Data Section

Consolidated Statement of Financial Position

Consolidated Statement of Profit or Loss

Consolidated Statement of Comprehensive Income

Consolidated Statement of Changes in Equity

FY2021 (Fiscal year ended March 31, 2022)

FY2022 (Fiscal year ended March 31, 2023)

Consolidated Statement of Cash Flows

Management's Analysis of Financial Condition, Results of Operations and Cash Flows

Results of Operations

Operating Revenues

NTT Group's operating revenues are divided into six service categories, comprising fixed voice related services, mobile voice related services, IP/packet communications services, sales of telecommunications equipment, system integration and other.
　Operating revenues in the fiscal year ended March 31, 2023increased 8.1% from the fiscal year ended March 31, 2022 to ¥13,136.2 billion. This increase was due to such factors as an increase in system integration revenues and other revenues, partially offset by a decrease in fixed voice-related revenues and mobile voice-related revenues.
　Operating revenues for each service category for the fiscal year ended March 31, 2023 are summarized as follows:

■ Fixed Voice Related Services

　NTT Group's fixed voice related services include a portion of the services it provides in the regional communications business segment and Integrated ICT Business Segment, such as telephone subscriber lines, INS-Net, conventional leased circuits and high speed digital.
　Fixed voice related revenues for the fiscal year ended March 31,2023 decreased 4.9% from the fiscal year ended March 31, 2022 to ¥871.2 billion. This decrease was due to a continued decline in the number of subscriptions for telephone subscriber lines and INS-Net caused by the increased popularization of mobile phones and IP telephones, and an increase in free or low-priced communications services offered by providers of over-the-top content ("OTT" a content distribution service utilizing other companies' communications infrastructure, allowing a service provider to distribute services without owning its own communications infrastructure).

■ Mobile Voice Related Services

　Mobile voice related services include a portion of the services NTT Group provides in the Integrated ICT Business Segment, such as 5G, LTE (Xi) and other services.
　Mobile voice related revenues for the fiscal year ended March 31, 2023 decreased 5.1% from the fiscal year ended March 31, 2022 to ¥1,046.4 billion. This decrease was primarily due to a decrease in revenues resulting from the enhancement of customer returns through the introduction of ahamo and other billing plans.

■ IP/Packet Communications Services

　NTT Group's IP/packet communications services include a portion of the services it provides in the Regional Communications Business Segment, such as FLET'S Hikari, and a portion of the services it provides in the Integrated ICT Business Segment, such as Arcstar Universal One, IP-VPN, OCN, and 5G, LTE (Xi) and other packet communications services.
　In the fiscal year ended March 31, 2023, revenues from IP/packet communications services decreased 0.0% from the fiscal year ended March 31, 2022 to ¥3,444.0 billion.

■ Sales of Telecommunications Equipment

　This category includes a portion of the services NTT Group provides in the Integrated ICT Business Segment and the Regional Communications Business Segment.
　In the fiscal year ended March 31, 2023, revenues from telecommunications equipment sales increased 8.9% from the fiscal year ended March 31, 2022 to ¥756.2 billion. This increase was mainly due to an increase in revenues in the Integrated ICT Business Segment due to an increase in the unit sale prices of devices.

■ System Integration

　NTT Group's system integration services include a portion of the services it provides in the Global Solutions Business Segment, the Integrated ICT Business Segment and the Regional Communications Business Segment.
　In the fiscal year ended March 31, 2023, revenues from system integration increased 13.4% from the fiscal year ended March 31, 2022 to ¥4,546.5 billion. This increase was mainly due to factors such capturing increased demand for digitalization both domestically and abroad in the Global Solutions Business Segment.

■ Other Operating Revenues

　Other services principally comprise building maintenance, real estate rentals, sales of electricity and the Smart Life businesses in the Integrated ICT Business Segment.
　In the fiscal year ended March 31, 2023, revenues from other services increased 24.2% from the fiscal year ended March 31, 2022 to ¥2,472.0 billion. This increase was due to an increase in electricity revenues in the energy business, among other factors.

Operating Expenses

Operating expenses in the fiscal year ended March 31, 2023 increased 8.9% from the fiscal year ended March 31, 2022 to ¥11,307.2 billion. The reasons for the increase are discussed below.

■ Personnel Expenses

　Personnel expenses in the fiscal year ended March 31, 2023 increased 7.9% from the fiscal year ended March 31, 2022 to ¥2,768.7 billion. This increase was mainly due to the increase in personnel expenses as a result of the expansion of businesses in the Global Solutions Business Segment.

■ Expenses for Purchase of Goods and Services and Other Expenses

　In the fiscal year ended March 31, 2023, expenses for purchase of goods and services and other expenses increased 12.4% from the fiscal year ended March 31, 2022 to ¥6,563.3 billion. This increase was mainly due to an increase in sales-related costs resulting from the increase in electricity revenues, among other factors.

■ Depreciation and Amortization Expenses

　Depreciation and amortization expenses in the fiscal year ended March 31, 2023 increased 1.4% from the fiscal year ended March 31, 2022 to ¥1,582.6 billion.

Operating Profit

As a result of the foregoing, operating profit for the fiscal year ended March 31, 2023 increased 3.4% from the fiscal year ended March 31, 2022 to ¥1,829.0 billion.

Finance Income and Costs

Finance income and costs for the fiscal year ended March 31, 2023 were ¥(25.3) billion compared to ¥7.2 billion for the fiscal year ended March 31, 2022. This increase was mainly due to an increase in interest expenses resulting from a rise in interest rates, among other factors.

Share of Profit of Entities Accounted for Using Equity Method

Share of profit of entities accounted for using the equity method for the fiscal year ended March 31, 2023 decreased 28.9% from the fiscal year ended March 31, 2022 to ¥14.0 billion.

Profit Before Taxes

As a result of the foregoing, profit before taxes for the fiscal year ended March 31, 2023 increased 1.2% from the fiscal year ended March 31, 2022 to ¥1,817.7 billion.

Income Taxes

In the fiscal year ended March 31, 2023, income taxes decreased 2.7% from the fiscal year ended March 31, 2022 to ¥524.9 billion. Effective tax rates for the fiscal year ended March 31, 2022 and for the fiscal year ended March 31, 2023 were 30.05% and 28.88%, respectively.

Profit Attributable to NTT

As a result of the foregoing, profit for the fiscal year ended March 31, 2023 increased 2.9% from the fiscal year ended March 31, 2022 to ¥1,292.8 billion. Profit attributable to NTT (excluding the profit attributable to non-controlling interests) for the fiscal year ended March 31, 2023, increased 2.7% from the fiscal year ended March 31, 2022 to ¥1,213.1 billion.

Cash Flows and Financial Position

Cash Flows

At NTT Group, the stable cash flows generated by its business cover the expenditures necessary for recurring investment activities, such as capital investments, and provide the main source of funds for shareholder returns (dividends and share buy-backs) and repayments of borrowings.

■ Operating Cash Flows

　Cash flows provided by operating activities during the fiscal year ended March 31, 2023 amounted to ¥2,261.0 billion.
　This was primarily due to profit (loss) as adjusted for noncash items (profit for the period, plus non-cash items such as depreciation and losses on retirement of property, plant and equipment) reaching ¥2,925.9 billion.
　Furthermore, cash flows provided by operating activities represented a decrease of ¥749.2 billion from ¥3,010.3 billion in the fiscal year ended March 31, 2022. This decrease was due to, in comparison to the prior fiscal year, profit (loss) as adjusted for non-cash items increasing by ¥29.4 billion while cash outflows increased by ¥778.6 billion, primarily due to increases in working capital and corporate taxes.

■ Investment Cash Flows

　Cash flows used in investment activities during the fiscal year ended March 31, 2023 amounted to ¥1,736.9 billion.
　This was primarily due to payments for purchase of property, plant and equipment, intangible assets and investment property reaching ¥1,851.9 billion.
　Furthermore, cash flows used in investment activities represented an increase of net payments by ¥37.8 billion from ¥1,699.2 billion in the fiscal year ended March 31, 2022. This increase was due to, among other factors, an increase of ¥93.8 billion of payments for purchase of property, plant and equipment, intangible assets and investment property in the fiscal year ended March 31, 2023 compared to the fiscal year ended March 31, 2022.

■ Financing Cash Flows

　Cash flows used in financing activities during the fiscal year ended March 31, 2023 amounted to ¥590.2 billion.
　This was primarily due to expenditures for shareholder returns reaching ¥950.8 billion while net income from borrowings was ¥693.0 billion.
　Expenditures for shareholder returns consisted of ¥439.7 billion of dividend payments and expenditures of ¥511.1 billion for acquisitions of treasury stock. Net income from borrowings consisted of ¥295.6 billion of income from an increase in short-term borrowings, ¥1,090.9 billion of income from an increase in long-term borrowings and ¥693.4 billion of expenditures for repayments of long-term borrowings. The increase in long-term borrowings included the incurrence of ¥667.7 billion of green financings during the fiscal year ended March 31, 2023. The proceeds from these financings were allocated to projects that contribute to the resolution of environmental issues (5G-related investments, FTTH-related investments, research and development for achieving the IOWN concept and renewable energy).
　Furthermore, cash flows used in finance activities represented a decrease in payments of ¥847.9 billion from ¥1,438.1 billion in the fiscal year ended March 31, 2022. This decrease was due to, among other factors, an increase of ¥1,238.9 billion in proceeds from borrowings, partially offset by an increase of ¥257.4 billion in payments for acquisitions of treasury stock in comparison to the prior fiscal year.

Financial Position

Assets as of the end of the fiscal year ended March 31, 2023 increased by ¥1,446.6 billion from the end of the fiscal year ended March 31, 2022 to ¥25,308.9 billion, due to among other factors, increases in trade receivables and other current assets.
　Liabilities as of the end of the fiscal year ended March 31, 2023 increased by ¥1,114.1 billion from the end of the fiscal year ended March 31, 2022 to ¥15,958.2 billion, due to, among other factors, an increase in borrowings for the acquisition of treasury stock and payment of taxes, and an increase in liabilities due to the continued depreciation of the yen. The balance of interest-bearing debt was ¥8,230.5 billion, an increase of ¥866.3 billion from ¥7,364.3 billion as of the end of the fiscal year ended March 31, 2022.
　Shareholders' equity as of the end of the fiscal year ended March 31, 2023 increased by ¥278.9 billion from the end of the fiscal year ended March 31, 2022 to ¥8,561.4 billion, due to an increase in profit. The ratio of interest-bearing debt to shareholders' equity was 96.1% (compared to 88.9% at the end of the fiscal year ended March 31, 2022). In addition, equity, which consists of the sum of shareholders' equity and non-controlling interests, increased by ¥332.5 billion from the end of the fiscal year ended March 31, 2022 to ¥9,350.6 billion.

■ Liquidity and Capital Resources

　In addition to its cash and cash equivalents, NTT Group has entered into agreements with its banks to provide for overdraft accounts and committed financing lines to ensure that it maintains the liquidity necessary for its business activities. As of the end of the fiscal year ended March 31, 2023, NTT Group had a cash and cash equivalents balance of ¥793.9 billion, a decrease of ¥40.6 billion compared to the balance of ¥834.6 billion as of the end of the fiscal year ended March 31, 2022. Cash and cash equivalents represent a temporary cash surplus used to repay debts and make capital investments, among other factors, and are used as working capital. Accordingly, the balance of cash equivalents fluctuates each fiscal year depending on particular financing and working capital requirements.
　In addition, as of the end of the fiscal year ended March 31, 2023, NTT Group had undrawn committed lines of credit of ¥318.2 billion.

Stock Information (As of March 31, 2023)

・ Corporate Information

Company name NIPPON TELEGRAPH AND TELEPHONE CORPORATION
Date of establishment April 1, 1985
Head office Otemachi First Square, East Tower, 5-1, Otemachi 1-Chome, Chiyoda-ku, Tokyo 100-8116, Japan

Common stock ¥937,950,000,000
Total number of shares authorized to be issued by NTT 6,192,920,900 shares (Total number of issuable shares after the stock split effective as of July 1, 2023: 154,823,022,500 shares)
Total number of shares issued 3,622,012,656 shares (Total number of issued shares after the stock split effective as of July 1, 2023: 90,550,316,400 shares)
Aggregate voting rights 34,058,629
Number of shareholders (including holders of only fractional shares) 918,858

・ Stock Exchange on Which the Company Is Listed

Tokyo (Stock Code: 9432)

・ Investor Relations

NIPPON TELEGRAPH AND TELEPHONE CORPORATION, Finance and Accounting Department, IR Office
https://group.ntt/en/ir/contact/index.html

・ Shareholder Registry Administrator/Special Account Administrator

Sumitomo Mitsui Trust Bank, Limited 1-4-1 Marunouchi, Chiyoda-ku, Tokyo
Inquiries Stock Transfer Agency 2-8-4 Izumi, Suginami-ku, Tokyo 168-0063
Toll free number: 0120-584-400 (For NTT shareholders)
0120-782-031 (Main number)

・ Depositary for NTT American Depositary Receipts (ADRs)

JPMorgan Chase Bank, N.A.
383 Madison Avenue, Floor 11
New York, NY10179, U.S.A.
Inquiries
JPMorgan Service Center
P.O. Box 64504
St. Paul, MN 55164-0504, U.S.A.
TEL： 1-800-990-1135 (General) 1-651-453-2128 (From outside the U.S.A.)

・ Principal Shareholders

(Notes) 1. Number of Shares Held is rounded down to the nearest thousand.
2. NTT's holdings of treasury stock (211,524,308 shares) are not included in the above table.
3. Equity ownership percentages do not include treasury stock. Furthermore, treasury stock does not include 1,033,466 shares of the Company held by the officer compensation BIP trust.

・ Breakdown of Shares by Shareholder

The number of shares is rounded down to the nearest thousand. The figures in parentheses represent the percentage of total shares owned for each category of shareholder.

(Notes) 1. The composition ratio is calculated based on the ratio to the total number of issued shares, excluding treasury shares. Note that shares held by the Board Incentive Plan (BIP) trust for executive compensation are not included.
2. The "Other Corporations" noted above include 57,000 shares registered under the name of the Japan Securities Depository Center, Inc.

・ Restrictions under the NTT Act

　The NTT Act requires the government to own at least one-third of the total number of issued shares.* Pursuant to the NTT Act, the proportion of voting rights of foreign nationals and foreign corporations is limited to less than one-third of the total voting rights.
　If the proportion of voting rights of foreign nationals and foreign corporations should exceed one-third, pursuant to the NTT Act, NTT is prohibited from registering ownership of shareholders in excess of such limit.
　As of the end of March 2023, 7,405,421 of the voting rights were owned by foreign nationals and foreign corporations.

* For the time being, pursuant to Article 13 of the NTT Act, any increase in the number of shares attributable to the issuance of new shares is not included in calculating the total number of issued shares for the purposes of the NTT Act.

・ NTT's Share Price on the Tokyo Stock Exchange

(Notes) 1. NTT's share price and TOPIX index are the simple average closing prices on the last trading day every month.
2. NTT's trading volume refers to the number of NTT shares traded every month.
3. NTT conducted a 2-for-1 stock split of its common stock with an effective date of July 1, 2015, a 2-for-1 stock split of its common stock with an effective date of January 1, 2020, and a 25-for-1 stock split of its common stock with an effective date of July 1, 2023. NTT share prices have been adjusted to reflect the impact of these stock splits.

External Evaluations (As of September 30, 2023)

Dow Jones Sustainability Index (DJSI)

FTSE4Good Index Series

FTSE Blossom Japan Index

MSCI Japan Empowering Women Index

Best IR Award

Awards for Excellence in Corporate Disclosure

Eruboshi (Rank 3)

Platinum Kurumin

PRIDE Index Gold status

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