For Immediate Release
May 23, 1997
NTT Announces Financial Results for Fiscal Year Ended March 31, 1997
Nippon Telegraph and Telephone Corporation (NTT) announced today the non-consolidated financial results for its fiscal year which ended March 31, 1997. Operating revenues increased 2.2% over the previous fiscal year to 6,371.2 billion yen, recurring profit climbed 11.3% to 365.9 billion yen, and net income declined 17.5% to 179.4 billion yen.On a consolidated basis, the group posted operating revenues of 8,821.7 billion yen, a 11.5 % increase from the previous fiscal year, recurring profit of 444.5 billion yen, a 15.2% increase, and net income of 149.8 billion yen, a 29.7% decrease.
The Japanese economy continued to recover moderately as equipment investment in the private sector expanded and personal consumption grew steadily.
The telecommunications field is undergoing a dramatic change globally as technological innovation and globalization are progressing. Technological innovation based on digitization of network is rapidly expanding demand for computer communication as evidenced by the penetration and development of Internet. Meanwhile, on-going globalization of telecommunication network is raising demand for sophisticated information and telecommunication services available at home and abroad. The multimedia age is evident as new services and businesses have emerged aided by the globally-growing flow of information and the continuing development of borderless industries. And, there is a tougher competition among the U.S. and European telecommunications operators that are proceeding with M&As to provide multinational companies with comprehensive information and telecommunication services.
Against this background, NTT, under its continuing effort to provide low-priced, high-quality telecommunications services, engaged in a broad range of activities to respond to the rapid development of multimedia and the globalization of information communications.
In the previous fiscal year, the corporation began providing a low-priced network service based on a fixed-price charge system called "Open Computer Network (OCN) service" and a digital leased circuit, which has reduced price by limiting functions, called "Digital Access 64." These services are aimed to respond to the development of multimedia and the exploding demand for computer communications.
To construct a communications infrastructure for the multimedia age, which enables high-speed transmission of large-volume data, such as images, NTT developed "New Optical Access System" that can realize the installation of optical fiber cables at the price similar to that for the installation of metallic cables. The company also actively constructed facilities necessary to meet rapidly increasing needs for digital network services, such as INS-Net service.
Furthermore, NTT commenced "Konet Plan," a program to help providing environment for the Internet to elementary, junior, and high schools nationwide, so that the company can contribute to the promotion of education utilizing the Internet. The company also made efforts to expand the multimedia market through tie-ups with foreign and domestic companies and other means to realize the commercialization of multimedia.
Regarding the efforts to respond to the globalization, NTT conducted active business operations in Asia and other areas, where telecommunications carriers from advanced countries are competing. In addition to the telecommunications network construction businesses in Thailand, Philippines, and Indonesia, where NTT has already participated, the company also joined a Malaysia's national project, "Multimedia Super Corridor Project," and signed a memorandum to participate in a project to construct a submarine optical cable under the Pacific Ocean between China and the United States. NTT was also active in spreading the use of PHS in overseas countries. The company provided test services in Vietnam, China, and Philippines. To construct a platform for multimedia use and to promote the development of services and applications that can be utilized internationally, NTT agreed to form "Asia Multimedia Forum (AMF)" with 12 telecommunications carriers and other related companies in the As! ia and Pacific region.
NTT aggressively opened its network to other carriers, with a view to contributing to the further promotion of competition and market activation in the telecommunications field. While energetically negotiating with telecommunications carriers toward realization of a variety of requests, such as interconnections with local switches, NTT set up "Interconnection Promotion Department" last May to complete a system for quick and smooth negotiations. As a result, steady success, such as enabling interconnections with CATV operators, has been achieved. Concerning interconnections rules among operators, which are scheduled to be covered by legislation, NTT has contributed to making rules that can be accepted internationally, since the report by the Telecommunications Council was submitted last December.
On the other hand, to increase profits, NTT has conducted corporate operation activities, including construction of company communications systems utilizing LANs and the Internet. NTT also endeavored to enrich customer services. In response to customer needs, the company started selling "Voice Warp," which provides sophisticated call-forwarding functions, and "Super Telewise," which gives a discount through putting together, by company or other unit, charges for long-distance calls originated from multiple telephone lines that are located in different places. NTT also began to give a set discount to customers who bought multiple services, including its call waiting service, "Catch Phone." Furthermore, NTT reduced charges for long-distance calls of over 100 km from ¥140 to ¥110 per 3 minutes this February, thus minimizing price differences between foreign and domestic services and strengthening the company's competitiveness.
To make its operations more efficient, NTT introduced new operator service systems to the telephone directory business, merged directory assistance centers, and integrated and abolished branches and business offices. Moreover, the company reviewed the organization of the headquarters last July, and streamlined administrative divisions.
NTT will continue to undertake active R&D and investment as part of constructing a sophisticated telecommunications network for the 21st century, while also providing reliable, high-quality telecommunications services as a foundation for social and economic activity. The corporation recognizes the importance of pursuing shareholders' interests over the long term, while enhancing the business and improving financial performance.
NTT pays appropriate dividends while carefully monitoring internal reserves. Based on this basic policy, NTT will provide a year-end dividend of 2,500 yen per share which, combined the interim dividend of 2,500 yen, brings the annual dividend to 5,000 yen, unchanged from the previous fiscal year.
In the current fiscal year, internal reserves for business development will be used for R&D and capital expenditure, targeting construction of telecommunications networks and improved financial performance.
NTT's non-consolidated operating revenues, recurring profit and net income based on Japanese accounting principles for the fiscal year ending March 31, 1998, are forecast to be 6,459 billion yen, and 387 billion yen and 216 billion yen, respectively. Also, NTT's consolidated operating revenues, recurring profit and net income based on the principles for the same fiscal year are expected to be 9,444 billion yen, 519 billion yen, and 220 billion yen, respectively.
All the financial information stated in this release was prepared on the basis of Japanese accounting principles.
Attachment 1
NIPPON TELEGRAPH AND TELEPHONE CORPORATIONNON-CONSOLIDATED BALANCE SHEET
(Based on Japanese Accounting Principles)
| March 31, 1996 | March 31, 1997 | ||
| ASSETS | Millions of Yen |
Millions of Yen |
Millions of US$ |
| FIXED ASSETS | 9,729,099 | 9,780,806 | 78,877 |
| CURRENT ASSETS | 1,385,578 | 1,396,510 | 11,262 |
| TOTAL ASSETS | 11,114,677 | 11,177,317 | 90,139 |
| LIABILITIES | |||
| LONG-TERM LIABILITIES: | |||
| Bond and long-term debt | 2,785,164 | 2,674,122 | 21,565 |
| Severance payments | 2,045,947 | 2,092,251 | 16,872 |
| Others | 21,146 | 19,081 | 153 |
| Total long-term liabilities | 4,852,259 | 4,785,454 | 38,592 |
| CURRENT LIABILITIES: | |||
| Current portion of long-term | 581,182 | 535,187 | 4,316 |
| debt and short-term borrowings | |||
| Accounts payable and accrued liabilities | 798,510 | 925,643 | 7,464 |
| Others | 478,246 | 426,788 | 3,441 |
| Total current liabilities | 1,857,940 | 1,887,619 | 15,222 |
| TOTAL LIABILITIES | 6,710,199 | 6,673,074 | 53,815 |
| SHAREHOLDERS' EQUITY | |||
| Common stock | 795,600 | 795,600 | 6,416 |
| Legal capital reserve | 2,530,476 | 2,530,476 | 20,407 |
| Legal earned reserve | 83,529 | 91,502 | 737 |
| Special depreciation reserve | 34,282 | 53,191 | 428 |
| General reserves | 786,000 | 810,000 | 6,532 |
| Unappropriated retained earnings | 174,591 | 223,472 | 1,802 |
| TOTAL SHAREHOLDERS' EQUITY | 4,404,478 | 4,504,242 | 36,324 |
| TOTAL LIABILITIES AND | |||
| SHAREHOLDERS' EQUITY | 11,114,677 | 11,177,317 | 90,139 |
| Note: | Yen amounts have been translated, for convenience only, at ¥124= US$1.00, the approximate exchange rate on March 31, 1997. Fractions are rounded down. | ||
Attachment 2
NIPPON TELEGRAPH AND TELEPHONE CORPORATIONNON-CONSOLIDATED STATEMENTS OF INCOME
(Based on Japanese Accounting Principles)
| Fiscal Year Ended March 31 | |||
| 1996 | 1997 | ||
| Millions of Yen |
Millions of Yen |
||
| OPERATING REVENUES | 6,234,751 | 6,371,287 | 51,381 |
| OPERATING EXPENSES | 5,793,634 | 5,892,911 | 47,523 |
| OPERATING INCOME | 441,117 | 478,375 | 3,857 |
| NON-OPERATING REVENUES | 76,051 | 83,044 | 669 |
| NON-OPERATING EXPENSES | 188,245 | 195,421 | 1,575 |
| RECURRING PROFIT | 328,923 | 365,999 | 2,951 |
| EXTRAORDINARY INCOME | 47,465 | ------ | ----- |
| INCOME BEFORE TAXES | 376,388 | 365,999 | 2,951 |
| CORPORATION AND | 158,900 | 186,500 | 1,504 |
| INHABITANT TAXES | |||
| NET INCOME | 217,488 | 179,499 | 1,447 |
| PER SHARE DATA (in exact) |
of Yen | of Yen | of US$ |
| NET INCOME | 13,668 | 11,280 | 90 |
| CASH DIVIDEND | 5,000 | 5,000 | 40 |
| Note: | Yen amounts have been translated, for convenience only, at ¥124= US$1.00, the approximate exchange rate on March 31, 1997. Fractions are rounded down. | ||
Attachment 3
Business Results (Non-consolidated Operating Revenues)(Based on Japanese Accounting Principles)
(Unit: Million Yen)
| Service | Fiscal Year Ended on Mar. 31, 1996 |
Fiscal Year Ended on Mar. 31, 1997 |
Increase (Decrease) |
| Telephone Services Telex Services Telegram Services Leased Circuit Services Digital Data Exchange Services ISDN Services Other Services Telecommunications Total Revenues |
4,816,718 1,995 94,750 467,648 42,481 163,232 310,593 5,897,419 |
4,798,593 1,758 96,925 515,713 43,624 226,898 326,238 6,009,751 |
(18,124) (237) 2,175 48,065 1,142 63,666 15,645 112,332 |
| Related Business Total Revenues |
337,332 | 361,535 | 24,203 |
| Total Operating Revenues | 6,234,751 | 6,371,287 | 136,535 |
| Notes: | Fractions are rounded down. | ||
Attachment 4
NIPPON TELEGRAPH AND TELEPHONE CORPORATIONCONSOLIDATED BALANCE SHEET
(Based on Japanese Accounting Principles)
| March 31, 1996 | March 31, 1997 | ||
| Millions of Yen |
Millions of Yen |
Millions of US$ |
|
| ASSETS | |||
| FIXED ASSETS | 11,651,447 | 12,294,393 | 99,148 |
| CURRENT ASSETS | 1,945,828 | 2,078,600 | 16,762 |
| TOTAL ASSETS | 13,597,276 | 14,372,994 | 115,911 |
| LIABILITIES | |||
| LONG-TERM LIABILITIES: | |||
| Bond and long-term debt | 4,173,740 | 4,454,968 | 35,927 |
| Severance payments | 2,150,914 | 2,206,742 | 17,796 |
| Others | 179,704 | 182,692 | 1,473 |
| Total long-term liabilities | 6,504,359 | 6,844,402 | 55,196 |
| CURRENT LIABILITIES: | |||
| Current portion of long-term | 903,710 | 1,071,838 | 8,643 |
| debt and borrowings | |||
| Accounts payable, and accrued liabilities | 983,660 | 1,184,154 | 9,549 |
| Others | 602,546 | 588,539 | 4,746 |
| Total current liabilities | 2,489,917 | 2,844,531 | 22,939 |
| MINORITY INTEREST | 83,303 | 94,524 | 762 |
| TOTAL LIABILITIES | 9,077,579 | 9,783,458 | 78,898 |
| SHAREHOLDERS' EQUITY | |||
| Common stock | 795,600 | 795,600 | 6,416 |
| Legal capital reserve | 2,530,476 | 2,530,476 | 20,407 |
| Legal earned reserve | 83,529 | 91,502 | 737 |
| Retained earnings | 1,110,167 | 1,171,995 | 9,451 |
| Treasury stock | (75) | (39) | (0) |
| TOTAL SHAREHOLDERS' EQUITY | 4,519,696 | 4,589,535 | 37,012 |
| TOTAL LIABILITIES AND | |||
| SHAREHOLDERS' EQUITY | 13,597,276 | 14,372,994 | 115,911 |
| Note: | Yen amounts have been translated, for convenience only, at ¥124= US$1.00 the approximate exchange rate on March 31, 1997. Fractions are rounded down. | ||
Attachment 5
NIPPON TELEGRAPH AND TELEPHONE CORPORATIOCONSOLIDATED STATEMENTS OF INCOME
(Based on Japanese Accounting Principles)
| Fiscal Year Ended March 31 | |||
| 1996 | 1997 | ||
| Millions of Yen |
Millions of Yen |
Millions of US$ |
|
| OPERATING REVENUES | 7,908,578 | 8,821,782 | 71,143 |
| OPERATING EXPENSES | 7,302,430 | 8,154,029 | 65,758 |
| OPERATING INCOME | 606,147 | 667,753 | 5,385 |
| NON-OPERATING REVENUES | 57,169 | 63,342 | 510 |
| NON-OPERATING EXPENSES | 277,577 | 286,541 | 2,310 |
| RECURRING PROFIT | 385,740 | 444,555 | 3,585 |
| EXTRAORDINARY INCOME | 37,880 | ------ | ------ |
| INCOME BEFORE TAXES | 423,620 | 444,555 | 3,585 |
| CORPORATION AND | 211,661 | 282,042 | 2,274 |
| INHABITANT TAXES | |||
| MINORITY INTEREST | (1,267) | 12,675 | 102 |
| NET INCOME | 213,226 | 149,837 | 1,208 |
| Note: | Yen amounts have been translated, for convenience only, at ¥124= US$1.00, the approximate exchange rate on March 31, 1997. Fractions are rounded down. | ||
Attachment 6
NTT's New Board of Directors(subject to shareholders' approval)
| Chairman | |||
| Shigeo Sawada | |||
| President | |||
| Junichiro Miyazu | |||
| Senior Executive Vice Presidents | |||
| Hidekazu Inoue | Toshiharu Aoki | Kazuo Asada | |
| Executive Vice Presidents | |||
| Toshio Hayata | Yuji Matsuo | Hitoshi Tajima | |
| Shigeru Ikeda | Hiroshi Ishihara | Hiroshi Ishikawa | |
| Shuichi Kizuka | Toshiyuki Mineshima | Masanobu Suzuki | |
| Norio Wada | |||
| Senior Vice Presidents | |||
| Shoichi Makino | Yoshinori Uda | Kunihiro Kato | |
| Hirofumi Shimada | Seiji Takashima | Shinnichi Aizawa | |
| Masahiro Shibao | Satoshi Miura | Masaaki Kasahara | |
| Ryuji Nunotani | Michio Takeuchi | Kanji Koide | |
| Tadayuki Arai | Michitomo Ueno | Yoshiyuki Sukemune | |
| Kiyoshi Mita | Toshiaki Fukui | Tatsuo Izawa | |
| Katsuya Okimi | |||
| Directors and Counselors of the President | |||
| Ryuzo Sejima | Masashi Kojima | ||
| Statutory Auditors | |||
| Satoshi Hirose | Tadashi Yamamoto | Masayuki Kojima | |
| Tokuhiko Shiota | |||
| Note: | The first five members of this list are nominated for positions with representative authority. | ||
(Reference)
The consolidated financial results cover NTT and 39 subsidiaries.
Firms included in consolidated results of fiscal year ended on March 31, 1997 (39 companies):
NTT Data Communications Systems Corporation
NTT Mobile Communications Network Inc.
NTT Hokkaido Mobile Communications Network Inc.
NTT Tohoku Mobile Communications Network Inc.
NTT Tokai Mobile Communications Network Inc.
NTT Hokuriku Mobile Communications Network Inc.
NTT Kansai Mobile Communications Network Inc.
NTT Chugoku Mobile Communications Network Inc.
NTT Shikoku Mobile Communications Network Inc.
NTT Kyushu Mobile Communications Network Inc.
NTT Hokkaido Estate Co., Ltd.
NTT Urban Development Co., Ltd.
NTT Tokai Real Estate Corporation
NTT Kansai Building Co., Ltd.
NTT Cred Co., Ltd.
NTT Kyushu Real Estate Corporation
NTT Power and Building Facilities Inc.
NTT Telecom Engineering Hokkaido Co., Ltd.
NTT Telecom Engineering Tohoku Co., Ltd.
NTT Telecom Engineering Kanto Co., Ltd.
NTT Telecom Engineering Tokyo Co., Ltd.
NTT Telecom Engineering Shinetsu Co., Ltd.
NTT Telecom Engineering Tokai Co., Ltd.
NTT Telecom Engineering Hokuriku Co., Ltd.
NTT Telecom Engineering Kansai Co., Ltd.
NTT Telecom Engineering Chugoku Co., Ltd.
NTT Telecom Engineering Shikoku Co., Ltd.
NTT Telecom Engineering Kyushu Co,., Ltd.
NTT-Do Co., Ltd.
NTT Teleca Corporation
NTT Hokkaido Personal Communications Network Inc.
NTT Tohoku Personal Communications Network Inc.
NTT Central Personal Communications Network Inc.
NTT Tokai Personal Communications Network Inc.
NTT Hokuriku Personal Communications Network Inc.
NTT Kansai Personal Communications Network Inc.
NTT Chugoku Personal Communications Network Inc.
NTT Shikoku Personal Communications Network Inc.
NTT Kyushu Personal Communications Network Inc.
