Results Presentation for the Fiscal Year Ended March 31, 2015 April - - PowerPoint PPT Presentation

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Results Presentation

for the Fiscal Year Ended March 31, 2015

April 28, 2015

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• 1. FY2014 Results Highlights

 Principal Financial Results  Operational Data  Key Topics

• 2. FY2015 Business Management Policies

 Results Prospects  Planned Actions for FY2015  Shareholder Returns

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Operating income: ¥639.1 billion

Financial data Operational data

17.83 million 3.49 million 28.75 million

U.S. GAAP

• Operating revenues:
• Operating income:

¥4,383.4 billion ¥639.1 billion (Down 1.7% YOY) （Down 22.0% YOY)

• New billing plan subs*:
• Net additions:
• Smartphone users*:

(Up 2.2-fold YOY) (Up 1.2-fold YOY)

* Numbers as of Mar. 31, 2015

Operational data show significant improvement

FY2014 Results Summary

◆ Consolidated financial statements in this document are unaudited

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FY2013 Full year

(1)

FY2014 Full year

(2)

Changes

(2) - (1)

Operating revenues 4,461.2 4,383.4

• 77.8

Operating expenses 3,642.0 3,744.3 +102.3 Operating income 819.2 639.1

• 180.1

Net income attributable to NTT DOCOMO, INC. 464.7 410.1

• 54.6

EBITDA margin (%) *1 35.2 31.2

• 4.0

Capital expenditures 703.1 661.8

• 41.4

Adjusted free cash flow *1*2 257.2 295.6 +38.4

(Billions of yen)

U.S. GAAP

Selected Financial Data

*1: For an explanation of the calculation processes of these numbers, please see slide “Reconciliations of the Disclosed Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measures” in this document and the IR page of our website, www.nttdocomo.co.jp *2: Adjusted free cash flow excludes the effects of changes in investment derived from purchases, redemption at maturity and disposals of financial instruments held for cash management purposes with

• riginal maturities of longer than three months.

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Results by Segment

U.S. GAAP

Telecommunications business Smart Life business Other businesses

FY2013

Full year

(1)

FY2014

Full year

(2)

Changes

(2) –(1)

3,827.3 3,654.6

• 172.8

812.7 636.1

• 176.7

356.8 437.0 +80.2 11.8

• 3.9
• 15.7

302.2 319.8 +17.6

• 5.3

6.9 +12.2

Operating income Operating revenues Operating income Operating revenues Operating income Operating revenues

(Billions of yen)

Smart Life domain

◆ To conform to the changes in reportable segments (former mobile communications business was changed to telecommunications business under the new presentation), certain items have been retroactively reclassified. For details, see “Revisions to Income Statement & Reportable Segments” in this document. ◆ Operating income from Smart Life business includes the impact of recognizing ¥30.2 billion of impairment loss on assets relating to the multimedia broadcasting business for mobile devices (business operated by mmbi group, etc).

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U.S. GAAP

Key Factors Behind YOY Changes in Operating Income (FY13→ FY14)

*1: Excluding impact of “Monthly Support” discounts *2: Sum of cost of equipment sold and commissions to agent resellers

FY13 FY14

Operating revenues:

• ¥77.8 billion

Operating expenses: +¥102.3 billion ¥819.2 billion

Decrease in telecommunications services revenues*1: Down ¥99.9 billion

¥639.1 billion

Decrease in network-related expenses: Down ¥19.3 billion Impact of “Monthly Support” discounts: Down ¥117.0 billion Increase in

• ther operating

revenues: Up ¥106.9 billion Increase in equipment sales expenses*2: Up ¥24.1 billion Increase in equipment sales revenues: Up ¥32.1 billion Increase in

• ther

expenses: Up ¥67.3 billion Impairment loss: Up ¥30.2 billion Equipment sales P/L: Up ¥8.0 billion

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Operational Performance (1)

1.57 3.49 FY13 FY14

(Million subs)

FY13 FY14

• 1.23

Net adds MNP

Significant improvement

FY13 FY14

列1

0.87% 0.71%

Churn rate

(Million subs)

• 0.38

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Operational Performance (2)

Also recorded a steady increase in handset sales

22.51 23.75 8.03 8.98 FY13 FY14

(Million units)

Total handsets sold

Total handsets sold: Sales to New customers:

13.78 14.60 0.99 1.73 FY13 FY14

(Million units)

Total smartphones sold

Smartphones sold: Tablets sold:

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24.35

28.75

79%

92%

FY13/4Q FY14/1Q 2Q 3Q 4Q

Smartphone Users

Increasing at a favorable pace

(Million subs)

% of LTE-enabled smartphones

◆ Numbers in the graph above represent the data as of the end of each quarter

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ARPU (Exclusive of impact of discounts*)

Reversed downward trend in aggregate ARPU

1,750 1,730 1,700 1,710 1,710 3,040 3,040 2,970 2,890 2,890 520 530 560 620 640 5,310 5,300 5,230 5,220

5,240

FY13/4Q FY14/1Q 2Q 3Q 4Q Voice ARPU Packet ARPU Smart ARPU

(850) (850)

(Yen)

(860) (880) (900)

* Exclusive of impact of “Monthly Support” discount program and “docomo Hikari Pack” bundle discounts ◆ Numbers in parentheses represent the impact of the above discount packages, which do not affect the Smart ARPU. ◆ For an explanation on ARPU and MOU, please see slide “Definition and Calculation Methods of ARPU and MOU “ in this document.

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New Billing Plan Subscriptions

系列 2

• Apr. 5, 2015:

Topped 18 mil

• Oct. 14, 2014:

Topped 10 mil

June 2014

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Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar

New Billing Plan: Impact on Profits

Trend of improvement continues

Negative impact on profits for FY2014

(cumulative):

¥107 billion

FY2014

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Service launched: Mar. 1, 2015 Pre-order acceptance: From Feb 16, 2015

Subscription applications:

230,000

(As of Mar. 31, 2015)

docomo Hikari

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13 13 New billing plan Acquisition of new subs Retention

* “Hikari Sumaho Wari” discount is applicable only to new or MNP port-in subscribers ◆The numbers presented in this page are as of Mar. 31, 2015

30% of “docomo Hikari” subs

are new subscribers to our mobile service

60% of “docomo Hikari” subs

have opted to join “Share Pack”

“docomo Hikari”: Updates 20% of “docomo Hikari” subs

have switched to larger data buckets

(No. of subs applied with “Hikari Sumaho Wari” discount*)

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FY13 FY14

756.8

659.0 302.2 356.8

Up 15%

Revenues from Smart Life Domain

(Billions of yen)

◆ The amounts are inclusive of inter-segment transactions under the new reportable segment classification

Smart life business:

437.0

Other businesses:

319.8

Up approx. ¥100 billion year-on-year

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Total “dmarket” Transactions

55.3

72.8

FY13 FY14

Up 32%

(Billions of yen)

Significant growth over prior year

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FY13/4Q FY14/1Q 2Q 3Q 4Q

“dmarket” Subscriptions

Maintaining strong growth momentum

7.69

(Million subs)

11.88 “dmarket”

410,000 subs

• No. of subs (As of Mar. 31, 2015)

4.68 million subs 1.83 million subs

“dTV” “d anime store” “dhits”

¥500/month service: 2.02 million subs ¥300/month service: 1.02 million subs 1.91 million subs

“dkids” “dmagazine”

◆ No. of “dmarket” subscriptions on this page accounts for only monthly subscriptions, and one-time transactions are not included. The numbers in the graph above represent the subscriber count at the end of each quarter.

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750

1,010

FY13 FY14

Up 35%

(Yen)

“dmarket” Usage Per Subscriber

◆ The full-year dmarket usage per subscriber is calculated by dividing the total amount of dmarket transactions for the year by the annual sum of unique users for each month. The amounts are exclusive of tax.

Significant growth over prior year

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• Mar. 31, 2014
• Mar. 31, 2015

55,300 stations 97,400 stations 3,500 stations

BSs compatible with

• max. download speed
• f 100Mbps or higher:

57,700 stations

LTE Network Expansion

Significantly increased number of base stations compatible with high-speed service

：Launched Mar. 27, 2015 Japan’s fastest 225Mbps service

*The transmissions speeds above represent the maximum download speed specified in the technical standard. The actual throughput may vary depending on the communication environment and other factors. *225Mbps is the fastest transmission rate in Japan’s mobile communications market as of March 2015

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Capital Expenditures

703.1

661.8

FY13 FY14

(Billions of yen) (Full year guidance: ¥690 billion)

Achieved greater efficiency improvement than planned

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FY14/1Q 1-2Q cumulative 1-3Q cumulative 1-4Q cumulative

Achieved cost reduction exceeding budget

Cost Efficiency Improvement

(Billions of yen)

• 120

Planned amount:

• 105

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FY2014 Results Snapshot

 Improved competitiveness through introduction of new billing plan and “docomo Hikari”  Continued to expand revenues from smart life domain  Enhanced coverage and speed of LTE network, while improving efficiency of capital expenditures  Achieved cost reduction exceeding plan  Stepped up shareholder returns (Dividend increase to ¥65/share, repurchase of own shares worth an aggregate of ¥473 billion)

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• 1. FY2014 Results Highlights

 Principal Financial Results  Operational Data  Key Topics

• 2. FY2015 Business Management Policies

 Results Prospects  Planned Actions for FY2015  Shareholder Returns

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FY2015 Forecasts

FY2014

full year

(1)

FY2015

full-year forecast

(2)

Changes

(2) –(1)

Operating revenues 4,383.4 4,510.0 +126.6 Operating expenses 3,744.3 3,830.0 +85.7 Operating income 639.1 680.0 +40.9 Net income attributable to NTT DOCOMO, INC. 410.1 470.0 +59.9 EBITDA margin (%)*1 31.2 29.7

• 1.5

Capital Expenditures 661.8 630.0

• 31.8

Adjusted Free Cash Flow*1*2 295.6 400.0 +104.4

(Billions of yen)

U.S. GAAP

*1: For an explanation of the calculation processes of these numbers, please see slide “Reconciliations of the Disclosed Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measures” in this document and the IR page of our website, www.nttdocomo.co.jp *2: Adjusted free cash flow excludes the effects of changes in investment derived from purchases, redemption at maturity and disposals of financial instruments held for cash management purposes with

• riginal maturities of longer than three months.

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FY2015 Operational Indicators (Forecast)

FY2014 Full year

(1)

FY2015 Full-year forecast

(2)

Changes

(2) - (1)

Net additions (million subs)

3.49 3.30

• 0.19

Total handsets sold (million units)

23.75 24.10 +0.35

Smartphones sold (million units)

14.60 15.80 +1.20

LTE subscriptions (million subs)

30.74 37.00 +6.26

“docomo Hikari” subs (million subs)

0.23* 1.80 +1.57

*: No. of subscription applications (FY2014 actual)

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FY14 FY15 (forecast) ¥639.1 billion ¥680.0 billion

Key Factors Behind Projected YOY Changes in Operating Income (FY14 → FY15)

+¥210 billion +¥70 billion +¥50 billion

• ¥290 billion
• “Monthly Support”
• Equipment sales P/L
• Cost increase resulting

from traffic growth

• Other

Increase in mobile communications services revenues* Growth of Smart Life domain Cost efficiency improvement

* Exclusive of impact of discount programs

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26 26  ARPU recovery

(Halt of decline in voice revenues, growth of packet revenues)

 Expansion of customer base

(New subscriber acquisition and stepped up subscriber retention measures)

“docomo Hikari” New billing plan

×

Growth of Mobile Communications Services Revenues

Main driver: “docomo Hikari” + new billing plan

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3.0

50.0

33.2

FY14 FY15 (forecast)

Expansion of Smart Life Domain

(Billions of yen)

*Exclusive of impairment loss

Operating income projected to reach ¥50 billion

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Cost Efficiency Improvement Target

Pursue further efficiency improvement

FY14 FY15 (Target)

• 210
• 120
• 330

(Billions of yen)

* Numbers in the graph above represent the cumulative amount of cost reduction achieved compared to FY2013 level

Principal actions planned

【Network】

CAPEX, network maintenance outsourcing

cost, etc.

【Marketing】

Sales tools, phone bill preparation/delivery

expenses, etc.

【Other】

R&D, information system, etc.

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225Mbps

300Mbps

370Mbps 1Gbps

5G

FY2015 FY2016 FY2017 FY2020 CA *1

3.5GHz band Extended MIMO *2, etc.

Further NW Advancement Plan

300Mbps service to be started to pave the way for 5G

Estimated annual CAPEX: ¥630 billion

*1: CA (Carrier Aggregation). A technology that enhances transmission rates by aggregating multiple carrier frequencies. *2: MIMO. A technology that simultaneously transmits and receives different signals from multiple antennas ◆ The transmissions speeds above represent the maximum download speed specified in the technical standard. The actual throughput may vary depending on the communication environment and other factors.

Extended CA *1

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FY2015 Planned Actions

In FY15, we will attach utmost importance to delivering results toward our future growth

Accelerate uptake of new billing plan/”docomo Hikari” and step up retention measures Boost packet revenues by encouraging subscriber migration to larger data buckets, etc. Accelerate measures aimed at increasing the adoption of “dmarket” etc., and expand our sphere of service by adding home offerings Cultivate new demand by stepping up our enterprise sales and further reinforcement of B2B2C offerings Reinforcement of “PREMIUM 4G” and more efficient use of CAPEX Rigorous cost efficiency improvement through structural reforms

Increase in telecom services revenues Growth of Smart Life domain Cost efficiency improvement

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52 56 60 60 65

70

FY10 FY11 FY12 FY13 FY14 (planned) FY15 (forecast) Dividend per share Payout ratio

Return to Shareholders

44.1% 50.1% 50.7%

(Yen)

53.5%

 Historical growth of dividend per share:

◆ The dividend amount takes into account the 1:100 stock split that took effect Oct. 1, 2013

FY15 dividend (forecast): ¥70/share (Up ¥5)

64.0% 57.8%

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Solid Step Toward Achievement of Medium-Term Targets

Item FY2015 plan FY2017 target Operating income ¥680 billion ¥820 billion or higher New business income ¥50 billion

Operating income

Over ¥100 billion Cost efficiency improvement

• ¥330 billion*

Compared to FY2013 level

• ¥400 billion or more

Capital expenditures ¥630 billion

FY2015-2017

¥650 billion per annum or less Shareholder returns ¥70 (up ¥5) per share

(forecast) Enhance shareholder returns through dividend hike and share repurchase

*Cumulative cost reduction achieved in FY2014 (¥120 billion) and projected amount for FY2015 (¥210 billion)

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Appendices

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Revisions to Income Statement & Reportable Segments

After revision Telecommunications business Other businesses Smart Life business Mobile Communications business Other businesses Smart Life business

Mobile communications services revenues

Other operating revenues Equipment sales Mobile communications services Other operating revenues Equipment sales

Telecommunications services

Before revision

Optical-fiber broadband service and

• ther telecommunications service

Items included in operating revenues of consolidated statements of income Reportable segments

* *

* Certain items have been reclassified to conform to the revised presentation method.

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Telecommunications business Smart Life business Other businesses

等 等 ・ Xi services (LTE) ・ FOMA services (3G) Mobile communications services revenues ・ International services ・ Sales of handset/equipment for each service ・Optical-fiber broadband service Optical-fiber broadband service and other telecommunications service ・ Satellite communications services etc. ・ Submarine cable TV service

Services, etc., Included in New Reportable Segments

・Video distribution service ・Music distribution service ・Electronic book service ・Online shopping service etc. “dmarket” (Media/Content, Commerce) ・Credit service ・Proxy bill collection etc. Finance/Payment services ・Home shopping service ・Music software sales ・Food delivery etc. ・Cooking studio ・Health management ・Medical database etc. Life-Related services Shopping services (Commerce) ・Mobile device protection services ・System development/sales/maintenance services

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FY13 FY14 FY15 (forecast) Telecommunications services 2,964.0 2,747.2 2,755.0 Equipment sales 872.0 904.1 929.0 Other operating revenues 625.2 732.2 826.0

Operating Revenues

U.S. GAAP

(Billions of yen)

4,461.2

◆ “International services revenues” are included in “Telecommunications services” ◆ With the introduction of “Optical-fiber services and other telecommunications services revenues” in the fiscal year ended March 31, 2015, some elements (revenues from satellite mobile communications, cable television of overseas and other services) included in conventional “Other operating revenues” in the financial statements for the fiscal year ended March 31, 2014 have been retroactively reclassified into “Optical-fiber broadband service and other telecommunications services revenues.” The amount of the reclassification for this period is ¥8.2 billion.

4,383.4 4,510.0

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FY13 FY14 FY15(forecast) Personnel expenses 275.9 286.5 296.0 Non-personnel expenses 2,338.2 2,418.1 2,509.0 Depreciation & amortization 718.7 659.8 625.0 Impairment losses 30.2 Loss on disposal of property, plant, equipment and intangible assets 65.4 69.5 67.0 Communication network charges 204.7 240.3 293.0 Taxes and public duties 39.1 40.1 40.0 (Incl) Revenue-linked expenses* 1,257.4 1,281.0 1,272.0 (Incl) Other non-personnel expenses 1,080.8 1,137.0 1,237.0

Operating Expenses

3,642.0 3,830.0

(Billions of yen)

U.S. GAAP

3,744.3

＊Revenue-linked expenses: Cost of equipment sold + commissions to agent resellers + loyalty program expenses

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FY13 FY14 FY15 (forecast) Telecommunications business (LTE (Xi)) 331.1 406.7 366.0 Telecomunications business (FOMA) 38.5 1.4 0.0 Telecommunications business (other) 288.8 227.3 235.0 Smart Life business 27.5 17.2 18.0 Others 17.2 9.1 11.0

Capital Expenditures

703.1 661.8 630.0

U.S. GAAP

◆ To conform to the changes in reportable segments, items contained in the capital expenditures for FY2013 (actual) have been reclassified from the former segment presentation. ◆ Research and development investments, which had previously been included in “Mobile phone business (LTE)” and “Mobile phone business (FOMA)” are recorded in “Telecommunications business (other)” under the new segment reporting structure.

(Billions of yen)

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Operational Results and Forecasts

FY2013 (1) FY2014 (2) Changes (2)-(1) FY2015 (full-year forecast) Cellular phone

• No. of subscriptions (thousands)

63,105 66,595 +3,490 69,900

FOMA

41,140 35,851

• 5,289

32,900

LTE (Xi)

21,965 30,744 +8,779 37,000

i-mode

26,415 22,338

• 4,077

19,100

sp-mode

23,781 28,160 +4,379 31,900

Communication module service

3,338 4,176 +838

• Net additional subscriptions (thousands)

1,569 3,490 +1,921 3,300

Handsets sold (thousands) (Including handsets sold without involving sales by DOCOMO) Total handsets sold

22,514 23,751 +1,237 24,100

LTE (Xi) New Xi subscription

5,005 6,091 +1,086

• Change of subscription

from FOMA

7,154 5,271

• 1,884
• Xi handset upgrade by Xi

subscribers

2,601 5,836 +3,235

• FOMA

New FOMA subscription

3,023 2,890

• 133
• Changes of subscription

from Xi

69 130 +61

• FOMA handset upgrade by

FOMA subscribers

4,662 3,534

• 1,128
• Smartphones sold (thousands)

13,781 14,595 +814 15,800

Churn rate (%)

0.87 0.71

• 0.16
• Aggregate ARPU (yen)

4,610 4,370

• 240

4,310

Voice ARPU (yen)

1,410 1,180

• 230

1,090

Packet ARPU (yen)

2,700 2,600

• 100

2,540

Smart ARPU (yen)

500 590 +90 680

MOU (minutes)

109 112 +3

• ◆ ARPU and MOU calculation methods have been changed beginning with results presentation for the first six months of the fiscal year ended March 31, 2015. Accordingly, the ARPU and MOU data

for the fiscal year ended March 31, 2014 have been adjusted to align with the new calculation methods. ◆ For an explanation on ARPU, please see the slide “Definition and calculation methods of ARPU and MOU” in this document.

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Principal Services: Miscellaneous Data

FY2014/3Q (1) FY2014/4Q (2) Changes (2) – (1) dmarket dTV subscriptions (Millions)

4.30 4.68 +0.39

dhits subscriptions (Millions)

2.45 3.04 +0.59

danime store subscriptions (Millions)

1.47 1.83 +0.37

dkids subscriptions (Millions)

0.28 0.41 +0.14

dmagazine subscriptions (Millions)

1.17 1.91 +0.74

docomo Service Pack Osusume Pack subscriptions (Millions)

4.21 4.92 +0.72

Anshin Pack subscriptions (Millions)

8.06 9.80 +1.74

Other services Karada-no-kimochi subs (Millions)

0.57 0.66 +0.09

NOTTV subscriptions (Millions)

1.70 1.75 +0.05

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1,870 1,870 1,860 1,750 1,730 1,700 1,710 1,710 1,760 2,930 2,970 3,000 3,040 3,040 2,970 2,890 2,890 2,900 470 500 510 520 530 560 620 640 680 5,270 5,340 5,370 5,310 5,300 5,230 5,220 5,240 5,340

FY13/1Q 2Q 3Q 4Q FY14/1Q 2Q2 3Q2 4Q2 FY15 (full- year forecast)

Voice ARPU Packet ARPU Smart ARPU （660） （760） （850）

(Yen)

（850） （1,030） （860） （590） （880） （900）

Aggregate ARPU

(Exclusive of impact of discounts)

FY13/1Q 2Q 3Q 4Q FY14/1Q 2Q 3Q 4Q FY15 (Full-year forecast)

◆ Smart ARPU is not impacted by the discount programs. ◆ ARPU and MOU calculation methods have been changed beginning with the second quarter for the first six months of the fiscal year ending March 31, 2015. Accordingly, the ARPU and MOU data for the fiscal year ended March 31, 2014 and the first quarter of the fiscal year ending March 31, 2015 have been adjusted to align with the new calculation methods. ◆ For an explanation on ARPU, please see the slide “Definition and calculation methods of ARPU and MOU” in this document.

* Numbers in parentheses indicate the impact of discount programs.

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1,490 1,460 1,400 1,260 1,250 1,190 1,160 1,120 1,090 2,720 2,720 2,700 2,680 2,670 2,620 2,560 2,580 2,540 470 500 510 520 530 560 620 640 680 4,680 4,680 4,610 4,460 4,450 4,370 4,340 4,340 4,310 FY13/Q1 Q2 Q3 Q4 FY14/Q1 Q22 Q32 Q42 FY15 (full- year forecast) Voice ARPU Packet ARPU Smart ARPU

Aggregate ARPU/MOU

(Yen) MOU (minutes)

110 110 105 103 112 111 118 115

FY13/1Q 2Q 3Q 4Q FY14/1Q 2Q 3Q 4Q FY15 (Full-year forecast)

◆ ARPU and MOU calculation methods have been changed beginning with the second quarter of the fiscal year ending March 31, 2015. Accordingly, the ARPU and MOU data for the fiscal year ended March 31, 2014 and the first quarter of the fiscal year ended March 31, 2015 have been adjusted to align with the new calculation methods. ◆ For an explanation on ARPU, please see the slide “Definition and calculation methods of ARPU and MOU” in this document.

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Key Indicators

FY2013 FY2014 FY2015 (Forecast)

Profitability/efficiency indicators

EBITDA (billions of yen) 1,572.2 1,369.1 1,340.0 EBITDA margin (%) 35.2 31.2 29.7 Adjusted free cash flow (billions of yen) 257.2 295.6 400.0 ROE (%)

*Net income attributable to NTT DOCOMO, INC../shareholders’ equity*

8.4 7.4 8.6

Safety indicators

Shareholders’ equity ratio (%) *Shareholders’ equity/total assets 75.2 75.3 77.2 Debt ratio *Interest bearing liabilities/shareholders’ equity 0.041 0.041 0.040 Interest bearing liabilities/EBITDA multiples 0.15 0.16 0.17

Equity value indicators

EPS (yen) *Net income attributable to NTT DOCOMO, INC. per share 112.07 101.55 121.09 PER *Market capitalization/net income 14.53 19.74

• PBR *Market capitalization/shareholders’ equity

1.20 1.50

• Divided payout ratio (%)

53.5 64.0 57.8 Dividend yield (%)

*Annual cash dividend per share/Closing share price at end of period

3.7 3.1

• Market capitalization (billions of yen)

*Closing share price x number of issued shares (excluding treasury stocks) as of

the of end of the fiscal period

6,750.9 8,094.8

• * ROE is calculated using the average end-of-period shareholders’ equity for the current and previous fiscal periods.

*Adjusted free cash flow excludes the effects from changes in investments derived from purchases, redemption at maturity and disposal of financial instruments held for cash management purposes with original maturities of longer than three months.

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Definition and Calculation Methods of ARPU and MOU

• i. Definition of ARPU and MOU
• a. ARPU (Average monthly Revenue Per Unit):

Average monthly revenue per unit, or ARPU, is used to measure average monthly operating revenues attributable to designated services on a per subscription basis. ARPU is calculated by dividing various revenue items included in

• perating revenues from our mobile communications services and a part of other operating revenues by the number of

active subscriptions to our wireless services in the relevant periods. We believe that our ARPU figures provide useful information to analyze the average usage per subscription and the impacts of changes in our billing arrangements. The revenue items included in the numerators of our ARPU figures are based on our U.S. GAAP results of operations.

• b. MOU (Minutes of Use): Average monthly communication time per subscription.
• ii. ARPU Calculation Methods

Aggregate ARPU = Voice ARPU + Packet ARPU + Smart ARPU

• Voice ARPU : Voice ARPU Related Revenues (basic monthly charges, voice communication charges)

/ No. of active subscriptions

• Packet ARPU : Packet ARPU Related Revenues (basic monthly charges, packet communication charges)

/ No. of active subscriptions

• Smart ARPU : A part of other operating revenues (revenues from content services, proxy bill collection

commissions, mobile phone insurance service, advertising and others) / No. of active subscriptions

• iii. Active Subscriptions Calculation Methods

Sum of No. of active subscriptions for each month ((No. of subscriptions at the end of previous month + No. of subscriptions at the end of current month) / 2) during the relevant period Note: Subscriptions for and revenues from communication module services, “Phone Number Storage,” “Mail Address Storage,” “docomo Business Transceiver” and wholesale telecommunications services and interconnecting telecommunications facilities that are provided to Mobile Virtual Network Operators (MVNOs) are not included in the ARPU and MOU calculations.

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Year ending March 31, 2016 (Forecasts) Year ended March 31, 2014 Year ended March 31,2015

• a. EBITDA

¥ 1,340.0 ¥ 1,572.2 ¥ 1,369.1 Depreciation and amortization (625.0) (718.7) (659.8) Loss on sale or disposal of property, plant and equipment (35.0) (34.3) (40.1) Impairment loss

• (30.2)

Operating income 680.0 819.2 639.1 Other income (expense) 7.0 13.9 4.8 Income taxes (212.0) (308.0) (238.1) Equity in net income (losses) of affiliates (7.0) (69.1) (7.8) Less: Net (income) loss attributable to noncontrolling interests 2.0 8.8 12.1

• b. Net income attributable to NTT DOCOMO, INC.

470.0 464.7 410.1

• c. Operating revenues

4,510.0 4,461.2 4,383.4 EBITDA margin (=a/c) 29.7% 35.2% 31.2% Net income margin (=b/c) 10.4% 10.4% 9.4% Note: EBITDA and EBITDA margin, as we use them, are different from EBITDA as used in Item 10(e) of regulation S-K and may not be comparable to similarly titled measures used by other companies. (Billions of yen)

Reconciliations of the Disclosed Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measures (1)

Year ending March 31, 2016 (Forecasts) Year ended March 31, 2014 Year ended March 31,2015

• a. Net income attributable to NTT DOCOMO, INC.

¥ 470.0 ¥ 464.7 ¥ 410.1

• b. Shareholders'equity

5,479.1 5,505.9 5,511.7 ROE (=a/b) 8.6% 8.4% 7.4% Notes: Shareholders'equity = Two period ends average of NTT DOCOMO, INC. shareholders' equity (Billions of yen)

• i. EBITDA and EBITDA margin
• ii. ROE

SLIDE 49

48 48 Reconciliations of the Disclosed Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measures (2)

Year ending March 31, 2016 (Forecasts) Year ended March 31, 2014 Year ended March 31,2015

Net cash provided by operating activities ¥ 1,030.0 ¥ 1,000.6 ¥ 963.0 Net cash used in investing activities (630.0) (703.6) (651.2) Free cash flows 400.0 297.1 311.8 Changes in investments for cash management purposes

• 39.9

(16.2) Free cash flows excluding changes in investments for cash management purposes 400.0 257.2 295.6

Note: Changes in investments for cash management purposes were derived from purchases, redemption at maturity and disposals of financial instruments held for cash management purposes with

• riginal maturities of longer than three months.

Net cash used in investing activities includes changes in investments for cash management purposes for the year ended March 31, 2014 and 2015. The effect of changes in investments for cash management purposes is not taken into account when we forecasted net cash used in investing activities for the year ending March 31, 2016 due to the difficulties in forecasting such effect. (Billions of yen)

• iii. Free cash flows excluding changes in investments for cash management purposes

SLIDE 50

49 49

Special Note Regarding Forward-Looking Statements

This earning release contains forward-looking statements such as forecasts of results of operations, management strategies, objectives and plans, forecasts of

• perational data such as the expected number of subscriptions, and the expected dividend payments. All forward-looking statements that are not historical facts

are based on management’s current plans, expectations, assumptions and estimates based on the information currently available. Some of the projected numbers in this report were derived using certain assumptions that were indispensable for making such projections in addition to historical facts. These forward-looking statements are subject to various known and unknown risks, uncertainties and other factors that could cause our actual results to differ materially from those contained in or suggested by any forward-looking statement. Potential risks and uncertainties include, without limitation, the following: (1) Changes in the market environment in the telecommunications industry, such as intensifying competition from other businesses or other technologies caused by Mobile Number Portability, development of appealing new handsets, new market entrants, mergers among other service providers and other factors, or the expansion of the areas of competition could limit the acquisition of new subscriptions and retention of existing subscriptions by our corporate group, or it may lead to ARPU diminishing at a greater than expected rate, an increase in our costs, or an inability to reduce expenses as expected. (2) If current and new services, usage patterns, and sales schemes proposed and introduced by our corporate group cannot be developed as planned, or if unanticipated expenses arise the financial condition of our corporate group could be affected and our growth could be limited. (3) The introduction or change of various laws or regulations inside and outside of Japan, 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 and could increase our costs. (5) Other mobile service providers in the world may not adopt the technologies and the frequency bands that are compatible with those used by our corporate group’s mobile communications system on a continuing basis, which could affect our ability to sufficiently offer international services. (6) Our domestic and international investments, alliances and collaborations, as well as investments in new business fields, may not produce the returns or provide the opportunities we expect. (7) Malfunctions, defects or imperfections in our products and services or those of other parties may give rise to problems. (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 others may adversely affect

• ur credibility or corporate image.

(10) Owners of intellectual property rights that are essential for our business execution may not grant us a license or other use of such intellectual property rights, which may result in our inability to offer certain technologies, products and/or services, and our corporate group may also be held liable for damage compensation if we infringe the intellectual property rights of others. In addition, the illicit use by a third party of the intellectual property rights owned by

• ur corporate group could reduce our license revenues actually obtained and may inhibit our competitive superiority.

(11) Events and incidents caused by natural disasters, social infrastructure paralysis such as power shortages, the proliferation of harmful substances, terror or

• ther destructive acts, the malfunctioning of equipment, software bugs, deliberate incidents induced by computer viruses, cyber-attacks, equipment

misconfiguration, hacking, unauthorized access and other problems could cause failure in our networks, distribution channels, and/or other factors necessary for the provision of service, disrupting our ability to offer services to our subscribers and such incidents may adversely affect our credibility or corporate image, or lead to a reduction of revenues and/or increase of costs. (12) Concerns about adverse health effects arising from wireless telecommunications may spread and consequently 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.