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o | REGISTRATION STATEMENT PURSUANT TO SECTION 12(B) OR (G) OF THE SECURITIES EXCHANGE ACT OF 1934 |
þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Sanno Park Tower | ||
11-1, Nagata-cho 2-chome | ||
Chiyoda-ku, Tokyo 100-6150 | ||
Japan | Japan | |
(Jurisdiction of incorporation or organization) | (Address of principal executive offices) |
TEL: +81-3-5156-1338 / FAX: +81-5156-0271
Sanno Park Tower, 2-11-1 Nagata-cho, Chiyoda-ku, Tokyo 100-6150 Japan
(Name, Telephone, E-mail and /or Facsimile number and Address of Company Contact Person)
Title of each class | Name of each exchange on which registered | |
Common Stock | New York Stock Exchange | |
Yesþ Noo
Standards Boardo Othero
* | Not for trading, but only in connection with the listing of the American Depositary Shares. |
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Exhibit 1.3 | ||||||||
Exhibit 8.1 | ||||||||
Exhibit 12.1 | ||||||||
Exhibit 12.2 | ||||||||
Exhibit 13.1 | ||||||||
Exhibit 13.2 | ||||||||
Exhibit 15.1 | ||||||||
Exhibit 15.2 |
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1. | As competition in the market becomes more fierce due to changes in the business environment caused by Mobile Number Portability (“MNP”), new market entrants, competition from other cellular service providers or other technologies, and other factors, could limit our acquisition of new subscriptions and retention of existing subscriptions, or may lead to diminishing ARPU or an increase in our costs and expenses. |
2. | Current and new services, usage patterns, and sales schemes introduced by our corporate group may not develop as planned, which could affect our financial conditions and limit our growth. |
3. | The introduction of or changes in various laws or regulations or the application of such laws and regulations to our corporate group could restrict our business operations, which may adversely affect our financial condition and results of operations. |
4. | Limitations in the amount of frequency spectrum or facilities made available to us could negatively affect our ability to maintain and improve our service quality and level of customer satisfaction. |
5. | The W-CDMA technology that we use for our 3G system and/or mobile multimedia services may not be introduced by other overseas operators, which could limit our ability to offer international services to our subscribers. |
6. | Our domestic and international investments, alliances and collaborations may not produce the returns or provide the opportunities we expect. |
7. | As electronic payment capability and many other new features are built into our cellular phones, and services of parties other than those belonging to our corporate group are provided through our cellular handsets, potential problems resulting from malfunctions, defects or loss of handsets, or imperfection of services provided by such other parties may arise, which could have an adverse effect on our financial condition and results of operations. |
8. | Social problems that could be caused by misuse or misunderstanding of our products and services may adversely affect our credibility or corporate image. |
9. | Inadequate handling of confidential business information including personal information by our corporate group, contractors and other factors, may adversely affect our credibility or corporate image. |
10. | Owners of intellectual property rights that are essential for our business execution may not grant us the right to license or otherwise use such intellectual property rights on acceptable terms or at all, which may limit our ability to offer certain technologies, products and/or services, and we may also be held liable for damage compensation if we infringe the intellectual property rights of others. |
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11. | Earthquakes, power shortages, malfunctioning of equipment, software bugs, computer viruses, cyber attacks, hacking, unauthorized access and other problems could cause systems failures in the networks required for the provision of service, disrupting our ability to offer services to our subscribers and may adversely affect our credibility or corporate image. |
12. | Concerns about wireless telecommunications health risks may adversely affect our financial condition and results of operations. |
13. | Our parent company, Nippon Telegraph and Telephone Corporation (NTT), could exercise influence that may not be in the interests of our other shareholders. |
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As of and for the year ended March 31, | ||||||||||||||||||||||||
2004 | 2005 | 2006 | 2007 | 2008 | 2008 | |||||||||||||||||||
(in millions, except per share data) | ||||||||||||||||||||||||
Income Statement Data | ||||||||||||||||||||||||
Operating revenues: | ||||||||||||||||||||||||
Wireless services | ¥ | 4,487,912 | ¥ | 4,296,537 | ¥ | 4,295,856 | ¥ | 4,314,140 | ¥ | 4,165,234 | $ | 41,715 | ||||||||||||
Equipment sales | 560,153 | 548,073 | 470,016 | 473,953 | 546,593 | 5,474 | ||||||||||||||||||
Total | 5,048,065 | 4,844,610 | 4,765,872 | 4,788,093 | 4,711,827 | 47,189 | ||||||||||||||||||
Operating expenses | 3,945,147 | 4,060,444 | 3,933,233 | 4,014,569 | 3,903,515 | 39,094 | ||||||||||||||||||
Operating income | 1,102,918 | 784,166 | 832,639 | 773,524 | 808,312 | 8,095 | ||||||||||||||||||
Other income (expense) (1) | (1,795 | ) | 504,055 | 119,664 | (581 | ) | (7,624 | ) | (76 | ) | ||||||||||||||
Income before income taxes, equity in net income (losses) of affiliates and minority interests | 1,101,123 | 1,288,221 | 952,303 | 772,943 | 800,688 | 8,019 | ||||||||||||||||||
Income taxes | 429,116 | 527,711 | 341,382 | 313,679 | 322,955 | 3,234 | ||||||||||||||||||
Income before equity in net income (losses) of affiliates and minority interests | 672,007 | 760,510 | 610,921 | 459,264 | 477,733 | 4,785 | ||||||||||||||||||
Equity in net income (losses) of affiliates, net of applicable taxes (2)(3) | (21,960 | ) | (12,886 | ) | (364 | ) | (1,941 | ) | 13,553 | 135 | ||||||||||||||
Minority interests | (40 | ) | (60 | ) | (76 | ) | (45 | ) | (84 | ) | (1 | ) | ||||||||||||
Net income | ¥ | 650,007 | ¥ | 747,564 | ¥ | 610,481 | ¥ | 457,278 | ¥ | 491,202 | $ | 4,919 | ||||||||||||
Per Share Data | ||||||||||||||||||||||||
Basic and diluted earnings per share | ¥ | 13,099 | ¥ | 15,771 | ¥ | 13,491 | ¥ | 10,396 | ¥ | 11,391 | $ | 114.08 | ||||||||||||
Dividends declared and paid per share | ¥ | 1,000 | ¥ | 2,000 | ¥ | 3,000 | ¥ | 4,000 | ¥ | 4,400 | ||||||||||||||
Dividends declared and paid per share (4) | $ | 8.72 | $ | 18.65 | $ | 25.54 | $ | 34.03 | $ | 44.07 | ||||||||||||||
Balance Sheet Data | ||||||||||||||||||||||||
Working capital (5) | ¥ | 493,679 | ¥ | 1,047,597 | ¥ | 558,459 | ¥ | 568,988 | ¥ | 533,465 | $ | 5,343 | ||||||||||||
Total property, plant and equipment, net | 2,702,505 | 2,682,429 | 2,777,454 | 2,900,653 | 2,834,607 | 28,389 | ||||||||||||||||||
Total assets | 6,262,266 | 6,136,521 | 6,365,257 | 6,116,215 | 6,210,834 | 62,202 | ||||||||||||||||||
Total debt (6) | 1,091,596 | 948,523 | 792,405 | 602,965 | 478,464 | 4,792 | ||||||||||||||||||
Total liabilities | 2,557,510 | 2,228,468 | 2,312,120 | 1,953,748 | 1,933,050 | 19,360 | ||||||||||||||||||
Total shareholders’ equity | 3,704,695 | 3,907,932 | 4,052,017 | 4,161,303 | 4,276,496 | 42,829 |
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As of and for the year ended March 31, | ||||||||||||||||||||||||
2004 | 2005 | 2006 | 2007 | 2008 | 2008 | |||||||||||||||||||
(in millions, except per share data) | ||||||||||||||||||||||||
Other Financial Data | ||||||||||||||||||||||||
Depreciation and amortization expenses and loss on sale or disposal of property, plant and equipment | 756,002 | 781,096 | 774,137 | 801,046 | 830,784 | 8,320 | ||||||||||||||||||
Net cash provided by operating activities | 1,710,243 | 1,181,585 | 1,610,941 | 980,598 | 1,560,140 | 15,625 | ||||||||||||||||||
Net cash used in investing activities | (847,309 | ) | (578,329 | ) | (951,077 | ) | (947,651 | ) | (758,849 | ) | (7,600 | ) | ||||||||||||
Net cash used in financing activities | (705,856 | ) | (672,039 | ) | (590,621 | ) | (531,481 | ) | (497,475 | ) | (4,982 | ) | ||||||||||||
Margins (percent of operating revenues): | ||||||||||||||||||||||||
Operating income margin | 21.8 | % | 16.2 | % | 17.5 | % | 16.2 | % | 17.2 | % | 17.2 | % | ||||||||||||
Net income margin | 12.9 | % | 15.4 | % | 12.8 | % | 9.6 | % | 10.4 | % | 10.4 | % |
(1) | Includes a gain on the sale of AT&T Wireless Services, Inc. shares of ¥501,781 million for the year ended March 31, 2005, and an aggregate gain on the sales of Hutchison 3G UK Holdings Limited and KPN-Mobile N.V. shares of ¥101,992 million for the year ended March 31, 2006. | |
(2) | Includes impairment of investments in affiliates. See Note 7 of Notes to Consolidated Financial Statements. | |
(3) | Net of deferred taxes of ¥ (4,527) million, ¥1,492 million, ¥1,653 million, ¥ (850) million and ¥9,257 million in the years ended March 31, 2004, 2005, 2006, 2007 and 2008, respectively. | |
(4) | The dividends per share were translated into U.S. dollars at the relevant record date. | |
(5) | Working capital was computed by subtracting total current liabilities from total current assets. | |
(6) | Total debt includes total short-term debt (including commercial paper and current portion of long-term debt) and long-term debt. |
Fiscal Year ended March 31, | High | Low | Average (1) | Period-end | ||||||||||||
2004 | 120.55 | 104.18 | 112.94 | 104.18 | ||||||||||||
2005 | 114.30 | 102.26 | 107.28 | 107.22 | ||||||||||||
2006 | 120.93 | 104.41 | 113.15 | 117.48 | ||||||||||||
2007 | 121.81 | 110.07 | 116.92 | 117.56 | ||||||||||||
2008 | 124.09 | 96.88 | 114.31 | 99.85 | ||||||||||||
Calendar Year 2007 | ||||||||||||||||
December | 114.45 | 109.68 | 112.45 | 111.71 | ||||||||||||
Calendar Year 2008 | ||||||||||||||||
January | 109.70 | 105.42 | 107.82 | 106.74 | ||||||||||||
February | 108.15 | 104.19 | 107.03 | 104.19 | ||||||||||||
March | 103.99 | 96.88 | 100.76 | 99.85 | ||||||||||||
April | 104.56 | 100.87 | 102.68 | 104.53 | ||||||||||||
May | 105.52 | 103.01 | 104.36 | 105.46 | ||||||||||||
June (through June 13, 2008) | 107.94 | 104.41 | 106.19 | 107.92 |
(1) | For fiscal years, calculated from the average of the exchange rates on the last day of each month during the period. For calendar year months, calculated based on the average of daily closing exchange rates. |
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* MVNO: | Mobile Virtual Network Operator, a business that borrows the wireless communication infrastructure of other companies to provide services. |
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• | We will be able to find the partners and content providers needed to provide the new services and forms of usage we are introducing and persuade a sufficient number of vendors and other establishments to install i-mode FeliCa readers; |
• | We will be able to provide planned new services and forms of usage as scheduled and keep costs needed for the deployment and expansion of such services within budget; |
• | The services and installment sale and other methods we offer and plan to offer will be attractive to current and potential subscribers and there will be sufficient demand for such services; |
• | Manufacturers and content providers will create and offer products including handsets for our 3G system and handsets and programming for our 3G i-mode services at appropriate prices and on a timely basis; |
• | Our current and future data communications services including i-mode and other services will be attractive to existing and potential subscribers and achieve continued or new growth; |
• | Demand in the market for mobile handset functionality will be as we expect and as a result our handset procurement costs will be reduced; and |
• | We will be able to commence services with improved data communication speeds enabled by HSDPA (High Speed Downlink Packet Access, a high-speed packet transmission technology utilizing Wideband Code Division Multiple Access, or W-CDMA) technology planned. |
• | Revision of the spectrum allocation system such as reallocation of spectrum and introduction of an auction system; |
• | Measures to open up some segments of telecommunication platform functions such as authentication and payment collection to other operators; |
• | Rules that could require us to open our i-mode service to all content providers and Internet service providers or that could prevent us from setting or collecting i-mode content fees or putting i-mode service on cellular phone handsets as an initial setting; |
• | Regulations to prohibit or restrict certain content or transactions or mobile Internet services such as i-mode; |
• | Measures which would introduce new costs such as the designation of mobile phone communications as a universal service and other changes to the current universal service fund system; |
• | Regulations to increase handset competition such as SIM*1 unlocking regulations; |
• | Fair competition measures to promote new entry by MVNOs |
• | Introduction of new measures to promote competition based on a review of the designated telecommunications facilities system(dominant carrier regulation); and |
• | Other measures including competition safeguard measures directed toward us, NTT East and NTT West to enhance competition that would restrict our business operations in the telecommunications industry. |
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* 1 SIM: | Subscriber Identity Module. An IC card inserted into a handset on which subscriber information is recorded, used to identify user. |
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• | Breakdown, defect and malfunction of our handsets; |
• | Loss of information, e-money or points due to a breakdown of handsets or other factors; |
• | Illegal use of information, e-money, credit functions and points by third parties due to a loss or theft of handsets; |
• | Illegal access to and use of user records and balances accumulated on handsets by third-parties; and |
• | Inadequate and inappropriate management of e-money, credit functions or points by companies with which we make alliances or collaborate. |
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(1) | These service subsidiaries provide operational services, such as engineering and support services, to NTT DOCOMO, INC. | |
(2) | These DOCOMO regional subsidiaries provide wireless telecommunications services in respective geographical regions in Japan, other than the region in which NTT DOCOMO, INC. itself provides such services. | |
(3) | These indirect service subsidiaries provide operational services, such as engineering and other services, to the respective DOCOMO regional subsidiaries which wholly own them. |
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• | Increase revenues from international roaming services, license agreements and consulting services; |
• | Earn dividends revenues and capital gains from investments; and |
• | Expand our revenue sources into cellular phone-related businesses. |
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• | For a safer, healthier and more secure society |
• | Held approximately 2,400 sessions of “DOCOMO Mobile Phone Safety Program” seminars nationwide during the fiscal year ended March 31, 2008, to provide children with tips on safe and proper phone usage manners, and further promoted and encourage the use of Access Restriction Service (Filtering Service). |
• | Established the “DOCOMO Anshin Hotline”, a dedicated call center, to provide consultation for billing plans and various services to help reduce anxiety regarding the use of cellular phones by children. |
• | Universal design products and services |
• | To enable the elderly and the disabled to use mobile phones in their daily activities with greater convenience, provided a touring seminar called “Mobile Phone Usage Program” (a total of 41 classes in the Kanto-Koushinetsu area for the fiscal year ended March 31, 2008). |
• | The cumulative number of sales of the “Raku Raku Phone” series, which has been well received by many customers since its introduction in 1999, exceeded 10 million units nationwide in April 2007, and had reached 12.89 million units as of the end of March 31, 2008. |
• | We were awarded the “1997 Prime Minister’s Commendation for Contributors to the Promotion of Barrier-Free Environments” in recognition of our efforts to create a universal design for our products and services enabling easy use by all. |
• | Global environmental conservation initiatives |
• | Deployed optical extension stations (hikari haridashi-kyoku) (a base station where the child device is placed at a location different from the main device (parent station), and is connected to the parent device by optical cable), and deployed high-efficiency power supply equipment and high-efficiency air conditioning equipment, as part of our efforts to facilitate energy savings at our communication facilities. |
• | Collected used cellular handsets (approximately 65 million units on a cumulative basis), and continued our forest improvement initiatives by adding five more locations to the “DOCOMO Woods” Campaign (Reforestation Project) (36 locations on a cumulative basis). |
• | Social contribution activities |
• | To assist the education of children, constructed a total of 10 schools in Thailand, and carried out programs aimed at fostering the health and well-being of young talent by sponsoring various sports clinics. |
• | Participated in “Product Red” (an initiative that creates a flow of donations from private businesses to a global fund), donating one percent of the monthly billing amount from our customers who used our “FOMA M702 iS (RED)” as to fight HIV/AIDS in Africa. |
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• | Enhancement of System Reliability | |
To ensure that our mobile communications systems function properly in the event of a disaster, we have reinforced our facilities and equipment by applying earthquake resistant reinforcement to our buildings/antenna towers, anchoring our machines/equipment and strengthening their earthquake resistance, accommodating cables in shielded tunnels, and laying our communication cables underground. We have also endeavored to enhance the reliability of our networks by providing backups to our facilities and circuits through the use of multiple/dual routes or loop structure in our relay transmission lines (middle-distance transmission lines), using redundant configurations in our communication facilities or installing them in dispersed locations, and increasing the use of communications satellites. | ||
• | Securing important communications | |
As a designated public institution that is required to cooperate with national/local government institutions in their disaster damage prevention efforts, we have established a priority telephone system allowing institutions engaged in disaster damage prevention activities to use our circuits with higher priority in the event of a disaster. We have also strived to ensure that important communications are protected by ensuring efficient network control and lending cellular phones and/or other devices to municipal governments and/or other institutions in the event of a disaster. | ||
• | Early recovery of communications services | |
With the goal of recovering mobile communications services at the earliest possible time following a disaster, we have employed various measures, including the preparation of hardware such as the deployment of mobile base station equipment, and mobile power supply vehicles and the securing of restoration materials, as well as the creation of operation manuals for disaster situations, organizing “Disaster Management Headquarters” and conducting drills for disaster damage prevention. |
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• | e-mail; |
• | games and other entertainment; |
• | music distribution/video clips/e-books; |
• | social network services |
• | online shopping (CDs, books, tickets, others)/auctions; |
• | news, weather and sports information; |
• | mobile banking; |
• | other financial services, such as DCMX, iD and other credit card services and information and online stock quotes and trading; |
• | maps and travel information; |
• | community guides, living information, safety and healthcare information; and |
• | telephone directories. |
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Year ended March 31, | ||||||||||||||||
2005 | 2006 | 2007 | 2008 | |||||||||||||
(in thousands) | ||||||||||||||||
DOCOMO cellular subscriptions | 48,825 | 51,144 | 52,621 | 53,388 | ||||||||||||
mova subscriptions | 37,324 | 27,680 | 17,092 | 9,438 | ||||||||||||
FOMA subscriptions | 11,501 | 23,463 | 35,529 | 43,949 | ||||||||||||
i-mode subscriptions | 44,021 | 46,360 | 47,574 | 47,993 | ||||||||||||
i-mode subscriptions (FOMA) | 11,353 | 22,914 | 34,052 | 41,213 | ||||||||||||
i-mode subscriptions (mova) | 32,667 | 23,446 | 13,522 | 6,780 | ||||||||||||
DOCOMO estimated market share of total subscriptions | 56.1% | 55.7% | 54.4% | 52.0% | ||||||||||||
DOCOMO subscription growth rate | 5.4% | 4.7% | 2.9% | 1.5% | ||||||||||||
DOCOMO average monthly churn rate (1) | 1.01% | 0.77% | 0.78% | 0.80% |
(1) | In general, the term “churn rate” is defined as the level of customers who disconnect their service relative to the total subscription base. Our measurement of churn rates includes voluntary terminations in connection with handset upgrades or changes. The average monthly churn rate for each fiscal year is calculated by adding the number of cellular subscriber contract terminations in each month of that fiscal year and dividing that number by sum of the active cellular subscriptions* from April to March. | |
* | active cellular subscriptions = (No. of subscriptions at the end of previous month + No. of subscriptions at the end of current month) / 2 |
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Year ended March 31, | ||||||||||||
2006 | 2007 | 2008 | ||||||||||
MOU (FOMA+mova) | 149 | 144 | 138 | |||||||||
Aggregate ARPU (FOMA+mova) | ¥ | 6,910 | ¥ | 6,700 | ¥ | 6,360 | ||||||
Voice ARPU (FOMA+mova) | 5,030 | 4,690 | 4,160 | |||||||||
Packet ARPU (FOMA+mova) | 1,880 | 2,010 | 2,200 | |||||||||
i-mode ARPU (FOMA+mova) | 1,870 | 1,990 | 2,170 |
FY Results : Sum of No. of subscriptions* for each month from April to March | ||
* | subscriptions = (No. of subscriptions at the end of previous month + No. of subscriptions at the end of current month) / 2 |
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Year ended March 31, | ||||||||||||
2006 | 2007 | 2008 | ||||||||||
MOU (FOMA) | 202 | 175 | 156 | |||||||||
Aggregate ARPU (FOMA) | ¥ | 8,700 | ¥ | 7,860 | ¥ | 6,990 | ||||||
Voice ARPU (FOMA) | 5,680 | 5,070 | 4,340 | |||||||||
Packet ARPU (FOMA) | 3,020 | 2,790 | 2,650 | |||||||||
i-mode ARPU (FOMA) | 2,980 | 2,750 | 2,610 |
FY Results : Sum of No. of subscriptions* for each month from April to March | ||
* | subscriptions = (No. of subscriptions at the end of previous month + No. of subscriptions at the end of current month) / 2 |
Year ended March 31, | ||||||||||||
2006 | 2007 | 2008 | ||||||||||
MOU (mova) | 122 | 104 | 82 | |||||||||
Aggregate ARPU (mova) | ¥ | 5,970 | ¥ | 5,180 | ¥ | 4,340 | ||||||
Voice ARPU (mova) | 4,680 | 4,190 | 3,590 | |||||||||
i-mode ARPU (mova) | 1,290 | 990 | 750 |
FY Results : Sum of No. of subscriptions* for each month from April to March | ||
* | subscriptions = (No. of subscriptions at the end of previous month + No. of subscriptions at the end of current month) / 2 |
(1) | Communications module service subscriptions and the revenues thereof are not included in the ARPU and MOU calculations. | |
(2) | The denominator used in calculating i-mode ARPU (FOMA+mova, FOMA, mova) is the aggregate number of cellular subscriptions to each service (FOMA+mova, FOMA, mova, respectively), regardless of whether i-mode service is activated or not. |
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(1) | We will re-build our brand and strengthen our ties with our customers. | ||
(2) | We will seek and value the voices of our customers and become a company that exceeds their expectations. | ||
(3) | We will continue to drive innovations, and aspire to become a corporation that is admired by the world. | ||
(4) | We will enrich our organization with diverse and active talents who seek a common goal and dream. |
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* | “Windows Mobile” is a registered trademark of Microsoft Corporation in the United States and other countries. |
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* | MOAP is a software platform that was first used on some models in the FOMA 901i series handsets, and the Linux-version of MOAP was jointly developed with NEC Corporation and Panasonic Mobile Communications, Co., Ltd. |
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• | IMT-MC, known as cdma2000; and | ||
• | IMT-DS, known as Wideband Code Division Multiple Access, or W-CDMA. |
• | a research laboratory; | ||
• | four development departments, including core network development, radio access network development, service & solution development, and communication device development departments; | ||
• | an R&D general affairs department; and | ||
• | an R&D strategy department. |
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Regulation: | ||||
a. | Business entry | Registration with the Minister of MIC required for carriers that install large-size telecommunications circuit facilities. Notification to the Minister of MIC required for carriers other than the above. | ||
b. | Suspension and Discontinuation of business | Notification to the Minister of MIC and, in general, announcement to users are required. | ||
c. | Tariff settings, service offerings, etc. | Unregulated in principle (1) Accountability to users concerning outline of terms and conditions of telecommunications service and proper and swift processing of complaints and inquiries from the users are required. |
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Regulation: | ||||
d. | Business improvement order | The Minister of MIC may order a telecommunications carrier to improve business activities to protect the interests of the public and users with regard to the secrecy of communications, unreasonably discriminatory treatment, ensuring important communications, tariff and other service conditions, sound development of telecommunications, national convenience, etc. | ||
e. | Interconnection | Obligation for interconnection with other telecommunications carriers in principle, which propose interconnection. In the event a telecommunications carrier does not accept entering into a consultation despite other carrier’s proposal to enter into an agreement to interconnect telecommunications facilities or if said consultation fails to come to an agreement, except for certain cases, the Minister of MIC may order such telecommunications carrier to start or resume consultation. | ||
f. | Privilege of public utilities | Based on a request by a telecommunications carrier, except for certain cases, the Minister of MIC may designate the telecommunications carrier as an approved carrier who has the privilege to act as a public utility. | ||
g. | Ensuring important communications | Telecommunications carriers are required to prioritize important communications when natural disaster, accident or any other emergency occurs or is on the verge of occurring. | ||
h. | Permission of agreement with foreign governments, etc. | The Minister of MIC’s permission is required for conclusion, amendment or abolition of agreements/contracts on important matters relating to telecommunications business with foreign governments, nationals, or judicial persons/entities. | ||
i. | Maintenance and Self-declaration of conformity | Telecommunications carriers that install telecommunications circuit facilities are obligated to maintain their facilities in compliance with technical standards and to confirm conformity of such facilities to technical standards by themselves, and notify the outcome to the Minister of MIC. |
(1) | A telecommunications carrier providing universal telecommunications services shall establish tariffs concerning such services and shall submit tariffs to the Minister of MIC. A telecommunications carrier providing certain designated telecommunications services shall establish tariffs concerning such services and shall submit tariffs to the Minister of MIC. |
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• | realization of a mobile communications system with data transmission speeds that are 100 times faster than the current level by fiscal year 2010, and | ||
• | formulation of guidelines for standardization by 2010 of displays and methods of operations for handsets and equipment that take into consideration user-friendliness for all people, including seniors and the handicapped, and promotion of product labeling that facilitates selection by consumers of easy-to-use products. |
• | cellular handsets for 3G mobile communication systems introduced by network operators in April 2007 and after must in principle be equipped with GPS location and notification functionality. |
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• | further opening of the NTT group’s local network, and | ||
• | realization of competition within the NTT group by decreasing NTT’s ownership percentage in our company and NTT Com. |
• | maintaining the present group operation under a holding company will be necessary in order to proceed with the structural reform that would revise NTT East and NTT West cost structures by reallocating personnel within the NTT group and making use of outsourcing companies, | ||
• | from the standpoint of maximizing corporate value (shareholders’ profits), the NTT group management apportions each group company’s business areas such that (i) in fields where new markets need to be developed, such as Internet-related business, each company is free to decide its own business strategy while taking advantage of its own strengths, even if this involves competition among NTT group companies; and (ii) in the remaining fields, group operations are carried out on the principle of avoiding duplication of resources, | ||
• | the simultaneous holding of executive positions between local companies (NTT East and NTT West) and NTT Com or our company is not implemented currently and will remain unimplemented, from the viewpoint of fair competition, and | ||
• | decisions on NTT’s investment ratio of NTT Com and our company and the simultaneous holding of executive positions will continue to be considered from the standpoint of maximizing shareholders’ profits, while fully respecting the autonomy in actual business operations of each NTT group company and taking into account operational necessities and stock market trends, as the market and other environmental factors surrounding the NTT group are rapidly changing. |
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• | in the cellular phone and PHS markets, the migration from 2G to 3G would advance, and competition would remain brisk; | ||
• | while the NTT DOCOMO Group had a market share, as of December 31, 2006, of 52.8% and has been in a position to control the market, due to the regulations on Category II-designated telecommunication facilities and the intense competition among carriers for market share, the possibility of its actually exercising market control in the future is low; and | ||
• | regarding concerns that multiple carriers could collude to exercise market control, the entry of new competitors to the market, including Softbank and EMOBILE, and the introduction of Mobile Number Portability, have resulted in the provision of a variety of rate discounts and a diverse range of services. As a result, the competition seems even greater than ever, and the possibility of the exercise of market control in the future is low. |
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• | promotion of facility competition; | ||
• | review of the designated telecommunications facilities system (dominant regulations); | ||
• | review of the calculation rules for NTT East and NTT West interconnection charges; | ||
• | promotion of competition in the mobile telecommunications market; | ||
• | environmental improvements for realizing communication handsets compatible with IP technology; | ||
• | review of rate policy; | ||
• | review of the Universal Service Fund system; | ||
• | environmental improvements for ensuring network neutrality; | ||
• | strengthening of dispute resolution functions; | ||
• | review of market exit rules; and | ||
• | enhancement of consumer protection measures. |
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• | review of marketing models for mobile businesses; | ||
• | partial introduction of the new sales price plans (plans separating communication charges and handset fees) for fiscal 2008; | ||
• | clarification of the accounting arrangements for sales promotion funds; | ||
• | removal of SIM locks (final conclusion in 2010 regarding mandatory removal of SIM locks); | ||
• | promotion of handset platform standardization; | ||
• | examination of measures for enhancing consumer protection; and | ||
• | consideration of greater platform collaboration. |
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• | To the extent possible, we must establish transmission lines for our network independent of NTT. In the event that we use NTT transmission lines, the terms and conditions for such use shall be the same as those for our competitors. | ||
• | NTT must not favor us in any transactions between NTT and us. The terms and conditions for our use of NTT utility poles, access to NTT’s network, access to NTT research and development and similar matters should be the same as for our competitors. | ||
• | All former NTT employees transferred to us were required to be permanent employees, rather than being seconded from NTT. | ||
• | We were to plan to have our shares listed and NTT’s ownership in us reduced approximately five years after incorporation. | ||
• | We must not engage in joint procurement with NTT so as not to use NTT’s purchasing power with the objective of obtaining favorable treatment or pricing from its suppliers and manufacturers. |
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Country of | Voting rights owned by the | |||||||
Name | Incorporation | Company, directly or indirectly | ||||||
NTT DoCoMo Hokkaido, Inc. (1) | Japan | 100.0 | % | |||||
NTT DoCoMo Tohoku, Inc. (1) | Japan | 100.0 | % | |||||
NTT DoCoMo Tokai, Inc. (1) | Japan | 100.0 | % | |||||
NTT DoCoMo Hokuriku, Inc. (1) | Japan | 100.0 | % | |||||
NTT DoCoMo Kansai, Inc. (1) | Japan | 100.0 | % | |||||
NTT DoCoMo Chugoku, Inc. (1) | Japan | 100.0 | % | |||||
NTT DoCoMo Shikoku, Inc. (1) | Japan | 100.0 | % | |||||
NTT DoCoMo Kyushu, Inc. (1) | Japan | 100.0 | % | |||||
DoCoMo Service Inc. | Japan | 100.0 | % | |||||
DoCoMo Engineering Inc. | Japan | 100.0 | % | |||||
DoCoMo Mobile Inc. | Japan | 100.0 | % | |||||
DoCoMo Support Inc. | Japan | 100.0 | % | |||||
DoCoMo Systems, Inc. | Japan | 100.0 | % | |||||
DoCoMo Sentsu, Inc. | Japan | 100.0 | % | |||||
DoCoMo Business Net, inc. | Japan | 100.0 | % | |||||
DoCoMo Technology, Inc. | Japan | 100.0 | % |
(1) | One of our eight regional subsidiaries. |
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• | Our Business | ||
• | Trends in the Mobile Communications Industry in Japan | ||
• | Operating Strategies | ||
• | Operating Trends | ||
• | Operating Results for the years ended March 31, 2008 and 2007 | ||
• | Segment Information | ||
• | Recent Accounting Pronouncements and Critical Accounting Policies | ||
• | Liquidity and Capital Resources | ||
• | Research and Development | ||
• | Trend Information | ||
• | Others |
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• | Offering of free voice calls among family members under the same discount account with the same operators, free voice calls among subscribers under the same corporate subscription account with the same operators, introduction of new discount programs to cut basic monthly charges by half upon commitment of long-term subscriptions; | ||
• | Introduction of new sales methods such as installment sales for handsets; | ||
• | Launching of new services such as providing mobile credit payment services, music downloading, video downloading, news casting, web-browsing filtering, location information services and high-speed data transmission; | ||
• | Equipping new handsets with various new functions including a TV tuner, radio tuner, music player, video player, contact-less IC (Integrated Circuit) chip capability, GPS (Global Positioning System), enlarged memory capability, compatibility with GSM network or security function; and | ||
• | Partnering with entities of different industries including retail, manufacturing and financial institutions. |
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• | further enhancement of FOMA network quality; | ||
• | buildup of FOMA network capacity in response to an increase in data traffic following the penetration of our packet flat-rate service for unlimited i-mode usage; and | ||
• | further expansion of HSDPA service coverage. |
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• | cellular services revenues decreased due to a gradual increase in the discount rate of basic monthly charges according to an increase in the number of years of subscriptions under long-term subscription discount, penetration of discount programs newly introduced for subscriber retention purposes and a decrease in MOU in addition to the adverse impact of changes in estimates during the prior year regarding initially recognizing as revenues the portion of “Nikagetsu Kurikoshi (2 month carry-over)” allowances that are estimated to expire; |
• | a decrease in both the number of handsets sold to agent resellers and revenues per handset was more than offset by a decrease in sales commissions to be deducted from gross equipment sales. As a result, net equipment sales increased from the prior fiscal year. However, operating revenues still decreased as the increase in net equipment sales was not sufficient to cover the decrease in cellular services revenues; and |
• | a combination of a decrease in sales commissions subsequent to the introduction of “Value Course” and a decrease in cost of equipment sold due to a decline in the purchase price per handset and in the number of handsets sold contributed to a decrease in operating expenses, which more than offset the decrease in operating revenues and resulted in an increase in operating income. |
• | we expect cellular services revenues to decrease because a decline in ARPU caused by penetration of “Value Plan”, for which the basic monthly charge is discounted, penetration of discount programs newly introduced for subscriber retention purposes and negative impact of the provision of free domestic voice calls among subscribers registered in the same “Fami-wari MAX 50” account will more than offset the positive effect of our acquisition of new subscriptions; |
• | we expect that an increase in the number of handsets sold to agent resellers and a continued decrease in sales commissions subsequent to the introduction of “Value Course” will contribute to an increase in equipment sales, which will more than offset the decrease in cellular services revenues and result in an increase in operating revenues; and |
• | we expect that a continued decrease in sales commissions will be offset by an increase in expenses related to retention of current subscribers, resulting in a slight increase in operating expenses. We expect the net of the increases in operating revenues and operating expenses to be an increase in operating income. |
• | promotion of optional flat rate-billing plans or flat-rate value added services including “Pake-hodai”, an optional packet flat-rate service for unlimited i-mode usage, “i-channel”, a convenient and easy-to-use information push-delivery service and “Music & Video Channel”, a music and video downloading service; |
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• | accelerated development of non-traffic businesses including the acquisition of DCMX subscriptions and promotion of credit usage; and |
• | promotion of usage of international calls and international roaming services, and growth through investment and partnership in Asia-Pacific regions. |
• | reduction of sales commissions through further penetration of “Value Course”; |
• | saving on the development cost of FOMA handsets through provision of packaged software dedicated to our handsets to handset manufacturers; and |
• | administrative optimization and efficient inventory management through the merger with our regional subsidiaries. |
Years ended March 31 | ||||||||||||||||
Increase | ||||||||||||||||
2007 | 2008 | (Decrease) | Change (%) | |||||||||||||
Cellular | ||||||||||||||||
Subscriptions (thousands) | 52,621 | 53,388 | 767 | 1.5 | % | |||||||||||
FOMA services (thousands) | 35,529 | 43,949 | 8,420 | 23.7 | % | |||||||||||
mova services (thousands) | 17,092 | 9,438 | (7,653 | ) | (44.8 | )% | ||||||||||
i-mode services (thousands) | 47,574 | 47,993 | 419 | 0.9 | % | |||||||||||
Market Share (%)(1)(2) | 54.4 | 52.0 | (2.4 | ) | — | |||||||||||
Aggregate ARPU (FOMA+mova) (yen/month/contract)(3) | 6,700 | 6,360 | (340 | ) | (5.1 | )% | ||||||||||
Voice ARPU (yen/month/contract)(4) | 4,690 | 4,160 | (530 | ) | (11.3 | )% | ||||||||||
Packet ARPU(yen/month/contract) | 2,010 | 2,200 | 190 | 9.5 | % | |||||||||||
MOU (FOMA+mova) (minutes/month/contract)(3)(5) | 144 | 138 | (6 | ) | (4.2 | )% | ||||||||||
Churn Rate (%)(2) | 0.78 | 0.80 | 0.02 | — |
(1) | Source for other cellular telecommunications operators: Data announced by Telecommunications Carriers Association | |
(2) | Data calculated including Communication Module Service subscriptions. | |
(3) | Data calculated excluding Communication Module Services-related revenues and Communication Module Services subscriptions. | |
(4) | Inclusive of circuit switched data communications. | |
(5) | MOU (Minutes of usage): Average communication time per month per subscription |
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Millions of yen | ||||||||||||||||
Years ended March 31 | ||||||||||||||||
Increase | ||||||||||||||||
2007 | 2008 | (Decrease) | Change (%) | |||||||||||||
Operating revenues : | ||||||||||||||||
Wireless services | ¥ | 4,314,140 | ¥ | 4,165,234 | ¥ | (148,906 | ) | (3.5 | )% | |||||||
Cellular services revenues | 4,182,609 | 4,018,988 | (163,621 | ) | (3.9 | )% | ||||||||||
- Voice revenues(6) | 2,940,364 | 2,645,096 | (295,268 | ) | (10.0 | )% | ||||||||||
Including: FOMA services | 1,793,037 | 2,084,263 | 291,226 | 16.2 | % | |||||||||||
- Packet communications revenues | 1,242,245 | 1,373,892 | 131,647 | 10.6 | % | |||||||||||
Including: FOMA services | 971,946 | 1,254,648 | 282,702 | 29.1 | % | |||||||||||
PHS services revenues | 23,002 | 9,472 | (13,530 | ) | (58.8 | )% | ||||||||||
Other revenues | 108,529 | 136,774 | 28,245 | 26.0 | % | |||||||||||
Equipment sales | 473,953 | 546,593 | 72,640 | 15.3 | % | |||||||||||
Total operating revenues | 4,788,093 | 4,711,827 | (76,266 | ) | (1.6 | )% | ||||||||||
Operating expenses | ||||||||||||||||
Cost of services | 766,960 | 811,133 | 44,173 | 5.8 | % | |||||||||||
Cost of equipment sold | 1,218,694 | 1,150,261 | (68,433 | ) | (5.6 | )% | ||||||||||
Depreciation and amortization | 745,338 | 776,425 | 31,087 | 4.2 | % | |||||||||||
Selling, general and administrative | 1,283,577 | 1,165,696 | (117,881 | ) | (9.2 | )% | ||||||||||
Total operating expense | 4,014,569 | 3,903,515 | (111,054 | ) | (2.8 | )% | ||||||||||
Operating income | 773,524 | 808,312 | 34,788 | 4.5 | % | |||||||||||
Other income (expense) | (581 | ) | (7,624 | ) | (7,043 | ) | — | |||||||||
Income before income taxes, equity in net income (losses) of affiliates and minority interests: | 772,943 | 800,688 | 27,745 | 3.6 | % | |||||||||||
Income taxes | 313,679 | 322,955 | 9,276 | 3.0 | % | |||||||||||
Income before equity in net income (losses) of affiliates and minority interests: | 459,264 | 477,733 | 18,469 | 4.0 | % | |||||||||||
Equity in net income (losses) of affiliates (net of applicable taxes) | (1,941 | ) | 13,553 | 15,494 | — | |||||||||||
Minority interests | (45 | ) | (84 | ) | (39 | ) | (86.7 | )% | ||||||||
Net income | ¥ | 457,278 | ¥ | 491,202 | ¥ | 33,924 | 7.4 | % | ||||||||
(6) | Inclusive of circuit switched data communications. |
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Years ended March 31 | ||||||||||||||||
Increase | ||||||||||||||||
2006 | 2007 | (Decrease) | Change (%) | |||||||||||||
Cellular | ||||||||||||||||
Subscriptions (thousands) | 51,144 | 52,621 | 1,477 | 2.9 | % | |||||||||||
FOMA services (thousands) | 23,463 | 35,529 | 12,066 | 51.4 | % | |||||||||||
mova services (thousands) | 27,680 | 17,092 | (10,589 | ) | (38.3 | )% | ||||||||||
i-mode services (thousands) | 46,360 | 47,574 | 1,214 | 2.6 | % | |||||||||||
Market Share (%)(1)(2) | 55.7 | 54.4 | (1.3 | ) | — | |||||||||||
Aggregate ARPU (FOMA+mova) (yen/month/contract)(3) | 6,910 | 6,700 | (210 | ) | (3.0 | )% | ||||||||||
Voice ARPU (yen/month/contract)(4) | 5,030 | 4,690 | (340 | ) | (6.8 | )% | ||||||||||
Packet ARPU(yen/month/contract) | 1,880 | 2,010 | 130 | 6.9 | % | |||||||||||
MOU (FOMA+mova) (minutes/month/contract)(3)(5) | 149 | 144 | (5 | ) | (3.4 | )% | ||||||||||
Churn Rate (%)(2) | 0.77 | 0.78 | 0.01 | — |
(1) | Source for other cellular telecommunications operators: Data announced by Telecommunications Carriers Association | |
(2) | Data calculated including Communication Module Service subscriptions. | |
(3) | Data calculated excluding Communication Module Services-related revenues and Communication Module Services subscriptions. | |
(4) | Inclusive of circuit switched data communications. | |
(5) | MOU (Minutes of usage): Average communication time per month per subscription |
Millions of yen | ||||||||||||||||
Years ended March 31 | ||||||||||||||||
Increase | ||||||||||||||||
2006 | 2007 | (Decrease) | Change (%) | |||||||||||||
Operating revenues : | ||||||||||||||||
Wireless services | ¥ | 4,295,856 | ¥ | 4,314,140 | ¥ | 18,284 | 0.4 | % | ||||||||
Cellular services revenues | 4,158,134 | 4,182,609 | 24,475 | 0.6 | % | |||||||||||
- Voice revenues(6) | 3,038,654 | 2,940,364 | (98,290 | ) | (3.2 | )% | ||||||||||
Including: FOMA services | 1,169,947 | 1,793,037 | 623,090 | 53.3 | % | |||||||||||
- Packet communications revenues | 1,119,480 | 1,242,245 | 122,765 | 11.0 | % | |||||||||||
Including: FOMA services | 613,310 | 971,946 | 358,636 | 58.5 | % | |||||||||||
PHS services revenues | 40,943 | 23,002 | (17,941 | ) | (43.8 | )% | ||||||||||
Other revenues | 96,779 | 108,529 | 11,750 | 12.1 | % | |||||||||||
Equipment sales | 470,016 | 473,953 | 3,937 | 0.8 | % | |||||||||||
Total operating revenues | 4,765,872 | 4,788,093 | 22,221 | 0.5 | % | |||||||||||
Operating expenses | ||||||||||||||||
Cost of services | 746,099 | 766,960 | 20,861 | 2.8 | % | |||||||||||
Cost of equipment sold | 1,113,464 | 1,218,694 | 105,230 | 9.5 | % | |||||||||||
Depreciation and amortization | 738,137 | 745,338 | 7,201 | 1.0 | % | |||||||||||
Selling, general and administrative | 1,335,533 | 1,283,577 | (51,956 | ) | (3.9 | )% | ||||||||||
Total operating expense | 3,933,233 | 4,014,569 | 81,336 | 2.1 | % | |||||||||||
Operating income | 832,639 | 773,524 | (59,115 | ) | (7.1 | )% | ||||||||||
Other income (expense) (7) | 119,664 | (581 | ) | (120,245 | ) | — | ||||||||||
Income before income taxes, equity in net losses of affiliates and minority interests: | 952,303 | 772,943 | (179,360 | ) | (18.8 | )% | ||||||||||
Income taxes | 341,382 | 313,679 | (27,703 | ) | (8.1 | )% | ||||||||||
Income before equity in net losses of affiliates and minority interests: | 610,921 | 459,264 | (151,657 | ) | (24.8 | )% | ||||||||||
Equity in net losses of affiliates (net of applicable taxes) | (364 | ) | (1,941 | ) | (1,577 | ) | (433.2 | )% | ||||||||
Minority interests | (76 | ) | (45 | ) | 31 | 40.8 | % | |||||||||
Net income | ¥ | 610,481 | ¥ | 457,278 | ¥ | (153,203 | ) | (25.1 | )% | |||||||
(6) | Inclusive of circuit switched data communications. | |
(7) | Inclusive of an aggregate gain on sales of Hutchison 3G UK Holdings Limited (“H3G UK”) and KPN Mobile N.V. (“KPN Mobile”) shares of ¥101,992 million for the year ended March 31, 2006. |
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• | FOMA services; |
• | mova services; |
• | packet communications services; |
• | international services ; |
• | satellite mobile communications services; and |
• | equipment sales related to these services. |
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• | significant decline in the market value of an asset; |
• | loss of operating cash flow in current period; |
• | introduction of competitive technologies and services; |
• | significant underperformance of expected or historical cash flows; |
• | significant or continuing decline in subscriptions; |
• | changes in the manner of usage of an asset; and |
• | other negative industry or economic trends. |
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• | significant or continued declines in the market values of the investee; |
• | loss of operating cash flow in current period; |
• | significant underperformance of historical cash flows of the investee; |
• | significant impairment losses or write-downs recorded by the investee; |
• | significant changes in the quoted market price of public investee affiliates; |
• | negative results of competitors of investee affiliates; and |
• | other negative industry or economic trends. |
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Years ended March 31 | ||||
2007 | 2008 | |||
Non-contributory defined benefit pension plan | ||||
Discount rate | 2.2% | 2.3% | ||
Expected long-term rate of return on plan assets | 2.5% | 2.5% | ||
Actual return on plan assets | Approximately 3% | Approximately (9)% | ||
NTT CDBP | ||||
Discount rate | 2.2% | 2.3% | ||
Expected long-term rate of return on plan assets | 2.5% | 2.5% | ||
Actual return on plan assets | Approximately 3% | Approximately (5)% |
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Billions of yen | ||||||||||||
Accumulated other | ||||||||||||
Change in pension | comprehensive | |||||||||||
Change in projected | cost, before | income, net of | ||||||||||
Change in Assumptions | benefit obligation | applicable taxes | applicable taxes | |||||||||
Non-contributory defined benefit pension plan | ||||||||||||
0.5% increase/decrease in discount rate | (11.6) / 12.5 | 0.3 / (0.2) | 7.0 / (7.5) | |||||||||
0.5% increase/decrease in expected long-term rate of return on plan assets | — | (0.4) / 0.4 | — | |||||||||
NTT CDBP | ||||||||||||
0.5% increase/decrease in discount rate | (8.6) / 9.7 | 0.3 / (0.3) | 5.3 / (5.9) | |||||||||
0.5% increase/decrease in expected long-term rate of return on plan assets | — | (0.4) / 0.5 | — |
Cash Requirements
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Rating agencies | Type of rating | rating | Outlook | |||
Moody’s | Long Term Obligation Rating | Aa1 | Stable | |||
Standard & Poor’s | Long-Term Issuer Credit Rating | AA | Stable | |||
Standard & Poor’s | Long-Term Issue Credit Rating | AA | — | |||
Japan Credit Rating Agency, Ltd. | Long-Term Senior Debt Rating | AAA | Stable | |||
Rating and Investment Information, Inc. | Issuer Rating | AA+ | Stable |
Payments Due by Period | ||||||||||||||||||||
1 year | After | |||||||||||||||||||
Category of Obligations | Total | or less | 1-3 years | 4-5 years | 5 years | |||||||||||||||
(millions of yen) | ||||||||||||||||||||
Long-Term Debt | ||||||||||||||||||||
Bonds | ¥ | 381,511 | ¥ | 49,200 | ¥ | 163,845 | ¥ | 168,466 | ¥ | — | ||||||||||
Loans | 95,241 | 26,462 | 46,037 | 22,742 | — | |||||||||||||||
Capital Leases | 8,284 | 3,036 | 3,923 | 1,264 | 61 | |||||||||||||||
Operating Leases | 22,629 | 2,152 | 3,391 | 2,848 | 14,238 | |||||||||||||||
Other Contractual Obligations | 118,695 | 118,695 | — | — | — | |||||||||||||||
Total | ¥ | 626,360 | ¥ | 199,545 | ¥ | 217,196 | ¥ | 195,320 | ¥ | 14,299 |
* | The amount of contractual obligations which is immaterial in amount or of which the timing of payments are uncertain is not included in “Other Contractual Obligations” in the above table. |
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Years ended March 31 | ||||||||||||
2006 | 2007 | 2008 | ||||||||||
(millions of yen) | ||||||||||||
Net cash provided by operating activities | ¥ | 1,610,941 | ¥ | 980,598 | ¥ | 1,560,140 | ||||||
Net cash used in investing activities | (951,077 | ) | (947,651 | ) | (758,849 | ) | ||||||
Net cash used in financing activities | (590,621 | ) | (531,481 | ) | (497,475 | ) | ||||||
Net increase (decrease) in cash and cash equivalents | 70,772 | (497,662 | ) | 303,843 | ||||||||
Cash and cash equivalents at beginning of year | 769,952 | 840,724 | 343,062 | |||||||||
Cash and cash equivalents at end of year | ¥ | 840,724 | ¥ | 343,062 | ¥ | 646,905 | ||||||
• | a decrease in the net payment of income taxes by ¥179.2 billion, where the payment of income taxes decreased to ¥ 200.1 billion from ¥359.9 billion in the prior fiscal year and the collection of income taxes receivable increased to ¥20.3 billion from ¥0.9 billion in the prior fiscal year, after deferred tax asset from the impairment of our investment in H3G UK was realized; and |
• | as banks were closed on the last day of March 2007, cash in the amount of ¥210.0 billion including cellular revenues, which would have been received by March 31, 2007, was actually received in April 2007. |
• | expenditures for purchases of tangible and intangible assets decreased to ¥765.3 billion from ¥948.7 billion in the prior fiscal year; |
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• | net proceeds from redemption of long-term investments and changes in investments with original maturities of more than three months for cash management purposes increased to ¥148.9 billion from ¥50.7 billion in the prior fiscal year, and |
• | purchases of non-current investments increased to ¥124.3 billion from ¥41.9 billion in the prior fiscal year. |
• | a decrease in the repayment of long-term debt to ¥131.0 billion from ¥193.7 billion in the prior fiscal year; |
• | an increase in dividend payments to ¥190.5 billion from ¥176.9 billion in the prior fiscal year; and |
• | an increase in payments to acquire treasury stock to ¥173.0 billion from ¥157.2 billion in the prior fiscal year. |
• | an increase in the payment of income taxes to ¥359.9 billion from ¥182.9 billion and a decrease in the collection of income taxes receivable to ¥0.9 billion from ¥93.1 billion in the prior fiscal year, when deferred tax asset from the impairment of our investment in AT&T Wireless Services, Inc. was realized; and |
• | because the bank was closed on the last day of March 2007, which fell on a weekend, our cash reception of ¥210.0 billion including cellular revenues was deferred to the following month. |
• | expenditures for purchases of tangible and intangible assets increased to ¥948.7 billion from ¥833.9 billion in the prior fiscal year; |
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• | proceeds from redemption of long-term investments and changes in investments with original maturities of more than three months for cash management purposes decreased to ¥50.7 billion from ¥149.0 billion in the prior fiscal year, and |
• | purchases of non-current investments decreased to ¥41.9 billion from ¥292.6 billion in the prior fiscal year. |
• | an increase in the repayment for long-term debt to ¥193.7 billion from ¥150.3 billion in the prior fiscal year; |
• | an increase in dividend payments to ¥176.9 billion from ¥135.5 billion in the prior fiscal year; and |
• | a decrease in payments to acquire treasury stock to ¥157.2 billion from ¥300.1 billion in the prior fiscal year. |
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• | While we anticipate that an increase in new subscriptions will be limited due to the high cellular phone penetration rate, we expect to acquire a higher net increase in the number of subscriptions in the year ending March 31, 2009 compared to that in the year ended March 31, 2008, by taking measures such as lowering the churn rate through our marketing aimed at upgrading brand loyalty and improving the satisfaction of current subscribers. Furthermore, we expect the proportion of FOMA subscriptions to increase to approximately 90% of our total cellular subscriptions due to ongoing migration of our mova subscribers to FOMA services; |
• | Aggregate ARPU (FOMA+mova) and voice ARPU (FOMA+mova) each decreased while packet ARPU (FOMA+mova) increased in the year ended March 31, 2008, as compared to the prior fiscal year. We expect these trends to continue in the year ending March 31, 2009, primarily as a result of the penetration of the discount programs implemented in prior years to strengthen our competitiveness and the effects of a decrease in revenue in conjunction with the introduction of the “Value Plan”. The “Value Plan” provides discounted basic monthly charges in exchange for the subscriber’s payment for the handset price not discounted by handset sales incentives. With regards to the packet ARPU, the increase is due primarily to the uptrend in billed amounts in conjunction with the migration from mova to FOMA and the increase in subscriptions to our optional packet flat-rate service for unlimited i-mode usage; |
• | With regard to equipment sales, in the fiscal year ended March 31, 2008, the number of handsets sold to sales agents and handset costs declined compared to the previous fiscal year, but with the introduction of the “Value Course” in November 2007, handset sales incentives which are deducted from equipment sales were reduced, and after deduction of sales commission to agent resellers, equipment sales increased over the previous fiscal year. In the fiscal year ending March 31, 2009, we expect an increase in the number of handsets sold wholesale to agent resellers is expected, and combined with further market penetration by the “Value Course”, we expect this increase to lead to a decline of handset sales incentives which are deducted from equipment sales, and we expect equipment sales after deduction of sales commission to agent resellers to increase significantly over the previous fiscal year. |
• | Due to the above, we expect operating income for the fiscal year ending March 31, 2009 to increase over the previous fiscal year. Despite a decrease in cellular services revenues resulting from the decrease in aggregate ARPU exceeding the effects of increased revenue in conjunction with subscriber growth, we expect that this decrease will be more than offset by the increase in equipment sales. |
• | We expect SG&A expenses, network cost (telecommunication facility use charges, depreciation and amortization cost, loss on sale or disposal of fixed assets) and other operating expenses for the fiscal year ending March 31, 2009, to remain at the same level as the previous fiscal year. While we expect measures implemented to improve the satisfaction of current subscribers (including CI changes through revamping of the corporate brand and the merger with the regional DOCOMO companies) to lead to an increase in general expenses, this increase will be offset by a decrease in sales commissions through market penetration of the “Value Course” and greater efficiency and lower costs in capital investment. |
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Current | Initial | |||||||||||||||
Responsibility | Date of | Term | Shares | Appointment | ||||||||||||
Name | Position | As of June 26, 2008 | From July 1, 2008 | Birth | Expires | Owned(1) | Date | |||||||||
Directors: | ||||||||||||||||
Ryuji Yamada(2) | President and Chief Executive Officer | — | — | May 5, 1948 | June 2010 | 143 | June 2007 | |||||||||
Kiyoyuki Tsujimura(2) | Senior Executive Vice President | Managing Director of Products & Services Division | Responsible for: Multimedia Services, Technology | Jan. 11, 1950 | June 2010 | 146 | June 2001 | |||||||||
Information Systems Department | ||||||||||||||||
Intellectual Property Department | ||||||||||||||||
Procurement and Supply Department | �� | |||||||||||||||
Masatoshi Suzuki(2) | Senior Executive Vice President | Managing Director of Global Business Division | Responsible for: Global Business, Corporate | Oct. 30, 1951 | June 2010 | 61 | June 2007 | |||||||||
Public Relations Department | ||||||||||||||||
Legal Department | ||||||||||||||||
General Affairs Department | ||||||||||||||||
Human Resources Management Department | ||||||||||||||||
Internal Audit Department | ||||||||||||||||
Investor Relations Department | ||||||||||||||||
Hiroshi Matsui(2) | Senior Executive Vice President | Information Security Department | Responsible for: CSR, Branches in Kanto and Koshinetsu areas | Aug. 6, 1946 | June 2010 | 16 | June 2008 | |||||||||
Corporate Citizenship Department | ||||||||||||||||
Responsible for Branches | ||||||||||||||||
Harunari Futatsugi* | Executive Vice President | Managing Director of Network Division | Responsible for: Network | Nov. 23, 1951 | June 2010 | 67 | June 2003 | |||||||||
Bunya Kumagai* | Executive Vice President | Managing Director of Marketing Division | Responsible for: Consumer Sales | Oct. 13, 1952 | June 2010 | 70 | June 2006 | |||||||||
Kazuto Tsubouchi* | Executive Vice President and Chief Financial Officer | Managing Director of Accounts and Finance Department | Managing Director of Accounts and Finance Department | May 2, 1952 | June 2010 | 42 | June 2006 | |||||||||
Affiliated Companies Department | Responsible for: Business Alliance | |||||||||||||||
Kaoru Kato* | Executive Vice President | Managing Director of Corporate Strategy & Planning Department | Managing Director of Corporate Strategy & Planning Department | May 20, 1951 | June 2010 | 28 | June 2008 | |||||||||
Mitsunobu Komori* | Executive Vice President | Managing Director of Research and Development Division | Managing Director of R&D Center | Sep. 18, 1952 | June 2010 | 45 | June 2008 | |||||||||
Takashi Tanaka* | Senior Vice President | Managing Director of Human Resources Management Department | Managing Director of Human Resources Management Department | June 2, 1955 | June 2010 | 38 | June 2007 |
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Current | Initial | |||||||||||||||
Responsibility | Date of | Term | Shares | Appointment | ||||||||||||
Name | Position | As of June 26, 2008 | From July 1, 2008 | Birth | Expires | Owned(1) | Date | |||||||||
Katsuhiro Nakamura* | Senior Vice President | Managing Director of General Affairs Department | Managing Director of General Affairs Department Managing Director of Corporate Citizenship Department | Mar. 2, 1953 | June 2010 | 31 | June 2008 | |||||||||
Masao Nakamura | Member of the Board | Corporate Advisor | Corporate Advisor | Nov. 11, 1944 | June 2010 | 200 | June 1998 | |||||||||
Hiroshi Tsujigami | Member of the Board | Sep. 8, 1958 | June 2010 | 10 | June 2008 | |||||||||||
Haruo Imai(3) | Corporate Auditor | Feb. 5, 1945 | June 2011 | 36 | June 2007 | |||||||||||
Kenichi Aoki (3) | Corporate Auditor | Oct. 9, 1946 | June 2011 | 32 | June 2008 | |||||||||||
Shunichi Tamari(3) | Corporate Auditor | Jan. 10, 1949 | June 2012 | 48 | June 2008 | |||||||||||
Kyouichi Yoshizawa (3) | Corporate Auditor | Apr. 12, 1950 | June 2011 | 30 | June 2007 | |||||||||||
Takaaki Wakasugi | Corporate Auditor | Mar. 11, 1943 | June 2011 | 33 | June 2007 |
(1) | DOCOMO shares owned as of May 31, 2008 | |
(2) | Representative Director | |
(3) | Full-time Corporate Auditor | |
* | Concurrently serves as a Corporate Officer |
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Responsibility | ||||||
Name | Position | As of June 26, 2008 | From July 1, 2008 | |||
Corporate Officers: | ||||||
Akio Oshima | Executive Vice President | Managing Director of Corporate Marketing Division | Managing Director of Corporate Marketing Division | |||
Haruhide Nakayama | Executive Vice President | Deputy Managing Director of Corporate Marketing Division | Deputy Managing Director of Corporate Marketing Division | |||
Shozo Nishimura | Executive Vice President | — | Managing Director of Kansai regional office | |||
Toru Kobayashi | Executive Vice President | — | Managing Director of Tokai Regional Office | |||
Hiroaki Nishioka** | Senior Vice President | Managing Director of DCMX Business Department | Managing Director of Credit Card Business Division | |||
Masaki Yoshikawa*** | Senior Vice President | Responsible for U.S. operations, Global Business Division | Responsible for: U.S. operations, Global Business Division | |||
Tatsuji Habuka | Senior Vice President | Managing Director of Service & Solution Development Department | Managing Director of Services & Solution Development Department | |||
Akiko Ide | Senior Vice President | Managing Director of Corporate Citizenship Department | Managing Director of Chugoku Regional Office | |||
Yuji Araki | Senior Vice President | Managing Director of Public Relations Department Managing Director of Advertisement Department | Managing Director of Advertising & Promotion Department | |||
Kiyoshi Tokuhiro | Senior Vice President | Managing Director of Network Planning Department | Managing Director of Network Department | |||
Seiji Nishikawa | Senior Vice President | Managing Director of Information Systems Department | Managing Director of Information Systems Department | |||
Toshinari Kunieda | Senior Vice President | Managing Director of Global Business Department | Managing Director of Global Business Division | |||
Tsutomu Shindou | Senior Vice President | Managing Director of Corporate Marketing Department I | Managing Director of Corporate Marketing Department I | |||
Kazuhiro Yoshizawa | Senior Vice President | Managing Director of Corporate Marketing Department II | Managing Director of Corporate Marketing Department II | |||
Kiyohito Nagata | Senior Vice President | Managing Director of Product Department | Managing Director of Product Department | |||
Tooru Azumi | Senior Vice President | Managing Director of DIG Promotion Office | Managing Director of Business Process Improvement Office | |||
Masaaki Sado | Senior Vice President | Deputy Managing Director of Corporate Branding Division | Managing Director of Strategic Marketing Department | |||
Yasuhiro Taguchi | Senior Vice President | General Manager of Kanagawa Branch | General Manager of Kanagawa Branch |
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Responsibility | ||||||
Name | Position | As of June 26, 2008 | From July 1, 2008 | |||
Shoji Suto | Senior Vice President | Managing Director of Sales Promotion Department | Managing Director of Sales Promotion Department | |||
Seizo Onoe | Senior Vice President | Managing Director of R&D Strategy Department Managing Director of Radio Access Network Development Department | Managing Director of R&D Strategy Department | |||
Tadashi Kitamura | Senior Vice President | — | Managing Director of Hokuriku Regional Office | |||
Fumio Iwasaki | Senior Vice President | — | Managing Director of Kyushu Regional Office | |||
Yoshiharu Yamazaki | Senior Vice President | — | Managing Director of Shikoku Regional Office | |||
Tetsuya Suzuki | Senior Vice President | — | Managing Director of Tohoku Regional Office |
* | Appointment takes effect as of July 1, 2008. | |
** | Hiroaki Nishioka is scheduled to be appointed as the Managing Director of Hokkaido Regional Office effective on July 14, 2008. | |
*** | Masaki Yoshikawa is scheduled to be appointed as the Managing Director of Credit Card Business Division effective on July 14, 2008. |
Position | Number of Persons | Total Compensation | ||||||
Director | 11 | ¥ | 430 million | |||||
Corporate Auditor | 5 | 112 million | ||||||
Total | 16 | 542 million |
1. | Upper limits on compensation to directors and corporate auditors were set at ¥600 million annually for Directors and ¥150 million annually for Corporate Auditors at the 15th ordinary general meeting of shareholders held on June 20, 2006. | |
2. | Compensation to Directors includes bonuses in the amount of ¥105 million relating to the year ended March 31, 2008, which were paid after the date. | |
3. | The amount presented above includes the compensation to Directors and Corporate Auditors who held an office after the 16th ordinary general meeting of shareholders held on June 19, 2007 . Total amount of compensation paid to Directors and Corporate Auditors who retired on or before June 19, 2007 (the date of the 16th ordinary general meeting of shareholders) was ¥36 million. |
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Number of | Number of | Outstanding Voting | ||||||||||
Category | Shareholders | Shares Held | Shares | |||||||||
Japanese financial institutions | 288 | 5,004,181 | 11.15 | |||||||||
Japanese securities companies | 81 | 297,812 | 0.67 | |||||||||
Other Japanese corporations | 2,476 | 28,169,882 | 62.78 | |||||||||
Foreign corporations and individuals | 973 | 6,244,872 | 13.92 | |||||||||
Japanese individuals, treasury shares and others | 336,699 | 5,153,253 | 11.48 | |||||||||
Total | 340,517 | 44,870,000 | 100.00 | |||||||||
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Average | ||||||||||||||||||||||||||||
daily | ||||||||||||||||||||||||||||
Tokyo Stock Exchange | trading | Closing Nikkei Stock | ||||||||||||||||||||||||||
Price per share (1) | volume of | Closing TOPIX | Average | |||||||||||||||||||||||||
High | Low | shares | High | Low | High | Low | ||||||||||||||||||||||
Fiscal Period | ||||||||||||||||||||||||||||
2003: | ||||||||||||||||||||||||||||
First Quarter | 276,000 | 225,000 | 64,097 | 865.43 | 770.62 | 9,137.14 | 7,607.88 | |||||||||||||||||||||
Second Quarter | 315,000 | 260,000 | 84,490 | 904.32 | 773.10 | 11,033.32 | 9,265.56 | |||||||||||||||||||||
Third Quarter | 291,000 | 216,000 | 99,485 | 1,075.73 | 915.91 | 11,161.71 | 9,614.60 | |||||||||||||||||||||
Fourth Quarter | 249,000 | 213,000 | 109,584 | 1,105.59 | 953.19 | 11,770.65 | 10,365.40 | |||||||||||||||||||||
2004: | ||||||||||||||||||||||||||||
First Quarter | 241,000 | 187,000 | 96,995 | 1,217.87 | 1,053.77 | 12,163.89 | 10,505.05 | |||||||||||||||||||||
Second Quarter | 211,000 | 173,000 | 91,867 | 1,188.42 | 1,084.64 | 11,896.01 | 10,687.81 | |||||||||||||||||||||
Third Quarter | 199,000 | 174,000 | 78,790 | 1,149.63 | 1,073.20 | 11,488.76 | 10,659.15 | |||||||||||||||||||||
Fourth Quarter | 189,000 | 174,000 | 89,373 | 1,203.26 | 1,132.18 | 11,966.69 | 11,238.37 | |||||||||||||||||||||
2005: | ||||||||||||||||||||||||||||
First Quarter | 183,000 | 160,000 | 88,149 | 1,201.30 | 1,109.19 | 11,874.75 | 10,825.39 | |||||||||||||||||||||
Second Quarter | 207,000 | 162,000 | 126,789 | 1,428.13 | 1,177.61 | 13,617.24 | 11,565.99 | |||||||||||||||||||||
Third Quarter | 213,000 | 178,000 | 149,309 | 1,663.75 | 1,371.37 | 16,344.20 | 13,106.18 | |||||||||||||||||||||
Fourth Quarter | 199,000 | 167,000 | 163,559 | 1,728.16 | 1,572.11 | 17,059.66 | 15,341.18 | |||||||||||||||||||||
2006: | ||||||||||||||||||||||||||||
First Quarter | 185,000 | 162,000 | 160,541 | 1,783.72 | 1,458.30 | 17,563.37 | 14,218.60 | |||||||||||||||||||||
Second Quarter | 183,000 | 162,000 | 96,509 | 1,651.35 | 1,475.28 | 16,385.96 | 14,437.24 | |||||||||||||||||||||
Third Quarter | 193,000 | 176,000 | 106,150 | 1,681.07 | 1,532.95 | 17,225.83 | 15,725.94 | |||||||||||||||||||||
Fourth Quarter | 227,000 | 184,000 | 180,800 | 1,816.97 | 1,656.72 | 18,215.35 | 16,642.25 | |||||||||||||||||||||
2007: | ||||||||||||||||||||||||||||
First Quarter | 222,000 | 192,000 | 110,361 | 1,789.38 | 1,682.49 | 18,240.30 | 17,028.41 | |||||||||||||||||||||
Second Quarter | 196,000 | 160,000 | 134,071 | 1,792.23 | 1,480.39 | 18,261.98 | 15,273.68 | |||||||||||||||||||||
Third Quarter | 190,000 | 150,000 | 149,269 | 1,677.52 | 1,437.38 | 17,458.98 | 14,837.66 | |||||||||||||||||||||
Fourth Quarter | 188,000 | 149,000 | 150,366 | 1,424.29 | 1,149.65 | 14,691.41 | 11,787.51 |
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Average | ||||||||||||||||||||||||||||
daily | ||||||||||||||||||||||||||||
Tokyo Stock Exchange | trading | Closing Nikkei Stock | ||||||||||||||||||||||||||
Price per share (1) | volume of | Closing TOPIX | Average | |||||||||||||||||||||||||
High | Low | shares | High | Low | High | Low | ||||||||||||||||||||||
Calendar Period | ||||||||||||||||||||||||||||
2007: | ||||||||||||||||||||||||||||
December | 190,000 | 176,000 | 133,273 | 1,567.02 | 1,456.79 | 16,044.72 | 15,030.51 | |||||||||||||||||||||
2008: | ||||||||||||||||||||||||||||
January | 188,000 | 151,000 | 174,541 | 1,424.29 | 1,219.95 | 14,691.41 | 12,573.05 | |||||||||||||||||||||
February | 173,000 | 151,000 | 156,711 | 1,364.72 | 1,285.35 | 14,031.30 | 13,017.24 | |||||||||||||||||||||
March | 160,000 | 149,000 | 121,054 | 1,287.55 | 1,149.65 | 13,215.42 | 11,787.51 | |||||||||||||||||||||
April | 161,000 | 151,000 | 88,892 | 1,361.75 | 1,230.49 | 13,894.37 | 12,656.42 | |||||||||||||||||||||
May | 168,000 | 152,000 | 105,355 | 1,408.14 | 1,341.76 | 14,338.54 | 13,655.34 | |||||||||||||||||||||
June (through June 13, 2008) | 163,000 | 154,000 | 79,860 | 1,430.47 | 1,363.14 | 14,489.44 | 13,888.60 |
(1) | On January 25, 2002, our Board of Directors declared a five-for-one common stock split. The record date for the split was March 31, 2002, and the new shares were distributed on May 15, 2002. Due to this stock split, there are 40,144,000 additional shares issued and 50,180,000 total shares in issue. |
Average | ||||||||||||
New York Stock Exchange | daily trading | |||||||||||
Price per share | volume of | |||||||||||
Closing High | Closing Low | shares | ||||||||||
Fiscal Period: | ||||||||||||
2007: | ||||||||||||
First Quarter | 18.72 | 15.56 | 242,196 | |||||||||
Second Quarter | 16.04 | 13.81 | 276,194 | |||||||||
Third Quarter | 16.71 | 13.16 | 285,618 | |||||||||
Fourth Quarter | 17.17 | 14.25 | 277,316 | |||||||||
Calendar Period: | ||||||||||||
2007: | ||||||||||||
December | 16.71 | 15.44 | 229,498 | |||||||||
2008: | ||||||||||||
January | 17.17 | 14.80 | 295,598 | |||||||||
February | 16.09 | 14.25 | 252,453 | |||||||||
March | 15.65 | 14.78 | 282,985 | |||||||||
April | 15.64 | 14.43 | 228,179 | |||||||||
May | 15.97 | 14.85 | 179,005 | |||||||||
June (through June 13, 2007) | 15.60 | 14.36 | 221,307 |
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• | any amendment of our articles of incorporation (except for amendments that may be authorized solely by the board of directors under the Corporation Law); | ||
• | a reduction of stated capital, except for a reduction of stated capital for the purpose of replenishing capital deficiencies at the day of the ordinary general meeting ; | ||
• | a distribution by us of surplus in-kind, if we do not grant shareholders the right to require us to effect the distribution in cash, instead of in-kind; | ||
• | a dissolution, a merger, subject to a certain exception under which a shareholders’ resolution is not required; | ||
• | the transfer of the whole or an important part of the business, except for the transfer of an important part of the business in which the book value of transferred assets does not exceed 20% of that of the company’s total assets; | ||
• | the taking over of the whole of the business of any other corporation; | ||
• | a share exchange or share transfer for the purpose of establishing a 100% parent-subsidiary relationship, subject to a certain exception under which a shareholders’ resolution is not required; |
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• | a company split, subject to a certain exception under which a shareholders’ resolution is not required; | ||
• | the offering of shares at a “specially favorable” price and any offering of stock acquisition rights or bonds with stock acquisition rights at a “specially favorable” price or in a “specially favorable” condition to any persons other than shareholders; and | ||
• | any purchase of the company’s own shares from a certain person. |
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(i) | a resolution at a general meeting of shareholders, | ||
(ii) | a resolution of the Board of Directors if the acquisition is in accordance with our Articles of Incorporation; or | ||
(iii) | a resolution of the Board of Directors if the acquisition is to purchase our shares from a subsidiary. |
• | in the case of (i) and (ii) above: |
• | through the stock exchanges on which the shares are listed or the over-the-counter markets on which the shares are traded; or | ||
• | by way of tender offer; |
• | in the case of (i) above, from a specific person, but only if our shareholders approve this acquisition by special resolution; and | ||
• | in the case of (iii) above, from the subsidiary. |
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Maximum Daily | ||||||||||||||||
Previous Day’s Closing Price or Special Quote | Price Movement | |||||||||||||||
Over | ¥ | 100,000 | Less than | ¥ | 150,000 | ¥ | 20,000 | |||||||||
Over | 150,000 | Less than | 200,000 | 30,000 | ||||||||||||
Over | 200,000 | Less than | 300,000 | 40,000 |
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• | a dealer in securities; | ||
• | a trader in securities that elects to use a mark-to-market method of accounting for securities holdings; | ||
• | a tax-exempt organization; | ||
• | a life insurance company; | ||
• | a person liable for alternative minimum tax; | ||
• | a person that actually or constructively owns 10% or more of our voting stock; | ||
• | a person that holds shares or ADSs as part of a straddle or a hedging or conversion transaction; or | ||
• | a person whose functional currency is not the U.S. dollar. |
• | a citizen or resident of the United States; | ||
• | a domestic corporation; |
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• | an estate whose income is subject to United States federal income tax regardless of its source; or | ||
• | a trust if a United States court can exercise primary supervision over the trust’s administration and one or more United States persons are authorized to control all substantial decisions of the trust. |
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• | the overall tax consequences of the acquisition, ownership and disposition of shares or ADSs, including specifically the tax consequences under Japanese law; | ||
• | the laws of the jurisdiction of which they are resident; and | ||
• | any tax treaty between Japan and their country of residence. |
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Weighted | ||||||||||||||||||||||||||||||||||||
Average | ||||||||||||||||||||||||||||||||||||
Interest | ||||||||||||||||||||||||||||||||||||
Rate | Expected Maturity | Fair | ||||||||||||||||||||||||||||||||||
(per | (Year Ended March 31) | value | ||||||||||||||||||||||||||||||||||
annum) | 2009 | 2010 | 2011 | 2012 | 2013 | Thereafter | Total | 3/31/08 | ||||||||||||||||||||||||||||
(Millions of yen) | ||||||||||||||||||||||||||||||||||||
DEBT | ||||||||||||||||||||||||||||||||||||
Corporate bonds | ||||||||||||||||||||||||||||||||||||
Japanese Yen Bonds | 1.4 | % | 49,200 | — | 163,845 | 168,466 | — | — | 381,511 | 385,430 | ||||||||||||||||||||||||||
Borrowings from banks and others | ||||||||||||||||||||||||||||||||||||
Japanese Yen Loans | 1.2 | % | 26,018 | 29,018 | 17,019 | 6,000 | 15,000 | — | 93,055 | 94,200 | ||||||||||||||||||||||||||
U.S. Dollar Loans | 6.4 | % | 285 | — | — | — | 1,427 | — | 1,712 | 1,729 | ||||||||||||||||||||||||||
Singapore Dollar Loans | 4.7 | % | 159 | — | — | 315 | — | — | 474 | 473 | ||||||||||||||||||||||||||
Long term debt, including current portion Total | 75,662 | 29,018 | 180,864 | 174,781 | 16,427 | — | 476,752 | 481,832 |
Expected Maturity and Weighted Average Interest Rate (per annum) | Fair | |||||||||||||||||||||||||||||||
(Year Ended March 31) | value | |||||||||||||||||||||||||||||||
2009 | 2010 | 2011 | 2012 | 2013 | Thereafter | Total | 3/31/08 | |||||||||||||||||||||||||
(Millions of yen) | ||||||||||||||||||||||||||||||||
INTEREST RATE SWAP AGREEMENTS | ||||||||||||||||||||||||||||||||
Fixed to Floating (Japanese Yen) | ||||||||||||||||||||||||||||||||
Notional Amount | — | — | 70,000 | 165,800 | — | — | 235,800 | 3,511 | ||||||||||||||||||||||||
Fixed receive rate | — | — | 1.4 | % | 1.6 | % | — | — | 1.5 | % | ||||||||||||||||||||||
Floating pay rate | — | — | 1.1 | % | 1.2 | % | — | — | 1.2 | % |
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March 31, 2008 | March 31, 2008 | |||||||||||||||
Carrying | Fair | Carrying | ||||||||||||||
Amount | Value | Amount | Fair Value | |||||||||||||
(Millions of yen) | (Thousands of U.S. dollars) | |||||||||||||||
Equity securities available-for-sale | 158,103 | 158,103 | 1,583,405 | 1,583,405 | ||||||||||||
Debt securities available-for-sale: | ||||||||||||||||
Due within 1 year | — | — | — | — | ||||||||||||
Due after 1 year through 5 years | 5 | 5 | 50 | 50 | ||||||||||||
Due after 5 years through 10 years | — | — | — | — | ||||||||||||
Due after 10 years | — | — | — | — | ||||||||||||
Total | 158,108 | 158,108 | 1,583,455 | 1,583,455 |
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Year ended March 31, | ||||||||
2007 | 2008 | |||||||
(in millions) | ||||||||
Audit fees (1) | ¥ | 831 | ¥ | 838 | ||||
Tax fees (2) | 52 | 48 | ||||||
All other fees (3) | 0 | 0 | ||||||
Total | ¥ | 883 | ¥ | 886 | ||||
(1) | These are fees for professional services performed by KPMG AZSA & Co. and its affiliates for the audit of the Company and its subsidiaries’ annual financial statements and services that are normally provided in connection with statutory and regulatory filings. | |
(2) | These are fees for professional services performed by KPMG AZSA & Co. and its affiliates tax division except those related to the audit and includes tax returns and tax consultations. | |
(3) | These are fees for all other services received from KPMG AZSA & Co. and its affiliates including consultations relating to company secretarial services to our foreign subsidiaries. |
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• | The board of corporate auditors must be established, and its members must be selected, pursuant to Japanese law expressly requiring such a board for Japanese companies that elect to have a corporate governance system with corporate auditors. | ||
• | Japanese law must and does require the board of corporate auditors to be separate from the board of directors. | ||
• | None of the members of the board of corporate auditors may be elected by management, and none of the listed company’s executive officers may be a member of the board of corporate auditors. | ||
• | Japanese law must and does set forth standards for the independence of the members of the board of corporate auditors from the listed company or its management. | ||
• | The board of corporate auditors, in accordance with Japanese law or the listed company’s governing documents, must be responsible, to the extent permitted by Japanese law, for the appointment, retention and oversight of the work of any registered public accounting firm engaged (including, to the extent permitted by Japanese law, the resolution of disagreements between management and the auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the listed company, including its principal accountant which audits its consolidated financial statements included in its annual reports on Form 20-F. | ||
• | To the extent permitted by Japanese law: |
• | the board of corporate auditors must establish procedures for (i) the receipt, retention and treatment of complaints received by the listed company regarding accounting, internal accounting controls, or auditing matters, and (ii) the confidential, anonymous submission by the listed company’s employees of concerns regarding questionable accounting or auditing matters; | ||
• | the board of corporate auditors must have the authority to engage independent counsel and other advisers, as it determines necessary to carry out its duties; and | ||
• | the listed company must provide for appropriate funding, as determined by its board of corporate auditors, for payment of (i) compensation to any registered public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the listed company, (ii) compensation to any advisers employed by the board of corporate auditors, and (iii) ordinary administrative expenses of the board of corporate auditors that are necessary or appropriate in carrying out its duties. |
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(c) Total Number of | ||||||||||||||||
Shares Purchased as | (d) Maximum Number | |||||||||||||||
(a)Total Number | (b) Average | Part of Publicly | of Shares that May Yet Be | |||||||||||||
of Shares | Price Paid per | Announced Plans or | Purchased Under the Plans | |||||||||||||
Period | Purchased(*) | Share | Programs | or Programs(**) | ||||||||||||
April, 2007 | 0 | — | 0 | 802,734 | ||||||||||||
(from April 1 to April 30) | ||||||||||||||||
May, 2007 | 265,843.40 | 210,106.3 | 265,843 | 536,891 | ||||||||||||
(from May 1 to May 31) | ||||||||||||||||
June, 2007 | 84,536 | 202,779.1 | 84,536 | 1,000,000 | ||||||||||||
(from June 1 to June 30) | ||||||||||||||||
July, 2007 | 0 | — | 0 | 1,000,000 | ||||||||||||
(from July 1 to July 31) | ||||||||||||||||
August, 2007 | 178,608.96 | 167,959.5 | 178,608 | 821,392 | ||||||||||||
(from August 1 to August 31) | ||||||||||||||||
September, 2007 | 0.50 | — | 0 | 821,392 | ||||||||||||
(from September 1 to September 30) | ||||||||||||||||
October, 2007 | 30,505.92 | 163,550.4 | 30,505 | 790,887 | ||||||||||||
(from October 1 to October 31) | ||||||||||||||||
November, 2007 | 87,166.49 | 172,237.6 | 87,148 | 703,739 | ||||||||||||
(from November 1 to November 30) | ||||||||||||||||
December, 2007 | 17.02 | — | 0 | 703,739 | ||||||||||||
(from December 1 to December 31) | ||||||||||||||||
January, 2008 | 2.81 | — | 0 | 703,739 | ||||||||||||
(from January 1 to January 31) | ||||||||||||||||
February, 2008 | 8.40 | — | 0 | 703,739 | ||||||||||||
(from February 1 to February 29) | ||||||||||||||||
March, 2008 | 319,027.55 | 156,720.5 | 319,026 | 384,713 | ||||||||||||
(from March 1 to March 31) | ||||||||||||||||
Total | 965,717.05 | 179,144.3 | 965,666 | 384,713 | ||||||||||||
(*) | Shares purchased include fractional shares purchased from time to time. | |
(**) | The numbers as of April and May, 2007, described in column (d) are based on the aggregate number of 1,400,000 shares authorized at the general shareholders meeting held on June 20, 2006. Likewise, the numbers for June 2007 or later in column (d) are based on the aggregate number of 1,000,000 shares authorized at the general shareholders meeting held on June 19, 2007. |
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131
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Exhibit | ||||||
Number | Description | |||||
1.1 | — | Articles of Incorporation of the registrant (English translation) | ||||
1.2 | — | Share Handling Regulations of the registrant (English translation)* | ||||
1.3 | — | Regulations of the Board of Directors of the registrant (English translation) | ||||
1.4 | — | Regulations of the Board of Corporate Auditors of the registrant (English translation)** | ||||
2.1 | — | Specimen common stock certificates of the registrant*** | ||||
2.2 | — | Form of Deposit Agreement among the registrant, The Bank of New York as Depositary and all owners and holders from time to time of American Depositary Receipts, including the form of American Depositary Receipt (incorporated by reference to Post-Effective Amendment No. 3 to Registration Statement on Form F-6 (File No. 333-9694) filed on May 15, 2002) | ||||
8.1 | — | List of Subsidiaries | ||||
11.1 | — | Code of Ethics* | ||||
12.1 | — | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | ||||
12.2 | — | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | ||||
13.1 | — | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350 | ||||
13.2 | — | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350 | ||||
15.1 | — | Management’s Report on Internal Control Over Financial Reporting | ||||
15.2 | — | Report of Independent Registered Public Accounting Firm |
* | Previously filed with the Securities and Exchange Commission on June 27, 2006 and herein incorporated by reference. | |
** | Previously filed with the Securities and Exchange Commission on June 25, 2007 and herein incorporated by reference. | |
*** | Previously filed with the Securities and Exchange Commission on January 25, 2002 and herein incorporated by reference. |
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Page | ||||
F-2 | ||||
F-3 | ||||
F-5 | ||||
F-6 | ||||
F-8 | ||||
F-9 | ||||
F-52 | ||||
F-1
Table of Contents
NTT DoCoMo, Inc.:
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our
opinion.
position of NTT DoCoMo, Inc. and subsidiaries as of March 31, 2007 and 2008, and the results of their operations and their cash
flows for each of the years in the three-year period ended March 31, 2008, in conformity with U.S. generally accepted accounting
principles. Also in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated
financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.
United States dollars solely for the convenience of the reader. We have audited the translation and, in our opinion, the consolidated
financial statements expressed in Japanese yen have been translated into dollars on the basis set forth in Note 3 of the notes to the
consolidated financial statements.
the Company’s internal control over financial reporting as of March 31, 2008, based on criteria established in Internal Control
— Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report
dated June 20, 2008 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.
June 20, 2008
F-2
Table of Contents
Thousands of | ||||||||||||
Millions of yen | U.S. dollars | |||||||||||
2007 | 2008 | 2008 | ||||||||||
ASSETS | ||||||||||||
Current assets: | ||||||||||||
Cash and cash equivalents | ¥ | 343,062 | ¥ | 646,905 | $ | 6,478,768 | ||||||
Short-term investments | ||||||||||||
Third parties | 100,543 | 2,208 | 22,113 | |||||||||
Related parties | 50,000 | 50,000 | 500,751 | |||||||||
Accounts receivable | ||||||||||||
Third parties | 844,305 | 671,417 | 6,724,257 | |||||||||
Related parties | 28,018 | 15,256 | 152,789 | |||||||||
Sub-total | 872,323 | 686,673 | 6,877,046 | |||||||||
Less: Allowance for doubtful accounts | (13,178 | ) | (15,037 | ) | (150,596 | ) | ||||||
Total accounts receivable, net | 859,145 | 671,636 | 6,726,450 | |||||||||
Inventories | 145,892 | 146,584 | 1,468,042 | |||||||||
Deferred tax assets | 94,868 | 108,037 | 1,081,993 | |||||||||
Prepaid expenses and other current assets | ||||||||||||
Third parties | 132,959 | 136,395 | 1,365,999 | |||||||||
Related parties | 5,444 | 6,015 | 60,240 | |||||||||
Total current assets | 1,731,913 | 1,767,780 | 17,704,356 | |||||||||
Property, plant and equipment: | ||||||||||||
Wireless telecommunications equipment | 5,149,132 | 5,346,486 | 53,545,178 | |||||||||
Buildings and structures | 778,638 | 797,904 | 7,991,027 | |||||||||
Tools, furniture and fixtures | 613,945 | 536,718 | 5,375,243 | |||||||||
Land | 199,007 | 198,958 | 1,992,569 | |||||||||
Construction in progress | 114,292 | 128,042 | 1,282,343 | |||||||||
Sub-total | 6,855,014 | 7,008,108 | 70,186,360 | |||||||||
Accumulated depreciation and amortization | (3,954,361 | ) | (4,173,501 | ) | (41,797,707 | ) | ||||||
Total property, plant and equipment, net | 2,900,653 | 2,834,607 | 28,388,653 | |||||||||
Non-current investments and other assets: | ||||||||||||
Investments in affiliates | 176,376 | 349,488 | 3,500,130 | |||||||||
Marketable securities and other investments | 261,456 | 187,361 | 1,876,425 | |||||||||
Intangible assets, net | 551,029 | 555,259 | 5,560,931 | |||||||||
Goodwill | 147,821 | 158,889 | 1,591,277 | |||||||||
Other assets | ||||||||||||
Third parties | 157,656 | 222,225 | 2,225,588 | |||||||||
Related parties | 61,615 | 11,822 | 118,398 | |||||||||
Deferred tax assets | 127,696 | 123,403 | 1,235,884 | |||||||||
Total non-current investments and other assets | 1,483,649 | 1,608,447 | 16,108,633 | |||||||||
Total assets | ¥ | 6,116,215 | ¥ | 6,210,834 | $ | 62,201,642 | ||||||
F-3
Table of Contents
CONSOLIDATED BALANCE SHEETS — (Continued)
MARCH 31, 2007 and 2008
Thousands of | ||||||||||||
Millions of yen | U.S. dollars | |||||||||||
2007 | 2008 | 2008 | ||||||||||
LIABILITIES, MINORITY INTERESTS AND SHAREHOLDERS’ EQUITY | ||||||||||||
Current liabilities: | ||||||||||||
Current portion of long-term debt | ¥ | 131,005 | ¥ | 75,662 | $ | 757,757 | ||||||
Short-term borrowings | 102 | 1,712 | 17,146 | |||||||||
Accounts payable, trade | ||||||||||||
Third parties | 666,829 | 626,992 | 6,279,339 | |||||||||
Related parties | 94,279 | 90,461 | 905,969 | |||||||||
Accrued payroll | 46,584 | 53,538 | 536,184 | |||||||||
Accrued interest | 809 | 710 | 7,111 | |||||||||
Accrued income taxes | 68,408 | 203,645 | 2,039,509 | |||||||||
Other current liabilities | ||||||||||||
Third parties | 152,843 | 179,513 | 1,797,827 | |||||||||
Related parties | 2,066 | 2,082 | 20,851 | |||||||||
Total current liabilities | 1,162,925 | 1,234,315 | 12,361,693 | |||||||||
Long-term liabilities: | ||||||||||||
Long-term debt (exclusive of current portion) | 471,858 | 401,090 | 4,016,925 | |||||||||
Liability for employees’ retirement benefits | 135,890 | 116,888 | 1,170,636 | |||||||||
Other long-term liabilities | ||||||||||||
Third parties | 179,699 | 177,002 | 1,772,679 | |||||||||
Related parties | 3,376 | 3,755 | 37,606 | |||||||||
Total long-term liabilities | 790,823 | 698,735 | 6,997,846 | |||||||||
Total liabilities | 1,953,748 | 1,933,050 | 19,359,539 | |||||||||
Minority interests | 1,164 | 1,288 | 12,899 | |||||||||
Shareholders’ equity: | ||||||||||||
Common stock, without a stated value - | ||||||||||||
Authorized -188,130,000 shares and 188,130,000 shares at March 31, 2007 and 2008, respectively | ||||||||||||
Issued - 45,880,000 and 44,870,000 shares at March 31, 2007 and 2008, respectively | ||||||||||||
Outstanding - 43,593,644 and 42,627,927 shares at March 31, 2007 and 2008, respectively | 949,680 | 949,680 | 9,511,067 | |||||||||
Additional paid-in capital | 1,135,958 | 948,571 | 9,499,960 | |||||||||
Retained earnings | 2,493,155 | 2,793,814 | 27,980,110 | |||||||||
Accumulated other comprehensive income | 12,874 | 410 | 4,106 | |||||||||
Treasury stock, 2,286,356 and 2,242,073 shares at March 31, 2007 and 2008, at cost, respectively | (430,364 | ) | (415,979 | ) | (4,166,039 | ) | ||||||
Total shareholders’ equity | 4,161,303 | 4,276,496 | 42,829,204 | |||||||||
Commitments and contingencies | ||||||||||||
Total liabilities, minority interests and shareholders’ equity | ¥ | 6,116,215 | ¥ | 6,210,834 | $ | 62,201,642 | ||||||
F-4
Table of Contents
Thousands of | ||||||||||||||||
Millions of yen | U.S. dollars | |||||||||||||||
2006 | 2007 | 2008 | 2008 | |||||||||||||
Operating revenues: | ||||||||||||||||
Wireless services | ||||||||||||||||
Third parties | ¥ | 4,242,230 | ¥ | 4,259,951 | ¥ | 4,107,844 | $ | 41,140,151 | ||||||||
Related parties | 53,626 | 54,189 | 57,390 | 574,762 | ||||||||||||
Equipment sales | ||||||||||||||||
Third parties | 462,490 | 465,924 | 538,195 | 5,390,035 | ||||||||||||
Related parties | 7,526 | 8,029 | 8,398 | 84,106 | ||||||||||||
4,765,872 | 4,788,093 | 4,711,827 | 47,189,054 | |||||||||||||
Operating expenses: | ||||||||||||||||
Cost of services (exclusive of items shown separately below) | ||||||||||||||||
Third parties | 462,852 | 498,852 | 561,763 | 5,626,069 | ||||||||||||
Related parties | 283,247 | 268,108 | 249,370 | 2,497,446 | ||||||||||||
Cost of equipment sold (exclusive of items shown separately below) | 1,113,464 | 1,218,694 | 1,150,261 | 11,519,890 | ||||||||||||
Depreciation and amortization | 738,137 | 745,338 | 776,425 | 7,775,914 | ||||||||||||
Selling, general and administrative | ||||||||||||||||
Third parties | 1,179,252 | 1,121,374 | 1,025,812 | 10,273,530 | ||||||||||||
Related parties | 156,281 | 162,203 | 139,884 | 1,400,942 | ||||||||||||
3,933,233 | 4,014,569 | 3,903,515 | 39,093,791 | |||||||||||||
Operating income | 832,639 | 773,524 | 808,312 | 8,095,263 | ||||||||||||
Other income (expense): | ||||||||||||||||
Interest expense | (8,420 | ) | (5,749 | ) | (4,556 | ) | (45,629 | ) | ||||||||
Interest income | 4,659 | 1,459 | 2,487 | 24,907 | ||||||||||||
Gain on sale of affiliate shares | 61,962 | — | 333 | 3,335 | ||||||||||||
Gain (loss) on sale of other investments | 40,088 | (113 | ) | (2 | ) | (20 | ) | |||||||||
Other, net | 21,375 | 3,822 | (5,886 | ) | (58,948 | ) | ||||||||||
119,664 | (581 | ) | (7,624 | ) | (76,355 | ) | ||||||||||
Income before income taxes, equity in net income (losses) of affiliates and minority interests | 952,303 | 772,943 | 800,688 | 8,018,908 | ||||||||||||
Income taxes: | ||||||||||||||||
Current | 293,707 | 237,734 | 334,462 | 3,349,644 | ||||||||||||
Deferred | 47,675 | 75,945 | (11,507 | ) | (115,243 | ) | ||||||||||
341,382 | 313,679 | 322,955 | 3,234,401 | |||||||||||||
Income before equity in net income (losses) of affiliates and minority interests | 610,921 | 459,264 | 477,733 | 4,784,507 | ||||||||||||
Equity in net income (losses) of affiliates, net of applicable taxes | (364 | ) | (1,941 | ) | 13,553 | 135,733 | ||||||||||
Minority interests | (76 | ) | (45 | ) | (84 | ) | (841 | ) | ||||||||
Net income | ¥ | 610,481 | ¥ | 457,278 | ¥ | 491,202 | $ | 4,919,399 | ||||||||
Other comprehensive income (loss): | ||||||||||||||||
Unrealized holding gains (losses) on available-for-sale securities, net of applicable taxes | 10,000 | (15,364 | ) | (16,762 | ) | (167,872 | ) | |||||||||
Less: Reclassification of realized gains and losses, net of applicable taxes included in net income | (2,338 | ) | (399 | ) | 431 | 4,317 | ||||||||||
Net revaluation of financial instruments, net of applicable taxes | 369 | 832 | (525 | ) | (5,258 | ) | ||||||||||
Less: Reclassification of realized gains and losses, net of applicable taxes included in net income | (248 | ) | (798 | ) | 658 | 6,590 | ||||||||||
Foreign currency translation adjustment, net of applicable taxes | 5,433 | 1,103 | 7,299 | 73,100 | ||||||||||||
Less: Reclassification of realized gains and losses, net of applicable taxes included in net income | (48,030 | ) | — | (127 | ) | (1,272 | ) | |||||||||
Pension liability adjustment, net of applicable taxes: | ||||||||||||||||
Actuarial gains (losses) arising during period, net | — | — | (4,909 | ) | (49,164 | ) | ||||||||||
Less: Amortization of prior service cost | — | — | (1,338 | ) | (13,400 | ) | ||||||||||
Less: Amortization of actuarial gains and losses | — | — | 502 | 5,027 | ||||||||||||
Less: Amortization of transition obligation | — | — | 75 | 751 | ||||||||||||
Less: Reclassification of actuarial gains and losses due to transfer of the substitutional portion to the government | — | — | 2,232 | 22,354 | ||||||||||||
Minimum pension liability adjustment, net of applicable taxes | 3,986 | 5,562 | — | — | ||||||||||||
Comprehensive income | ¥ | 579,653 | ¥ | 448,214 | ¥ | 478,738 | $ | 4,794,572 | ||||||||
Per share data: | ||||||||||||||||
Weighted average common shares outstanding — Basic and Diluted (shares) | 45,250,031 | 43,985,082 | 43,120,586 | 43,120,586 | ||||||||||||
Basic and diluted earnings per share (Yen and U.S. dollars) | ¥ | 13,491.28 | ¥ | 10,396.21 | ¥ | 11,391.36 | $ | 114.08 | ||||||||
F-5
Table of Contents
Number of Shares | Millions of yen | |||||||||||||||||||||||||||||||
Accumulated | ||||||||||||||||||||||||||||||||
Issued | Additional | other | Treasury | Total | ||||||||||||||||||||||||||||
Common | Treasury | Common | paid-in | Retained | comprehensive | stock, | Shareholders’ | |||||||||||||||||||||||||
Stock | Stock | stock | capital | earnings | income | at cost | Equity | |||||||||||||||||||||||||
Balance at March 31, 2005 | 48,700,000 | 2,427,792 | ¥ | 949,680 | ¥ | 1,311,013 | ¥ | 2,100,407 | ¥ | 57,609 | ¥ | (510,777 | ) | ¥ | 3,907,932 | |||||||||||||||||
Purchase of treasury stock | 1,797,981 | (300,078 | ) | (300,078 | ) | |||||||||||||||||||||||||||
Retirement of treasury stock | (1,890,000 | ) | (1,890,000 | ) | (362,659 | ) | 362,659 | — | ||||||||||||||||||||||||
Cash dividends declared and paid (¥3,000 per share) | (135,490 | ) | (135,490 | ) | ||||||||||||||||||||||||||||
Net income | 610,481 | 610,481 | ||||||||||||||||||||||||||||||
Unrealized holding gains on available-for-sale securities | 7,662 | 7,662 | ||||||||||||||||||||||||||||||
Net revaluation of financial instruments | 121 | 121 | ||||||||||||||||||||||||||||||
Foreign currency translation adjustment | (42,597 | ) | (42,597 | ) | ||||||||||||||||||||||||||||
Minimum pension liability adjustment | 3,986 | 3,986 | ||||||||||||||||||||||||||||||
Balance at March 31, 2006 | 46,810,000 | 2,335,773 | ¥ | 949,680 | ¥ | 1,311,013 | ¥ | 2,212,739 | ¥ | 26,781 | ¥ | (448,196 | ) | ¥ | 4,052,017 | |||||||||||||||||
Purchase of treasury stock | 880,583 | (157,223 | ) | (157,223 | ) | |||||||||||||||||||||||||||
Retirement of treasury stock | (930,000 | ) | (930,000 | ) | (175,055 | ) | 175,055 | — | ||||||||||||||||||||||||
Cash dividends declared and paid (¥4,000 per share) | (176,862 | ) | (176,862 | ) | ||||||||||||||||||||||||||||
Net income | 457,278 | 457,278 | ||||||||||||||||||||||||||||||
Unrealized holding losses on available-for-sale securities | (15,763 | ) | (15,763 | ) | ||||||||||||||||||||||||||||
Net revaluation of financial instruments | 34 | 34 | ||||||||||||||||||||||||||||||
Foreign currency translation adjustment | 1,103 | 1,103 | ||||||||||||||||||||||||||||||
Minimum pension liability adjustment | 5,562 | 5,562 | ||||||||||||||||||||||||||||||
Adjustment to initially apply SFAS No. 158 | (4,843 | ) | (4,843 | ) | ||||||||||||||||||||||||||||
Balance at March 31, 2007 | 45,880,000 | 2,286,356 | ¥ | 949,680 | ¥ | 1,135,958 | ¥ | 2,493,155 | ¥ | 12,874 | ¥ | (430,364 | ) | ¥ | 4,161,303 | |||||||||||||||||
Purchase of treasury stock | 965,717 | (173,002 | ) | (173,002 | ) | |||||||||||||||||||||||||||
Retirement of treasury stock | (1,010,000 | ) | (1,010,000 | ) | (187,387 | ) | 187,387 | — | ||||||||||||||||||||||||
Cash dividends declared and paid (¥4,400 per share) | (190,543 | ) | (190,543 | ) | ||||||||||||||||||||||||||||
Net income | 491,202 | 491,202 | ||||||||||||||||||||||||||||||
Unrealized holding losses on available-for-sale securities | (16,331 | ) | (16,331 | ) | ||||||||||||||||||||||||||||
Net revaluation of financial instruments | 133 | 133 | ||||||||||||||||||||||||||||||
Foreign currency translation adjustment | 7,172 | 7,172 | ||||||||||||||||||||||||||||||
Pension liability adjustment: | ||||||||||||||||||||||||||||||||
Actuarial gains (losses) arising during period, net | (4,909 | ) | (4,909 | ) | ||||||||||||||||||||||||||||
Less: Amortization of prior service cost | (1,338 | ) | (1,338 | ) | ||||||||||||||||||||||||||||
Less: Amortization of actuarial gains and losses | 502 | 502 | ||||||||||||||||||||||||||||||
Less: Amortization of transition obligation | 75 | 75 | ||||||||||||||||||||||||||||||
Less: Reclassification of actuarial gains and losses due to transfer of the substitutional portion to the government | 2,232 | 2,232 | ||||||||||||||||||||||||||||||
Balance at March 31, 2008 | 44,870,000 | 2,242,073 | ¥ | 949,680 | ¥ | 948,571 | ¥ | 2,793,814 | ¥ | 410 | ¥ | (415,979 | ) | ¥ | 4,276,496 | |||||||||||||||||
F-6
Table of Contents
YEARS ENDED MARCH 31, 2006, 2007 and 2008
Thousands of U.S. dollars | ||||||||||||||||||||||||
Accumulated | ||||||||||||||||||||||||
Additional | other | Treasury | Total | |||||||||||||||||||||
Common | paid-in | Retained | comprehensive | stock, | Shareholders’ | |||||||||||||||||||
stock | capital | earnings | income | at cost | Equity | |||||||||||||||||||
Balance at March 31, 2007 | $ | 9,511,067 | $ | 11,376,645 | $ | 24,969,003 | $ | 128,933 | $ | (4,310,105 | ) | $ | 41,675,543 | |||||||||||
Purchase of treasury stock | (1,732,619 | ) | (1,732,619 | ) | ||||||||||||||||||||
Retirement of treasury stock | (1,876,685 | ) | 1,876,685 | — | ||||||||||||||||||||
Cash dividends declared and paid (¥4,400 per share) | (1,908,292 | ) | (1,908,292 | ) | ||||||||||||||||||||
Net income | 4,919,399 | 4,919,399 | ||||||||||||||||||||||
Unrealized holding losses on available-for-sale securities | (163,555 | ) | (163,555 | ) | ||||||||||||||||||||
Net revaluation of financial instruments | 1,332 | 1,332 | ||||||||||||||||||||||
Foreign currency translation adjustment | 71,828 | 71,828 | ||||||||||||||||||||||
Pension liability adjustment: | ||||||||||||||||||||||||
Actuarial gains (losses) arising during period, net | (49,164 | ) | (49,164 | ) | ||||||||||||||||||||
Less: Amortization of prior service cost | (13,400 | ) | (13,400 | ) | ||||||||||||||||||||
Less: Amortization of actuarial gains and losses | 5,027 | 5,027 | ||||||||||||||||||||||
Less: Amortization of transition obligation | 751 | 751 | ||||||||||||||||||||||
Less: Reclassification of actuarial gains and losses due to transfer of the substitutional portion to the government | 22,354 | 22,354 | ||||||||||||||||||||||
Balance at March 31, 2008 | $ | 9,511,067 | $ | 9,499,960 | $ | 27,980,110 | $ | 4,106 | $ | (4,166,039 | ) | $ | 42,829,204 | |||||||||||
F-7
Table of Contents
Thousands of | ||||||||||||||||
Millions of yen | U.S. dollars | |||||||||||||||
2006 | 2007 | 2008 | 2008 | |||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net income | ¥ | 610,481 | ¥ | 457,278 | ¥ | 491,202 | $ | 4,919,399 | ||||||||
Adjustments to reconcile net income to net cash provided by operating activities - | ||||||||||||||||
Depreciation and amortization | 738,137 | 745,338 | 776,425 | 7,775,914 | ||||||||||||
Deferred taxes | 49,101 | 74,987 | (2,471 | ) | (24,747 | ) | ||||||||||
Loss on sale or disposal of property, plant and equipment | 36,000 | 55,708 | 54,359 | 544,406 | ||||||||||||
Gain on sale of affiliate shares | (61,962 | ) | — | (333 | ) | (3,335 | ) | |||||||||
(Gain) loss on sale of other investments | (40,088 | ) | 113 | 2 | 20 | |||||||||||
Expense associated with sale of other investments | 14,062 | — | — | — | ||||||||||||
Equity in net (income) losses of affiliates | (1,289 | ) | 2,791 | (22,810 | ) | (228,443 | ) | |||||||||
Dividends from affiliates | 1,034 | 1,258 | 15,349 | 153,721 | ||||||||||||
Minority interests | 76 | 45 | 84 | 841 | ||||||||||||
Changes in assets and liabilities: | ||||||||||||||||
Decrease (increase) in accounts receivable | 21,345 | (262,032 | ) | 187,434 | 1,877,156 | |||||||||||
(Decrease) increase in allowance for doubtful accounts | (3,623 | ) | (1,600 | ) | 1,803 | 18,057 | ||||||||||
(Increase) decrease in inventories | (73,094 | ) | 83,716 | (10 | ) | (100 | ) | |||||||||
Decrease (increase) in income taxes receivable | 92,869 | (20,261 | ) | 20,261 | 202,914 | |||||||||||
Decrease (increase) in prepaid expenses and other current assets | 16,323 | (18,993 | ) | (16,085 | ) | (161,091 | ) | |||||||||
Increase (decrease) in accounts payable, trade | 45,108 | (42,013 | ) | (50,477 | ) | (505,528 | ) | |||||||||
Increase (decrease) in accrued income taxes | 111,141 | (100,197 | ) | 134,912 | 1,351,147 | |||||||||||
Increase in other current liabilities | 17,641 | 534 | 6,206 | 62,153 | ||||||||||||
(Decrease) increase in liability for employees’ retirement benefits | (3,378 | ) | 379 | (19,002 | ) | (190,306 | ) | |||||||||
Increase (decrease) in other long-term liabilities | 24,725 | (26,241 | ) | 8,780 | 87,932 | |||||||||||
Other, net | 16,332 | 29,788 | (25,489 | ) | (255,273 | ) | ||||||||||
Net cash provided by operating activities | 1,610,941 | 980,598 | 1,560,140 | 15,624,837 | ||||||||||||
Cash flows from investing activities: | ||||||||||||||||
Purchases of property, plant and equipment | (638,590 | ) | (735,650 | ) | (548,517 | ) | (5,493,410 | ) | ||||||||
Purchases of intangible and other assets | (195,277 | ) | (213,075 | ) | (216,816 | ) | (2,171,417 | ) | ||||||||
Purchases of non-current investments | (292,556 | ) | (41,876 | ) | (124,312 | ) | (1,244,987 | ) | ||||||||
Proceeds from sale and redemption of non-current investments | 25,142 | 50,594 | 101,341 | 1,014,932 | ||||||||||||
Acquisitions of subsidiaries, net of cash acquired | — | (8,392 | ) | (14,797 | ) | (148,192 | ) | |||||||||
Purchases of short-term investments | (252,474 | ) | (3,557 | ) | (6,562 | ) | (65,719 | ) | ||||||||
Redemption of short-term investments | 501,433 | 4,267 | 5,443 | 54,512 | ||||||||||||
Long-term bailment for consumption to a related party | (100,000 | ) | — | — | — | |||||||||||
Proceeds from redemption of long-term bailment for consumption to a related party | — | — | 50,000 | 500,751 | ||||||||||||
Other, net | 1,245 | 38 | (4,629 | ) | (46,360 | ) | ||||||||||
Net cash used in investing activities | (951,077 | ) | (947,651 | ) | (758,849 | ) | (7,599,890 | ) | ||||||||
Cash flows from financing activities: | ||||||||||||||||
Repayment of long-term debt | (150,304 | ) | (193,723 | ) | (131,005 | ) | (1,312,018 | ) | ||||||||
Proceeds from short-term borrowings | 27,002 | 18,400 | 15,249 | 152,719 | ||||||||||||
Repayment of short-term borrowings | (27,010 | ) | (18,450 | ) | (15,351 | ) | (153,741 | ) | ||||||||
Principal payments under capital lease obligations | (4,740 | ) | (3,621 | ) | (2,821 | ) | (28,252 | ) | ||||||||
Payments to acquire treasury stock | (300,078 | ) | (157,223 | ) | (173,002 | ) | (1,732,619 | ) | ||||||||
Dividends paid | (135,490 | ) | (176,862 | ) | (190,543 | ) | (1,908,292 | ) | ||||||||
Other, net | (1 | ) | (2 | ) | (2 | ) | (20 | ) | ||||||||
Net cash used in financing activities | (590,621 | ) | (531,481 | ) | (497,475 | ) | (4,982,223 | ) | ||||||||
Effect of exchange rate changes on cash and cash equivalents | 1,529 | 872 | 27 | 270 | ||||||||||||
Net increase (decrease) in cash and cash equivalents | 70,772 | (497,662 | ) | 303,843 | 3,042,994 | |||||||||||
Cash and cash equivalents at beginning of year | 769,952 | 840,724 | 343,062 | 3,435,774 | ||||||||||||
Cash and cash equivalents at end of year | ¥ | 840,724 | ¥ | 343,062 | ¥ | 646,905 | $ | 6,478,768 | ||||||||
Supplemental disclosures of cash flow information: | ||||||||||||||||
Cash received during the year for: | ||||||||||||||||
Income taxes | ¥ | 93,103 | ¥ | 925 | ¥ | 20,346 | $ | 203,766 | ||||||||
Cash paid during the year for: | ||||||||||||||||
Interest, net of amount capitalized | 8,666 | 6,203 | 4,656 | 46,630 | ||||||||||||
Income taxes | 182,914 | 359,861 | 200,079 | 2,003,796 | ||||||||||||
Non-cash investing and financing activities: | ||||||||||||||||
Assets acquired through capital lease obligations | 5,038 | 3,530 | 2,579 | 25,829 | ||||||||||||
Retirement of treasury stock | 362,659 | 175,055 | 187,387 | 1,876,685 |
F-8
Table of Contents
Accounting for Uncertainty in Income Taxes
Principles of consolidation—
F-9
Table of Contents
Major wireless telecommunications equipment | 8 to 16 years | |||
Steel towers and poles for antenna equipment | 30 to 40 years | |||
Reinforced concrete buildings | 38 to 50 years | |||
Tools, furniture and fixtures | 4 to 15 years |
F-10
Table of Contents
F-11
Table of Contents
F-12
Table of Contents
Hedging activities—
F-13
Table of Contents
F-14
Table of Contents
Thousands of | ||||||||||||
Millions of yen | U.S. dollars | |||||||||||
2007 | 2008 | 2008 | ||||||||||
Current deferred revenue | ¥ | 105,506 | ¥ | 106,348 | $ | 1,065,078 | ||||||
Long-term deferred revenue | 76,499 | 76,654 | 767,692 | |||||||||
Current deferred charges | 35,142 | 27,031 | 270,716 | |||||||||
Long-term deferred charges | 76,499 | 76,654 | 767,692 |
F-15
Table of Contents
F-16
Table of Contents
Thousands of | ||||||||||||
Millions of yen | U.S. dollars | |||||||||||
2007 | 2008 | 2008 | ||||||||||
Cash | ¥ | 173,067 | ¥ | 306,905 | $ | 3,073,661 | ||||||
Certificates of deposit | 150,000 | 280,000 | 2,804,206 | |||||||||
Bailment for consumption | — | 50,000 | 500,751 | |||||||||
Other | 19,995 | 10,000 | 100,150 | |||||||||
Total | ¥ | 343,062 | ¥ | 646,905 | $ | 6,478,768 | ||||||
Thousands of | ||||||||||||
Millions of yen | U.S. dollars | |||||||||||
2007 | 2008 | 2008 | ||||||||||
Telecommunications equipment to be sold | ¥ | 144,292 | ¥ | 145,086 | $ | 1,453,039 | ||||||
Materials and supplies | 306 | 306 | 3,065 | |||||||||
Other | 1,294 | 1,192 | 11,938 | |||||||||
Total | ¥ | 145,892 | ¥ | 146,584 | $ | 1,468,042 | ||||||
F-17
Table of Contents
F-18
Table of Contents
F-19
Table of Contents
Thousands of | ||||||||||||
Millions of yen | U.S. dollars | |||||||||||
2007 | 2008 | 2008 | ||||||||||
Marketable securities: | ||||||||||||
Available-for-sale | ¥ | 268,528 | ¥ | 158,108 | $ | 1,583,455 | ||||||
Other investments | 92,853 | 29,253 | 292,970 | |||||||||
Sub-total | ¥ | 361,381 | ¥ | 187,361 | $ | 1,876,425 | ||||||
Less: Available-for-sale securities classified as “Short-term investments” | ¥ | (99,925 | ) | — | — | |||||||
Marketable securities and other investments (Non-current) | ¥ | 261,456 | ¥ | 187,361 | $ | 1,876,425 | ||||||
Millions of yen | Millions of yen | Thousands of U.S. dollars | ||||||||||||||||||||||
2007 | 2008 | 2008 | ||||||||||||||||||||||
Carrying | Fair | Carrying | Fair | Carrying | Fair | |||||||||||||||||||
amount | value | amount | value | amount | value | |||||||||||||||||||
Due within 1 year | ¥ | 99,925 | ¥ | 99,925 | — | — | — | — | ||||||||||||||||
Due after 1 year through 5 years | 5 | 5 | ¥ | 5 | ¥ | 5 | $ | 50 | $ | 50 | ||||||||||||||
Due after 5 years through 10 years | — | — | — | — | — | — | ||||||||||||||||||
Due after 10 years | — | — | — | — | — | — | ||||||||||||||||||
Total | ¥ | 99,930 | ¥ | 99,930 | ¥ | 5 | ¥ | 5 | $ | 50 | $ | 50 | ||||||||||||
Millions of yen | ||||||||||||||||
2007 | ||||||||||||||||
Cost / Amortized | Gross unrealized | Gross unrealized | ||||||||||||||
cost | holding gains | holding losses | Fair value | |||||||||||||
Available-for-sale: | ||||||||||||||||
Equity securities | ¥ | 147,998 | ¥ | 21,585 | ¥ | 985 | ¥ | 168,598 | ||||||||
Debt securities | 100,076 | 0 | 146 | 99,930 |
Millions of yen | ||||||||||||||||
2008 | ||||||||||||||||
Cost / Amortized | Gross unrealized | Gross unrealized | ||||||||||||||
cost | holding gains | holding losses | Fair value | |||||||||||||
Available-for-sale: | ||||||||||||||||
Equity securities | ¥ | 162,504 | ¥ | 17,403 | ¥ | 21,804 | ¥ | 158,103 | ||||||||
Debt securities | 5 | 0 | — | 5 |
F-20
Table of Contents
Thousands of U.S. dollars | ||||||||||||||||
2008 | ||||||||||||||||
Cost / Amortized | Gross unrealized | Gross unrealized | ||||||||||||||
cost | holding gains | holding losses | Fair value | |||||||||||||
Available-for-sale: | ||||||||||||||||
Equity securities | $ | 1,627,481 | $ | 174,292 | $ | 218,368 | $ | 1,583,405 | ||||||||
Debt securities | 50 | 0 | — | 50 |
Thousands of | ||||||||||||||||
Millions of yen | U.S. dollars | |||||||||||||||
2006 | 2007 | 2008 | 2008 | |||||||||||||
Proceeds | ¥ | 14,902 | ¥ | 448 | ¥ | 896 | $ | 8,973 | ||||||||
Gross realized gains | 40,454 | 314 | 748 | 7,491 | ||||||||||||
Gross realized losses | — | (118 | ) | (2 | ) | (20 | ) |
Millions of yen | ||||||||||||||||||||||||
2007 | ||||||||||||||||||||||||
Less than | 12 months | |||||||||||||||||||||||
12 months | or longer | Total | ||||||||||||||||||||||
Gross unrealized | Gross unrealized | Gross unrealized | ||||||||||||||||||||||
Fair value | holding losses | Fair value | holding losses | Fair value | holding losses | |||||||||||||||||||
Available-for-sale: | ||||||||||||||||||||||||
Equity securities | ¥ | 4,503 | ¥ | 481 | ¥ | 1,543 | ¥ | 504 | ¥ | 6,046 | ¥ | 985 | ||||||||||||
Debt securities | — | — | 99,925 | 146 | 99,925 | 146 | ||||||||||||||||||
Cost method investments | 345 | 261 | 32 | 105 | 377 | 366 |
F-21
Table of Contents
Millions of yen | ||||||||||||||||||||||||
2008 | ||||||||||||||||||||||||
Less than | 12 months | |||||||||||||||||||||||
12 months | or longer | Total | ||||||||||||||||||||||
Gross unrealized | Gross unrealized | Gross unrealized | ||||||||||||||||||||||
Fair value | holding losses | Fair value | holding losses | Fair value | holding losses | |||||||||||||||||||
Available-for-sale: | ||||||||||||||||||||||||
Equity securities | ¥ | 97,739 | ¥ | 20,122 | ¥ | 2,783 | ¥ | 1,682 | ¥ | 100,522 | ¥ | 21,804 | ||||||||||||
Debt securities | — | — | — | — | — | — | ||||||||||||||||||
Cost method investments | 7 | 20 | 184 | 162 | 191 | 182 |
Thousands of U.S. dollars | ||||||||||||||||||||||||
2008 | ||||||||||||||||||||||||
Less than | 12 months | |||||||||||||||||||||||
12 months | or longer | Total | ||||||||||||||||||||||
Gross unrealized | Gross unrealized | Gross unrealized | ||||||||||||||||||||||
Fair value | holding losses | Fair value | holding losses | Fair value | holding losses | |||||||||||||||||||
Available-for-sale: | ||||||||||||||||||||||||
Equity securities | $ | 978,858 | $ | 201,523 | $ | 27,872 | $ | 16,845 | $ | 1,006,730 | $ | 218,368 | ||||||||||||
Debt securities | — | — | — | — | — | — | ||||||||||||||||||
Cost method investments | 70 | 201 | 1,843 | 1,622 | 1,913 | 1,823 |
Thousands of | ||||||||||||
Millions of yen | U.S. dollars | |||||||||||
2007 | 2008 | 2008 | ||||||||||
Restricted stock | ¥ | 68,658 | — | — |
F-22
Table of Contents
Thousands of | ||||||||||||
Millions of yen | U.S. dollars | |||||||||||
2007 | 2008 | 2008 | ||||||||||
Aggregate market price of the equivalent amount of unrestricted stock | ¥ | 96,680 | — | — |
Thousands of | ||||||||||||
Millions of yen | U.S. dollars | |||||||||||
2007 | 2008 | 2008 | ||||||||||
Cost method investments included in other investments | ¥ | 92,818 | ¥ | 29,209 | $ | 292,529 | ||||||
Including: Investments whose fair values were not evaluated for impairment | 86,119 | 26,383 | 264,226 |
Millions of yen | ||||||||||||
2007 | ||||||||||||
Mobile phone | Miscellaneous | |||||||||||
business | businesses | Consolidated | ||||||||||
Balance at beginning of year | ¥ | 133,505 | ¥ | 7,589 | ¥ | 141,094 | ||||||
Goodwill acquired during the year | 6,660 | — | 6,660 | |||||||||
Foreign currency translation adjustment | — | 67 | 67 | |||||||||
Balance at end of year | ¥ | 140,165 | ¥ | 7,656 | ¥ | 147,821 | ||||||
Millions of yen | ||||||||||||
2008 | ||||||||||||
Mobile phone | Miscellaneous | |||||||||||
business | businesses | Consolidated | ||||||||||
Balance at beginning of year | ¥ | 140,165 | ¥ | 7,656 | ¥ | 147,821 | ||||||
Goodwill acquired during the year | — | 11,662 | 11,662 | |||||||||
Foreign currency translation adjustment | (275 | ) | (319 | ) | (594 | ) | ||||||
Balance at end of year | ¥ | 139,890 | ¥ | 18,999 | ¥ | 158,889 | ||||||
F-23
Table of Contents
Thousands of U.S. dollars | ||||||||||||
2008 | ||||||||||||
Mobile phone | Miscellaneous | |||||||||||
business | businesses | Consolidated | ||||||||||
Balance at beginning of year | $ | 1,403,756 | $ | 76,675 | $ | 1,480,431 | ||||||
Goodwill acquired during the year | — | 116,795 | 116,795 | |||||||||
Foreign currency translation adjustment | (2,754 | ) | (3,195 | ) | (5,949 | ) | ||||||
Balance at end of year | $ | 1,401,002 | $ | 190,275 | $ | 1,591,277 | ||||||
Millions of yen | ||||||||||||
2007 | ||||||||||||
Gross carrying | Accumulated | Net carrying | ||||||||||
amount | amortization | amount | ||||||||||
Software for telecommunications network | ¥ | 562,107 | ¥ | 346,472 | ¥ | 215,635 | ||||||
Internal-use software | 835,410 | 581,356 | 254,054 | |||||||||
Software acquired to be used in the manufacture of handsets | 76,304 | 24,241 | 52,063 | |||||||||
Customer related assets | 50,949 | 37,504 | 13,445 | |||||||||
Rights to use telecommunications facilities of wireline operators | 17,380 | 8,828 | 8,552 | |||||||||
Other | 9,727 | 2,447 | 7,280 | |||||||||
Total | ¥ | 1,551,877 | ¥ | 1,000,848 | ¥ | 551,029 | ||||||
Millions of yen | ||||||||||||
2008 | ||||||||||||
Gross carrying | Accumulated | Net carrying | ||||||||||
amount | amortization | amount | ||||||||||
Software for telecommunications network | ¥ | 623,107 | ¥ | 400,032 | ¥ | 223,075 | ||||||
Internal-use software | 876,792 | 617,071 | 259,721 | |||||||||
Software acquired to be used in the manufacture of handsets | 89,560 | 40,480 | 49,080 | |||||||||
Customer related assets | 50,949 | 45,996 | 4,953 | |||||||||
Rights to use telecommunications facilities of wireline operators | 19,151 | 9,145 | 10,006 | |||||||||
Other | 11,300 | 2,876 | 8,424 | |||||||||
Total | ¥ | 1,670,859 | ¥ | 1,115,600 | ¥ | 555,259 | ||||||
F-24
Table of Contents
Thousands of U.S. dollars | ||||||||||||
2008 | ||||||||||||
Gross carrying | Accumulated | Net carrying | ||||||||||
amount | amortization | amount | ||||||||||
Software for telecommunications network | $ | 6,240,431 | $ | 4,006,330 | $ | 2,234,101 | ||||||
Internal-use software | 8,781,092 | 6,179,980 | 2,601,112 | |||||||||
Software acquired to be used in the manufacture of handsets | 896,945 | 405,408 | 491,537 | |||||||||
Customer related assets | 510,255 | 460,651 | 49,604 | |||||||||
Rights to use telecommunications facilities of wireline operators | 191,798 | 91,588 | 100,210 | |||||||||
Other | 113,170 | 28,803 | 84,367 | |||||||||
Total | $ | 16,733,691 | $ | 11,172,760 | $ | 5,560,931 | ||||||
Thousands of | ||||||||||||
Millions of yen | U.S. dollars | |||||||||||
2007 | 2008 | 2008 | ||||||||||
Deposits | ¥ | 73,504 | ¥ | 74,672 | $ | 747,841 | ||||||
Deferred customer activation costs | 76,499 | 76,654 | 767,692 | |||||||||
Long-term bailment for consumption to a related party | 50,000 | — | — | |||||||||
Installment receivables for handsets (non-current), net of allowance for doubtful accounts of ¥1,464 ($14,662 thousand) in 2008 | — | 57,572 | 576,585 | |||||||||
Other | 19,268 | 25,149 | 251,868 | |||||||||
Total | ¥ | 219,271 | ¥ | 234,047 | $ | 2,343,986 | ||||||
F-25
Table of Contents
Thousands of | ||||||||||||
Millions of yen | U.S. dollars | |||||||||||
2007 | 2008 | 2008 | ||||||||||
Short-term borrowings denominated in Japanese Yen: | ||||||||||||
Unsecured short-term loans from financial institutions | ¥ | 102 | — | — | ||||||||
(Year ended March 31, 2007 - weighted-average interest of 1.3% per annum) | ||||||||||||
Short-term borrowings denominated in U.S. dollars: | ||||||||||||
Unsecured short-term loans from financial institutions | — | ¥ | 1,712 | $ | 17,146 | |||||||
(Year ended March 31, 2008 - weighted-average interest of 6.3% per annum) | ||||||||||||
Total short-term borrowings | ¥ | 102 | ¥ | 1,712 | $ | 17,146 | ||||||
Thousands of | ||||||||||||
Millions of yen | U.S. dollars | |||||||||||
2007 | 2008 | 2008 | ||||||||||
Debt denominated in Japanese Yen: | ||||||||||||
Unsecured corporate bonds | ¥ | 477,058 | ¥ | 381,511 | $ | 3,820,841 | ||||||
(Year ended March 31, 2007 - interest rates per annum : 0.7%-1.6%, due : 2008-2012) | ||||||||||||
(Year ended March 31, 2008 - interest rates per annum : 1.0%-1.6%, due : 2009-2012) | ||||||||||||
Unsecured indebtedness to financial institutions | 114,000 | 93,055 | 931,948 | |||||||||
(Year ended March 31, 2007 - interest rates per annum : 0.8%-1.5%, due : 2008-2013) | ||||||||||||
(Year ended March 31, 2008 - interest rates per annum : 0.8%-2.5%, due : 2009-2013) | ||||||||||||
Debt denominated in U.S. dollars: | ||||||||||||
Unsecured corporate bonds | 11,805 | — | — | |||||||||
(Year ended March 31, 2007 - interest rate per annum : 3.5%, due : 2008) | ||||||||||||
Unsecured indebtedness to financial institutions | — | 1,712 | 17,146 | |||||||||
(Year ended March 31, 2008 - interest rate per annum : 6.4%, due : 2013) | ||||||||||||
Debt denominated in Singapore dollars: | ||||||||||||
Unsecured indebtedness to financial institutions | — | 474 | 4,747 | |||||||||
(Year ended March 31, 2008 - interest rate per annum : 4.7%, due : 2012) | ||||||||||||
Sub-total | ¥ | 602,863 | ¥ | 476,752 | $ | 4,774,682 | ||||||
Less: Current portion | (131,005 | ) | (75,662 | ) | (757,757 | ) | ||||||
Total long-term debt | ¥ | 471,858 | ¥ | 401,090 | $ | 4,016,925 | ||||||
F-26
Table of Contents
Series 15 NTT DOCOMO Unsecured Straight Bonds | ||
Date of payment | June 11, 2008 | |
Issue amount | ¥80,000 million ($801,202 thousand) | |
Issue price | ¥99.93 per ¥100 | |
Interest rate | 1.96% per annum | |
Date of maturity | June 20, 2018 | |
Use of proceeds | Repayment of outstanding debt, Redemption of outstanding corporate bonds, Capital expenditures, Investments, Loans, and Working capital |
Millions of | Thousands of | |||||||
Year ending March 31, | yen | U.S. dollars | ||||||
2009 | ¥ | 75,662 | $ | 757,756 | ||||
2010 | 29,018 | 290,616 | ||||||
2011 | 180,864 | 1,811,357 | ||||||
2012 | 174,781 | 1,750,436 | ||||||
2013 | 16,427 | 164,517 | ||||||
Thereafter | — | — | ||||||
¥ | 476,752 | $ | 4,774,682 | |||||
F-27
Table of Contents
Number of | Number of | |||||||
issued shares | treasury stock | |||||||
As of March 31, 2005 | 48,700,000 | 2,427,792 | ||||||
Acquisition of treasury stock based on the resolution by the general meeting of shareholders | — | 1,797,977 | ||||||
Acquisition of fractional shares | — | 4 | ||||||
Retirement of treasury stock | (1,890,000 | ) | (1,890,000 | ) | ||||
As of March 31, 2006 | 46,810,000 | 2,335,773 | ||||||
Acquisition of treasury stock based on the resolution by the general meeting of shareholders | — | 880,578 | ||||||
Acquisition of fractional shares | — | 5 | ||||||
Retirement of treasury stock | (930,000 | ) | (930,000 | ) | ||||
As of March 31, 2007 | 45,880,000 | 2,286,356 | ||||||
Acquisition of treasury stock based on the resolution by the general meeting of shareholders | — | 965,666 | ||||||
Acquisition of fractional shares | — | 51 | ||||||
Retirement of treasury stock | (1,010,000 | ) | (1,010,000 | ) | ||||
As of March 31, 2008 | 44,870,000 | 2,242,073 | ||||||
F-28
Table of Contents
Approved maximum number | ||||||||||||
of treasury stock to be | Approved maximum budget | |||||||||||
Date of the general meeting | Term of | repurchased | for share repurchase | |||||||||
of shareholders | repurchase | (Shares) | (Millions of yen) | |||||||||
June 18, 2004 | June 18, 2004 - June 21, 2005 | 2,500,000 | ¥ | 600,000 | ||||||||
June 21, 2005 | June 21, 2005 - June 20, 2006 | 2,200,000 | 400,000 | |||||||||
June 20, 2006 | June 20, 2006 - June 19, 2007 | 1,400,000 | 250,000 | |||||||||
June 19, 2007 | June 20, 2007 - June 19, 2008 | 1,000,000 | 200,000 | |||||||||
June 20, 2008 | June 21, 2008 - June 20, 2009 | 900,000 | 150,000 |
Millions of | ||||||||
Year ended March 31, | Shares | yen | ||||||
2006 | 1,797,981 | ¥ | 300,078 | |||||
2007 | 880,583 | 157,223 | ||||||
2008 | 965,717 | 173,002 |
Thousands of | ||||||||
Year ended March 31, | Shares | U.S. dollars | ||||||
2008 | 965,717 | $ | 1,732,619 |
Millions of | ||||||||
Date of the board of directors | Shares | yen | ||||||
March 28, 2006 | 1,890,000 | ¥ | 362,659 | |||||
March 28, 2007 | 930,000 | 175,055 | ||||||
March 28, 2008 | 1,010,000 | 187,387 |
Thousands of | ||||||||
Date of the board of directors | Shares | U.S. dollars | ||||||
March 28, 2008 | 1,010,000 | $ | 1,876,685 |
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Millions of yen | ||||||||||||||||||||||||
Unrealized holding | ||||||||||||||||||||||||
gains (losses) on | Net revaluation of | Foreign currency | Minimum pension | Accumulated other | ||||||||||||||||||||
available-for-sale | financial | translation | Pension liability | liability | comprehensive | |||||||||||||||||||
securities | instruments | adjustment | adjustment | adjustment | income | |||||||||||||||||||
As of March 31, 2005 | ¥ | 21,930 | ¥ | (213 | ) | ¥ | 48,921 | — | ¥ | (13,029 | ) | ¥ | 57,609 | |||||||||||
2006 change | 7,662 | 121 | (42,597 | ) | — | 3,986 | (30,828 | ) | ||||||||||||||||
As of March 31, 2006 | ¥ | 29,592 | ¥ | (92 | ) | ¥ | 6,324 | — | ¥ | (9,043 | ) | ¥ | 26,781 | |||||||||||
2007 change | (15,763 | ) | 34 | 1,103 | — | 5,562 | (9,064 | ) | ||||||||||||||||
Adjustment to initially apply SFAS No. 158 | — | — | — | ¥ | (8,324 | ) | 3,481 | (4,843 | ) | |||||||||||||||
As of March 31, 2007 | ¥ | 13,829 | ¥ | (58 | ) | ¥ | 7,427 | ¥ | (8,324 | ) | — | ¥ | 12,874 | |||||||||||
2008 change | (16,331 | ) | 133 | 7,172 | (3,438 | ) | — | (12,464 | ) | |||||||||||||||
As of March 31, 2008 | ¥ | (2,502 | ) | ¥ | 75 | ¥ | 14,599 | ¥ | (11,762 | ) | — | ¥ | 410 | |||||||||||
Thousands of U.S. dollars | ||||||||||||||||||||||||
Unrealized holding | ||||||||||||||||||||||||
gains (losses) on | Net revaluation of | Foreign currency | Minimum pension | Accumulated other | ||||||||||||||||||||
available-for-sale | financial | translation | Pension liability | liability | comprehensive | |||||||||||||||||||
securities | instruments | adjustment | adjustment | adjustment | income | |||||||||||||||||||
As of March 31, 2007 | $ | 138,498 | $ | (581 | ) | $ | 74,381 | $ | (83,365 | ) | — | $ | 128,933 | |||||||||||
2008 change | (163,555 | ) | 1,332 | 71,828 | (34,432 | ) | — | (124,827 | ) | |||||||||||||||
As of March 31, 2008 | $ | (25,057 | ) | $ | 751 | $ | 146,209 | $ | (117,797 | ) | — | $ | 4,106 | |||||||||||
F-30
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Thousands of | ||||||||||||||||
Millions of yen | U.S. dollars | |||||||||||||||
2006 | 2007 | 2008 | 2008 | |||||||||||||
Net realized gains on marketable securities | ¥ | 366 | ¥ | 309 | ¥ | 748 | $ | 7,491 | ||||||||
Other than temporary impairment of marketable securities and other investments | (251 | ) | (8,086 | ) | (11,418 | ) | (114,352 | ) | ||||||||
Foreign exchange gains (losses), net | 8,072 | 281 | (1,609 | ) | (16,114 | ) | ||||||||||
Rental revenue received | 2,525 | 2,407 | 2,256 | 22,594 | ||||||||||||
Dividends income | 4,446 | 7,203 | 3,310 | 33,150 | ||||||||||||
Penalties and compensation for damages | 3,279 | 2,000 | 2,193 | 21,963 | ||||||||||||
Other, net | 2,938 | (292 | ) | (1,366 | ) | (13,680 | ) | |||||||||
Total | ¥ | 21,375 | ¥ | 3,822 | ¥ | (5,886 | ) | $ | (58,948 | ) | ||||||
F-31
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F-32
Table of Contents
Millions of yen | ||||||||||||||||||||
Mobile phone | PHS | Miscellaneous | ||||||||||||||||||
Year ended March 31, 2006 | business | business | businesses | Corporate | Consolidated | |||||||||||||||
Operating revenues | ¥ | 4,683,002 | ¥ | 41,741 | ¥ | 41,129 | — | ¥ | 4,765,872 | |||||||||||
Operating expenses | 3,838,567 | 51,210 | 43,456 | — | 3,933,233 | |||||||||||||||
Operating income (loss) | ¥ | 844,435 | ¥ | (9,469 | ) | ¥ | (2,327 | ) | — | ¥ | 832,639 | |||||||||
Total assets | ¥ | 4,782,740 | ¥ | 34,414 | ¥ | 23,241 | ¥ | 1,524,862 | ¥ | 6,365,257 | ||||||||||
Depreciation and amortization | ¥ | 729,349 | ¥ | 5,054 | ¥ | 3,734 | — | ¥ | 738,137 | |||||||||||
Capital expenditures | ¥ | 749,456 | ¥ | 1,071 | — | ¥ | 136,586 | ¥ | 887,113 | |||||||||||
Millions of yen | ||||||||||||||||||||
Mobile phone | PHS | Miscellaneous | ||||||||||||||||||
Year ended March 31, 2007 | business | business | businesses | Corporate | Consolidated | |||||||||||||||
Operating revenues | ¥ | 4,718,875 | ¥ | 23,429 | ¥ | 45,789 | — | ¥ | 4,788,093 | |||||||||||
Operating expenses | 3,915,204 | 38,812 | 60,553 | — | 4,014,569 | |||||||||||||||
Operating income (loss) | ¥ | 803,671 | ¥ | (15,383 | ) | ¥ | (14,764 | ) | — | ¥ | 773,524 | |||||||||
Total assets | ¥ | 5,067,348 | ¥ | 25,212 | ¥ | 40,213 | ¥ | 983,442 | ¥ | 6,116,215 | ||||||||||
Depreciation and amortization | ¥ | 735,270 | ¥ | 3,230 | ¥ | 6,838 | — | ¥ | 745,338 | |||||||||||
Capital expenditures | ¥ | 781,548 | ¥ | 1,195 | — | ¥ | 151,680 | ¥ | 934,423 | |||||||||||
F-33
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Millions of yen | ||||||||||||||||||||
Mobile phone | PHS | Miscellaneous | ||||||||||||||||||
Year ended March 31, 2008 | business | business | businesses | Corporate | Consolidated | |||||||||||||||
Operating revenues | ¥ | 4,647,132 | ¥ | 9,953 | ¥ | 54,742 | — | ¥ | 4,711,827 | |||||||||||
Operating expenses | 3,788,943 | 39,912 | 74,660 | — | 3,903,515 | |||||||||||||||
Operating income (loss) | ¥ | 858,189 | ¥ | (29,959 | ) | ¥ | (19,918 | ) | — | ¥ | 808,312 | |||||||||
Total assets | ¥ | 4,838,663 | ¥ | 19,664 | ¥ | 80,668 | ¥ | 1,271,839 | ¥ | 6,210,834 | ||||||||||
Depreciation and amortization | ¥ | 767,481 | ¥ | 1,601 | ¥ | 7,343 | — | ¥ | 776,425 | |||||||||||
Capital expenditures | ¥ | 623,975 | ¥ | 244 | — | ¥ | 134,524 | ¥ | 758,743 | |||||||||||
Thousands of U.S. dollars | ||||||||||||||||||||
Mobile phone | PHS | Miscellaneous | ||||||||||||||||||
Year ended March 31, 2008 | business | business | businesses | Corporate | Consolidated | |||||||||||||||
Operating revenues | $ | 46,541,132 | $ | 99,680 | $ | 548,242 | — | $ | 47,189,054 | |||||||||||
Operating expenses | 37,946,350 | 399,720 | 747,721 | — | 39,093,791 | |||||||||||||||
Operating income (loss) | $ | 8,594,782 | $ | (300,040 | ) | $ | (199,479 | ) | — | $ | 8,095,263 | |||||||||
Total assets | $ | 48,459,319 | $ | 196,935 | $ | 807,892 | $ | 12,737,496 | $ | 62,201,642 | ||||||||||
Depreciation and amortization | $ | 7,686,340 | $ | 16,034 | $ | 73,540 | — | $ | 7,775,914 | |||||||||||
Capital expenditures | $ | 6,249,124 | $ | 2,443 | — | $ | 1,347,261 | $ | 7,598,828 | |||||||||||
Thousands of | ||||||||||||||||
Millions of yen | U.S. dollars | |||||||||||||||
Year ended March 31 | 2006 | 2007 | 2008 | 2008 | ||||||||||||
Operating Revenues : | ||||||||||||||||
Wireless services | ¥ | 4,295,856 | ¥ | 4,314,140 | ¥ | 4,165,234 | $ | 41,714,913 | ||||||||
Cellular services revenues | 4,158,134 | 4,182,609 | 4,018,988 | 40,250,255 | ||||||||||||
- Voice revenues | 3,038,654 | 2,940,364 | 2,645,096 | 26,490,696 | ||||||||||||
Including: FOMA services | 1,169,947 | 1,793,037 | 2,084,263 | 20,873,941 | ||||||||||||
- Packet communications revenues | 1,119,480 | 1,242,245 | 1,373,892 | 13,759,559 | ||||||||||||
Including: FOMA services | 613,310 | 971,946 | 1,254,648 | 12,565,328 | ||||||||||||
PHS services revenues | 40,943 | 23,002 | 9,472 | 94,863 | ||||||||||||
Other revenues | 96,779 | 108,529 | 136,774 | 1,369,795 | ||||||||||||
Equipment sales | 470,016 | 473,953 | 546,593 | 5,474,141 | ||||||||||||
Total operating revenues | ¥ | 4,765,872 | ¥ | 4,788,093 | ¥ | 4,711,827 | $ | 47,189,054 | ||||||||
F-34
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Thousands of | ||||||||||||
Millions of yen | U.S. dollars | |||||||||||
2007 | 2008 | 2008 | ||||||||||
Change in benefit obligations: | ||||||||||||
Projected benefit obligation, beginning of year | ¥ | 188,856 | ¥ | 183,004 | $ | 1,832,789 | ||||||
Service cost | 10,219 | 9,521 | 95,353 | |||||||||
Interest cost | 3,654 | 3,889 | 38,948 | |||||||||
Benefit payments | (9,737 | ) | (10,471 | ) | (104,867 | ) | ||||||
Plan amendment | (465 | ) | — | — | ||||||||
Transfer of liability from defined benefit pension plans of the NTT group | 160 | 281 | 2,815 | |||||||||
Actuarial gain | (9,683 | ) | (3,996 | ) | (40,020 | ) | ||||||
Projected benefit obligation, end of year | ¥ | 183,004 | ¥ | 182,228 | $ | 1,825,018 | ||||||
Change in fair value of plan assets: | ||||||||||||
Fair value of plan assets, beginning of year | ¥ | 79,266 | ¥ | 85,207 | $ | 853,350 | ||||||
Actual return on plan assets | 3,096 | (7,870 | ) | (78,818 | ) | |||||||
Employer contributions | 4,470 | 3,980 | 39,860 | |||||||||
Benefit payments | (1,661 | ) | (1,838 | ) | (18,408 | ) | ||||||
Transfer of plan assets from defined benefit pension plans of the NTT group | 36 | 65 | 651 | |||||||||
Fair value of plan assets, end of year | ¥ | 85,207 | ¥ | 79,544 | $ | 796,635 | ||||||
At March 31: | ||||||||||||
Funded status | ¥ | (97,797 | ) | ¥ | (102,684 | ) | $ | (1,028,383 | ) | |||
Thousands of | ||||||||||||
Millions of yen | U.S. dollars | |||||||||||
2007 | 2008 | 2008 | ||||||||||
Liability for employees’ retirement benefits | ¥ | (98,621 | ) | ¥ | (102,912 | ) | $ | (1,030,666 | ) | |||
Prepaid pension cost | 824 | 228 | 2,283 | |||||||||
Net amount recognized | ¥ | (97,797 | ) | ¥ | (102,684 | ) | $ | (1,028,383 | ) | |||
F-35
Table of Contents
Thousands of | ||||||||||||
Millions of yen | U.S. dollars | |||||||||||
2007 | 2008 | 2008 | ||||||||||
Actuarial gains (losses), net | ¥ | (28,737 | ) | ¥ | (33,921 | ) | $ | (339,720 | ) | |||
Prior service cost | 20,239 | 18,332 | 183,595 | |||||||||
Transition obligation | (1,439 | ) | (1,312 | ) | (13,140 | ) | ||||||
Total | ¥ | (9,937 | ) | ¥ | (16,901 | ) | $ | (169,265 | ) | |||
Thousands of | ||||||||||||
Millions of yen | U.S. dollars | |||||||||||
2007 | 2008 | 2008 | ||||||||||
Plans with projected benefit obligation in excess of plan assets | ||||||||||||
Projected benefit obligation | ¥ | 178,323 | ¥ | 177,963 | $ | 1,782,303 | ||||||
Fair value of plan assets | 79,702 | 75,051 | 751,637 | |||||||||
Plans with accumulated benefit obligation in excess of plan assets | ||||||||||||
Accumulated benefit obligation | ¥ | 171,549 | ¥ | 172,239 | $ | 1,724,977 | ||||||
Fair value of plan assets | 79,313 | 75,051 | 751,637 |
Thousands of | ||||||||||||||||
Millions of yen | U.S. dollars | |||||||||||||||
2006 | 2007 | 2008 | 2008 | |||||||||||||
Service cost | ¥ | 9,879 | ¥ | 10,219 | ¥ | 9,521 | $ | 95,353 | ||||||||
Interest cost on projected benefit obligation | 3,493 | 3,654 | 3,889 | 38,948 | ||||||||||||
Expected return on plan assets | (1,640 | ) | (2,028 | ) | (2,144 | ) | (21,472 | ) | ||||||||
Amortization of prior service cost | (1,861 | ) | (1,907 | ) | (1,907 | ) | (19,099 | ) | ||||||||
Amortization of actuarial gains and losses | 2,018 | 1,600 | 834 | 8,353 | ||||||||||||
Amortization of transition obligation | 132 | 127 | 127 | 1,272 | ||||||||||||
Net periodic pension cost | ¥ | 12,021 | ¥ | 11,665 | ¥ | 10,320 | $ | 103,355 | ||||||||
F-36
Table of Contents
Thousands of | ||||||||||||||||
Millions of yen | U.S. dollars | |||||||||||||||
2006 | 2007 | 2008 | 2008 | |||||||||||||
Other changes in plan assets and benefit obligations recognized in “Accumulated other comprehensive income”: | ||||||||||||||||
Adjustment to minimum pension liability | ¥ | (4,564 | ) | ¥ | (8,778 | ) | — | — | ||||||||
Actuarial (gains) losses arising during period, net | — | 28,737 | ¥ | 6,018 | $ | 60,270 | ||||||||||
Prior service cost arising during period | — | (20,239 | ) | — | — | |||||||||||
Transition obligation arising during period | — | 1,439 | — | — | ||||||||||||
Amortization of prior service cost | — | — | 1,907 | 19,099 | ||||||||||||
Amortization of actuarial gains and losses | — | — | (834 | ) | (8,353 | ) | ||||||||||
Amortization of transition obligation | — | — | (127 | ) | (1,272 | ) | ||||||||||
Elimination of minimum pension liability | — | (5,206 | ) | — | — | |||||||||||
Total recognized in “Accumulated other comprehensive income” | ¥ | (4,564 | ) | ¥ | (4,047 | ) | ¥ | 6,964 | $ | 69,744 | ||||||
Total recognized in net periodic pension cost and “Accumulated other comprehensive income” | ¥ | 7,457 | ¥ | 7,618 | ¥ | 17,284 | $ | 173,099 | ||||||||
2007 | 2008 | |||||||
Discount rate | 2.2 | % | 2.3 | % | ||||
Long-term rate of salary increases | 2.1 | 2.2 |
2006 | 2007 | 2008 | ||||||||||
Discount rate | 2.0 | % | 2.0 | % | 2.2 | % | ||||||
Long-term rate of salary increases | 2.1 | 2.1 | 2.1 | |||||||||
Expected long-term rate of return on plan assets | 2.5 | 2.5 | 2.5 |
F-37
Table of Contents
2007 | 2008 | |||||||
Domestic bonds | 32.8 | % | 42.6 | % | ||||
Domestic stock | 23.8 | 23.0 | ||||||
Foreign stock | 14.8 | 13.8 | ||||||
Foreign bonds | 18.3 | 10.7 | ||||||
Other | 10.3 | 9.9 | ||||||
Total | 100.0 | % | 100.0 | % | ||||
Thousands of | ||||||||
Year ending March 31, | Millions of yen | U.S. dollars | ||||||
2009 | ¥ | 13,365 | $ | 133,851 | ||||
2010 | 12,164 | 121,823 | ||||||
2011 | 11,701 | 117,186 | ||||||
2012 | 11,435 | 114,522 | ||||||
2013 | 11,176 | 111,928 | ||||||
2014-2018 | 65,981 | 660,801 |
F-38
Table of Contents
F-39
Table of Contents
Thousands of | ||||||||||||
Millions of yen | U.S. dollars | |||||||||||
2007 | 2008 | 2008 | ||||||||||
Change in benefit obligations: | ||||||||||||
Projected benefit obligation, beginning of year | ¥ | 132,031 | ¥ | 131,405 | $ | 1,316,024 | ||||||
Service cost | 3,440 | 3,244 | 32,489 | |||||||||
Interest cost | 2,619 | 2,872 | 28,763 | |||||||||
Benefit payments | (1,272 | ) | (1,123 | ) | (11,247 | ) | ||||||
Internal adjustment due to transfer of employees within the NTT group | (438 | ) | (413 | ) | (4,136 | ) | ||||||
Actuarial gain | (4,975 | ) | (2,412 | ) | (24,156 | ) | ||||||
Transfer of the substitutional portion to the government | — | (55,288 | ) | (553,711 | ) | |||||||
Projected benefit obligation, end of year | ¥ | 131,405 | ¥ | 78,285 | $ | 784,026 | ||||||
Change in fair value of plan assets: | ||||||||||||
Fair value of plan assets, beginning of year | ¥ | 90,262 | ¥ | 94,136 | $ | 942,774 | ||||||
Actual return on plan assets | 3,697 | (3,122 | ) | (31,267 | ) | |||||||
Employer contributions | 1,240 | 954 | 9,554 | |||||||||
Employee contributions | 522 | 452 | 4,527 | |||||||||
Benefit payments | (1,272 | ) | (1,123 | ) | (11,247 | ) | ||||||
Internal adjustment due to transfer of employees within the NTT group | (313 | ) | (294 | ) | (2,944 | ) | ||||||
Transfer of the substitutional portion to the government | — | (26,694 | ) | (267,341 | ) | |||||||
Fair value of plan assets, end of year | ¥ | 94,136 | ¥ | 64,309 | $ | 644,056 | ||||||
At March 31: | ||||||||||||
Funded status | ¥ | (37,269 | ) | ¥ | (13,976 | ) | $ | (139,970 | ) | |||
Thousands of | ||||||||||||
Millions of yen | U.S. dollars | |||||||||||
2007 | 2008 | 2008 | ||||||||||
Actuarial gains (losses), net | ¥ | (6,080 | ) | ¥ | (5,221 | ) | $ | (52,288 | ) | |||
Prior service cost | 2,497 | 2,140 | 21,432 | |||||||||
Total | ¥ | (3,583 | ) | ¥ | (3,081 | ) | $ | (30,856 | ) | |||
F-40
Table of Contents
Thousands of | ||||||||||||
Millions of yen | U.S. dollars | |||||||||||
2007 | 2008 | 2008 | ||||||||||
Plans with projected benefit obligation in excess of plan assets | ||||||||||||
Projected benefit obligation | ¥ | 131,405 | ¥ | 78,285 | $ | 784,026 | ||||||
Fair value of plan assets | 94,136 | 64,309 | 644,056 | |||||||||
Plans with accumulated benefit obligation in excess of plan assets | ||||||||||||
Accumulated benefit obligation | ¥ | 109,680 | ¥ | 19,518 | $ | 195,473 | ||||||
Fair value of plan assets | 94,136 | 16,803 | 168,282 |
Thousands of | ||||||||||||||||
Millions of yen | U.S. dollars | |||||||||||||||
2006 | 2007 | 2008 | 2008 | |||||||||||||
Service cost | ¥ | 3,626 | ¥ | 3,440 | ¥ | 3,244 | $ | 32,489 | ||||||||
Interest cost on projected benefit obligation | 2,580 | 2,619 | 2,872 | 28,763 | ||||||||||||
Expected return on plan assets | (1,970 | ) | (2,254 | ) | (2,339 | ) | (23,425 | ) | ||||||||
Amortization of prior service cost | (357 | ) | (357 | ) | (357 | ) | (3,575 | ) | ||||||||
Amortization of actuarial gains and losses | 1,956 | 362 | 16 | 160 | ||||||||||||
Contribution from employees | (532 | ) | (522 | ) | (452 | ) | (4,527 | ) | ||||||||
Net periodic pension cost | ¥ | 5,303 | ¥ | 3,288 | ¥ | 2,984 | $ | 29,885 | ||||||||
Gain on transfer of substitutional portion of pension liabilities | — | — | (24,702 | ) | (247,391 | ) | ||||||||||
Total | ¥ | 5,303 | ¥ | 3,288 | ¥ | (21,718 | ) | $ | (217,506 | ) | ||||||
F-41
Table of Contents
Thousands of | ||||||||||||||||
Millions of yen | U.S. dollars | |||||||||||||||
2006 | 2007 | 2008 | 2008 | |||||||||||||
Other changes in plan assets and benefit obligations recognized in “Accumulated other comprehensive income”: | ||||||||||||||||
Adjustment to minimum pension liability | ¥ | (2,132 | ) | ¥ | (600 | ) | — | — | ||||||||
Actuarial (gains) losses arising during period, net | — | 6,080 | ¥ | 3,049 | $ | 30,536 | ||||||||||
Prior service cost arising during period | — | (2,497 | ) | — | — | |||||||||||
Amortization of prior service cost | — | — | 357 | 3,575 | ||||||||||||
Amortization of actuarial gains and losses | — | — | (16 | ) | (160 | ) | ||||||||||
Reclassification of actuarial gains and losses due to transfer of the substitutional portion to the government | — | — | (3,892 | ) | (38,978 | ) | ||||||||||
Elimination of minimum pension liability | — | (311 | ) | — | — | |||||||||||
Total recognized in “Accumulated other comprehensive income” | ¥ | (2,132 | ) | ¥ | 2,672 | ¥ | (502 | ) | $ | (5,027 | ) | |||||
Total recognized in net periodic pension cost, gain on transfer of substitutional portion of pension liabilities and “Accumulated other comprehensive income” | ¥ | 3,171 | ¥ | 5,960 | ¥ | (22,220 | ) | $ | (222,533 | ) | ||||||
2007 | 2008 | |||||||
Discount rate | 2.2 | % | 2.3 | % | ||||
Long-term rate of salary increases | 2.6 | 2.6 |
2006 | 2007 | 2008 | ||||||||||
Discount rate | 2.0 | % | 2.0 | % | 2.2 | % | ||||||
Long-term rate of salary increases | 2.6 | 2.6 | 2.6 | |||||||||
Expected long-term rate of return on plan assets | 2.5 | 2.5 | 2.5 |
F-42
Table of Contents
2007 | 2008 | |||||||
Domestic bonds | 49.6 | % | 58.2 | % | ||||
Domestic stock | 17.9 | 17.4 | ||||||
Foreign stock | 11.4 | 10.4 | ||||||
Foreign bonds | 14.2 | 8.1 | ||||||
Other | 6.9 | 5.9 | ||||||
Total | 100.0 | % | 100.0 | % | ||||
Thousands of | ||||||||
Year ending March 31, | Millions of yen | U.S. dollars | ||||||
2009 | ¥ | 981 | $ | 9,825 | ||||
2010 | 1,323 | 13,250 | ||||||
2011 | 1,497 | 14,992 | ||||||
2012 | 1,672 | 16,745 | ||||||
2013 | 1,852 | 18,548 | ||||||
2014-2018 | 11,729 | 117,466 |
F-43
Table of Contents
Thousands of | ||||||||||||||||
Millions of yen | U.S. dollars | |||||||||||||||
2006 | 2007 | 2008 | 2008 | |||||||||||||
Income from continuing operations before equity in net income (losses) of affiliates and minority interest | ¥ | 341,382 | ¥ | 313,679 | ¥ | 322,955 | $ | 3,234,401 | ||||||||
Equity in net income (losses) of affiliates | 1,653 | (850 | ) | 9,257 | 92,709 | |||||||||||
Other comprehensive income (loss): | ||||||||||||||||
Unrealized holding gains (losses) on available-for-sale securities | 6,927 | (10,586 | ) | (11,668 | ) | (116,855 | ) | |||||||||
Less: Reclassification of realized gains and losses included in net income | (1,618 | ) | (276 | ) | 299 | 2,994 | ||||||||||
Net revaluation of financial instruments | 256 | 576 | (363 | ) | (3,635 | ) | ||||||||||
Less: Reclassification of realized gains and losses included in net income | (172 | ) | (552 | ) | 455 | 4,557 | ||||||||||
Foreign currency translation adjustment | (234 | ) | 76 | 6,634 | 66,440 | |||||||||||
Less: Reclassification of realized gains and losses included in net income | (15,779 | ) | — | (88 | ) | (881 | ) | |||||||||
Adjustment to initially apply SFAS No. 158 | — | (3,395 | ) | — | — | |||||||||||
Pension liability adjustment: | ||||||||||||||||
Actuarial gains (losses) arising during period, net | — | — | (3,513 | ) | (35,183 | ) | ||||||||||
Less: Amortization of prior service cost | — | — | (926 | ) | (9,274 | ) | ||||||||||
Less: Amortization of actuarial gains and losses | — | — | 348 | 3,486 | ||||||||||||
Less: Amortization of transition obligation | — | — | 52 | 521 | ||||||||||||
Less: Reclassification of actuarial gains and losses due to transfer of the substitutional portion to the government | — | — | 1,660 | 16,624 | ||||||||||||
Minimum pension liability adjustment | 2,758 | 3,849 | — | — | ||||||||||||
Total income taxes | ¥ | 335,173 | ¥ | 302,521 | ¥ | 325,102 | $ | 3,255,904 | ||||||||
F-44
Table of Contents
2006 | 2007 | 2008 | ||||||||||
Statutory income tax rate | 40.9 | % | 40.9 | % | 40.9 | % | ||||||
Expenses not deductible for tax purposes | 0.2 | 0.2 | 0.3 | |||||||||
Tax credit for special tax treatment such as R&D investment tax incentive, IT investment promotion tax incentive and IT infrastructure tax incentive | (2.6 | ) | (0.9 | ) | (0.8 | ) | ||||||
Changes in valuation allowance | (0.9 | ) | — | — | ||||||||
Other | (1.7 | ) | 0.4 | (0.1 | ) | |||||||
Effective income tax rate | 35.9 | % | 40.6 | % | 40.3 | % | ||||||
Thousands of | ||||||||||||
Millions of yen | U.S. dollars | |||||||||||
2007 | 2008 | 2008 | ||||||||||
Deferred tax assets: | ||||||||||||
Property, plant and equipment and intangible assets principally due to differences in depreciation and amortization | ¥ | 45,139 | ¥ | 48,618 | $ | 486,911 | ||||||
Liability for employees’ retirement benefits | 54,329 | 46,965 | 470,356 | |||||||||
Reserve for point loyalty programs | 42,397 | 46,004 | 460,731 | |||||||||
Deferred revenues regarding “Nikagetsu Kurikoshi” (2 month carry-over) | 28,779 | 32,441 | 324,897 | |||||||||
Accrued enterprise tax | 6,244 | 16,594 | 166,189 | |||||||||
Compensated absences | 9,276 | 12,455 | 124,737 | |||||||||
Accrued commissions to agent resellers | 23,293 | 9,343 | 93,570 | |||||||||
Marketable securities and other investments | 3,604 | 7,873 | 78,848 | |||||||||
Accrued bonus | 7,006 | 6,897 | 69,074 | |||||||||
Inventories | 14,861 | 5,428 | 54,362 | |||||||||
Unrealized holding losses on available-for-sale securities | — | 1,746 | 17,486 | |||||||||
Other | 10,571 | 12,435 | 124,537 | |||||||||
Total deferred tax assets | ¥ | 245,499 | ¥ | 246,799 | $ | 2,471,698 | ||||||
Deferred tax liabilities: | ||||||||||||
Foreign currency translation adjustment | 128 | 6,674 | 66,840 | |||||||||
Property, plant and equipment due to differences in capitalized interest | 1,738 | 2,343 | 23,465 | |||||||||
Investment in affiliates | 438 | 2,292 | 22,955 | |||||||||
Intangible assets (principally customer related assets) | 5,499 | 2,026 | 20,291 | |||||||||
Unrealized holding gains on available-for-sale securities | 9,623 | — | — | |||||||||
Other | 7,436 | 3,551 | 35,563 | |||||||||
Total deferred tax liabilities | ¥ | 24,862 | ¥ | 16,886 | $ | 169,114 | ||||||
Net deferred tax assets | ¥ | 220,637 | ¥ | 229,913 | $ | 2,302,584 | ||||||
F-45
Table of Contents
Thousands of | ||||||||||||
Millions of yen | U.S. dollars | |||||||||||
2007 | 2008 | 2008 | ||||||||||
Deferred tax assets (current assets) | ¥ | 94,868 | ¥ | 108,037 | $ | 1,081,993 | ||||||
Deferred tax assets (non-current investments and other assets) | 127,696 | 123,403 | 1,235,884 | |||||||||
Other current liabilities | (7 | ) | — | — | ||||||||
Other long-term liabilities | (1,920 | ) | (1,527 | ) | (15,293 | ) | ||||||
Total | ¥ | 220,637 | ¥ | 229,913 | $ | 2,302,584 | ||||||
F-46
Table of Contents
Leases—
Thousands of | ||||||||||||
Millions of yen | U.S. dollars | |||||||||||
Class of property | 2007 | 2008 | 2008 | |||||||||
Tools, furniture and fixtures | ¥ | 12,016 | ¥ | 11,699 | $ | 117,166 | ||||||
Software | 875 | 409 | 4,096 | |||||||||
Sub-total | 12,891 | 12,108 | 121,262 | |||||||||
Less: Accumulated depreciation and amortization | (7,143 | ) | (7,833 | ) | (78,448 | ) | ||||||
Total | ¥ | 5,748 | ¥ | 4,275 | $ | 42,814 | ||||||
Millions of | Thousands of | |||||||
Year ending March 31, | yen | U.S. dollars | ||||||
2009 | ¥ | 3,036 | $ | 30,405 | ||||
2010 | 2,332 | 23,355 | ||||||
2011 | 1,591 | 15,934 | ||||||
2012 | 882 | 8,833 | ||||||
2013 | 382 | 3,826 | ||||||
Thereafter | 61 | 611 | ||||||
Total minimum lease payments | 8,284 | 82,964 | ||||||
Less—Amount representing interest | (506 | ) | (5,067 | ) | ||||
Present value of net minimum lease payments | 7,778 | 77,897 | ||||||
Less—Amounts representing estimated executory costs | (1,031 | ) | (10,326 | ) | ||||
Net minimum lease payments | 6,747 | 67,571 | ||||||
Less—Current obligation | (2,422 | ) | (24,256 | ) | ||||
Long-term capital lease obligations | ¥ | 4,325 | $ | 43,315 | ||||
F-47
Table of Contents
Millions of | Thousands of | |||||||
Year ending March 31, | yen | U.S. dollars | ||||||
2009 | ¥ | 2,152 | $ | 21,553 | ||||
2010 | 1,870 | 18,728 | ||||||
2011 | 1,521 | 15,233 | ||||||
2012 | 1,424 | 14,261 | ||||||
2013 | 1,424 | 14,261 | ||||||
Thereafter | 14,238 | 142,594 | ||||||
Total minimum future rentals | ¥ | 22,629 | $ | 226,630 | ||||
Thousands of | ||||||||||||||||
Millions of yen | U.S. dollars | |||||||||||||||
2006 | 2007 | 2008 | 2008 | |||||||||||||
Minimum rentals | ¥ | 64,323 | ¥ | 67,897 | ¥ | 70,673 | $ | 707,792 | ||||||||
F-48
Table of Contents
Millions of yen | Thousands of U.S. dollars | |||||||||||||||||||||||
2007 | 2008 | 2008 | ||||||||||||||||||||||
Carrying | Carrying | Carrying | ||||||||||||||||||||||
amount | Fair value | amount | Fair value | amount | Fair value | |||||||||||||||||||
¥ | 602,863 | ¥ | 606,910 | ¥ | 476,752 | ¥ | 481,832 | $ | 4,774,682 | $ | 4,825,558 |
F-49
Table of Contents
Contract Term | Millions of yen | |||||||||||||||
(in the year | Weighted average rate per annum | 2007 | ||||||||||||||
ended/ending | Receive | Pay | Contract | Fair | ||||||||||||
March 31,) | fixed | floating | Amount | value | ||||||||||||
2004-2012 | 1.5 | % | 0.9 | % | ¥ | 235,800 | ¥ | 858 |
Thousands of | ||||||||||||||||||||||||
Contract Term | Millions of yen | U.S. dollars | ||||||||||||||||||||||
(in the year | Weighted average rate per annum | 2008 | 2008 | |||||||||||||||||||||
ended/ending | Receive | Pay | Contract | Fair | Contract | Fair | ||||||||||||||||||
March 31,) | fixed | floating | Amount | value | Amount | Value | ||||||||||||||||||
2004-2012 | 1.5 | % | 1.2 | % | ¥ | 235,800 | ¥ | 3,511 | $ | 2,361,542 | $ | 35,163 |
F-50
Table of Contents
Millions of yen | Thousands of U.S. dollars | |||||||||||||||||||||||
2007 | 2008 | 2008 | ||||||||||||||||||||||
Contract | Contract | Contract | ||||||||||||||||||||||
amount | Fair value | amount | Fair value | Amount | Fair value | |||||||||||||||||||
¥ | 10,485 | ¥ | 1,251 | — | — | — | — |
Millions of yen | Thousands of U.S. dollars | |||||||||||||||||||||||
2007 | 2008 | 2008 | ||||||||||||||||||||||
Contract | Contract | Contract | ||||||||||||||||||||||
amount | Fair value | amount | Fair value | Amount | Fair value | |||||||||||||||||||
¥ | 938 | ¥ | 4 | ¥ | 4,731 | ¥ | (16 | ) | $ | 47,381 | $ | (160 | ) |
F-51
Table of Contents
Millions of yen | ||||||||||||||||
Balance at | ||||||||||||||||
Beginning of | Balance at End | |||||||||||||||
Year | Additions | Deductions (*1) | of Year | |||||||||||||
2006 | ||||||||||||||||
Allowance for doubtful accounts | ¥ | 18,359 | ¥ | 9,919 | ¥ | (13,538 | ) | ¥ | 14,740 | |||||||
2007 | ||||||||||||||||
Allowance for doubtful accounts | ¥ | 14,740 | ¥ | 8,654 | ¥ | (10,216 | ) | ¥ | 13,178 | |||||||
2008 | ||||||||||||||||
Allowance for doubtful accounts | ¥ | 13,178 | ¥ | 12,107 | ¥ | (8,784 | ) | ¥ | 16,501 |
Thousands of U.S. dollars | ||||||||||||||||
Balance at | ||||||||||||||||
Beginning of | Balance at End | |||||||||||||||
Year | Additions | Deductions (*1) | of Year | |||||||||||||
2008 | ||||||||||||||||
Allowance for doubtful accounts | $ | 131,978 | $ | 121,252 | $ | (87,972 | ) | $ | 165,258 |
* | 1: Amounts written off. |
Millions of yen | ||||||||||||||||
Balance at | ||||||||||||||||
Beginning of | Balance at End | |||||||||||||||
Year | Additions | Deductions | of Year | |||||||||||||
2006 | ||||||||||||||||
Valuation allowances—Deferred tax assets | ¥ | 23,436 | — | ¥ | (23,436 | ) | — | |||||||||
2007 | ||||||||||||||||
Valuation allowances—Deferred tax assets | — | — | — | — | ||||||||||||
2008 | ||||||||||||||||
Valuation allowances—Deferred tax assets | — | — | — | — |
Thousands of U.S. dollars | ||||||||||||||||
Balance at | ||||||||||||||||
Beginning of | Balance at End | |||||||||||||||
Year | Additions | Deductions | of Year | |||||||||||||
2008 | ||||||||||||||||
Valuation allowances—Deferred tax assets | — | — | — | — |
F-52
Table of Contents
NTT DoCoMo, Inc. | ||||
By | /s/ Ryuji Yamada | |||
Name: Ryuji Yamada | ||||
Title: President and Chief Executive Officer |
Table of Contents
Exhibit | ||||||
Number | Description | |||||
1.1 | — | Articles of Incorporation of the registrant (English translation) | ||||
1.2 | — | Share Handling Regulations of the registrant (English translation)* | ||||
1.3 | — | Regulations of the Board of Directors of the registrant (English translation) | ||||
1.4 | — | Regulations of the Board of Corporate Auditors of the registrant (English translation)** | ||||
2.1 | — | Specimen common stock certificates of the registrant*** | ||||
2.2 | — | Form of Deposit Agreement among the registrant, The Bank of New York as Depositary and all owners and holders from time to time of American Depositary Receipts, including the form of American Depositary Receipt (incorporated by reference to Post-Effective Amendment No. 3 to Registration Statement on Form F-6 (File No. 333-9694) filed on May 15, 2002) | ||||
8.1 | — | List of Subsidiaries | ||||
11.1 | — | Code of Ethics* | ||||
12.1 | — | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | ||||
12.2 | — | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | ||||
13.1 | — | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350 | ||||
13.2 | — | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350 | ||||
15.1 | — | Management’s Report on Internal Control Over Financial Reporting | ||||
15.2 | — | Report of Independent Registered Public Accounting Firm |
* | Previously filed with the Securities and Exchange Commission on June 27, 2006 and herein incorporated by reference. | |
** | Previously filed with the Securities and Exchange Commission on June 25, 2007 and herein incorporated by reference. | |
*** | Previously filed with the Securities and Exchange Commission on January 25, 2002 and herein incorporated by reference. |