industries, Ltd., NTT West conducted a field trial by connecting an air conditioner to an LPWA network in order to constantly monitor the operating status of the air conditioner as well as indoor and outdoor spatial information. Furthermore, through its collaboration with Faith, Inc., NTT West launched the “FaRao PRO Hikari Box ⁺ ,” an all-in-one service to support store management operations that includes in-store background music services, signage, and security cameras, among other features. In addition, in collaboration with Hyakusenrenma, Inc., NTT worked on the trial version of “Minpaku Support Pack,” a complete support solution package that establishes a communication environment for vacation rentals by owners (VRBO), or minpaku owners, and provides various types of services for lodgers at minpaku , to facilitate a comfortable, convenient and officially authorized minpaku environment, which is an area of expected rapid future growth.

– 2 –

NTT West also works to expand its service offerings by, for example, launching “Hikari Cloud PBX,” which aims to use cloud services to provide fundamental private branch exchange (PBX) functions, including extension number and group call functions for telephone systems.

<3>

Status of Business Operation Structure

As part of its efforts to “create a safe and secure society,” NTT West established a summit task force for the Ise-Shima G7 Summit held in Mie Prefecture in May 2016. NTT West contributed to the smooth operation of the Summit by setting up a Summit Response Headquarters, coordinating with local branches to reinforce its maintenance capabilities, and strengthening its security systems against cyber-attacks.

In the area of disaster preparedness, when the Kumamoto earthquakes occurred in April 2016, NTT West quickly established a wide-area support system which included various other regions, thereby enabling the early recovery of services and the restoration of its facilities. Furthermore, NTT West worked to provide means of communication, such as disaster message dialing services, special public Wi-Fi, special public telephones and portable satellite telephones, for customers to use to confirm their safety and for the communication of disaster information in afflicted areas.

In addition, NTT West entered into an “Agreement on the Installation and Usage of Special Public Telephones” with various local governments, and pre-installed special public telephones, in order to provide immediate means of communication to people who have been evacuated when evacuation centers are established after large-scale disasters occur in the future.

NTT West also implemented measures to prevent accidents involving facilities, such as planned facility inspections, with the goal of eliminating third-party accidents caused by fallen lines. To prevent site accidents involving physical injury, NTT West worked to expand its safety measures by establishing a timeframe for improving safety promotion initiatives.

As part of its efforts to further enhance its management efficiency, NTT West worked to reduce material costs by utilizing device equipment and streamlining procurement operations for materials, and improving the efficiency of fiber optic service installations.

– 3 –

<4>

Corporate Social Responsibility (“CSR”) Activities

In the area of CSR promotion, the “NTT Group CSR Charter” (revised on May 12, 2016) provides that, as a “Value Partner” for customers, NTT Group companies will provide services of the highest quality and reliability and contribute to the development of a safe, secure and prosperous society in which people, society and the earth are connected through “communications.” Based on the NTT Group CSR Charter, NTT West established three core CSR principles – “thorough compliance,” “development of a safe and secure society,” and “creation of value through business activities” – as well as a “visualization” benchmark for activities that support these principles. Each NTT West employee takes part in CSR activities, including working to maintain legal compliance, providing safe and reliable communication services, and reducing the burden on the environment.

To ensure “thorough compliance,” NTT West Group has focused on promoting group-wide initiatives in high-risk areas that have the potential to erode the trust of the general public and of consumers in NTT West group companies, namely eradicating “on-the-job misconduct,” “driving while under the influence,” “information security incidents” and “power harassment” as well as observing “respect for human rights,” by making posters to promote awareness and providing training programs for all employees in order to ensure compliance by increasing knowledge and preventing recurrence.

In the area of activities to give back to the community, since 1983, NTT West has continued to publish “Denwa Onegai Techo (Telephone Request Handbook) (Pamphlet Version)” as a communication tool that allows people with hearing or speech difficulties to write out their matters of concern or contacts in order to assist them in seeking help from those around them when they are away from home. In recent years, given that mobile devices with internet connectivity (such as smartphones and feature phones) have become widespread, NTT West developed the “Denwa Onegai Techo (Telephone Request Handbook) (Web/App Version)” in order to enhance user convenience, and launched the service on December 21, 2016.

Based on the “Green NTT West Strategy” established in June 2012, in order to “achieve its environmental grand design,” NTT West has been working to decrease its environmental burden by decreasing power usage, the amount of paper it uses, and the volume of its waste products. In addition, NTT West also worked on protecting the earth’s environment by undertaking community-based activities centered around tree-planting and plant growing, grass-cutting and cleaning activities pursuant to the “NTT West Midori Ippai Project” in order to “promote biodiversity preservation activities.”

NTT West has been promoting its group-wide CSR activities and enhancing its environmental management while instilling the principles of the NTT Group CSR Charter. NTT West also issued the “NTT West Group CSR Report 2016” and the “NTT West Group Environmental Annual Report 2016” to proactively disclose relevant information to its stakeholders.

– 4 –

<5>

Financial Standing

As a result of the above, operating revenues totaled 1,479.0 billion yen (a decrease of 3.2% from the previous fiscal year), operating income was 95.1 billion yen (an increase of 28.5% from the previous fiscal year), income before income taxes was 88.1 billion yen (an increase of 31.3% from the previous fiscal year), and net profit was 59.7 billion yen (a decrease of 17.5% from the previous fiscal year).

– 5 –

2. Non-Consolidated Comparative Balance Sheets

(Based on accounting principles generally accepted in Japan)


	(Millions of yen)
	March 31, 2016			March 31, 2017			Increase (Decrease)
ASSETS
Fixed assets:
Fixed assets - telecommunications businesses
Property, plant and equipment
Machinery and equipment		371,004			297,757			(73,247	)
Antenna facilities		6,224			5,895			(328	)
Terminal equipment		17,166			11,318			(5,847	)
Local line facilities		993,040			1,051,300			58,260
Long-distance line facilities		2,138			1,693			(445	)
Engineering facilities		530,501			517,724			(12,776	)
Submarine line facilities		3,587			3,131			(456	)
Buildings		327,911			312,924			(14,987	)
Structures		13,445			10,918			(2,526	)
Other machinery and equipment		1,359			1,036			(322	)
Vehicles and vessels		371			294			(77	)
Tools, furniture and fixtures		31,513			34,425			2,912
Land		173,841			173,092			(749	)
Lease assets		165			151			(13	)
Construction in progress		18,488			31,294			12,806
Total property, plant and equipment		2,490,761			2,452,960			(37,801	)
Intangible fixed assets		65,914			64,444			(1,470	)
Total fixed assets - telecommunications businesses		2,556,676			2,517,404			(39,271	)
Investments and other assets
Investment securities		4,994			4,243			(750	)
Investments in subsidiaries and affiliated companies		38,481			40,001			1,520
Investment in capital		637			610			(26	)
Long-term prepaid expenses		3,411			3,971			560
Prepaid pension costs		—			3,439			3,439
Deferred income taxes		116,066			128,900			12,833
Other investments and assets		6,660			6,438			(222	)
Allowance for doubtful accounts		(638	)		(681	)		(43	)
Total investments and other assets		169,613			186,924			17,311
Total fixed assets		2,726,289			2,704,329			(21,960	)
Current assets:
Cash and bank deposits		21,765			18,251			(3,514	)
Accounts receivable, trade		201,155			199,820			(1,334	)
Accounts receivable, other		89,674			79,402			(10,272	)
Securities		6			6			—
Supplies		34,656			29,950			(4,705	)
Advance payments		3,867			4,592			724
Prepaid expenses		6,281			6,688			406
Deferred income taxes		5,543			4,944			(598	)
Deposits		50,000			48,000			(2,000	)
Other current assets		8,537			8,082			(455	)
Allowance for doubtful accounts		(514	)		(339	)		174
Total current assets		420,973			399,398			(21,574	)

TOTAL ASSETS		3,147,263			3,103,728			(43,534	)

– 6 –


	(Millions of yen)
	March 31, 2016		March 31, 2017		Increase (Decrease)
LIABILITIES
Long-term liabilities:
Long-term borrowings from parent company		651,707		591,000		(60,707	)
Lease obligations		706		678		(28	)
Liability for employees’ retirement benefits		233,574		242,251		8,677
Reserve for point services		4,672		3,792		(879	)
Reserve for unused telephone cards		8,200		8,000		(200	)
Allowance for environmental measures		9,074		9,074		—
Asset retirement obligations		361		228		(132	)
Other long-term liabilities		4,837		4,071		(765	)
Total long-term liabilities		913,134		859,097		(54,036	)
Current liabilities:
Current portion of long-term borrowings from parent company		127,120		110,707		(16,412	)
Accounts payable, trade		70,067		71,635		1,567
Short-term borrowings		142,465		105,259		(37,205	)
Lease obligations		198		191		(6	)
Accounts payable, other		178,421		199,133		20,712
Accrued expenses		14,368		13,572		(795	)
Accrued taxes on income		8,102		8,731		629
Advances received		2,814		2,184		(630	)
Deposits received		129,490		143,945		14,455
Unearned revenues		16		15		(1	)
Allowance for loss on disaster		—		4,096		4,096
Allowance for environmental measures		2,467		2,361		(106	)
Asset retirement obligations		—		133		133
Other current liabilities		2,631		3,307		676
Total current liabilities		678,163		665,277		(12,886	)

TOTAL LIABILITIES		1,591,297		1,524,374		(66,922	)

NET ASSETS
Shareholders’ equity:
Common stock		312,000		312,000		—
Capital surplus
Additional paid-in capital		1,170,054		1,170,054		—
Total capital surplus		1,170,054		1,170,054		—
Earned surplus
Other earned surplus
Accumulated earned surplus		73,358		96,911		23,553
Total earned surplus		73,358		96,911		23,553
Total shareholders’ equity		1,555,412		1,578,965		23,553
Unrealized gains (losses), translation adjustments, and others:
Net unrealized gains (losses) on securities		553		388		(164	)
Total unrealized gains (losses), translation adjustments, and others		553		388		(164	)

TOTAL NET ASSETS		1,555,965		1,579,353		23,388

TOTAL LIABILITIES AND NET ASSETS		3,147,263		3,103,728		(43,534	)

– 7 –

3. Non-Consolidated Comparative Statements of Income

(Based on accounting principles generally accepted in Japan)


	(Millions of yen)
	Year ended March 31, 2016			Year ended March 31, 2017			Increase (Decrease)
Telecommunications businesses:
Operating revenues		1,372,571			1,325,585			(46,986	)
Operating expenses
Business expenses		323,076			296,688			(26,388	)
Operations		10,176			9,648			(527	)
Maintenance expenses		347,429			339,119			(8,309	)
Overhead expenses		60,167			57,449			(2,718	)
Administration		72,246			71,346			(899	)
Experiment and research		39,522			38,947			(574	)
Depreciation and amortization		313,724			284,405			(29,318	)
Retirement of fixed assets		55,995			53,012			(2,983	)
Access charges		25,485			26,035			549
Miscellaneous taxes		65,116			65,831			715
Total operating expenses		1,312,941			1,242,485			(70,455	)
Operating income from telecommunications businesses		59,630			83,099			23,469
Supplementary businesses:
Operating revenues		155,452			153,430			(2,021	)
Operating expenses		141,010			141,343			333
Operating income from supplementary businesses		14,442			12,086			(2,355	)
Operating income		74,072			95,186			21,113

Non-operating revenues:
Interest income		2			0			(1	)
Interest on securities		1			11			10
Dividends received		1,568			615			(952	)
Miscellaneous income		4,205			2,330			(1,874	)
Total non-operating revenues		5,775			2,957			(2,817	)

Non-operating expenses:
Interest expenses		9,410			7,114			(2,295	)
Miscellaneous expenses		3,290			2,875			(415	)
Total non-operating expenses		12,701			9,989			(2,711	)
Recurring profit		67,146			88,154			21,007

Special losses:
Special loss on disaster		—			6,915			6,915
Total special losses		—			6,915			6,915
Income before income taxes		67,146			81,239			14,092
Corporation, inhabitant, and enterprise taxes		21,449			33,631			12,182
Deferred tax expenses (benefits)		(26,727	)		(12,162	)		14,564
Net income		72,425			59,770			(12,655	)

– 8 –

4. Non-Consolidated Statements of Changes in Shareholders’ Equity and Other Net Assets

(Based on accounting principles generally accepted in Japan)


Year ended March 31,2016	(Millions of yen)
	Shareholders’ equity															Unrealized gains (losses), translation adjustments, and others						Total net assets
	Common stock		Capital surplus				Earned surplus						Total shareholders’ equity			Net unrealized gains (losses) on securities			Total unrealized gains (losses), translation adjustments, and others
							Other earned surplus			Total earned surplus
			Additional paid-in capital		Total capital surplus		Accumulated earned surplus			Total earned surplus
April 1, 2015		312,000		1,170,054		1,170,054		15,934			15,934			1,497,988			738			738			1,498,726
Net change during the annual period
Cash dividends								(15,000	)		(15,000	)		(15,000	)								(15,000	)
Net income								72,425			72,425			72,425									72,425
Others, net																	(185	)		(185	)		(185	)

Total net change during the annual period		—		—		—		57,424			57,424			57,424			(185	)		(185	)		57,239

March 31, 2016		312,000		1,170,054		1,170,054		73,358			73,358			1,555,412			553			553			1,555,965


Year ended March 31, 2017	(Millions of yen)
	Shareholders’ equity															Unrealized gains (losses), translation adjustments, and others						Total net assets
	Common stock		Capital surplus				Earned surplus						Total shareholders’ equity			Net unrealized gains (losses) on securities			Total unrealized gains (losses), translation adjustments, and others
							Other earned surplus			Total earned surplus
			Additional paid-in capital		Total capital surplus		Accumulated earned surplus			Total earned surplus
April 1, 2016		312,000		1,170,054		1,170,054		73,358			73,358			1,555,412			553			553			1,555,965
Net change during the annual period
Cash dividends								(36,216	)		(36,216	)		(36,216	)								(36,216	)
Net income								59,770			59,770			59,770									59,770
Others, net																	(164	)		(164	)		(164	)

Total net change during the annual period		—		—		—		23,553			23,553			23,553			(164	)		(164	)		23,388

March 31, 2017		312,000		1,170,054		1,170,054		96,911			96,911			1,578,965			388			388			1,579,353

– 9 –

5. Business Results (Non-Consolidated Operating Revenues)

(Based on accounting principles generally accepted in Japan)


	(Millions of yen)
	Year ended March 31, 2016		Year ended March 31, 2017		Increase (Decrease)			Percent Increase (Decrease)
Voice transmission services revenues (excluding IP services revenues)		428,645		396,272		(32,372	)		(7.6	)
Monthly charge revenues*		319,687		298,340		(21,347	)		(6.7	)
Call rates revenues*		28,259		24,590		(3,669	)		(13.0	)
Interconnection call revenues*		55,840		49,676		(6,164	)		(11.0	)
IP services revenues		702,712		697,252		(5,460	)		(0.8	)
Leased circuit services revenues (excluding IP services revenues)		93,383		86,362		(7,020	)		(7.5	)
Telegram services revenues		14,088		12,625		(1,462	)		(10.4	)
Other telecommunications services revenues		133,741		133,071		(669	)		(0.5	)

Telecommunications total revenues		1,372,571		1,325,585		(46,986	)		(3.4	)

Supplementary business total revenues		155,452		153,430		(2,021	)		(1.3	)

Total operating revenues		1,528,023		1,479,015		(49,008	)		(3.2	)

*	Partial listing only

– 10 –

6. Non-Consolidated Comparative Statements of Cash Flows

(Based on accounting principles generally accepted in Japan)


	(Millions of yen)
	Year ended March 31, 2016			Year ended March 31, 2017			Increase (Decrease)
Cash flows from operating activities:

Income before income taxes		67,146			81,239			14,092
Depreciation and amortization		317,082			287,620			(29,462	)
Loss on disposal of property, plant and equipment		26,641			19,285			(7,355	)
Increase (decrease) in liability for employees’ retirement benefits		3,621			8,677			5,055
(Increase) decrease in accounts receivable		5,852			11,377			5,525
(Increase) decrease in inventories		(902	)		4,599			5,502
Increase (decrease) in accounts payable and accrued expenses		(8,759	)		7,799			16,559
Increase (decrease) in accrued consumption tax		(4,085	)		(2,241	)		1,844
Other		(5,957	)		21,841			27,799

Sub-total		400,637			440,199			39,561
Interest and dividends received		1,571			628			(942	)
Interest paid		(9,477	)		(7,575	)		1,902
Income taxes received (paid)		(5,528	)		(24,428	)		(18,900	)

Net cash provided by (used in) operating activities		387,203			408,824			21,620

Cash flows from investing activities:

Payments for property, plant and equipment		(284,746	)		(261,759	)		22,986
Proceeds from sale of property, plant and equipment		2,275			650			(1,624	)
Payments for purchase of investment securities		(865	)		(3,100	)		(2,235	)
Proceeds from sale of investment securities		462			576			113
Other		265			61			(203	)

Net cash provided by (used in) investing activities		(282,607	)		(263,571	)		19,036

Cash flows from financing activities:

Proceeds from issuance of long-term debt		—			50,000			50,000
Payments for settlement of long-term debt		(175,600	)		(127,120	)		48,480
Net increase (decrease) in short-term borrowings		67,462			(37,205	)		(104,667	)
Payments for settlement of lease obligations		(227	)		(224	)		2
Dividends paid		(15,000	)		(36,216	)		(21,216	)

Net cash provided by (used in) financing activities		(123,365	)		(150,766	)		(27,401	)
Net increase (decrease) in cash and cash equivalents		(18,769	)		(5,514	)		13,255
Cash and cash equivalents at beginning of year		90,535			71,765			(18,769	)

Cash and cash equivalents at end of year		71,765			66,251			(5,514	)

– 11 –

7. CHANGES IN BOARD OF DIRECTORS

Scheduled appointment date: June 23, 2017

(1) Candidates for Members of the Board

Kunihiro Yamada (Executive Manager, Fiber Access Collaboration Department, Alliance Business Headquarters)

Keiji Ueyama (General Manager, Kumamoto Branch; and Deputy Senior Executive Manager, Kyusyu Regional Headquarters)

Masanori Ozawa (Vice President, General Affairs Department, Nippon Telegraph and Telephone Corporation)

(2) Members of the Board scheduled to resign from office

Kazunari Furugen (Scheduled to take office at Nippon COMSYS Corporation)

Mikihiro Kitamura (Scheduled to take office at NTT FACILITIES, INC.)

(3) New Executive Positions and Organizational Responsibilities

Scheduled appointment date: June 23, 2017


New Position(s) and Organizational Responsibilities	Name	Current Position(s) and Organizational Responsibilities
Senior Executive Vice President, Representative Director; Senior Executive Manager, Plant Headquarters; In charge of Technology Innovation Department	Yoshihiro Kuroda	Senior Executive Vice President, Representative Director; Senior Executive Manager, Plant Headquarters; Executive Manager, Network Department, Plant Headquarters; In charge of Technology Innovation Department

Member of the Board; Executive Manager, Network Department, Plant Headquarters	Yasushi Tohtake	Member of the Board; Executive Manager, Service Management Department, Plant Headquarters

Member of the Board; Senior Executive Manager, Corporate Business Headquarters	Ichiro Uehara	Member of the Board; Senior Executive Manager, Kyusyu Regional Headquarters; General Manager, Fukuoka Branch

– 12 –


Member of the Board; Senior Executive Manager, Kansai Regional Headquarters; General Manager, Osaka Branch	Teruyuki Kishimoto	Member of the Board

Member of the Board; Executive Manager, Service Management Department, Plant Headquarters	Takafumi Sakaguchi	Member of the Board

Member of the Board; Executive Manager, Fiber Access Collaboration Department, Alliance Business Headquarters	Kunihiro Yamada

Member of the Board	Keiji Ueyama

Member of the Board; Senior Executive Manager, Kyusyu Regional Headquarters; General Manager, Fukuoka Branch	Masanori Ozawa

– 13 –

Scheduled appointment date: July 1, 2017


New Position(s) and Organizational Responsibilities	Name	Current Position(s) and Organizational Responsibilities
Senior Executive Vice President, Representative Director; Senior Executive Manager, Alliance Business Headquarters;	Shinji Oota	Senior Executive Vice President, Representative Director; Senior Executive Manager, Alliance Business Headquarters;

In charge of Corporate Business Headquarters; In charge of Sales Promotion Department In charge of Corporate Strategy Planning Department In charge of Accounts and Finance Department; In charge of Personnel Department; In charge of General Affairs Department; In charge of Compliance and CSR		In charge of Corporate Business Headquarters; In charge of Marketing Department; In charge of Corporate Strategy Planning Department; In charge of Accounts and Finance Department; In charge of Personnel Department; In charge of General Affairs Department; In charge of Compliance and CSR


Note:		Ichiro Uehara is scheduled to become the President and Representative Director of NTT Business Solutions.
		Keiji Ueyama is scheduled to become the President and Representative Director of NTT- Neomeit.

– 14 –

May 15, 2017

FOR IMMEDIATE RELEASE

NTT Com Announces Financial Results for Fiscal Year Ended March 31, 2017

TOKYO, JAPAN — NTT Communications Corporation (NTT Com) announced today its financial results for the fiscal year ended March 31, 2017. Please see the following attachments for further details:

I.	Results for Fiscal Year Ended March 31, 2017

II.	Financial Results of NTT Communications Group

III.	Non-Consolidated Comparative Balance Sheets

IV.	Non-Consolidated Comparative Statements of Income

V.	Non-Consolidated Statements of Changes in Shareholders’ Equity and Other Net Assets

VI.	Business Results (Non-Consolidated Operating Revenues)

VII.	Non-Consolidated Comparative Statements of Cash Flows

VIII.

Changes in NTT Communications Directors (Subject to Shareholders’ Approval)

# # #

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 the 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. Results for the Fiscal Year Ended March 31, 2017

1.	Background

Although the world economy is undergoing a gradual recovery, there are uncertainties in international politics and the outlook for the future has become unclear. Many companies have been moving forward with the digital transformation of their businesses and with their “as-a-service” trend, and both their business departments and their IT departments are taking the initiative with respect to the adoption and utilization of ICT. Within the ICT market, there has been an expansion in the scope of software-defined services, dominance of the IaaS market by a small number of overseas providers, and increases in the sophistication and development of AI, with rapid changes in the market structure. Competition is wide-ranging and fierce, and it is intensifying on a global level.

2.	Business Strategies

Based on these changes in the market environment, NTT Communications has established a new corporate vision, “Vision 2020,” and a new corporate slogan: “Transform. Transcend.” During FY2016, under this new slogan, NTT Com worked to promote its offerings for solutions models that push “global seamlessness” to its fullest extent, while also pursuing automation and improvement of process efficiency, strengthening its competitiveness through its own digital transformation, and working on business process innovations and the creation of new business models for NTT Com’s customers.

Specifically, through its “seamless ICT solutions,” an optimized, global combination of various services including clouds, data centers, networks, applications, security, and managed ICT in which NTT Com has a particular strength as a telecommunications provider, NTT Com has produced an ICT environment that is uniformly managed on a global level, flexible, on-demand and low-cost, and safe and secure, and supports business operations. Through its seamless ICT solutions, NTT Com has contributed to innovation in business processes, such as accelerating customers’ decision-making processes and improving productivity, and has supported the creation of new business.

In addition, in an analyst vendor comparison report that evaluates IT vendors on a worldwide basis, NTT Com was named to the top “Leader” position in the global network business field for the fourth year in a row. Furthermore, NTT Com was also named to the “Leader” position for the second year in a row in an assessment of cloud business operators in the Asia-Pacific region. NTT Com further enhanced the competitiveness of its services based on its Global Cloud Vision. NTT Com’s key measures by type of service were as follows:

Measures taken by type of service

•

Cloud Computing Platforms

“Enterprise Cloud,” a cloud service for businesses that has platforms deployed at 14 bases in 11 countries around the world, substantially increased its functionality in Japan in March 2016, and from April 2016 has been expanding in various countries abroad as well. In addition, NTT Com’s new partnerships with other companies included the signing of a collaboration agreement with Mirantis Japan, Inc. in October 2016 to provide OpenStack managed private cloud services, a collaboration agreement with NTT Data Corporation, Pivotal Japan K.K., and Intel Corporation in November 2016 to develop and deliver cloud-native solutions, a collaboration agreement with Virtustream, Inc. and EMC Japan K.K. in February 2017 for the development and distribution of shared-cloud platform services that support large-scale SAP systems, and a collaboration agreement with Microsoft Japan Co., Ltd. in March 2017 for joint development and marketing cooperation on hybrid cloud platforms for corporate customers.

– 1 –

With respect to NTT Com’s Nexcenter data center services, NTT Com launched the Virginia Ashburn 2 (VA2) Data Center in April 2016 and the Tokyo 9 Data Center in December 2016. NTT Com also commenced the construction of the Virginia Ashburn 3 (VA3) Data Center in December 2016.

In addition, with respect to NTT Com’s “SDx+M” solution, which utilize software-defined technology, beginning in March 2017, NTT Com started offering the “Software-Defined Exchange Service (SD-Exchange),” which provides seamless and secure high-speed global connection between “Enterprise Cloud,” “Nexcenter” and multiple other cloud services, including “Amazon Web Services.”

•

Data Networks

In October 2016, NTT Com launched the “Secure Internet Connectivity Function (vUTM)” security option service for the high-quality, high-reliability “Arcstar Universal One” VPN. Additionally, for its “Arcstar Universal One Multi-Cloud Connect” services, with which a multi-cloud system can be built on a secure closed area network, NTT Com launched an enhanced function that enables immediate connection and bandwidth changes on-demand in April 2016, enabled connections to United Kingdom-based cloud platforms in June 2016, enabled connections to United States-based cloud platforms in October 2016, and launched options that comprehensively support the installation, implementation, and operation of “Amazon Web Services” in December 2016.

In September 2016, NTT Com launched the “OCN vWAF” service, a SaaS-based security service that protects customers’ web servers from unauthorized access, for NTT Com’s “OCN” Internet connectivity service.

For its high-speed LTE communication service, “OCN Mobile ONE,” NTT Com launched Wi-Fi spots that offer free connections in July 2016, “burst transfer functions” that improve communication speeds starting September 2016, a device warranty service “Anshin Hosho” (“Peace of Mind Warranty”) covering repair and replacement of smartphones that went into use in October 2016, and high-capacity and sharable 20GB/month and 30GB/month plans in February 2017.

For its “SDx+M” solution, which utilizes software-defined technology, NTT Com began offering the “Software-Defined Network Service (SD-NS),” which flexibly builds and manages overlay networks over multiple lines through software control, in March 2017.

•

Voice Communications

For its unified communication service “Arcstar UCaaS,” NTT Com expanded the range of its services for large enterprises. For example, Arkadin SAS, an NTT Com group company, completed the acquisition of Applicable Limited, a leading UK provider with a particular strength in implementing Microsoft-based unified communication services, in September 2016.

For voice-based services, in October 2016, NTT Com launched the unlimited calling service “Business Mobile” for business customers, allowing customers who make a high volume of calls from cellular telephones to receive a higher discount. In February 2017, NTT Com also launched a website for changing settings, such as strengthening security, when using BYOD. Furthermore, with respect to its “OCN Denwa” service, which is offered to customers with “OCN Mobile ONE” SIM cards with voice support, in August 2016, NTT Com launched the “OCN Denwa Unlimited 5-Minute Calls Option,” which can be used as often as desired at a fixed price, launched the “OCN Denwa Unlimited 10-Minute Calls Option,” which increased the call-time provided under a fixed price plan, in February 2017, and, in March 2017, launched a wholesale service for “OCN Denwa” for MVNOs that can reduce calling charges on low-cost smartphones.

– 2 –

With respect to international hubbing services, NTT Com launched the “A2P SMS International Hubbing Service” in November 2016 for use with A2P SMSs (Application to Person Short Messaging Services), which are messages sent by businesses to individuals for marketing or authorization or other purposes. The service relays international messages via the most appropriate route to minimize delays and to ensure delivery.

•

Applications and Content

In October 2016, NTT Com launched the “MySign” service, which supports the use of the public personal identification services that use the My Number card.

With respect to services that utilize AI (Artificial Intelligence), NTT Com launched the “Communication Engine ‘COTOHA,’” which can understand natural Japanese conversation with a high degree of accuracy and actively asks for necessary information for “human-like conversations.” In addition, in January 2017, NTT Com launched the “Semantic Search Engine ‘COTOHA Chat & FAQ ^TM ,’” an AI-based query resolution support service for business customers that displays appropriate answers in response to queries entered by website users, and also launched the beta version of the “Industry-Specialized AI Translation Platform Service,” which provides highly accurate AI-based translation functions.

•

Solution Services

In August 2016, NTT Com expanded the AI capabilities it had installed on the managed security services operations platform of “WideAngle,” NTT Com’s comprehensive risk-management service, substantially strengthening its cyber-attack analysis logic. In addition, in October 2016, NTT Com launched the “Rapid Incident Support Warranty” and “Standardized Malware-Infected Device Inspection” options for security incident responses. Furthermore, in February 2017, NTT Com began offering a “Proactive Response” option that automatically shuts down communications with infected devices after any unauthorized access to a company’s internal systems is identified. NTT Com has been working to provide services that comprehensively support risk management and counter-measures against increasingly sophisticated and malicious security threats in conjunction with NTT Security (Japan) K.K., which commenced operation in August 2016.

For SDx+M solution that utilizes software-defined technology, in October 2016 NTT Com launched a “Software-Defined LAN Solution (SD-LAN solution)” that builds an office-based LAN structure combining both solidity and flexibility.

NTT Com added “SD-NS,” “SD-Exchange” and “SD-LAN Solutions” in March 2017 to its total managed ICT service “Global Management One,” enabling full-life cycle support from design, construction, maintenance, operation, and analysis for the entirety of customers’ ICT environment on a global basis.

•

New Service Areas

NTT Com’s IoT business promotion included collaborations with partner businesses, including application platform providers and device companies, as well as providing services that are suited to all use-cases, from “Factory” to “Product” and “Vehicle,” utilizing NTT Com’s network, cloud, and data center assets that are deployed worldwide and are available to NTT Com as a carrier, in order to contribute to business transformation and productivity increases by enabling the rapid realization of business ideas through IoT.

With respect to SDx+M solution that utilizes SDx technology, beginning in March 2017, NTT Com expanded the functionality of its “Cloud Management Platform (CMP)” system, which enables the centralized management of cloud services, such as “Enterprise Cloud,” “Amazon Web Services” and “Microsoft Azure,” with on-premise systems that customers have built, supporting “SD-NS,” “SD-LAN Solution,” and “SD-Exchange.”

– 3 –

Other Measures

In connection with sales, NTT Com has developed solutions proposals that contribute to the Digital Transformations of customer companies from a company-wide Go-to-Market perspective, including through its entry into mutual collaborations. For example, NTT Com signed a three-year technology partnership agreement with the McLaren-Honda Formula 1 racing team, commencing mutual collaboration towards building an ICT foundation with optimized performance to support the Formula 1 team with the latest technology for networks, clouds, IoT, data collection, and analysis. In addition, NTT Com worked on the global rollout of efficient and effective sales efforts by establishing its sales channel portfolios and solution models to meet the needs of the target market, supporting customers’ “transformation of existing business” and “creation of new business models” by strengthening its offerings with solution models that utilize seamless global services to the fullest extent.

In the field of operations, NTT Com worked to utilize digital technology as a source of its competitiveness to accelerate simplification/automation/standardization, and reinforced its capability to handle combined service projects and deepen its customer contact points. NTT Com also built delivery, maintenance, and operations processes to meet the needs of combined service projects, and worked on full and complete automation of standard operations. Further, in October 2016, NTT Com commenced operation of the “Asia Pacific Gateway” high-bandwidth optical submarine cable network in order to increase its cable capacity within Asia and to enhance connectivity with Asian countries. In addition, construction of the undersea cable-laying vessel “Kizuna,” to be operated by NTT World Engineering Marine Corporation, began in March 2017 to strengthen NTT Com’s ability to lay and maintain cables.

In order to promote seamless global management, NTT Com has implemented a globally standardized ERP system across each NTT Com group company. Furthermore, with respect to procurement, NTT Com undertook an evaluation of modifications to its procurement systems, and fundamentally streamlined its procurement processes for resales, office products, low-cost items, and supplier management. NTT Com also worked to improve its process efficiency by advancing the standardization of its service procurement, increasing the use of databases and setting suitability check-flows to reduce costs, and promoting the flow-through of contracting and payment tasks (electronic estimates/contracts/invoicing). In addition, in human resources, NTT Com focused on personnel recruitment, retention, and training to be able to offer even more sophisticated services, such as by providing engineering experience to all of its younger staff members.

In terms of CSR, in October 2016, NTT Com published a review of basic principles in the CSR Report 2016. In the area of environmental protection activities, NTT Com established its Environmental Declaration and Environmental Targets for 2030 in November 2016. In addition, NTT Com is working to protect the environment and to reduce its own environmental burden by making air conditioning systems at its data centers and communication buildings more efficient, improving air flow, and expanding the installation of automatic air conditioning control systems.

With respect to security, NTT Com has started initiatives to reduce security risks and to strengthen its collaboration and support system with its group companies in order to further reinforce cyber security measures at group companies both in Japan and overseas.

In terms of diversity, NTT Com has been actively promoting a highly productive ICT-enabled workplace environment for its own employees that allows them to adopt flexible working practices, achieve an improved work/life balance and thereby achieve their full potential, regardless of age, gender, nationality, religion or physical ability/disability. Based on NTT Group’s gender equality plan targeting a doubling of the percentage of women managers to 8.9% in 2020, NTT Com additionally continues to support the career development of female employees and the appointment of female managers, and also actively hires more female employees. As a result of these measures, NTT Com was recognized in the Ministry of Internal Affairs and Communications’ newly established “100 Pioneers in Teleworking,” and also received the highest certification, “Eruboshi,” from the Minister of Health, Labor and Welfare, based on the Act on Promotion of Women’s Participation and Advancement in the Workplace.

– 4 –

3.	Operating Results

As a whole, NTT Communications Group’s consolidated operating revenues decreased for the first time in four years, decreasing 36.1 billion yen (-2.7%) over the prior fiscal year to 1,283.0 billion yen. However, operating income increased 14.3 billion yen (+12.1%) compared to the prior fiscal year to 132.5 billion yen.

Non-consolidated operating revenues for NTT Communications by service were as follows. While revenues from NTT Com’s Cloud Computing Platforms increased 2.0 billion yen (+2.9%) over the prior fiscal year to 72.0 billion yen, revenues from Data Networks increased 14.9 billion yen (+4.0%) to 384.8 billion yen, and solution services revenues increased 1.1 billion yen (+0.7%) to 163.4 billion yen, Applications and Contents revenues decreased by 0.9 billion yen (-2.6%) compared to the prior fiscal year to 37.7 billion yen and Voice Communications revenues decreased 9.5 billion yen (-3.7%) to 250.7 billion yen. As a result, NTT Communications’ total non-consolidated operating revenues increased, for the second year in the row, by 5.5 billion yen (+0.6%) over the prior fiscal year to 923.8 billion yen.

As a result of increased telecommunication equipment expenses from the provision of Hikari Collaboration Model services, total operating expenses increased 4.1 billion yen (+0.5%) compared to the prior fiscal year to 831.3 billion yen.

As a result of the above, operating income increased by 1.4 billion yen (+1.5%) compared to the prior fiscal year to 92.5 billion yen, marking the first time in nine years that NTT Com’s operating revenues and operating income both increased over the prior fiscal year, and net income increased by 12.6 billion yen (+17.5%) to 85.0 billion yen.

– 5 –

II. Financial Results of NTT Communications Group


	(Millions of yen)
	Year ended March 31, 2016		Year ended March 31, 2017		Increase (Decrease)			Percent Increase (Decrease)
Operating revenues		1,319,113		1,282,968		(36,145	)		(2.7	)
Operating expenses		1,200,915		1,150,477		(50,438	)		(4.2	)
Operating income		118,198		132,491		14,293			12.1

– 6 –

III. Non-Consolidated Comparative Balance Sheets

(Based on accounting principles generally accepted in Japan)


	(Millions of yen)
	March 31, 2016			March 31, 2017			Increase (Decrease)
ASSETS
Fixed assets:
Fixed assets - telecommunications businesses
Property, plant and equipment
Machinery and equipment		134,315			151,531			17,215
Antenna facilities		1,707			1,674			(33	)
Terminal equipment		1,397			1,963			565
Local line facilities		730			1,103			373
Long-distance line facilities		5,759			5,122			(637	)
Engineering facilities		51,789			49,878			(1,911	)
Submarine line facilities		13,408			16,701			3,293
Buildings		199,178			205,475			6,296
Structures		3,030			2,624			(406	)
Other machinery and equipment		112			68			(43	)
Vehicles and vessels		82			62			(20	)
Tools, furniture and fixtures		37,805			46,700			8,895
Land		45,241			48,577			3,335
Lease assets		5,060			7,950			2,889
Construction in progress		28,085			13,323			(14,761	)
Total property, plant and equipment		527,706			552,757			25,051
Intangible fixed assets		101,766			98,820			(2,945	)
Total fixed assets - telecommunications businesses		629,472			651,578			22,105
Investments and other assets
Investment securities		135,291			108,152			(27,139	)
Investments in subsidiaries and affiliated companies		381,949			387,905			5,956
Other investments in subsidiaries and affiliated companies		1,500			—			(1,500	)
Investment in capital		359			345			(14	)
Contributions to affiliated companies		2,049			2,049			—
Long-term loans receivable to subsidiaries		1,725			1,268			(456	)
Long-term prepaid expenses		3,483			4,841			1,357
Prepaid pension costs		6,235			6,391			156
Deferred income taxes		6,217			17,499			11,282
Submarine line use rights		17,088			17,114			26
Other investments and assets		14,624			16,268			1,643
Allowance for doubtful accounts		(207	)		(160	)		47
Total investments and other assets		570,316			561,675			(8,641	)
Total fixed assets		1,199,789			1,213,254			13,464

Current assets:
Cash and bank deposits		12,607			3,406			(9,200	)
Notes receivable		—			8			8
Accounts receivable, trade		179,839			178,248			(1,590	)
Accounts receivable, other		47,624			49,459			1,834
Lease investment assets		117			92			(24	)
Securities		—			4			4
Supplies		9,806			9,643			(162	)
Advance payments		3,700			4,552			851
Prepaid expenses		6,469			8,084			1,615
Deferred income taxes		3,694			3,177			(516	)
Deposits paid to parent company		4,054			16,636			12,582
Other current assets		29,214			8,647			(20,566	)
Allowance for doubtful accounts		(1,017	)		(1,367	)		(349	)
Total current assets		296,110			280,595			(15,514	)

TOTAL ASSETS		1,495,899			1,493,849			(2,050	)

– 7 –


	(Millions of yen)
	March 31, 2016		March 31, 2017		Increase (Decrease)
LIABILITIES
Long-term liabilities:
Long-term borrowings from parent company and subsidiary		199,504		222,333		22,829
Lease obligations		5,183		6,297		1,113
Liability for employees’ retirement benefits		86,722		89,994		3,272
Reserve for point services		547		407		(139	)
Reserve for unused telephone cards		3,628		3,540		(88	)
Asset retirement obligations		3,296		4,126		829
Other long-term liabilities		5,170		13,118		7,948
Total long-term liabilities		304,053		339,818		35,765
Current liabilities:
Current portion of long-term borrowings from parent company		43,360		—		(43,360	)
Accounts payable, trade		31,894		29,548		(2,346	)
Short-term borrowings		7,766		—		(7,766	)
Lease obligations		3,222		3,851		629
Accounts payable, other		151,623		153,953		2,329
Accrued expenses		5,002		4,960		(42	)
Accrued taxes on income		6,968		3,749		(3,218	)
Advances received		3,790		3,736		(53	)
Deposits received		14,150		1,525		(12,625	)
Unearned revenues		150		173		22
Allowance for losses on construction		13		627		613
Asset retirement obligations		—		56		56
Other current liabilities		1,363		1,178		(185	)
Total current liabilities		269,307		203,360		(65,946	)

TOTAL LIABILITIES		573,360		543,179		(30,181	)


NET ASSETS
Shareholders’ equity:
Common stock		211,763		211,763		—
Capital surplus
Additional paid-in capital		131,615		131,615		—
Total capital surplus		131,615		131,615		—
Earned surplus
Other earned surplus
Reserve for reduction entry		7,228		7,189		(39	)
Accumulated earned surplus		510,207		556,808		46,600
Total earned surplus		517,436		563,997		46,561
Total shareholders’ equity		860,815		907,376		46,561
Unrealized gains (losses), translation adjustments, and others:
Net unrealized gains (losses) on securities		61,723		43,080		(18,643	)
Deferred gains or losses on hedges		—		213		213
Total unrealized gains (losses), translation adjustments, and others		61,723		43,293		(18,429	)

TOTAL NET ASSETS		922,538		950,670		28,131

TOTAL LIABILITIES AND NET ASSETS		1,495,899		1,493,849		(2,050	)

– 8 –

IV. Non-Consolidated Comparative Statements of Income

(Based on accounting principles generally accepted in Japan)


	(Millions of yen)
	Year ended March 31, 2016		Year ended March 31, 2017			Increase (Decrease)
Telecommunications businesses:
Operating revenues		691,290		697,333			6,042
Operating expenses
Business expenses		156,429		159,654			3,224
Maintenance expenses		74,197		74,148			(48	)
Overhead expenses		11,373		10,976			(397	)
Administration		66,380		66,106			(273	)
Experiment and research		11,665		11,654			(10	)
Depreciation and amortization		89,545		89,139			(405	)
Retirement of fixed assets		5,195		6,236			1,040
Access charges		187,152		190,708			3,555
Miscellaneous taxes		11,153		11,745			591
Total operating expenses		613,093		620,370			7,276
Operating income from telecommunications businesses		78,196		76,963			(1,233	)

Supplementary businesses:
Operating revenues		227,018		226,522			(495	)
Operating expenses		214,072		210,936			(3,135	)
Operating income from supplementary businesses		12,946		15,585			2,639
Operating income		91,143		92,549			1,405

Non-operating revenues:
Interest income		272		62			(209	)
Interest on securities		0		0			(0	)
Dividends received		12,486		8,258			(4,228	)
Lease and rental income		11,581		11,204			(376	)
Miscellaneous income		2,822		1,222			(1,599	)
Total non-operating revenues		27,163		20,748			(6,415	)

Non-operating expenses:
Interest expenses		1,514		1,050			(463	)
Lease and rental expenses		5,551		5,712			161
Miscellaneous expenses		1,034		1,072			38
Total non-operating expenses		8,100		7,836			(264	)
Recurring profit		110,206		105,461			(4,745	)

Special losses:
Write-off of investments in affiliated companies		5,847		—			(5,847	)
Total special losses		5,847		—			(5,847	)
Income before income taxes		104,359		105,461			1,102
Corporation, inhabitant, and enterprise taxes		29,003		23,097			(5,906	)
Deferred tax expenses (benefits)		3,042		(2,639	)		(5,681	)
Net income		72,312		85,003			12,690

– 9 –

V. Non-Consolidated Statements of Changes in Shareholders’ Equity and Other Net Assets

(Based on accounting principles generally accepted in Japan)


Year ended March 31, 2016	(Millions of yen)
	Shareholders’ equity																		Unrealized gains (losses), translation adjustments, and others								Total net assets
	Common stock		Capital surplus				Earned surplus									Total shareholders’ equity			Net unrealized gains (losses) on securities			Deferred gains or losses on hedges		Total unrealized gains (losses), translation adjustments, and others
			Additional paid-in capital		Total capital surplus		Other earned surplus						Total earned surplus
			Additional paid-in capital		Total capital surplus		Reserve for reduction entry			Accumulated earned surplus			Total earned surplus
April 1, 2015		211,763		131,615		131,615		6,517			481,672			488,190			831,569			98,314			—		98,314			929,884
Net change during the annual period
Cash dividends											(43,067	)		(43,067	)		(43,067	)										(43,067	)
Net income											72,312			72,312			72,312											72,312
Provision of reserve for reduction entry								727			(727	)		—			—											—
Return of reserve for reduction entry								(17	)		17			—			—											—
Others, net																				(36,590	)				(36,590	)		(36,590	)

Total net change during the annual period		—		—		—		710			28,534			29,245			29,245			(36,590	)		—		(36,590	)		(7,345	)

March 31, 2016		211,763		131,615		131,615		7,228			510,207			517,436			860,815			61,723			—		61,723			922,538


Year ended March 31, 2017	(Millions of yen)
	Shareholders’ equity																		Unrealized gains (losses), translation adjustments, and others								Total net assets
	Common stock		Capital surplus				Earned surplus									Total shareholders’ equity			Net unrealized gains (losses) on securities			Deferred gains or losses on hedges		Total unrealized gains (losses), translation adjustments, and others
			Additional paid-in capital		Total capital surplus		Other earned surplus						Total earned surplus
			Additional paid-in capital		Total capital surplus		Reserve for reduction entry			Accumulated earned surplus			Total earned surplus
April 1, 2016		211,763		131,615		131,615		7,228			510,207			517,436			860,815			61,723			—		61,723			922,538
Net change during the annual period
Cash dividends											(38,441	)		(38,441	)		(38,441	)										(38,441	)
Net income											85,003			85,003			85,003											85,003
Return of reserve for reduction entry								(39	)		39			—			—											—
Others, net																				(18,643	)		213		(18,429	)		(18,429	)

Total net change during the annual period		—		—		—		(39	)		46,600			46,561			46,561			(18,643	)		213		(18,429	)		28,131

March 31, 2017		211,763		131,615		131,615		7,189			556,808			563,997			907,376			43,080			213		43,293			950,670

– 10 –

VI. Business Results (Non-Consolidated Operating Revenues)

(Based on accounting principles generally accepted in Japan)


	(Millions of yen)
	Year ended March 31, 2016		Year ended March 31, 2017		Increase (Decrease)			Percent Increase (Decrease)
Cloud Computing Platforms		70,029		72,034		2,005			2.9
Data Networks		369,871		384,804		14,933			4.0
Voice Communications		260,329		250,794		(9,535	)		(3.7	)
Applications & Content		38,729		37,732		(996	)		(2.6	)
Solution Services		162,352		163,496		1,144			0.7
Others		16,997		14,993		(2,003	)		(11.8	)

Total operating revenues		918,309		923,855		5,546			0.6

– 11 –

VII. Non-Consolidated Comparative Statements of Cash Flows

(Based on accounting principles generally accepted in Japan)


	(Millions of yen)
	Year ended March 31, 2016			Year ended March 31, 2017			Increase (Decrease)
Cash flows from operating activities:

Income before income taxes		104,359			105,461			1,102
Depreciation and amortization		106,837			106,971			134
Loss on disposal of property, plant and equipment		4,075			4,517			441
Gains on sales of fixed assets		(3	)		(78	)		(75	)
Increase (decrease) in allowance for doubtful accounts		(117	)		302			419
Increase (decrease) in liability for employees’ retirement benefits		1,140			3,272			2,131
Write-off of investments in affiliated companies		5,847			—			(5,847	)
(Increase) decrease in accounts receivable		(3,413	)		(239	)		3,174
(Increase) decrease in inventories		(3,015	)		1,152			4,167
Increase (decrease) in accounts payable and accrued expenses		432			703			270
Increase (decrease) in accrued consumption tax		(4,850	)		2,434			7,285
Other		(23,183	)		(10,925	)		12,257

Sub-total		188,108			213,571			25,463
Interest and dividends received		12,752			8,344			(4,407	)
Interest paid		(1,418	)		(1,086	)		332
Income taxes received (paid)		(22,436	)		(29,892	)		(7,455	)

Net cash provided by (used in) operating activities		177,004			190,937			13,933

Cash flows from investing activities:

Payments for property, plant and equipment		(124,453	)		(134,677	)		(10,224	)
Proceeds from sale of property, plant and equipment		18			412			394
Payments for purchase of investment securities		(105,792	)		(422	)		105,370
Proceeds from sale of investment securities		152			2,242			2,090
Payments for long-term loans		(5,852	)		—			5,852
Other		(1,720	)		(4,042	)		(2,321	)

Net cash provided by (used in) investing activities		(237,648	)		(136,487	)		101,161

Cash flows from financing activities:

Proceeds from issuance of long-term debt		149,857			22,864			(126,993	)
Payments for settlement of long-term debt		(53,360	)		(43,360	)		10,000
Net increase (decrease) in short-term borrowings		(2,647	)		(7,766	)		(5,119	)
Payments for settlement of lease obligations		(7,470	)		(4,306	)		3,164
Dividends paid		(36,001	)		(33,000	)		3,000

Net cash provided by (used in) financing activities		50,378			(65,569	)		(115,947	)

Effect of exchange rate changes on cash and cash equivalents		(2,147	)		(158	)		1,988
Net increase (decrease) in cash and cash equivalents		(12,412	)		(11,277	)		1,135
Cash and cash equivalents at beginning of year		44,042			31,630			(12,412	)

Cash and cash equivalents at end of year		31,630			20,353			(11,277	)

– 12 –

VIII. Changes in NTT Communications Directors

(Subject to Shareholders’ Approval)

1. Candidates scheduled to take office as Directors


Shuichi Sasakura		Head of Corporate Planning
Yoichiro Takaya		Head of Fifth Sales Division
Naoki Kajita		Deputy Senior Vice President of Fourth Sales Division
Keigo Kajimura		Head of Solution Services
Hiromasa Takaoka		Vice President of General Affairs Department, NIPPON TELEGRAPH AND TELEPHONE CORPORATION
Atsuhiro Fuseya		Vice President of General Affairs Department, NIPPON TELEGRAPH AND TELEPHONE CORPORATION

2. Directors scheduled to resign


Takashi Ooi		Senior Vice President
(scheduled to transfer to NTT Bizlink, Inc.)

Akira Arima		Senior Vice President
(scheduled to remain as NTT Communications’ Corporate Advisor)

Masanori Ozawa		Senior Vice President
(scheduled to transfer to NIPPON TELEGRAPH AND TELEPHONE WEST CORPORATION)

3. New Executive Positions and Organizational Responsibilities


Name	New Position(s) and Organizational Responsibilities	Current Position(s) and Organizational Responsibilities
Tetsuya Funabashi	Senior Executive Vice President In charge of technology In charge of services In charge of operations In charge of information security	Senior Executive Vice President In charge of technology In charge of operations In charge of information security In charge of corporate Head of Customer Services

Katsumi Nakata	Senior Executive Vice President In charge of sales In charge of global business In charge of corporate	Senior Executive Vice President In charge of sales In charge of global business

Shuichi Sasakura	Senior Vice President Head of Network Services	Head of Corporate Planning

Yoichiro Takaya	Senior Vice President Head of Fifth Sales Division	Head of Fifth Sales Division

Naoki Kajita	Senior Vice President Head of ICT Consulting Division	Deputy Senior Vice President of Fourth Sales Division

Keigo Kajimura	Senior Vice President Head of Solution Services	Head of Solution Services

Hiromasa Takaoka	Senior Vice President Head of Customer Services	Vice President of General Affairs Department, NIPPON TELEGRAPH AND TELEPHONE CORPORATION

Atsuhiro Fuseya	Senior Vice President	Vice President of General Affairs Department, NIPPON TELEGRAPH AND TELEPHONE CORPORATION

Notes:

• Among the Directors scheduled to resign from office, Takashi Ooi is expected to resign on June 11, 2017, Masanori Ozawa is expected to resign on June 22, 2017, and Akira Arima is expected to resign at the close of the 18th Annual General Shareholders’ Meeting (to be held on June 23, 2017).

• Shuichi Sasakura is expected to concurrently become Head of Network Services on June 12, 2017.

– 13 –

May 15, 2017

Nippon Telegraph and Telephone Corporation

Supplementary Data for

the Annual Results for the Fiscal Year Ended March 31, 2017

Contents



1. Financial Results Summary (Consolidated)			pages 1-2

2. Financial Results (Business Segments)			page 3

3. Financial Results (Holding Company and Subsidiaries)			pages 4-6

4. Operating Data			pages 7-9

Disclaimers

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.

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

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

1. Financial Results Summary (NTT Consolidated Financial Results, EBITDA and EBITDA Margin and Interest-Bearing Liabilities)

NTT Consolidated Financial Results


	(Billions of yen)
	FY 2015															FY 2016															FY 2017 (E)
	Three Months Ended												Year Ended			Three Months Ended												Year Ended			Year Ending
	June 30			September 30			December 31			March 31			March 31			June 30			September 30			December 31			March 31			March 31			March 31
Consolidated (US GAAP)
Operating Revenues		2,706.5			2,882.5			2,906.4			3,045.6			11,541.0			2,716.7			2,807.6			2,836.2			3,030.5			11,391.0			11,750.0
Fixed Voice Related Services		336.4			331.2			326.9			335.5			1,330.0			311.8			307.5			299.8			314.7			1,233.9			—
Mobile Voice Related Services		193.1			214.6			216.9			213.2			837.8			213.0			216.6			221.8			213.9			865.3			—
IP/Packet Communications Services		933.7			941.6			944.2			938.3			3,757.8			948.0			953.3			941.0			966.6			3,809.0			—
Sales of Telecommunications Equipment		223.8			240.0			262.0			227.3			953.0			186.7			236.4			227.0			156.4			806.5			—
System Integration		673.0			764.3			774.9			851.3			3,063.5			688.3			708.8			726.7			917.9			3,041.6			—
Other		346.4			390.8			381.5			480.1			1,598.8			368.9			385.0			419.9			461.0			1,634.8			—
Operating Expenses		2,347.7			2,507.8			2,513.3			2,824.1			10,192.8			2,229.3			2,368.5			2,444.1			2,809.3			9,851.2			10,160.0
Cost of Services (excluding items shown separately below)		556.0			593.1			584.3			724.7			2,458.1			547.3			606.1			598.0			736.2			2,487.6			—
Cost of Equipment Sold (excluding items shown separately below)		196.6			234.5			268.4			271.0			970.5			175.3			231.2			248.3			225.0			879.7			—
Cost of System Integration (excluding items shown separately below)		475.8			558.7			543.2			619.8			2,197.5			501.7			484.5			510.3			664.4			2,161.0			—
Depreciation and Amortization		432.6			439.1			445.5			449.2			1,766.3			359.2			357.3			366.4			379.3			1,462.2			1,359.0
Impairment Loss		0.0			3.6			2.4			26.7			32.7			0.4			14.3			51.3			7.9			73.9			—
Goodwill		—			—			—			4.7			4.7			—			4.5			48.8			—			53.3			—
Other		0.0			3.6			2.4			22.0			28.0			0.4			9.8			2.5			7.9			20.6			—
Selling, General and Administrative Expenses		686.7			678.8			669.6			732.7			2,767.8			645.5			675.1			669.7			796.5			2,786.8			—
Operating Income		358.8			374.7			393.1			221.6			1,348.1			487.4			439.1			392.1			221.2			1,539.8			1,590.0
Income Before Income Taxes		367.4			350.0			403.7			208.1			1,329.3			446.1			450.8			410.3			220.6			1,527.8			1,580.0
Net Income Attributable to NTT		193.2			184.1			226.7			133.7			737.7			243.6			232.5			192.6			131.4			800.1			830.0

(Ref.) Details of “Cost of Services,” “Cost of Equipment Sold,” “Cost of System Integration” and “Selling, General and Administrative Expenses”
Personnel		569.5			577.4			577.6			575.2			2,299.7			557.7			569.7			547.5			601.9			2,276.8			—
Cost of Services and Equipment Sold, and Selling, General and Administrative Expenses		1,257.3			1,402.0			1,395.2			1,621.4			5,675.9			1,227.9			1,335.4			1,384.4			1,664.2			5,612.0			—
Loss on Disposal of Property, Plant and Equipment		30.0			31.3			37.6			92.8			191.7			24.2			36.3			39.8			96.8			197.0			—
Other Expenses		58.3			54.5			55.1			58.8			226.6			60.0			55.6			54.7			59.1			229.4			—
Total		1,915.1			2,065.1			2,065.4			2,348.2			8,393.8			1,869.8			1,996.9			2,026.4			2,422.1			8,315.1			—
EBITDA and EBITDA Margin with Reconciliation
EBITDA [a+b+c+d] ⁽¹⁾		812.9			835.3			860.5			769.3			3,277.9			860.0			830.7			829.8			662.9			3,183.3			3,190.0
a Operating Income		358.8			374.7			393.1			221.6			1,348.1			487.4			439.1			392.1			221.2			1,539.8			1,590.0
b Depreciation and Amortization		432.6			439.1			445.5			449.2			1,766.3			359.2			357.3			366.4			379.3			1,462.2			1,359.0
c Loss on Sales and Disposal of Property, Plant and Equipment		21.5			17.9			19.5			71.8			130.7			13.0			20.0			20.0			54.4			107.4			241.0
d Impairment Loss		0.0			3.6			2.4			26.7			32.7			0.4			14.3			51.3			7.9			73.9			—
EBITDA Margin [(e÷f)×100] ⁽¹⁾		30.0	%		29.0	%		29.6	%		25.3	%		28.4	%		31.7	%		29.6	%		29.3	%		21.9	%		27.9	%		27.1	%
e EBITDA [a+b+c+d]		812.9			835.3			860.5			769.3			3,277.9			860.0			830.7			829.8			662.9			3,183.3			3,190.0
f Operating Revenues		2,706.5			2,882.5			2,906.4			3,045.6			11,541.0			2,716.7			2,807.6			2,836.2			3,030.5			11,391.0			11,750.0

Interest-Bearing Liabilities

	FY 2015															FY 2016															FY 2017 (E)
	As of June 30			As of September 30			As of December 31			As of March 31						As of June 30			As of September 30			As of December 31			As of March 31						As of March 31
Interest-Bearing Liabilities		4,838.1			4,520.4			4,446.2			4,163.3						4,353.6			4,091.8			4,497.1			4,088.2						3,900.0

– 1 –

1. Financial Results Summary (Capital Investment)

Capital Investment


	(Billions of yen)
	FY 2015										FY 2016										FY 2017 (E)
	Three Months Ended								Year Ended		Three Months Ended								Year Ended		Year Ending
	June 30		September 30		December 31		March 31		March 31		June 30		September 30		December 31		March 31		March 31		March 31
Capital Investment ⁽¹⁾⁽²⁾		285.8		359.8		393.8		647.8		1,687.2		284.4		381.5		426.5		607.8		1,700.0		1,700.0
Regional communications business		107.7		126.9		134.5		252.9		622.1		96.3		118.7		130.6		237.7		583.4		555.0
Long distance and international communications business		42.9		53.5		58.5		72.7		227.6		44.8		56.6		67.0		76.5		244.9		249.0
Mobile communications business		93.2		126.4		143.0		232.8		595.3		97.1		148.9		153.3		197.7		597.1		570.0
Data communications business		26.9		31.4		29.9		45.9		134.0		28.5		39.1		37.9		52.5		158.1		192.0
Other business		15.2		21.6		27.8		43.5		108.2		17.6		18.1		37.6		43.3		116.6		134.0
(Ref.) Core Group Companies
NTT (Holding Company)		1.1		2.2		3.2		12.1		18.7		1.0		2.6		3.8		8.1		15.7		18.0
R&D Facilities		—		—		—		—		16.5		—		—		—		—		12.9		15.0
Joint Facilities		—		—		—		—		2.1		—		—		—		—		2.8		3.0
NTT East		46.1		56.5		59.4		131.7		294.0		42.1		52.4		61.0		118.0		273.8		250.0
Service Expansion and Improvement		—		—		—		—		261.0		—		—		—		—		249.6		231.0
Voice Transmission		—		—		—		—		147.6		—		—		—		—		142.6		133.0
Data Transmission		—		—		—		—		22.1		—		—		—		—		17.8		14.0
Leased Circuit		—		—		—		—		91.1		—		—		—		—		88.2		83.0
Telegraph		—		—		—		—		0.0		—		—		—		—		0.9		1.0
R&D Facilities		—		—		—		—		2.5		—		—		—		—		2.7		2.0
Joint Facilities		—		—		—		—		30.3		—		—		—		—		21.3		17.0
NTT West		57.9		63.5		68.5		99.4		289.4		46.2		56.8		61.7		109.3		274.1		260.0
Service Expansion and Improvement		—		—		—		—		272.2		—		—		—		—		256.0		239.0
Voice Transmission		—		—		—		—		154.3		—		—		—		—		157.7		144.0
Data Transmission		—		—		—		—		21.5		—		—		—		—		22.9		17.0
Leased Circuit		—		—		—		—		96.2		—		—		—		—		74.9		77.0
Telegraph		—		—		—		—		0.0		—		—		—		—		0.3		1.0
R&D Facilities		—		—		—		—		1.9		—		—		—		—		1.9		2.0
Joint Facilities		—		—		—		—		15.2		—		—		—		—		16.0		19.0
NTT Communications		28.0		26.9		28.6		47.2		130.8		25.1		32.2		34.1		43.6		135.1		111.0
Cloud Computing Platforms		—		—		—		—		34.2		—		—		—		—		39.6		23.0
Data Networks		—		—		—		—		16.8		—		—		—		—		26.3		22.1
Voice Communications		—		—		—		—		11.0		—		—		—		—		10.2		8.2
Applications & Content		—		—		—		—		1.9		—		—		—		—		1.9		4.1
Solution Services		—		—		—		—		9.1		—		—		—		—		6.3		5.3
Infrastructure and Joint Facilities, etc.		—		—		—		—		57.4		—		—		—		—		50.5		48.0
NTT DOCOMO (Consolidated)		93.1		126.3		143.0		232.8		595.2		97.1		148.9		153.3		197.7		597.1		570.0
NTT DATA (Consolidated)		26.8		31.3		29.9		45.8		134.0		28.5		39.1		37.9		52.5		158.1		192.0

(Ref.) Optical Access Network Investment
NTT East		—		—		—		—		90.0		—		—		—		—		85.0		Approx. 80.0
NTT West		—		—		—		—		87.0		—		—		—		—		71.0		Approx. 73.0


Notes :	(1)	Capital Investment figures for domestic access network businesses for Year Ended March 31, 2016, Year Ended March 31, 2017 and Year Ending March 31, 2018 (Forecast) are 1,302.3 billion yen, 1,261.6 billion yen and 1,193.0 billion yen, respectively.
	(2)	Figures for NTT East and NTT West include figures for Optical Access Network Investment.

– 2 –

2. Financial Results (Business Segments)


	(Billions of yen)
	FY 2015										FY 2016											FY 2017 (E)
	Three Months Ended								Year Ended		Three Months Ended									Year Ended		Year Ending
	June 30		September 30		December 31		March 31		March 31		June 30		September 30		December 31			March 31		March 31		March 31
Business segments ⁽¹⁾
Regional communications business
Operating Revenues		836.5		844.1		839.7		887.6		3,407.9		802.9		817.5		814.4			873.4		3,308.2		3,230.0
Operating Expenses		765.4		760.6		762.1		854.8		3,142.9		675.1		713.1		716.2			844.3		2,948.7		2,900.0
Operating Income		71.1		83.5		77.6		32.8		265.0		127.8		104.5		98.2			29.0		359.5		330.0
Long distance and international communications business
Operating Revenues		518.1		579.1		578.2		575.5		2,250.9		519.0		519.8		531.8			558.6		2,129.3		2,230.0
Operating Expenses		496.9		552.7		543.6		561.0		2,154.2		492.0		504.7		555.3			536.5		2,088.4		2,110.0
Operating Income		21.2		26.4		34.6		14.5		96.7		27.0		15.2		(23.5	)		22.1		40.8		120.0
Mobile communications business
Operating Revenues		1,076.9		1,138.2		1,168.5		1,143.6		4,527.1		1,108.7		1,179.4		1,181.2			1,115.3		4,584.6		4,750.0
Operating Expenses		842.2		911.7		946.6		1,038.3		3,738.8		810.4		893.9		925.6			1,003.0		3,632.9		3,795.0
Operating Income		234.7		226.4		221.9		105.3		788.4		298.3		285.4		255.6			112.3		951.6		955.0
Data communications business
Operating Revenues		360.2		385.5		402.1		469.0		1,616.8		373.5		388.6		402.6			554.1		1,718.7		1,970.0
Operating Expenses		341.4		366.2		366.2		430.3		1,504.1		351.6		374.6		371.4			513.3		1,610.8		1,840.0
Operating Income		18.9		19.3		35.8		38.7		112.7		21.9		14.0		31.2			40.8		107.9		130.0
Other business
Operating Revenues		267.1		300.6		305.0		421.7		1,294.5		272.1		295.5		322.3			392.4		1,282.3		1,260.0
Operating Expenses		256.8		283.4		286.5		393.8		1,220.4		259.8		278.1		292.7			374.4		1,205.0		1,185.0
Operating Income		10.4		17.3		18.5		27.9		74.0		12.3		17.4		29.6			18.0		77.3		75.0


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

– 3 –

3. Financial Results (Holding Company and Subsidiaries)


	(Billions of yen)
	FY 2015										FY 2016												FY 2017 (E)
	Three Months Ended								Year Ended		Three Months Ended										Year Ended		Year Ending
	June 30		September 30		December 31		March 31		March 31		June 30		September 30			December 31		March 31			March 31		March 31
NTT (Holding Company) (JPN GAAP)
Operating Revenues		224.0		32.5		130.1		134.9		521.7		269.1		32.7			138.6		33.7			474.3		662.0
Operating Expenses		30.4		30.9		31.7		44.5		137.6		29.4		30.7			31.1		43.3			134.6		130.0
Operating Income		193.6		1.6		98.4		90.4		384.0		239.6		2.0			107.5		(9.5	)		339.6		532.0
Non-Operating Revenues		6.9		7.1		6.3		9.5		30.0		6.0		6.2			5.7		6.0			24.1		22.0
Non-Operating Expenses		7.7		7.8		7.3		9.6		32.6		7.7		6.8			6.7		7.6			28.9		25.0
Recurring Profit		192.8		0.9		97.4		90.2		381.4		237.9		1.4			106.5		(11.0	)		334.9		529.0
Net Income		192.5		0.6		97.2		376.2		666.6		237.5		(19.7	)		79.2		(8.9	)		288.1		530.0
NTT East (JPN GAAP)
Operating Revenues		429.7		429.7		427.5		435.2		1,722.3		410.1		413.3			413.1		435.5			1,672.2		1,640.0
Voice Transmission Services (excluding IP) ⁽¹⁾		110.0		108.2		106.4		103.1		427.8		101.4		99.9			99.2		95.8			396.5		370.0
IP Services		217.0		214.4		214.5		209.4		855.4		213.3		211.7			212.4		212.8			850.3		850.0
Leased Circuit (excluding IP)		28.6		26.4		24.6		23.9		103.7		24.0		23.6			23.0		22.6			93.3		93.0
Other		47.8		47.6		48.5		54.6		198.5		46.1		46.0			48.1		54.1			194.5		193.0
Supplementary Business		26.2		32.9		33.3		44.1		136.7		25.0		31.9			30.3		50.0			137.4		134.0
Operating Expenses		379.0		378.5		377.4		425.4		1,560.4		346.0		353.6			363.1		420.2			1,483.1		1,450.0
Personnel		24.3		23.8		24.0		24.6		96.8		23.6		23.6			23.2		24.0			94.6		85.0
Cost of Services and Equipment Sold, and Selling, General and Administrative Expenses		241.5		242.2		238.0		270.9		992.8		224.3		230.9			236.1		270.7			962.1		947.0
Depreciation and Amortization		87.9		86.0		86.0		82.6		342.6		72.2		72.5			76.0		74.2			295.0		234.0
Loss on Disposal of Property, Plant and Equipment		6.3		8.7		11.4		28.1		54.7		6.1		8.4			9.7		31.5			55.9		110.0
Taxes and Public Dues		18.8		17.5		17.8		18.9		73.3		19.5		18.1			17.9		19.6			75.3		74.0
Operating Income		50.7		51.2		50.1		9.7		161.8		64.1		59.6			49.9		15.3			189.1		190.0
Non-Operating Revenues		5.8		6.2		0.7		4.6		17.5		17.3		0.5			1.5		0.7			20.2		5.0
Non-Operating Expenses		1.4		1.3		1.3		1.6		5.9		1.2		1.2			1.2		1.1			4.9		5.0
Recurring Profit		55.0		56.1		49.5		12.7		173.4		80.2		58.9			50.2		14.9			204.4		190.0
Net Income		40.9		37.1		35.0		5.6		118.7		57.8		42.1			36.5		13.1			149.6		131.0
NTT West (JPN GAAP)
Operating Revenues		374.1		380.5		374.4		398.8		1,528.0		362.0		368.4			362.7		385.7			1,479.0		1,436.0
Voice Transmission Services (excluding IP) ⁽¹⁾		110.5		108.4		106.5		103.1		428.6		101.6		99.9			99.0		95.6			396.2		370.0
IP Services		174.5		176.2		176.0		175.8		702.7		175.5		173.6			174.0		173.9			697.2		689.0
Leased Circuit (excluding IP)		24.7		23.7		22.7		22.1		93.3		22.0		21.7			21.3		21.1			86.3		87.0
Other		35.1		35.3		36.0		41.3		147.8		33.8		35.0			35.9		40.8			145.6		138.0
Supplementary Business		29.1		36.8		33.0		56.3		155.4		29.0		38.0			32.2		54.0			153.4		152.0
Operating Expenses		359.2		357.9		344.1		392.6		1,453.9		323.3		335.9			336.6		387.8			1,383.8		1,336.0
Personnel		22.6		22.3		22.3		22.7		90.0		20.3		20.0			19.9		20.2			80.5		77.0
Cost of Services and Equipment Sold, and Selling, General and Administrative Expenses		230.0		230.2		213.7		250.5		924.5		206.3		219.1			215.4		254.4			895.4		860.0
Depreciation and Amortization		80.5		79.2		79.5		77.7		317.0		70.4		70.8			74.1		72.1			287.6		213.0
Loss on Disposal of Property, Plant and Equipment		8.7		10.0		12.3		25.0		56.2		8.6		9.4			10.9		24.1			53.2		119.0
Taxes and Public Dues		17.2		16.0		16.1		16.4		66.0		17.5		16.3			16.2		16.8			66.9		67.0
Operating Income		14.8		22.6		30.2		6.2		74.0		38.7		32.5			26.0		(2.0	)		95.1		100.0
Non-Operating Revenues		2.7		0.6		0.5		1.7		5.7		1.2		0.4			0.5		0.7			2.9		4.0
Non-Operating Expenses		2.8		3.7		2.2		3.8		12.7		2.0		1.7			1.7		4.3			9.9		9.0
Recurring Profit		14.7		19.5		28.5		4.2		67.1		37.8		31.1			24.8		(5.7	)		88.1		95.0
Net Income		12.2		14.0		19.6		26.4		72.4		23.3		22.2			18.0		(3.8	)		59.7		70.0


Note:		(1)		Operating Revenues from Voice Transmission Services (excluding IP) of NTT East and NTT West for the fiscal year ended March 31, 2017 include monthly charges, call charges and interconnection charges of 299.9 billion yen, 26.2 billion yen and 45.6 billion yen for NTT East, and 298.3 billion yen, 24.5 billion yen and 49.6 billion yen for NTT West, respectively.

– 4 –

3. Financial Results (Holding Company and Subsidiaries)


	(Billions of yen)
	FY 2015														FY 2016															FY 2017 (E)
	Three Months Ended											Year Ended			Three Months Ended												Year Ended			Year Ending
	June 30			September 30			December 31		March 31			March 31			June 30			September 30			December 31			March 31			March 31			March 31
NTT Communications (JPN GAAP)
Operating Revenues ⁽¹⁾		216.6			225.3			226.2		250.0			918.3			220.2			226.9			227.0			249.6			923.8			940.0
Cloud Computing Platforms		16.7			17.0			17.4		18.7			70.0			17.1			17.6			17.6			19.5			72.0			87.0
Data Networks		91.0			91.7			92.7		94.3			369.8			94.8			95.1			96.3			98.4			384.8			393.0
Voice Communications		64.3			64.5			66.9		64.4			260.3			63.0			63.3			63.7			60.6			250.7			244.0
Applications & Content		9.5			9.8			9.3		9.8			38.7			9.4			9.2			9.3			9.6			37.7			37.0
Solution Services		31.0			38.2			35.8		57.2			162.3			31.9			37.7			36.1			57.5			163.4			159.0
Others		3.8			3.9			3.8		5.3			16.9			3.7			3.7			3.8			3.6			14.9			20.0
Operating Expenses		199.3			202.5			199.4		225.7			827.1			194.3			202.5			204.1			230.2			831.3			847.0
Personnel		19.1			19.1			18.8		20.0			77.2			19.2			18.9			19.0			19.7			77.0			77.0
Cost of Services, Cost of Equipment Sold, and Selling, General and Administrative Expenses		100.9			102.9			97.1		116.0			417.1			90.8			98.8			95.1			121.6			406.4			639.0
Communication Network Charges		49.6			50.8			52.5		56.8			209.9			54.7			54.6			59.2			54.4			223.1
Depreciation and Amortization		25.9			25.9			26.7		25.7			104.4			25.4			25.6			26.2			27.0			104.4			96.0
Loss on Disposal of Property, Plant and Equipment		0.4			0.6			0.9		3.7			5.6			0.5			1.0			0.9			4.1			6.7			22.0
Taxes and Public Dues		3.2			3.1			3.1		3.1			12.7			3.5			3.2			3.4			3.2			13.4			13.0
Operating Income		17.2			22.7			26.7		24.3			91.1			25.8			24.3			22.9			19.4			92.5			93.0
Non-Operating Revenues		8.8			7.1			6.2		4.9			27.1			7.4			5.6			4.0			3.5			20.7			18.0
Non-Operating Expenses		2.3			1.7			1.7		2.2			8.1			2.3			1.6			1.3			2.5			7.8			8.0
Recurring Profit		23.7			28.0			31.2		27.1			110.2			30.9			28.3			25.6			20.5			105.4			103.0
Net Income		16.6			19.8			22.6		13.1			72.3			22.3			20.4			18.5			23.6			85.0			73.0
Dimension Data (IFRS) ⁽²⁾⁽³⁾
Operating Revenues		206.8			247.1			246.5		221.5			921.9			206.6			198.6			196.4			207.4			809.0			890.0
Operating Expenses		207.9			246.4			244.0		223.4			921.6			207.9			205.7			197.9			207.4			818.9			881.0
Operating Income ⁽⁴⁾		(1.0	)		0.8			2.5		(2.0	)		0.3			(1.3	)		(7.0	)		(1.5	)		(0.0	)		(9.9	)		9.0
Net Income Attributable to Dimension Data		(2.8	)		(1.4	)		2.6		(6.1	)		(7.7	)		(2.4	)		(9.6	)		(14.6	)		(1.4	)		(27.9	)		—


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, 2016 are consolidated into NTT’s consolidated statements of income from April 1, 2016 to March 31, 2017, Dimension Data’s financial results for the twelve months ended December 31, 2016 are included under Year Ended March 31, 2017 and Dimension Data’s forecast for the twelve months ending December 31, 2017 is included under Year Ending March 31, 2018 (Forecast).
	(3)	The conversion rate used for Dimension Data figures for the fiscal year ended March 31, 2017 is USD1.00 = JPY108.78.
	(4)	Operating Income for the fiscal year ended March 31, 2017 under US GAAP was (68.4) billion yen.

– 5 –

3. Financial Results (Holding Company and Subsidiaries)


	(Billions of yen)
	FY 2015															FY 2016															FY 2017 (E)
	Three Months Ended												Year Ended			Three Months Ended												Year Ended			Year Ending
	June 30			September 30			December 31			March 31			March 31			June 30			September 30			December 31			March 31			March 31			March 31
NTT DOCOMO Consolidated (US GAAP)
Operating Revenues		1,076.9			1,138.1			1,168.5			1,143.6			4,527.1			1,108.7			1,179.7			1,181.3			1,115.0			4,584.6			4,750.0
Telecommunications Services		675.3			707.1			717.3			715.9			2,815.5			729.7			744.8			750.7			759.9			2,985.1			3,125.0
Mobile Communications Services		669.4			697.2			703.6			697.4			2,767.6			704.2			712.8			712.1			714.8			2,844.0			2,894.0
Voice Revenues		196.6			217.0			219.8			216.0			849.4			215.9			219.6			224.8			215.0			875.2			928.0
Packet Communications Revenues		472.7			480.2			483.8			481.4			1,918.2			488.3			493.3			487.4			499.8			1,968.8			1,966.0
Optical-fiber Broadband Services and Other Telecommunications Services		5.9			9.9			13.7			18.5			47.9			25.5			31.9			38.6			45.1			141.1			231.0
Equipment Sales		201.3			215.5			241.0			202.7			860.5			165.8			214.4			206.2			132.9			719.2			748.0
Other Operating Revenues		200.3			215.6			210.2			225.1			851.1			213.2			220.5			224.4			222.2			880.3			877.0
Operating Expenses		841.5			910.9			945.5			1,046.1			3,744.1			809.4			893.4			924.5			1,012.6			3,639.8			3,790.0
Personnel		72.3			72.0			72.1			69.8			286.2			72.3			72.8			72.2			74.5			291.8			300.0
Cost of Services, Cost of Equipment Sold, and Selling, General and Administrative Expenses		537.5			597.9			619.4			672.5			2,427.3			531.5			600.6			622.8			677.3			2,432.1			2,498.0
Depreciation and Amortization		145.6			151.5			160.0			168.8			625.9			109.7			110.8			113.9			117.9			452.3			490.0
Impairment Loss		—			—			—			17.7			17.7			—			—			—			12.2			12.2			—
Loss on Disposal of Property, Plant and Equipment		11.3			11.2			12.2			34.0			68.8			7.9			16.8			16.5			38.3			79.6			60.0
Communication Network Charges		64.6			68.3			71.8			72.2			276.9			76.7			82.1			88.8			81.8			329.4			400.0
Taxes and Public Dues		10.3			10.0			10.1			11.0			41.3			11.2			10.3			10.3			10.5			42.4			42.0
Operating Income		235.4			227.2			222.9			97.5			783.0			299.3			286.3			256.7			102.4			944.7			960.0
Non-Operating Income (Loss)		5.2			(15.2	)		1.9			3.1			(5.0	)		(4.0	)		(0.4	)		8.3			1.0			4.8			6.0
Income Before Income Taxes		240.6			212.0			224.8			100.6			778.0			295.3			285.9			265.0			103.4			949.6			966.0
Net Income Attributable to NTT DOCOMO		168.8			148.4			175.3			55.9			548.4			206.9			198.6			184.0			63.1			652.5			655.0
NTT DATA Consolidated (JPN GAAP)
Net sales		358.5			384.6			402.0			469.5			1,614.8			392.2			387.4			401.2			551.5			1,732.4			2,060.0
Public & Social Infrastructure		82.5			94.1			100.7			143.3			420.8			89.1			97.6			109.5			159.1			455.4			447.0
Financial		116.3			120.2			136.1			150.9			523.6			118.6			127.7			124.3			147.2			518.0			539.0
Enterprise & Solutions		88.9			97.6			94.0			111.1			391.8			97.7			103.1			103.0			121.6			425.6			442.0
Global		122.6			129.9			129.9			136.9			519.6			145.2			122.8			128.7			206.5			603.3			908.0
Elimination or Corporate		(51.9	)		(57.4	)		(58.8	)		(72.8	)		(241.0	)		(58.5	)		(63.9	)		(64.5	)		(83.0	)		(269.9	)		(276.0	)
Cost of Sales		270.5			296.0			295.7			354.4			1,216.7			294.5			286.7			293.7			418.6			1,293.6			1,550.0
Gross Profit		88.0			88.6			106.3			115.1			398.1			97.6			100.6			107.5			132.9			438.8			510.0
Selling, General and Administrative Expenses		72.8			72.6			73.1			78.5			297.2			80.3			72.7			78.3			90.4			321.7			390.0
Operating Income		15.1			15.9			33.1			36.6			100.8			17.3			27.9			29.1			42.5			117.1			120.0
Non-Operating Income (Loss)		0.2			(0.1	)		(3.4	)		0.5			(2.7	)		(0	)		(0.1	)		(1.1	)		(2.7	)		(4.1	)		(4.0	)
Ordinary income		15.3			15.8			29.7			37.1			98.1			17.3			27.7			28.0			39.8			112.9			116.0
Net Income Attributable to Owners of Parent		7.3			8.3			28.1			19.4			63.3			10.0			18.9			16.0			20.6			65.6			59.0

– 6 –

4. Operating Data

Number of Subscribers


	(in thousands except for Public Telephones)
	FY 2015								FY 2016								FY 2017 (E)
	As of June 30		As of September 30		As of December 31		As of March 31		As of June 30		As of September 30		As of December 31		As of March 31		As of March 31
Telephone Subscriber Lines ⁽¹⁾		20,891		20,580		20,278		19,943		19,671		19,413		19,117		18,797		17,785
NTT East		10,324		10,181		10,036		9,875		9,740		9,617		9,471		9,315		8,865
NTT West		10,567		10,399		10,242		10,068		9,931		9,796		9,647		9,482		8,920
INS-Net ⁽²⁾		2,975		2,906		2,843		2,776		2,719		2,661		2,602		2,539		2,326
NTT East		1,519		1,483		1,450		1,414		1,384		1,356		1,325		1,293		1,193
NTT West		1,456		1,423		1,393		1,361		1,334		1,305		1,276		1,246		1,133
Telephone Subscriber Lines + INS-Net		23,866		23,486		23,121		22,718		22,390		22,074		21,719		21,336		20,111
NTT East		11,844		11,664		11,486		11,289		11,125		10,973		10,796		10,609		10,059
NTT West		12,023		11,822		11,634		11,429		11,265		11,102		10,923		10,727		10,052
Public Telephones		181,711		179,428		176,573		171,179		168,673		166,120		163,921		161,375		157,972
NTT East		86,514		85,071		82,907		78,199		76,511		74,846		73,357		71,434		70,434
NTT West		95,197		94,357		93,666		92,980		92,162		91,274		90,564		89,941		87,538
FLET’S ISDN		93		90		88		85		83		81		79		77		70
NTT East		41		40		38		37		36		35		34		33		30
NTT West		52		51		49		48		47		46		45		44		39
FLET’S ADSL		1,162		1,125		1,090		1,053		1,019		987		955		919		791
NTT East		526		510		493		475		459		444		428		411		351
NTT West		636		615		597		577		560		543		527		508		440
FLET’S Hikari (including Hikari Collaboration Model) ^(3)(4)(5)		18,951		19,036		19,157		19,259		19,520		19,704		19,903		20,053		20,853
NTT East		10,476		10,510		10,582		10,666		10,839		10,958		11,078		11,173		11,673
NTT West		8,475		8,526		8,576		8,593		8,681		8,746		8,825		8,880		9,180
(incl.) Hikari Collaboration Model		1,322		2,348		3,478		4,691		5,912		6,917		7,854		8,744		11,894
NTT East		954		1,637		2,350		3,077		3,781		4,337		4,846		5,328		7,028
NTT West		368		711		1,128		1,615		2,131		2,580		3,008		3,416		4,866
Hikari Denwa ⁽⁶⁾		17,243		17,293		17,335		17,374		17,451		17,545		17,655		17,759		17,988
NTT East		9,056		9,068		9,089		9,123		9,180		9,242		9,311		9,369		9,569
NTT West		8,187		8,225		8,246		8,252		8,271		8,302		8,344		8,390		8,419
Conventional Leased Circuit Services		239		237		235		232		231		229		227		225		218
NTT East		116		115		114		113		112		111		110		109		105
NTT West		123		122		121		120		118		118		117		116		113
High Speed Digital Services		121		119		118		115		114		112		110		108		100
NTT East		62		62		60		59		58		57		56		55		52
NTT West		58		58		57		56		56		55		54		53		48
NTT Group Major ISPs ⁽⁷⁾		11,650		11,609		11,514		11,411		11,360		11,328		11,303		11,231		11,031
(incl.) OCN		8,342		8,290		8,177		8,046		7,969		7,905		7,847		7,739		7,496
(incl.) Plala		2,968		2,974		2,986		3,005		3,024		3,047		3,075		3,106		3,130
Hikari TV		3,038		3,043		3,047		3,052		3,047		3,041		3,032		3,023		3,030
FLET’S TV Transmission Services ⁽⁶⁾		1,378		1,398		1,417		1,432		1,445		1,464		1,489		1,521		1,602
NTT East		887		894		903		910		917		926		939		951		981
NTT West		490		504		514		522		528		538		551		570		621
Mobile Telecommunications Services ⁽⁸⁾		67,532		68,494		69,602		70,964		71,614		72,943		73,588		74,880		77,100
(incl.) “Kake-hodai & Pake-aeru” billing plan		20,812		23,777		26,519		29,704		31,586		33,416		35,198		37,066		—
Telecommunications Services (LTE (Xi))		32,609		34,504		36,293		38,679		39,893		41,281		42,671		44,544		51,700
Telecommunications Services (FOMA (3G))		34,923		33,989		33,309		32,285		31,721		31,662		30,917		30,336		25,400
sp-mode		29,094		30,209		31,126		32,463		33,082		33,809		34,749		35,921		40,200
i-mode		21,512		20,581		19,862		18,770		18,136		17,416		16,503		15,493		11,300


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 year ended March 31, 2017 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 1,646 thousand lines and 1,211 thousand lines, respectively, for a total of 2,857 thousand lines; the numbers of new subscribers (excluding switchover lines) for the “Hikari Collaboration Model” for NTT East and NTT West were 1,132 thousand lines and 793 thousand lines, respectively, for a total of 1,925 thousand lines; and the numbers of switchover lines for NTT East and NTT West were 1,557 thousand lines and 1,260 thousand lines, respectively, for a total of 2,817 thousand lines.
	(5)	The comparative forecast for the year ending March 31, 2018 compared to the results for the year ended March 31, 2017 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 1,700 thousand lines and 1,200 thousand lines, respectively, for a total of 2,900 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 1,250 thousand lines and 850 thousand lines, respectively, for a total of 2,100 thousand lines; and the numbers of switchover lines for NTT East and NTT West are expected to be 1,100 thousand lines and 1,000 thousand lines, respectively, for a total of 2,100 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.

– 7 –

4. Operating Data

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 (3G) 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)
	FY 2015										FY 2016										FY 2017 (E)
	Three Months Ended								Year Ended		Three Months Ended								Year Ended		Year Ending
	June 30		September 30		December 31		March 31		March 31		June 30		September 30		December 31		March 31		March 31		March 31
NTT East ^{(1)(2)(3)(4)(5)}
Aggregate Fixed Line ARPU (Telephone Subscriber Lines + INS-NET Subscriber Lines)		2,660		2,660		2,660		2,630		2,650		2,620		2,620		2,620		2,590		2,610		2,570
FLET’S Hikari ARPU ⁽⁶⁾		5,590		5,550		5,510		5,380		5,510		5,340		5,280		5,230		5,170		5,250		5,050
Basic Monthly Charge		3,860		3,850		3,830		3,750		3,830		3,750		3,720		3,690		3,670		3,700		3,600
Optional Services		1,730		1,700		1,680		1,630		1,680		1,590		1,560		1,540		1,500		1,550		1,450
NTT West ^{(1)(2)(3)(4)(5)}
Aggregate Fixed Line ARPU (Telephone Subscriber Lines + INS-NET Subscriber Lines)		2,620		2,610		2,610		2,590		2,610		2,580		2,580		2,580		2,560		2,580		2,550
FLET’S Hikari ARPU ⁽⁶⁾		5,550		5,490		5,450		5,400		5,470		5,350		5,300		5,260		5,210		5,280		5,080
Basic Monthly Charge		3,770		3,730		3,700		3,670		3,720		3,640		3,620		3,590		3,570		3,610		3,490
Optional Services		1,780		1,760		1,750		1,730		1,750		1,710		1,680		1,670		1,640		1,670		1,590
NTT DOCOMO ^(7)(8)(9)
Aggregate ARPU		4,010		4,190		4,230		4,260		4,170		4,330		4,420		4,450		4,550		4,430		4,700
Voice ARPU (LTE (Xi) + FOMA (3G))		1,120		1,240		1,240		1,230		1,210		1,240		1,250		1,280		1,220		1,250		1,350
Data ARPU		2,890		2,950		2,990		3,030		2,960		3,090		3,170		3,170		3,330		3,180		3,350
Packet ARPU (LTE (Xi) + FOMA (3G))		2,870		2,910		2,930		2,940		2,910		2,960		2,990		2,960		3,080		2,990		3,010
“docomo Hikari” ARPU		20		40		60		90		50		130		180		210		250		190		340


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
		- FY Results: Sum of number of active subscribers* for each month from April to March
		- FY Forecast: Sum of the average expected active number of subscribers during the fiscal year ((number of subscribers at March 31, 2017 + number of expected subscribers at March 31, 2018)/2)x12
		*activesubscribers = (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
		- Packet ARPU: Packet ARPU Related Revenues (basic monthly charges, packet 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
		- FY Results/FY Forecast: Sum of number of active users/expected number of active users for each month from April to March
		*activeusers = (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 of communication modules 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 in the case where the customer contracting for such subscription in his/her name also has a subscription for “Xi” or “FOMA” 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.

– 8 –

4. Operating Data

Number of Employees


	(Persons)
	FY 2015								FY 2016								FY 2017 (E)
	As of June 30		As of September 30		As of December 31		As of March 31		As of June 30		As of September 30		As of December 31		As of March 31		As of March 31
NTT Consolidated ⁽¹⁾		247,800		249,450		249,650		241,450		248,650		248,650		280,600		274,850		281,350
Regional communications business		72,550		72,500		72,500		66,200		67,400		67,300		73,700		68,250		67,150
Long distance and international communications business		43,450		44,450		44,200		43,750		45,150		44,450		44,050		43,850		45,850
Mobile communications business		27,050		26,500		26,700		26,150		27,500		27,450		27,400		26,750		28,050
Data communications business		78,650		80,150		80,600		80,550		83,200		84,000		109,950		111,650		115,950
Other business		26,100		25,850		25,650		24,800		25,400		25,450		25,500		24,350		24,350
Core Group Companies
NTT (Holding Company)		2,850		2,850		2,800		2,750		2,800		2,800		2,750		2,700		2,700
NTT East		5,400		5,150		5,150		4,800		5,200		4,950		4,950		4,850		4,800
NTT West		4,750		4,600		4,600		4,450		4,600		4,450		4,450		4,400		4,300
NTT Communications		6,600		6,550		6,550		6,450		6,550		6,450		6,450		6,350		6,300
NTT DOCOMO (Consolidated)		27,050		26,500		26,700		26,150		27,500		27,450		27,400		26,750		28,050
NTT DATA (Consolidated)		78,650		80,150		80,600		80,550		83,200		84,000		109,950		111,650		115,950


Note:		(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.