<PAGE>
THE TOTAL NUMBER OF PAGES CONTAINED IN THIS DOCUMENT IS 67
FORM 6-K
--------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of the
Securities Exchange Act of 1934
For the month of June 2000
NIPPON TELEGRAPH AND TELEPHONE CORPORATION
(Translation of registrant's name into English)
3-1, OTEMACHI 2-CHOME
CHIYODA-KU, TOKYO 100-8116 JAPAN
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.
Form 20-F X Form 40-F
--- ---
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No X
--- ---
If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82-____________.
<PAGE>
2
NOTICE OF CONVOCATION OF THE ORDINARY GENERAL MEETING OF SHAREHOLDERS TO BE HELD
ON JUNE 29, 2000
On June 13, 2000, the registrant issued a Notice of Convocation of the
Ordinary General Meeting of Shareholders to be held on June 29, 2000 to its
shareholders. Attached is an English translation of such notice. The financial
information included in the attached notice was prepared on the basis of
accounting principles generally accepted in Japan and, accordingly, will not be
directly comparable to the financial information to be included in the
registrant's Annual Report on Form 20-F for the fiscal year ended March 31,
2000, which information will be prepared on the basis of accounting principles
generally accepted in the United States.
The attached notice contains certain forward-looking statements. The
registrant desires to qualify for the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995, and consequently is hereby filing
cautionary statements identifying important factors that could cause the
registrant's actual results to differ materially from those set forth in the
attachment.
Certain projections in the attached notice are based on a series of
projections and estimates regarding the economy and the telecommunications
industry in Japan in general. The projections and estimates regarding the
telecommunications industry may be affected by the pricing of services, the
effects of competition, and the success of new products, services and new
business.
No assurance can be given that the registrant's actual results will not
vary significantly from the included projections.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
NIPPON TELEGRAPH AND TELEPHONE
CORPORATION
By /s/ KAZUTO TSUBOUCHI
-------------------------
Name: Kazuto Tsubouchi
Title: Senior Manager
Investor Relations Group
Department IV
Date: June 13, 2000
<PAGE>
NOTICE OF CONVOCATION OF
THE 15TH ORDINARY GENERAL MEETING OF SHAREHOLDERS
TO BE HELD AT
THE NEW TAKANAWA PRINCE HOTEL, TOKYO, JAPAN
ON JUNE 29, 2000, AT 10:00 A.M.
(This is a translation of the original notice
in Japanese mailed on June 13, 2000,
to shareholders in Japan.)
NIPPON TELEGRAPH AND TELEPHONE CORPORATION (NTT)
TOKYO, JAPAN
1
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June 13, 2000
To the Shareholders
NIPPON TELEGRAPH AND TELEPHONE CORPORATION
3-1, Otemachi 2-chome, Chiyoda-ku, Tokyo 100-8116, Japan
Jun-ichiro Miyazu
President and Representative Director
NOTICE OF CONVOCATION OF
THE 15TH ORDINARY GENERAL MEETING
OF SHAREHOLDERS
You are hereby notified that the 15th Ordinary General Meeting of Shareholders
will be held as stated below. Your attendance is respectfully requested.
In the event of your inability to attend, it is possible to exercise your
voting rights with the voting right exercise form. You are requested to study
the attached reference documents, indicate your approval or disapproval on the
enclosed voting right exercise form, and return it to the Company after affixing
your seal.
Particulars
1. Date and Time: 10:00 a.m. on Thursday, June 29, 2000
2. Place: International Convention Center PAMIR
New Takanawa Prince Hotel
13-1, Takanawa 3-chome, Minato-Ku, Tokyo
3. Purpose of the Meeting:
Matters to be reported
Report on the business report, balance sheet, and statement of income
for the 15th fiscal year (from April 1, 1999 to March 31, 2000)
Matters to be resolved
First Item Approval of proposed appropriation of
unappropriated retained earnings
for the 15th fiscal year ended March 31, 2000.
Second Item Partial Modifications of Articles of Incorporation
Details of the proposed modification are given in the
appended reference
documents concerning the exercise of voting rights.
2
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Third Item Election of eleven Directors
Fourth Item Election of four Corporate Auditors
Fifth Item Presentation of retirement allowances to retired and
retiring Directors and Corporate Auditors
END
--------------------------------------------------------------------------------
When attending the meeting in person, you are kindly requested to submit the
enclosed voting right exercise form to the receptionist at the place of the
meeting.
(Attachment)
BUSINESS REPORT
(from April 1, 1999 to March 31, 2000)
I. OUTLINE OF BUSINESS
1. BUSINESS PROGRESS AND RESULTS
(1) Overall Conditions
During the fiscal year under review, with private-sector demand recovering only
weakly, business conditions remained harsh. Despite this, there were some signs
of gentle recovery towards the fiscal year-end, as evidenced by a leveling off
in capital investment.
In telecommunications markets, the pace of structural change stepped up a
gear. Amid increasing globalization and a trend towards the provision of
seamless, one-stop services,
3
<PAGE>
existing carriers undertook substantial M&A activity, including a number of
defensive moves. Spurred on by a sharp increase in demand for data
communications fueled by an explosive rise in the number of Internet users and
the spread of mobile computing, communications firms made concerted moves
towards the provision of high-capacity, high-speed services. At the same time,
they tackled the urgent task of responding to demand for diverse, low-priced
services.
Under these business conditions, Nippon Telegraph and Telephone Corporation
(NTT) obtained approval at the 14th Ordinary General Meeting of Shareholders,
held on June 29, 1999, for the transfers of business pursuant to the Company's
reorganization, based on the proposed law to amend a part of the Nippon
Telegraph and Telephone Corporation Law. On July 1, 1999, NTT continued to exist
as a holding company, while NTT's operations were transferred to three
companies--two regional companies (Nippon Telegraph and Telephone East
Corporation and Nippon Telegraph and Telephone West Corporation), and one long-
distance company (NTT Communications Corporation). All the shares in each of
these companies were transferred to the ownership of the holding company.
To respond to the rapid growth in Internet demand and other challenges, NTT
(in the period prior to the reorganization covering April-June 1999) and the
three aforementioned companies to which its business was transferred (in the
period following the reorganization since July 1999) broadened the range of
pricing plans and services available, thereby striving to make services as
convenient as possible for customers.
Since the reorganization, NTT has been involved in promoting fundamental
research activities and in disseminating their results. At the same time, as a
holding company with responsibility for formulating overall strategy for the NTT
Group, it has adopted a unifying and coordinating role, working to maintain and
strengthen the Company's competitiveness so that the value of the NTT Group can
be maximized.
In practical terms, the holding company exercised its rights as a shareholder
and provided each of the companies within the NTT Group with suitable advice and
mediation services where appropriate so that Group member firms--while basically
developing their respective businesses independently and autonomously--undertook
activities that were in line with the general direction in which the Group was
moving. NTT also furnished them with the results of fundamental R&D activities,
and gave them support as necessary in relation to the expansion of their
businesses.
As a result, NTT's operating revenues for the fiscal year amounted to
(Yen)1,696.7 billion, a decrease of 72.4.% from the previous year. Recurring
profit declined 50.5% to (Yen)117.5 billion, while net income for the fiscal
year fell 74.9% to (Yen)97 billion.
Note: the large decreases in operating revenues and other business performance
indicators were the result of the transfer of businesses in July 1999 to Nippon
Telegraph and Telephone East Corporation, Nippon Telegraph and Telephone West
Corporation and NTT Communications Corporation.
Furthermore, with regard to the acquisition and retirement of Company stock
through
4
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retained profits--subject to the limits of the number of shares being acquired
not exceeding 120,000 shares of common stock and the total cost of acquisition
not exceeding (Yen)120 billion--for which approval was obtained at the 14th
Ordinary General Meeting of Shareholders, held on June 29, 1999, during the
fiscal year, the Company acquired and retired a total of 77,410 shares of common
stock, with the total acquisition cost amounting to (Yen)119,999.21 million.
(2) Group Operational Review
[1] Share ownership and exercise of voting rights
NTT exercises its rights as a shareholder using the criterion of whether or not
Group member companies are developing their businesses appropriately and
independently in line with the general direction in which the Group is moving.
In concrete terms, the exercising of shareholder rights manifested itself in
NTT voting for the approval of a number of resolutions at the ordinary general
meeting of NTT Group companies that took place in fiscal year 1999. At that
meeting, it was resolved that the business development directions being taken by
NTT Group member firms during the fiscal year ended March 1999 (fiscal 1998) had
been appropriately in line with that of the Group as a whole. The meeting also
resolved that the Group's financial results and condition, retained profits and
business management for fiscal 1998 had been similarly fitting. Following this
decision, NTT voted to approve the proposed appropriation of unappropriated
retained earnings, based on proposals by each of the companies, as well as the
election of directors and other matters. As a result of this appropriation, NTT
received (Yen)13.8 billion in dividends.
Notes
(1) The business development activities of the principal NTT Group member
companies during fiscal 1998 were as follows. Aiming to secure orders for large-
scale system renewals, NTT Data Corporation was actively seeking to develop
orders; alongside this, it was pouring its efforts into the introduction of
advanced computing and communications technology and the marketing of package
software.
Having taken over Personal Handyphone System (PHS) business to become
a company offering comprehensive mobile telecommunications services, NTT
Mobile Communications Network, Inc. (which changed its name to NTT DoCoMo,
Inc. on April 1, 2000) was engaged in a number of business activities
including the provision of a wide range of services, the introduction of
various pricing plans, and the development and provision of new services
targeting the mobile multimedia sector while developing international
services to respond to the fast-changing business environmnent.
(2) The major business developments pertaining to each of the main NTT Group
companies during the fiscal year under review are described on pages 5-7 of this
report.
In connection with the reorganization of the company, NTT also voted to approve
resolutions
5
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regarding, among other things, the election of directors, at the inaugural
meetings of Nippon Telegraph and Telephone East Corporation and Nippon Telegraph
and Telephone West Corporation convened on June 30, 1999, and at the meeting of
shareholders of NTT Communications Corporation that was held on June 29, 1999.
Furthermore, at the extraordinary general meeting of shareholders of NTT
Communications Corporation held in July 1999, NTT also voted in favor of a
resolution to merge NTT Communications Corporation with its wholly-owned
subsidiary, NTT Worldwide Network Corporation.
[2] Provision of advice and mediation services to NTT Group companies
During the fiscal year, to manage the NTT Group effectively and to boost intra-
Group operational synergies, NTT provided Group member companies with advice,
mediation and other services. In practical terms, NTT supported the upgrading of
networks and the expansion of Group member company service functions. NTT also
helped unify and organize the Group's response to the Year 2000 (Y2K) problem,
and ensure that it was prepared for natural disasters and other emergency
situations. In addition, NTT's advice and mediation services were targeted at
training and developing core personnel and boosting business efficiency.
Essentially, NTT was engaged in supporting Group member companies with new
business development. Besides these activities, NTT was also involved with
advising Nippon Telegraph and Telephone East Corporation and Nippon Telegraph
and Telephone West Corporation on the maintenance of universal
telecommunications services provision. NTT's total remuneration for these
advice, mediation and other services amounted to (Yen)20.5 billion. While
receiving the benefit of such advice, mediation and other services, the business
development activities of the main NTT Group member companies during the fiscal
year were as follows.
Nippon Telegraph and Telephone East Corporation and Nippon Telegraph and
Telephone West Corporation
Nippon Telegraph and Telephone East Corporation and Nippon Telegraph and
Telephone West Corporation both provide intra-prefectural telecommunications
services. Owing to the development of increasing GC connections and the entry of
rival firms offering high-speed Internet access services, intra-prefectural
telecommunications services markets became increasingly competitive during the
fiscal year.
Facing such business conditions, regional companies strove to provide high-
quality, consistent universal telecommunications services. At the same time, in
order to make their business bases stronger and more stable, they offered
customers a wider variety of discount pricing plans to boost competitiveness,
and worked to develop improved customer services. Alongside these efforts, they
actively strove to raise operational efficiency.
A number of services designed to boost competitiveness were introduced or
developed during the fiscal year. Regional companies began offering "i-ai Plan,"
a monthly communications discount plan for the INS-Net 64 and INS-Net 64 Lite
services, and also began offering IP (Internet Protocol) connections to link
customers to the Internet using INS-Net
6
<PAGE>
(ISDN) lines as part of a fixed-rate service. In another initiative, amongst
other service developments, regional companies offered fixed-amount discounts
from the total bills of those customers agreeing to be supplied with a number of
supplementary services.
To improve customer services, from July 31, 1999, both companies extended the
operation of the "dial 116" general orders and service inquiries line to
weekends and public holidays. This move was in response to the demands of
customers, many of whose lifestyles and living patterns have changed greatly in
recent years.
With regard to raising operational efficiency, to cope with a greater demand
for lower telecommunications service charges, and to build a stronger business
base capable of responding to a radically changing environment, in November 1999
regional companies announced packages of "Mid-Term Restructuring Plans," among
which were moves to reduce personnel and capital investment levels. They spent
the rest of the year making preparations to begin implementing these various
measures from April 2000 onwards.
As a result, Nippon Telegraph and Telephone East Corporation posted operating
revenues for the fiscal year of (Yen)2,154.7 billion, while the equivalent
figure for Nippon Telegraph and Telephone West Corporation was (Yen)2,071.6
billion.
Other Group member companies
(a)NTT Communications Corporation
NTT Communications Corporation provides inter-prefectural and international
telecommunications services. While hitherto competition in these markets has
already been intense, it has become even fiercer with deregulation, technical
innovation, and moves by more and more companies to globalize their
operations. During the fiscal year, competition intensified significantly due
to a number of large-scale mergers and alliances involving both Japanese and
foreign communications firms.
Faced with such business conditions, NTT Communications Corporation
focused on developing its business through the provision of a wider range of
services, and by concentrating on making itself more competitive in global
market terms.
One of its moves in domestic telecommunications business was to begin
offering unified discount pricing plans covering both domestic long-distance
and international calls. It also developed nationwide access points for an
OCN service so that customers could access the service via a local call. This
and other moves were designed to strengthen its competitiveness by raising
the convenience of its services to customers.
On the international front, in October 1999 it began offering
international telephone services using the "0033" access code. By utilizing
the NTT internal network, it worked to expand the number of service regions
and countries abroad--as of the end of March 2000, their total number had
risen to 231. It also continued to increase the range of countries and
regions available for corporate global telecommunications services under the
"Arcstar" brand, which NTT first launched in September 1997--as of the end of
March 2000, this number had risen to 47 regions.
In addition, through strategic alliances with overseas carriers such as
Philippine's PLDT
7
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and Australia's Davnet Group, the company actively developed IP services
abroad. As a result, NTT Communications Corporation posted operating
revenues for the year of (Yen)1,075.3 billion.
(b) Other
NTT Data Corporation is principally engaged in the businesses of systems
integration and network system services.
During the fiscal year, in the field of large-scale systems, it continued
to offer a number of reliable services, and worked to expand system
functions, while also developing its peripherals business. At the same time,
it strove to meet customer demand for reduced costs and boosted versatility
to assure a stronger management foundation.
Separately, it built up ISP (Internet Service Provider) operations, while
also taking the initiative to expand ASP (Applications Service Provider)
operations.
As a result, NTT Data Corporation's operating revenues for the fiscal
year were (Yen)716.4 billion, an increase of 1.6% compared with the previous
year.
NTT Mobile Communications Network Inc. is principally engaged in the
business of providing cellular telecommunications services, PHS telephone
services, and pager services. During the fiscal year, amid intensifying
competition in mobile telecommunications markets, it introduced a variety of
new cellular handsets boasting higher call quality, and deepened its
involvement with mobile multimedia services as its "i-Mode" Internet-capable
mobile telephones quickly gained popularity. In addition, to accelerate the
launch of mobile telecommunications using next-generation systems
(compatible with IMT-2000 standards), it made further progress with R&D
efforts. Aiming to commercialize the W-CDMA system, these included various
field trials. It also worked assiduously to take its operations global by
making capital investments in overseas telecommunications carriers and
various content providers. As a result, NTT Mobile Communications Network
Inc. reported operating revenues for the fiscal year of (Yen)3,927.4
billion, an increase of 20.5% compared with the previous year.
(3) Fundamental research and development activities
As evidenced by the rapid spread of cellular telephones and personal computers
(PCs) and the explosive growth in demand for the Internet and other computer-
based communications, the information sharing market continues to expand
quickly. Network-mediated cyberbusinesses are just one example of the many
remarkable, nascent changes being witnessed in the structure of information
sharing across a variety of fields. Against this backdrop, NTT has energetically
engaged in fundamental research and development programs that are the foundation
for information sharing. R&D expenses for the fiscal year under review totaled
(Yen)216.8 billion. Following the reorganization, NTT received (Yen)176.6
billion in remuneration for its fundamental research and development activities
as a holding company.
. R&D activities targeted at the creation of a secure, safe, convenient and
pleasant information-sharing society
8
<PAGE>
With the aim of developing the high-quality, high-speed, broadband network
Services--notably IP-VPN services and fixed-rate IP connection services
that use ISDN lines--that promise to become the foundation of the
information-sharing society in the future, NTT is conducting R&D into
access network technologies that make use of a variety of media. Such
technologies include backbone network technologies such as IP and ATM, as
well as optical fiber and wireless. Moreover, as a part of work towards the
creation of information-sharing structures, NTT is developing optical
access technologies capable of dedicated connection speeds of up to 10
Mb/s. Alongside these efforts, NTT has also carried out field trials on a
global network of IPv6, a next-generation Internet technology designed for
large-scale networks.
NTT's R&D programs have also targeted technologies associated with a number
of information-sharing platforms--for example, methods to make e-commerce
safe and reliable, such as authentication, settlement, IC cards, or
copyright protection and other technologies designed to facilitate contents
distribution.
NTT is also conducting R&D into ways of enriching the quality of
information sharing. Such programs include "DUG-1," an intelligent spoken
dialogue system that can adapt to human interruption, and a "MultiMedia
World Processor" that can support 3-D computer graphics animation.
. Fundamental R&D activities into technologies supporting future information
sharing
As part of research into ways of lowering the cost of constructing future
ultra-high-speed, high-capacity networks, NTT has developed processing
technology that has taken great strides in creating the manufacturing
expertise required to produce high-performance devices on a nanometer (a
billionth of a meter) scale--which has not been possible before now. NTT
was also the first firm in the world to develop a single-chip opto-LSI
circuit, which is capable of the simultaneous detection of 16 optical
signals of different wavelengths, transmitted along a single optical fiber.
In other work, NTT has successfully tested prototype electronic circuits
that have extremely low electric power consumption--about 100,000 times
less than that of conventional devices. Elsewhere, NTT is working on R&D
that contributes to the global environment--for example, it has developed a
method for recycling used fiber-optic cables as a raw material for cement.
Results like these typically have applications in a variety of fields.
9
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(4) External Financing & Capital Investment
[1] External financing
To lend to Nippon Telegraph and Telephone East Corporation, Nippon Telegraph
and Telephone West Corporation and NTT Communications Corporation for their
capital investment and other purposes, NTT issued bonds and notes, and borrowed
long-term debts from banks as detailed below.
<TABLE>
<CAPTION>
Long-Term Debts
-------------------------------------------------------------------------------------------
Amount Details
-------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Bonds and notes (Yen)295.3 billion NTT bonds: (Yen)200 billion
Euro Euro notes: EUR750 million
((Yen)95.3 billion)
-------------------------------------------------------------------------------------------
Long-term borrowings
from banks (Yen)279.0 billion
-------------------------------------------------------------------------------------------
Total (Yen)574.3 billion
-------------------------------------------------------------------------------------------
</TABLE>
[2] Capital investment
Total capital investment by NTT during the fiscal year amounted to (Yen)344.6
billion. Of this total, (Yen)301.6 billion was related to capital investments
made prior to the reorganization (April--June 1999). All facilities, whether
completed or uncompleted, that were part of these latter investments were duly
transferred subsequently to Nippon Telegraph and Telephone East Corporation,
Nippon Telegraph and Telephone West Corporation and NTT Communications
Corporation--excepting those associated with NTT's ongoing post-reorganization
operations, such as any research facilities.
Capital investment expenditure by NTT after the reorganization was mainly on
necessary items connected with its fundamental R&D activities.
10
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2. ISSUES FACING THE COMPANY
While there remain many causes for concern, such as depressed consumer spending
and an unstable employment situation, the appearance of signs of a revival in
corporate earnings and the effects of various government measures mean that the
Japanese economy is expected to enter a sustained, if gentle, recovery over the
coming year.
In the telecommunications field, fueled by the reinforcing cycle of the
ongoing explosive spread of the Internet, the rapid increase in access driven by
proliferating Internet connection channels, and the increasing prevalence of
video and other types of content, the market is forecast to grow quickly.
Precisely because of this, price-based and service-based competition will become
even fiercer. At the same time, the Internet is causing the development of a
wide variety of new ways of doing business, such as e-commerce. The sheer
potential of this market is spurring competition, and NTT believes that this
will serve to heighten the pace of realignment within the industry.
Responding to this fast-changing operating environment, NTT has recently
announced, in April 2000, the "NTT Group Three-Year Business Plan" (FY 2000 --
FY2002). Aiming to reform NTT as a "Global Information-Sharing Corporate Group,"
this plan sets out the direction that the entire NTT Group needs to take to
achieve its goals. Based on this plan, the NTT Group member firms, working
independently and autonomously, will take a wide range of measures towards the
realization of a dynamic information-sharing society in which text, voice and
image information is distributed on a global basis.
To this end, NTT provides Group member companies, notably Nippon Telegraph
and Telephone East Corporation, Nippon Telegraph and Telephone West
Corporation, with advice and mediation services as required, and also strives to
promote fundamental R&D activities into the telecommunications technology that
is the foundation of information sharing.
In practical terms, NTT will assist with the planning and organization of
advanced telecommunication networks to enable the provision of reliable
telecommunications services. In addition, it will strive to unify and organize
the NTT Group's response to any natural disasters or other emergency situations,
advise on how to source capital effectively, and conduct effective financing.
Moreover, while taking on an internal Group coordination role to ensure the
smooth implementation of the "Mid-term Restructuring Plan" announced by regional
companies in November 1999, the holding company will, on behalf of Group member
companies, conduct research for the purposes of new business development, while
also lending management support to help these firms expand their respective
businesses.
Fundamental R&D activities have three major themes: an affluent future
society in which electronic information, products and money could be
distributed; network services that are both faster and less costly; and next-
generation infrastructure that realizes the twin goals of ultra-high data
transmission speeds and mega-bandwidth. The Company will also continue to work
proactively to disseminate the results of R&D activities, ensuring that these
efforts
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contribute to moves towards industry standardization and the standardization of
R&D results. In addition, by cooperating in its R&D activities with other
research institutions, NTT hopes to foster positive technical interchange both
in Japan and abroad.
Through such activities, NTT aims to achieve more efficient Group company
management while developing new business in the field of information sharing,
continuing to build and expand NTT Group operations through a focus on the
development of a global information-sharing business.
We look forward to the continued support of its shareholders.
3. BUSINESS RESULTS AND FINANCIAL POSITION
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
12th fiscal year, 13th fiscal year, 14th fiscal year, 15th fiscal year,
ended ended ended ended
March 31, 1997 March 31, 1998 March 31, 1999 March 31, 2000
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operating revenues 6,371.2 6,322.3 6,137.0 1,696.7
(billions of yen)
-------------------------------------------------------------------------------------------------------------------
Recurring profit 365.9 356.6 237.3 117.5
(billions of yen)
-------------------------------------------------------------------------------------------------------------------
Net income 179.4 176.6 386.2 97.0
(billions of yen)
-------------------------------------------------------------------------------------------------------------------
Net income per share (yen) 11,280.74 11,100.84 24,271.69 6,115.18
-------------------------------------------------------------------------------------------------------------------
Assets (billions of yen) 11,177.3 10,838.6 11,467.3 8,068.9
-------------------------------------------------------------------------------------------------------------------
Shareholders' equity 4,504.2 4,601.1 4,907.5 4,815.6
(billions of yen)
-------------------------------------------------------------------------------------------------------------------
Shareholders' equity per 283,072.08 289,161.25 308,420.57 304,123.66
share
(yen)
-------------------------------------------------------------------------------------------------------------------
</TABLE>
12
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Note: Calculation of net income per share is based on that for the average
number of shares this fiscal year.
. In the 12th fiscal year, in response to surging demand for computer-based
communications media, the Company launched such services as "OCN (Open
Computer Network)," and strove to reinforce its earning power by promoting
business activities for corporate customers and by introducing "Voice Warp"
services. As a result, operating revenues amounted to (Yen)6,371.2 billion,
recurring profit reached (Yen)365.9 billion, and net income was (Yen)179.4
billion.
. In the 13th fiscal year, NTT reduced long-distance call rates and boosted
its competitiveness through the launch of new services such as "Area Plus,"
and "Time Plus". NTT also developed and provided services that meet
customer demands such as "Number Display." As a result, operating revenues
amounted to (Yen)6,322.3 billion, recurring profit reached (Yen)356.6
billion, and net income of (Yen)176.6 billion.
. In the 14th fiscal year, to meet diversifying demands for advanced computer
networking services, NTT broadened the menu of OCN service options, and
strove to boost its competitiveness by extending the "Time Plus" service
nationwide. As a result, operating revenues amounted to (Yen)6,137.0
billion; recurring profit totaled (Yen)237.3 billion, while net income rose
to (Yen)386.2 billion.
. For a review of the Company's performance during the 15th fiscal year,
please see "1. Business Conditions and Results."
13
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II. COMPANY OUTLINE (as of March 31, 2000)
1. MAJOR BUSINESSES
The Company's major business as a holding company for the NTT Group, which
contains firms such as Nippon Telegraph and Telephone East Corporation, Nippon
Telegraph and Telephone West Corporation, and NTT Communications Corporation, is
to exercise its rights as sole shareholder and owner. In addition, the Company
provides support to the Group in the form of advice and mediation services,
conducts research relating to the telecommunications technologies that will form
the foundation for telecommunications, and develops new businesses.
2. HEAD OFFICE AND RESEARCH FACILITIES
Head office: 3-1, Otemachi 2-chome, Chiyoda-ku, Tokyo
R&D facilities: Laboratory Groups
Cyber Communications Laboratory Group (Kanagawa)
Information Sharing Laboratory Group (Tokyo)
Science and Core Technology Laboratory Group (Kanagawa)
Laboratories: 12
3. EMPLOYEES
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
Number of employees
(change from end of previous fiscal year) Average age Average working years
--------------------------------------------------------------------------------------------
<S> <C> <C>
3,475(-134,675) 36.3 12.4
--------------------------------------------------------------------------------------------
</TABLE>
Note: The year-on-year reduction in the number of employees of 134,675 was
primarily a result of the transfer of business on July 1, 1999 to NTT
subsidiaries Nippon Telegraph and Telephone East Corporation, Nippon
Telegraph and Telephone West Corporation and NTT Communications
Corporation. A total of 59,837 employees were transferred to
14
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Nippon Telegraph and Telephone East Corporation, 67,586 employees to
Nippon Telegraph and Telephone West Corporation, and 6,610 employees to
NTT Communications Corporation.
4. SHARES AND SHAREHOLDERS
(1) Total number of shares authorized
to be issued by the Company: 62,322,590 shares
(2) Total number of shares issued: 15,834,590 shares
Note: During the fiscal year under review, as the result of the acquisition
and retirement of Company stock with retained profits, the total number of
both authorized and issued shares fell by 77,410 compared with the previous
fiscal year-end.
(3) Number of shareholders (including holders of odd-lot shares): 1,636,818
(4) Principal shareholders:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
Investment by NTT
in principal shareholder
-----------------------------------------------------
Ratio of the Ratio of the
number of shares number of shares held
held to the to the
Number total number of Number total number of shares
Name of shares held shares issued (%) of shares held issued (%)
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
The Minister of 8,416,855.26 53.15 0 0
Finance
-----------------------------------------------------------------------------------------------------------------------
State Street Bank 249,755.00 1.58 0 0
and Trust Company
-----------------------------------------------------------------------------------------------------------------------
The Sumitomo 224,640.00 1.42 1,800,912 0.12
Trust &
Banking Co., Ltd.
-----------------------------------------------------------------------------------------------------------------------
The Chase 179,698.00 1.13 0 0
Manhattan
Bank, N.A. London
-----------------------------------------------------------------------------------------------------------------------
The Mitsubishi 152,902.00 0.97 1,800,275 0.14
Trust and
Banking
Corporation
-----------------------------------------------------------------------------------------------------------------------
</TABLE>
15
<PAGE>
<TABLE>
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
The Chase 142,074.00 0.90 0 0
Manhattan Bank,
N.A. London Secs
Lending Omnibus
Account
-----------------------------------------------------------------------------------------------------------------------
NTT Employee 133,386.22 0.84 0 0
Share- Holding
Association
-----------------------------------------------------------------------------------------------------------------------
Moxley and Company 108,929.00 0.69 0 0
-----------------------------------------------------------------------------------------------------------------------
Nippon Life 108,369.68 0.68 0 0
Insurance Company
-----------------------------------------------------------------------------------------------------------------------
Boston Safe 103,649.00 0.65 0 0
Deposit BSDT
Treaty Client
Omnibus
-----------------------------------------------------------------------------------------------------------------------
</TABLE>
Note: The ratios of the number of shares held to the total number of shares
issued with respect to The Sumitomo Trust & Banking Co., Ltd., and The
Mitsubishi Trust and Banking Corporation are calculated excluding non-
voting preferred shares.
(5) Acquisition, retirement and ownership of treasury stock
Based on the resolution's approval at the 14th Ordinary General Meeting of
Shareholders, held on June 29, 1999, during the fiscal year, the Company
used retained profits to acquire a total of 77,410 shares of common stock--
with the total acquisition cost amounting to (Yen)119,999.21 million--and
also completed the procedures to retire all of these shares.
5. PRINCIPAL SUBSIDIARIES
(1) Principal Consolidated Subsidiaries
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
Capitalization Percentage owned by
(millions of yen) the Company (%)
Company Main line(s) of business
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Nippon Telegraph (Yen)335,000 100.0% Intra-prefectural
and Telephone East telecommunications services
Corporation in eastern Japan
----------------------------------------------------------------------------------------------------
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
Corporation
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Nippon Telegraph 312,000 100.0 Intra-prefectural
and Telephone West telecommunications services
Corporation in western Japan
----------------------------------------------------------------------------------------------------
NTT Communications 72,000 100.0 Inter-prefectural and
Corporation international
telecommunications services,
multimedia network services
----------------------------------------------------------------------------------------------------
NTT Mobile 474,499 67.1 Cellular telecommunications
Communications services, PHS services,
Network Inc. pocket pager services
----------------------------------------------------------------------------------------------------
NTT Data Corporation 142,520 54.2 Systems integration, network
systems services
----------------------------------------------------------------------------------------------------
</TABLE>
Note: NTT Mobile Communications Network, Inc. changed its company name to NTT
DoCoMo, Inc. on April 1, 2000.
(2) Principal Non-Consolidated Subsidiaries
<TABLE>
<CAPTION>
Capitalization Percentage
(millions of yen) owned by Main line(s) of
Company Company (%) business
-------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NTT America, Inc. US$426.98 0 (100.0) Provision of Arcstar
million services in the U.S.
-------------------------------------------------------------------------------------------
NTT Urban 26,292 100.0 Real estate
Development Co.
-------------------------------------------------------------------------------------------
NTT Kansai Mobile 24,458 0 (88.2) Cellular
Communications telecommunications
Network, Inc. services, PHS
services, pocket
pager services in
-------------------------------------------------------------------------------------------
</TABLE>
17
<PAGE>
<TABLE>
-------------------------------------------------------------------------------------------
<S> <C> <C> <C>
the Kansai region
-------------------------------------------------------------------------------------------
NTT Tokai Mobile 20,340 0 (91.1) Cellular
Communications telecommunications
Network, Inc. services, PHS
services, pocket
pager services in
the Tokai region
-------------------------------------------------------------------------------------------
NTT 20,000 100.0 Development,
Communication-ware operation and
Corporation maintenance of
telecommunications
systems and software
-------------------------------------------------------------------------------------------
NTT-ME Corporation 16,460 0 (100.0) Management of
telecommunications
facilities and the
sale and maintenance
of
telecommunications
equipment
-------------------------------------------------------------------------------------------
NTT Kyushu Mobile 15,834 0 (93.6) Cellular
Communications telecommunications
Network, Inc. services, PHS
services, pocket
pager services in
Kyushu
-------------------------------------------------------------------------------------------
NTT Hokkaido Mobile 15,630 0 (96.3) Cellular
Communications telecommunications
Network, Inc. services, PHS
services, pocket
pager services in
Hokkaido
-------------------------------------------------------------------------------------------
NTT Tohoku Mobile 14,981 0 (92.8) Cellular
Communications telecommunications
Network, Inc. services, PHS
services, pocket
pager services in
the Tohoku region
-------------------------------------------------------------------------------------------
NTT Chugoku 14,732 0 (83.9) Cellular
-------------------------------------------------------------------------------------------
</TABLE>
18
<PAGE>
<TABLE>
-------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Mobile
Communications telecommunications
Network, Inc. services, PHS
services, pocket
pager services in
the Chugoku region
-------------------------------------------------------------------------------------------
NTT Rocky, Inc. US$100.40 0 (100.0) Securities
million investment to ISP in
U.S.
-------------------------------------------------------------------------------------------
NTT AT&T US$100.00 0 (100.0) Securities
Investment, Inc. million investment to
telecommunications
companies in U.S.
-------------------------------------------------------------------------------------------
NTT Worldwide 12,000 0 (100.0) Global
Telecommunications telecommunications
Corporation services as a Type
II international
telecommunications
company
-------------------------------------------------------------------------------------------
NTT Power and 10,000 100.0 Design, management
Building and maintenance of
Facilities Inc. buildings, equipment
and electric power
facilities
-------------------------------------------------------------------------------------------
</TABLE>
Notes: 1. On April 1, 2000, NTT Kansai Mobile Communications Network, Inc., NTT
Tokai Mobile Communications Network, Inc., NTT Kyushu Mobile
Communications Network, Inc., NTT Hokkaido Mobile Communications
Network, Inc., NTT Tohoku Mobile Communications Network, Inc., and NTT
Chugoku Mobile Communications Network, Inc. changed their respective
company names to NTT DoCoMo Kansai, NTT DoCoMo Tokai, NTT DoCoMo
Kyushu, NTT DoCoMo Hokkaido, NTT DoCoMo Tohoku, and NTT DoCoMo
Chugoku.
2. The figures in parentheses represent shareholdings in the company
through subsidiaries.
19
<PAGE>
(3) Business Results of Principal Consolidated Subsidiaries
Net sales Net income
Company (millions of yen) (millions of yen)
================================================================================
Nippon Telegraph and 2,154,710 157,246
Telephone East Corporation
--------------------------------------------------------------------------------
Nippon Telegraph and 2,071,622 239,236
Telephone West Corporation
--------------------------------------------------------------------------------
NTT Communications 1,075,302 72,845
Corporation
--------------------------------------------------------------------------------
NTT Mobile Communications 3,927,413 277,869
Network Inc.
--------------------------------------------------------------------------------
NTT Data Corporation 716,430 17,996
--------------------------------------------------------------------------------
Notes:1. NTT Mobile Communications Network Inc. changed its company name to NTT
DoCoMo, Inc. on April 1, 2000.
2. The figures shown for NTT Mobile Communications Network Inc. are a
total of its performance, plus that of eight regional subsidiaries
(making a total of nine firms).
3. Total net sales for NTT and the five principal consolidated Group
subsidiaries listed above were 10,080.9 billion (after intercompany
eliminations); the six companies posted an aggregate net loss for the
year of 81.6 billion (after intercompany eliminations). The actual
final net loss after taking into cumulative effect for prior year's
tax allocation was 515.8 billion.
6. PRINCIPAL LENDERS
--------------------------------------------------------------------------------
Borrowings Number and percentage
outstanding of shares of the Company owned by
Name of lender (millions of yen) the lenders
--------------------------------------------------------------------------------
Shares %
--------------------------------------------------------------------------------
Development 149,121 0 0
--------------------------------------------------------------------------------
20
<PAGE>
--------------------------------------------------------------------------------
Bank of Japan
--------------------------------------------------------------------------------
Nippon Life 97,000 108,369.68 0.68
Insurance Company
--------------------------------------------------------------------------------
The Dai-ichi Mutual 88,500 51,003.00 0.32
Life Insurance
Company
--------------------------------------------------------------------------------
Sumitomo Life 71,000 37,578.00 0.24
Insurance Company
--------------------------------------------------------------------------------
The Yasuda Mutual 52,000 10,506.22 0.07
Life Insurance
Company
--------------------------------------------------------------------------------
The Meiji Mutual 38,000 14,790.00 0.09
Life Insurance
Company
--------------------------------------------------------------------------------
The Dai-ichi Kangyo 33,500 19,380.00 0.12
Bank, Limited
--------------------------------------------------------------------------------
The Fuji Bank, 32,500 19,380.00 0.12
Limited
--------------------------------------------------------------------------------
The Sanwa Bank, 32,417 14,280.00 0.09
Limited
--------------------------------------------------------------------------------
The Industrial Bank 30,500 19,278.00 0.12
of Japan, Limited
--------------------------------------------------------------------------------
7. DIRECTORS AND CORPORATE AUDITORS
21
<PAGE>
<TABLE>
<CAPTION>
Position Name Area(s) of responsibility
or principal occupation
------------------------------------------------------------------------------------------
<S> <C> <C>
Chairman and Representative Shigeo Sawada
Director
------------------------------------------------------------------------------------------
President and Jun-ichiro Miyazu
Representative Directer
------------------------------------------------------------------------------------------
Senior Executive Vice Norio Wada In charge of business
Presidents strategy
------------------------------------------------------------------------------------------
Yusuke Tachibana In charge of technical
strategy
------------------------------------------------------------------------------------------
Executive Vice Presidents Toshiyuki Mineshima In charge of finance
In charge of internal
auditing
------------------------------------------------------------------------------------------
Senior Vice Presidents Kunihiro Kato Executive Manager of Cyber
Communications Laboratory
Group
------------------------------------------------------------------------------------------
Kanji Koide Director of Department I
------------------------------------------------------------------------------------------
Shigehiko Suzuki Director of Department III
and Executive Manager of
Information Sharing
Laboratory Group
In charge of intellectual
property
------------------------------------------------------------------------------------------
Hiromi Wasai In charge of new business
In charge of information
sharing and network
development
------------------------------------------------------------------------------------------
Toyohiko Takabe Director of Department V
In charge of legal affairs
------------------------------------------------------------------------------------------
Takashi Imai Chairman and Representative
Director of Nippon Steel
Corporation
------------------------------------------------------------------------------------------
Yotaro Kobayashi Chairman and
------------------------------------------------------------------------------------------
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------
Representative
Director of Fuji Xerox Co.,
Ltd.
------------------------------------------------------------------------------------------
<S> <C> <C>
Full-time Corporate Auditors Tadashi Yamamoto
------------------------------------------------------------------------------------------
Keisuke Soda
------------------------------------------------------------------------------------------
Auditors Makoto Yoshida
------------------------------------------------------------------------------------------
Hideaki Toda
------------------------------------------------------------------------------------------
</TABLE>
Notes: 1.Executive Vice President Mr. Toshiyuki Mineshima resigned on March 31,
2000.
2. Of the Corporate Auditors, Mr. Tadashi Yamamoto and Mr. Hideaki Toda
are outside Corporate Auditors assigned in accordance with Item-1 of
Article 18 of the Law of Special Exceptions to the Commercial Code
regarding corporate auditing.
The following is a list of directors who resigned during the fiscal year:
<TABLE>
<CAPTION>
Position Name Date of resignation
==========================================================================================
<S> <C> <C>
Senior Executive Vice Toshiharu Aoki June 29, 1999
President
------------------------------------------------------------------------------------------
Senior Executive Vice Hidekazu Inoue June 30, 1999
President
------------------------------------------------------------------------------------------
Senior Executive Vice Kazuo Asada June 30, 1999
President
------------------------------------------------------------------------------------------
Executive Vice Masanobu Suzuki June 30, 1999
------------------------------------------------------------------------------------------
</TABLE>
23
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------
President
------------------------------------------------------------------------------------------
<S> <C> <C>
Executive Vice President Yuji Matsuo June 30, 1999
------------------------------------------------------------------------------------------
Executive Vice President Tadayuki Arai June 30, 1999
------------------------------------------------------------------------------------------
Executive Vice President Satoshi Miura June 30, 1999
------------------------------------------------------------------------------------------
Executive Vice President Michio Takeuchi June 30, 1999
------------------------------------------------------------------------------------------
Executive Vice President Katsuya Okimi June 30, 1999
------------------------------------------------------------------------------------------
Senior Vice President Michitomo Ueno June 30, 1999
------------------------------------------------------------------------------------------
Senior Vice President Masaaki Kasahara June 30, 1999
------------------------------------------------------------------------------------------
Senior Vice President Yoshiyuki Sukemune June 30, 1999
------------------------------------------------------------------------------------------
Senior Vice President Jun-ichi Yuki June 30, 1999
------------------------------------------------------------------------------------------
Senior Vice President Kiyoshi Fujita June 30, 1999
------------------------------------------------------------------------------------------
Senior Vice President Shunzo Morishita June 30, 1999
------------------------------------------------------------------------------------------
Senior Vice President Mamoru Ishida June 30, 1999
------------------------------------------------------------------------------------------
Senior Vice President Nobuharu Ono June 30, 1999
------------------------------------------------------------------------------------------
Senior Vice President Susumu Fukuzawa June 30, 1999
------------------------------------------------------------------------------------------
Director and Counseller to Ryuzo Sejima June 30, 1999
the President
------------------------------------------------------------------------------------------
Full-time Corporate Auditor Masayuki Kojima June 30, 1999
------------------------------------------------------------------------------------------
Full-time Corporate Auditor Toshio Hayata June 30, 1999
------------------------------------------------------------------------------------------
</TABLE>
III. MAJOR EVENTS AFTER THE END
OF THE FISCAL YEAR
1. At the meeting of the Board of Directors held on March 29, 2000, it was
resolved that, during the period from April through June 2000, the Company would
issue a total amount of not more than (Yen)200 billion in bonds, including NTT
bonds, foreign currency denominated bonds and other bonds.
2. NTT Communications Corporation, a subsidiary of NTT, and Verio Inc., a US
Internet solution provider, entered into a definitive merger agreement on May 8,
2000 through a U.S. subsidiary of NTT Communications in which, provided NTT
Communications acquires a
24
<PAGE>
majority of the shares of Verio at a price of $60 per share of common stock
(TOB), Verio Inc. will be merged into the U.S. subsidiary of NTT Communications.
The transaction value was approximately $5.1 billion.
3. Regarding equity participation in cellular phone service provider KPN Mobile
N.V. (KPN Mobile, a subsidiary of Dutch-based KPN*) under which NTT DoCoMo will
acquire a share of KPN Mobile equivalent to 15% of voting rights (the maximum
acquiring price: Euro 5.1 billion), NTT DoCoMo, Inc., a subsidiary of NTT,
concluded a Memorandum of Understanding on May 9, 2000 with KPN and KPN Mobile
*Koninklijke KPN N.V.
--------------------------------------------------------------------------------
Note: The figures given in this report are rounded down to eliminate any amounts
less than the units shown.
<TABLE>
<CAPTION>
BALANCE SHEET
(at March 31, 2000)
(millions of yen)
-----------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS 8,068,962 LIABILITIES 3,253,288
=========================================================================================
CURRENT ASSETS 765,801 CURRENT LIABILITIES 800,712
-----------------------------------------------------------------------------------------
Cash 15,855 Accounts payable 11,492
-----------------------------------------------------------------------------------------
Accounts receivable 1,738 Short-term corporate 182,011
debenture payable
-------------------------------------------
Inventories 410
-----------------------------------------------------------------------------------------
Advance payments 2,107 Long-term loans 68,492
payable
-----------------------------------------------------------------------------------------
Short-term loans 452,798 Accrued liabilities 59,458
-----------------------------------------------------------------------------------------
Accounts 29,684 Accrued expenses 22,979
receivable, others
-----------------------------------------------------------------------------------------
Income tax 239,428 Consumption Taxes 417,582
receivable payable
-----------------------------------------------------------------------------------------
Other current assets 23,777 Deferred taxes 26,000
payable
===========================================----------------------------------------------
</TABLE>
25
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
===========================================----------------------------------------------
<S> <C> <C> <C>
FIXED ASSETS 7,303,161 Advances received 1,797
-----------------------------------------------------------------------------------------
Property, plant and 258,245 Deposits received 361
equipment:
-----------------------------------------------------------------------------------------
Buildings 178,152 Unearned income 48
-----------------------------------------------------------------------------------------
Structures 8,682 Others 10,488
-------------------------------------------==============================================
Machinery and 1,536 SHAREHOLDERS' EQUITY 4,815,673
transportation
-------------------------------------------==============================================
Tools and fixtures 31,155 COMMON STOCK 795,600
-----------------------------------------------------------------------------------------
Land 32,686 LEGAL RESERVE 2,653,848
-----------------------------------------------------------------------------------------
Construction in 6,031 Legal capital reserve 2,530,476
progress
===========================================----------------------------------------------
Intangible assets: 91,416 Legal earned reserve 123,372
-------------------------------------------==============================================
Software 91,128 RETAINED EARNINGS 1,366,224
-----------------------------------------------------------------------------------------
Others 288 Special depreciation 31,567
reserve
===========================================----------------------------------------------
Investments: 6,953,499 Reserve for buy-back 0
of shares
-----------------------------------------------------------------------------------------
Investment 33,552 General reserves 895,000
securities
-----------------------------------------------------------------------------------------
Investment in 4,440,382 Unappropriated 439,656
subsidiaries retained earnings
for the year
-------------------------------------------
Investments in 1,004
capital
-----------------------------------------------------------------------------------------
Long-term loans 2,425,854 [Net income for the year 97,071]
-----------------------------------------------------------------------------------------
Deferred tax assets 51,200
-------------------------------------------
Others 1,505
=========================================================================================
Total assets 8,068,962 Total liabilities 8,068,962
and shareholders'
equity
-----------------------------------------------------------------------------------------
</TABLE>
26
<PAGE>
Notes:1. In the figures above, amounts less than one million yen are rounded
down.
2. The significant accounting policies and notes are stated on pages 24
to 27 of this report.
STATEMENT OF INCOME
(from July 1,1999, to March 31,2000)
(millions of yen)
--------------------------------------------------------------------------------
RECURRING INCOME (LOSS)
================================================================================
OPERATING INCOME (LOSS)
--------------------------------------------------------------------------------
Operating revenues 1,696,799
--------------------------------------------------------------------------------
Voice transmission 1,090,095
--------------------------------------------------------------------------------
Data transmission 33,333
--------------------------------------------------------------------------------
Leased circuit 161,763
--------------------------------------------------------------------------------
Telegram 21,531
--------------------------------------------------------------------------------
Dividend income 4,234
--------------------------------------------------------------------------------
Group management and administration income 20,591
--------------------------------------------------------------------------------
Fundamental R&D income 176,620
--------------------------------------------------------------------------------
Other 188,628
--------------------------------------------------------------------------------
Operating expenses 1,585,076
--------------------------------------------------------------------------------
Business expenses 340,385
--------------------------------------------------------------------------------
Running cost 21,889
--------------------------------------------------------------------------------
Repair and maintenance 350,786
--------------------------------------------------------------------------------
Common expenses 104,134
--------------------------------------------------------------------------------
Administrative expenses 116,495
--------------------------------------------------------------------------------
R&D expenses 181,890
--------------------------------------------------------------------------------
Depreciation 373,199
--------------------------------------------------------------------------------
Removal of fixed assets 47,547
--------------------------------------------------------------------------------
Rent for telecommunications equipment 437
--------------------------------------------------------------------------------
Miscellaneous taxes 48,309
--------------------------------------------------------------------------------
Total operating income 111,722
================================================================================
NON-OPERATING INCOME (LOSS)
--------------------------------------------------------------------------------
Non-operating revenues 135,100
--------------------------------------------------------------------------------
27
<PAGE>
--------------------------------------------------------------------------------
Interest income 68,883
--------------------------------------------------------------------------------
Dividend income 9,664
--------------------------------------------------------------------------------
Rent 38,447
--------------------------------------------------------------------------------
Other income 18,104
--------------------------------------------------------------------------------
Non-operating expenses 129,248
--------------------------------------------------------------------------------
Interest expenses 21,409
--------------------------------------------------------------------------------
Debenture interest 69,419
--------------------------------------------------------------------------------
Rent cost 22,703
--------------------------------------------------------------------------------
Other expenses 15,716
--------------------------------------------------------------------------------
Recurring profit 117,574
================================================================================
EXTRAORDINARY INCOME (LOSS)
--------------------------------------------------------------------------------
Extraordinary income 71,827
--------------------------------------------------------------------------------
Telephone calls income from previous year 69,253
--------------------------------------------------------------------------------
Bad debts recovery 2,574
--------------------------------------------------------------------------------
Extraordinary loss 11,330
--------------------------------------------------------------------------------
Loss on sale of assets from business 4,293
transfer
--------------------------------------------------------------------------------
Allowance for severance payments 7,037
provisions
--------------------------------------------------------------------------------
Income before taxes 178,071
--------------------------------------------------------------------------------
Corporation tax, inhabitants' tax and 16,000
business tax
--------------------------------------------------------------------------------
Corporation tax etc. adjustments 65,000
--------------------------------------------------------------------------------
Net income for the year 97,071
--------------------------------------------------------------------------------
Unappropriated retained earnings brought 273,316
forward
--------------------------------------------------------------------------------
Prior-year tax-effect adjustments 90,200
--------------------------------------------------------------------------------
Disposition of a special depreciation 22,691
reserve for tax effect accounting
--------------------------------------------------------------------------------
Reserve for buy-back of shares 119,999
--------------------------------------------------------------------------------
Sale of treasury stocks 119,999
--------------------------------------------------------------------------------
Interim dividends 39,657
--------------------------------------------------------------------------------
Transfer to legal reserve relating to 3,965
interim dividends
--------------------------------------------------------------------------------
Unappropriated retained earnings at end 439,656
of year
--------------------------------------------------------------------------------
Notes: 1. In the figures above, amount less than one million yen are rounded
down.
2. The significant accounting policies and notes are stated on pages 24
to 27 of this
28
<PAGE>
report.
SIGNIFICANT ACCOUNTING POLICIES
1. Method of accounting for depreciation and amortization of fixed assets
In accordance with the provisions of the Japanese Corporation Tax Law,
depreciation of property, plant and equipment is computed by the declining-
balance method (with the exception of buildings, for which the straight-line
method is used). Amortization of intangible
29
<PAGE>
assets is calculated by the straight-line method.
The depreciation expenses for the software used internally in NTT are
calculated by the straight-line method under the limited usage period of 5
years.
2. Basis and method of evaluating marketable securities
Listed marketable securities: Stated at the lower of cost or market, cost
being determined by the moving average method
Other securities: Stated generally at cost, cost being determined
by the moving average method
3. Basis and method of evaluating inventories
Inventories are stated at cost determined by the annual average method.
4. Accounting for deferred assets
The full amounts of bond discounts and expenses related to bonds issued are
charged to income as incurred or paid.
5. Accounting for allowances
(1) Allowance for bad debt
In order to prepare for possible losses from write-off of bad debt, "Allowance
for bad debt" is provided for in an amount determined by the method prescribed
by the Japanese Corporation Tax Law for allowing deductions (transfer rate based
on actuals). In addition, allowance is provided against specific receivables
based on the evaluation of possibility of collection.
No allowance is provided in this term.
(2) Allowance for severance payments
Allowance for severance payments was previously calculated on the present value
of the benefits payable upon voluntary retirement of all eligible employees at
the balance sheet date.
However, from this term, 100% of benefits payable upon voluntary retirement
at the balance sheet date is reserved. In addition, the reserve balance is
increased to the allowance for severance payments by the amount of the benefits
applicable to all employees who are in service with the Company at the balance
sheet date.
The amount of benefits in this context is determined by the amount of
retirement benefits recognized in respect of all employees at the time of
incorporation of the Company pursuant to the Nippon Telegraph and Telephone
Corporation Law, less the amount of such benefits determined by the present
value method.
However, when the new calculation method was introduced, relevant added
amount is included in the benefits payable upon voluntary retirement, so that
the balance was all reversed at the end of this term.
According to this change, the allowance for severance payment provision is
listed under Operating Expenses based on the conventional calculation method,
and also the incremental
30
<PAGE>
amount of (Yen)7,037 million until the benefits payable upon voluntary
retirement occurs are listed under the "Allowance for the severance payment
provision" in Extraordinary Loss at the balance sheet date.
This resulted in less influence to the recurring profits compared to that
calculated by the conventional method. However, income before tax at the balance
sheet date is decreased by the corresponding amount.
6. Accounting for monetary liabilities in a foreign currency covered by forward
exchange contracts
Foreign currency bonds issued with forward exchange contracts are translated
into yen at the contracted forward rate. Exchange differences resulting from the
use of the contracted rate are amortized over the period through the month of
settlement of the contracts on a monthly basis.
Note also that, out of the specified exchange differences on forward
contracts, (Yen)54 million of profit has been accounted for in this fiscal year
as a foreign exchange profit in other income of the non-operating revenue in the
Statement of Income. Additionally, (Yen)50 million for the following fiscal year
is being accounted for in the balance sheet, split between (Yen)3 million as
other fixed liabilities and (Yen)47 million as prepaid income.
7. Non-contributory funded pension plan
A non-contributory funded pension plan was introduced on June 1, 1992, as a part
of the Company's severance payment system to employees. The assets of the
pension fund amounted to (Yen)7,353 million at March 31, 2000.
The excess portion of the allowance for employees' severance payments is
being reversed over an approximately 19-year period for which the past service
liabilities are contributed and such contributions, net of reversals, are
included in operating expenses.
8. Accounting for consumption tax
Consumption tax is eliminated from the amount of recorded transactions.
9. Applying tax effect accounting
Tax-effect accounting has been employed from this balance-sheet date.
As a result, compared with the non-application of tax-effect accounting, net
income was (Yen)65,000 million lower, while year-end unappropriated retained
earnings were (Yen)47,891 million higher.
Alteration in the method of accounting treatment
The cost corresponding to the rent listing in the non-operating revenue was
previously calculated as a part of operating expenses. However, it is calculated
as non-operating revenues from this balance sheet date.
After applying this change, the total operating income has increased
(Yen)22,703 million
31
<PAGE>
without having any influence on the recurring profit and the income before taxes
for this term.
Changes in presentation
1. Following the Company's reorganization on July 1, 1999, which caused the
balance-sheet presentation of assets and liabilities to fall outside the remit
of regulations covering the presentation of telecommunications accounts that had
hitherto applied, the balance sheet is divided on the basis of whether assets or
liabilities are current or non-current, instead of whether they are fixed or
not.
2. Classifications of "Machinery" and "Vehicles and Vessels" are consolidated to
"Machinery and Carrier".
3. The production costs occurring in the process of producing software, which
used to be classified under "Construction in progress", is now classified under
"Software" as an intangible asset.
4. The shares of subsidiaries, which used to be classified under "Investment in
affiliates" are now classified under "Subsidiary shares" and "Investment in
securities".
5. The "Income tax" is now classified under "Corporation tax, inhabitants' tax
and business tax".
NOTES TO THE BALANCE SHEET
1. Accumulated depreciation of property, plant and equipment amounted to
(Yen)180,973 million.
2. Monetary receivables from and payables to the Company's subsidiaries and
controlling shareholders are as follows:
(1) Subsidiaries
Short-term monetary receivables: (Yen)472,608 million
Long-term monetary receivables: (Yen)2,426,215 million
Short-term monetary payables: (Yen)33,108 million
(2) Controlling shareholders
Short-term monetary receivables: (Yen)4 million
3. Major assets and liabilities denominated in foreign currencies are as
follows: Liabilities denominated in foreign currencies
Bonds and notes: (Yen)556,127 million
(Including those maturing within one year)
------------------------------------------
U.S. dollars 2,850,000,000
------------------------------------------
Euro 750,000,000
------------------------------------------
32
<PAGE>
------------------------------------------
Pounds sterling 350,000,000
------------------------------------------
Swiss francs 340,000,000
------------------------------------------
Canadian dollars 20,000,000
------------------------------------------
Long-term borrowings: (Yen)4,587 million
(U.S. dollars 45,000,000)
(Including those maturing within one year)
Accrued expenses: (Yen)4,835 million
Pounds sterling 15,791,000
------------------------------------------
U.S. dollars 55,112,000
------------------------------------------
Euro 24,820,000
------------------------------------------
Swiss francs 7,745,000
------------------------------------------
4. Treasury stock included in other current assets: (Yen)51 million
5. According to the regulation in Article 9 in the law concerning Nippon
Telegraph and Telephone Corporation, etc. the entire Company's assets are
pledged as general collateral for the bonds. Also, based upon Article 9 of the
proposed law to amend the part of Nippon Telegraph and Telephone Corporation Law
(Law No. 98, 1997), NTT contracts liabilities for the bonds issued on June 30,
1999 on joint and several liability with Nippon Telegraph and Telephone East
Corporation, Nippon Telegraph and Telephone West Corporation and NTT
Communications Corporation, and also submits the entire properties of these four
companies to the general security for the relevant bonds.
6. Guaranteed deposits: (Yen)10,300 million
7. NTT, Nippon Telegraph and Telephone East Corporation, Nippon Telegraph and
Telephone West Corporation, and NTT Communications Corporation are jointly and
severally liable for contingent liabilities of (Yen)150,000 million in respect
of contractual obligations relating to corporate bonds issued prior to June 30,
1999.
8. Net income per share: (Yen)6,115.18
NOTES TO THE STATEMENT OF INCOME
1. Operating expenses incurred through transactions with subsidiaries were
(Yen)404,326 million and operating income through transactions with subsidiaries
was (Yen)338,120 million.
Capital transfers incurred through non-operating transaction with subsidiaries
were (Yen)5,746,869 million and miscellaneous were (Yen)196,767 million.
2. Operating expenses incurred through transactions with controlling
shareholders were (Yen)2,650 million. Operating income earned through
transactions with controlling shareholders was (Yen)410 million. Non-operating
transactions with controlling shareholders were (Yen)111 million.
33
<PAGE>
3. Dividend income was listed as non-operating revenues; however, the dividend
income after the company's reorganization on July 1, 1999 was listed as
operating revenues.
4. For the appropriate implementation of the reorganization of NTT executed on
July 1, 1999, the call calculation system for call charges (including public
phone call charges) has been modified. Before the date the reorganization was
executed, all charges for completed calls were checked on meters and the
revenues were computed. Calls, which were completed during the previous fiscal
year but were not checked on meters, are listed in this fiscal year under "Call
charge brought forward" in Extraordinary income.
5. "Loss on sales of operation transfer assets" listed under Extraordinary Loss
is caused by the asset transfers, which occurred when the reorganization of NTT
was executed on July 1, 1999.
PROPOSAL OF APPROPRIATION
OF UNAPPROPRIATED RETAINED EARNINGS
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------
Item Amount
=======================================================================================
<S> <C>
Unappropriated retained earnings for the (Yen)439,656,293,590
year
---------------------------------------------------------------------------------------
Reversal of reserve for buy-back of shares 790,000
---------------------------------------------------------------------------------------
Reversal of special depreciation reserve 7,692,196,452
---------------------------------------------------------------------------------------
Total 447,349,280,042
---------------------------------------------------------------------------------------
Proposal of appropriation:
---------------------------------------------------------------------------------------
Legal earned reserve 3,964,000,000
---------------------------------------------------------------------------------------
Cash dividends [(Yen)2,500 per share] 39,586,387,450
---------------------------------------------------------------------------------------
Bonuses to directors and corporate 52,440,000
auditors
---------------------------------------------------------------------------------------
[Portion to corporate auditors] [8,100,000]
---------------------------------------------------------------------------------------
Special depreciation reserve 403,117,960
---------------------------------------------------------------------------------------
Special reserve 150,000,000,000
---------------------------------------------------------------------------------------
Profits brought forward 253,343,334,632
---------------------------------------------------------------------------------------
</TABLE>
34
<PAGE>
Notes: 1. An interim dividend of (Yen)39,657,654,525 ((Yen)2,500 per share) was
paid to shareholders on December 13, 1999.
2. Reserve for buy-back of shares is reversed from the balance after
acquiring treasury stock and retiring of stock through retained
profits out of the reserve for buy-back of shares submitted at the
resolutions of shareholders at the 14th Ordinary General Meeting of
Shareholders.
3. Reversal and provision of the special depreciation reserve are in
accordance with the Special Taxation Measures Law. The amount of
reversal and provision are net of tax.
Certified Copy
INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS' REPORT
May 17, 2000
Mr. Jun-ichiro Miyazu
President and Representative Director
Nippon Telegraph and Telephone Corporation
ChuoAoyama Audit Corporation
Tokugoro Murayama, C.P.A.,
Representative Partner and
Engagement Partner
Tsutomu Kawaguchi, C.P.A.,
Representative Partner and
Engagement Partner
Asahi & Co.
Shigeru Iwamoto, C.P.A.,
Representative Partner and
Engagement Partner
Takuichi Arai, C.P.A.,
35
<PAGE>
Representative Partner and
Engagement Partner
Pursuant to Article 2 of "the Law for Special Exceptions to the Commercial Code
concerning the audit, etc. of joint-stock corporations", we have examined the
balance sheet, the statement of income, the business report (with respect to
accounting matters only), the proposal of appropriation of unappropriated
retained earnings, and the supplementary schedules (with respect to accounting
matters only) of Nippon Telephone and Telegraph Corporation for the 15th fiscal
year from April 1, 1999 to March 31, 2000. The accounting matters included in
the business report and supplementary schedules referred to above that were
subject to our audit were limited to those derived from the accounting and other
records of the Company and its subsidiaries.
Our audit was conducted in accordance with auditing standards generally
accepted in Japan, and included all auditing procedures that are normally
required. It also included all auditing procedures as are normally required for
the audit of subsidiaries.
We state our opinions on the results of the audit as follows:
(1) The balance sheet and the statement of income present fairly the financial
position and operational performance of the Company, in conformity with
applicable laws and regulations and the Company's articles of incorporation.
(2) We state our opinions on the changes in accounting policies as follows:
[1]The change in accounting policy dating from this balance sheet with
regard to the allowance for severance payments (as noted elsewhere in this
report under Significant Accounting Policies 5. (2)), which was to change
from calculating such allowance on the basis of the present value at the
balance-sheet date of benefits payable to all eligible employees on
voluntary retirement to reserving 100% of such benefits payable as of the
balance-sheet date, is entirely appropriate. It stems from the
introduction in April 2000 of new accounting standards in Japan relating
to severance payment provisions that reflect changes in recent years in
the general stance towards accounting practices with regard to pension
benefits, and which were introduced with the objective of taking
preventative measures to ensure corporate pension funds remain in sound
financial health.
[2]The change in accounting policy dating from this balance sheet with
regard to the calculation of rental expenses (as noted elsewhere in this
report under Alteration in the method of accounting treatment), which was
to change from counting them as part of operating expenses to including
them within non-operating expenses, is entirely appropriate. The change
derives from the increase in loans and advances by the Company to Group
companies to the point where they have become financially significant; in
addition, in connection with the reorganization of the Company on July 1,
1999, various intra-Group loans and advances became materially
significant. As a
36
<PAGE>
result of the change, such expenses are classified more appropriately
within the profit and loss accounts.
(3) The business report (with respect to accounting matters only) presents
fairly the status of the Company, in conformity with applicable laws and
regulations and the Company's articles of incorporation.
(4) The proposal of appropriation of unappropriated retained earnings is in
conformity with applicable laws and regulations and the Company's articles
of incorporation.
(5) There are no matters to be noted in the supplementary schedules (with
respect to accounting matters only) in accordance with the provisions of the
Commercial Code.
Subsequent events with respect to the issue of bonds and notes and purchases and
investments related to affiliated companies that may have a significant material
effect on the financial position and operational performance of the Company in
subsequent fiscal years are described in Section III of the business report
entitled "Major Events After The End Of The Fiscal Year".
Both ChuoAoyama Audit Corporation and Asahi & Co., as well as the respective
engagement partners of both firms, have no interest in the Company that should
be disclosed pursuant to the provisions of the Certified Public Accountants Law.
END
37
<PAGE>
REFERENCE DOCUMENTS CONCERNING THE EXERCISE OF VOTING RIGHTS
1. Total number of shares owned by shareholders with voting rights:
15,787,670
2. Matters for resolution and reference
First Item Approval of proposal of appropriation of unappropriated retained
earnings for the 15th fiscal year.
The Company proposes to make an appropriation of unappropriated retained
earnings for this fiscal year, as described in the chart on page 28.
An interim dividend of (Yen)2,500 per share was paid in December 1999. The year-
end dividend for this fiscal year is proposed to also be (Yen)2,500 per share,
taking into consideration shareholders' interests.
Second Item Partial Modifications to the Articles of Incorporation
1. Reason for the modifications
In accordance with the shareholders resolutions at the 14th Ordinary General
Meeting of Shareholders, treasury stocks were acquired through retained profit
for cancellation of 77,410 shares.
After this action, the number of total shares was amended accordingly.
2. Modifications
The relevant item should be modified as follows: (The modified portions are
underlined)
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
Current Version Modified Version
--------------------------------------------------------------------------------------------
<S> <C>
Article 5 (Total number of shares) Article 5 (Total number of shares)
The total number of shares authorized to The total number of shares authorized to
be issued by the Company shall be be issued by the Company shall be
sixty-two million four hundred thousand 62,322,590 shares.
--------------------------------------- ------------------
(62,400,000) shares.
--------------------
--------------------------------------------------------------------------------------------
</TABLE>
38
<PAGE>
Third Item Election of eleven Directors
As of the end of this Annual General Meeting of Shareholders, the entire Board
of Directors has completed its term of office. Accordingly, it is proposed that
eleven directors be elected.
Candidates for Directors are as follows:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------
Number of
Candi- shares of the
date Name Company held
No. (Date of birth) Resume and representation of other companies
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Jun-ichiro Miyazu April 1958 Entered Nippon Telegraph and 25.36
(January 2, 1936) Telephone Public Corporation Shares
------------------------------------------------------
June 1987 Senior Vice President and Senior
Executive Manager of
Telecommunications Network Sector of
the Company
------------------------------------------------------
June 1988 Executive Vice President and Senior
Executive Manager of
Telecommunications Network Sector of
the Company
------------------------------------------------------
June 1990 Executive Vice President and Senior
Executive Manager of Engineering
Strategy Planning Headquarters of
the Company
------------------------------------------------------
February 1991 Executive Vice President and Senior
Executive Manager of Network
Engineering Headquarters of the
Company
------------------------------------------------------
June 1992 Senior Executive Vice President and
Senior Executive Manager of Network
Engineering Headquarters of the
Company
------------------------------------------------------
July 1993 Senior Executive Vice President and
Senior Executive Manager of Service
Engineering Headquarters of the
Company
------------------------------------------------------
</TABLE>
39
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
------------------------------------------------------
February 1994 Senior Executive Vice President and
Senior Executive Manager of Service
Engineering Headquarters and
Executive Manager of Multimedia
Planning and Promotion Office of the
Company
------------------------------------------------------
June 1995 Senior Executive Vice President and
Executive Manager of Multimedia
Planning and Promotion Office of the
Company
------------------------------------------------------
July 1995 Senior Executive Vice President and
Senior Executive Manager of
Multimedia Service Promotion
Headquarters of the Company
------------------------------------------------------
June 1996 President of the Company (present
post)
--------------------------------------------------------------------------------------------------------
2. Norio Wada April 1964 Entered Nippon Telegraph and 17.24
(August 16, 1940) Telephone Public Corporation Shares
------------------------------------------------------
June 1992 Senior Vice President and General
Manager of Tohoku Regional
Communications Sector of the Company
------------------------------------------------------
June 1996 Senior Vice President and Senior
Executive Manager of Affiliated
Business Development Headquarters of
the Company
------------------------------------------------------
July 1996 Senior Vice President and Senior
Executive Manager of Affiliated
Business Headquarters of the Company
------------------------------------------------------
June 1997 Executive Vice President and Senior
Executive Manager of Affiliated
Business Headquarters of the Company
------------------------------------------------------
</TABLE>
40
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
---------------------------------------------------------
June 1998 Executive Vice President and Senior
Executive Manager of Affiliated
Business Headquarters and Executive
Manager of NTT-Holding
Organizational Office of the Company
---------------------------------------------------------
January 1999 Executive Vice President and Senior
Executive Manager of NTT-Holding
Provisional Headquarters of the
Company
---------------------------------------------------------
July 1999 Senior Executive Vice President of
the Company (present post)
----------------------------------------------------------------------------------------------------------
3. Yusuke Tachibana April 1962 Entered Nippon Telegraph and 13.04
(September 16, 1938) Telephone Public Corporation Shares
---------------------------------------------------------
April 1993 Executive Vice President and Senior
Executive Manager of Industrial
Systems Sector of NTT
DataCommunications System Corporation
---------------------------------------------------------
June 1996 President of Japan Leisure Card
System Co., Ltd.
---------------------------------------------------------
July 1999 Senior Executive Vice President of
the Company (present post)
----------------------------------------------------------------------------------------------------------
4. Haruki Matsuno April 1960 Entered the Ministry of Posts and 7.00
(January 24, 1937) Telecommunications Shares
---------------------------------------------------------
July 1993 Director-General of the
Telecommunications Bureau of the
Ministry
---------------------------------------------------------
July 1994 Vice Minister of the Ministry
---------------------------------------------------------
July 1996 Chairman of the Japan Computer
Communications Association (present
post)
---------------------------------------------------------
August 1997 Chairman of the Postal Savings
Promotion Society
----------------------------------------------------------------------------------------------------------
5. Kanji Koide April 1968 Entered Nippon Telegraph and 7.00
(May 22, 1945) Telephone Public Corporation Shares
---------------------------------------------------------
</TABLE>
41
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
---------------------------------------------------------
June 1995 Vice President and Executive Manager
of Market Strategy Department of the
Company
---------------------------------------------------------
June 1996 Vice President and Executive Manager
of Market Strategy Department and
Executive Manager of Service Charge
Planning Office of the Company
---------------------------------------------------------
July 1996 Vice President and Executive Manager
of Market Strategy Department of the
Company
---------------------------------------------------------
June 1997 Senior Vice President and Executive
Manager of Market Strategy
Department of the Company
---------------------------------------------------------
January 1999 Senior Vice President and Executive
Manager of Corporate Strategy
Planning Office and Executive
Manager of Department I of
NTT-Holding Provisional Headquarters
of the Company
---------------------------------------------------------
July 1999 Senior Vice President and Executive
Manager of Department I of the
Company (present post)
-----------------------------------------------------------------------------------------------------------
6. Shigehiko Suzuki April 1968 Entered Nippon Telegraph and 9.06
(October 16, 1945) Telephone Public Corporation Shares
---------------------------------------------------------
June 1995 Vice President and Executive Manager
of Network Service Systems
Laboratories of the Company
---------------------------------------------------------
July 1997 Associate Senior Vice President and
Executive Manager of Network Service
Systems Laboratories of the Company
---------------------------------------------------------
October 1997 Associate Senior Vice President and
Executive Manager of
Telecommunication Network Laboratory
Group of the Company
---------------------------------------------------------
</TABLE>
42
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
---------------------------------------------------------
June 1998 Senior Vice President and Executive
Manager of Telecommunication
Network Laboratory Group of the
Company
---------------------------------------------------------
July 1998 Senior Vice President and Deputy
Senior Executive Manager of Research
and Development Headquarters of the
Company
---------------------------------------------------------
January 1999 Senior Vice President and Executive
Manager of Department III of
NTT-Holding Provisional Headquarters
and Executive Manager of Information
Sharing Laboratory Group of
NTT-Holding Provisional
Headquarters of the Company
---------------------------------------------------------
July 1999 Senior Vice President and Executive
Manager of Department III and
Executive Manager of Information
Sharing Laboratory Group of the
Company (present post)
-----------------------------------------------------------------------------------------------------------
7. Hiromi Wasai April 1969 Entered Nippon Telegraph and 5.00
(August 25, 1946) Telephone Public Corporation Shares
---------------------------------------------------------
June 1996 Vice President and Senior Manager of
Corporate Strategy Planning
Department of the Company
---------------------------------------------------------
June 1998 Vice President and Deputy Executive
Manager of NTT-Holding
Organizational Office of the Company
---------------------------------------------------------
January 1999 Vice President and Senior Manager of
Department I of NTT-Holding
Provisional Headquarters of the
Company
---------------------------------------------------------
July 1999 Senior Vice President of the Company
(present post)
---------------------------------------------------------
</TABLE>
43
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------------------
8. Toyohiko Takabe July 1969 Entered Nippon Telegraph and 8.08
(January 9, 1947) Telephone Public Corporation Shares
---------------------------------------------------------
June 1996 Vice President and Senior Manager of
Multimedia Service Department of the
Company
---------------------------------------------------------
April 1997 Vice President and Senior Manager of
Reorganization Planning Office of
the Company
---------------------------------------------------------
June 1998 Vice President and Executive Manager
of Coordination and Liaison
Department of the Company
---------------------------------------------------------
January 1999 Vice President and Executive Manager
of Reorganization Office and
Executive Manager of Department V of
NTT-Holding Provisional Headquarters
of the Company
---------------------------------------------------------
July 1999 Senior Vice President and Executive
Manager of Department V of the
Company (present post)
-------------------------------------------------------------------------------------------------------------
9. Satoru Miyamura July 1969 Entered the Ministry of Finance 5.00
(November 26, 1946) Shares
---------------------------------------------------------
July 1995 Dispatched Official for the Ministry
of Finance (General Manager of Tokyo
Office of International Bank for
Reconstruction and Development)
---------------------------------------------------------
June 1998 Dispatched Official for the Ministry
of Finance (Vice President of
International Bank for
Reconstruction and Development)
-------------------------------------------------------------------------------------------------------------
10. Takashi Imai April 1952 Entered Fuji Steel Corporation 1.02
(December 23, 1929) Shares
---------------------------------------------------------
April 1998 Chairman of Nippon Steel Corporation 1.02
(present post) Shares
---------------------------------------------------------
</TABLE>
44
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
---------------------------------------------------------
May 1998 Chairman of Japan Federation of
Economic Organizations (present post)
---------------------------------------------------------
July 1999 Senior Vice President of the Company
(present post)
-------------------------------------------------------------------------------------------------------------
11. Yotaro Kobayashi October 1958 Entered Fuji Photo Film Co., Ltd. 0
(April 25, 1933) Shares
---------------------------------------------------------
September 1963 Entered Fuji Xerox Co., Ltd.
---------------------------------------------------------
January 1992 Chairman of Fuji Xerox Co., Ltd.
(present post)
---------------------------------------------------------
April 1999 Chairman of KEIZAI DOYUKAI (Japan
Association of Corporate Executives)
(present post)
---------------------------------------------------------
July 1999 Senior Vice President of the Company
(present post)
-------------------------------------------------------------------------------------------------------------
</TABLE>
Fourth Item Election of four Corporate Auditors
Since all Full-Time Corporate Auditors are to retire at the close of this Annual
General Meeting of Shareholders, it is proposed that four Corporate Auditors be
elected to fill the vacancies
Candidates for Corporate Auditors are as follows:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------
Number of
shares of the
Candi- Name Company
date No. (Date of birth) Resume and representation of other companies held
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Keisuke Sada April 1960 Entered Nippon Telegraph and 8.14
(September 18, 1935) Telephone Public Corporation Shares
---------------------------------------------------------
June 1986 Vice President and Executive
Manager of Public Relations
Department of the Company
---------------------------------------------------------
</TABLE>
45
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
---------------------------------------------------------
June 1988 Vice President and General
Manager of Chugoku
Telecommunications Service
Region of the Company
---------------------------------------------------------
April 1989 Vice President and General
Manager of Chugoku Regional
Communications Sector of the
Company
---------------------------------------------------------
June 1990 Senior Vice President and
General Manager of Chugoku
Regional Communications
Sector of the Company
---------------------------------------------------------
June 1991 Senior Vice President and
Deputy Senior Executive
Manager of advanced
Telecommunications Services
Sector of the Company
---------------------------------------------------------
June 1991 Senior Vice President and
Deputy Senior Executive
Manager of Mobile
Communications Sector of the
Company
---------------------------------------------------------
May 1992 Senior Executive Vice
President of NTT Mobile
Communications Network, Inc.
---------------------------------------------------------
April 1995 Senior Executive Vice
President and Senior
Executive Manager of Pager
Business Reinforcement
Headquarters of the Company
---------------------------------------------------------
June 1998 Full-time Corporate Auditor
of the Company (present post)
---------------------------------------------------------------------------------------------------------------
2. Takao Nakajima April 1963 Entered the Board of Audit 6.00
(July 7, 1938) Shares
---------------------------------------------------------
</TABLE>
46
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
---------------------------------------------------------
June 1996 Secretary General of Board
of Audit
---------------------------------------------------------
June 1998 Adviser to the Board of Audit
Adviser to Kitano-gumi
Corporation
----------------------------------------------------------------------------------------------------------------
3. Makoto Yoshida April 1956 Entered Nippon Telegraph and 7.14
(October 16, 1932) Telephone Public Corporation Shares
---------------------------------------------------------
April 1985 Vice President and Senior
Manager of President's
Office of the Company
---------------------------------------------------------
July 1985 Vice President and Executive
Manager of Personnel
Department of the Company
---------------------------------------------------------
June 1987 Senior Vice President and
Executive Manager of
Personnel Department of the
Company
---------------------------------------------------------
June 1989 Full-time Corporate Auditor
of NTT Data Communications
System Corporation
---------------------------------------------------------
December 1991 Executive Vice President and
Senior Executive Manager of
Telecommunications
Headquarters of Kyowa Exeo
Corporation
---------------------------------------------------------
December 1993 Executive Vice President and
Senior Executive Manager of
Industrial Relations
Department of Kyowa Exeo
Corporation
---------------------------------------------------------
June 1995 President of NTT Living
Corporation
---------------------------------------------------------
July 1999 Corporate Auditor of the
Company (present post)
----------------------------------------------------------------------------------------------------------------
</TABLE>
47
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------------------
4. Hideaki Toda April 1958 Entered Nippon Telegraph and 11.22
(August 15, 1934) Telephone Public Corporation Shares
---------------------------------------------------------
June 1986 Vice President and Executive
Manager of Coordination and
Liaison Department of
General Planning Headquarters
---------------------------------------------------------
June 1988 Senior Vice President and
Executive Manager of
Affiliated Companies
Headquarters of the Company
---------------------------------------------------------
June 1990 Senior Vice President and
Executive Manager of
International Affairs
Department of the Company
---------------------------------------------------------
June 1992 President of Nippon
Information and
Communication Corporation
---------------------------------------------------------
July 1999 Corporate Auditor of the
Company (present post)
----------------------------------------------------------------------------------------------------------------
</TABLE>
Note: 1. Mr. Takao Nakajima and Mr. Hideaki Toda are outside Corporate Auditors
assigned in accordance with Item 1 of Article 18 of the Law for Special
Exceptions to the Commercial Code regarding corporate auditing.
2. Among the candidates, Mr. Takao Nakajima has not yet accepted the post
of Corporate Auditor but he is scheduled to do so before the holding
of this Ordinary General Meeting of Shareholders.
Fifth Item Presentation of retirement allowances to retired and retiring
Directors and Corporate Auditors
It is proposed that retirement allowances be given in accordance with the
Company's regulations and at an appropriate level for respective services
rendered by three Directors, namely Mr. Toshiyuki Mineshima, Executive Vice
President, who resigned on March 31, 2000, Mr. Shigeo Sawada, Chairman of the
Company, Mr. Kunihiro Kato, Senior Vice President, who will retire at the close
of this Annual General Meeting of Shareholders, and one Corporate Auditor,
namely Mr. Tadashi Yamamoto, who will also retire at the close of this Annual
General Meeting of Shareholders.
48
<PAGE>
It is proposed that decisions on the amount of money, time and method of
payment of such monetary awards be entrusted to the Board of Directors as to the
retiring Directors and to the Board of Corporate Auditors as to the retiring
Corporate Auditor.
Resumes of the retiring Directors and Corporate Auditor are as follows:
<TABLE>
<CAPTION>
Name Resume
------------------------------------------------------------------------------------------------------
<S> <C> <C>
Toshiyuki Mineshima June 1996 Executive Vice President of the
Company
----------------------------------------------------------------------
March 2000 Resigned the position of
Executive Vice President of the
Company
------------------------------------------------------------------------------------------------------
Shigeo Sawada June 1990 Senior Executive Vice President
of the Company
----------------------------------------------------------------------
February 1991 Senior Executive Vice President
and Senior Executive Manager of
Telecommunications Service
Promotion Headquarters of the
Company
----------------------------------------------------------------------
July 1993 Senior Executive Vice President
and Senior Executive Manager of
Service Marketing and Support
Headquarters of the Company
----------------------------------------------------------------------
June 1996 Chairman of the Company
------------------------------------------------------------------------------------------------------
Kunihiro Kato June 1997 Senior Vice President and
Executive Manager of Multimedia
System Laboratory Group and
Executive Manager of Multimedia
Communication Promotion
Department of the Company
----------------------------------------------------------------------
January 1999 Senior Vice President and
Executive Manager of Cyber
Communications Laboratory Group
of NTT-Holding Provisional
Headquarters of the Company
----------------------------------------------------------------------
</TABLE>
49
<PAGE>
<TABLE>
<S> <C> <C>
----------------------------------------------------------------------
July 1999 Senior Vice President and
Executive Manager of Cyber
Communications Laboratory Group
of the Company (present post)
------------------------------------------------------------------------------------------------------
Tadashi Yamamoto June 1996 Full-time Corporate Auditor
(present post)
------------------------------------------------------------------------------------------------------
</TABLE>
50
<PAGE>
Merge of Auditors
Chuo Audit Corporation, which is an NTT auditor, and Aoyama Audit Corporation
were merged on April 1, 2000 and was renamed to ChuoAoyama Audit Corporation.
After the merger, ChuoAoyama Audit Corporation succeeded to the rights and
duties of Chuo Audit Corporation and is undertaking to audit NTT.
The following is an outline of the Audit Corporation as of April 1, 2000
(1) Main office: Kasumigaseki Bldg. 2-5 Kasumigaseki 3-chome, Chiyoda-ku, Tokyo
(2) Outline: Certified Public Accountants: 1,301,
Junior Accountants: 674,
Auditing related company: 4,514
END
[For reference]
1. The following are outline financial accounts for Nippon Telegraph and
Telephone East Corporation, Nippon Telegraph and Telephone West Corporation
and NTT Communications Corporation.
(1) Outline figures for Nippon Telegraph and Telephone East Corporation
ABBREVIATED BALANCE SHEET
(at March 31, 2000)
(billions of yen)
--------------------------------------------------------------------------------
ASSETS (Yen)5,336.5 LIABILITIES (Yen)3,262.6
51
<PAGE>
<TABLE>
------------------------------------------------------------------------------------------
<S> <C> <C> <C>
FIXED ASSETS 4,399.6 LONG-TERM LIABILITIES 2,296.4
------------------------------------------------------------------------------------------
Fixed assets for 3,968.6 Long-term debt from 1,041.9
telecommunications affiliated company
business:
------------------------------------------------------------------------------------------
Property, plant and 3,779.3 Severance payments 1,246.5
equipment
------------------------------------------------------------------------------------------
Telecommunications 938.7 Others 7.9
equipment
------------------------------------------------------------------------------------------
Local telephone 646.6 CURRENT LIABILITIES 966.2
service lines
------------------------------------------------------------------------------------------
Civil engineering 959.0 Accounts payable 275.4
equipment
------------------------------------------------------------------------------------------
Buildings 702.2 Short-term debt 188.2
------------------------------------------------------------------------------------------
Land 197.8 Accrued liabilities 280.3
------------------------------------------------------------------------------------------
Others 334.7 Others 222.1
-------------------------------------------===============================================
Intangible assets: 189.3 SHAREHOLDERS' EQUITY 2,073.9
-------------------------------------------===============================================
Investments: 430.9 COMMON STOCK 335.0
------------------------------------------------------------------------------------------
Deferred tax 359.9 LEGAL RESERVE 1,679.2
------------------------------------------------------------------------------------------
Others 72.6 RETAINED EARNINGS 59.6
------------------------------------------------------------------------------------------
Allowance for bad (1.6) [Net loss for the year 157.2]
debts
-------------------------------------------
CURRENT ASSETS 936.9
-------------------------------------------
Cash 173.9
-------------------------------------------
Accounts receivable 523.2
-------------------------------------------
</TABLE>
52
<PAGE>
<TABLE>
<S> <C> <C> <C>
-------------------------------------------
Accrued consumption 175.7
tax etc.
-------------------------------------------
Others 68.9
-------------------------------------------
Allowance for bad (4.9)
debts
==========================================================================================
Total assets (Yen)5,336.5 Total liabilities 5,336.5
and shareholders'
equity
------------------------------------------------------------------------------------------
</TABLE>
ABBREVIATED STATEMENT OF INCOME
(from July 1, 1999, to March 31, 2000)
(billions of yen)
-----------------------------------------------------------------------------
Telecommunications business
-----------------------------------------------------------------------------
Operating revenues 1,976.7
-----------------------------------------------------------------------------
Operating expenses 1,910.2
-----------------------------------------------------------------------------
Telecommunications business income 66.5
-----------------------------------------------------------------------------
Related business
-----------------------------------------------------------------------------
Operating revenues 177.9
-----------------------------------------------------------------------------
Operating expenses 173.7
-----------------------------------------------------------------------------
Related business income 4.2
-----------------------------------------------------------------------------
53
<PAGE>
-----------------------------------------------------------------------------
Total operating income 70.7
-----------------------------------------------------------------------------
Non-operating revenues 38.6
-----------------------------------------------------------------------------
Non-operating expenses 52.5
-----------------------------------------------------------------------------
Recurring profit 56.7
-----------------------------------------------------------------------------
Extraordinary loss 325.0
-----------------------------------------------------------------------------
Loss before taxes 268.2
-----------------------------------------------------------------------------
Income taxes 43.5
-----------------------------------------------------------------------------
Corporation tax etc. adjustments (154.5)
-----------------------------------------------------------------------------
Net loss for the year 157.2
-----------------------------------------------------------------------------
Prior-year tax-effect adjustments 216.9
-----------------------------------------------------------------------------
Unappropriated retained earnings at end
of year 59.6
-----------------------------------------------------------------------------
(2) Outline figures for Nippon Telegraph and Telephone West Corporation
ABBREVIATED BALANCE SHEET
(at March 31, 2000)
(billions of yen)
-------------------------------------------------------------------------------
ASSETS 5,112.5 LIABILITIES 3,230.4
===============================================================================
FIXED ASSETS 4,179.1 LONG-TERM LIABILITIES 2,392.1
-------------------------------------------------------------------------------
Fixed assets for Long-term debt from 974.4
telecommunications affiliated company
-------------------------------------------------------------------------------
business: 3,745.8 Severance 1,406.4
-------------------------------------------------------------------------------
54
<PAGE>
payments
-------------------------------------------------------------------------------
Property, plant and 3,565.6 Others 11.2
equipment
-------------------------------------------------------------------------------
Telecommunications 883.0 CURRENT LIABILITIES 838.2
equipment
-------------------------------------------------------------------------------
Local telephone 725.9 Accounts payable 280.9
service lines
-------------------------------------------------------------------------------
Civil engineering 729.1 Short-term debt 122.2
equipment
-------------------------------------------------------------------------------
Buildings 731.2 Accrued liabilities 268.7
-------------------------------------------------------------------------------
Land 202.4 Others 166.4
------------------------------------===========================================
Others 293.9 SHAREHOLDERS' EQUITY 1,882.0
------------------------------------===========================================
Intangible assets: 180.1 COMMON STOCK 312.0
-------------------------------------------------------------------------------
Investments: 433.3 LEGAL RESERVE 1,562.9
-------------------------------------------------------------------------------
Deferred tax 407.8 RETAINED EARNINGS 7.0
-------------------------------------------------------------------------------
Others 28.0 [Net loss for the year 239.2]
------------------------------------
Allowance for bad (2.4)
debts
------------------------------------
CURRENT ASSETS 933.3
------------------------------------
Cash 203.2
------------------------------------
Accounts receivable 506.7
------------------------------------
Accrued consumption 166.2
tax etc.
------------------------------------
Others 60.2
------------------------------------
Allowance for bad (3.0)
debts
55
<PAGE>
Total assets 5,112.5 Total liabilities 5,112.5
and
shareholders' equity
-------------------------------------------------------------------------------
ABBREVIATED STATEMENT OF INCOME
(from July 1, 1999, to March 31, 2000)
(billions of yen)
------------------------------------------------------------------------------
Telecommunications business
------------------------------------------------------------------------------
Operating revenues 1,882.8
------------------------------------------------------------------------------
Operating expenses 1,918.4
------------------------------------------------------------------------------
Telecommunications business loss 35.6
------------------------------------------------------------------------------
Related business
------------------------------------------------------------------------------
Operating revenues 188.7
------------------------------------------------------------------------------
Operating expenses 180.9
------------------------------------------------------------------------------
Related business loss 7.7
------------------------------------------------------------------------------
56
<PAGE>
------------------------------------------------------------------------------
Total operating income 27.8
------------------------------------------------------------------------------
Non-operating revenues 29.3
------------------------------------------------------------------------------
Non-operating expenses 44.5
------------------------------------------------------------------------------
Recurring loss 43.0
------------------------------------------------------------------------------
Extraordinary loss 365.9
------------------------------------------------------------------------------
Loss before taxes 408.9
------------------------------------------------------------------------------
Corporation tax etc. adjustments (170.2)
------------------------------------------------------------------------------
Net loss for the year 239.2
------------------------------------------------------------------------------
Prior-year tax-effect adjustments 246.3
------------------------------------------------------------------------------
Unappropriated retained earnings at 7.0
end of year
------------------------------------------------------------------------------
(3) Outline figures for NTT Communications Corporation
ABBREVIATED BALANCE SHEET
(at March 31, 2000)
(billions of yen)
--------------------------------------------------------------------------------
ASSETS 1,420.8 LIABILITIES 902.7
================================================================================
FIXED ASSETS 963.2 Long-term debt from 409.4
affiliated company
--------------------------------------------------------------------------------
Fixed assets for 684.0 Others 62.5
--------------------------------------------------------------------------------
57
<PAGE>
--------------------------------------------------------------------------------
telecommunications
business:
--------------------------------------------------------------------------------
Property, plant and 622.1 CURRENT LIABILITIES 430.6
equipment
--------------------------------------------------------------------------------
Telecommunications 177.8 Accounts payable 50.4
equipment
--------------------------------------------------------------------------------
Long distance 40.0 Accrued liabilities 198.6
telephone service
lines
--------------------------------------------------------------------------------
Civil engineering 114.4 Accrued corporate tax 75.4
equipment
--------------------------------------------------------------------------------
Buildings 160.3 Others 106.0
--------------------------------------------------------------------------------
Land 42.5
------------------------------------============================================
Others 86.7 SHAREHOLDERS' EQUITY 518.1
------------------------------------============================================
Intangible assets: 61.9 COMMON STOCK 72.0
--------------------------------------------------------------------------------
Investments: 279.1 LEGAL RESERVE 361.9
--------------------------------------------------------------------------------
Investments in 202.6 RETAINED EARNINGS 84.1
affiliates
--------------------------------------------------------------------------------
Others 76.5 [Net income for the year 72.8]
------------------------------------
Allowance for bad (0)
debts
------------------------------------
CURRENT ASSETS 457.6
------------------------------------
Cash 112.3
------------------------------------
Accounts receivable 224.6
------------------------------------
Accounts 58.0
receivable, others
------------------------------------
Others 62.7
------------------------------------
Allowance for bad (0.2)
debts
================================================================================
Total assets 1,420.8 Total liabilities 1,420.8
--------------------------------------------------------------------------------
58
<PAGE>
================================================================================
and shareholders'
equity
--------------------------------------------------------------------------------
ABBREVIATED STATEMENT OF INCOME
(from May 28, 1999, to March 31, 2000)
(billions of yen)
Telecommunications business
-------------------------------------------------------------------------------
Operating revenues 1,001.9
-------------------------------------------------------------------------------
Operating expenses 879.2
-------------------------------------------------------------------------------
Telecommunications business income 122.6
-------------------------------------------------------------------------------
Related business
-------------------------------------------------------------------------------
Operating revenues 73.3
-------------------------------------------------------------------------------
Operating expenses 66.5
--------------------------------------------------------------------------------
59
<PAGE>
-------------------------------------------------------------------------------
Related business income 6.8
-------------------------------------------------------------------------------
Total operating income 129.5
-------------------------------------------------------------------------------
Non-operating revenues 19.2
-------------------------------------------------------------------------------
Non-operating expenses 21.1
-------------------------------------------------------------------------------
Recurring profit 127.7
-------------------------------------------------------------------------------
Extraordinary profit 16.8
-------------------------------------------------------------------------------
Extraordinary loss 18.1
-------------------------------------------------------------------------------
Income before taxes 126.4
-------------------------------------------------------------------------------
Income taxes 75.5
-------------------------------------------------------------------------------
Corporation tax etc. adjustments (21.9)
-------------------------------------------------------------------------------
Net income for the year 72.8
-------------------------------------------------------------------------------
Prior-year tax-effect adjustments 11.3
-------------------------------------------------------------------------------
Unappropriated retained earnings at end 84.1
of year
-------------------------------------------------------------------------------
2. The following is an outline of capital investments made by Nippon Telegraph
and Telephone East Corporation, Nippon Telegraph and Telephone West
Corporation and NTT Communications Corporation.
Capital Investment Amounts
--------------------------------------------------------------------------------
Company Capital investment
================================================================================
Nippon Telegraph and Telephone East 530.9 billion
Corporation
--------------------------------------------------------------------------------
Nippon Telegraph and Telephone West 505.9 billion
Corporation
--------------------------------------------------------------------------------
NTT Communications Corporation 78.3 billion
--------------------------------------------------------------------------------
Major Facilities Completed During the Fiscal Year
--------------------------------------------------------------------------------
Company Item Completed Facility
--------------------------------------------------------------------------------
Nippon Telegraph Integrated services INS-Net 64 1,091 thousand lines
and Telephone East digital network
Corporation
60
<PAGE>
--------------------------------------------------------------------------------
INS-Net 1500 16,500 lines
--------------------------------------------------------------------------------
Subscriber optical cable 6,800Km
--------------------------------------------------------------------------------
Nippon Telegraph Integrated services INS-Net 64 1,035 thousand lines
and Telephone West digital network
Corporation ------------------------------------
INS-Net 1500 12,500 lines
--------------------------------------------------------------------------------
Subscriber optical cable 6,200Km
--------------------------------------------------------------------------------
3. The following is an outline of R&D expenditures for Nippon Telegraph and
Telephone East Corporation, Nippon Telegraph and Telephone West Corporation
and NTT Communications Corporation.
--------------------------------------------------------------------------------
Company Amount
--------------------------------------------------------------------------------
Nippon Telegraph and Telephone East 96.9 billion
Corporation
--------------------------------------------------------------------------------
Nippon Telegraph and Telephone West 97.6 billion
Corporation
--------------------------------------------------------------------------------
NTT Communications Corporation 28.2 billion
--------------------------------------------------------------------------------
61
<PAGE>
4. The following are the equivalent figures for operating revenues, recurring
profit and net income for Nippon Telegraph and Telephone Corporation prior to
the reorganization.
Assuming that there had been no transfer of business as a result of the
reorganization, NTT's operating revenues would have amounted to (Yen)6,093.9
billion, an decrease of 0.7% from the previous fiscal year. Recurring profit
would have risen by 10.9% to (Yen)263.2 billion, while the net loss for the
year would have been (Yen)226.7 billion. In addition, the actual final net
loss after prior-year tax-effect adjustments would have been (Yen)360.6
billion, a decrease of 6.6% from the previous fiscal year.
The breakdown of operating revenues for the telecommunications business are
detailed in the following table.
62
<PAGE>
Telecommunications Business Operating Revenues
(billions of yen)
--------------------------------------------------------------------------------
Operating revenues Change (%)
Service --------------------------------------------
classification Previous fiscal Fiscal year under
year review
-------------------------------------------------------------------------------
Voice transmission 4,599.2(80.0) 4,475.8 (78.8) -2.7
services
-------------------------------------------------------------------------------
Data transmission 111.6 (1.9) 158.9 (2.8) 42.3
services
-------------------------------------------------------------------------------
Leased circuit 640.0 (11.1) 652.3 (11.5) 1.9
services
-------------------------------------------------------------------------------
Telegram services 84.4 (1.5) 77.4 (1.4) -8.3
-------------------------------------------------------------------------------
Other services 313.0 (5.5) 314.4 (5.5) 0.5
===============================================================================
Total 5,748.4 (100.0) 5,679.0 (100.0) -1.2
-------------------------------------------------------------------------------
Notes: Figures in parentheses are percentages of total telecommunications
business operating revenues.
END
63
<PAGE>
The Location
of the
15th Ordinary General Meeting of Shareholders
International Convention Center PAMIR
New Takanawa Prince Hotel
13-1, Takanawa 3-chome, Minato-ku, Tokyo
64
