RNS Number:6702P
Nippon Telegraph and Telephone Corp
03 August 2005
Outline of Consolidated Financial Results August 3, 2005
For the Three Months Ended June 30, 2005 (U.S. GAAP)
Name of registrant: Nippon Telegraph and Telephone Corporation
Code No.: 9432
Stock exchanges on which the Company's shares are listed: Tokyo, Osaka, Nagoya,
Fukuoka and Sapporo
Address of principal executive office: Tokyo, Japan
(URL http://www.ntt.co.jp/ir/)
Representative: Norio Wada, President
Contact: Shigehito Katsuki, Head of IR, Department 4/ TEL(03)5205-5581
1. Notes Related to the Preparation of the Quarterly Consolidated Financial
Statements
(1) Adoption of simplified accounting method: Yes
Income taxes are calculated using an estimated annual income tax rate
based on the statutory tax rate.
(2) Change in accounting method from the most recent fiscal year: No
(3) Change in number of consolidated subsidiaries and affiliated companies
accounted for under the equity method: Yes
Number of consolidated subsidiaries added: 42 Number of consolidated subsidiaries 4
removed:
Number of companies accounted for under the 0 Number of companies accounted for under the 42
equity method added: equity method removed:
2. Consolidated Financial Results for the Three Months Ended June 30, 2005
(April 1, 2005 - June 30, 2005)
Amounts are rounded off to nearest million yen throughout this report.
(1) Consolidated Results of Operations
(Millions of yen, except per share amounts)
Operating Revenues Operating Income Income (Loss)
before Income
Taxes
Three months ended June 30, 2005 2,599,648 (2.0% ) 399,626 (5.3%) 464,337 11.7%
Three months ended June 30, 2004 2,653,962 (0.7% ) 421,958 (- %) 415,681 - %
Year ended March 31, 2005 10,805,868 1,211,201 1,723,312
Net Income Earnings Diluted
(Loss) Earnings
(Loss) per Share per Share
Three months ended June 30, 2005 177,583 (4.4% ) 11,886.66 (yen) - (yen)
Three months ended June 30, 2004 185,844 -% 11,806.29 (yen) - (yen)
Year ended March 31, 2005 710,184 45,891.26 (yen) - (yen)
Notes: 1. Percentages above represent changes from the corresponding previous
period. Since the consolidated financial information (except
Operating Revenues) for the three months ended June 30, 2003 was not
prepared, year-on-year comparisons for the three months ended June
30, 2004 are not available.
2. Weighted average number of shares outstanding (consolidated):
For the three months ended June 30, 2005: 14,939,686 shares
For the three months ended June 30, 2004: 15,741,100 shares
For the year ended March 31, 2005: 15,475,366 shares
(2) Consolidated Financial Position
(Millions of yen, except per share amounts)
Total Shareholders' Equity Ratio Shareholders'
Assets Equity (Ratio of Equity
Shareholders' per Share
Equity
to Total
Assets)
June 30, 2005 18,892,104 6,897,074 36.5 % 461,663.37 (yen)
June 30, 2004 18,955,393 6,560,875 34.6 % 416,800.95 (yen)
March 31, 2005 19,098,584 6,768,603 35.4 % 453,059.74 (yen)
Note: Number of shares outstanding at end of period (consolidated): June 30,2005: 14,939,617 shares
June 30,2004: 15,741,027 shares
March 31,2005: 14,939,758 shares
(3) Consolidated Cash Flows
(Millions
of yen)
Cash flows Cash flows Cash flows Cash and
from from from Cash
Operating Investing Financing Equivalents
Activities Activities Activities at End of
Period
Three months ended June 30, 2005 471,266 (402,612 ) (550 ) 1,454,591
Three months ended June 30, 2004 246,155 (507,505 ) 11,681 1,177,307
Year ended March 31, 2005 2,829,813 (1,768,361 ) (1,111,963 ) 1,381,959
-1-
3. Consolidated Financial Results Forecasts for the Year Ending March 31, 2006
(April 1, 2005 - March 31, 2006)
(Millions of yen)
Operating Income Net
Revenues before Income
Income
Taxes
Year ending March 31, 2006 10,590,000 1,080,000 440,000
(Reference) Expected Earnings per Share (Year ending March 31, 2006): 29,451.89
yen
Note: Forecasts for the fiscal year ending March 31, 2006 have never been
changed from those announced on May 12, 2005. With regard to the
assumptions and other related matters concerning the above estimated
results, please refer to page 15.
* Consolidated financial statements are unaudited.
-2-
1. Consolidated Balance Sheets
(Millions of yen)
March 31, June 30, Increase
2005 2005 (Decrease)
ASSETS
Current assets:
Cash and cash equivalents 1,381,959 1,454,591 72,632
Short-term investments 264,455 160,792 (103,663 )
Notes and accounts receivable, trade 1,846,176 1,649,204 (196,972 )
Allowance for doubtful accounts (35,912 ) (33,609 ) 2,303
Inventories 284,826 331,147 46,321
Prepaid expenses and other current assets 453,173 590,953 137,780
Deferred income taxes 321,936 269,319 (52,617 )
Total current assets 4,516,613 4,422,397 (94,216 )
Property, plant and equipment:
Telecommunications equipment 13,945,449 14,081,748 136,299
Telecommunications service lines 12,865,704 12,922,219 56,515
Buildings and structures 5,602,881 5,608,800 5,919
Machinery, vessels and tools 1,918,728 1,909,676 (9,052 )
Land 837,103 842,850 5,747
Construction in progress 258,455 340,340 81,885
Accumulated depreciation (24,947,768 ) (25,216,348 ) (268,580 )
Total property, plant and equipment 10,480,552 10,489,285 8,733
Investments and other assets:
Investments in affiliated companies 178,033 140,929 (37,104 )
Marketable securities and other investments 438,159 436,208 (1,951 )
Goodwill, net 320,536 327,701 7,165
Other intangibles, net 1,329,631 1,324,894 (4,737 )
Other assets 707,543 660,811 (46,732 )
Deferred income taxes 1,127,517 1,089,879 (37,638 )
Total investments and other assets 4,101,419 3,980,422 (120,997 )
TOTAL ASSETS 19,098,584 18,892,104 (206,480 )
-3-
(Millions of yen)
March 31, June 30, Increase
2005 2005 (Decrease)
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term borrowings 422,886 598,967 176,081
Current portion of long-term debt 779,198 929,898 150,700
Accounts payable, trade 1,465,229 1,135,689 (329,540 )
Accrued payroll 493,935 325,090 (168,845 )
Accrued interest 18,200 15,761 (2,439 )
Accrued taxes on income 115,084 87,098 (27,986 )
Accrued consumption tax 16,034 47,021 30,987
Advances received 67,389 87,556 20,167
Other 301,624 393,318 91,694
Total current liabilities 3,679,579 3,620,398 (59,181 )
Long-term liabilities:
Long-term debt 4,323,751 4,102,509 (221,242 )
Obligations under capital leases 187,845 116,095 (71,750 )
Liability for employees' severance payments 1,861,073 1,855,416 (5,657 )
Other 548,464 531,519 (16,945 )
Total long-term liabilities 6,921,133 6,605,539 (315,594 )
Minority interest in consolidated subsidiaries 1,729,269 1,769,093 39,824
Shareholders' equity:
Common stock 937,950 937,950 -
Additional paid-in capital 2,799,828 2,799,828 -
Retained earnings 3,334,866 3,467,630 132,764
Accumulated other comprehensive income (loss) 63,066 58,837 (4,229 )
Treasury stock, at cost (367,107 ) (367,171 ) (64 )
Total shareholders' equity 6,768,603 6,897,074 128,471
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 19,098,584 18,892,104 (206,480 )
-4-
2. Consolidated Statements of Income
(Millions of yen)
Three Three Increase Year ended
months months March 31,
ended ended (Decrease) 2005
June 30, June 30,
2004 2005
Operating revenues:
Fixed voice related services 905,795 856,336 (49,459 ) 3,578,092
Mobile voice related services 803,224 781,134 (22,090 ) 3,216,107
IP/packet communications services 438,334 463,250 24,916 1,772,737
Sales of telecommunications equipment 172,225 156,824 (15,401 ) 688,083
System integration 192,044 184,244 (7,800 ) 910,273
Other 142,340 157,860 15,520 640,576
Total operating revenues 2,653,962 2,599,648 (54,314 ) 10,805,868
Operating expenses:
Cost of services (exclusive of items shown separately 535,232 564,086 28,854 2,349,151
below)
Cost of equipment sold (exclusive of items shown 304,712 293,817 (10,895 ) 1,260,252
separately below)
Cost of system integration (exclusive of items shown 117,570 106,553 (11,017 ) 592,035
separately below)
Depreciation and amortization 517,565 502,700 (14,865 ) 2,141,720
Impairment loss - 1,426 1,426 44,310
Selling, general and administrative expenses 756,925 731,440 (25,485 ) 3,207,199
Total operating expenses 2,232,004 2,200,022 (31,982 ) 9,594,667
Operating income 421,958 399,626 (22,332 ) 1,211,201
Other income (expenses):
Interest and amortization of bond discounts and issue (23,700 ) (20,042 ) 3,658 (93,966 )
costs
Interest income 6,446 8,871 2,425 26,288
Gains on sales of subsidiary stock - - - 26,984
Gains on sales of investments in affiliated company - 61,962 61,962 508,492
Other, net 10,977 13,920 2,943 44,313
Total other income and expenses (6,277 ) 64,711 70,988 512,111
Income (loss) before income taxes 415,681 464,337 48,656 1,723,312
Income tax expense (benefit) 164,484 190,059 25,575 713,918
Income (loss) before minority interest and equity in 251,197 274,278 23,081 1,009,394
earnings (losses) of affiliated companies
Minority interest in consolidated subsidiaries 66,011 79,700 13,689 290,225
Equity in earnings (losses) of affiliated companies 658 (16,995 ) (17,653 ) (8,985 )
Net income (loss) 185,844 177,583 (8,261 ) 710,184
-5-
3. Consolidated Statements of Shareholders' Equity
(Millions of yen)
Three Three Increase Year
months months ended
ended ended (Decrease) March 31,
June 30, June 30, 2005
2004 2005
Common stock:
At beginning of period 937,950 937,950 - 937,950
At end of period 937,950 937,950 - 937,950
Additional paid-in capital:
At beginning of period 2,722,092 2,799,828 77,736 2,722,092
Increase in interest of investee - - - 77,736
At end of period 2,722,092 2,799,828 77,736 2,799,828
Retained earnings:
At beginning of period 2,710,805 3,334,866 624,061 2,710,805
Appropriations-
Cash dividends (39,353 ) (44,819 ) (5,466 ) (39,353 )
Interim distribution-
Cash dividends - - - (47,222 )
Net income (loss) 185,844 177,583 (8,261 ) 710,184
Other 452 - (452 ) 452
At end of period 2,857,748 3,467,630 609,882 3,334,866
Accumulated other comprehensive income (loss):
At beginning of period 27,129 63,066 35,937 27,129
Other comprehensive income (loss) 16,060 (4,229 ) (20,289 ) 35,937
At end of period 43,189 58,837 15,648 63,066
Treasury stock, at cost
At beginning of period (4 ) (367,107 ) (367,103 ) (4 )
Net change in treasury stock (100 ) (64 ) 36 (367,103 )
At end of period (104 ) (367,171 ) (367,067 ) (367,107 )
Shareholders' equity at end of period 6,560,875 6,897,074 336,199 6,768,603
Summary of total comprehensive income (loss):
Net income (loss) 185,844 177,583 (8,261 ) 710,184
Other comprehensive income (loss) 16,060 (4,229 ) (20,289 ) 35,937
Comprehensive income (loss) 201,904 173,354 (28,550 ) 746,121
-6-
4. Consolidated Statements of Cash Flows
(Millions
of yen)
Three Three Increase Year ended
months months March 31,
ended ended (Decrease) 2005
June 30, June 30,
2004 2005
I Cash flows from operating activities:
Net income (loss) 185,844 177,583 (8,261 ) 710,184
Adjustments to reconcile net income (loss) to net
cash provided by operating activities-
Depreciation and amortization 517,565 502,700 (14,865 ) 2,141,720
Impairment loss - 1,426 1,426 44,310
Minority interest in consolidated subsidiaries 66,011 79,700 13,689 290,225
Loss on disposal of property, plant and equipment 50,736 26,237 (24,499 ) 186,674
Gains on sales of subsidiary stock - - - (26,984 )
Gains on sales of investments in affiliated - (61,962 ) (61,962 ) (508,492 )
company
Equity in (earnings) losses of affiliated (658 ) 16,995 17,653 8,985
companies
(Increase) decrease in notes and accounts 153,269 195,632 42,363 (37,130 )
receivable, trade
(Increase) decrease in inventories (42,292 ) (46,310 ) (4,018 ) (46,771 )
(Increase) decrease in other current assets (72,839 ) (137,310 ) (64,471 ) (66,897 )
Increase (decrease) in accounts payable, trade (459,653 ) (443,356 ) 16,297 29,595
and accrued payroll
Increase (decrease) in accrued consumption tax 2,086 30,930 28,844 (35,483 )
Increase (decrease) in accrued interest (421 ) (2,703 ) (2,282 ) (782 )
Increase (decrease) in advances received 9,610 19,750 10,140 8,292
Increase (decrease) in accrued taxes on income (244,309 ) (27,988 ) 216,321 (231,037 )
Increase (decrease) in other current liabilities 42,198 57,179 14,981 65,114
Increase (decrease) in liability for employees' 3,808 (2,646 ) (6,454 ) (95,606 )
severance payments, net of deferred pension costs
Increase (decrease) in other long-term (3,037 ) (4,816 ) (1,779 ) (49,903 )
liabilities
Other 38,237 90,225 51,988 443,799
- - - -
Net cash provided by operating activities 246,155 471,266 225,111 2,829,813
II Cash flows from investing activities:
Payments for property, plant and equipment (504,201 ) (484,385 ) 19,816 (1,610,991 )
Proceeds from sale of property, plant and 10,686 8,026 (2,660 ) 54,095
equipment
Payments for purchase of non-current investments (4,258 ) (2,507 ) 1,751 (195,892 )
Proceeds from sale of non-current investments 14,456 33,059 18,603 776,369
Payments for purchase of short-term investments - (156 ) (156 ) (361,850 )
Proceeds from redemption of short-term - 100,425 100,425 113,576
investments
Acquisition of intangible and other assets (24,188 ) (57,074 ) (32,886 ) (543,668 )
- - - -
Net cash used in investing activities (507,505 ) (402,612 ) 104,893 (1,768,361 )
III Cash flows from financing activities:
Proceeds from issuance of long-term debt 79,178 95,145 15,967 343,814
Payments for settlement of long-term debt (187,258 ) (166,749 ) 20,509 (893,682 )
Dividends paid (39,353 ) (44,819 ) (5,466 ) (86,575 )
Purchase and retirement of common stock (100 ) (64 ) 36 (367,103 )
Payments for acquisition of subsidiary stocks (8,447 ) (16,916 ) (8,469 ) (105,363 )
from minority shareholders
Net increase (decrease) in short-term borrowings 167,661 132,853 (34,808 ) (3,054 )
and other
Net cash provided by (used in) financing 11,681 (550 ) (12,231 ) (1,111,963 )
activities
IV Effect of exchange rate changes on cash and (4,445 ) 4,528 8,973 1,049
cash equivalents
V Net increase (decrease) in cash and cash (254,114 ) 72,632 326,746 (49,462 )
equivalents
VI Cash and cash equivalents at beginning of 1,431,421 1,381,959 (49,462 ) 1,431,421
period
VII Cash and cash equivalents at end of period 1,177,307 1,454,591 277,284 1,381,959
-7-
(Note)
Significant Matters Pertaining to 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
(Accounting Principles Board Opinions, Statements of Financial Accounting
Standards, etc).
1. Application of New Accounting Standard
Accounting for Conditional Asset Retirement Obligations
Effective April 1, 2005, NTT Group adopted the Financial Accounting Standards
Board ("FASB") Interpretation No. 47 ("FIN 47") "Accounting for Conditional
Asset Retirement Obligations-an interpretation of FASB Statement No. 143." FIN
47 provides guidance relating to the identification of and financial reporting
for legal obligations to perform an asset retirement activity. The
Interpretation requires recognition of a liability for the fair value of a
conditional asset retirement obligation when incurred if the liability's fair
value can be reasonably estimated. The adoption of FIN 47 did not have an impact
on the results of operations or the financial position of NTT Group.
2. Subsequent Events
On August 2, 2005, NTT DoCoMo, Inc. decided to effect a tender offer for
repurchase of its own shares.
Class of shares to be repurchased Common Stock
Tender offer period From August 3, 2005
To August 23, 2005
Purchase price 166,000 yen per share
Number of shares planned to be purchased 1,686,746 shares
Amount of funds necessary for purchase (including fees) 280,078,836 thousand yen
(Reference)
Details of "Operating revenues" classified by the corresponding previous
period's service categories
(Millions of yen)
Three Three
months months
ended ended
June 30,2004 June 30, 2005
Fixed voice transmission services 751,996 701,487
Mobile voice transmission services 785,942 775,756
Data transmission services 397,072 406,978
Leased circuit 111,569 117,242
Sales of telecommunications equipment 172,225 156,824
System integration 192,044 184,244
Other 243,114 257,117
Total 2,653,962 2,599,648
-8-
5. Business Segments
(Consolidated)
1. Sales and operating revenues
(Millions of yen)
Three Three Increase Year ended
months months March 31,
ended ended (Decrease) 2005
June 30, June 30,
2004 2005
Regional communications business
Customers 957,419 933,081 (24,338 ) 3,937,789
Intersegment 160,336 158,324 (2,012 ) 651,772
Total 1,117,755 1,091,405 (26,350 ) 4,589,561
Long-distance and international communications
business
Customers 247,277 260,630 13,353 1,045,218
Intersegment 29,387 26,458 (2,929 ) 119,580
Total 276,664 287,088 10,424 1,164,798
Mobile communications business
Customers 1,215,161 1,174,344 (40,817 ) 4,821,941
Intersegment 5,977 12,738 6,761 22,669
Total 1,221,138 1,187,082 (34,056 ) 4,844,610
Data communications business
Customers 169,490 153,748 (15,742 ) 721,816
Intersegment 20,559 22,992 2,433 110,804
Total 190,049 176,740 (13,309 ) 832,620
Other
Customers 64,615 77,845 13,230 279,104
Intersegment 210,456 196,404 (14,052 ) 946,619
Total 275,071 274,249 (822 ) 1,225,723
Elimination of intersegment (426,715 ) (416,916 ) 9,799 (1,851,444 )
Consolidated total 2,653,962 2,599,648 (54,314 ) 10,805,868
2. Segment profit or loss
(Millions of yen)
Three Three Increase Year
months months ended
ended ended (Decrease) March 31,
June June 2005
30, 30,
2004 2005
Operating income
Regional communications business 79,414 67,245 (12,169 ) 246,759
Long-distance and international communications business 19,785 13,138 (6,647 ) 62,329
Mobile communications business 276,575 287,614 11,039 784,166
Data communications business 12,456 8,285 (4,171 ) 36,894
Other 21,813 18,431 (3,382 ) 37,554
-
Total 410,043 394,713 (15,330 ) 1,167,702
-
Elimination of intersegment 11,915 4,913 (7,002 ) 43,499
-
Consolidated total 421,958 399,626 (22,332 ) 1,211,201
-9-
Outline of Non-consolidated Financial Results August 3, 2005
For the Three Months Ended June 30, 2005 (Japanese GAAP)
Name of registrant: Nippon Telegraph and Telephone Corporation
Code No.: 9432
Stock exchanges on which the Company's shares are listed: Tokyo, Osaka, Nagoya,
Fukuoka and Sapporo
Address of principal executive office: Tokyo, Japan
(URL http://www.ntt.co.jp/ir/)
Representative: Norio Wada, President
Contact: Shigehito Katsuki, Head of IR, Department 4/ TEL (03) 5205-5581
1. Notes Related to the Preparation of the Quarterly Non-consolidated
Financial Statements
(1) Adoption of simplified accounting method: Yes
Income taxes are calculated using an estimated annual income tax rate based
on the statutory tax rate.
(2) Change in accounting method from the most recent fiscal year: No
2. Non-consolidated Financial Results for the Three Months Ended June 30, 2005
(April 1, 2005 - June 30, 2005)
Amounts are rounded off per 1 million yen throughout this report.
(1) Non-consolidated Results of Operations
(Millions of yen, except per share amounts)
Operating Operating Recurring
Revenues Income Profit
Three months ended June 30, 2005 151,861 (3.0 %) 118,018 (4.5 %) 120,389 (4.5 %)
Three months ended June 30, 2004 156,583 59.1 % 123,611 - % 126,094 - %
Year ended March 31, 2005 323,261 143,709 151,700
Net Income Earnings
per Share
Three months ended June 30, 2005 116,779 (3.4 %) 7,816.73 (yen)
Three months ended June 30, 2004 120,834 - % 7,676.39 (yen)
Year ended March 31, 2005 455,660 29,439.71 (yen)
Notes: 1. Percentages above represent changes from the corresponding previous
period. Since the non-consolidated financial information (except
Operating Revenues) for the three months ended June 30, 2003 was not
prepared, year-on-year comparisons for the three months ended June
30, 2004 are not available.
2. Weighted average number of shares outstanding (non-consolidated):
For the three months ended June 30, 2005: 14,939,686 shares
For the three months ended June 30, 2004: 15,741,100 shares
For the year ended March 31, 2005: 15,475,366 shares
(2) Non-consolidated Financial Position
(Millions of yen, except per share amounts)
Total Shareholders' Equity Ratio Shareholders'
Assets Equity (Ratio of Equity
Shareholders' per Share
Equity
to Total
Assets)
June 30, 2005 8,430,935 5,242,592 62.2 % 350,918.78 (yen)
June 30, 2004 8,715,093 5,249,103 60.2 % 333,466.39 (yen)
March 31, 2005 8,401,448 5,170,267 61.5 % 346,069.68 (yen)
Note: Number of shares outstanding at end of period (non-consolidated): June 30, 2005 14,939,617 shares
June 30, 2004 15,741,027 shares
March 31,2005 14,939,758 shares
3. Non-consolidated Financial Results Forecasts for the Year Ending
March 31, 2006 (April 1, 2005 - March 31, 2006)
(Millions of yen)
Operating Recurring Net
Revenues Profit Income
Year ending March 31, 2006 340,000 177,000 174,000
(Reference) Expected Earnings per Share (Year ending March 31, 2006): 11,646.88 yen
Note: Forecasts for the fiscal year ending March 31, 2006 have never been changed from those announced
on May 12, 2005.
With regard to the assumptions and other related matters concerning the above estimated results,
please refer to page 15.
* Non-consolidated financial statements are unaudited.
-10-
1. Non-Consolidated Comparative Balance Sheets
(Millions of yen)
March 31, June 30, Increase
2005 2005 (Decrease)
ASSETS
Current assets:
Cash and bank deposits 115,802 77,626 (38,176 )
Accounts receivable, trade 1,567 1,159 (407 )
Supplies 213 199 (13 )
Short-term loan receivable 426,792 430,358 3,566
Other current assets 124,039 205,664 81,625
Total current assets 668,415 715,009 46,593
Fixed assets:
Property, plant and equipment 217,430 214,007 (3,423 )
Intangible fixed assets 20,892 19,153 (1,738 )
Investments and other assets
Investment securities 4,820,173 4,821,318 1,144
Long-term loan receivable to subsidiaries 2,617,890 2,605,082 (12,807 )
Other investments 55,994 55,660 (333 )
Total investments and other assets 7,494,057 7,482,060 (11,996 )
Total fixed assets 7,732,381 7,715,222 (17,158 )
Deferred assets 652 704 52
-
TOTAL ASSETS 8,401,448 8,430,935 29,487
-
-11-
(Millions of yen)
March 31, June 30, Increase
2005 2005 (Decrease)
LIABILITIES
Current liabilities:
Accounts payable, trade 1,135 203 (932 )
Current portion of corporate bonds 162,685 256,262 93,576
Current portion of long-term borrowings 256,244 177,984 (78,260 )
Accrued taxes on income 18,197 1,477 (16,719 )
Other current liabilities 146,807 130,812 (15,994 )
Total current liabilities 585,071 566,740 (18,330 )
Long-term liabilities:
Corporate bonds 1,614,827 1,529,422 (85,405 )
Long-term borrowings 1,001,578 1,062,425 60,847
Liability for employees' severance payments 29,299 29,355 55
Other long-term liabilities 404 399 (5 )
Total long-term liabilities 2,646,110 2,621,602 (24,507 )
TOTAL LIABILITIES 3,231,181 3,188,343 (42,837 )
SHAREHOLDERS' EQUITY
Common stock 937,950 937,950 -
Capital surplus
Additional paid-in capital 2,672,826 2,672,826 -
Total capital surplus 2,672,826 2,672,826 -
Earned surplus
Legal reserve 135,333 135,333 -
Voluntary reserve
Reserve for special depreciation 2,394 530 (1,863 )
Other reserve 1,131,000 1,131,000 -
Unappropriated retained earnings for the period 651,486 725,240 73,754
Total earned surplus 1,920,214 1,992,104 71,890
Net unrealized gains (losses) on securities 6,384 6,883 498
Treasury stock (367,107 ) (367,171 ) (64 )
TOTAL SHAREHOLDERS' EQUITY 5,170,267 5,242,592 72,324
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 8,401,448 8,430,935 29,487
-12-
2. Non-Consolidated Comparative Statements of Income
(Millions of yen)
Three Three Increase Year
months months ended
ended ended (Decrease) March
June June 31,
30, 30, 2005
2004 2005
Operating revenues 156,583 151,861 (4,722 ) 323,261
Operating expenses 32,972 33,842 870 179,551
Operating income 123,611 118,018 (5,592 ) 143,709
Non-operating revenues: 17,904 15,834 (2,069 ) 69,483
Interest income 12,923 11,727 (1,196 ) 51,374
Lease income 3,428 3,288 (140 ) 13,636
Miscellaneous income 1,552 818 (733 ) 4,472
Non-operating expenses: 15,420 13,462 (1,957 ) 61,492
Interest expenses 4,465 4,403 (62 ) 17,915
Corporate bond interest expenses 9,156 7,484 (1,672 ) 35,794
Lease expenses 1,435 1,368 (67 ) 6,555
Miscellaneous expenses 362 207 (155 ) 1,226
Recurring profit 126,094 120,389 (5,705 ) 151,700
Special profits - - - 350,659
Income before Income taxes 126,094 120,389 (5,705 ) 502,360
Corporation, inhabitant, and enterprise taxes 5,260 3,610 (1,650 ) 53,900
Deferred tax expenses (benefits) - - - (7,200 )
Net income 120,834 116,779 (4,055 ) 455,660
Unappropriated retained earnings brought forward 243,048 608,461 365,412 243,048
Interim dividends - - - 47,222
Unappropriated retained earnings for the period 363,883 725,240 361,357 651,486
(Reference) Major components of operating revenues
Dividends received 113,320 110,273 (3,047 ) 144,067
Revenues from Group management 5,232 5,070 (161 ) 20,931
Revenues from basic R&D 34,808 31,719 (3,089 ) 139,234
-13-
Non-Consolidated Comparative Statements of Cash Flows
(Millions of yen)
Three months ended Three months ended Increase Year ended
June 30, 2004 June 30, 2005 (Decrease) March 31,2005
I Cash flows from operating
activities:
Income before income taxes 126,094 120,389 (5,705 ) 502,360
Depreciation and amortization 8,642 7,352 (1,290 ) 32,823
Loss on disposal of property, 94 50 (43 ) 1,682
plant and equipment
Dividends received (113,320 ) (110,273 ) 3,047 (144,067 )
Increase (decrease) in
liability for employees'
severance payments (1,414 ) 55 1,470 (194 )
(Increase) decrease in accounts 7,365 1,490 (5,874 ) 19,011
receivable
Increase (decrease) in accounts
payable and accrued expenses (22,481 ) (17,488 ) 4,992 (15,866 )
Increase (decrease) in accrued 471 1,273 801 (990 )
consumption tax
Other (17,756 ) (81 ) 17,674 (353,641 )
Sub-total (12,304 ) 2,768 15,072 41,118
Interest and dividends 125,787 122,191 (3,596 ) 196,270
received
Interest paid (12,667 ) (11,268 ) 1,399 (55,060 )
Income taxes received (paid) - (34,446 ) (34,446 ) 3,121
Net cash provided by 100,815 79,244 (21,571 ) 185,449
(used in) operating activities
II Cash flows from investing
activities:
Payments for property, plant and (6,413 ) (7,223 ) (810 ) (22,357 )
equipment
Proceeds from sale of property, - - - 617
plant and equipment
Acquisition of investments (75 ) (225 ) (150 ) (17,348 )
Proceeds from sale of - 0 0 355,623
investments
Payments for long-term loans (74,593 ) (98,366 ) (23,773 ) (216,733 )
Proceeds from long-term 40,202 109,496 69,294 470,058
loans receivable
Other 1,010 (7 ) (1,018 ) 5,011
Net cash provided by (39,869 ) 3,673 43,542 574,871
(used in) investing activities
III Cash flows from financing
activities:
Proceeds from issuance of 74,036 98,285 24,249 236,148
long-term debt
Payments for settlement (39,380 ) (109,496 ) (70,116 ) (486,896 )
of long-term debt
Dividends paid (39,353 ) (44,819 ) (5,466 ) (86,575 )
Purchase and retirement (100 ) (64 ) 35 (367,102 )
of common stock
Net cash provided by (4,797 ) (56,094 ) (51,297 ) (704,426 )
(used in) financing activities
IV Net increase (decrease) 56,149 26,823 (29,325 ) 55,894
in cash and cash equivalents
V Cash and cash equivalents 59,907 115,802 55,894 59,907
at beginning of period
VI Cash and cash equivalents 116,057 142,626 26,569 115,802
at end of period
-14-
(Note)
The forward-looking statements and projected figures on the future performance
of NTT contained in this financial report are based on the judgments,
evaluations, recognition of facts, and formulation of plans by the current
management of NTT based on the information at their disposal. The projected
figures in this report were derived using certain assumptions that are
indispensable for making projections in addition to historical facts that have
been ascertained and acknowledged accurately. In view of the element of
uncertainty inherent in future projections, the possibility of fluctuations in
its future business operations, the state of the economy in Japan and abroad,
stock markets, and other circumstances, NTT's actual results could differ
materially from the projected figures contained in this report.
-15-
August 3, 2005
FOR IMMEDIATE RELEASE
Financial Statements for the Three Months Ended June 30, 2005
The results of Nippon Telegraph and Telephone East Corporation (NTT East) for
the three months ended June 30, 2005 are presented in the following attachments.
(Attachments)
1. Non-consolidated Comparative Balance Sheets
2. Non-consolidated Comparative Statements of Income
3. Business Results (Non-consolidated Operating Revenues)
4. Non-consolidated Comparative Statements of Cash Flows
Inquiries:
Hiroshi Niitsu and Kenkichi Nakata
Accounting Section, Finance Division
NTT East
Tel: (03) 5359-3331
E-mail: kessan@sinoa.east.ntt.co.jp
1. Non-Consolidated Comparative Balance Sheets
(Based on accounting principles generally accepted in Japan)
(Millions of yen)
March 31, 2005 June 30, 2005 Increase
(Decrease)
ASSETS
Fixed assets:
Non-current assets for
telecommunications
businesses
Property, plant and 2,968,134 2,984,841 16,707
equipment
Machinery and equipment 580,807 569,760 (11,047 )
Antenna facilities 8,158 8,022 (136 )
Terminal equipment 30,769 35,039 4,269
Local line facilities 655,890 661,317 5,427
Long-distance line 11,901 11,319 (581 )
facilities
Engineering facilities 766,392 757,430 (8,962 )
Submarine line facilities 1,050 994 (55 )
Buildings 622,535 652,840 30,304
Construction in progress 28,245 29,140 895
Other 262,382 258,977 (3,405 )
Intangible fixed assets 105,746 100,818 (4,928 )
Total non-current assets 3,073,880 3,085,660 11,779
for telecommunications
businesses
Investments and other
assets
Deferred income taxes 347,781 347,482 (299 )
Other investments 84,291 74,518 (9,772 )
Allowance for doubtful (2,122 ) (1,993 ) 129
accounts
Total investments and other 429,950 420,007 (9,942 )
assets
Total fixed assets 3,503,830 3,505,667 1,836
Current assets:
Cash and bank deposits 107,637 118,777 11,139
Notes receivable 131 226 95
Accounts receivable, trade 370,104 339,660 (30,443 )
Supplies 29,475 29,516 40
Other current assets 81,202 107,601 26,398
Allowance for doubtful (4,082 ) (3,837 ) 244
accounts
Total current assets 584,469 591,944 7,475
TOTAL ASSETS 4,088,300 4,097,612 9,312
-1-
(Millions of yen)
March 31, 2005 June 30, 2005 Increase
(Decrease)
LIABILITIES
Long-term liabilities:
Long-term borrowings from 883,881 857,215 (26,666 )
parent company
Liability for employees' 656,004 646,330 (9,673 )
severance payments
Other long-term liabilities 7,359 7,340 (19 )
Total long-term liabilities 1,547,245 1,510,886 (36,358 )
Current liabilities:
Current portion of long-term 144,171 179,788 35,616
borrowings from parent
company
Accounts payable, trade 118,372 78,688 (39,683 )
Short-term borrowings - 33,000 33,000
Accounts payable, other 273,517 240,600 (32,917 )
Accrued taxes on income 2,676 *4,254 1,578
Other current liabilities 83,266 148,242 64,975
Total current liabilities 622,004 684,573 62,569
TOTAL LIABILITIES 2,169,249 2,195,460 26,210
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
Unappropriated retained 83,563 66,225 (17,337 )
earnings for the period
Total earned surplus 83,563 66,225 (17,337 )
Net unrealized gains (losses) 760 1,199 438
on securities
TOTAL SHAREHOLDERS' EQUITY 1,919,050 1,902,151 (16,898 )
TOTAL LIABILITIES AND 4,088,300 4,097,612 9,312
SHAREHOLDERS' EQUITY
Note: *The Company participates in a consolidated tax return system, which is
adopted by NTT (Holding company) and its wholly-owned subsidiaries in
Japan, but did not calculate income taxes on a consolidated basis in the
quarterly financial statements.
-2-
2. Non-Consolidated Comparative Statements of Income
(Based on accounting principles generally accepted in Japan)
(Millions of yen)
Three months ended Three months ended Increase Year ended
June 30, 2004 June 30, 2005 (Decrease) March 31, 2005
Recurring profits
and losses
Operating revenues
and expenses
Telecommunications
businesses
Operating revenues 499,333 488,624 (10,709 ) 2,024,629
Operating expenses 476,940 464,581 (12,358 ) 1,937,555
Operating income 22,392 24,042 1,649 87,073
from
telecommunications
businesses
Supplementary
businesses
Operating revenues 32,064 29,816 (2,247 ) 156,298
Operating expenses 30,983 29,307 (1,675 ) 155,638
Operating income 1,081 508 (572 ) 660
from supplementary
businesses
Operating income 23,473 24,551 1,077 87,733
Non-Operating
revenues and
expenses
Non-operating 14,016 14,699 682 61,006
revenues:
Interest income 16 13 (2 ) 63
Lease income 12,350 12,985 635 53,563
Miscellaneous 1,650 1,699 49 7,379
income
Non-operating 10,202 12,269 2,067 51,124
expenses:
Interest expenses 4,465 4,145 (319 ) 17,628
Lease expenses 5,092 7,017 1,924 26,497
Miscellaneous 645 1,106 461 6,997
expenses
Recurring profit 27,287 26,980 (306 ) 97,615
Special profits
and losses
Special profits 1,967 836 (1,130 ) 8,397
Special losses 1,684 - (1,684 ) 6,736
Income before 27,570 27,817 246 99,276
Income taxes
Corporation, *11,400 *11,600 200 (21,153 )
inhabitant, and
enterprise taxes
Deferred tax *- * - - 62,300
expenses
(benefits)
Net income 16,170 16,217 46 58,129
Unappropriated 25,433 50,008 24,574 25,433
retained earnings
brought forward
Unappropriated 41,604 66,225 24,621 83,563
retained earnings
for the period
Note: *The Company participates in a consolidated tax return system, which is
adopted by NTT (Holding company) and its wholly-owned subsidiaries in
Japan, but did not calculate income taxes on a consolidated basis in the
quarterly financial statements.
-3-
3. Business Results (Non-Consolidated Operating Revenues)
(Based on accounting principles generally accepted in Japan)
(Millions of Yen)
Three months ended Three months ended Increase Percent Year ended
June 30, 2004 June 30, 2005 (Decrease) Increase March 31, 2005
(Decrease)
Voice transmission 358,966 333,190 (25,775 ) (7.2 %) 1,401,433
services revenues
(excluding the
amounts of IP
services revenues)
Monthly charge 231,546 204,134 (27,411 ) (11.8 %) 903,629
revenues*
Call rates 50,220 48,998 (1,221 ) (2.4 %) 190,405
revenues*
Interconnection 52,361 54,833 2,471 4.7 % 215,128
call revenues*
IP services 47,729 62,155 14,426 30.2 % 211,357
revenues
Leased circuit 56,336 51,397 (4,939 ) (8.8 %) 208,730
services revenues
(excluding the
amounts of IP
services revenues)
Telegram services 7,438 7,199 (239 ) (3.2 %) 27,201
revenues
Other 28,862 34,682 5,819 20.2 % 175,907
telecommunications
services revenues
Telecommunications 499,333 488,624 (10,709 ) (2.1 %) 2,024,629
total revenues
Related business 32,064 29,816 (2,247 ) (7.0 %) 156,298
total revenues
Total operating 531,397 518,440 (12,956 ) (2.4 %) 2,180,928
revenues
* Partial listing only
-4-
4. Non-Consolidated Comparative Statements of Cash Flows
(Based on accounting principles generally accepted in Japan)
(Millions of yen)
Three months Three months Increase Year ended
ended ended (Decrease) March 31, 2005
June 30, June 30,
2004 2005
I Cash flows from
operating
activities:
Income before 27,570 27,817 246 99,276
income taxes
Depreciation 114,746 132,051 17,304 483,027
and amortization
Loss on 9,840 3,954 (5,886 ) 40,136
disposal of
property, plant
and equipment
Increase (7,032 ) (9,673 ) (2,640 ) (72,575 )
(decrease)
in liability
for employees'
severance
payments
(Increase) 25,025 32,520 7,494 12,725
decrease in
accounts
receivable
(Increase) 1,240 (40 ) (1,280 ) 1,171
decrease in
inventories
Increase (184,304 ) (72,407 ) 111,896 (83,952 )
(decrease)
in accounts
payable and
accrued expenses
Increase 4,837 2,813 (2,024 ) (158 )
(decrease)
in accrued
consumption tax
Other (14,943 ) (65,856 ) (50,912 ) (13,159 )
Sub-total (23,018 ) 51,179 74,198 466,490
Interest and 145 163 17 297
dividends
received
Interest paid (3,463 ) (3,506 ) (42 ) (17,771 )
Income taxes (145 ) (101 ) 44 (16,095 )
received (paid)
Net cash (26,482 ) 47,734 74,217 432,922
provided by
(used in)
operating
activities
II Cash flows from
investing
activities:
Payments for (113,940 ) (108,482 ) 5,457 (401,013 )
property,
plant and
equipment
Proceeds 2,425 1,212 (1,213 ) 11,624
from sale of
property,
plant and
equipment
Acquisition (29 ) (9 ) 19 (7,353 )
of investments
Proceeds 369 375 5 417
from sale of
investments
Other (2,399 ) (286 ) 2,113 8,273
Net cash (113,573 ) (107,190 ) 6,382 (388,050 )
provided by
(used in)
investing
activities
III Cash flows from
financing
activities:
Proceeds 17,950 25,000 7,050 17,950
from issuance of
long-term debt
Payments for (4,313 ) (16,049 ) (11,735 ) (95,559 )
settlement
of long-term debt
Increase 73,100 93,000 19,900 -
(decrease) in
short-term
borrowings
Dividends paid (32,495 ) (33,500 ) (1,005 ) (32,495 )
Net cash 54,241 68,450 14,209 (110,104 )
provided by
(used in)
financing
activities
IV Net increase (85,815 ) 8,994 94,810 (65,232 )
(decrease)
in cash and
cash equivalents
V Cash and 186,287 121,055 (65,232 ) 186,287
cash equivalents
at beginning
of period
VI Cash and 100,472 130,049 29,577 121,055
cash equivalents
at end of
period
-5-
August 3, 2005
FOR IMMEDIATE RELEASE
Financial Statements for the Three Months Ended June 30, 2005
The results of Nippon Telegraph and Telephone West Corporation (NTT West) for
the three months ended June 30, 2005 are presented in the following attachments.
(Attachments)
1. Non-consolidated Comparative Balance Sheets
2. Non-consolidated Comparative Statements of Income
3. Business Results (Non-consolidated Operating Revenues)
4. Non-consolidated Comparative Statements of Cash Flows
Inquiries:
Mr. Shinji Uchida or Mr. Kazunori Oonishi
Accounting Section, Finance Division
NTT West
Tel: 06-4793-3141
E-mail: kessan-info@west.ntt.co.jp
1. Non-Consolidated Comparative Balance Sheets
(Based on accounting principles generally accepted in Japan)
(Millions of yen)
March 31, 2005 June 30, 2005 Increase
(Decrease)
ASSETS
Fixed assets:
Non-current assets for
telecommunications
businesses
Property, plant and 2,920,524 2,903,139 (17,385 )
equipment
Machinery and equipment 550,458 544,420 (6,037 )
Antenna facilities 11,407 11,189 (218 )
Terminal equipment 27,847 30,081 2,233
Local line facilities 826,738 820,397 (6,340 )
Long-distance line 8,497 8,119 (377 )
facilities
Engineering facilities 647,060 641,885 (5,175 )
Submarine line facilities 5,177 4,908 (268 )
Buildings 555,067 546,426 (8,640 )
Construction in progress 38,253 48,662 10,409
Other 250,017 247,048 (2,968 )
Intangible fixed assets 94,823 95,786 963
Total non-current assets 3,015,348 2,998,926 (16,421 )
for telecommunications
businesses
Investments and other
assets
Deferred income taxes 391,488 391,460 (27 )
Other investments 34,376 32,182 (2,193 )
Allowance for doubtful (713 ) (701 ) 11
accounts
Total investments and other 425,151 422,941 (2,209 )
assets
Total fixed assets 3,440,499 3,421,867 (18,631 )
Current assets:
Cash and bank deposits 111,479 100,216 (11,263 )
Notes receivable 14 168 154
Accounts receivable, trade 379,119 344,652 (34,467 )
Supplies 34,833 35,098 265
Other current assets 118,116 130,295 12,179
Allowance for doubtful (3,233 ) (2,506 ) 726
accounts
Total current assets 640,329 607,925 (32,404 )
TOTAL ASSETS 4,080,829 4,029,793 (51,036 )
-1-
(Millions of yen)
March 31, 2005 June 30, 2005 Increase
(Decrease)
LIABILITIES
Long-term liabilities:
Long-term borrowings from 1,055,194 1,057,137 1,943
parent company
Liability for employees' 710,090 702,540 (7,549 )
severance payments
Other long-term liabilities 10,112 12,620 2,508
Total long-term liabilities 1,775,397 1,772,299 (3,097 )
Current liabilities:
Current portion of long-term 200,090 180,508 (19,582 )
borrowings from parent
company
Accounts payable, trade 167,218 112,677 (54,541 )
Accrued taxes on income 2,481 *2,311 (169 )
Other current liabilities 384,900 435,479 50,579
Total current liabilities 754,690 730,976 (23,713 )
TOTAL LIABILITIES 2,530,087 2,503,276 (26,811 )
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
Unappropriated retained 68,670 44,404 (24,265 )
earnings for the period
Total earned surplus 68,670 44,404 (24,265 )
Net unrealized gains (losses) 17 58 40
on securities
TOTAL SHAREHOLDERS' EQUITY 1,550,741 1,526,516 (24,225 )
TOTAL LIABILITIES AND 4,080,829 4,029,793 (51,036 )
SHAREHOLDERS' EQUITY
Note: * The Company participates in a consolidated tax return system, which is
adopted by NTT (Holding company) and its wholly-owned subsidiaries in
Japan, but did not calculate income taxes on a consolidated basis in the
quarterly financial statements.
-2-
2. Non-Consolidated Comparative Statements of Income
(Based on accounting principles generally accepted in Japan)
(Millions of yen)
Three months ended Three months ended Increase Year ended
June 30, 2004 June 30, 2005 (Decrease) March 31, 2005
Recurring profits
and losses
Operating revenues
and expenses
Telecommunications
businesses
Operating revenues 489,525 476,685 (12,839 ) 1,921,025
Operating expenses 465,148 465,581 432 1,846,367
Operating income 24,377 11,104 (13,272 ) 74,657
from
telecommunications
businesses
Supplementary
businesses
Operating revenues 33,298 32,377 (921 ) 177,022
Operating expenses 34,464 32,802 (1,661 ) 181,531
Operating losses (1,165 ) (425 ) 740 (4,508 )
from supplementary
businesses
Operating income 23,211 10,679 (12,531 ) 70,148
Non-Operating
revenues and
expenses
Non-operating 13,252 13,308 56 56,074
revenues:
Interest income 1 1 0 6
Lease income 12,012 11,797 (215 ) 47,648
Miscellaneous 1,238 1,510 271 8,419
income
Non-operating 10,937 12,190 1,252 46,135
expenses:
Interest expenses 4,845 4,193 (651 ) 19,264
Lease expenses 5,359 6,280 920 21,858
Miscellaneous 731 1,716 984 5,012
expenses
Recurring profit 25,526 11,798 (13,728 ) 80,087
Special profits
and losses
Special profits 2,392 1,100 (1,291 ) 10,170
Special losses 1,795 - (1,795 ) 7,181
Income before 26,123 12,899 (13,224 ) 83,077
Income taxes
Corporation, *10,800 *5,910 (4,890 ) (57,120 )
inhabitant, and
enterprise taxes
Deferred tax * - * - - 99,100
expenses
(benefits)
Net income 15,323 6,989 (8,334 ) 41,097
Unappropriated 27,572 37,415 9,842 27,572
retained earnings
brought forward
Unappropriated 42,896 44,404 1,508 68,670
retained earnings
for the period
Note: * The Company participates in a consolidated tax return system, which is
adopted by NTT (Holding company) and its wholly-owned subsidiaries in
Japan, but did not calculate income taxes on a consolidated basis in the
quarterly financial statements.
-3-
3. Business Results (Non-Consolidated Operating Revenues)
(Based on accounting principles generally accepted in Japan)
(Millions of Yen)
Three months Three months Increase Percent Year
ended ended (Decrease) Increase ended
June 30, June 30, (Decrease) March 31,
2004 2005 2005
Voice transmission 350,016 323,812 (26,203 ) (7.5 %) 1,369,195
services revenues
(excluding the
amounts of IP
services revenues)
Monthly charge 223,225 198,787 (24,437 ) (10.9 %) 872,886
revenues*
Call rates 52,387 47,289 (5,098 ) (9.7 %) 198,733
revenues*
Interconnection 51,160 53,934 2,773 5.4 % 209,544
call revenues*
IP services 40,283 53,745 13,462 33.4 % 180,326
revenues
Leased circuit 48,290 43,898 (4,391 ) (9.1 %) 174,392
services revenues
(excluding the
amounts of IP
services revenues)
Telegram services 8,220 8,049 (171 ) (2.1 %) 31,180
revenues
Other 42,714 47,179 4,464 10.5 % 165,929
telecommunications
services revenues
Telecommunications 489,525 476,685 (12,839 ) (2.6 %) 1,921,025
total revenues
Related business 33,298 32,377 (921 ) (2.8 %) 177,022
total revenues
Total operating 522,823 509,063 (13,760 ) (2.6 %) 2,098,048
revenues
* Partial listing only
-4-
4. Non-Consolidated Comparative Statements of Cash Flows
(Based on accounting principles generally accepted in Japan)
(Millions of yen)
Three months ended Three months ended Increase Year ended
June 30, 2004 June 30, 2005 (Decrease) March 31, 2005
I Cash flows from
operating activities:
Income 26,123 12,899 (13,224 ) 83,077
before income taxes
Depreciation 109,896 109,606 (290 ) 435,060
and amortization
Loss on 10,819 8,268 (2,551 ) 33,319
disposal of
property, plant and
equipment
Increase (8,356 ) (7,549 ) 806 (80,346 )
(decrease)
in liability
for employees'
severance payments
(Increase) 37,860 34,586 (3,274 ) 1,956
decrease in
accounts receivable
(Increase) 1,295 (265 ) (1,560 ) 4,606
decrease in
inventories
Increase (175,504 ) (154,981 ) 20,523 (6,390 )
(decrease)
in accounts
payable and
accrued expenses
(Increase) - 62 62 (62 )
decrease in
receivable
consumption tax
Increase 4,015 4,739 724 (2,652 )
(decrease)
in accrued
consumption tax
Other (2,658 ) (2,357 ) 301 (3,381 )
Sub-total 3,490 5,007 1,517 465,187
Interest and 92 106 14 283
dividends received
Interest paid (4,970 ) (4,554 ) 416 (19,698 )
Income taxes (185 ) (194 ) (8 ) 52,439
received (paid)
Net cash (1,572 ) 365 1,938 498,212
provided by
(used in)
operating
activities
II Cash flows from
investing activities:
Payments for (98,845 ) (127,618 ) (28,772 ) (381,332 )
property,
plant and equipment
Proceeds 2,812 1,672 (1,139 ) 13,567
from sale of
property, plant
and equipment
Acquisition (2,280 ) (1,000 ) 1,280 (3,678 )
of investments
Proceeds 134 1,503 1,368 2,239
from sale of
investments
Other 890 535 (354 ) (197 )
Net cash (97,287 ) (124,906 ) (27,618 ) (369,401 )
provided by
(used in)
investing
activities
III Cash flows from
financing activities:
Proceeds 50,000 46,707 (3,292 ) 190,000
from issuance of
long-term debt
Payments for (33,737 ) (64,346 ) (30,609 ) (276,201 )
settlement
of long-term debt
Increase 120,000 153,000 33,000 2,000
(decrease) in
short-term
borrowings
Dividends paid (34,494 ) (31,200 ) 3,294 (34,494 )
Net cash 101,767 104,160 2,392 (118,696 )
provided by
(used in)
financing
activities
IV Net increase 2,907 (20,379 ) (23,286 ) 10,114
(decrease)
in cash and cash
equivalents
V Cash and 118,806 128,920 10,114 118,806
cash equivalents
at beginning
of period
VI Cash and 121,713 108,541 (13,172 ) 128,920
cash equivalents
at end of
period
-5-
August 3, 2005
NTT Com Announces Financial Results for the Three Months Ended June 30, 2005
TOKYO, JAPAN - NTT Communications (NTT Com) announced today its fiscal results
for the three months ended June 30, 2005. Please see the following attachments
for further details:
1. Non-consolidated Comparative Balance Sheets
2. Non-consolidated Comparative Statements of Income
3. Business Results (Non-consolidated Operating Revenues)
4. Non-consolidated Comparative Statements of Cash Flows
# # #
About NTT Com
NTT Communications is a subsidiary of Nippon Telegraph and Telephone (NTT)
Corporation (NYSE: NTT) - one of the world's largest telecommunications
companies. NTT Com provides high-quality, technologically advanced network
management, security and solution services to consumers, corporations and
governments on a global basis, with a special focus on the Asia-Pacific region.
Its world-class backbone network, combined with the networks of partner
companies around the world, offers access to more than 200 countries. NTT Com
Group has more than 30 companies in the Asia-Pacific region, Europe and the
Americas. The company has garnered several awards for its leading edge
technologies, outstanding performance and customer service, including "Best
Global Carrier - 2004." For more information, please visit http://www.ntt.com
For more information
(Mr.) Noboru Takeuchi or (Mr.) Makoto Inoue
Accounts and Finance Department, NTT Communications
Tel. +81 3 6700 4311
I. Non-Consolidated Comparative Balance Sheets
(Based on accounting principles generally accepted in Japan)
(Millions of yen)
March 31, 2005 June 30, 2005 Increase
(Decrease)
ASSETS
Fixed assets:
Non-current assets
for telecommunications
businesses
Property, plant and 515,409 510,697 (4,711 )
equipment
Machinery and 169,185 171,065 1,879
equipment
Antenna facilities 7,669 7,532 (136 )
Terminal equipment 3,680 3,580 (100 )
Local line 440 641 200
facilities
Long-distance line 14,846 14,337 (509 )
facilities
Engineering 78,693 77,675 (1,017 )
facilities
Submarine line 10,084 8,802 (1,281 )
facilities
Buildings 141,234 139,729 (1,504 )
Construction in 10,370 10,348 (22 )
progress
Other 79,202 76,984 (2,218 )
Intangible fixed 125,321 123,167 (2,153 )
assets
Total non-current 640,730 633,865 (6,865 )
assets for
telecommunications
businesses
Investments and
other assets
Investment 77,394 91,000 13,605
securities
Investments in 152,220 137,627 (14,592 )
subsidiaries and
affiliated companies
Deferred income 305,557 300,029 (5,528 )
taxes
Other investments 58,896 86,546 27,650
Allowance for (363 ) (347 ) 15
doubtful accounts
Total investments 593,705 614,856 21,151
and other assets
Total fixed assets 1,234,435 1,248,721 14,285
Current assets:
Cash and bank 61,084 56,499 (4,584 )
deposits
Notes receivable 256 166 (90 )
Accounts receivable, 176,443 145,125 (31,317 )
trade
Supplies 10,669 10,191 (478 )
Other current assets 60,039 36,612 (23,426 )
Allowance for (1,716 ) (1,405 ) 310
doubtful accounts
Total current assets 306,776 247,189 (59,586 )
TOTAL ASSETS 1,541,212 1,495,911 (45,300 )
(Millions of yen)
March 31, June 30, Increase
2005 2005 (Decrease)
LIABILITIES
Long-term liabilities:
Long-term borrowings from 678,813 690,728 11,915
parent company
Liability for employees' 73,380 73,166 (214 )
severance payments
Other long-term liabilities 3,965 3,952 (12 )
Total long-term liabilities 756,159 767,848 11,688
Current liabilities:
Current portion of long-term 82,530 70,061 (12,468 )
borrowings from parent company
Accounts payable, trade 60,265 50,042 (10,223 )
Accounts payable, other 178,524 131,817 (46,706 )
Accrued taxes on income 12,007 * 2,348 (9,659 )
Other current liabilities 46,619 74,347 27,727
Total current liabilities 379,947 328,617 (51,330 )
TOTAL LIABILITIES 1,136,107 1,096,465 (39,641 )
SHAREHOLDERS' EQUITY
Common stock 211,650 211,650 -
Capital surplus
Additional paid-in capital 119,149 119,149 -
Total capital surplus 119,149 119,149 -
Earned surplus
Unappropriated retained 41,231 27,497 (13,733 )
earnings for the period
Total earned surplus 41,231 27,497 (13,733 )
Net unrealized gains (losses) 33,074 41,149 8,074
on securities
TOTAL SHAREHOLDERS' EQUITY 405,105 399,446 (5,658 )
TOTAL LIABILITIES AND 1,541,212 1,495,911 (45,300 )
SHAREHOLDERS' EQUITY
Note: *The Company participates in a consolidated tax return system, which is
adopted by NTT (Holding company) and its wholly-owned subsidiaries in
Japan, but did not calculate income taxes on a consolidated basis in the
quarterly financial statements.
II. Non-Consolidated Comparative Statements of Income
(Based on accounting principles generally accepted in Japan)
(Millions of yen)
Three months ended Three months ended Increase Year ended
June 30, 2004 June 30, 2005 (Decrease) March 31, 2005
Recurring profits
and losses
Operating revenues
and expenses
Telecommunications
businesses
Operating revenues 239,332 246,324 6,992 968,438
Operating expenses 213,411 231,522 18,111 895,223
Operating income 25,920 14,801 (11,119 ) 73,214
from telecommunications
businesses
Supplementary
businesses
Operating revenues 17,818 23,141 5,322 121,634
Operating expenses 18,816 24,527 5,711 124,972
Operating losses (997 ) (1,385 ) (388 ) (3,338 )
from supplementary
businesses
Operating income 24,922 13,415 (11,507 ) 69,876
Non-Operating
revenues and
expenses
Non-operating 7,961 7,756 (205 ) 26,166
revenues:
Interest income 278 535 257 1,539
Dividends received 745 1,445 699 982
Lease income 4,879 4,769 (110 ) 18,945
Miscellaneous 2,057 1,006 (1,051 ) 4,699
income
Non-operating 7,401 5,511 (1,890 ) 28,082
expenses:
Interest expenses 3,627 3,370 (257 ) 14,468
Lease expenses 3,102 2,052 (1,050 ) 9,024
Miscellaneous 671 88 (582 ) 4,589
expenses
Recurring profit 25,482 15,660 (9,821 ) 67,959
Special profits
and losses
Special profits - - - 4,094
Special losses - 14,592 14,592 25,022
Income before 25,482 1,067 (24,414 ) 47,032
Income taxes
Corporation, *10,400 * 6,040 (4,360 ) 37,420
inhabitant, and
enterprise taxes
Deferred tax * - *- - (15,000 )
expenses
(benefits)
Net income 15,082 (4,972 ) (20,054 ) 24,612
Unappropriated 16,618 32,469 15,851 16,618
retained earnings
brought forward
Unappropriated 31,701 27,497 (4,203 ) 41,231
retained earnings
for the period
Note: *The Company participates in a consolidated tax return system, which is
adopted by NTT (Holding company) and its wholly-owned subsidiaries in
Japan, but did not calculate income taxes on a consolidated basis in the
quarterly financial statements.
III. Business Results (Non-Consolidated Operating Revenues)
(Based on accounting principles generally accepted in Japan)
(Millions of yen)
Three months ended Three months ended Increase Percent Year ended
June 30, 2004 June 30, 2005 (Decrease) Increase March 31, 2005
(Decrease)
Voice 109,039 116,745 7,705 7.1 % 440,655
transmission
services
revenues
(excluding the
amounts of IP
services
revenues)
IP services 66,114 74,029 7,915 12.0 % 278,315
revenues
Open computer 32,312 34,282 1,969 6.1 % 133,475
network
services
revenues*
IP-Virtual 15,064 17,399 2,335 15.5 % 63,198
private
network
services
revenues*
Wide-Area 7,649 10,172 2,522 33.0 % 35,086
Ethernet
services
revenues*
Data 56,668 46,224 (10,443 ) (18.4 %) 212,751
communications
revenues
(excluding the
amounts of IP
services
revenues)
Leased circuit 35,461 29,567 (5,894 ) (16.6 %) 135,642
services
revenues*
Solution 17,718 24,874 7,156 40.4 % 125,829
services
revenues
Others 7,610 7,592 (17 ) (0.2 %) 32,520
Total 257,151 269,466 12,315 4.8 % 1,090,072
operating
revenues
* Partial listing only
IV. Non-Consolidated Comparative Statements of Cash Flows
(Based on accounting principles generally accepted in Japan)
(Millions of yen)
Three months ended Three months ended Increase Year ended
June 30, 2004 June 30, 2005 (Decrease) March 31, 2005
I Cash flows
from
operating
activities:
Income 25,482 1,067 (24,414 ) 47,032
before
income taxes
Depreciation 30,387 30,001 (386 ) 123,494
and
amortization
Loss on 746 1,310 563 13,822
disposal of
property,
plant and
equipment
Increase 57 (326 ) (383 ) (325 )
(decrease)
in allowance
for doubtful
accounts
Increase (526 ) (214 ) 311 (1,035 )
(decrease)
in liability
for employees'
severance
payments
Write-off of - 14,592 14,592 25,022
investments
in affiliated
companies
(Increase) 37,798 38,300 501 (3,934 )
decrease in
accounts
receivable
(Increase) (684 ) 478 1,162 (2,225 )
decrease in
inventories
Increase (44,305 ) (52,690 ) (8,385 ) 25,228
(decrease)
in accounts
payable and
accrued
expenses
Increase 2,425 3,687 1,262 (269 )
(decrease)
in accrued
consumption tax
Other (3,336 ) (4,078 ) (741 ) 10,044
Sub-total 48,045 32,128 (15,916 ) 236,854
Interest and 1,238 2,472 1,234 2,222
dividends
received
Interest (4,048 ) (3,911 ) 136 (14,733 )
paid
Income taxes - (11,104 ) (11,104 ) 9,159
received
(paid)
Net cash 45,235 19,585 (25,650 ) 233,503
provided by
(used in)
operating
activities
II Cash
flows from
investing
activities:
Payments for (41,184 ) (37,685 ) 3,499 (155,158 )
property,
plant and
equipment
Proceeds 1,372 475 (897 ) 3,011
from sale of
property,
plant and
equipment
Acquisition - (12 ) (12 ) (1,603 )
of investments
Proceeds 5 0 (5 ) 7,728
from sale of
investments
Payments for (6,643 ) (26,659 ) (20,015 ) (8,783 )
long-term
loans
Proceeds 296 23,947 23,651 409
from long-term
loans
receivable
(Increase) - 644 644 (365 )
decrease in
short-term
loan
Other 340 167 (173 ) (34 )
Net cash (45,811 ) (39,121 ) 6,690 (154,794 )
provided by
(used in)
investing
activities
III Cash
flows from
financing
activities:
Proceeds 6,643 26,659 20,015 8,783
from issuance of
long-term debt
Payments for (2,150 ) (28,380 ) (26,229 ) (98,297 )
settlement
of long-term debt
Increase (3,382 ) 25,355 28,737 15,246
(decrease) in
short-term
borrowings
Dividends (8,811 ) (8,700 ) 111 (8,811 )
paid
Net cash (7,700 ) 14,934 22,635 (83,078 )
provided by
(used in)
financing
activities
IV Effect of (11 ) 16 27 9
exchange
rate changes
on cash and
cash
equivalents
V Net (8,287 ) (4,584 ) 3,702 (4,359 )
increase
(decrease)
in cash and
cash
equivalents
VI Cash and 65,444 61,084 (4,359 ) 65,444
cash
equivalents
at beginning
of period
VII Cash and 57,156 56,499 (657 ) 61,084
cash
equivalents
at end of
period
August 3, 2005
Nippon Telegraph and Telephone Corporation
Supplementary Data for
The Three Months Ended June 30, 2005
Contents
pages
1. Number of Subscribers 1
2. Number of Employees 2
3. Capital Investment 2
4. Financial Results and Projections 3-5
5. Average Monthly Revenue per Unit (ARPU) 6
6. Interest Bearing Liabilities (Consolidated) 7
7. Indices (Consolidated) 7
The forecasts included herein are forward-looking statements about the future
performance of NTT which are based on the assumptions, estimates, judgments,
projections and beliefs of the management of NTT in light of the information
currently available to it. The projected numbers in this release were derived
using certain assumptions that are indispensable for making projections in
addition to facts that have been ascertained in the past and recognized
accurately. Risks and uncertainties inherent in future projections, NTT's future
business operations, the state of the economy in Japan and abroad, possible
fluctuations in the securities markets and other changes in circumstances could
cause NTT's actual results to differ materially from the projected figures. The
projected figures included herein (including revenue and cost details) are
provided for the reference of investors. NTT group makes no representation or
warranty as to the accuracy or completeness of these figures.
1. Number of Subscribers
(thousands)
A B C
As of As of As of
Mar. 31, 2005 Jun. 30, 2005 Mar. 31, 2006
(Forecast)
Change Change
B-A C-A
Telephone 50,321 49,603 (719 ) 46,148 (4,173 )
Subscriber Line
NTT East 24,925 24,576 (349 ) 22,664 (2,261 )
NTT West 25,396 25,026 (370 ) 23,484 (1,912 )
INS-Net 8,467 8,320 (147 ) 7,354 (1,113 )
NTT East 4,425 4,356 (69 ) 3,845 (581 )
NTT West 4,042 3,964 (77 ) 3,509 (532 )
INS-Net 64 7,885 7,735 (151 ) 6,802 (1,083 )
NTT East 4,056 3,985 (71 ) 3,498 (559 )
NTT West 3,829 3,749 (79 ) 3,305 (524 )
INS-Net 1500 58 59 0 55 (3 )
NTT East 37 37 0 35 (2 )
NTT West 21 21 0 20 (1 )
Telephone 58,788 57,923 (865 ) 53,502 (5,286 )
Subscriber Line
+ INS-Net
NTT East 29,350 28,933 (418 ) 26,509 (2,841 )
NTT West 29,438 28,991 (448 ) 26,994 (2,445 )
FLET'S ISDN 769 727 (42 ) 536 (233 )
NTT East 413 392 (21 ) 263 (150 )
NTT West 356 335 (21 ) 273 (83 )
FLET'S ADSL 5,208 5,439 231 5,808 600
NTT East 2,833 2,922 89 3,033 200
NTT West 2,374 2,516 142 2,774 400
B FLET'S 1,665 1,991 326 3,465 1,800
NTT East 885 1,086 201 1,885 1,000
NTT West 779 905 125 1,579 800
Optical IP 4 32 28 1,600 1,596
Phone Services
NTT East 4 30 26 1,000 996
NTT West 0 1 1 600 600
Conventional 464 449 (15 ) 376 (87 )
Leased Circuit
NTT East 240 232 (8 ) 203 (38 )
NTT West 223 217 (7 ) 174 (49 )
High Speed 386 371 (15 ) 273 (113 )
Digital
NTT East 211 203 (8 ) 169 (42 )
NTT West 175 168 (7 ) 104 (71 )
NTT Group Major 6,882 7,105 223 7,500 618
ISPs
OCN* 4,640 4,794 154 5,000 360
Plala* 1,930 2,000 70 2,200 270
Cellular 48,825 49,430 605 50,700 1,875
FOMA* 11,501 13,710 2,210 24,100 12,599
i-mode 44,021 44,659 638 46,200 2,179
FOMA* 11,353 13,514 2,161 - -
PHS 1,314 1,150 (164 ) 800 (514 )
Notes : 1 No. of Telephone Subscriber Lines is the total of individual
lines and central station lines (Subscriber Telephone Light Plan
is included).
2 In terms of No. 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
(INS-Net 64 Lite Plan is included).
3 No. of B FLET'S includes FLET's Hikari Premium provided by NTT
West.
4 No. of Optical IP Phone Services is calculated by No. of thousand
channels.
5 NTT Group Major ISPs include WAKWAK, InfoSphere and Dreamnet,
aside from OCN and Plala.
6 No. of DoPa single service subscribers, which had not been
included in previous reports, has been included in the No. of
mova subscribers from the results as of Sept. 30, 2004 in order
to standardize the definition of subscribers used by all of the
mobile operators in Japan. DoPa single service subscribers are
544 thousand as of Mar. 31, 2005, 582 thousand as of Jun. 30,
2005, and 730 thousand as of Mar. 31, 2006 (Forecast).
* Partial listing only.
-1-
2. Number of Employees
A B C
As of As of As of
Mar. 31, 2005 Jun. 30, 2005 Mar. 31, 2006
(Forecast)
NTT Consolidated 201,500 211,500 198,650
Core Group Companies
NTT (Holding) 2,800 2,800 2,750
NTT East 14,200 14,400 13,850
NTT West 12,850 13,250 12,300
NTT Communications 7,700 7,800 7,650
NTT DATA (Consolidated) 18,700 20,250 19,250
NTT DoCoMo (Consolidated) 21,550 22,200 21,650
(Reference) "Outsourcing
Companies"
East Outsourcing Companies 46,050 46,350 44,600
West Outsourcing Companies 50,650 51,100 48,650
Notes: 1 Figures for NTT Consolidated do not include the No. of employees
who retired / are retiring at the end of fiscal year and rehired /
are being rehired at the beginning of next fiscal year.
2 Figures for East Outsourcing Companies and West Outsourcing
Companies include figures for companies in the facilities and
equipment field, management and marketing field and administrative
field. Figures for those companies include the No. of employees
who retired at the end of fiscal year and are rehired at the
beginning of next fiscal year, as described below:
- As of Mar. 31, 2005 (East Outsourcing Companies: 2,550
employees, West Outsourcing Companies: 2,600 employees)
- As of Mar. 31, 2006 (Forecast) (East Outsourcing
Companies: 2,450 employees, West Outsourcing Companies: 2,350
employees)
3. Capital Investment
(billions of yen)
A B C
Three Months Ended Three Months Ended Year Ending
Jun. 30, 2004 Jun. 30, 2005 Mar. 31, 2006
(From Apr. to Jun., 2004) (From Apr. to Jun., 2005) (Forecast)
Change
B-A
NTT 419.5 475.9 56.4 2,050.0
Consolidated
Subsidiaries
NTT (Holding) 2.6 2.5 (0.1 ) 21.0
NTT East 83.9 88.8 4.9 400.0
NTT West 79.2 95.6 16.4 380.0
NTT 24.1 25.0 0.9 160.0
Communications
NTT DATA 18.5 24.6 6.1 105.0
(Consolidated)
NTT DoCoMo 187.6 210.7 23.1 848.0
(Consolidated)
-2-
4. Financial Results and Projections (NTT Consolidated, NTT (Holding))
(billions of yen)
A B C
Three Months Ended Three Months Ended Year Ending
Jun. 30, 2004 Jun. 30, 2005 Mar. 31, 2006
(From Apr. to Jun., 2004) (From Apr. to Jun., 2005) (Forecast)
Change Progress
B-A B/C
NTT Consolidated
(US GAAP)
Operating Revenues 2,654.0 2,599.6 (54.3 ) 24.5 % 10,590.0
Fixed Voice 905.8 856.3 (49.5 ) - -
Related Services
Mobile Voice 803.2 781.1 (22.1 ) - -
Related Services
IP/Packet 438.3 463.3 24.9 - -
Communications
Services
Sales of 172.2 156.8 (15.4 ) - -
Telecommunications
Equipment
System Integration 192.0 184.2 (7.8 ) - -
Other 142.3 157.9 15.5 - -
Operating Expenses 2,232.0 2,200.0 (32.0 ) 23.1 % 9,540.0
Cost of Sevices 535.2 564.1 28.9 - -
(exclusive of
items shown
separately below)
Cost of equipment 304.7 293.8 (10.9 ) - -
sold (exclusive of
items shown
separately below)
Cost of systems 117.6 106.6 (11.0 ) - -
integration
(exclusive of
items shown
separately below)
Depreciation and 517.6 502.7 (14.9 ) - -
amortization
Impairment loss - 1.4 1.4 - -
Selling, general 756.9 731.4 (25.5 ) - -
and administrative
expenses
Operating Income 422.0 399.6 (22.3 ) 38.1 % 1,050.0
Income before 415.7 464.3 48.7 43.0 % 1,080.0
Income Taxes
Net Income 185.8 177.6 (8.3 ) 40.4 % 440.0
(Ref.) Details of "Cost of services," "Cost of equipment sold," "Cost of systems integration" and
"Selling, general and administrative expenses"
Personnel 504.1 488.5 (15.6 ) - -
Cost of services 1,095.6 1,117.1 21.5 - -
and equipment
sold, and selling,
general and
administrative
expenses
Loss on disposal 57.2 32.4 (24.8 ) - -
of property, plant
and equipment
Other expenses 57.6 57.9 0.3 - -
Total 1,714.4 1,695.9 (18.5 ) - -
NTT (Holding) (JPN GAAP)
Operating Revenues 156.5 151.8 (4.7 ) 44.7 % 340.0
Operating Expenses 32.9 33.8 0.8 20.0 % 169.0
Operating Income 123.6 118.0 (5.5 ) 69.0 % 171.0
Non-Operating 17.9 15.8 (2.0 ) 24.7 % 64.0
Revenues
Non-Operating 15.4 13.4 (1.9 ) 23.2 % 58.0
Expenses
Recurring Profit 126.0 120.3 (5.7 ) 68.0 % 177.0
Net Income 120.8 116.7 (4.0 ) 67.1 % 174.0
-3-
4. Financial Results and Projections (NTT East, NTT West)
(billions of yen)
A B C
Three Months Ended Three Months Ended Year Ending
Jun. 30, 2004 Jun. 30, 2005 Mar. 31, 2006
(From Apr. to Jun., 2004) (From Apr. to Jun., 2005) (Forecast)
Change Progress
B-A B/C
NTT East (JPN
GAAP)
Operating 531.3 518.4 (12.9 ) 25.8 % 2,012.0
Revenues
Voice 358.9 333.1 (25.7 ) 27.6 % 1,208.0
Transmission
Services
(excluding IP)
IP Services 47.7 62.1 14.4 21.1 % 295.0
Leased Circuit 56.3 51.3 (4.9 ) 32.5 % 158.0
(excluding IP)
Telegraph 7.4 7.1 (0.2 ) 28.8 % 25.0
Others 28.8 34.6 5.8 19.8 % 326.0
Related 32.0 29.8 (2.2 )
Business
Operating 507.9 493.8 (14.0 ) 24.7 % 1,997.0
Expenses
Personnel 52.6 49.1 (3.5 ) 25.2 % 195.0
Cost of 309.8 290.6 (19.1 ) 23.3 % 1,250.0
services and
equipment
sold, and
selling,
general and
administrative
expenses
Depreciation 112.9 127.4 14.4 29.8 % 427.0
and
amortization
Loss on 12.6 6.7 (5.9 ) 13.4 % 50.0
disposal of
property,
plant and
equipment
Taxes and 19.7 19.8 0.1 26.5 % 75.0
public dues
Operating 23.4 24.5 1.0 163.7 % 15.0
Income
Non-Operating 14.0 14.6 0.6 27.2 % 54.0
Revenues
Non-Operating 10.2 12.2 2.0 27.9 % 44.0
Expenses
Recurring 27.2 26.9 (0.3 ) 107.9 % 25.0
Profit
Net Income 16.1 16.2 0.0 108.1 % 15.0
NTT West (JPN
GAAP)
Operating 522.8 509.0 (13.7 ) 25.9 % 1,966.0
Revenues
Voice 350.0 323.8 (26.2 ) 26.7 % 1,213.0
Transmission
Services
(excluding IP)
IP Services 40.2 53.7 13.4 21.7 % 248.0
Leased Circuit 48.2 43.8 (4.3 ) 29.1 % 151.0
(excluding IP)
Telegraph 8.2 8.0 (0.1 ) 28.7 % 28.0
Others 42.7 47.1 4.4 24.4 % 326.0
Related 33.2 32.3 (0.9 )
Business
Operating 499.6 498.3 (1.2 ) 25.4 % 1,962.0
Expenses
Personnel 50.0 45.7 (4.2 ) 25.1 % 182.0
Cost of 308.3 315.9 7.6 25.4 % 1,244.0
services and
equipment
sold, and
selling,
general and
administrative
expenses
Depreciation 108.2 106.7 (1.5 ) 26.2 % 408.0
and
amortization
Loss on 14.2 11.4 (2.8 ) 20.7 % 55.0
disposal of
property,
plant and
equipment
Taxes and 18.7 18.5 (0.2 ) 25.4 % 73.0
public dues
Operating 23.2 10.6 (12.5 ) 267.0 % 4.0
Income
Non-Operating 13.2 13.3 0.0 26.1 % 51.0
Revenues
Non-Operating 10.9 12.1 1.2 30.5 % 40.0
Expenses
Recurring 25.5 11.7 (13.7 ) 78.7 % 15.0
Profit
Net Income 15.3 6.9 (8.3 ) 77.7 % 9.0
Notes : Operating Revenues from Voice Transmission Services of NTT East and
NTT West for the three months ended Jun. 30, 2005 include Monthly
Charges, Call Rates and Interconnection Rates of 204.1 billion yen,
48.9 billion yen and 54.8 billion yen, and 198.7 billion yen, 47.2
billion yen and 53.9 billion yen, respectively.
-4-
4. Financial Results and Projections (NTT Communications, NTT Data, NTT DoCoMo)
(billions of yen)
A B C
Three Months Ended Three Months Ended Year Ending
Jun. 30, 2004 Jun. 30, 2005 Mar. 31, 2006
(From Apr. to Jun., 2004) (From Apr. to Jun., 2005) (Forecast)
Change Progress
B-A B/C
NTT
Communications
(JPN GAAP)
Operating 257.1 269.4 12.3 24.9 % 1,081.0
Revenues
Voice 109.0 116.7 7.7 28.7 % 407.0
Transmission
Services
(excluding IP)
IP Services 66.1 74.0 7.9 22.2 % 333.0
Data 56.6 46.2 (10.4 ) 28.2 % 164.0
Transmission
Services
(excluding IP)
Leased Circuit 35.4 29.5 (5.8 ) 28.2 % 105.0
*
Solutions 17.7 24.8 7.1 18.3 % 177.0
Business
Others 7.6 7.5 (0.0 )
Operating 232.2 256.0 23.8 25.0 % 1,023.0
Expenses
Personnel 21.8 21.7 (0.1 ) 25.0 % 87.0
Cost of 108.6 121.2 12.6 785.0
services and 25.5 %
equipment
sold, and
selling,
general and
administrative
expenses
Communication 67.8 78.8 11.0
Network
Charges
Depreciation 29.8 29.4 (0.3 ) 23.6 % 125.0
and
amortization
Loss on 0.9 1.7 0.7 13.1 % 13.0
disposal of
property,
plant and
equipment
Taxes and 3.1 3.0 (0.1 ) 23.2 % 13.0
public dues
Operating 24.9 13.4 (11.5 ) 23.1 % 58.0
Income
Non-Operating 7.9 7.7 (0.2 ) 32.3 % 24.0
Revenues
Non-Operating 7.4 5.5 (1.8 ) 25.1 % 22.0
Expenses
Recurring 25.4 15.6 (9.8 ) 26.1 % 60.0
Profit
Net Income 15.0 (4.9 ) (20.0 ) - 34.0
(Ref.) Major
Revenues of
Services
Voice 113.7 119.9 6.2 28.2 % 425.0
Transmission
Services
Data 83.9 87.4 3.5 23.4 % 373.0
Transmission
Services
Leased Circuit 35.4 29.5 (5.8 ) 28.2 % 105.0
Others 6.1 9.3 3.1 18.2 % 178.0
Related 17.8 23.1 5.3 0.0 %
Business
NTT Data
Consolidated
(JPN GAAP)
Operating 195.0 181.7 (13.2 ) 20.7 % 880.0
Revenues
Systems 158.2 141.7 (16.4 ) 20.1 % 706.0
Integration
Business
Network System 13.9 15.2 1.2 25.4 % 60.0
Business
Others 41.0 43.7 2.6 22.7 % 193.0
Elimination or (18.2 ) (18.9 ) (0.6 ) 24.0 % (79.0 )
corporate
Cost of Sales 147.0 132.1 (14.9 ) 19.9 % 665.0
Gross Profit 47.9 49.6 1.7 23.1 % 215.0
Selling and 36.8 40.4 3.5 23.8 % 170.0
General
Expense
Operating 11.0 9.1 (1.8 ) 20.4 % 45.0
Income
Non-Operating 0.3 (0.0 ) (0.4 ) 1.4 % (4.0 )
Income (loss)
Recurring 11.4 9.1 (2.2 ) 22.3 % 41.0
Profit
Net Income 7.4 5.9 (1.5 ) 21.9 % 27.0
NTT DoCoMo
Consolidated
(US GAAP)
Operating 1,221.1 1,187.1 (34.1 ) 24.7 % 4,805.0
Revenues
Wireless 1,079.8 1,059.8 (20.0 ) 25.3 % 4,194.0
Services
Cellular 1,045.5 1,029.0 (16.4 ) 25.3 % 4,066.0
Services
Voice 773.7 761.7 (12.0 ) 25.3 % 3,010.0
FOMA* 75.8 228.8 153.0 19.0 % 1,202.0
Packet 271.8 267.3 (4.5 ) 25.3 % 1,056.0
Communications
FOMA* 41.7 116.9 75.2 19.7 % 594.0
PHS 16.0 12.4 (3.6 ) 30.4 % 41.0
Others 18.3 18.3 0.0 21.0 % 87.0
Equipment 141.4 127.3 (14.1 ) 20.8 % 611.0
sales
Operating 944.6 899.5 (45.1 ) 22.5 % 3,995.0
Expenses
Personnel 62.2 62.0 (0.2 ) 24.7 % 251.0
Cost of 609.7 566.2 (43.4 ) 22.2 % 2,550.0
services and
equipment
sold, and
selling,
general and
administrative
expenses
Depreciation 165.2 165.3 0.1 22.3 % 740.0
and
amortization
Impairment - 0.2 0.2 - -
loss
Loss on 5.2 2.8 (2.4 ) 6.5 % 43.0
disposal of
property,
plant and
equipment
Communication 93.0 93.7 0.7 25.1 % 374.0
Network
Charges
Taxes and 9.3 9.2 (0.1 ) 24.9 % 37.0
public dues
Operating 276.6 287.6 11.0 35.5 % 810.0
Income
Non-Operating 0.3 65.8 65.5 102.8 % 64.0
Income (loss)
Income before 276.9 353.4 76.5 40.4 % 874.0
Tax
Net Income 170.4 207.9 37.5 39.0 % 533.0
Note: 1 Operating Revenues of NTT Communications for the three months
ended Jun. 30, 2005 include revenues from telephone subscriber
lines (66.2 billion yen) for Voice Transmission (excluding IP),
revenues from OCN (34.2 billion yen), IP-VPN (17.3 billion yen)
and e-VLAN (10.1 billion yen) for IP Services, revenues from Frame
Relay / Cell Relay (6.0 billion yen) for Data Transmission, and
revenues from conventional leased circuits (2.9 billion yen) and
high-speed digital (14.3 billion yen) for Leased Circuit.
2 From the three months ended Jun. 30, 2005, NTT DoCoMo's, Quickcast
services revenues, which were separately represented, are included
in "Other revenues," and international services revenues, which
were previously included in "Others," are included in "Cellular
services," and forecasts for the year ending Mar. 31, 2006 have
been correspondingly adjusted. In addition, international services
revenues related to FOMA services for the three months ended June
30, 2004 is not included in FOMA services revenues for the three
months ended June 30, 2004 because the necessary information was
not previously maintained. (For the three months ended Jun. 30,
2004, Quickcast services revenues are included in "Other
revenues.")
* Partial listing only.
-5-
5. Average monthly revenue per unit (ARPU)
Average monthly revenue per unit, or ARPU, is used to measure average monthly
operating revenues attributable to designated services on a per user basis. In
the case of our fixed line business, ARPU is calculated by dividing revenue
items in the operating revenues of our Regional Communications Services, that
is, subscriber lines services and ISDN, by the No. of active subscribers to the
relevant services. In the case of our cellular business, ARPU is calculated by
dividing revenue items included in the operating revenues from our Wireless
Services, such as revenues from Cellular (mova) services and revenues from
Cellular (FOMA) services, which are incurred consistently each month (i.e.,
monthly charges and voice/packet transmission charges), by the No. of active
subscribers to the relevant services (the calculation of these figures excludes
revenues that are not representative of monthly average usage such as equipment
sales and activation fees). We believe that our ARPU figures calculated in this
way provide useful information regarding the monthly average usage of our
subscribers. The revenue items included in the numerators of our ARPU figures
are based on our financial results comprising our U.S. GAAP results of
operations.
(yen)
Year Ended 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 1st Quarter Year
Ending
Mar. 31, 2005 Ended Ended Ended Ended Ended March
31, 2006
Jun. 30, 2004 Sept. 30, Dec. 31, 2004 Mar. 31, 2005 Jun. 30, 2005 (Forecast)
(From Apr. to 2004 (From Oct. (From Jan. (From Apr.
Jun., 2004) (From Jul. to to Dec., 2004) to Mar., 2005) to Jun., 2005)
Sept., 2004)
NTT East
Telephone 2,920 2,960 2,970 3,000 2,730 2,770 2,690
Subscriber
Lines ARPU
ISDN 5,510 5,560 5,560 5,570 5,370 5,550 5,260
Subscriber
Lines ARPU
NTT West
Telephone 2,830 2,860 2,880 2,900 2,660 2,670 2,640
Subscriber
Lines ARPU
ISDN 5,480 5,530 5,530 5,520 5,320 5,400 5,160
Subscriber
Lines ARPU
NTT DoCoMo
Cellular 7,200 7,400 7,340 7,170 6,920 6,940 6,770
Aggregate
ARPU
(FOMA+mova)
Voice ARPU 5,330 5,450 5,440 5,350 5,090 5,120 4,990
(FOMA+mova)
Packet ARPU 1,870 1,950 1,900 1,820 1,830 1,820 1,780
(FOMA+mova)
i-mode ARPU 1,870 1,940 1,890 1,810 1,820 1,810 1,770
(FOMA+mova)*
ARPU 2,060 2,170 2,100 2,000 2,000 1,990 1,930
generated
purely from
i-mode
(FOMA+mova)
Cellular 9,650 10,240 9,890 9,650 9,280 9,090 8,550
Aggregate
ARPU (FOMA)
Voice ARPU 6,380 6,580 6,610 6,460 6,110 5,990 5,700
(FOMA)
Packet ARPU 3,270 3,660 3,280 3,190 3,170 3,100 2,850
(FOMA)
i-mode ARPU 3,220 3,590 3,230 3,150 3,130 3,070 2,820
(FOMA)*
ARPU 3,260 3,640 3,270 3,190 3,170 3,110 2,870
generated
purely from
i-mode
(FOMA)
Cellular 6,800 7,150 6,990 6,710 6,300 6,190 5,800
Aggregate
ARPU (mova)
Voice ARPU 5,160 5,350 5,280 5,150 4,830 4,820 4,600
(mova)
i-mode ARPU 1,640 1,800 1,710 1,560 1,470 1,370 1,200
(mova)
ARPU 1,850 2,020 1,920 1,760 1,660 1,550 1,360
generated
purely from
i-mode
(mova)
Notes : 1 We separately compute ARPU for the fixed line business conducted
by each of NTT East and NTT West using two measures.
- ARPU from telephone subscriber lines services, which is
based on operating revenues from monthly charges, call charges
and FLET'S ADSL charges attributable to our telephone subscriber
lines services.
- ARPU from ISDN, which is based on operating revenues from
monthly charges, transmission/call charges and FLET'S ISDN
charges attributable to our ISDN.
2 Interconnection revenues are excluded in ARPU of Telephone
Subscriber Lines and ISDN Subscriber Lines.
3 In terms of No. 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.
4 From the three months ended Jun. 30, 2005, calls from fixed
telephones of NTT East or West to mobile phones with a dialing
Carrier Identification Code are billed on end-to-end basis and
amounts are recorded as call rates revenues of NTT East or West.
5 We compute ARPU for our cellular business using two aggregate
measures.
- Cellular Aggregate ARPU (FOMA+mova) = Voice ARPU (FOMA+mova) +
Packet ARPU (FOMA+mova).
- Our Voice ARPU (FOMA+mova) is based on operating revenues
related to voice services, such as monthly charges and voice
transmission charges, attributable to our third generation FOMA
and conventional mova services, and our Packet ARPU (FOMA+mova)
is based on operating revenues related to packet communication
services, such as monthly charges and packet transmission
charges, attributable to our third generation FOMA services and
based on operating revenues related to i-mode services, such as
monthly charges and packet transmission charges, attributable to
our conventional mova services. We also separately compute
i-mode ARPU (FOMA+mova), as a subcomponent of Packet ARPU
(FOMA+mova). In particular, i-mode ARPU (FOMA+mova) is based on
operating revenues from monthly charges and packet transmission
charges attributable to our i-mode-related FOMA and mova
services.
- Cellular Aggregate ARPU (FOMA) = Voice ARPU (FOMA) + Packet
ARPU (FOMA).
- Our Voice ARPU (FOMA) is based on operating revenues
related to voice services, such as monthly charges and voice
transmission charges, and our Packet ARPU (FOMA) is based on
operating revenues related to packet communication services,
such as monthly charges and packet transmission charges, in each
case attributable to our third generation FOMA services. We also
separately compute i-mode ARPU (FOMA), as a subcomponent of
Packet ARPU (FOMA). In particular, i-mode ARPU (FOMA) is based
on operating revenues from monthly charges and packet
transmission charges attributable to our i-mode-related FOMA
services.
- Cellular Aggregate ARPU (mova) = Cellular Voice ARPU (mova) +
i-mode ARPU (mova).
- Our Voice ARPU (mova) is based on operating revenues
related to voice services, such as monthly charges and voice
transmission charges, and our i-mode ARPU (mova) is based on
operating revenues related to i-mode services, such as monthly
charges and packet transmission charges, in each case
attributable to our conventional mova services.
6 We show ARPU for our i-mode using two aggregate measures.
- i-mode ARPU is based on the No. of all subscribers who
have active cellular phones, regardless of whether the i-mode
service is activated.
- ARPU generated purely from i-mode is based on the No. of
active subscribers to the i-mode service only.
7 International service-related revenues in cellular business,
which had not been included in previous reports, have been
included in the Cellular ARPU data calculation for the 1st
Quarter ended Jun. 30, 2005 and for the forecasts for the fiscal
year ending Mar. 31, 2006, due to its growing contribution to
total revenues. International service-related Cellular ARPU
included in the Cellular ARPU results for the 1st Quarter ended
Jun. 30, 2005 are 30 yen for Cellular Aggregate ARPU
(FOMA+mova), 60 yen for Cellular Aggregate ARPU (FOMA), and 20
yen for Cellular Aggregate ARPU (mova), and forecasts for the
fiscal year ending Mar. 31, 2006 are 40 yen for Cellular
Aggregate ARPU (FOMA+mova), 60 yen for Cellular Aggregate ARPU
(FOMA), and 30 yen for Cellular Aggregate ARPU (mova). Cellular
ARPU data in previous reports do not include International
service-related revenues, but Cellular Aggregate ARPU
(FOMA+mova) generated from International services for the
relevant periods are 20 yen for the fiscal year ended Mar. 31,
2004, 20 yen for 1st quarter ended Jun. 30, 2004, 20 yen for 2nd
quarter ended Sept. 30, 2004, 30 yen for 3rd quarter ended Dec.
31, 2004, 30 yen for 4th quarter ended Mar. 31, 2005, and 20 yen
for the fiscal year ended Mar. 31, 2005.
8 No. of DoPa single service subscribers, which had not been
included in previous reports, has been included in the No. of
mova subscribers from the results for the first six months of
the fiscal year ending Mar. 31, 2005 in order to standardize the
definition of subscribers used by all the mobile operators in
Japan. DoPa single service subscribers and the revenues thereof
are not included in the ARPU calculations.
9 No. of active subscribers used in ARPU calculation are as below.
- FY Results & Forecast: Sum of No. of active subscribers**
(as defined below) for each month from Apr. to Mar.
- 1Q Results: Sum of No. of active subscribers**(as defined
below) for each month from Apr. to Jun.
- 2Q Results: Sum of No. of active subscribers**(as defined
below) for each month from Jul. to Sept.
- 3Q Results: Sum of No. of active subscribers**(as defined
below) for each month from Oct. to Dec.
- 4Q Results: Sum of No. of active subscribers**(as defined
below) for each month from Jan. to Mar.
** active subscribers = (No. of subscribers at end of
previous month + No. of subscriber at end of current month)/2
* Partial listing only.
-6-
6. Interest-Bearing Liabilities (Consolidated)
(billions of yen )
As of Mar. 31, 2004 As of Jun. 30, 2005 As of Mar. 31, 2006
(Forecast)
Interest-Bearing 5,525.8 5,631.4 5,430.0
Liabilities
7. Indices (Consolidated)
Year Ended Three Months Ended Year Ending
Mar. 31, 2005 Jun. 30, 2005 Mar. 31, 2006
(From Apr. to Jun., 2005) (Forecast)
Operating Income 1,211.2 billion yen 399.6 billion yen 1,050.0 billion yen
EBITDA Margin 32.8 % 35.7 % 30.9 %
Operating FCF 1,482.2 billion yen 452.6 billion yen 1,219.0 billion yen
ROCE 5.8 % - 5.0 %
Note : The reconciliation of Indices are as follows.
Year Ended Three Months Ended Year Ending
Mar. 31, 2005 Jun. 30, 2005 Mar. 31, 2006
(From Apr. to Jun., 2005) (Forecast)
EBITDA Margin ((c/d) 32.8 % 35.7 % 30.9 %
X100)
a Operating 1,211.2 billion yen 399.6 billion yen 1,050.0 billion yen
Income
b Depreciation, 2,328.4 billion yen 528.9 billion yen 2,219.0 billion yen
Amortization, and
Loss on disposal of
property, plant and
equipment
c EBITDA (a+b) 3,539.6 billion yen 928.6 billion yen 3,269.0 billion yen
d Operating 10,805.9 billion yen 2,599.6 billion yen 10,590.0 billion yen
Revenues
Operating FCF ((c-d)) 1,482.2 billion yen 452.6 billion yen 1,219.0 billion yen
a Operating 1,211.2 billion yen 399.6 billion yen 1,050.0 billion yen
Income
b Depreciation, 2,328.4 billion yen 528.9 billion yen 2,219.0 billion yen
Amortization, and
Loss on disposal of
property, plant and
equipment
c EBITDA (a+b) 3,539.6 billion yen 928.6 billion yen 3,269.0 billion yen
d Capital 2,057.4 billion yen 475.9 billion yen 2,050.0 billion yen
Investment
ROCE ((b/c)X100) 5.8 % - 5.0 %
a Operating 1,211.2 billion yen - 1,050.0 billion yen
Income
(Normal Statutory Tax 41 % - 41 %
Rate)
b Operating 715.7 billion yen - 619.5 billion yen
Income X(1-Normal
Statutory Tax Rate)
c Operating 12,307.0 billion yen - 12,421.7 billion yen
Capital Employed
Note : Figures for consolidated capital investment is the accrual-based amounts
required for acquisition of fixed assets and intangibles. The
differences from the figures for "Payments for property, plant and
equipment" and "Acquisition of intangible and other assets" in the
consolidated statements of cash flows are as described in reconciliation
below.
(billions of yen )
Year Ended Three Months Ended
Mar. 31, 2005 Jun. 30, 2005
(From Apr. to Jun., 2005)
NTT Consolidated 2,057.4 475.9
Capital Investment
Payments for property, 1,611.0 484.4
plant and equipment
Acquisition of 543.7 57.1
intangible and other
assets
Other differences (97.3 ) (65.5 )
-7-
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