NTT Group s Process of Self-Transformation

Transcription

1 Operating revenues.76 trillion Operating income Overview of NTT Group s Value Creation Mechanism NTT Group s Process of Self-Transformation NTT Group has proceeded to implement strategic initiatives that address changes in the social structure while simultaneously leading innovation in information and telecommunications technologies. In this way, the Group has continued to drive ahead with a process of self-transformation to achieve sustained increases in its corporate value. March 31 of the succeeding year) 1985 Establishment of Nippon Telegraph and Telephone Corporation 5.1 trillion 1986/3 87/3 88/3 89/3 9/3 91/3 92/3 93/3 94/3 (Millions of subscriptions) Establishment of 1987 mobile phone service Fixed-Line Services (telephone subscriber lines + INS-Net) 1991 Establishment of Development of Telephony Services Fixed-Line Broadband Services (FLET S Hikari and FLET S ADSL) 2.97million (as of March 31, 217) 1996 Start of provision of OCN 1999 Establishment of 1998 i-mode 95/3 96/3 97/3 98/3 99/3 /3 1/3 2/3 21 B FLET S FOMA 2 FLET S ISDN and FLET S ADSL 24 Hikari Denwa 3/3 4/3 5/3 6/3 7/3 8/3 9/3 1/3 11/3 12/3 Transition to and Broadband Services Development of and Broadband Services Transitioning from Operations Centered on Voice Services to Operations Centered on SI / IP Services 8 Services (LTE + 3G + 2G) million 1.7 trillion 11.4 trillion (as of March 31, 217) 6 SI, etc. 26% SI, etc. 49% IP 26% Voice 48% 28 FLET S TV 27 Hikari TV Acquisition of itelligence IP 33% Voice 18% 21 Acquisition of Dimension Data LTE (Xi) service Acquisition of Keane (currently NTT DATA Services) 29 Acquisition of Integralis (currently, NTT Security) Android OS smartphones 11.8 trillion 11.4 trillion 1.54 trillion 13/3 14/3 15/3 16/3 17/3 18/3 (Plan) Expansion of Global Cloud Services sales $2. billion 214 Acquisition of Nexus IS billing plan Kake-hodai & Pake-aeru Hikari Collaboration Model docomo Hikari 213 Acquisitions of everis, Arkadin, Virtela, RagingWire, and NextiraOne iphone* Expanding Sales sales $15. billion operating income $.67 billion 216 Acquisition of Dell Services (currently NTT DATA Services) 215 Acquisition of e-shelter sales $19.6 billion Nearly doubled operating revenues / operating income 1.59 trillion operating income $1.2 billion 9/3 91/3 92/3 93/3 94/3 95/3 96/3 97/3 98/3 99/3 /3 1/3 2/3 3/3 4/3 5/3 6/3 7/3 8/3 9/3 1/3 11/3 12/3 13/3 14/3 15/3 16/3 17/3 Fiscal year March 31, 28 Fiscal year March 31, 217 Fiscal year March 31, 28 Fiscal year March 31, 215 Fiscal year ending March 31, 218 (Plan) 2 NIPPON TELEGRAPH AND TELEPHONE CORPORATION * TM and 214 Apple Inc. All rights reserved. iphone is a trademark of Apple Inc. ANNUAL REPORT The iphone trademark is used under license from AiPhone Co., Ltd.

2 Value Creation Image Guided by the Towards the Next Stage 2. Medium-Term Management Strategy, NTT Group will leverage the management resources it has accumulated to date to pursue sustainable gains in corporate value in a distinctive manner by utilizing ICT. Management Resources Customer Base Solid customer base in Japan No. 1 share for fiber-optic access services (2.5 million subscriptions) No. 1 share for mobile services (74.88 million subscriptions) 88% of the top 1 Fortune Global 5 companies are NTT customers Brand Image Human Resources P12 Human resources active around the world 111, employees (approximately 4% of all employees) work overseas Services provided in 196 countries and regions security experts: Approx. 3, R&D Capabilities World-leading technologies Clarivate Analytics: Included among 216 Top 1 Global Innovators patents: Approx. 16, Financial Base Capacity to generate stable earnings Operating income: More than 1 trillion P15 Globally recognized brand image Brand Finance Global 5: Rated 15th in the world 217 BrandZ Top 1 Most Valuable Global Brands: Rated 5th in the world P66 P82 P1 Input From Fiscal Year 215 to Fiscal Year 217 Towards the Next Stage 2. Expand Global / Increase Profit Generation Sales $22. billion Operating Income* 1 $1.5 billion Improve Efficiency and Enhance Profitability of Domestic Network Streamline Capital Investment* 2 At least 2. billion decrease Reduce Cost* 3 At least 8. billion decrease Expand B2B2X es Contributions to Society and the Environment Reinforcement of information security and personal information protection Reduction of environmental impact Development of frameworks for encouraging participation by diverse human resources Profit Growth Foundation to Support the Value Creation P56 P62 P66 etc. EPS Target At least 4 Improve Capital Efficiency Stock Repurchases Enhancement of Dividends Corporate Governance Supervisory function carried out by outside independent Members of the Board in relation to business execution Management oversight function carried out by Audit & Supervisory Board Members, including outside independent Audit & Supervisory Board Members etc. P32 Outcome Medium-to Long-Term Improvement in Corporate Value *1 Excludes M&A-related temporary expenses, such as depreciation costs of intangible fixed assets *2 Applies to the domestic network business (excluding NTT data centers and certain other assets) *3 Applies to fixed-line / mobile access networks (excluding the impact of the change in the depreciation method for property, plant and equipment) *4 In comparison with the fiscal year March 31, NIPPON TELEGRAPH AND TELEPHONE CORPORATION ANNUAL REPORT 217 5

3 NTT Group Formation March 31, 217) NTT Group* 1 Total Assets: Consolidated Operating Revenues: Consolidated Operating Income: Employees: 21,25.3 billion 11,391. billion 1,539.8 billion 274,844 Nippon Telegraph and Telephone Corporation (Holding Company) Main es: For NTT Group as a whole, formulation of management strategies and promotion of basic research *1 In this annual report, NTT Group refers to NTT and its subsidiaries *2 Voting rights to major subsidiaries (As of March 31, 217) 1.%* 2 1.%* %* %* 2 Data Other es Other Group Companies Consolidated Subsidiaries: 944 Activities telecommunications operations in Japan and related businesses, etc. Major Services FTTH and other services Competitive Advantages In the field of regional telecommunications, comprehensive strengths (reliability / stability of services and area coverage), large market share, and extensive customer base Activities Long-distance telecommunications operations in Japan, international telecommunications business, solutions business, and related businesses Major Services Cloud services, data center services, migration support services, and other services Competitive Advantages In the fields of long-distance and international telecommunications, comprehensive strengths (reliability / stability of services and area coverage), extensive service lineup, including application services and cloud services, large market share, and extensive customer base Activities phone business and related businesses, etc. Major Services LTE mobile phone services and other services Competitive Advantages In the mobile telecommunications market, technical and R&D capabilities, as demonstrated by the LTE Xi service, network quality, service development capabilities, including partnerships with related companies, large market share, and extensive customer base Activities System integration, network system services, etc., in Japan and overseas Major Services ERP services, ICT outsourcing, and other services Competitive Advantages In the IT services market, neutrality, technical capabilities, reliability, and foresight, as well as results and know-how in large-scale systems that leverage these capabilities in such fields as the public sector and finance Activities Real estate, finance, construction / electric power, system development, advanced technology development, etc. Composition by Segments Other es 9.8% ( 1,282.3 billion) Data 13.2% ( 1,718.7 billion) 35.2% ( 4,584.6 billion) Other es 5.% ( 77.3 billion) Data 7.% ( 17.9 billion) 61.9% ( billion) Other es 6.9% ( billion) Data 9.3% ( billion) 35.1% ( billion) Other es 8.9% (24,368) Data 4.6% (111,657) Operating Revenues* 3 Operating Income* 3 Capital Investment Employees 25.4% ( 3,38.2 billion) 16.4% ( 2,129.3 billion) 23.4% ( billion) 2.7% ( 4.8 billion) 34.3% ( billion) 14.4% ( billion) 24.8% (68,243) 9.7% (26,734) 16.% (43,842) *3 Percentage of simple sum of all segments (including intersegment transactions) 6 NIPPON TELEGRAPH AND TELEPHONE CORPORATION ANNUAL REPORT 217 7

4 NTT Group Topics March 31, 217) In accordance with the Medium-Term Management Strategy, Towards the Next Stage 2., each segment implemented initiatives to accelerate the process of self-transformation to a Value Partner and to return NTT Group to a profit growth track. Holding Company (Groupwide Coordination) April April April First quarter Second quarter Third quarter Fourth quarter Established NTT Security Corporation as a specialized security company Consolidating the security technologies of Group companies Concluded a partnership agreement with Kubota Corporation for creating innovative ICT for use in the agricultural, water, and environmental infrastructure fields Utilizing ICT to increase the competitiveness of the agricultural industry and to provide more comfortable living environments NTT East began providing Iida Cable Television & FLET S Hikari Commenced service of the Virginia Ashburn 2 (VA2) Data Center NTT West concluded a comprehensive collaboration agreement with Matsumoto City, Ehime Prefecture Subscriptions for Kake-hodai & Pake-aeru surpassed 3 million Received data center service and security service order from major U.K. insurance company ReAssure UK Services Limited Began providing points thanking customers for renewing contracts August Concluded a cooperation agreement on the Smart Stadium project between the J.League, DAZN, and NTT Group Injecting new emotions and experiences into sports through the advancement of ICT in J.League stadiums and club hometowns Reached an agreement with FANUC CORPORATION to collaborate in utilizing the IoT for manufacturing optimization Participating in the FANUC Intelligent Edge Link and Drive system scheme NTT East appointed as the first gold partner for the 217 Sapporo Asian Winter Games Received order for development and operation of transportation IC card system from Public Transport Victoria of Australia through collaboration with NTT DATA Appointed as the first gold partner for the 217 Sapporo Asian Winter Games Formed a business alliance with Lawson, Inc., regarding bicycle sharing service Contributing to reductions in greenhouse gas emissions and invigoration of local economies and tourism October October October Commenced joint field test with Seven & i Holdings Co., Ltd., for realizing new levels of convenience for customers Providing product information in stores via smartphones NTT East began providing a platform service that consolidates and supplies household electricity use information NTT West commenced verification test of tourist guidance solutions using NTT Group s corevo AI technologies Introducing tourist spots through robots using digital signage and interactive communication Launched COTOHA AI communication engine that converses in natural Japanese Providing communication engine capable of understanding Japanese with unrivaled levels of accuracy Commenced DOCOMO Drone Project Verifying potential to utilize drones to prevent and reduce disasters and to improve productivity in agricultural, distribution, and various other fields Began providing docomo Child Raising Support Program January March March Subscriptions for FLET S Hikari and Hikari Collaboration Model fiber-optic access services exceeded 2 million March Concluded R&D agreement with Toyota Motor Corporation regarding the development of ICT platforms for connected cars Establishing technologies for the creation of a smart mobility society NTT East began providing Sayama Cable TV & FLET S Hikari Made it possible to use DAZN and DAZN for docomo via the Hikari TV smart TV service offered by NTT Plala Commenced sales of next-generation point-of-purchase advertisements using deformation lamps developed jointly with Dai Nippon Printing Co., Ltd. Started verification test of self-driving buses at Ito Campus of Kyushu University Launched DAZN for docomo live sports service Data May Named a Leader in the IDC ITMarketScape* for Cloud Professional Services The report says, IDC rates NTT DATA highly in terms of its sales and distribution strategy, the range of its services portfolio, and its customer service strategy. August Received order for development and operation of transportation IC card system from Public Transport Victoria of Australia Constructed one of Japan s largest state-of-the-art data centers in Mitaka City, Tokyo Converted Dell Systems Corporation into a subsidiary and acquired its IT service operations Improving presence in North America and strengthening global brand January Received the 216 Nikkei Daily Award for Superiority in the Superior Products and Services category for the AW 3D Global High-resolution 3D Map service Concluded a sales agent agreement for the AW 3D Global High-resolution 3D Map service with DigitalGlobe, Inc., of the United States * Source: IDC MarketScape: Worldwide Cloud Professional Services 216 Vendor Assessment, doc #US , April NIPPON TELEGRAPH AND TELEPHONE CORPORATION ANNUAL REPORT 217 9

5 Performance Highlights Financial Data (End of year / month) Billions of yen 27/3 28/3 29/3 21/3 211/3 212/3 213/3 214/3 215/3 216/3 217/3 Operating revenues* 1 Graph 1 1,76.6 1,68.9 1, , ,35. 1,57.4 1,7.7 1, , , ,391. Operating expenses 9, , ,36.6 9,63.7 9,9.1 9, , , ,1.8 1, ,851.2 Operating income Graph 2 1,17. 1,34.6 1,19.8 1, , ,223. 1,22. 1, ,84.6 1, ,539.8 Net income attributable to NTT* 1 * 8 Graph Total assets* 1 18, , , , , , , , , , ,25.3 Shareholders equity* 1 7,12.8 7,41.8 7, , ,2.7 7, , , , , ,52.5 Interest-bearing debt Graph 3 4,77.8 4, , , , ,274. 4,36. 4,2. 4,46.7 4, ,88.2 D/E ratio (%)* 2 Graph 3 67.% 63.1% 67.1% 57.7% 56.8% 54.2% 49.% 49.3% 5.8% 47.1% 45.2% Capital investment* 3 Graph 4 2, , , , ,87.1 1, ,97. 1, , , ,7. Capex to sales ratio (%)* 4 Graph 4 2.8% 19.9% 2.6% 19.5% 18.1% 18.5% 18.4% 17.3% 16.4% 14.6% 14.9% Depreciation Graph 5 2,97.3 2, , ,12.1 1, ,91.7 1, ,88.3 1,828. 1, ,462.2 R&D expenses EBITDA* 5 Graph 6 3, , , , ,286. 3, , ,24.2 3,63.4 3, ,183.3 EBITDA margin (%) Graph % 33.8% 32.5% 31.9% 31.9% 3.8% 3.3% 29.3% 27.6% 28.4% 27.9% Cash flows from operating activities 2, ,9.8 2, , ,83.9 2,58.3 2, , , , ,917.4 Cash flows from investing activities (2,151.) (1,99.6) (2,269.7) (2,38.9) (2,52.2) (1,971.2) (1,776.3) (2,16.8) (1,868.6) (1,759.8) (2,89.3) Free cash flows* , Cash dividends, applicable to earnings for the year (Yen)* Dividend payout ratio (%) 23.% 19.5% 27.5% 32.3% 31.2% 38.2% 37.2% 33.4% 38.% 31.4% 3.7% ROE (%) 6.9% 8.7% 7.3% 6.5% 6.4% 5.9% 6.5% 7.% 6.% 8.4% 8.9% Net income attributable to NTT per share (Yen) * 1 * 7 * 8 Graph Graph 1 Graph 2 Graph 5 Graph 6 Operating Revenues* 1 (Billions of yen) 12, 11,391. 8, 4, Graph 3 28/3 29/3 21/3 211/3 212/3 213/3 214/3 215/3 216/3 217/3 Interest-Bearing Debt / D/E Ratio* 2 (Billions of yen) (%) 6, 4, 2, 4, Operating Income / Net Income Attributable to NTT* 1 * 8 (Billions of yen) 1,8 1,2 6 1, /3 29/3 21/3 211/3 212/3 213/3 214/3 215/3 216/3 217/3 28/3 29/3 21/3 211/3 212/3 213/3 214/3 215/3 216/3 217/3 28/3 29/3 21/3 211/3 212/3 213/3 214/3 215/3 216/3 217/3 Interest-bearing debt (left scale) D/E ratio (right scale) Capital investment (left scale) Capex to sales ratio (right scale) 2,4 1,6 8 Operating income Net income attributable to NTT 8.1 Graph 4 Graph 7 Graph 8 Capital Investment* 3 / Capex to Sales Ratio* 4 (Billions of yen) (%) 1, Depreciation (Billions of yen) 2,4 1, , /3 29/3 21/3 211/3 212/3 213/3 214/3 215/3 216/3 217/3 Net Income Attributable to NTT per Share* 1 * 7 * 8 (Yen) /3 29/3 21/3 211/3 212/3 213/3 214/3 215/3 216/3 217/3 EBITDA* 5 / EBITDA Margin (Billions of yen) (%) 4, 3, 2, 1, Ratings Aa1/AA+ Aa2/AA Aa3/AA A1/A+ A2/A A3/A Baa1/BBB+ Baa2/BBB 27/5/21 AA AA 26/1/3 Aa2 Aa1 211/9/1 Aa1 Aa2 214/12/3 Aa2 Aa3 215/1/2 AA AA 3, /3 29/3 21/3 211/3 212/3 213/3 214/3 215/3 216/3 217/3 EBITDA (left scale) EBITDA margin (right scale) Baa3/BBB 28/3 29/3 21/3 211/3 212/3 213/3 214/3 215/3 216/3 217/3 Moody s S&P *1 In regard to affiliates that became subject to the application of the equity method in the fiscal year March 31, 28, and in the fiscal year March 31, 214, the equity method has been applied retroactively to past years, and consequently figures for the period from the fiscal year March 31, 27, to the fiscal year March 31, 213, have been retroactively adjusted. *2 D/E ratio = Interest-bearing debt / Shareholders equity x 1 *3 Capital investment is recognized on an accrual basis for the acquisition of property, plant and equipment. *4 Capex to sales ratio = Capital investment / Operating revenues x 1 *5 From the fiscal year March 31, 217, the method for calculating EBITDA has been revised. EBITDA = Operating income + Depreciation + Loss on sales of property, plant and equipment + Impairment loss *6 Free cash flows = Cash flows from operating activities + Cash flows from investing activities *7 Adjusted for a stock split of common stock (1-for-1) with an effective date of January 4, 29, and a stock split of common stock (2-for-1) with an effective date of 1, 215. *8 With the application of the accounting pronouncement issued by the Financial Accounting Standards Board ( FASB ) in December 27, relating to noncontrolling interests in the consolidated financial statements, starting from the fiscal year March 31, 21, the name of this line item was changed. 1 NIPPON TELEGRAPH AND TELEPHONE CORPORATION ANNUAL REPORT

6 Performance Highlights Operational Data (End of year / month) Fixed-Line Broadband Services Subscriptions (Thousands of subscriptions) 25, 2, 15, 1, 5, 2,972 17,759 Services Subscriptions (Thousands of subscriptions) 8, 74,88 6, 4, 2, Thousands of subscriptions subscriptions* 1, etc. 27/3 28/3 29/3 21/3 211/3 212/3 213/3 214/3 215/3 216/3 217/3 Fixed-line communications services Telephone subscriber line* 2 + 5,495 46,34 42,85 38,33 34,884 31,672 28,766 26,366 24,344 22,718 21,336 INS-Net* 3 Fixed-line broadband services subscriptions Graph 1 FLET S ADSL 5,323 4,656 3,992 3,381 2,858 2,322 1,848 1,483 1,219 1, FLET S Hikari* 4 6,76 8,777 11,134 13,251 15,59 16,564 17,3 18,5 18,716 19,259 2,53 Hikari Collaboration Model 27 4,691 8,744 Hikari Denwa* 4 * 5 3,174 5,725 8,11 1,142 12,113 13,9 15,169 16,256 17,18 17,374 17,759 Video services subscriptions Hikari TV 552 1,9 1,413 2,4 2,453 2,823 3,14 3,52 3,23 FLET S TV* ,3 1,161 1,345 1,432 1,521 communications services subscriptions Graph 2 Xi + FOMA + mova 52,621 53,388 54,61 56,82 58,1 6,129 61,536 63,15 66,595 7,964 74,88 FOMA 35,529 43,949 49,4 53,23 56,746 57,95 49,97 41,14 35,851 32,285 3,336 LTE (Xi) 26 2,225 11,566 21,965 3,744 38,679 44,544 dmarket (1, subscriptions)* 6 dmarket ,188 1,554 1,68 dtv dhits danime store dkids dmagazine dgourmet Billing plan Kake-hodai & Pake-aeru (1, subscriptions)* 7 1,783 2,97 3,77 ARPU* 8 ARPU of fixed-line NTT East 3,17 3,11 3,5 2,98 2,93 2,86 2,81 2,76 2,7 2,65 2,61 (Telephone subscriber line* 2 + INS-Net subscriber line* 3 ) NTT West 3,2 2,96 2,9 2,85 2,8 2,76 2,72 2,69 2,65 2,61 2,58 ARPU of FLET S Hikari* 4 Graph 3 NTT East 5,5 5,31 5,58 5,74 5,88 5,92 5,86 5,66 5,49 5,51 5,25 NTT West 5,12 5,46 5,62 5,78 5,89 5,94 5,88 5,83 5,68 5,47 5,28 aggregate ARPU* 9 Graph 4 aggregate ARPU 6,7 6,36 5,71 5,35 5,7 5,14 4,9 4,37 4,1 4,17 4,43 Voice ARPU 4,69 4,16 3,33 2,9 2,53 2,2 1,76 1,49 1,28 1,21 1,25 Packet ARPU 2,1 2,2 2,38 2,45 2,54 2,59 2,72 2,88 2,82 2,91 2,99 Smart ARPU docomo Hikari ARPU 5 19 Graph 1 Graph 2 Graph 3 Graph 4 ARPU of FLET S Hikari* 4 (Yen) 6, 4, 2, 5,25 5,28 Aggregate ARPU* 9 (Yen) 9, 6, 3, 4,43 Yen (End of year / month) 28/3 29/3 21/3 211/3 212/3 213/3 214/3 215/3 216/3 217/3 (End of year / FLET S Hikari* 4 FLET S ADSL Hikari Denwa* 4 * 5 month) mova (2G) FOMA (3G) LTE (Xi) 28/3 29/3 21/3 211/3 212/3 213/3 214/3 215/3 216/3 217/3 28/3 29/3 21/3 211/3 212/3 213/3 214/3 215/3 216/3 217/3 28/3 29/3 21/3 211/3 212/3 213/3 214/3 215/3 216/3 217/3 NTT East NTT West Voice ARPU Packet ARPU Smart ARPU docomo Hikari ARPU *1 As of each fiscal year-end *2 The number of Telephone subscriber line is the total of individual lines and central station lines (Subscriber Telephone Light Plan is included). *3 The number of INS-Net is the total of INS-Net 64 and INS-Net 15 (INS-Net 64 Lite Plan is included). In terms of the number of channels, transmission rate, and line use rate (base rate), INS-Net 15 is in all cases roughly 1 times greater than INS-Net 64. For this reason, one INS-Net 15 subscription is calculated as 1 INS-Net 64 subscriptions. *4 The figures for FLET S Hikari, Hikari Denwa, and FLET S TV include wholesale services provided to service providers by NTT East and NTT West. *5 The number of Hikari Denwa subscriptions is calculated by number of channels in thousands. *6 dmarket subscriptions represents the total for dtv, dhits, danime store, dkids, dmagazine, dgourmet, dhealthcare pack, and dliving *7 Billing plan with four central components Kake-hodai, which offers nationwide voice calls for a flat monthly rate; Share Pack, which allows packet data volume to be shared among family members; Zutto DOCOMO Wari, which is a discount service based on the number of years of use; and U25 Ouen Discount, which supports customers who are aged 25 or younger. *8 Please see page 9 for the ARPU calculation method and other details. *9 The ARPU calculation method was changed from the fiscal year March 31, 216. Accompanying this change, the new method has been applied retroactively to the ARPU figures for the fiscal year March 31, 214, and the fiscal year March 31, 215. Packet ARPU from the fiscal year March 31, 29, to the fiscal year March 31, 211, includes an amount corresponding to Smart ARPU. 12 NIPPON TELEGRAPH AND TELEPHONE CORPORATION ANNUAL REPORT

7 Non-Financial Highlights Environmental / Social Data Environmental Data 213/3 214/3 215/3 216/3 217/3 CO2 emissions volume* 1 (Million tons of CO2) CO2 emissions volume per sales (t-co2 /Billions of yen) Contribution to reduction in society s CO2 emissions* 2 * 3 (Times, compared to CO2 from NTT Group) Electrical efficiency of communications services* 2 * 4 (Times, improvement from the fiscal year March 31, 214) Calculated from the fiscal year March 31, 217 Calculated from the fiscal year March 31, 217 Final disposal rate for waste (%) *1 Total for Scope 1 (direct emissions from the use of fuel, etc.) and Scope 2 (indirect emissions accompanying the use of energy, such as electricity) *2 Performance in comparison with 23 environmental targets *3 Calculated by converting the energy saving benefits of supplied ICT services into CO2 *4 Calculated for five major domestic companies (NTT East, NTT West, NTT, NTT DOCOMO, and NTT DATA) CO2 Emissions Volume (Million tons of CO2) Social Data Numbers of Consolidated Group Companies and Employees 213/3 214/3 215/3 216/3 217/3 Group companies (Companies) employees (Employees) 227,15 239,75 241,6 241,5 275, Employment /3 214/3 215/3 216/3 217/3 Final Disposal Rate for Waste (%) 111, /3 214/3 215/3 216/3 217/3 275, CO2 Emission Volume per Sales (t-co2 /Billions of yen) *1 As of March 31, 217, estimated number of employees for 944 consolidated companies in the NTT Group *2 As of March 31, 217, total number of employees of NTT, directly affiliated companies in Japan, and their affiliated companies in Japan (total of 41 companies) *3 Section manager level or higher Employees Employees *2 Managers *2*3 by Region *1 11,1 25,19 Japan 164, Female 16, /3 214/3 215/3 216/3 217/3 Note: Scope of data collection: Japan Male 93,79 Female 1,19 Male 24, External Evaluations SRI Indexes and Other External Evaluations ( Represents Inclusion) Dow Jones Sustainability Index Index evaluating corporate sustainability from the three perspectives of the economy, environment, and society. Developed through collaboration by Dow Jones, of the U.S., and RobecoSAM, of Switzerland, a specialist in the investigation of SRI. FTSE4 Good Index Global ESG index from FTSE Russell, of the U.K., a wholly owned subsidiary of the London Stock Exchange. FTSE Blossom Japan Index Index compiled by FTSE Russell to reflect performance of Japanese companies displaying excellence in terms of environmental, social, and governance (ESG) factors Morningstar Socially Responsible Investment Index From among approximately 4, listed companies in Japan, Morningstar selects 15 companies for superior social responsibility and converts their stock prices into the index, which is the first SRI index in Japan. Intellectual Property Related Clarivate Analytics Top 1 Global Innovators Top 1 organizations selected as global business leaders each year by Clarivate Analytics. Organizations are selected on the basis of granted IP rights for unique inventions and successful commercialization. Brand Related Brand Finance Global 5 Brand Finance is a global leader in brand valuation and strategic consultancy, with a presence in more than 2 countries. Brand Finance uses an original methodology to quantify and rank corporate brands for companies in a wide range of categories. BrandZ Top 1 Most Valuable Global Brands 216 Millward Brown, which is one of the world s leading market research firms, conducts branding-, media-, and communications- related operations. Millward Brown uses an original methodology to rank approximately 23, company brands, with comprehensive consideration of company finances and corporate image based on consumer surveys Asia Pacific Asia Pacific Asia Pacific As of Asia Pacific As of As of As of As of January 15 2nd among Japanese companies 5 2nd among Japanese companies 14 NIPPON TELEGRAPH AND TELEPHONE CORPORATION ANNUAL REPORT