Kddi Ar2019 e

INTEGRATED
REPORT
2019
Our Value Our Management Our Future Our Sustainability Financial Information
Tomorrow, Together
Realizing Sustained Growth and Medium- and Long-Term Improvement in
Corporate Value
As a telecommunications operator that provides social infrastructure, KDDI has the important
social mission of enabling stable communications services on an ongoing basis, 24 hours a day
and 365 days a year, regardless of conditions.
Furthermore, as a telecommunications operation, our business derives from utilizing radio
waves—an important asset shared by all citizens. Accordingly, we recognize that we have the
social responsibility to address the issues society faces and seek to resolve them through
telecommunications.
To achieve this social mission and fulfill our social responsibility, KDDI is committed to sustaining
growth and enhancing corporate value over the medium and long term through measures to
achieve its newly created medium-term management plan spanning the period of April 1, 2019 to
March 31, 2022 (FY20.3–FY22.3).
The KDDI Group Mission Statement
The KDDI Group values and cares about

the material and emotional well-being of
The KDDI all its employees, and delivers a thrilling
Group Mission customer experience by always going further
Statement than expected with the ultimate goal of
achieving a truly connected society.
Brand message
Company Vision
1 The company the customer can feel closest to

2 A company that continues to produce excitement
3 Contributing to the sustainable growth of society
Business Strategy Financial Target
1 Creating innovation toward the 5G era We achieve sustainable profit growth and
2 The integration of telecommunications and life design further strengthen shareholder returns.
3 Further expansion of global business
Profit
1.5 times in 6 years

4 Utilizing big data
Growth
5 Expanding the finance business EPS Grow
6 Growth as the Group
7 Sustainability
40% payout ratio

Shareholder
Returns
DPS Over
Strengthen Management Infrastructure
 Practicing the KDDI Group Philosophy  Thoroughly managing profitability by segment
KDDI CORPORATION INTEGRATED REPORT 2019

Our Value Our Sustainability 48 The Japanese Market and KDDI:
Characteristics of the
02 The Path of Value Creation 28 KDDI’s Sustainability
Domestic Market
04 KDDI’s Value Creation Cycle 30 KDDI’s Target SDGs
50 The Japanese Market and KDDI:
32 Executive Members
KDDI’s Domestic Status
Our Management 34 Corporate Governance
52 Market Overview
38 Messages from Outside Directors
53 Analysis of the Consolidated
06 Medium-Term Management Plan
40 Executive Remuneration
Statement of Income
08 Risks and Growth Opportunities
41 Compliance
54 Analysis of the Consolidated
10 Interview with Management
42 Risk Management and
Statement of Financial Position
Internal Control
55 Analysis of Capital Expenditures
Our Future 43 Disclosure and IR
and Cash Flows
18 Special Feature: 56 Performance Analysis by Segment
Aiming for a New Stage of Growth Financial Information 62 Consolidated Financial Statements
44 Consolidated Financial Highlights 131 Corporate Overview /
46 Financial and Non-Financial Highlights Stock Information
WEB Financial Information WEB Non-Financial Information
Investor Relations Sustainability Research & Development

• Summary of Financial Statements (The Environment & Society) (R&D)
• Corporate Governance https://www.kddi.com/english/ https://www.kddi.com/english/
• Business Risks corporate/csr/ corporate/r-and-d/
https://www.kddi.com/english/
corporate/ir/
Editorial Policy: Disclosure of Financial and Non-Financial Information

This report is based on multiple guidelines and frameworks, which contains expanded information about non-financial infor-
including the principles outlined by the International Integrated mation from both environmental and social aspects.
Reporting Council (IIRC), providing basic information, financial KDDI has applied International Financial Reporting Standards
data, management strategy descriptions, and environmental, (IFRS) since the fiscal year ended March 31, 2016. For this report,
social, and governance (ESG) data considered particularly neces- unless otherwise stated, figures up to the fiscal year ended March 31,
sary for investors. Additional sustainability and research & devel- 2014, are based on Japanese GAAP and figures for the fiscal year
opment (R&D) information that is not contained in this report can ended March 31, 2015, onward are based on IFRS.
be found on KDDI’s website, including the Sustainability Report,
Disclaimer Regarding Forward-Looking Statements

Statements contained in this report concerning KDDI’s plans, strategies, beliefs, expectations, or projections about the future, and other statements other than
those of historical fact, are forward-looking statements based on management’s assumptions in light of information currently available and involve risks and
uncertainties. Actual results may differ materially from these statements. Potential risks and uncertainties include, but are not limited to, domestic and overseas
economic conditions; fluctuations in currency exchange rates, particularly those affecting the U.S. dollar, euro, and other overseas currencies in which KDDI or
KDDI Group companies do business; and the ability of KDDI and KDDI Group companies to continue developing and marketing services that enable them to
secure new customers in the communications market—a market characterized by rapid technological advances, the steady introduction of new services,
intense price competition, and others.
KDDI CORPORATION INTEGRATED REPORT 2019 01

The Path of Value Creation
2000 2002 FY2004.3-FY2008.3 2011

3G
Popularization of mobile phones
2012 2014
KDDI “Chaku-uta” au ranks KDDI offers “au Smart Value” “au WALLET”
CORPORATION music download No. 1 for its first iPhone and “au Smart Pass” service begins
established service launched net additions in services start
market share*1
(Operating income*2: Billions of yen)

1,200
1,000
800
Dec. 2010
600 Takashi Tanaka
appointed president
Oct. 2000
DDI CORPORATION (now KDDI CORPORATION) established
Yuusai Okuyama appointed president
400
Jun. 2001
Tadashi Onodera appointed president
200
0
(Fiscal years) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
*1 Share among NTT DOCOMO, INC. (NTT DOCOMO), SoftBank Corp. *4 CAGR: Compound Average Growth Rate
(SoftBank), and KDDI + Okinawa Cellular Telephone Company (au) *5 RGU: Revenue Generating Units. Each household’s subscription to CATV, high-
*2 Results for fiscal years ended March 31. Figures up to the fiscal year ended speed Internet connection, or telephony services each represent one RGU.
March 31, 2014 are based on Japanese GAAP and figures for the fiscal year *6 J.D. Power 2016–2018 Mobile Phone Service Satisfaction Study. The 2018
ended March 31, 2015 onward are based on IFRS (International Financial study is based on responses from 27,600 mobile phone users in Japan.
Reporting Standards). jdpower-japan.com
*3 On a closing price basis for the end of October 2000 to the end of March *7 J.D. Power 2018-2019 Low-Cost Smartphone Service Satisfaction Study.
2019 (monthly) Based on the survey conducted in FY2019 responses from 4,000 users who
02 KDDI CORPORATION INTEGRATED REPORT 2019

4G 5G
Retaining a strong customer
Customer Base* base inside and outside Japan
(As of March 31, 2019)
* Personal Services Segment
Mobile ID subscriptions 26.95 million

Improve customer
The rising popularity of value using high-speed FTTH subscriptions 4.45 million
smartphones and integration high-volume transfer for CATV RGU*5 households 5.48 million
of telecommunications enhanced experience
and life design Global Consumer Business
No. 1 in domestic shares in both Myanmar and Mongolia
2016 2017 2018 2019
“au Denki” “au Wowma!” KDDI entered Smart Money
begins begins the education Concept
business announced
Touchpoints both online

Touchpoints and offline
Approx. 2,300 au shops

nationwide
15.49 million “au Smart Pass” and
“au Smart Pass Premium” members
(Market capitalization*3: Trillions of yen) MAU over 10 million use
12 “au WALLET” app
Fiscal year
ending
Apr. 2018 March 31, 2020
Makoto Takahashi appointed president Operating income
target ¥1.02 10
trillion Develop new pricing plans
Innovativeness
ahead of the industry
8
Nov. 2003 Industry’s first flat-rate packet service
introduced
6
Mar. 2012 Launch of “au Smart Value”
Fiscal year and “au Smart Pass”
ended
March 31, 2019 Jul. 2017 Start of “au Pitatto Plan” and “au Flat Plan”
Operating income Aug. 2018 Start of “au Flat Plan 25 Netflix Pack”
over ¥1 trillion for 4
Jul. 2019 Start of “au Data MAX Plan”
the first time
Three-Year Three-Year
Medium-Term Targets Medium-Term Targets
(FY14.3–FY16.3) (FY17.3–FY19.3)
2 No. 1 in brand strength
Double-digit growth in Operating income CAGR* 4
7% Brand Strength
and customer satisfaction
operating income each fiscal year Dividend payout ratio and in both corporate
Dividend payout ratio over 30% over 35%
and individual services
0
2014 2015 2016 2017 2018 2019 2020 (E)
bought and use smartphones or SIM cards with service from contracted
operators. jdpower-japan.com
*8 J .D. Power 2016–2018 Business Mobile Phone Service Satisfaction Study. The
2018 survey is based on 2,890 responses received from 2,287 companies with J.D. Power “No. 1 in Mobile (UQ mobile) J.D. Power J.D. Power “No. 1 in
100 or more employees. jdpower-japan.com Phone Service Satisfaction”*6 “No. 1 in Low-Cost Business Mobile Phone
for three years Smartphone Service Service Satisfaction” (Large
Satisfaction”*7 for two years Corporations / Medium-
Sized Enterprises Market
Segment)*8 for three years

KDDI’s Value Creation Cycle
The four sources of KDDI’s value are its “customer base,” “touchpoints,” “innovativeness,” and “brand
strength” that have been built over the years since its establishment. We will further refine and enhance
these sources of value and optimally allocate the Company’s management resources to maximize KDDI’s
corporate value. In doing so, we aim to achieve our medium-term management plan for the fiscal year
ending March 31, 2022.
KDDI’s Surrounding Business Environment

Political (Government / Legislation) INPUT
• Comprehensive verification of competition rules in
the telecommunications business field
• Complete separation of telecommunication fees
and handset prices
Financial capital
Economic
Fund procurement
• Consumption tax hike, expansion of cashless settlement
• Development of economic and social infrastructure
for the Tokyo Olympics
Social (Society / Culture) Manufactured capital

• Declining birth rate and aging population / Shrinking population
Telecommunications,
• Decrease in local labor force, Regional revitalization
equipment and platforms
Technological
• 5G service starts
• Development of technologies such as IoT and AI
• Accelerating use of big data for a data-driven society Intellectual capital
• Strengthening measures against cyber terrorism
Brand strength and R&D
Customers (Market / Clients)
• Further popularization of smartphone use
• Expansion of sharing
• Expansion of fintech market
• Diversification of SNS
Human capital
Personnel
Competition
• Entry of new business operators into MNO*1
and price competition
• Expansion of business to fields beyond telecommunications Social and
• Accelerate collaboration with partner companies for 5G
• Homogenization of services offered
relationship capital
by mobile companies Regions and communities
*1 MNO (Mobile Network Operator)
Medium-Term Targets (FY2017.3-FY2019.3)
Achieve continuous growth and enhance shareholder return

Transform into a Business Providing Customer Experience Value
Business (1) Sustainably grow the domestic telecommunications business
Strategies (2) Maximize the “au Economic Zone”

(3) Ambitiously develop global business
• Target operating income; CAGR*2 of 7%

Profit Growth • Gross merchandise value of au Economic Zone; over ¥2 trillion
• M&As for growth; approx. 500 billion yen over three years
• Lift dividend payout ratio from “above 30%” to “above 35%

Shareholder • Repurchase own shares after growth investment
Returns • Limit the amount of treasury stock to approximately 5% of our total issued shares, and cancel
any treasury stock held in excess of this limit
*2 CAGR (Compound Average Growth Rate)

OUTPUT
Financial capital
Generating cash flow Page 55
Customer Brand
Optimal Base Strength Manufactured capital
distribution of Creating innovation toward
Page 24
the 5G era
management Business model communications society,
Page 27
promotion capability Promoting the global IoT business
resources
across the Intellectual capital
Touchpoints Innovativeness
four sources The integration of telecommunications
and life design, Page 20
of value Strengthening the life design domain
Sus
t a i n a b ilit y
Human capital
Human resource development,
support for women’s advancement,
Page 31
respect for human rights,
and diversity and inclusion
Management strategy 08
Page
Social and relationship
Corporate governance Page 34 capital
Global business,
regional revitalization, Page 30-31
and environment conservation
Medium-Term Management Plan (FY2020.3-FY2022.3) Page 06
Medium-Term Management Plan Summary

FY2025.3 Target EPS growth FY2019.3 R FY2025.3 1.5 times
Operating • Operating revenue of life design domain Page 22 FY2022.3 target ¥1.5 trillion
revenue
• Operating revenue of new Business
growth
Services segment Page 26 FY2022.3 target ¥1 trillion
FY2020.3-
FY2022.3
Cost reduction, etc. Page 07 3 years total ¥100 billion (approx.)
Initiatives
• Over 40% payout ratio
Shareholder returns • Flexible share buybacks
• Cancel all treasury shares*3
We achieve sustainable profit growth and further strengthen shareholder returns

*3 Except KDDI shares owned by executives’ compensation BIP Trust Account and ESOP Trust Account

Medium-Term Management Plan (FY2020.3-FY2022.3)

We aimed for continuous growth and enhance shareholder return by offering customer experience value
which goes further than expected and it has brought us a secured solid customer base and a steady
growth in consolidated operating income up to now.
From now on, full-scale digitization is speeding onward against the backdrop of continual technological
advances encompassing 5G (5th Generation Mobile Communications System), and it will bring us big
changes in the competitive environment of Japans telecommunications market.
Amid this age of epochal change, KDDI drew up a new three-year medium-term management plan
(FY2020.3-FY2022.3) to realize “the integration of telecommunications and life design.”
Sustaining Profit Growth and

Further Strengthening Shareholder Returns
Since its establishment in October 2010, KDDI has achieved compared with the level in the fiscal year ended March 31,
18 straight years of growth in operating income, with its 2019, while sustaining growth in profits.
strengths as a comprehensive communications carrier trans- Regarding shareholder returns, KDDI has steadily increased
lating into continued business growth. KDDI has also focused dividends toward a dividend payout ratio of at least 40%,
on enhancing shareholder returns, increasing dividends for while taking a flexible approach to buying back its own shares.
17 fiscal years in a row. In principle, KDDI retires all the shares it buys back.
Under the new medium-term management plan unveiled in Through these initiatives, we intend to continue balancing
May 2019, KDDI targets growth of 1.5 times in earnings per sustained profit growth with stronger shareholder returns.
share (EPS) by the fiscal year ending March 31, 2025,
1.5 times
(Yen)
Target
EPS
Increase of 1.5 times in six years
through sustained profit growth
259.10
235.54
221.65
DPS
Dividend payout ratio over 40%
90.00 105.00
85.00
Flexible share buybacks
FY2017.3 FY2018.3 FY2019.3 FY2025.3 Cancel all treasury shares*
EPS DPS
* Except KDDI shares owned by executives’ compensation BIP Trust Account and ESOP Trust Account
Our Growth Story

01: Earnings expansion via “the integration of telecommunications and life design”
Although growth is gradually tapering off in the domestic Commerce
mobile communications business, KDDI aims to sustain FY2019.3
FY2022.3 (Target)
expansion by offering faster communications speeds and GMV*1
encouraging greater use of rich content in the coming 5G era. ¥ 250 billion ¥400 billion
Furthermore, KDDI will aggressively move forward on its
growth strategy for “the integration of telecommunications Energy
and life design,” with the aim of increasing earnings alongside Life
au Denki FY2019.3 FY2022.3 (Target)
growth in the life design domain. Design subscriptions
KDDI is keen to expand both operating revenue and oper-
Over 2 million 3.4
million
ating income in the life design domain, with growth driven by Finance
commerce, energy, finance, and other services.
Transaction FY2019.3
FY2022.3 (Target)
volume*2
Pa ge 20 Special Feature 1: The Integration of Telecommunications and ¥ 4.4 trillion ¥6.0 trillion
Life Design
Telecom-
munica- Growth through 5G
tions
*1 Gross merchandise value
*2 Transaction volume of settlement/loan

02: Operating revenue expansion via the strengthening of growth domains
Under our new medium-term management plan, we have In both growth domains, KDDI is focusing on the targets it
positioned the new Business Services segment as a pillar of set for increasing operating revenue in the life design domain
growth to accompany the life design domain. from ¥946 billion in the fiscal year ended March 31, 2019, to
In the new Business Services segment, KDDI aims to ¥1.5 trillion by the fiscal year ending March 31, 2022, and
increase the total number of IoT connections from eight mil- expanding operating revenue in the new Business Services
lion as of March 31, 2019 to 18 million by March 31, 2022, segment from ¥886.4 billion to ¥1.0 trillion over the same
by creating recurring business centered on IoT operations time frame.
and providing various business platforms in Japan and other
countries around the world.
Pag e 26 Special Feature 3: Business Expansion through Collaboration with Partners
Operating revenue of Operating revenue of new Business

life design domain Services segment
Target ¥1.5 trillion Target ¥1trillion

¥946 billion ¥886.4 billion
FY2019.3 FY2022.3 FY2019.3 FY2022.3
03: Capital expenditures and cost reductions

3 years total
Reducing
¥1.68 trillion 5G
Promoting cost Automating promotion costs
investment Revising
efficiency by operation through
operation
network and advanced
4G, etc
methods
virtualization maintenance marketing
4G, etc
method
Fixed-line Fixed-line
and others and others Minimizing corporate costs
FY2017.3- FY2020.3-
Generating approx. ¥100 billion profit through cost reductions, etc.
FY2019.3 FY2022.3 (E)
Over the course of the previous medium-term management plan, of new ideas that are not bound to conventional thinking.
KDDI spent about ¥1.68 trillion on capital investments, mainly for Specifically, KDDI is advancing measures to increase busi-
maintaining and expending its 4G network. Under the new ness efficiency through systemization and the reform of work
medium-term management plan, management intends to keep processes as well as improvements in the cost efficiency of
annual capital investment at a little over ¥600 billion, including network operations through the use of network virtualization
investments in 5G that are ramping up this fiscal year. and AI. Management targets a total of ¥100 billion in cost
To sustain profit growth at the same time, KDDI is keen to reductions over the next three years that will translate into
reduce costs through the use of technology and the adoption stronger profit growth.

Risks and Growth Opportunities
The business environment surrounding KDDI is constantly changing.

KDDI implements measures to quickly anticipate and avoid the many kinds of risks that exist in the
changing business environment. At the same time, KDDI aims to maximize corporate value by turning
these risks into growth opportunities for business success.
Below is a description of the risks and growth opportunities of particular interest to investors.
Main Risks Measures to Avoid Risks
ompetition and Rapid Shifts in Markets

C • KDDI began offering plans that separate billing for telecommunications
and Business Environment and handsets ahead of its rivals in July 2017 in response to these changes in
Exodus of customers: There is a risk that the the business environment, and its current telecommunications rates are as
number of subscribers will fall if budget smartphones much as 40% lower than those prior to the introduction of the unbundled plans.
catch on or new telecommunications carriers enter • The au churn rate improved significantly due in part to customers quickly
the business. switching to rate plans they prefer.
Cuts in communications rates: There is a risk that Before unbundling plans (fiscal year ended March 31, 2017): 0.83%
earnings will be adversely affected by tougher After unbundling plans (fiscal year ended March 31, 2019): 0.76%
competition. • Roughly two thirds of smartphone customers have switched to unbun-
dled plans already, marking favorable progress (as of March 31, 2019).
elecommunications Security and

T • KDDI protects telecommunications secrecy. To protect customer information,
Protection of Customer Information KDDI has established the Information Security Committee to prevent
(Personal and Corporate Information) information leaks from within and has drawn up Companywide measures
Data leaks and hacking attempts from external for preventing hacking attempts from external networks. KDDI also com-
networks could undermine trust in and tarnish plies with the European Union’s General Data Protection Regulation
the brand of KDDI . (GDPR) and other global regulatory frameworks.
Natural Disasters, Accidents and • To create a management structure for dealing with large-scale natural disas-
Other Events ters, KDDI has formulated disaster response regulations and business con-
Stoppage and interruption of data communica- tinuity plans (BCPs), and undertaken a number of other initiatives, including
tions services: There is a risk that information com- building a disaster response framework. We have also entered into disaster
munications services could be cut off as a result of management agreements with the Ministry of Defense, the Self-Defense
unforeseen events, including natural disasters, Forces, and the Coast Guard, collaborating with relevant organizations to
power shortages and outages, cyberattacks, and further strengthen our disaster response.
communications equipment failures and accidents. • Effectiveness is assessed through biannual disaster response training. KDDI
works to improve on any issues or problem areas identified through that train-
ing, and each year a PDCA cycle is employed to construct a more solid
foundation for disaster response.
elecommunications Sector Regulations

T • In light of laws and regulations concerning upgrade programs, time constraints,
and Government Policies and automatic renewals, for example, KDDI intends to change what is nec-
Revisions to Telecommunications Business Act: essary and to legally comply by the deadline (estimated to be October 1,
Complete separation of telecommunication fees and 2019).
handset prices, and the prohibition of excessive Moreover, KDDI aims to make steady progress toward its profit objectives
enclosure customers, will become law. for the fiscal year.
Allocation of frequencies: There are risks that • In April 2019, portions of the 5G frequencies were allocated by the government
network costs will increase when adapting to new in Japan. Based on the ambitious plan it submitted, KDDI was allocated
frequencies, and that the necessary frequencies 600MHz in total bandwidth in the 3.7GHz and 28GHz bands, including fre-
cannot be acquired. quencies likely to be used by other 5G networks around the world. We
anticipate major advantages from the standpoint of improvements in cost
efficiency, in terms of network development outlays, and terminal pro-
curement costs.

Initiatives for Growth
• As stand-alone domestic mobile telecommunications face more challenges for existing business growth, KDDI aims to establish
a presence in new growth areas.
• Specifically, KDDI aims for growth centered on existing telecommunications services tied into life design services encompassing
commerce, finance, energy, entertainment, and education. While further advancing “the integration of telecommunications
and life design,” the core of its business strategy, KDDI aims to increase sales on a total ARPA basis by providing new
experience value to customers who use au and other services.
• Moreover, we are aiming for a deeper engagement with our customers by combining various life design services with telecom-
munications services that are essential to their lifestyles. This will lead to the maximization of Life Time Value, an expression
of the sum of customer numbers (IDs, including Group companies), total ARPA, and customer engagement. Pa ge 20
• With data-driven management using big data gaining attention these days, KDDI makes concerted efforts every day to main-
tain service quality, which is a prerequisite for retaining customers, by ensuring security and protecting privacy through
the strict management of customer information, an important asset.
• Along with Group companies, KDDI will provide advanced information security and reliable ICT so its customers can focus on
their businesses, thereby contributing to the development of a digital society and economy.
• Japan currently faces a variety of issues, such as a long-term decline in its population, and waning vitality in regional economies
caused by the overconcentration of people in large cities. KDDI is contributing to the advancement of Japanese society by
helping to solve these various issues through the provision of high-quality telecommunications services over reliable
mobile networks, a crucial component of social infrastructure.
• In April 2019, the KDDI Regional Initiatives Fund No. 1 was established with the aim of financing local companies and venture
firms that promote regional revitalization. This put into place a structure for promoting regional revitalization through 5G and
IoT. KDDI’s system to promote regional economy will also serve to create and expand new business areas.
• Although there is a risk that customers will leave KDDI as a result of coverage concerning the prohibition of billing tactics to retain
customers, KDDI also anticipates an increase in opportunities to win new customers as market flow is stimulated. By latching
onto these opportunities, we aim to increase the number of customers (IDs), including Group companies, in a bid to
expand the customer base.
• KDDI aims to improve the efficiency of investments in facilities by leveraging the advantages of the 5G frequencies it has
obtained, sharing 4G, adding software functions and sharing equipment with other companies. Pa ge 24
• The Company plans to launch commercial 5G services in March 2020. As smartphone-centric services become more prevalent
and data traffic increases alongside the spread of data-heavy content, KDDI views these changes as an excellent opportunity to
advance “the integration of telecommunications and life design” and increase total ARPA in the 5G era.

Interview with Management
Tomorrow, Together
In addition to realizing “the integration of
telecommunications and life design,”
we endeavor to provide solutions to social issues
and help achieve a truly connected society.
Question 01 Answer 01
Please tell us, in a frank Looking back, I think it was a very fulfilling year. In my first year as president, I devot-
manner, your thoughts about ed my energy to formulating the new medium-term management plan (April 2019 to
the past year or so, since being March 2022), which was unveiled in May 2019.
appointed president of KDDI. During this process, however, two major changes occurred, requiring us to make
last-minute revisions to the management plan. After this arduous process, I am confi-
dent the final version of the management plan is able to firmly address the issue of
creating a path toward sustained growth while keeping costs in check.
Page 06 The Medium-Term Management Plan
What specifically were these The first was a revision to the Telecommunications Business Law, which reflected the
two major changes you “urgent proposal to fix mobile services” announced by the Ministry of Internal Affairs
mentioned? and Communications in November 2018.
The revision fostered speculation on the stock market that the entire telecommuni-
cations sector, including KDDI, would stop growing, and KDDI’s share price fell
sharply. To be honest, this event was quite a shock for me.
However, KDDI had already taken steps to separate charges for communications
and handsets with the rollout of the “au Pitatto Plan” and the “au Flat Plan” in July
2017, returning value to customers. We estimate that the additional negative impact
on revenue from revising our rate plans in view of the new rate plans of competitors
will total almost ¥100 billion over the next three years.
The second major change was the entrance of a new competitor into the telecom-
munications field. This will probably heat up competition in the domestic mobile com-
munications market.
Even considering the additional measures to address these major changes, we still
aim for sustained growth under the new medium-term management plan, a major
accomplishment in my opinion.

Makoto Takahashi
President, KDDI CORPORATION

More than ever before,

we will use our ingenuity to “innovate,”
while fortifying our “defenses” in the form
of highly trusted networks.
As we go on the “offensive,”
we will effect a transformation of KDDI.
How will KDDI take on the new With the emergence of a potential rival, KDDI is at risk of losing market share, so we
competitor in the telecommu- are readying ourselves ahead of the new player’s launch of services in October 2019.
nications field? The new rival has strengths in the e-commerce field, etc. an area where KDDI
does not presently hold the advantage. For this reason, we intend to use our ingenu-
ity to “innovate” areas of weakness while fortifying our “defenses” in trusted, highly
reliable communications networks, KDDI’s area of strength.
At the same time, we will go on the “offensive” by taking on challenges with a
sense of urgency, including innovative initiatives such as the network function virtual-
ization (NFV) technology being adopted by the new rival. Although the competition
will be fierce, KDDI will flexibly and appropriately respond to various changes.
In addition to the reliability of KDDI has consistently grown profits for 18 consecutive fiscal years. Being able to
existing communications sustain growth in a rapidly changing business environment is a testament to our ability
networks, what else can KDDI to take on new challenges and maintain downward pressure on costs even in the face
take pride in? Where is KDDI’s of hardship. This achievement has also fostered confidence among all our employees
wellspring of value? and will be instrumental in carrying on with the fight against the competition.
We have been innovators during past transitions to new communications stan-
dards. For example, KDDI was the first to introduce flat-rate data plans during the 3G
era and to offer affordable rate plans for smartphones that bundled mobile and fixed-
line services during the 4G era. We have constantly produced excitement for our
customers by creating new added value through collaboration with our partners, as
evidenced in our financial performance.
As we head into the 5G era, we must fix our attention on the latest trends around
the world while pursuing the digital transformation of KDDI. In order to continue pro-
viding ever-better services, I believe we must reduce operating costs further through
network virtualization and the deployment of AI, and fully demonstrate the ability of
our corporate culture, employee motivation, and behavioral patterns to endure
changes in the business environment.

The KDDI
Group Mission
Statement
“Explore the extraordinary”
What concepts have been incor- The new medium-term management plan has five layers comprising the KDDI Group
porated into the new medium- Mission Statement, our brand message, the company vision, business strategy/
term management plan? financial objectives, and stronger management infrastructure.
With the KDDI Group Mission Statement providing an important foundational com-
ponent of this framework, we have refreshed our brand message. For the KDDI cor-
porate brand slogan and as the brand for our businesses serving corporate
customers, we decided on “Tomorrow, Together.” And for consumer-facing busi-
nesses, we chose the au brand slogan “Explore the Extraordinary.” This decision was
the result of intense discussions by employees who will lead KDDI into the future,
a group now mainly in their 40s.
Also, we have added a third vision: to be “a company that contributes to the sus-
tained growth of society.” It joins the two visions, announced last year, of what KDDI
will become going forward: to be “the company the customer can feel closest to”
and “a company that continues to produce excitement.”
We intend to instill this frame of mind throughout the Company so that all of our
employees can move in the same direction toward achieving the objectives of the
new medium-term management plan.
What is unique about KDDI’s Maximizing revenues, minimizing expenses is a central tenet of the KDDI Group
sustained growth? Philosophy, and our employees have been instilled with a mindset focused on
increasing the top line through business growth while continuing to expand profits by
responsibly reducing costs. Our aim for sustained growth also relates to the core of
the KDDI Group Mission Statement, which is to value and care about the material and
emotional well-being of all our employees, and to achieve a truly connected society.
What is the purpose of changing To further “the integration of telecommunications and life design,” KDDI rearranged
segment classifications at the its four segments into the Personal Services Segment for consumer-facing business-
start of the new medium-term es, and the Business Services Segment for our businesses serving corporate cus-
management plan? tomers. In addition, global businesses are now positioned as an extension of
domestic businesses, as integrating both into the same segment will allow for global
businesses to take advantage of business expertise and management resources
accumulated in Japan.
In the Personal Services Segment, the telecommunications business has driven
growth to date, but in the future, KDDI aims to expand earnings on a total ARPA
basis that integrates telecommunications and life design services.
Moreover, KDDI is keen to expand operations in Southeast Asia. In particular, it is
duplicating its “integration of telecommunications and life design” business model

overseas, with the ultimate aim of creating an “au Economic Zone” like that in Japan.
In the Business Services Segment, KDDI targets steady overall profit growth for its core
business, including existing fixed-line services, the global ICT business, and Group com-
panies, while stepping up efforts in new growth fields centered on the IoT business.
In the Personal Services In the life design domain, the Company targets growth in operating revenue from
Segment, KDDI is aiming for ¥946.0 billion in the fiscal year ended March 31, 2019 to ¥1.5 trillion by the fiscal
top-line growth by expanding year ending March 31, 2022. Specifically, we aim for top-line growth across the
operating revenue in the life board, including entertainment and education operations, with growth being driven
design domain. How exactly by commerce, energy, and financial businesses.
will this growth be In the financial services field, KDDI announced in February 2019 the establishment
accomplished? of intermediate financial holding company au Financial Holdings Corporation. Related
financial companies were then placed under the new holding company’s umbrella as
of April 1, 2019.
In the energy field, “au Denki” (electricity) has already signed up over two million
accounts. This market share places us in the top tier of retail electric power
providers.
In the commerce business, although we have lined up merchandise, we still have
much to learn from other companies, and this is an area we must reinforce. While
growing existing business, KDDI will consider M&A activities if the need arises while
closely scrutinizing potential deals.
Page 20 Special Feature 1: The Integration of Telecommunications and Life Design
KDDI targets ¥1 trillion in In the Business Services Segment, KDDI is building out platforms for providing ser-
operating revenue from the vices to various industries, based on the KDDI IoT World Architecture it has devel-
new Business Services oped and adopted for the Global Communications Platform being promoted by
segment as one more growth Toyota Motor Corporation (Toyota). KDDI is building a strong cooperative relationship
area, but how will this target with Toyota, with KDDI communications modules embedded in connected cars the
be attained? automaker sells in Japan. Responding to the need to develop this business model
globally, KDDI has entered into a partnership with AT&T in the United States. KDDI
will expand the service area for this platform by forging partnerships with other carriers
around the world, including in China.
Moreover, we will take the know-how gained through our collaboration with Toyota
and apply it to KDDI’s IoT World Architecture, which will support our global partners,
including Hitachi, Ltd. and Toshiba Corporation, as well as the operations of our cus-
tomers who are keen to develop business globally.
Page 26 Special Feature 3: Business Expansion through Collaboration with Partners

In the 5G era,
telecommunications will be prevalent
everywhere with IoT connecting
a multiplicity of things to the Internet.
What is KDDI’s budget for In April 2019, 5G frequencies was allocated by the government in Japan. Based on
capital investment in 5G from the plan KDDI submitted to the Ministry of Internal Affairs and Communications, KDDI
the current fiscal year? was allocated 600MHz in total bandwidth that included frequencies likely to be used
by other 5G networks around the world, a reflection of its ambitious plan in terms of
5G area coverage and 5G-specific base station installations. We anticipate improve-
ments in cost efficiency in terms of network development outlays and terminal pro-
curement costs.
Our plan to roll out 5G entails ¥466.7 billion in capital investments over the next
five years. We intend to increase efficiency further by jointly using base station assets
with other companies.
Starting in the current fiscal year, KDDI will invest in both 4G and 5G networks, but
4G-related investment has already peaked. For the current fiscal year, KDDI plans
capital investments in the amount of ¥610 billion, roughly the same level as last year.
During the new medium-term management plan, we intend to keep capital invest-
ments a little over ¥600 billion level.
When do you think 5G services KDDI plans to commence trial services this autumn and then launch commercial ser-
will take off? vices in March 2020. To follow this schedule, KDDI will operate on a non-standalone
basis to offer 5G services in conjunction with 4G networks. KDDI will initially develop
a “hybrid network” with brilliant 4G service covering 99.9% of the population, com-
bined with special 5G services. Over the medium term, KDDI intends to operate a
separate 5G network on a standalone basis.
What kind of changes will 5G In the 5G era, video streaming will probably become commonplace. In addition to
services bring? video on demand and digital signage, I believe all forms of expression could feasibly
turn to video, such as videos embedded in recipe sites or videos exchanged instead
of text on social networking services. As a pioneering move in the 5G era, KDDI was
the first MNO* in Japan to start offering an unlimited monthly data plan called the “au
Data MAX Plan.”
With these potential changes on the horizon, KDDI aims to expand business by
considering partnerships with over-the-top (OTT) streaming media players.
Moreover, in April, 2019, we began using 5G to promote regional revitalization,
such as through the establishment of the KDDI Regional Initiatives Fund.
* Mobile Network Operator.

Page 24 Special Feature 2: New Growth Opportunities and Solutions for Social Issues with 5G

In an era where communications

functions are embedded in everything,
KDDI is confident in its ability
to help solve various social issues
through its telecommunications services.
The new medium-term In the 5G era, everything will be connected to the Internet via IoT, and communica-
management plan also covers tions functions will be embedded in all devices.
sustainability initiatives, such With this changeover in eras in mind, we have set forth KDDI’s target SDGs in line
as SDGs, within the context of with its clarified vision to be “a company that contributes to the sustained growth of
engagement with all stakehold- society” in the new medium-term management plan.
ers. What are the objectives of The Company is taking two approaches to addressing these SDGs, as “social
KDDI’s sustainability initiatives? issues to be solved through business” and “social issues to be solved through cor-
How do its business activities porate activities.” For the former, KDDI has set medium- and long-term targets that
translate into progress toward are tied to business strategies, encompassing telecommunications, global business,
the SDGs? regional revitalization, education, and finance, and for the latter, it has targets tied to
corporate activities that include developing human resources, supporting women’s
advancement in the workplace, respecting human rights, promoting diversity and
inclusion, and conserving the environment.
In an era where communications functions are embedded in everything, KDDI is
confident in its ability to help solve various social issues through its telecommunica-
tions services, and will spread this mindset throughout the Company.
Page 30 KDDI’s Target SDGs
In the new medium-term man- As with the previous medium-term management plan, KDDI is keen to expand prof-
agement plan, one of the new its, having set and achieved goals for double-digit growth in operating income every
targets is to achieve EPS year from the fiscal year ended March 31, 2014 to the fiscal year ended March 31,
growth in tandem with profit 2016, and for a CAGR of 7% in operating income from the fiscal year ended March
growth. Can you explain how 31, 2017 to the fiscal year ended March 31, 2019. Under the new medium-term
this target will be reached? management plan, owing in part to major changes in markets, we have for the first
time set EPS as a KPI instead of operating income.
While continuing to prioritize profit growth, we wanted to convey the message that
KDDI will achieve these lofty targets no matter what it takes, including the repurchase
of the Company’s own shares, as a means of making up for shortfalls from targets. In
addition to business growth, I believe this expresses our determination as a company
to return value to shareholders, with management clearly focused on the interests of
shareholders.

What are your thoughts on In allocating free cash flow, we are prioritizing investments in growth to ensure con-
shareholder returns in the tinued increases in profits, followed by dividends and then share buybacks when
future? appropriate. While maintaining a sound financial position, the Company’s basic policy
is to pay a stable dividend.
In the fiscal year ended March 31, 2019, operating income crossed the ¥1 trillion
threshold for the first time ever. To express our appreciation to our shareholders,
KDDI distributed a dividend of ¥105 per share, which is ¥15 per share higher than
last year, for a dividend payout ratio of 40.5%. We plan to increase dividends by ¥5,
to ¥110 per share for the current fiscal year, and have announced a ¥150 billion
share buyback program by December 23, 2019. For now, the Company will steadily
execute these plans.
Under the new medium-term management plan, we have made a commitment to a
dividend payout ratio of 40% or higher, and take a flexible approach to share buybacks
while retiring all treasury stock*. We have therefore taken a more proactive stance on
shareholder returns than under the previous medium-term management plan.
* Excluding treasury stock held in the executive compensation BIP trust account and the stock-granting
ESOP trust account.
In conclusion, do you have a KDDI would like to impress upon its stakeholders the fact that it has stayed true to its
final message for all basic aim of sustaining growth. Overcoming hardships since its founding in 2000,
stakeholders? KDDI has achieved 18 consecutive fiscal years of profit growth. The view that the
telecommunications industry is unlikely to grow much more, even on a global basis,
is becoming more widespread. Yet, at KDDI, we are rallying our ingenuity to meet the
challenge of sustaining growth. By helping create a truly connected society, KDDI
aims to be a company that wins the support of all its stakeholders, including share-
holders and investors.
We ask for your continued support and guidance in the future.
Makoto Takahashi
President, KDDI CORPORATION

Special Feature:
Aiming for a New Stage of Growth

Beginning in the fiscal year ending March 31, 2020, KDDI reorganized its business segments to better align
with its future business vision, creating the Personal Services segment, which provides services to individ-
ual consumers, and the Business Services segment, which offers services to corporate customers.
In addition to growth strategies for both business segments, we explain our 5G Strategy that will support
KDDI’s growth over the medium term.
Change of Segments
Former segments Personal Life Design Business Global
New segments
Domestic Global
Personal Services
Personal
+ Global
Life Design consumers
domain
Business Services
Global
Business
ICT

Feature 01: The Integration of Telecommunications and Life Design
In a mature communications market in Japan, strong
growth in au subscribers is unlikely. Nonetheless, KDDI
aims to sustain growth though “the integration of telecom-
munications and life design” by developing the Life Design
The Integration of
Telecommunications
Page 20
and Life Design.
Business with concentric rings entailing commerce,
finance, energy, entertainment, and education, around a
core of the domestic telecommunications business and its
customer base.
Feature 02: New Growth Opportunities and Solutions for Social Issues with 5G
Mobile telecommunications are on the verge of transitioning
from 4G to 5G technology. In line with “creating innovation
toward the 5G era,” one of our business strategies under the
new medium-term management plan, KDDI will advance busi- Page 24
ness strategies that view 5G as a new growth opportunity.
Moreover, by deploying 5G in regional revitalization, KDDI aims
to be “a company that contributes to the sustained growth of
society” by solving social issues framed by the SDGs.
Feature 03: Business Expansion through Collaboration with Partners

Society is undergoing dramatic changes amid advances in
IoT and AI technologies, as well as a digital transformation
(DX). In this period of change, KDDI is using IoT to help
customers realize their DX and expanding business globally Page 26
by working with them to create recurring business models.

Personal Services Segment:
The Integration of Telecommunications and

Advancing “the Integration of Telecommunications and Life Design”
The competitive landscape for the domestic mobile telecommunications busi-
ness is changing dramatically with the proliferation of discount smart-
phones, the entry of a new telecommunications carrier in autumn 2019,
and revisions to telecommunications-related laws. We believe it would
be more difficult to sustain growth at KDDI if we were to rely solely on
the mobile telecommunications business.
Establishing new growth domains is a pressing need.
KDDI is pushing forward with “the integration of
telecommunications and life design,” placing the
telecommunications business and its customer
base—sources of competitiveness—at the core
of the consumer business, surrounded by con-
centric rings of commerce, finance, energy, enter-
tainment, and education in the life design business.
KDDI invested a total of ¥500 billion in growth over the
three-year period of the previous medium-term management plan
(the fiscal year ended March 31, 2017 to the fiscal year ended March 31, 2019) in
order to bring together the parts necessary to push forward with “the integra-
tion of telecommunications and life design.”
Over the course of the new medium-term management plan, we aim to
significantly grow these products and services as the life design domain.
By providing comprehensive life design services for each life stage of its
customers, KDDI will come closer to realizing its aims to be “the compa-
ny the customer can feel closest to” and “a company that continues to
produce excitement,” thus remaining the preferred choice of its customers.
Provision of comprehensive life design services for every customer life stage
Breakdown of household expenditures*1 KDDI’s Life Design Domain

(households with two or more people)
*2
(%) au Jibun Bank
17.4 Others
Others
27.6 au Asset Management
Food
Food Furniture
3.9
Furniture Clothing
4.0 Clothing
Education
Education
4.1 Healthcare
Entertainment
Healthcare
Entertainment Communications
au Insurance
4.6 Communications 10.1 Housing Transportation
Basic
Housing Transportation utilities
4.7 Basic
utilities
5.9 10.0
7.7 au Loans and
Home Mortgage
au Denki (Electric Power Service)
*1 Source: KDDI, based on data from Ministry of Internal Affairs and *2 The planned change in the company name of Jibun Bank is contingent upon
Communications’ Family Income and Expenditure Survey (2018) receiving approval at the general meeting of shareholders for a revision of the
articles of incorporation, as well as approval from the relevant authorities.
Life Design
Maximizing Life Time Value
To sustain growth, KDDI has expanded “total ARPA”, the bundles fixed-line and mobile telecommunications, and
combination of telecommunications and added value, by pro- “Smart Value (life design edition),” a combination of telecom-
viding new experience value through the life design services it munications and life design services. We are keen to maxi-
has created to date while leveraging its ID base, which has mize Life Time Value as a concept of value generated as the
increased throughout the Group. product of (1) the number of customers (IDs) across the
KDDI aims to deepen engagement with customers through Group companies, (2) total ARPA, and (3) length of usage
the vigorous promotion of “au Smart Value,” a service that (engagement).
(2) Total ARPA Telecommunications x Life Design

Smart Value (life design edition)
Added value
ARPA growth through life design services
+
+
Telecommunications
Life Time
Value
(3) Usage over time (engagement) Fixed-line x Mobile
“au Smart Value”
ARPA growth through 5G

(1) IDs
Benefits from Deeper Engagement

The churn rate for customers who have signed up for con-
Significantly reduce churn rate using bundles with
tracts that bundle au with “au Denki” or au with the “au “au Denki” and credit cards
WALLET Credit card” is much lower than that for customers
Churn
who have only stand-alone contracts with au. rate
au
KDDI intends to deepen engagement with customers fur- only
au au Half
ther by bundling services that customers use for longer peri- + + au
au Wowma! Jibun Bank + au
ods of time than au Smartphone, such as financial products. au Smart Pass +
“au WALLET au
+
Credit card” “au Denki”
Growth Domains and M&A

KDDI approaches M&A from the standpoint of generating This policy has driven growth in KDDI’s own services, such
synergies with its existing operations. KDDI positions the fol- as “au Smart Pass” and carrier billing, in the life design
lowing four areas as growth domains: domain. In addition to the stable growth of KDDI’s own ser-
vices, Group companies have also contributed to KDDI’s
(1) Maximize Group IDs, the basis for “the integration of consolidated performance, creating a virtuous cycle.
telecommunications and life design” A New Growth Stage for KDDI Group
(2) Maximize Life Time Value by expanding operating (Billions of yen)
revenue and increasing engagement 962.8
1,013.7
913.0
(3) Provide new value by acquiring capabilities towards 832.6
741.3
663.2
the 5G and IoT era
512.7
(4) Expand global business
KDDI supports the companies it has invested in as much

as possible, prioritizing their growth as Group companies by FY13.3 FY14.3 FY15.3 FY16.3 FY17.3 FY18.3 FY19.3
granting them access to its assets. Operating income (non-consolidated)*1 Operating income (consolidated)*2
*1 Operating income (non-consolidated) on a Japanese GAAP basis

*2 Operating income (consolidated) on a Japanese GAAP basis until the fiscal year ended
March 31, 2015, and then on an IFRS basis from the fiscal year ended March 31, 2016.

Personal Services Segment:
Sustained Growth in the Life Design Domain

Under the new medium-term management plan unveiled in May 2019, KDDI aims to expand
operating revenue from the life design domain to ¥1.5 trillion by the fiscal year ending
March 31, 2022, the last year of the medium-
term management plan. To achieve this
goal, we are focusing on
1) expansion of commerce gross
merchandise value,
2) growth in “au Denki”
subscriptions, and
3) growth in the transaction vol-
ume of settlement and loan.
Furthermore, KDDI seeks to
continue increasing operating
income in the life design domain
while maintaining current operating
margins.
Life design domain: Operating revenue
¥1.5 trillion (target)

charge payment
¥946.0 billion
points
Balance: Number of issued cards:
Over ¥100 billion*1 Over 20 million*2
*1 Total of point and prepaid card balances
*2 Total of active credit cards and prepaid cards issued
FY2019.3 FY2022.3
01: Expansion of Commerce Gross Merchandise Value

Gross merchandise Fiscal year ended ¥250.0 ¥400.0

Commerce value March 31, 2019 billion
Fiscal year ending
March 31, 2022 billion
The KDDI Group’s commerce operations, including the “au smartphone or other telecommunications charges; on a
Wowma!” online shopping site and the “Shop Channel,” a TV monthly basis under the “au STAR” benefits program, which
shopping service, generate annual gross merchandise value encourages the long-term use of au services; when they set-
(GMV) of around ¥250 billion, as of the fiscal year ended tle “au Denki,” gas or other utility bills; or when they pay for
March 31, 2019. Plans call for expanding GMV to about financial products. Accumulated points (¥1 per point) can be
¥400 billion by the fiscal year ending March 31, 2022. used to pay for au services or daily shopping.
To achieve this target, we are improving the lineup of life The balance of au WALLET points and the balance on au
design merchandise to align more closely with the lifestyles of WALLET prepaid cards currently totals over ¥100 billion. We
customers and strengthening collaborative efforts related to aim to expand the “au Economic Zone” by creating a self-rein-
the au WALLET point program. forcing cycle within the “au Economic Zone” by, for example,
The au WALLET point program awards points to custom- encouraging customers to spend their points at “au Wowma!”
ers in a variety of ways, such as when they pay au

02: Growth in “au Denki” subscriptions
“au Denki” Fiscal year ended Over 2.0 3.4 million
Energy
subscriptions March 31, 2019 million
Fiscal year ending
March 31, 2022 (target)
KDDI began offering “au Denki” in tandem with the deregula- collaboration with the au WALLET point program and aggres-
tion of the retail electric power sector in April 2016. sively promoting bundled sales at retail stores, in the hope
Up to 5% of monthly charges for “au Denki” are converted that customers who use the “au WALLET Credit card” as
into points for au WALLET. This simple and rewarding rate their main card to pay for utilities essential in their daily lives,
plan has been a success, as shown by the number of “au such as telecommunications, electricity and gas bills, will
Denki” subscribers rising above 2 million as of March 31, begin to use it as their main credit card for payments for
2019. KDDI aims to further expand revenue by increasing the other items.
number of subscribers to 3.4 million by March 31, 2022. As a result of these initiatives, the ratio of “au Denki” sub-
Moreover, we are concentrating our efforts on increasing scribers that use “au WALLET Credit card” as their means of
bundled sales with “au WALLET Credit card” while expanding payment has steadily increased. Compared with customers
the customer base for “au Denki.” who do not subscribe to “au Denki,” these customers tend to
As a latecomer to the credit card industry, KDDI needs to charge more on their credit cards every month, and this has
find a way to improve the stature of “au WALLET Credit the side effect of expanding credit card transaction volume.
card.” In this context, KDDI is focusing on enhancing
Example of monthly usage

1 The first example features a customer who has
been an au subscriber for less than four years
and who has signed up for “au STAR.” The
total includes 40 points for a flat-rate plan cost-
ing ¥4,980 (tax not included) and 52 points for
a ¥5,378 (tax included) payment for au services
using the “au WALLET Credit Card.”
2 The second example uses bonus point stores,
where every ¥200 spent earns 3 points.
03: Growth in the Transaction Volume of Settlement and Loan

Transaction Volume of Fiscal year ended ¥4.4 Fiscal year ending ¥6.0 trillion

Finance Settlement and loan March 31, 2019 trillion March 31, 2022 (target)
KDDI is focusing efforts on the settlement and financial business believe KDDI has a substantial advantage entering this
as a profit growth driver for the life design domain. In the fiscal domain, thanks to its large base of more than 20 million
year ended March 31, 2019, the transaction volume of settle- smartphone customers.
ment and loan reached ¥4.4 trillion, and we aim to expand this to KDDI aims to expand overall profits in the settlement and
¥6.0 trillion by the fiscal year ending March 31, 2022. financial services business by latching its diverse settlement
As the first step toward attaining this target, au Financial operations, including high-margin carrier billing, as well as
Holdings Corporation started business in April 2019, putting au WALLET and au PAY services, onto growth in these new
into place a structure for accelerating decision making in the domains.
financial services business and strengthening ties with Group
companies in financial services. Provision of “smartphone-centric” settlements and
financial services
Under this new structure, we will comprehensively provide
a “smartphone-centric” settlement and financial services
experience, where customers’ smartphones become a gate-
*1
way for various financial services, such as savings, payments,
investments, loans, and insurance.
Moreover, KDDI is promoting collaboration between banks *2
and securities firms through capital participation in kabu.com

Securities Co., Ltd. and Jibun Bank Corporation in June
*1 The planned change in the company name of Jibun Bank is contingent upon
2019. In the domestic consumer finance market, instead of receiving approval at the general meeting of shareholders for a revision of the
traditional financial institutions, financial groups are more likely articles of incorporation, as well as approval from the relevant authorities.
to see strong growth if they aim to expand business using *2 We will steadily change the names of each company to match our au brand,
subject to obtaining approval from the relevant authorities. Logos of au
Fintech, owing to the proliferation of smartphone-based ser- Insurance Company and kabu.com Securities are currently under discus-
vices and a generational change in the customer base. We sion, and have not been determined.

Business Services Segment:
New Growth Opportunities and Solutions

KDDI plans to commence commercial 5G services in 2020. In line with “creating
innovation toward the 5G era,” one of our business strategies under the new
medium-term management plan, we will pursue 5G inno-
vation in diverse fields with partner companies.
Through this innovation, KDDI aims to fur-
ther improve corporate value by support-
ing regional revitalization and the
resolution of social issues, bringing
novel business models to society.
5G Rollout Plan
3.7GHz band 100MHz x 2 ranges + 28GHz band 400MHz = total 600MHz
(2) KDDI (5) KDDI

3.7GHz band (1) NTT Docomo Okinawa Cellular (3) Rakuten Mobile (4) Softbank Okinawa Cellular (6) NTT Docomo
4.5GHz band 100MHz Telephone 100MHz 100MHz Telephone 100MHz
100MHz 100MHz
3.6GHz 3.7GHz 3.8GHz 3.9GHz 4.0GHz 4.1GHz 4.5GHz 4.6GHz
(3) KDDI
(1) Rakuten Mobile (2) NTT Docomo Okinawa Cellular (4) Softbank
28GHz band
400MHz 400MHz Telephone 400MHz
400MHz
27.0GHz 27.4GHz 27.8GHz 28.2GHz 29.1GHz 29.5GHz

Source:Data prepared by KDDI based on materials from the Ministry of Internal Affairs and Communications
http://www.soumu.go.jp/main_content/000613734.pdf
4G 5G
Hybrid Network
In April 2019, KDDI received its allocation of the 5G frequency. bandwidth that KDDI has ever been allocated. These frequen-
KDDI plans to launch trials of 5G services in limited regions cies are in close proximity to the 5G bandwidth already being
from September 2019, before releasing 5G-compatible introduced in the United States and South Korea, and these
smartphones by the end of March 2020. While expanding its frequency bands are likely to be used around the world for 5G
5G coverage areas, KDDI will deploy a hybrid network based services. Having secured this desirable frequency, KDDI will
on its existing robust 4G network in order to ensure be able to strengthen its competitiveness for the 5G era, and
high-speed, high-quality services. anticipates a reduction in network development costs and
The frequency allocated to KDDI totals 600MHz, including handset procurement costs. KDDI will also make capital out-
two 100MHz ranges in the 3.7GHz band, and one 400MHz lays efficiently while sharing facilities with other companies.
range in the 28GHz band. This represents the most

for Social Issues with 5G
Innovations with 5G
Free view point image

Smart factories Autonomous driving Remote operations Remote medical care
stadium views
Partner companies
5G/IoT
Telecommunications Open innovation Platforms
platform
5G technology is likely to find applications in a broad range of solutions to their problems. To date, it has helped over 200
fields, thanks to its high capacity, low latency, and massive companies. KDDI DIGITAL GATE’s greatest advantage is its
connectivity. KDDI is keen to pursue 5G innovation through ability to solve customer issues with the latest technologies
tie-ups with partners in diverse fields that range far beyond and to rapidly prototype ideas with agile development. By
the telecommunications industry. KDDI DIGITAL GATE, which collaborating with startups, major enterprises and local gov-
opened as a center for open innovation in September 2018, ernment entities, we are expanding the scope of business
works with customers launching IoT businesses to devise development for the coming 5G/IoT era.
Accelerating the use of 5G with partners

Japanese sake Mt. Fuji trailhead ICT installation at Inland
Mackerel restoration project
brewery project visualization project Abalone Farms
Aizuwakamatsu City, Gotenba City, Hamamatsu City,

Obama City, Fukui Prefecture
Fukushima Prefecture Shizuoka Prefecture Shizuoka Prefecture
KDDI entered into agreements for regional collaboration on 5G usage with 63 local governments in Japan
in a bid to solve regional issues and realize regional revitalization.
Established ¥3.0 billion KDDI Regional Initiatives Fund in April 2019

Contributed to SDGs by promoting digital transformation using 5G with regional venture firms
Accelerated deployment of 5G with venture firms
Over the past few years, international movements to address In April 2019, KDDI established the KDDI Regional Initiatives
social issues, like the United Nations SDGs, which identify Fund, a regional revitalization fund. The Fund plans to invest
global issues, have gained momentum. Companies are ¥3.0 billion over the next five years in local companies and
increasingly expected to contribute to the sustained growth venture firms that are revitalizing regions by introducing inno-
of society through their business activities. vative technologies and business models. KDDI is strongly
KDDI has identified utilizing 5G to promote regional revital- pushing ahead with regional revitalization by supporting busi-
ization as an initiative in line with KDDI’s target SDGs outlined nesses through the KDDI Regional Initiatives Fund and by
in its new medium-term management plan. deploying KDDI resources, technologies, and expertise.
KDDI has long striven to solve social issues by collaborating Through the use of 5G technology, KDDI aims to be “a
with regional governments and local companies all over Japan. company that contributes to the sustained growth of society”
With the 5G era on the horizon, KDDI is promoting innovation while growing alongside the regional communities it serves.
through collaboration with partners and has formed similar ties
with 63 local governments across the nation.

Business Services Segment:
Business Expansion through Collaboration

As IoT and AI technologies grow in leaps and bounds, communications connecting
these technologies will become embedded throughout society. Beginning with
infrastructure, a multiplicity of things will produce data, and traditional busi-
ness models will change dramatically as a result of this digital transforma-
tion. During this period of change, KDDI is working with its
partners to build business platforms to help its
customers enable a digital transformation.
With our customers, we aim to sustain
growth by creating recurring busi-
ness centered on IoT
as a driver of business
growth.
Business Expansion Based on the Recurring

Business Model
KDDI interacts with corporate customers facing an endless customers accumulate through ubiquitous IoT, which connects
variety of issues. In our Business Services Segment, we everything together, KDDI’s relationship with its customers is
focus on “operational contributions,” that is, discovering the changing, and its engagement is deepening. As a result, our
true nature of a customer’s business issue and proposing a business model will evolve from the current one based on flat-
solution. This approach allows us to work closely with cus- rate subscriptions for the same services to a recurring business
tomers while sustaining growth in revenue and profit. In 2018, model where we propose ideas and provide value to customers
KDDI received first place in the J.D. Power 2018 Japan in a never-ending cycle of value creation. KDDI aims to expand
Business IP Phone & Direct Line Phone Service Satisfaction new business models based on recurring revenue as a driver of
Study*1 for a sixth consecutive year, as well as first place in growth. With recurring business driving growth, KDDI aims to
the J.D. Power 2018 Japan Business Mobile Phone and PHS increase operating revenue in the new Business Services
Service Satisfaction Study (large and mid-sized corporation Segment to ¥1 trillion, and increase the total number of IoT con-
market segment)*2 for a third straight year. nections to 18 million, by the fiscal year ending March 31, 2022.
KDDI provides a diverse range of business platforms and by *1 J.D. Power 2018 Japan Business IP Phone & Direct Line Phone Service
Satisfaction Study
linking them with the platforms of its partners aims to create new
*2 J.D. Power 2018 Japan Business Mobile Phone and PHS Service
B2B and B2C businesses. By utilizing the Big Data that Satisfaction Study
Enhancing initiatives in new growth fields, centered on IoT businesses Operating revenue of
new business segment
Creation of Recurring Business
Target ¥ 1trillion
Individual to C Individual
Corporate Customer Customers ¥886.4 billion

Success
Co-creating business
Partner companies
KDDI Platforms
Platforms
IoT connections FY2019.3 8 million FY2022.3 (Target) 18 million

FY2019.3 FY2022.3
Providing IoT business overseas, from communications connectivity to service development and data analysis

with Partners
Supporting customer businesses with global partners
“Connected” cars Support throughout IoT connect to everything
the world
KDDI IoT World Architecture
TOYOTA Smart Center
Applications and Global Communications Platform

Global Communications Platform development
Factory/Building facilities/Home electronics /

Connected service Construction machinery, etc.
KDDI has been cooperating with Toyota Motor Corporation and offers a connection to the optimal network available,
since 2016 on an initiative to build a global communications even when roaming, and provides data collection and analy-
platform that provides high-quality and reliable communica- sis services in collaboration with Hitachi, Ltd. and Toshiba
tions services that link cloud computing services with the Corporation. In addition, it provides support for compliance
automotive equipment necessary for connected cars. After with relevant laws and regulations as well as device
applying and developing this global communications plat- authentication.
form, KDDI began offering trials of the KDDI IoT World Moreover, through our work with subsidiary SORACOM,
Architecture platform in May 2019. Inc., we are enabling the use of IoT applications in more than
KDDI IoT World Architecture helps customers in various 120 countries and regions. With this strength,KDDI aims to
industries deploy IoT on a global basis. The platform identifies further expand the global business.
What is SORACOM?
KDDI turned SORACOM, Inc., a leading company in the
IoT domain, into a consolidated subsidiary in August 2017.
Building mobile core networks in the cloud
The SORACOM communications platform fuses together
with Amazon Web Service (AWS)
communications and cloud computing services, providing 15,000 businesses already use IoT services
reasonably priced and secure communications services
that are ideal for IoT applications. Customers can control
and manage all of their connections and devices from a
web-based console or API on the SORACOM platform.
Moreover, the platform facilitates the rapid deployment and
operation of IoT systems through the utilization of various
services, including links to cloud services, closed group
connectivity, device management and remote monitoring.
After launching domestic services in September 2015,
SORACOM rolled out services in the United States and
Europe. The service is now accessible in more than 130
• Realize cutting-edge IoT services with the latest cloud technologies.
countries and regions, with over 15,000 subscribers to the
Linking to the KDDI IoT World Architecture helps expand IoT cover-
SORACOM platform worldwide.
The combination of KDDI’s IoT business platform and age area for businesses to more than 130 countries and regions.
SORACOM’s platform has been a strong catalyst for building
Creating value in new business domains by
out domestic and global IoT platforms, and the IoT-related
acquiring new capabilities
knowledge that KDDI has gained will be deployed alongside
customer platforms to create new IoT businesses.

KDDI’s Sustainability
KDDI discloses in detail its initiatives to address six material sustainability issues
in the Sustainability Report. The following is an explanation of issues related to
governance, the environment measure, human rights, and human resources.
Minoru Tanaka
General Administration Division
Executive Officer of Sustainability
“Achieving a truly connected society” is the ultimate goal of Around the world, movements to address social issues
the KDDI Group Mission Statement. KDDI engages in sus- have gained momentum, as demonstrated by the Paris
tainability activities as a part of its management strategy in Agreement, an international framework to address climate
order to help solve social issues and encourage the sustained change, signed at COP21; the Task Force on Climate-related
growth of society. Financial Disclosures (TCFD); and the United Nations’
The foundation of KDDI’s sustainability activities is the KDDI Sustainable Development Goals (SDGs) to solve international
Group Philosophy, which has informed our code of conduct issues. We created KDDI’s Target SDGs to steadily advance
and the shared thinking of managers and employees since sustainability activities for the next three years under the new
our founding. These activities are also a part of ongoing medium-term management plan (FY2020.3-FY2022.3). We
efforts to strengthen corporate governance to ensure trans- set targets that are tied to business strategies, encompassing
parency and fairness. Furthermore, we strive to engage in telecommunications, global business, regional revitalization,
dialogue with diverse stakeholders that support our business, education, and finance, as well as to corporate activities,
such as customers, business partners, shareholders, local including developing human resources, supporting women’s
communities, and government agencies. While creating advancement in the workplace, respecting human rights, pro-
shared value with our stakeholders, we are committed to moting diversity and inclusion, and conserving the environ-
addressing the six Material Sustainability Issues. ment. As we strive to reach these targets, the entire company
will continue working together over the medium to long term
to provide solutions to social issues.
KDDI’s 6 Material Sustainability Issues
Safer and more resilient connected world
Cyber security and privacy protection
S: Society
Fulfilled life brought through ICTs
Rewarding workplaces for diverse talents
Respect for human rights and fairness in business

G: Governance
An energy-efficient, circular economy

E: Environment
Please refer to Sustainability Report 2018 for more detailed information about KDDI’s sustainability not included in this report.
https://www.kddi.com/english/corporate/csr/report/2018/

Governance Human Rights
By proactively adhering to Corporate Governance Code As part of the ICT industry, we face many potential
and practicing the KDDI Group Philosophy, the founda- human rights issues, including rights to privacy and
tion of its corporate activities, KDDI endeavors to freedom of expression as well as requests from govern-
strengthen corporate governance. We believe in the ment authorities to disclose customer data for legiti-
importance of strengthening corporate governance mate purposes. We will continue our efforts to identify
across the entire KDDI group, including subsidiaries, and address human rights issues in our business activi-
and we are building a structure for sharing know-how ties through ongoing dialogue with our stakeholders,
and proactively supporting KDDI group companies in while furthering understanding among employees of the
this regard. KDDI directly holds meetings with institu- KDDI Action Guidelines and the KDDI Group Human
tional investors on the topics of governance and sus- Rights Policy.
tainability, in addition to events directed at individual
investors, as a part of its proactive approach to
communications with stakeholders.
Environmental Measures Human Resources
Movements to address environmental issues have As the productive population declines in Japan, it is
accelerated, as demonstrated by the Paris Agreement imperative that companies provide attractive work envi-
and the establishment of the SDGs and TCFD. Around ronments that enable diverse work styles so that
the world, initiatives are under way to realize a society employees can use their various skills to the fullest, with
with zero CO2 emissions. In Japan, where renewable the ultimate aim of sustaining their growth as businesses
energy still has room to expand, specific action plans and contributing to society. KDDI will continue to pro-
are urgently needed for its promotion. Through our core mote respect for diversity—in the context of women,
ICT business and other information communications nationality, LGBT*2 orientation, disability, and age/gener-
operations, we contribute to improvements in work effi- ation—and work to accommodate various personalities
ciency and reductions in the movement of people, help- and abilities in its organization. In April 2019, KDDI
ing to reduce CO2 in society and reign in climate LEARNING CORPORATION was established as a wholly
change. However, these benefits are countered by the owned subsidiary to take charge of human resource
rather large environmental impact caused by telecom- development for employees of the KDDI Group. While
munications equipment. In 2017, ahead of other tele- supporting the growth of KDDI Group employees, pro-
communications carriers in Japan, KDDI formulated the moting the exchange of human resources, and creating
KDDI GREEN PLAN 2017-2030 with goals for reducing synergies in Group operations, KDDI LEARNING
its total volume*1 of CO2 emissions through the use of CORPORATION plans to offer educational services for its
energy-saving telecommunications equipment and stakeholders that draw on KDDI’s accumulated experi-
renewable energy. Putting these plans into action, we ence and knowledge in human resource development.
are concentrating on initiatives that are even more envi- Its aim is to contribute to broader society by helping people
ronmentally friendly than before. and companies grow. In April 2018, KDDI announced the
KDDI Group Declaration of Health-Focused Management
in a message from the President, and then created the
Work Style Reform & Health Management Department in
January 2019 as an organization focusing on health
management. By promoting health management, we
aim to establish a “health first” culture that fosters
improvements in employee vitality and productivity.
*1 Targets a 7% reduction in CO2 emissions for KDDI on a non-consolidated basis (Japan) by the fiscal year ending March 31, 2031, compared with levels in
the fiscal year ended March 31, 2014.
*2 LGBT stands for lesbian, gay, bisexual and transgender. Gender minorities include other people with identities other than LGBT, but for the sake of convenience
in this report, LGBT refers to all gender minorities.

KDDI’s Target SDGs

Medium-Term Management Plan (FY2020.3-FY2022.3)
KDDI’s Target SDGs
Social Issues to Be Solved through Business

Comparable
Sustainability Targets (FY2022.3)
SDGs
• 4G LTE population coverage over 99.9%

Building a safe and resilient infor-
• Provide 5G commercial services in all prefectures
Telecommunications mation and telecommunications-
• Reinforce communication stations against flooding and
based society
earthquakes, enhance resiliency of routes
• Reach 70 million mobile connections*1 in emerging coun-

Promoting economic develop-
tries where KDDI has a communications business
Global Business ment in countries with inade-
presence
quate infrastructure
• Total of 6 ICT projects to eliminate digital divides
Regional Building communities where • Total of over 60 initiatives to co-create solutions for issues
Revitalization everyone can prosper with regions using IoT / ICT
• Enroll about 130,000 students in foreign-language edu-

cation, create highly efficient educational environment
Training the next-generation of
Education using advanced technologies, such as adaptive learning*2
human resources
• ICT education support in emerging countries, introduce
English and PC classrooms at 11 schools in Cambodia
Providing financial services any- • Settlements / financial service transactions totaling ¥6.0
Finance
one can easily use trillion
Partnership Contribute to solutions for social issues in partnership with stakeholders
*1 Activated SIM cards (“Mobile connections, including licensed cellular IoT” in GSMA)
*2 Adaptive planning: The provision of study materials and learning methods optimized for each individual, based on each student’s level of understanding and progress.
Topics 01
Telecommunications
First experiment in Japan using 5G to remotely monitor autonomous driving cars
Business
In February 2019, KDDI conducted the first experiment in Japan using 5G to remotely
monitor autonomous driving cars on public roads.
Numerous social issues have emerged as a result of increasing numbers of elderly drivers
and others with limited transportation options after relinquishing their driver’s licenses.
Looking to the future, autonomous driving car technology and ICT show promise as trans-
portation solutions for people who face hardship in shopping, as well as for alleviating short-
ages of bus and taxi drivers, while also stimulating tourism and the automobile industry.

Social Issues to Be Solved through
Corporate Activities Comparable
Sustainability Targets (FY2022.3)
SDGs
Enhancing expertise and

Human Resource
providing autonomous career
Development
development
Support for
Realizing workplaces where • Promote 200 women to line manager positions
Women’s
diversity is respected (target for FY2021.3)
Advancement
• Update foundation for facilitating the employment of
senior citizens as a leading company (target for
FY2022.3)
• Reduce CO2 emissions by 7% compared with FY2014.3
Respect for
level at KDDI (domestic non-consolidated basis)
Human Rights, Realizing diverse work styles
(target for FY2031.3)
Diversity & Inclusion
Environmental Contributing to a sustainable

Conservation global environment
Partnership Contribute to solutions for social issues in partnership with stakeholders
Topics 02
Human Resource Establishment of KDDI LEARNING CORPORATION for corporate

Development human resource development
In April 2019, KDDI LEARNING CORPORATION was established as a wholly owned sub-
sidiary to help train human resources for the KDDI Group. We are currently building training
facilities that can accommodate overnight stays, while also facilitating various events, as
well as the planning and implementation of employee training for Group companies. Plans
call for opening the facility in April 2020.
We aim to support the growth of KDDI Group employees, facilitate the exchange of
human resources, and create synergies among Group businesses. At the same time, we
are planning to offer services to stakeholders that take advantage of the experiences and
know-how gained in human resource development for KDDI Group employees. KDDI aims
to contribute to society at large through support for the growth of people and companies.

Executive Members
(As of June 19, 2019)
Directors
Takashi Tanaka Hirofumi Morozumi Makoto Takahashi

Chairman, Representative Director Vice Chairman, Representative Director President, Representative Director
Number of the Company’s shares held: 62,500 Number of the Company’s shares held: 28,800 Number of the Company’s shares held: 27,300
Feb. 1957 Born May 1956 Born Oct. 1961 Born

Apr. 2003 Executive Officer Jun. 1995 Director Apr. 2003 Executive Officer
Jun. 2007 Managing Executive Officer, Director Jun. 2001 Executive Officer Jun. 2007 Managing Executive Officer, Director
Jun. 2010 Senior Managing Executive Officer, Apr. 2003 Managing Executive Officer Jun. 2010 Senior Managing Executive Officer,
Representative Director Jun. 2003 Managing Executive Officer, Director Representative Director
Dec. 2010 President, Representative Director Jun. 2007 Senior Managing Executive Officer, Director Jun. 2016 Executive Vice President, Representative Director
Apr. 2018 Chairman, Representative Director Jun. 2010 Executive Vice President, Representative Director Apr. 2018 President, Representative Director
(Current position) Apr. 2018 Vice Chairman, Representative Director (Current position)
(Current position) Apr. 2019 Executive Director, Corporate and Marketing
Communications (Current position)
Yoshiaki Uchida Takashi Shoji Shinichi Muramoto

Executive Vice President, Representative Director Senior Managing Executive Officer, Director Senior Managing Executive Officer, Director
Sept. 1956 Born Sept. 1958 Born Mar. 1960 Born

Apr. 2013 Executive Officer Oct. 2010 Executive Officer Oct. 2010 Executive Officer
Apr. 2014 Managing Executive Officer Apr. 2014 Managing Executive Officer Apr. 2016 Managing Executive Officer
Jun. 2014 Managing Executive Officer, Director Jun. 2016 Managing Executive Officer, Director Jun. 2016 Managing Executive Officer, Director
Apr. 2016 Executive Director, Technology Sector Jun. 2018 Senior Managing Executive Officer, Director Apr. 2018 Executive Director, Corporate Sector
(Current position) (Current position) (Current position)
Jun. 2016 Senior Managing Executive Officer, Director Apr. 2019 Executive Director, Consumer Business, Jun. 2018 Senior Managing Executive Officer, Director
Jun. 2018 Executive Vice President, Representative Global Consumer Business, and Product & (Current position)
Director (Current position) Customer Service Sector (Current position)
Keiichi Mori Kei Morita Toshitake Amamiya

Senior Managing Executive Officer, Director Managing Executive Officer, Director Managing Executive Officer, Director
Feb. 1960 Born Nov. 1961 Born Jun. 1960 Born

Oct. 2014 Executive Officer Apr. 2015 Executive Officer Apr. 2012 Executive Officer
Apr. 2017 Managing Executive Officer Apr. 2017 General Manager, Life Design Business Apr. 2019 Managing Executive Officer
Jun. 2017 Managing Executive Officer, Director Sector (Current position) Deputy Executive Director, Consumer
Apr. 2019 Executive Director, Solution Business Apr. 2018 Managing Executive Officer Business Sector and General Manager,
Sector (Current position) Jun. 2018 Managing Executive Officer, Director Consumer Business Strategy Division
Jun. 2019 Senior Managing Executive Officer, Director (Current position) (Current position)
(Current position) Jun. 2019 Managing Executive Officer, Director
(Current position)

Goro Yamaguchi  Keiji Yamamoto  Yoshiaki Nemoto 
Outside Director Outside Director Outside Director, Independent Director
Number of the Company’s shares held: 4,500 Number of the Company’s shares held: 0 Number of the Company’s shares held: 1,500
Jan. 1956 Born Mar. 1961 Born Dec. 1945 Born

Jun. 2009 Director and Managing Executive Officer of Apr. 2016 Executive General Manager of TOYOTA Apr. 1995 Professor, Graduate School of Information
Kyocera Corporation MOTOR CORPORATION Sciences, Tohoku University
Apr. 2013 President and Representative Director, Apr. 2017 Managing Officer of TOYOTA MOTOR Apr. 2000 Head of Information Synergy Center, Tohoku
President and Executive Officer of Kyocera CORPORATION University
Corporation Jun. 2019 Outside Director of KDDI (Current position) Apr. 2004 Councillor of Educational Research Board,
Apr. 2017 Chairman of the Board and Representative Jul. 2019 Operating Officer, President, Connected Tohoku University
Director of Kyocera Corporation Company of TOYOTA MOTOR Apr. 2008 Director, Tohoku University
(Current position) CORPORATION (Current position) Apr. 2012 Director General of Resilient ICT Research
Jun. 2017 Outside Director of KDDI (Current position) Center, the National Institute of Information
and Communications Technology (NICT)
Jun. 2016 Outside Director of KDDI (Current position)
Shigeo Ohyagi  Riyo Kano 

Outside Director, Independent Director Outside Director, Independent Director
Number of the Company’s shares held: 700 Number of the Company’s shares held: 0
May 1947 Born May 1966 Born

Jun. 2005 Executive Officer, Member of the Board of Apr. 1993 Registered as attorney at law
Teijin Limited Jan. 2005 Partner, Tanabe & Partners (Current position)
Jun. 2006 Senior Executive Officer, Member of the Board Aug. 2014 Member of Commission on Policy for
of Teijin Limited Persons with Disabilities of Cabinet Office
Jun. 2008 President and CEO, Representative Director of (Current position)
the Board of Teijin Limited June 2015 Outside Director of The Yamanashi Chuo
Apr. 2014 Chairman, Member of the Board of Teijin Limited
Bank, Ltd. (Current position)
Jun. 2014 Outside Audit & Supervisory Board Member
of JFE Holdings, Inc. (Current position) Feb. 2017 Member of Examination Committee for
Apr. 2018 Senior Advisor, Member of the Board of Relief Assistance of Ministry of Health,
TEIJIN LIMITED Labour and Welfare (Current position)
Jun. 2018 Senior Advisor of TEIJIN LIMITED Jun. 2019 Outside Director of KDDI (Current position)
(Current position)
Outside Director of KDDI (Current position)
Member of the Board of Directors (Outside),
Member of the Audit & Supervisory
Committee of MUFG Bank, Ltd.
(Current position)
Audit & Supervisory Board Members
Koichi Ishizu Akira Yamashita  Yasuhide Yamamoto

Full-time Audit & Supervisory Board Member Full-time Audit & Supervisory Board Member Full-time Audit & Supervisory Board Member
Number of the Company’s shares held: 12,900 Number of the Company’s shares held: 600 Number of the Company’s shares held: 14,000
Kakuji Takano  Nobuaki Katoh 

Audit & Supervisory Board Member Audit & Supervisory Board Member  Outside directors and Audit & Supervisory Board members
Number of the Company’s shares held: 2,100 Number of the Company’s shares held: 0  Independent directors and Audit & Supervisory Board
members
Composition of Directors and Advisory Committees

Nomination Remuneration
Newly Representative Execution of
Name Independent Outside Advisory Advisory Other
appointed rights business
Committee Committee
Takashi Tanaka P P P P Chairman of Board of Directors
Hirofumi Morozumi P P
Makoto Takahashi P P P P
Yoshiaki Uchida P P
Takashi Shoji P
Shinichi Muramoto P
Keiichi Mori P
Kei Morita P
Toshitake Amamiya P P
Goro Yamaguchi P P P
Keiji Yamamoto P P P P
Yoshiaki Nemoto P P P P
Shigeo Ohyagi P P P P
Riyo Kano P P P P P
* During the fiscal year ended March 31, 2019, the Nomination Advisory Committee met on three occasions and the Remuneration Advisory Committee met on two occasions.

Corporate Governance
Basic Views on Corporate Governance, Composition of Board of Directors, Corporate Governance Framework
Basic Views on Corporate Governance We recognize reinforcing corporate governance as important

to achieving sustainable growth and increased corporate value
As a telecommunications operator that provides social infra- over the medium to long term. Accordingly, we are in accor-
structure, the Company has the important social mission of dance with the tenets of the “Corporate Governance Code”
providing stable communications services on an ongoing defined by the financial instruments exchanges. While maintain-
basis, 24 hours a day and 365 days a year, regardless of ing transparency and fairness, we endeavor to enhance our
conditions. Furthermore, as a telecommunications operator, structures for ensuring timely and decisive decision-making.
our business derives from utilizing radio waves—an important In addition to our corporate credo and mission statement, we
asset shared by all citizens. Accordingly, we recognize that have formulated the “KDDI Group Philosophy,” which defines
we have the social responsibility to address the issues society perspectives, values, and a code of conduct that officers and
faces and seek to resolve them through telecommunications. employees should share. We conduct activities to promote
Attaining sustainable growth and increased corporate value awareness of this philosophy throughout the Company.
over the medium to long term is essential to achieving this By proactively adhering to Japan’s Corporate Governance
social mission and social responsibility. Furthermore, we strive Code and practicing the KDDI Group Philosophy, which we
to engage in dialogue with all our stakeholders, including cus- consider inseparable from the standpoint of corporate man-
tomers, shareholders, business partners, employees, and local agement, we will endeavor to enhance corporate governance
communities, and work in cooperation to proactively address throughout the KDDI Group, including its subsidiaries, to
societal issues. In this manner, we aim to contribute to the achieve sustainable growth and increased corporate value
development of a safe, secure, and truly connected society. over the medium to long term.
Composition of Board of Directors
Execution of Business: 9 persons
Chair
Independent directors: 6 persons
Internal directors
Outside directors
Audit & Supervisory Board members

Non-execution of Business: 10 persons
Changes in the Corporate Governance Framework

(Year)
2000— 2005— 2010— 2015— 2019—
President Yusai Okuyama From June 2001 Tadashi Onodera From December 2010 Takashi Tanaka From April 2018 Makoto Takahashi
Number of 53
13 12 11 10 13 12 13 14
directors *2
Directors
Outside
2 3 4 3 2 3 4 5
directors
Assurance of Number of
1
diversity*1 female directors
Audit & Number of Audit
Supervisory & Supervisory 5 4 5
Board members Board members
Number of
independent 2 1 3 4 5 6
Ensure directors*3
independence
Advisory
Nomination Advisory Committee established in 2015
Committee
Introduction of a stock option system in 2002
Remuneration Advisory Committee established in 2011
Introduction of a performance-based bonus system for executives in 2011
Transparency in executive
remuneration Introduction of
Revision of stock
stock compensa-
compensation plan for
tion plan for
directors in 2018
directors in 2015
The KDDI Group Philosophy Enactment in October 2000 Revised, continued promotion activities from 2013
*1 Number of people at the conclusion of each Annual General Meeting of Shareholders
*2 Number of people at the conclusion of an Extraordinary Meeting of Shareholders convened in October 2000
*3 Independent officers pursuant to Rule 436-2 of the Securities Listing Regulations of Tokyo Stock Exchange, Inc.

Corporate Governance Framework (As of June 19, 2019)
General Meeting of Shareholders

Election / Election / Dismissal Report Election /
Dismissal Dismissal
Judgment on appropriateness
of accounting audit
1 Board of Directors 4 Audit & Supervisory Board
Directors (14) Audit Audit & Supervisory Accounting Auditor
(Outside Directors (5)) Board Members (5)
Report
(Outside Audit & Supervisory Board
Deliberate / Report on Election/ Members (3))
Consult Advice important matters Dismissal/ Report
Supervision Audit & Supervisory Board
Members’ Office
2 Advisory Report
Committees Representative Director
Corporate Risk Management
Nomination Division
Advisory 5 Internal Audit
Committee
Audit Instruct actions
Remuneration Internal Control Division

3 Corporate Management
Advisory Committee Audit
Committee Full-Time Directors Internal Audit Division
Report
Deliberate / Report on
Election / Dismissal Instruct / Supervision Report
important matters
6 Internal Committees
Financial information
Executive Officers (21)* Disclosure Committee
(Business execution) Instruct actions
Information Security Committee

* Excludes the 6 directors who
double as executive officers
Sustainability Committee
Business Ethics Committee

Report
Propose / Deliberate Instruct actions
Business Divisions / Group Companies
1 Board of Directors 4 Audit & Supervisory Board /

At KDDI, Board of Directors resolutions determine: Audit & Supervisory Board Members
• Matters prescribed by the Companies Act or other laws Audit & Supervisory Board members conduct their audit work
and regulations, based on audit policies and plans established by the Audit &
• Matters prescribed by the Articles of Incorporation, Supervisory Board and carry out their work by attending
• Matters delegated for resolution at the general shareholder meetings of the Board of Directors, the Corporate
meeting, and Management Committee, and other major internal meetings.
• Other important management-related matters. The Audit & Supervisory Board receives reports on the audit
For other important management-related matters, their methods of Audit & Supervisory Board members and their
importance is determined according to such factors as the results, discusses them, and offers its opinions, as appropri-
scale of money, business, assets, and investment involved. ate, at meetings of the Board of Directors.
These decision standards for importance are not perma-
5 Internal Audit
nent. Rather, they are reviewed appropriately in accordance
KDDI conducts periodic internal audits targeting all the oper-
with changes in the legal system and the environment in
ations of the Group, and regularly reviews the appropriate-
which the Company operates, with the aim of ensuring man-
ness and effectiveness of internal controls.
agement speed and effectiveness.
The results of these internal audits are reported to the
2 Advisory Committees president and the Audit & Supervisory Board members, along
KDDI has formed a Nomination Advisory Committee and a with recommendations for improvement and correction of any
Remuneration Advisory Committee to discuss with and pro- problems.
vide advice to the Board of Directors to maintain both trans-
6 Internal Committees
parency and fairness in the system of nomination of executive
KDDI has put in place the KDDI Group Business Ethics
candidates and Audit & Supervisory Board member candi-
Committee (P. 41) to deliberate and make decisions on com-
dates and the level of remuneration for executives.
pliance-related items for the Group. We have also established
The Chairman, Vice Chairman and half or more of the
a Disclosure Committee (P. 43) to gather financial results
members of these committees are outside directors.
information to be disclosed at fiscal period-ends, as well as
3 Corporate Management Committee an Information Security Committee to ensure overall informa-
Comprised of internal directors, executive officers and others, tion security regarding information assets, and a Sustainability
the Corporate Management Committee deliberates and Committee, set up to deliberate on sustainability related mat-
decides on important matters related to business execution ters such as CSR and the environment.
at the Company and its subsidiaries.
Effectiveness evaluation, appointment of outside officers and support
Analysis and Evaluation of the Effectiveness of • While pursuing expansion into different industries and
the Board of Directors fields centered on the telecommunications business, we
will discuss the Company’s social mission and business
Objective of Board of Director Evaluations strategies and what kind of company we want to be
To ensure a correct understanding of the current status of its from various perspectives.
Board of Directors and to work toward continuous improve- •In order to grow the business of Group companies and
ment, KDDI has its Board of Directors conduct regular reinforce corporate governance, we will monitor the
annual self-evaluations. management status and operating structure of subsidiar-
ies in Board of Directors meetings in a timely manner.
Overview of the Evaluation Process
KDDI verifies the effectiveness of its Board of Directors Decision Standards for Independence of
based on an evaluation by the directors and the Audit & Outside Executives
Supervisory Board members. The evaluation is conducted in
questionnaire form, combining a four-grade rating scale with In addition to the independence standards provided by
free space for comments. This supports our efforts to vali- financial instruments exchanges, the Company has formu-
date the effectiveness of our initiatives and uncover any lated its own standards. Specifically, these standards state
areas for improvement from both a quantitative and that people hailing from business partners making up 1% or
qualitative perspective. more of the Company’s consolidated net sales or orders
The evaluation targets the most recent one-year period placed are not independent. Other matters are given individ-
and is conducted regularly on an annual basis. The results ual consideration depending on circumstances.
are reported to the Board of Directors, which then considers
future countermeasures. Support for Outside Directors and Audit &
Supervisory Board Members
Key items for evaluation are as listed below.
• Operation of the Board of Directors (including composi- In addition to notifying outside directors and outside Audit &
tion, documentation and explanations, provision of Supervisory Board members in advance of the schedule and
information, etc.) agenda for meetings of the Board of Directors, proposal
•Management supervision (including conflicts of interest, materials are also distributed prior to the meetings to
risk management, and management of subsidiaries, etc.) encourage understanding of the agenda items and invigo-
• Medium to long-term discussions (consideration for rate discussion at the meetings.
medium-term management planning, monitoring of plan Questions are also accepted in advance and are used to
execution, etc.) enhance explanations on the day of the meeting, in an effort
to provide for deepening more substantial deliberations.
Overview of Evaluation Results Outside of the Board of Directors, in addition to business
Summary strategy and management status, we provide information on
The Company’s Board of Directors was found to be man- research and development, and technology are offered.
aged appropriately and functioning effectively. Regarding business outlines, the heads and general man-
The following two points were found to be rated particu- agers of each business headquarters explain the overall pic-
larly highly. ture and issues in detail, and the management status of
• Meaningful questions and opinions are actively subsidiaries is regularly reported. We also have opportunities
expressed by outside directors and Audit & Supervisory to inspect sites such as social exhibitions of research and
Board with diverse backgrounds, including a manage- development results, telecommunication facilities, and moni-
ment executive, attorney at law, certified public accoun- toring and maintenance centers. In addition, we report twice
tant and expert in information engineering, thereby a year on corporate ethics and risk management activities.
achieving due consideration of each agenda item. In addition, in order for outside directors to maintain their
•In order to fulfill their role as outside directors, the out- independence and strengthen their ability to collect informa-
side directors, Audit & Supervisory Board members, and tion, collaboration with auditors has been strengthened, and
accounting auditors cooperate and share information on regular liaison meetings between outside directors and audi-
company issues, etc. as well as providing information tors have been held. Auditors also explain audit results to
from the company. outside directors.
In addition, in order to strengthen information exchange
Improvements over the Previous Evaluation and information sharing among outside directors, we hold
Themed discussion of the next medium-term management liaison meetings for only outside directors and liaison meet-
plan was held four times in 2018. On each occasion, opin- ings for outside directors and part-time auditors.
ions were vigorously exchanged from various angles, so that Through these efforts, we are deepening our understand-
awareness of issues and in-depth discussion of key strate- ing of KDDI’s business, thereby invigorating discussions on
gies were further enhanced. Thus, the Company’s Board management strategies at the Board of Directors and
confirmed that an issue raised in the previous evaluation, improving the effectiveness of management supervision and
“further expansion of discussion of medium- and long-term monitoring.
business strategies,” had been accomplished. On April 1, 2006, KDDI established the Auditing Office to
support Audit & Supervisory Board members, including out-
Future Issues to be Addressed side members.
We will work toward continued improvement of the following
two key issues, aimed at sustainable growth of corporate value.

Reasons for Appointment as Outside Officers and Principal Activities (FY2019.3)
Name Reason for appointment as an outside director of the Company Principal activities
Mr. Yamaguchi has a wealth of corporate management experience and excellent knowledge cultivated as the presi-
dent and representative director of one of the world’s leading electronic components and equipment manufactur-
Goro Attended 12 of
ers. In the Board of Directors meetings, the Company has received a large number of broad opinions related to
the 12 meetings of
Yamaguchi business administration and operations from him based on a medium- to long-term perspective and has deter-
the Board of Directors
mined that he can continue to contribute to improving the corporate value of the Company. Accordingly, he has
again been appointed as an outside director.
Mr. Yamamoto has excellent knowledge cultivated in IT development and electronics engineering divisions and
Keiji abundant management experience as a management at the one of the world’s leading automobile manufacturers.
The Company has determined that he can contribute to improving the corporate value of the Company by giving —
Yamamoto broad opinions on promoting 5G/IoT strategy, etc. from a medium- to long-term perspective, and for these reasons
he has been selected as an outside director.
Mr. Nemoto has a superior knowledge in information processing, telecommunications and network engineering,
which is directly relevant to the business of the Company, as well as a deep understanding of disaster prevention
that is valuable for the operation of our business. In the Board of Directors meetings, he has offered many expert
Yoshiaki Attended 12 of
opinions from an independent position from the management team regarding operational policy as an information
the 12 meetings of
Nemoto communications operator providing social infrastructure, taking a medium- to long-term perspective. We wish to
the Board of Directors
continue benefitting from his contributions to the enhancement of the Company’s corporate value. Accordingly, he
has again been appointed an outside director. Moreover, with this background, we judge there to be no risk of
a conflict of interest with general shareholders and accordingly he has been appointed as an independent director.
Mr. Ohyagi has a wealth of corporate management experience and excellent knowledge cultivated as the president
and CEO of one of the world’s leading companies in the fields of synthetic fibers, chemical products, medicines and
Shigeo medical treatment, and distribution and retail. The Company determined that he can contribute to improving the cor- Attended 9 of
porate value of the Company by giving broad opinions from a medium- to long-term perspective, especially focusing the 10 meetings
Ohyagi on the field of life design business that the Company will promote in the future, global strategy and M&A. Accordingly, the Board of Directors*
he has been appointed an outside director. Moreover, with this background, we judge there to be no risk of a conflict
of interest with general shareholders and accordingly he has been appointed as an independent director.
Ms. Kano has abundant experience and superior knowledge, cultivated as a partner at a law firm and a committee
member of government committees. The Company has determined that she can contribute to improving the cor-
Riyo porate value of the Company by giving technical opinions related to legal risk management from her experience
—
Kano based on a medium- to long-term perspective independent of the management team, and for these reasons she
has been selected as an outside director. Moreover, with this background we judge there to be no risk of a conflict
of interest with general shareholders and accordingly she has been nominated as independent director.
Name Reason for appointment as an outside Audit & Supervisory Board member of the Company Principal activities
Mr. Yamashita has cultivated abundant experience and knowledge gained from many years of practical experience Attended 12 of the 12
in the public sphere and involvement in the execution of business at various organizations. From the perspective of meetings of the Board of
Akira leveraging this knowledge and experience to monitor general management and to engage in appropriate audit Directors
Yamashita activities, he has been appointed as an Audit & Supervisory Board member. Furthermore, with his background, we Attended 12 of the 12
judge there to be no risk of a conflict of interest with general shareholders and accordingly he has been appointed meetings of the Audit &
as an independent auditor. Supervisory Board
Mr. Takano has abundant experience as a Certified Public Accountant, as the representative of an accountancy
Attended 12 of the 12
firm and as an auditor for other companies, in addition to which he has cultivated extensive experience and knowl-
meetings of the Board of
Kakuji edge in the execution of business at various organizations. From the perspective of leveraging this primarily
Directors
accounting-related knowledge and experience to monitor general management and to engage in appropriate audit
Takano Attended 12 of the 12
activities, he has been appointed as an Audit & Supervisory Board member. Furthermore, with his background, we
meetings of the Audit &
judge there to be no risk of a conflict of interest with general shareholders and accordingly he has been appointed
Supervisory Board
as an independent auditor.
Mr. Katoh has abundant experience as a director of listed companies and has cultivated extensive experience and Attended 10 of the 12
knowledge as an auditor and through execution of business at various organizations. From the perspective of meetings of the Board of
Nobuaki leveraging this knowledge and experience to monitor general management and to engage in appropriate audit Directors
Katoh activities, he has been appointed as an Audit & Supervisory Board member. Furthermore, with his background, we Attended 10 of the 12
judge there to be no risk of a conflict of interest with general shareholders and accordingly he has been appointed meetings of the Audit &
as an independent auditor. Supervisory Board
* Attendance and number of meetings following new appointment as director at the 34th Annual Shareholders Meeting held on June 20, 2018
Policy on Strategic Shareholdings holding by judging the significance and economic rationale.
Which have tenuous significance, we will sell a strategic share-
KDDI believes that participating in tie-ups with a variety of holding as promptly as possible.
companies is essential to providing our customers with The Company calculates the ratio of the contribution by the
increasingly diverse and advanced services. issuing company to the Company’s profits within the most
KDDI possesses strategic shareholdings if such possession recent fiscal year. The economic rationale is verified by com-
will contribute to the sustainable growth of KDDI’s business paring the ratio with valuation of each strategic shareholding
and the mid- long-term increase of corporate value. at the end of the most recent fiscal year, whether the ratio sat-
Every year, the Board of Directors reviews all the pros and isfies the capital cost standard established by the Company.
cons of continuing the possession of each individual strategic

Messages from Outside Directors
Yoshiaki Nemoto Shigeo Ohyagi Riyo Kano

Outside Director and Outside Director and Outside Director and
Independent Director Independent Director Independent Director

Yoshiaki Nemoto Outside Director and Independent Director
The information and communication technologies Since becoming an Outside Director at KDDI in
movement that KDDI is a part of has contributed enor- 2016, I have expressed my opinions and made sug-
mously to the world as an essential element of social gestions at meetings of the Board of Directors, espe-
infrastructure with cutting-edge technologies. The 5th cially regarding the state of R&D and
Generation Mobile Communications System (5G) being telecommunications services, based on my extensive
constructed now is the product of innovative technolo- knowledge and experience in the communications net-
gies, and its use has the potential to substantially work engineering and information processing fields.
change the lifestyles of people everywhere. Against this KDDI has unveiled a new medium-term manage-
backdrop, I believe KDDI and other MNOs have the ment plan with measures to advance the transforma-
responsibility not only to provide services at affordable tion of its services with an eye on changing
rates, but also to support their customers’ lifestyles by communications technologies.
maintaining the reliability of the communication net- As KDDI makes inroads into new fields, as an
works and systems as a part of the fabric of society, Outside Director, I will continue to contribute to improv-
and by providing the information they need, whenever ing the Company’s corporate value.
and wherever they need it.
Shigeo Ohyagi Outside Director and Independent Director
KDDI is expected to accomplish great things as a opinions and ideas about the Company’s initiatives in
leader in the information industry and society for the growth fields, such as life design and global business,
future. The “integration of telecommunications and life as well as its efforts to solve social issues.
design” is one of its initiatives in this regard. I have real- Looking ahead, the expectations for leading compa-
world experience in business areas other than tele- nies and the missions they are being demanded to
communications so I am extremely interested in undertake will only grow larger. I believe KDDI’s mission
improving customer convenience and satisfaction is to work toward genuinely helping solve social issues
by providing physical products and services through in Japan, including an increasingly elderly population,
virtual spaces free from constraints of time and place. regional disparities, and environmental issues.
When the Company was formulating the new medium- As an Outside Director, with this mission in mind,
term management plan, the details of the plan were I will engage in lively debate, while relying on my own
examined carefully from a long-term perspective and experiences and insights, at meetings of the Board
broad scope. As an Outside Director, I offered my of Directors.
Riyo Kano Outside Director and Independent Director
In 1993, when I registered as an attorney, mobile lifeline, with a diverse range of other businesses cen-
phones had just started to take off in Japan. Back tered around this core.
then, I was in charge of a project related to the mobile Amid rapid and significant changes in the environ-
phone business, and I remember the pride I felt being ment and society, I will make every effort to fulfill my
at the pinnacle of a new business venture. duties as an Outside Director so that KDDI will be able
The situation has changed in various ways since to pursue its mission. Without forgetting where I came
then. Smartphones and mobile communications have from, I will leverage my knowledge and experience as
become an essential lifeline in people’s lives. Having an attorney and, as a representative in various public
been appointed an Outside Director of KDDI, I feel a capacities, to advise the Board of Directors from the
great weight of responsibility as the Company engages perspective of a long-term au customer.
in the telecommunications business, such an essential

Executive Remuneration
Executive Remuneration
To ensure the transparency and fairness in executive compensation systems and levels, the Company has established a
Remuneration Advisory Committee to conduct deliberations and provide advice to the Board of Directors in accordance with
the consultation thereof. Compensation (base salary, bonus, stock compensation) for each director is decided at the Board of
Directors meeting based on the advice of the Compensation Advisory Committee.
Remuneration for Executive Members (Fiscal year ended March 31, 2019)
Total remuneration Total remuneration by type (millions of yen) Number of
Executive classification (millions of yen) Basic remuneration Bonus Stock compensation recipients (people)
Directors (excluding outside directors) 710 390 136 184 10
Outside directors 75 75 — — 7
Audit & Supervisory Board members
(excluding outside Audit & Supervisory 52 52 — — 3
Board members)
Outside Audit & Supervisory Board members 50 50 — — 3
Notes: 1 Above payment to directors includes three directors (of which two were an outside director) who retired at the conclusion of the 34th Annual General Meeting of Shareholders held on
June 20, 2018. The number of Directors received bonuses is nine, excluding said retired Directors.
2 Above payment to Audit and Supervisory Board members includes one auditor (who was not an outside director) who retired at the conclusion of the 34th Annual General Meeting of
Shareholders held on June 20, 2018.
3 In addition to the above, a resolution of the 20th General Meeting of Shareholders held on June 24, 2004, was passed that determined directors and Audit & Supervisory Board
members receive a retirement allowance in connection with the cancellation of the executive retirement bonus system.
Types and Methods for Determining Remuneration and others

Type of Composition Method of Determination Maximum Amount of Remuneration General Meeting of
Remuneration Ratio Shareholders Approval Date
Directors Basic Flat-rate • Based on such factors as direc- Maximum monthly remuneration of June 18, 2014
remuneration remuneration tors’ professional ranking and the ¥50 million. 30th General Meeting of
55% management environment. Shareholders
• Reference values are considered
and set at appropriate levels using
information from outside experts
Bonus Performance- Bonuses are linked to and deter- Within 0.1% of consolidated net income June 16, 2011
linked stock mined by the rate of achievement (profit attributable to owners of the parent 27th General Meeting of
compensation* of the Group’s consolidated reve- under IFRS) during the applicable fiscal year Shareholders
Stock 45% nue, operating income and profit for Applies to directors, executive officers Introduced: June 17, 2015
compensation each fiscal year, as well as the and administrative officers: Total num- 31st General Meeting of
(trust type) achievement of certain KPIs (net ber of points (maximum) granted per fis- Shareholders
additions of Mobile IDs, au churn rate, cal year to those eligible: 357,000 points Revised: June 20, 2018
value added ARPA, etc.) (Converted at a rate of 1 point = 1 share) 34th General Meeting of
Shareholders
Audit & Flat-rate remuneration only Paid only basic remuneration that is Maximum annual remuneration of ¥130 June 22, 2016
Supervisory not affected by fluctuations in the million (for each business year) 32nd General Meeting of
Board members Company’s operating performance. Shareholders
* Performance-linked stock compensation

The Company has been introducing performance-linked stock compensation since 2015 in order to clarify the link between management’s
compensation, performance and stock value, and to increase the willingness to contribute to medium- to long-term performance improvement
and corporate value improvement.
The system we introduced was partially revised in 2018, and the ratio of performance-based compensation to total compensation was
45%**.
** A numerical value calculated based on the assumption that the achievement rate is 100%, based on the ratio of bonuses and stock compen-
sation that fluctuate depending on the performance.
Formula for performance-linked stock compensation

Bonus= Basic amount by position multiplied by the Company operating performance and KPI evaluation
Stock compensation= Basic points by position multiplied by the Company operating performance and KPI evaluation
Results of Remuneration Advisory Committee Meeting (FY2019.3)

• The Remuneration Advisory Committee met twice, and all members attended.
• They discussed the level of performance-linked compensation and the revision of the executive remuneration system (partial
revision and continuance of the stock compensation system).

Compliance
Compliance Policy Business Ethics Helpline (Grievance Mechanism)

We recognize that in order to fulfill our social responsibilities We established the Business Ethics Helpline in 2006 to serve
through our business activities, raising compliance awareness as a contact point for all employees of KDDI, KDDI Group
throughout the group is a fundamental issue of corporate companies and business partners who have questions or
management. concerns about business ethics and legal compliance. The
As a global corporate group, we continue to further enforce helpline is available anytime and can receive reports through
our group-wide compliance framework. an internal or external contact point established in collabora-
tion with external experts (Reports can be received by e-mail,
KDDI Group Compliance and phone call or letter, in multiple languages).
Enforcement Framework Furthermore, we have established company regulations to
enable anonymous whistleblowing based on the
We created the KDDI Code of Business Conduct to encour- Whistleblower Protection Act enacted in Japan in April 2006.
age ethical behaviors of employees with a compliance mind- In the fiscal year ended March 31, 2019, we received 330
set. It’s published on the intranet to ensure that it is shared reports and inquiries, but there were no reports of serious
and practiced, enabling employees to check it whenever they issues that lead to disciplinary action or require external
are unsure what action to take. announcement.
Also, we established the KDDI Group Business Ethics The KDDI Group Business Ethics Committee conducts
Committee as a decision making body for KDDI Group’s investigation of the issues reported as required while protecting
compliance related matters. The KDDI Group Business Ethics privacy, and when the problems are detected, the committee
Committee is chaired by the Vice Chairman, Representative members as well as the management team and the Audit &
Director, and members include directors and additional nomi- Supervisory Board members receive the report and take cor-
nees appointed by the chair as required. They hold a meeting rective actions along with measures to prevent recurrence.
once every half-year, and in addition to assessing the condi-
tions of Group companies, the committee builds and sup- Business Ethics Helpline
ports enhancement of compliance frameworks. The
committee is also responsible for helpline issues, corruption Whistleblowers
prevention and compliance issues such as breaches of com- (Employees of the KDDI Group or partner companies)
petition laws.
In addition, the committee formulates policies on raising Report / Report back / Report / Report back /
consultation response consultation response
awareness as well as discusses countermeasures in case com-
pliance violations occur, and is responsible for disclosure of such Notification of
Internal contact point receiving a report* External contact point
information and prevention of recurrence, too. The report on their
activities is made available to all employees via the intranet. KDDI Group Legal offices
Business Ethics Committee Report back /
Contact point for overseas subsidiaries
response
KDDI Group Compliance and Enforcement Framework
Investigation / analysis / improvement /
Company President recurrence prevention
Report Consult Corporate Management Committee Relevant department’s managers and others
Report * Reports that the external contact point received are delivered to the internal contact point,
keeping anonymity for the whistleblowers
KDDI Group Business Ethics Committee
• Formulate policies for
educational activities
KDDI Group Business Ethics Committee Members • Discuss countermeasures
Committee Chair: in case compliance
violations occur
Vice Chairman, Representative Director
(Other members are appointed by the chair)
• Disclose information out-
side of the company
Preventing Anti-Competitive Behaviors
Secretariat: General Administration Department, • Deliberate on measures
to prevent recurrence
General Administration & Human Resources Division The KDDI Code of Business Conduct defines rules that pro-
hibit anti-competitive behaviors, and we make efforts to
Contact (Anonymous) ensure that all employees comply with competition laws.
Report
Feedback /
Business Ethics Helpline
In addition to competition laws, we stipulate that local laws
Instruction, etc.
and regulations in each country and region on labor, tax, the
Report Feedback
environment, monopoly and consumer protection must be
All Employees of KDDI Group examined thoroughly to ensure full compliance.
Under the KDDI Guidelines for CSR in Supply Chain, we
demand our business partners not engage in any activities that
inhibit fairness, transparency or freedom of competition.
In the fiscal year ended March 31, 2019, there were no
legal actions against us concerning anticompetitive or
monopolistic conduct.
We fully adhere to these related regulations and continue
appropriate business operations.

Risk Management and Internal Controls
Risk Management and Internal Controls Risk Management Activity Cycle
In the ever changing business environment, the risks that In order to prevent critical events for the company, we at
companies face are more diverse and complicated. KDDI consider that it is important to recognize signs of dan-
We define factors and events that negatively influence the ger and implement preventive measures before the situation
achievement of our business goals as risks and consider worsens. Based on this idea, we follow the PDCA cycle for
enforcing risk management a material business challenge. In risk management. We also have an organizational framework
order to be sustainable and responsible to society, we pro- for risk management in place to ensure any risks we find will
mote risk management initiatives throughout the KDDI Group. be addressed promptly and appropriately.
KDDI Group Internal Control Framework
Management level
Audit &
• Decide basic policies for
Supervisory Board of Directors building internal control
Present significant risks Report the situations
Board framework
Member
Corporate
• Audit in accordance • Evaluate internal control
Management and announces the results Risk management by sectors and subsidiaries
with laws and the arti- Committee (President)
cles of incorporation
relating to directors’ Corporate Risk Management Collect and analyze information
business execution and assess risks
Division
Internal Control Department
• Formulate implementation plans
Accounting
Auditors
• Manage overall progress
• Support operations of P
implementing divisions
Examine and
•Audit evaluations by managers

Improve and
adapt A D implement
countermeasures
KDDI Group C
Internal Control System Directors (7)
Execute intradivisional
Internal Control System Managers (KDDI: 31, group companies: 42) monitoring and
internal audits
As of June 1, 2019
Parent Company Parent Company

Corporate and Subsidiaries
Business Divisions
Support Divisions
Offices Offices Offices Risk Identifying Process
Individual Individual Individual We regularly examine information about risks to identify signif-
Organizational Organizational Organizational icant risks that seriously influence corporate business, and
Units Units Units discuss measures to reduce such risks and their impacts as
much as possible in case we face them. In order to ensure
the achievement of our business goals, in the fiscal year
ended March 31, 2019, we selected 25 significant risks
based on issues that manifested in the past and changes in
Our Risk Management and Internal Control the business environment, and held internal audits based
around risk prediction, reduction of significant risks, as well
We have established a system to centralize the management as risk approach. The selected significant risks include cyber-
of risks, which we define as factors that have the potential to attacks, which is becoming increasingly complex, global
block the achievement of our business goals, with the businesses and issues relating to new business fields we
Corporate Risk Management Division at the core. are entering such as e-commerce, finance and accounting
Furthermore, we are working to promote risk management and energy, which aim to make the Integration of
throughout the KDDI Group, including subsidiaries, in order to Telecommunications and Life Design a reality. We have also
realize continuous growth of the entire group. identified risks arising from the expansion of the group
We have appointed 31 Internal Control System Managers through M&A as significant risks and have implemented more
within KDDI and 42 at group companies, as well as 7 Internal robust measures against them.
Control System Directors to oversee their activities. Under In order to minimize information security risks, we have
their leadership, we introduce and run internal control sys- also established a common standard applicable group-wide
tems, carrying out risk management activities and run opera- to improve the level of information security across the group
tional quality improvement activities to foster a company including newly joined group companies.
culture in which risks are less likely to arise. The status of these significant risks is also reflected on
business risks that are revealed in the Securities Report since
it relates to the finance as well.

Disclosure and IR
Fundamental Thinking IR Activities in the Fiscal Year Ended March 31, 2019
The Company is fully committed to undertaking fair and Enhancing Communication
timely disclosure in an easily understandable manner of any Earnings presentation meetings were held quarterly to allow
information that could have a material bearing on the invest- management to directly communicate the Company’s
ment decisions of investors. Such disclosure is conducted results. KDDI also held individual and small group meetings
on an ongoing basis, and is focused on the requirements of with investors from Japan and overseas, and participated in
shareholders and investors. The Company’s policy in this various conferences and seminars for individual investors
regard is in line with the Financial Instruments and Exchange sponsored by securities companies for better
Act and the Securities Listing Regulations of Tokyo Stock communication.
Exchange, Inc. governing the timely disclosure of information KDDI takes the opinions expressed by shareholders and
concerning the issuers of publicly listed securities. KDDI dis- investors seriously, communicating them not only to man-
closes its IR Basic Policy* on its website, explaining such agement but also to employees in general. Such opinions
matters as fundamental thinking regarding IR activities and are considered an extremely valuable reference in the forma-
the system for disclosing pertinent information. In particular, tion of business and management strategies.
KDDI has set up a Disclosure Committee that concentrates
on determining what information should be disclosed with Results of IR Activities in the Fiscal Year Ended
the goal of improving business transparency and supplying March 31, 2019
appropriate information to the public. Individual meetings with institutional investors Approx. 800 times
* Matters to be decided by the Board of Directors.
Financial results briefings 4 times
IR Basic Policy Overseas road shows 12 times

KDDI places top management priority on building a trusting Number of participants or/ viewers of seminars Approx. 1,200 people
relationship with its shareholders and investors, ensuring for individual investors
value-oriented corporate management, active information
disclosure, and enhanced communication. Key External Recognition
Overseas • FTSE4Good Index Series
Value-Oriented Corporate Management • MSCI ESG Leaders Indexes
• Euronext Vigeo Eiris World Index 120
• Ethibel® Sustainability Index Excellence Global etc.
Maximizing corporate value In Japan • DBJ Environmentally Rated Loan Program

• MS-SRI
• Gold Award in the PRIDE Index
Trust-based relationships with • Second overall in the 13th CSR Company Ranking etc.
shareholders and investors
Active Information Disclosure

Active Information Disclosure Enhanced Communication KDDI provides webcasts of its results presentations on its
website, and also posts an English-language version of its
results presentations. Earnings reports, financial statements
and operational data, information related to corporate gover-
Three IR Activity Guidelines
nance, and other types of disclosure documents are made
Through IR based on the activity guidelines outlined below,
available. This data can also be viewed on our IR app and
KDDI strives to build long-term, trust-based relationships
website, which are compatible with multiple devices.
with shareholders and investors, as well as maximize its cor-
Moreover, in our small meetings, we provided on-demand
porate value.
streaming of certain briefings on the Company website.
As a result of our IR activities, in the fiscal year ended
Open IR Activities
March 31, 2019, KDDI has received excellent evaluations.
We value interactive dialogue with our shareholders and
The Company was selected for a third consecutive year to
investors as well as ensuring accountability to our share-
receive the Daiwa Investor Relations Internet IR 2018 Grand
holders and investors through honest and fair information
Prize. We were also ranked Gold Prize in the “Gomez IR
disclosure.
Website Overall Ranking 2018” by Morningstar Japan K.K.
Proactive IR Activities In addition, we achieved third place (first award) in the
By always incorporating new ideas into our IR activities, “Disclosure to Individual Investors” category of the
we strive to make KDDI known to more people and pro- “Securities Analysts Selection of Best Companies for
mote further knowledge of the Company. Disclosure” (FY2019.3) by the Securities Analysts
Association of Japan.
Organized IR Activities
Under the leadership of management, all of our officers
and employees, including those of Group companies,
engage in organized IR activities to further increase cor-
porate value.

Consolidated Financial Highlights*1

(Years ended March 31)
Consolidated 2010 2011 2012 2013
Operating Revenues/Operating Revenue P.53

¥3,442,147 ¥3,434,546 ¥3,572,098 ¥3,662,289
Operating Income P.53

443,862 471,912 477,648 512,669
Operating Margin 12.9% 13.7% 13.4% 14.0%
EBITDA* 3
927,253 936,315 908,499 959,571
EBITDA Margin 26.9% 27.3% 25.4% 26.2%
Net Income/Profit for the Year Attributable to Owners of the Parent P.53
212,764 255,122 238,605 241,470
Capital Expenditures P.55

518,034 443,677 421,568 467,020
Depreciation and Amortization 460,940 449,318 417,886 406,726
Interest-Bearing Debt P.54

1,096,778 979,630 1,046,754 977,563
Equity Ratio/Ratio of Equity Attributable to Owners of the Parent 52.8% 55.7% 51.5% 55.1%
Return on Equity/Ratio of Return on Equity Attributable to
Owners of the Parent (ROE) 11.0% 12.4% 11.5% 11.2%
Return on Assets/Ratio of Return on Total Assets (ROA) 12.2% 12.4% 12.3% 12.7%
Earnings per Share/Net Basic Earnings per Share*4 (yen/U.S. dollars) 79.61 96.92 96.86 105.30
Dividends per Share*4 (yen/U.S. dollars) P.53

21.67 23.33 26.67 30.00
Dividend Payout Ratio 27.2% 24.1% 27.5% 28.5%
Net Cash Provided by (Used in) Operating Activities 739,992 717,354 725,886 523,908
Net Cash Provided by (Used in) Investing Activities (924,442) (440,546) (484,507) (472,992)
Free Cash Flows*5 P.55

(184,450) 276,808 241,379 50,916
Net Cash Provided by (Used in) Financing Activities 149,239 (279,998) (225,931) (140,249)
Number of Consolidated Employees (people) 18,301 18,418 19,680 20,238
Number of Female Managers* (people) 6
59 92 113 124
Number of Consolidated Foreign Employees (people) — — — —
CO2 Emissions*7 (t) P.29

1,181,403 1,108,282 1,218,659 1,049,422
Power Consumption* (MWh) 8
2,126,440 1,995,042 2,190,787 1,885,703
*1 Terminology differences between Japanese GAAP and IFRS (adopted from the fiscal year ended March 31, 2016) will be presented as “Japanese GAAP/IFRS.”
*2 Yen amounts are translated into U.S. dollar amounts, for convenience only, at the rate of ¥110.99 = U.S.$1 on March 31, 2019.
*3 From the fiscal year ended March 31, 2013 and in the fiscal year ended March 31, 2015, the EBITDA calculation formula has been changed.
Until the fiscal year ended March 31, 2012 (JGAAP): EBITDA = Operating income + depreciation + noncurrent assets retirement cost
Until the fiscal year ended March 31, 2015 (JGAAP): EBITDA = Operating income + depreciation + amortization of goodwill + noncurrent assets retirement cost
Since the fiscal year ended March 31, 2015 (IFRS): EBITDA = Operating income + depreciation and amortization + noncurrent assets retirement cost + impairment loss
*4 Values are adjusted following stock splits conducted with effective dates of October 1, 2012, April 1, 2013, and April 1, 2015. Figures for previous fiscal years have been retroactively adjusted.
*5 Free cash flows = Net cash provided by (used in) operating activities + net cash provided by (used in) investing activities
*6 Including KDDI employees on loan outside of the Company in addition to full-time KDDI employees
*7 Covers electric power and fuel consumption (heavy oil, light oil, kerosene, and city gas) on a non-consolidated basis. The emission coefficient for electric power consumption is
0.555kg-CO2/kWh (emissions excluding heat, steam, and hot/cold water).
*8 Non-consolidated basis

Japanese GAAP IFRS
Millions of
Millions of yen U.S. dollars*2
2014 2015 2015 2016 2017 2018 2019 2019
¥4,333,628 ¥4,573,142 ¥4,270,094 ¥4,466,135 ¥4,748,259 ¥5,041,978 ¥5,080,353 $45,773
663,245 741,299 665,719 832,583 912,976 962,793 1,013,729 9,134
15.3% 16.2% 15.6% 18.6% 19.2% 19.1% 20.0% 20.0%
1,186,069 1,292,597 1,284,553 1,410,971 1,524,207 1,560,061 1,598,670 14,404
27.4% 28.3% 30.1% 31.6% 32.1% 30.9% 31.5% 31.5%
322,038 427,931 395,805 494,878 546,658 572,528 617,669 5,565
571,799 576,197 667,714 531,434 519,365 560,831 601,757 5,422
470,098 494,570 518,708 532,442 545,177 546,609 562,282 5,066
1,084,966 1,002,214 1,154,116 1,235,287 1,151,650 1,118,616 1,275,711 11,494
55.1% 57.3% 54.5% 56.3% 56.7% 57.4% 57.1% 57.1%
13.0% 14.9% 13.5% 15.5% 15.9% 15.6% 15.5% 15.5%
14.7% 14.5% 12.1% 14.5% 15.0% 15.0% 14.6% 14.6%
132.87 170.84 158.01 197.73 221.65 235.54 259.10 2
43.33 56.67 56.67 70.00 85.00 90.00 105.00 1
32.6% 33.2% 35.9% 35.4% 38.3% 38.2% 40.5% 40.5%
772,207 962,249 968,752 884,538 1,161,074 1,061,405 1,029,607 9,277
(546,257) (674,520) (635,745) (667,917) (637,225) (633,847) (714,578) (6,438)
225,950 287,729 333,006 216,621 523,849 427,558 315,028 2,838
(105,643) (224,862) (310,528) (299,003) (485,784) (453,168) (310,951) (2,802)
27,073 28,172 28,456 31,834 35,032 38,826 41,996 41,996
140 177 177 251 270 302 321 321
2,630 2,624 2,624 4,380 4,423 4,308 4,208 4,208
939,502 1,044,357 1,044,357 1,081,553 1,067,495 1,163,912 1,209,600 1,209,600
1,686,480 1,873,293 1,873,293 1,939,115 1,913,747 2,086,626 2,167,968 2,167,968

Financial and Non-Financial Highlights

Operating Revenues/Operating Revenue Operating Income
YOY +0.8% YOY +5.3%

(Billions of yen) (Billions of yen) (%)
6,000 1,000 1,014 25.0
963
913
5,042 5,080
5,000
4,748 800
833
19.2 19.1
20.0 20.0
4,573 4,466 18.6
4,334 741
4,270
4,000 663 16.2 666
3,572 3,662 600 14.0 15.0
3,442 3,435 13.7 13.4
12.9 15.3 15.6
3,000
513
400 472 478 10.0
444
2,000
200 5.0
1,000
0 0 0
10 11 12 13 14 15 15 16 17 18 19 10 11 12 13 14 15 15 16 17 18 19
Japanese GAAP IFRS Japanese GAAP IFRS
Operating Income (left) Operating Margin (right)
Net Income/
EBITDA Profit for the Year Attributable to Owners of the Parent
YOY +2.5% YOY +7.9%

(Billions of yen) (%) (Billions of yen)
2,000 40.0 700
600 618
31.6 32.1 30.9 1,599 547
573
1,500
28.3
30.1 31.5 30.0 500
26.9 27.3 27.4 1,411 495
25.4 26.2 1,524 1,560
1,285
1,186 1,293 428
400 396
1,000 960 20.0
927 936 908 322
300
255
239 241
200 213
500 10.0
100
0 0 0
10 11 12 13 14 15 15 16 17 18 19 10 11 12 13 14 15 15 16 17 18 19
EBITDA (left) EBITDA Margin (right)
Capital Expenditures ROE
YOY +¥40.9 billion YOY –0.1pp

(Billions of yen) (%)
750 20.0
668
600 602 18.0

572 576
545 561547 562
518 519 531 532 519 15.9
467
495 16.0 15.6 15.5
461 470
450 444449 14.7 14.9 15.5
422 418
407
14.0 13.5 15.0 15.0 14.6
14.5 14.5
300 12.4 12.7
12.2 12.3
12.0 13.0
12.4 12.1
150 11.5
10.0 11.0 11.2
0 0
10 11 12 13 14 15 15 16 17 18 19 10 11 12 13 14 15 15 16 17 18 19
Capital Expenditures Depreciation and Amortization ROE ROA

Earnings per Share/
Net Basic Earnings per Share (EPS) Dividends per Share
YOY +10.0% YOY +15.0 yen

(Yen) (Yen) (%)
300 120 60.0
259.10 105.00
250 100 50.0
235.54 90.00
221.65
85.00
200 197.73 80
35.9
40.5 40.0
35.4
170.84 32.6 33.2 38.3 38.2
158.01
150 60 27.5 28.5 56.67 70.00 30.0
27.2 56.67
132.87 24.1
105.30 43.33
100 96.92 96.86 40 20.0
79.61 30.00
26.67
23.33
50 20 21.67 10.0
0 0 0
10 11 12 13 14 15 15 16 17 18 19 10 11 12 13 14 15 15 16 17 18 19
Dividends per Share (left) Dividend Payout Ratio (right)
Number of Female Managers Number of Consolidated Foreign Employees
YOY +6.3% YOY –2.3%

(People) (People)
350 5,000
321 4,380 4,423
300 302 4,308
4,208
270 4,000
250 251
3,000
200
2,630 2,624
177
150
140 2,000
124
113
100 92
1,000
59
50
0 0
10 11 12 13 14 15 16 17 18 19 14 15 16 17 18 19
CO2 Emissions (Non-consolidated) Power Consumption (Non-consolidated)
YOY +3.9% YOY +3.9%

(Thousands of tons) (GWh)
1,250 2,500
1,181
1,219
1,164
1,210
1,108
1,049 1,044
1,082 1,067 2,126 2,191
2,087
2,168
1,000 2,000 1,995
940 1,886 1,939 1,914
1,873
1,686
750 1,500
500 1,000
250 500
0 0
10 11 12 13 14 15 16 17 18 19 10 11 12 13 14 15 16 17 18 19

The Japanese Market and KDDI: Characteristics of the Domestic Market
Market Conditions for Mobile Communications Business

As of March 31, 2019, cumulative mobile communications
Ratio of Cashless Payments by Country (2015)
subscriptions in Japan totaled 177.73 million,*1 up 4.5% year
on year. The mobile market continues to grow, driven by the (%)
100
spread of smartphones and further advances in the trend of
single users owning multiple devices. 89.1%
80
There has also been continued growth in the number of
service contracts for MVNO,*2 up 13.8% from a year earlier to 60 60.0%
20.94 million. 55.4% 54.9%
51.0% 48.6%
The Japanese market for mobile communications is enter- 40
45.0%
39.1% 38.4%
ing a new phase with the anticipated entry of a fourth com-
munications carrier in autumn 2019, along with revisions to 20 18.4%
the Telecommunications Business Act and reduced pros- 14.9%
pects for sales of mobile handsets on the overall market due 0

to the planned consumption tax hike.
ce
y
n
a
A
d
a
da
en
a
ia
an
pa
li
US
in
re
an
an
As the domestic telecommunications business transitions
d
ra
ed
na
m
Ch
In
Ko
Ja
gl
st
Fr
er
Ca
Sw
En
Au
G
to a stable growth period, mobile communications carriers
have stepped up efforts to expand earnings in non- Source: Ministry of Economy, Trade and Industry’s Cashless Vision (Condensed Version)
April 2018 Consumer Affairs, Distribution and Retail Industry Division, Commerce
telecommunications business domains in a bid to secure new and Service Industry Policy Group
sources of earnings by leveraging their customer bases in the
domestic telecommunications business. Meanwhile, compa-
nies from other sectors are entering the telecommunications Share of Mobile Communications Subscribers*3
business, heating up competition across sector boundaries. (As of March 31, 2019)
Against this backdrop, the Japanese government has set a SoftBank
target for increasing the ratio of cashless payments to 40% 23.8% Source: KDDI, based on
by 2025, and is ramping up efforts to encourage and spread data from
cashless payments as a measure to boost the economy 175 NTT DOCOMO
Telecommunications
when the consumption tax rate is raised, including such mea- million 44.7% Carriers Association
*3 Shares of NTT DOCOMO,
sures as awarding points to consumers who use cashless KDDI (au) INC., SoftBank Corporation,
payments during a limited period. 31.5% KDDI + Okinawa Cellular
Telephone Company (au)
Smartphone payments are a new form of settlement likely
to catch on at small-scale retail stores due to the low initial
investment required on the part of retailers. Viewing this as a
business opportunity, many companies have focused on Share of FTTH Subscriptions (As of March 31, 2019)
expanding their smartphone payment businesses.
*1 Source: Official Announcement of Quarterly Data on the Number of

Other 12.1%
Telecommunications Service Subscriptions and Market Shares (FY2018 Q4 Electric power
utilities NTT EAST Source: KDDI, based on data
(End of March 2019)), Ministry of Internal Affairs and Communications
*2 MVNO: Mobile Virtual Network Operator 8.9% 32 37.5% from Ministry of
Internal Affairs and
Procure networks from mobile network operators (MNOs) to provide mobile million
KDDI*4 Communication
services *4 KDDI + ctc + Okinawa
12.5% NTT WEST
Cellular Telephone Company
29.1% + BIGLOBE
Market Conditions for Fixed-Line Broadband Business

As of March 31, 2019, the number of fixed-line broadband Number of Fixed-Line Broadband Subscriptions*1
subscriptions was up 1.5% year on year to 40.25 million.*1
(Million subs)
Although fixed-line broadband service penetration has 40 36.86 37.91 38.82 39.64 40.25
reached around 70%,*5 the market continues to expand 0.01
0.01 0.01
2.51 2.15 1.73
3.20
gradually, driven by sales of discount bundled mobile and 30
3.75
6.73
6.85
6.88 6.86
fixed-line services and the opening of new markets by new 6.43
operators using the wholesaling fiber access service of NTT

20
East and NTT West.
26.68 27.97 29.46 30.60 31.66
*5 Source: KDDI, based on data from Ministry of Internal Affairs and 10

Communications
Ministry of Internal Affairs and Communications’ Population, Population
0
Trends, and Number of Households based on Residents Register: 58.53
million households (as of January 1, 2019) 2015.3 2016.3 2017.3 2018.3 2019.3
FTTH CATV DSL FWA

Market Conditions for IoT Business
In the IoT field for connecting a wide variety of things with the
Outlook for Demand on CPS/IoT Market in Japan and Worldwide
internet, low power wide area (LPWA) specifications have
been established to enable wide-area communications with (Trillions of yen)
500
low power consumption using LTE networks, and the use of
IoT is ramping up across a variety of product and service 400 404.4
fields.
Projections call for IoT to create a market worth ¥14 trillion 300
annually in Japan and ¥247 trillion worldwide by 2020 while 247.3
driving growth in the mobile communications market. 200 194.0
Source: KDDI, based on data

100 from JEITA’s Survey
of Trends in Emerging
11.1 14.4 19.7 Fields 2017
0
2016 2020 2030

Japan World
Increase in Mobile Traffic and Frequency Allocated to Each Telecommunications Company

Due to the proliferation of smartphones and tablets, and the
increased performance of such devices, along with increas- Total Mobile Traffic in Japan (Monthly)
ingly diverse mobile content services and evolution of tele- (Gbps)
4,000 3,958.3
communications technologies, mobile traffic in Japan
continues to grow, with both average monthly traffic and 3,246.3
3,000
peak traffic rising by about 20% in the most recent year.
2,345.1
This has become an important issue for mobile telecom- 2,911.2
2,000 1,764.7
munications companies as they work to efficiently absorb this 2,314.2
ongoing increase in mobile traffic and maintain stable network 1,289.5

1,636.7
operations. 1,000 1,216.9
871.8
0
2014.12 2015.12 2016.12 2017.12 2018.12
Average Monthly Traffic Peak Hour Traffic
Source: “The State of Mobile Communications Traffic in Japan,” Ministry of Internal Affairs
and Communications (March 2019)
Allocation of Bandwidth among Japan’s Mobile Telecommunications Operators (As of April 10, 2019)
800MHz 3.7GHz Total

700MHz 1.5GHz 1.7GHz 2.1GHz 2.6GHz 3.5GHz 28GHz
/900MHz /4.5GHz bandwidth
FD-LTE FD-LTE TD-LTE

FD-LTE FD-LTE FD-LTE TD-LTE 5G (TDD) 5G (TDD)
3G 3G WiMAX
10MHz 15MHz*1 10MHz 20MHz*2 20MHz*1

50MHz*4 *5 40MHz 200MHz*7 400MHz*7 840MHz
10MHz 15MHz* 1
10MHz 20MHz* 2
20MHz* 1
10MHz 15MHz 15MHz 20MHz*3 20MHz

NTT
80MHz*6 200MHz*7 400MHz*7 840MHz
DOCOMO
10MHz 15MHz 15MHz 20MHz* 3
20MHz
10MHz 15MHz 10MHz 15MHz 20MHz

SoftBank
30MHz 80MHz*6 100MHz*7 400MHz*7 750MHz
Group Wireless
10MHz 15MHz 10MHz 15MHz 20MHz City
Planning
20MHz*2
Rakuten 100MHz*7 400MHz*7 540MHz
20MHz*2
*1au 3G services using 800MHz and 2.1GHz will shut down on March 31, 2022 *5 UQ WiMAX services will shut down on March 31, 2020.
*2 Newly allocated by the Ministry of Internal Affairs and Communications on April 9, 2018 *6 Of this 80MHz, 40MHz was newly allocated by the Ministry of Internal Affairs and
*3 Only in Tokyo, Nagoya, and Osaka Communications on April 9, 2018
*4 Currently, a 40MHz section is used for WiMAX 2+ (TD-LTE) and a 10MHz section is used *7 Newly allocated by the Ministry of Internal Affairs and Communications on April 10, 2019
for WiMAX.

The Japanese Market and KDDI: KDDI’s Domestic Status
Toward Further Expansion of “the Integration of Telecommunications and Life Design”

KDDI CORPORATION was established in October 2000 For our corporate customers, meanwhile, we support their
through the merger of DDI, KDD and IDO, and has continued digital transformation by assisting them with the creation of
to expand its base as a comprehensive telecommunications new business models, based on the idea that telecommuni-
company with both mobile and fixed-line operations. cations services will contribute to their core businesses.
While the business has continued to grow with the expan- By leveraging the business know-how accumulated in
sion of the domestic mobile communications market and Japan at overseas sites, KDDI aims to create a global eco-
widespread popularity of smartphones, growth in the domestic system on a par with the one in Japan.
telecommunications business, once a key driver, has slowed, In the Personal Services segment, KDDI will develop tele-
and KDDI is working to establish new sources of growth. communications and life design services while increasing IDs,
Specifically, with its telecommunications business for indi- mainly in emerging countries in Asia. In the Business Services
vidual customers and its customer base as its core, KDDI will segment, KDDI will use its IoT World Architecture platform to
provide experience value that produces excitement for cus- support the global operations of its customers, with the aim
tomers by expanding the concentric circles of the life design of sustaining growth overseas.
business around this core, namely commerce, finance, ener-
gy, entertainment and education.
Global Expansion of KDDI’s Vision for “the Integration of Telecommunications and Life Design”
For individual customers For corporate customers
Principal Businesses of the KDDI Group

obile Telecommunications and Non-Telecommunications
M The “au Economic Zone gross merchandise value” is the
Field combined value of non-telecommunication services used,
As of March 31, 2019, au mobile subscriptions numbered along with total payments made through means provided by
55.23 million, up 5.6% year on year and accounting for a KDDI (“au Carrier Billing” and “au WALLET”). Approximately
31.5% (+0.5 percentage point) share of the mobile market 30% of this gross merchandise value is ultimately recorded
coverage by Japan’s three major carriers. as “au Economic Zone sales.”
In addition, unbundled plans offered beginning in July 2017
contributed to reducing churn, and as of March 31, 2019, au Fixed-Line Broadband
mobile subscriptions*1 numbered 24.50 million. Meanwhile, As of March 31, 2019, the cumulative number of FTTH sub-
the number of contracts to the MVNO provided by a consoli- scriptions*2 stood at 4.45 million, up 3.2% year on year and
dated subsidiary has increased by 670,000 over the previous accounting for a market share of 12.5%. In CATV services,
year to 2.45 million contracts, increasing the number of the number of RGU households*3 as of March 31, 2019
“mobile IDs” (the total of au account and MVNO subscrip- increased steadily to 5.48 million, up 1.7% year on year.
tions) by 1.8% year on year to 26.95 million. By cross-selling FTTH and CATV services to the au cus-
KDDI is aiming to establish a new source of growth in non- tomer base, we expect the KDDI Group customer base to
telecommunications business fields by maximizing the “au continue growing stronger and expanding.
Economic Zone” encompassing such as commerce, finance,
energy, entertainment, and education.

Number of Mobile IDs Total of Cumulative FTTH Subscriptions*2 and Number of
RGU Households*3
(Million subs) (Million households)
30 10
26.46 26.95
25.70 25.78 26.01
0.11 0.87 1.77 2.45 8
20 5.48
5.29 5.38
6 5.05
4.88
25.70 25.68 25.14 24.69 24.50 4

10
2 3.75 4.14 4.31 4.45

3.49
0 0
2015.3 2016.3 2017.3 2018.3 2019.3 2015.3 2016.3 2017.3 2018.3 2019.3
au Subscriptions*1 Number of MVNO Contracts Cumulative FTTH Subscriptions Number of RGU Households
*1au Subscriptions: Personal Services segment accounts under the same name are *2 Cumulative FTTH subscriptions: KDDI + ctc + Okinawa Cellular Telephone Company +
counted as one au subscription BIGLOBE
*3 RGU: Revenue Generating Units. Each household’s subscription to CATV, high-speed
Gross Merchandise Value and Sales of the “au Economic Zone” Internet connection, or telephony services represents one RGU
(Billions of yen)
3,000
2,517
2,000 1,890
1,280
1,000
730 709
560
421
380
0
2015.3 2016.3 2017.3 2018.3 2019.3
Gross Merchandise Value of the au Economic Zone au Economic Zone Sales
IoT Business and Regional Revitalization

In the IoT business, KDDI aims to create and expand new We aim to help solve local issues through collaborative
businesses tied to the platforms of its business partners and agreements with 63 local governments across the nation to
KDDI’s own 5G/IoT platform, which includes its IoT and ICT- deploy 5G/IoT technologies in various fields. For example,
related technologies and expertise. KDDI participated in Reviving the Mackerel: A Project to
KDDI plans to increase the total number of IoT connections Streamline Aquaculture in Obama City, Fukui Prefecture, as
from 8 million, as of March 31, 2019, to 18 million by March well as a Japanese sake brewing project with Aizuwakamatsu
31, 2022. City, Fukushima Prefecture, and a project to visualize the
KDDI is aggressively pursuing the use of 5G in regional revi- number of people who climb and descend Mt. Fuji with
talization as a business opportunity, and has already cooperat- Gotemba City in Shizuoka Prefecture.
ed with local governments to facilitate their deployment of IoT.
Kamishihoro Town Creation of basic tourism plan

Obihiro City Smart agriculture
Muroran City ICT tourism Isolated islands
Expansion of sales
channels for locally
Nikko City Cashless translation produced items
Nagaoka City Smart drones Marketing support
Otari Village Lifestyle support with IoT
Minamisanriku Town 4K 360° remote shopping experience
Toyama Prefecture Manufacturing with IoT Higashimatsushima City Smart fishery
Hakuba Village Snow removal vehicles with 5G / bus route app Kunimi Town Animal damage countermeasures
Aizuwakamatsu City Japanese sake production / drones / 5G / 4K images
Obama City Smart fishery
Maizuru City Industrial revitalization Ina City Drone distribution
Toyooka City Stimulate tourism, agriculture with IoT
Koganei City 5G education
Tottori City Multilingual translation taxi Gotemba City Visualization of Mt. Fuji climber numbers / VR / translation / drones
Fukuyama City 5G drones / VR experiences
Iida City AI-XR / self-driving cars
Hirado City Agricultural
experiences for children Gero City Snow removal vehicles with IoT
Toyota City Babysitting children with IoT
Goto City Smart fishery
Satsumasendai City Stimulate tourism, expand sales channels for local goods Okinawa Prefecture
Multilingual translation taxis /
mango cultivation with IoT /
5G stadium experiments

Market Overview
>>> For information about the quarterly status of KDDI for the fiscal year ended March 31, 2019, please download “Historical Data (2001–) (BS/PL/CF)” from
the Company’s website. https://www.kddi.com/english/corporate/ir/finance/highlight/
Mobile Communications Market Data Fixed-Line Communications Market Data
Number of Total Subscribers Number of Broadband Subscriptions

(Share of Cumulative Subscriptions*1)
(Thousand subs) (Million subs)
80,000 40
60,000 30
40,000 20
20,000 10
0 0
2015 2016 2017 2018 2019 2015 2016 2017 2018 2019
43,478 45,910 48,540 52,283 55,225  FTTH 26.68 27.97 29.46 30.60 31.66
 au
(29.4%) (29.3%) (29.8%) (31.0%) (31.5%)
66,596 70,964 74,880 76,370 78,453  CATV 6.43 6.73 6.85 6.88 6.86
 NTT DOCOMO
(45.0%) (45.4%) (46.0%) (45.3%) (44.7%)  DSL 3.75 3.20 2.51 2.15 1.73
37,766 39,586 39,310 39,787 41,686
 SoftBank  FWA 0.01 0.01 0.01 0.00 0.00
(25.5%) (25.3%) (24.2%) (23.6%) (23.8%)
Total 147,840 156,459 162,730 168,440 175,364 Total 36.86 37.91 38.82 39.64 40.25
Source: Data prepared by KDDI based on materials from the Telecommunications Carriers Association
*1 Share among NTT DOCOMO, INC., SoftBank Corp., and KDDI + Okinawa Cellular Telephone Company (au)
Net Additions (Share of Net Additions*1) Share of FTTH Subscriptions
(Thousand subs) (%)

5,000 50
4,000
40
3,000
30
2,000
20
1,000
10
0
-1,000 0
2015 2016 2017 2018 2019 2015 2016 2017 2018 2019
2,956 2,432 2,631 3,743 2,943 P KDDI 12.5 12.9 12.9 12.8 12.5
 au
(35.7%) (28.2%) (41.9%) (65.5%) (42.5%)
3,490 4,368 3,916 1,491 2,083 P NTT EAST 39.0 38.1 37.9 37.6 37.5
 NTT DOCOMO
(42.1%) (50.7%) (62.5%) (26.1%) (30.1%) P NTT WEST 31.2 30.7 30.1 29.6 29.1
1,841 1,820 -276 477 1,899
 SoftBank P Electric power utilities 8.6 8.9 8.8 8.7 8.9
(22.2%) (21.1%) (-4.4%) (8.3%) (27.4%)
Total 8,288 8,619 6,271 5,710 6,924 P Other 8.7 9.3 10.2 11.4 12.1
Churn Rate Share of Pay Multi-Channel CATV Subscriptions
(%) (%)
1.5 60
50
1.0 40
30
0.5 20
10
0 0
2015 2016 2017 2018 2019 2015 2016 2017 2018 2019
P au*2 0.69 0.88 0.83 0.86 0.76 P J:COM 52.8 50.7 51.7 51.7 52.8
P NTT DOCOMO 0.61 0.62 0.59 0.65 0.57 P CNCI 5.2 5.8 5.7 6.1 5.5
P SoftBank 1.36 1.35 1.24 1.22 1.07 P TOKAI 3.7 3.3 3.3 3.0 2.9
P Other 38.3 40.2 39.3 39.2 38.9
*2 For conventional mobile terminals (smartphones and feature phones) (Personal Services segment basis)
Source: Data prepared by KDDI from individual companies’ materials
Source: Data prepared by KDDI based on Hoso Journal

Analysis of the Consolidated Statement of Income
Operating Revenue (Years ended March 31)
YOY Up 0.8% ¥5,080.4 billion

(Billions of yen)
Business
+47
Global
-40
Consolidation
Although mobile communications revenues declined in the Life Design
adjustment,
etc. -38
+58
Personal Services segment, revenues were boosted by the
consolidation of subsidiaries. In addition revenues increased 5,080
in the energy business, value-added ARPA revenues grew, Personal
YOY
+12
+0.8%
revenues rose on expansion in the life design business, and 5,042
they also grew in the Business Services segment. As a result,

operating revenue rose 0.8% year on year to ¥5,080.4 billion.
2018 2019
Operating Income
YOY Up 5.3% ¥1,013.7 billion

(Billions of yen)
Business
Global
+2
Consolidation
adjustment,
etc. -3
+20 1,014
Value-added ARPA revenues increased on expansion in the

Life Design
life design business, and profits also grew in the Business +9
Personal YOY
Services segment, offsetting the decline in mobile communi- +23 + 5.3%
cations revenues in the Personal Services segment, the

accelerated depreciation of 3G equipment and the costs of
963
disaster response. As a result, operating income grew 5.3%
to ¥1,013.7 billion.
2018 2019
Profit for the Year Attributable to Owners of the Parent Dividends per Share
YOY Up 7.9% ¥617.7 billion YOY Up ¥ 15¥105

Profit for the year attributable to owners of the parent KDDI distributed an annual dividend of ¥105 per share, an
increased 7.9% year on year to ¥617.7 billion, reflecting increase of ¥15 compared with the previous year, for a con-
growth in operating income and a decline in non-controlling solidated dividend payout ratio of 40.5%. Our dividend policy
interests, despite an increase in income tax due to increase in for the fiscal year ending March 31, 2020 through the fiscal
profit for the period before income tax. year ending March 31, 2022 is to maintain the consolidated
dividend payout ratio at a level above 40% while taking into
consideration the investments necessary to achieve growth
and ensure stable business operations. We aim to continue
raising dividends through synergy with growth in earnings per
share in line with higher operating income.

Analysis of the Consolidated Statement of Financial Position
Total Assets (Years ended March 31)
YOY Up¥ 755.9 billion ¥7,330.4 billion (Billions of yen) Trade and
other receivables
+270
Other
-36
7,330
Total assets were ¥7,330.4 billion, an increase of ¥755.9 bil- Contract costs
+413
lion from the previous fiscal year-end. The increase reflects
YOY
higher contract costs in accordance with the adoption of +11.5%
Property, plant
IFRS No. 15, expansion of the “au WALLET Credit card” and equipment
+109
business and growth in receivables due to the diversification 6,575
of installment sales methods for au mobile phone handsets.
2018 2019
Total Equity
YOY Up¥ 481.7 billion ¥4,612.9 billion (Billions of yen)

Retained
earnings
Non-controlling
interests +72
Other
-17
4,613
+472
Total equity was ¥4,612.9 billion, up ¥481.7 billion, mainly

due to an increase in retained earnings associated with the
YOY
increase in profit and an increase in non-controlling interests, +11.7%
which outweighed a decline in equity due to the acquisition of

Treasury
treasury stock. stock
4,131 -45
2018 2019
Interest-Bearing Debt D/E Ratio
YOY Up¥ 157.1 billion ¥1,275.7 billion YOY ±0.00 point 0.30 times
Interest-bearing debt expanded ¥157.1 billion year on year to The D/E ratio was unchanged at 0.30 times as equity attribut-
¥1,275.7 billion, mainly because of more borrowings and an able to owners of the parent increased along with the increase
increase in bonds from the issuance of bonds. in retained earnings, but interest-bearing debt also grew.

Analysis of Capital Expenditures and Cash Flows
Capital Expenditures (Payment Basis) (Years ended March 31)
Consolidated capital expenditures increased ¥40.9 billion compared with the fiscal year ended March 31, 2018, to ¥601.8 billion.
Mobile Fixed-Line and Others
YOY Up¥ 17.1 billion ¥377.2 billion YOY Up¥ 23.9 billion ¥224.6 billion
In the mobile business, capital expenditures were up ¥17.1 In the fixed-line businesses and others, capital expenditures
billion to ¥377.2 billion, mainly due to efforts to enhance qual- increased ¥23.9 billion year on year to ¥224.6 billion. Despite
ity and expand service areas for 4G LTE ahead of the launch a decrease in FTTH-related investment, spending on domes-
of 5G, increase telecommunication speeds through carrier tic communications centers increased and on investments in
aggregation, and advance construction work on the 700MHz consolidated subsidiaries rose.
and 3.5GHz bands.
(Billions of yen) (Billions of yen)

500 250
400 200
300 150
200 100
100 50
0 0
2015 2016 2017 2018 2019 2015 2016 2017 2018 2019
M 3G 11 5 4 1 1 M FTTH 31 24 24 28 26
M LTE 191 131 114 152 181 M Other 158 170 170 173 199
M Common equipment 278 201 207 207 195 Total 189 193 194 201 225
Total 479 338 325 360 377
Cash Flows
Free Cash Flows (Billions of yen)

2,000
YOY Down¥ 112.5 billion ¥315.0 billion
1,000
Net cash provided by operating activities was ¥1,029.6 bil-
lion, ¥31.8 billion less than in the previous fiscal year. The
decrease mainly reflects an increase in trade and other 0
receivables, despite growth in EBITDA.

Meanwhile, net cash used in investing activities was
-1,000
¥714.6 billion, ¥80.7 billion higher than in the previous fiscal
2015 2016 2017 2018 2019
year. The increase mainly reflects expansion in capital expen-
P Free Cash Flows 333 217 524 428 315
ditures and greater spending on investments and acquisitions
M Net Cash Provided by (Used
in subsidiaries and affiliated companies. in) Operating Activities
969 885 1,161 1,061 1,030
As a result, free cash flows—the total of operating and M Capital Expenditures -668 -531 -519 -561 -602
investing cash flows—amounted to ¥315.0 billion, down M Other, Net Cash Provided by
32 -136 -118 -73 -113
(Used in) Investing Activities
¥112.5 billion from the previous fiscal year.
P EBITDA 1,285 1,411 1,524 1,560 1,599

Performance Analysis by Segment

Personal Services Segment (Years ended March 31)
Communication Services (au and MVNO mobile services, FTTH, CATV), Energy, Education, and Other
Services for Individuals
In mobile services, the segment offers the mainstay “au” The segment also provides non-telecommunications ser-
brand services and MVNO services provided by consolidated vices such as the “au WALLET Market” product sales service
subsidiaries such as UQ Communications Inc. Fixed-line ser- making use of au shops, as well as energy services such as
vices include “au Hikari” brand FTTH services, CATV service, “au Denki” and education services provided under the
and others. “AEON” brand.
Overview of Operations in the Fiscal Year Ended March 31, 2019
In the fiscal year ended March 31, 2019, operating revenue Operating income rose 3.2% year on year to ¥756.3 billion,
increased 0.3% year on year to ¥3,911.2 billion. A decrease in as reductions in noncurrent assets retirement costs and
mobile telecommunications revenue was offset by higher revenue impairment losses more than offset the decline in mobile
from the energy business, such as “au Denki,” as well as con- telecommunications revenues.
tributions from AEON Holdings Corporation, which was con-
solidated in January 2018, and higher revenues at subsidiaries.
Operating Revenue Operating Income/Operating Margin EBITDA/EBITDA Margin

(Billions of yen) (Billions of yen) (%) (Billions of yen) (%)
4,000 3,900 3,911 800 40.0 1,600 60.0
756
3,633 733
711
1,241 1,248 1,258

3,000 600 30.0 1,200 45.0
34.2
32.0
2,000 400 20.0 800 32.2 30.0
19.3
19.6 18.8
1,000 200 10.0 400 15.0
0 0 0 0 0
2017 2018 2019 2017 2018 2019 2017 2018 2019
Operating Income (left) Operating Margin (right) EBITDA (left) EBITDA Margin (right)
au ARPA
au ARPA decreased ¥50 year on year to ¥5,860, primarily (Yen)

6,000 5,970 5,970 5,910 5,780 5,840 5,870 5,870 5,860
due to the short-term adverse impact on revenue from the
plans separating charges that were introduced in July 2017. 4,500
In the fourth quarter alone, however, au ARPA was ¥5,860,

up ¥80 compared with the previous year, underscoring the 3,000
gradual lift to ARPA from increased expiration of limited-time

discounts held by subscribers and a boost to revenue from 1,500
the non-application of monthly discounts.

5,910 5,860
0
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
2018 2019

au Churn Rate
The au churn rate has gradually improved since the introduc- (%)
1.2
tion of plans for separating charges in July 2017. In the fourth
quarter, the au churn rate rose slightly due to the extension of 0.91
0.98
2018
0.9 0.96
the upgrade period for the “Everyone Discount” in March 0.86
0.79 0.78
2019, but remained low overall in line with expectations. 2019

0.6 0.71 0.72
0.76
To reduce the au churn rate, KDDI continues to promote 0.64
deeper engagement with customers through growth in bun-

0.3
dles combining “au Smart Value” and telecommunications
and life design services.
0
1Q 2Q 3Q 4Q Full year
Key Initiatives
Pricing Plans in Tune with Customer Needs Improving au Brand Value
In August 2018, KDDI launched the “au Flat Plan 25 Netflix
Pack” as a rate plan that bundles smartphone telecommuni-
cations charges with monthly Netflix fees as a discounted
package for customers who enjoy watching highly entertaining
Netflix video content.
KDDI has long been a leader in rolling out pricing plans and
services in tune with customer needs, beginning with “au
Smart Value,” a discount bundle for mobile and fixed-line
telecommunications services, and the “au Pitatto Plan” and With the quality of services becoming homogeneous on
“au Flat Plan” with charges set according to data usage tiers. the domestic telecommunications market, improving brand
The “au Pitatto Plan” and “au Flat Plan” have been quite pop- value is essential to winning over more customers.
ular with customers, as shown by the number of subscrip- KDDI is making concerted efforts to improve the quality of
tions rising above 13 million in March 2019. interactions with customers, from the products and services
it offers to advertising and customer services. In the fiscal
year ended March 31, 2019, KDDI was selected as the
BRAND OF THE YEAR 2018 for the popularity of its commer-
cials by CM Soken Consulting. This marked the fourth con-
secutive year (since the fiscal year ended March 31, 2016)
that KDDI has been selected as the number one brand.
Solving Social Issues through Business: Telecommunications Business
Through our telecommunications business, we contribute to a safer and more resilient connected world.
• Decline in quality due to increase in data usage • Existence of areas with weak signals
Social
• Lifelines cut off during natural disasters • Digital divide impacting the weakest in society
issues
• Population decline, loss of industrial competitiveness
KDDI’s Vision KDDI’s Initiatives
KDDI envisions a society with high-quality telecommunications To improve the quality of mobile telecommunications, KDDI is
services that anyone can use without discrimination and aims to sparing no effort to strengthen its networks, to this end expand-
realize this vision through the provision of reliable fixed-line tele- ing the 4G LTE coverage area while improving service quality
phone and internet services while improving the quality of and speed. At the same time, KDDI is developing technologies
mobile telecommunications. Moreover, KDDI has built a robust and building out foundations for the area rollout of 5G and IoT,
network resilient to natural disasters, and has ensured the which are essential for digital transformation.
means to rapidly restore services in the event of damage. To prepare for emergency situations, KDDI has built redun-
In the fields of 5G and IoT, KDDI is contributing to a society dancy into its networks and put in place a structure with land,
where everyone can live in safety and security through initiatives sea, and air capabilities to ensure the rapid reconstruction of
aimed at solving social issues, including the declining working damaged facilities. We also offer handsets and services that
population and regional economic disparities. everyone can safely and securely use.


Life Design Services Segment (Years ended March 31)
Providing Commerce, Finance, Settlement, Entertainment, and Other Services for Individuals
This segment provides individuals with value-added non- It also strengthens the commerce business with
telecommunications services both online and offline. The seg- “au Wowma!” and other services, as well as insurance and
ment makes subscription services, such as the digital content other services in the financing business, with the goal of max-
of “au Smart Pass/au Smart Pass Premium,” more attractive. imizing the “au Economic Zone” and expanding earnings.

In the fiscal year ended March 31, 2019, operating revenue Meanwhile, operating income grew 8.4% year on year to
expanded 11.0% year on year to ¥579.4 billion, reflecting a ¥112.8 billion, owing mainly to the increase in value-added ARPA
revenue increase from the higher ratio of premium subscrib- revenue, despite higher costs associated with expansion in the
ers to “au Smart Pass.” It also reflected an increase in value- commerce, as well as settlements and financial services,
added ARPA revenue from growth in gross merchandise businesses.
value, including settlements and commerce, in the “au
Economic Zone,” and contributions from ENERES Co., Ltd.
becoming a consolidated subsidiary.

600 579 120 40.0 150 50.0
113 138
522 104 128
96 120 117 40.0
450 451 90 30.0
90 30.0
21.3 26.0
300 60 19.9 19.5 20.0 24.5
23.8
60 20.0
150 30 10.0
30 10.0
0 0 0 0 0
2017 2018 2019 2017 2018 2019 2017 2018 2019
Value-Added ARPA
Value-added ARPA increased ¥110 compared with the previ- (Yen)

800
ous year to ¥700, thanks to the higher ratio of premium sub- 720 720
690
scribers to “au Smart Pass,” in addition to growth in 600
630
660
590
570
settlement commissions for “au WALLET Credit card” and 560
“au Carrier Billing” on top of higher commerce revenues. 400
200
590 700
0
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
2018 2019
Number of “au Smart Pass” and “au Smart Pass Premium” Members
The number of “au Smart Pass” and “au Smart Pass (Million members)
16 15.22 15.49
15.53
Premium” members declined 40 thousand compared with 14.47 0.49
the end of the previous fiscal year to 15.49 million. Of this 12

12.89 4.30
7.30
number, memberships of “au Smart Pass Premium,” which is
a sophisticated version of “au Smart Pass,” increased 8
3 million year on year due in part to an effective campaign to

sign people up at retail stores and the provision of more 4
special benefits for members.

0
2015 2016 2017 2018 2019
au Smart Pass Of which, au Smart Pass Premium

Key Initiatives
Smart Money Concept Strengthening the Energy Business
In February 2019, au Financial Holdings Corporation was In August 2018, KDDI, Electric Power Development Co., Ltd.
established as an intermediate financial holding company and ENERES Co., Ltd. entered into a business tie-up agree-
with the objective of strengthening the settlement and finan- ment with the objective of increasing corporate value by cre-
cial services business. At the same time, KDDI launched the ating business opportunities through innovation in the rapidly
“Smart Money Concept” to provide customers with settle- changing electric power market. In December 2018, KDDI
ment and financial services via their smartphones, which have acquired additional shares in ENERES through a public offer-
become inseparable from their daily lives. ing, and turned ENERES into a consolidated subsidiary.
Over 25 million customers have applied for “au WALLET KDDI began to offer “au Denki” when the retail electric
Prepaid cards” and “au WALLET Credit cards.” Balances on power sector was deregulated in April 2016. Since then,
“au WALLET” and WALLET points have risen above ¥100 bil- KDDI has outsourced the management of supply and
lion, and settlement and financial transaction volume has demand operations for “au Denki” to ENERES, whose
expanded to ¥4.4 trillion. In April 2019, “au PAY” was launched responsibility extended to the forecasting of demand for elec-
offering customers a new smartphone payment method centric power and procuring the necessary power sources. By
tered on the “au WALLET” app, encouraging cashless pay- making ENERES a consolidated subsidiary, KDDI expects to
ments and strengthening points of contact with customers. accelerate decision-making at the entity and be able to more
Building on “au WALLET,” KDDI aims to offer customers a flexibly invest management resources, including the provision
one-stop financial experience for savings, payments, invest- of support backed by the insight of KDDI and Electric Power
ments, loans, and insurance. While supporting customers Development. KDDI will continue to reinforce the energy busi-
with their finances, we intend to offer superior services in tune ness in the future.
with the life plans of each customer.
Building the foundation of energy business

to be one of core services in life design
Demand /Supply Procurement

management Alliance-backed support of power
know-how business base supply
Customer
base
Solving Social Issues through Business: Education Business
Through our education business, we contribute to the development of human resources that will lead the next generation.
• Need for training human resources responsive to globalization

Social
• Insufficient education opportunities for children to thrive in society
issues
• Insufficient learning opportunities for children in developing countries
KDDI’s Vision KDDI’s Initiatives
KDDI aims to broadly provide venues for children to learn life- Through the foreign language education business, the KDDI
long skills through work and social experiences while furnishing Group offers services for learning in a new format, blending
them with opportunities to learn foreign languages, with the education with communications services, that can be provided
intention of contributing to the development of a sustainable anywhere. Moreover, KDDI offers learning experiences at
society by solving issues faced by the young in an increasingly KidZania based on the concept of edutainment (learning while
diverse society. having fun). In developing countries, KDDI creates opportunities
By providing educational opportunities in developing countries, for people to study English, PC operation, and music, subjects
KDDI also contributes to the development of human resources that tend to be neglected in these countries.
who may guide their countries toward sustained growth.


Business Services Segment (Years ended March 31)
Providing Telecommunication Services, ICT Solutions, Data Center Services, and Others for Corporate Customers
This segment provides diverse solutions, including mobile corporations. In addition, the segment is moving forward with
services using devices such as smartphones and tablets as a variety of initiatives in the IoT sector, in which all manner of
well as networks, applications, and cloud services to a wide things are connected to the Internet.
range of corporate customers, ranging from small to major
In the fiscal year ended March 31, 2019, operating revenue MATOMETE OFFICE CORPORATION and other subsidiaries,
expanded 6.3% year on year to ¥796.9 billion, despite a and higher revenue from retail electric power sales.
decline in voice communications revenue. This increase mainly Operating income climbed 23.1% to ¥104.0 billion, thanks
reflected higher data telecommunications revenue, growth in to controls on the cost of sales and SG&A expenses as
the domestic data center business, stronger revenue at KDDI revenue grew.

800 797 120 20.0 150 150 25.0
750
710 104 133
124
120 20.0
600 90 15.0
17.5 17.7 18.8
84
76 13.1
11.3 90 15.0
10.7
400 60 10.0
60 10.0
200 30 5.0
30 5.0
0 0 0 0 0
2017 2018 2019 2017 2018 2019 2017 2018 2019
Key Initiatives
Promoting the IoT Business partners, and providing support for compliance with relevant
KDDI has been promoting a platform for providing services to laws and regulations as well as device authentication.
all industries based on the KDDI IoT World Architecture, an KDDI plans to increase the number of collaborative part-
evolved version of the Global Communications Platform that ners and help corporate customers solve issues related to
KDDI is jointly developing with Toyota Motor Corporation. the global rollout of their IoT solutions, offering strong support
KDDI IoT World Architecture is a business IoT platform for for customers dealing with business change and growth.
providing cloud-based services, applications and data analysis
in addition to connectivity. It is designed around the
Company’s new recurring business model. The KDDI IoT
World Architecture supports customers by selecting and
making available the optimal network for them, offering data
collection and analysis services in collaboration with KDDI’s
Solving Social Issues through Business: Global Business
Infrastructure maintenance through its global business, KDDI encourages economic development in
countries with inadequate
KDDI’s Vision
Social • Slow development of telecommunications In developing countries, KDDI aims to eliminate the digital divide
issues environments, economies and industries in by offering hardware and software assistance for information
telecommunications and by helping improve the livelihoods of
developing countries
people in these countries through economic and industrial devel-
• Digital divides in developing countries opment and upgrades to telecommunications infrastructure.
Through these initiatives, KDDI will contribute to the realization
of a society where everyone has easy access to telecommuni-
cations and information.

Global Services Segment (Years ended March 31)
Providing Telecommunication Services, ICT Solutions, Data Center Services, and Others for Individuals and
Corporate Customers Overseas
This segment offers the one-stop provision of ICT solutions to customer businesses, such as the telecommunications busi-
corporate customers, centered on our “TELEHOUSE” data ness in Myanmar and Mongolia.
centers. In addition, we are working aggressively to expand
In the fiscal year ended March 31, 2019, operating revenue However, operating income expanded 7.7% year on year
fell 16.0% year on year to ¥208.8 billion, reflecting the to ¥34.4 billion, due to brisk performance in the Myanmar
restructuring of low-profitability businesses, despite robust telecommunications, data center and systems integration
performance in the Myanmar telecommunications business, businesses, even though foreign exchange rates had a nega-
data center business and systems integration business. tive impact on profits.

400 40 40.0 50 49 25.0
23.4
44
34
32 40 20.0
300 30 30.0 37
277 17.6
249 24 30 15.0
209
200 20 20.0 13.4
16.5 20 10.0
12.8
100 10 8.7 10.0

10 5.0
0 0 0 0 0
2017 2018 2019 2017 2018 2019 2017 2018 2019
Key Initiatives
Initiatives to Develop the Telecommunications Business As of March 31, 2019, our LTE+ services could be used at
in Emerging Countries 314 of the nation’s 330 townships. Just one year and eight
In Myanmar, KDDI launched the MPT Club in May 2018 as months after launch, the service was providing 300Mbps*
the first point program in Myanmar, with the goal of improving high-speed access across almost all of Myanmar.
customer retention. It is a shared point program that can be As the telecommunications carrier with the No. 1 share in
used at affiliated stores and, as of March 31, 2019, a total of the country, we will continue efforts to expand operations.
28 companies had signed on, including convenience stores,
* Best-effort service. The listed speed is the maximum speed based on techni-
restaurants, and movie theaters. cal specifications, and actual speeds may be slower.
KDDI’s Initiatives while contributing to economic development and the realization

KDDI is leveraging the experience, know-how and technological of more comfortable lifestyles. We are also involved in peripheral
capabilities it has accumulated around the world in the telecommu- businesses around telecommunications that contribute to sus-
nications services business to develop reliable, “Japan-quality” tained growth in these countries. With the aim of eliminating
telecommunications services with expanded 4G LTE coverage in digital divides in international society, we proactively participate
Myanmar, Mongolia, and other developing countries. By offering in ICT projects and offer technological consultation in developing
inexpensive and fair access to telecommunications networks, we countries in addition to contributing to the training of technicians
will increase the number of mobile connections in these countries, through education and training programs in the ICT field.

Consolidated Financial Statements
Consolidated Statement of Financial Position

KDDI Corporation and its Subsidiaries
As of March 31
Millions of
Millions of yen U.S. dollars
Notes 2018 2019 2019
Assets
Non-current assets
Property, plant and equipment 6, 8 ¥2,437,196 ¥2,546,181 $22,941
Goodwill 4, 7, 8 526,601 539,694 4,863
Intangible assets 7, 8 953,106 946,837 8,531
Investments accounted for using the equity method 9 98,192 174,000 1,568
Other long-term financial assets 12, 32, 33 236,684 253,025 2,280
Deferred tax assets 16 106,050 15,227 137
Contract costs 25 — 412,838 3,720
Other non-current assets 13 65,477 10,117 91
Total non-current assets 4,423,306 4,897,918 44,129
Current assets
Inventories 10 89,207 90,588 816
Trade and other receivables 11, 32 1,695,403 1,965,554 17,709
Other short-term financial assets 12, 32, 33 30,173 41,963 378
Income tax receivables 2,101 4,633 42
Other current assets 13 133,531 125,162 1,128
Cash and cash equivalents 4, 14 200,834 204,597 1,843
Total current assets 2,151,249 2,432,498 21,916
Total assets ¥6,574,555 ¥7,330,416 $66,046

Millions of
Notes 2018 2019 2019
Liabilities and Equity
Liabilities
Non-current liabilities
Borrowings and bonds payable 15, 32, 33 ¥ 704,278 ¥1,040,978 $ 9,379
Other long-term financial liabilities 19, 32, 33 68,478 66,493 599
Retirement benefit liabilities 17 12,010 13,356 120
Deferred tax liabilities 16 80,298 100,680 907
Provisions 20 10,754 33,996 306
Contract liabilities 25 — 77,435 698
Other non-current liabilities 21 129,679 6,746 61
Total non-current liabilities 1,005,498 1,339,683 12,070
Current liabilities
Borrowings and bonds payable 15, 32, 33 329,559 150,574 1,357
Trade and other payables 18, 32 610,726 671,969 6,054
Other short-term financial liabilities 19, 32, 33 24,717 26,773 241
Income taxes payables 143,635 152,195 1,371
Provisions 20 31,231 34,403 310
Contract liabilities 25 — 116,076 1,046
Other current liabilities 21 297,932 225,810 2,035
Total current liabilities 1,437,800 1,377,801 12,414
Total liabilities 2,443,298 2,717,484 24,484
Equity
Equity attributable to owners of the parent
Common stock 23 141,852 141,852 1,278
Capital surplus 22, 23 289,578 284,409 2,562
Treasury stock 23 (338,254) (383,728) (3,457)
Retained earnings 23 3,672,344 4,144,133 37,338
Accumulated other comprehensive income 23 8,183 (3,174) (29)
Total equity attributable to owners of the parent 3,773,703 4,183,492 37,693
Non-controlling interests 38 357,554 429,440 3,869
Total equity 4,131,257 4,612,932 41,562
Total liabilities and equity ¥6,574,555 ¥7,330,416 $66,046
Note: The notes 1 to 41 are an integral part of these consolidated financial statements.

Consolidated Statement of Income

For year ended March 31
Millions of
Notes 2018 2019 2019
Operating revenue 25 ¥5,041,978 ¥5,080,353 $45,773
Cost of sales 26 2,821,803 2,867,413 25,835
Gross profit 2,220,175 2,212,940 19,938
Selling, general and administrative expenses 26 1,271,215 1,210,470 10,906
Other income 27 12,041 10,140 91
Other expense 27 2,801 3,661 33
Share of profit of investments accounted for
using the equity method 9 4,592 4,780 43
Operating income 962,793 1,013,729 9,134
Finance income 28 4,035 3,582 32
Finance cost 28 11,985 10,012 90
Other non-operating profit and loss 29 305 2,975 27
Profit for the year before income tax 955,147 1,010,275 9,102
Income tax 16 293,951 309,149 2,785
Profit for the year ¥ 661,196 ¥ 701,126 $ 6,317
Profit for the year attributable to

Owners of the parent ¥ 572,528 ¥ 617,669 $ 5,565
Non-controlling interests 88,668 83,457 752
Profit for the year ¥ 661,196 ¥ 701,126 $ 6,317
Earnings per share attributable to owners of the parent 35

Basic earnings per share (yen) ¥235.54 ¥259.10 $2
Diluted earnings per share (yen) 235.45 259.01 2

Consolidated Statement of Comprehensive Income
Millions of
Notes 2018 2019 2019
Profit for the year ¥661,196 ¥701,126 $6,317
Other comprehensive income

Items that will not be transferred subsequently to
profit or loss
Remeasurements of defined benefit pension plans 17, 30 4,132 (3,451) (31)
Changes measured in fair value of financial assets
through other comprehensive income 30, 32 8,359 (3,219) (29)
Share of other comprehensive income of
investments accounted for using the equity method 9, 30 (149) (1,267) (11)
Total 12,342 (7,937) (72)
Items that may be subsequently reclassified to profit

or loss
Changes in fair value of cash flow hedge 30, 32 933 (106) (1)
Translation differences on foreign operations 30 1,515 (6,620) (60)
Share of other comprehensive income of
investments accounted for using the equity method 9, 30 (25) (88) (1)
Total 2,423 (6,814) (61)
Total other comprehensive income 14,766 (14,751) (133)
Total comprehensive income for the year ¥675,961 ¥686,375 $6,184
Total comprehensive income for the year attributable to

Owners of the parent ¥588,324 ¥604,136 $5,443
Total ¥675,961 ¥686,375 $6,184
Notes: 1. Items in the statement above are disclosed net of tax.
2. Income taxes related to each component of other comprehensive income are disclosed in “Note 16. Deferred tax and income taxes.”
3. The notes 1 to 41 are an integral part of these consolidated financial statements.

Consolidated Statement of Changes in Equity

Millions of yen

Accumulated
other com- Non-
Common Capital Treasury Retained prehensive controlling
Notes stock surplus stock earnings income Total interests Total equity
As of April 1, 2017 ¥141,852 ¥298,046 ¥(237,014) ¥3,354,140 ¥ (2,601) ¥3,554,423 ¥294,710 ¥3,849,133
Comprehensive income
Profit for the year — — — 572,528 — 572,528 88,668 661,196
Other comprehensive income — — — — 15,795 15,795 (1,030) 14,766
Total comprehensive income — — — 572,528 15,795 588,324 87,638 675,961
Transactions with owners and
other transactions
Cash dividends 24 — — — (219,701) — (219,701) (47,590) (267,291)
Transfer of accumulated other compre-
hensive income to retained earnings — — — 5,012 (5,012) — — —
Purchase and disposal of treasury stock 23 — (50) (150,000) — — (150,050) — (150,050)
Cancellation of treasury stock 23 — (9,074) 48,709 (39,635) — — — —
Changes due to business combination — — — — — — 5,376 5,376
Changes in interests in subsidiaries — (635) — — — (635) 17,924 17,289
Other — 1,291 51 — — 1,343 (503) 839
Total transactions with owners and
other transactions — (8,467) (101,239) (254,324) (5,012) (369,043) (24,794) (393,837)
As of April 1, 2018 ¥141,852 ¥289,578 ¥(338,254) ¥3,672,344 ¥ 8,183 ¥3,773,703 ¥357,554 ¥4,131,257
Cumulative effects of changes in
accounting policies — — — 187,468 — 187,468 29,302 216,770
Restated balance 141,852 289,578 (338,254) 3,859,812 8,183 3,961,171 386,856 4,348,027
Profit for the year — — — 617,669 — 617,669 83,457 701,126
Other comprehensive income — — — — (13,533) (13,533) (1,219) (14,751)
Total comprehensive income — — — 617,669 (13,533) 604,136 82,238 686,375
other transactions
Cash dividends 24 — — — (227,937) — (227,937) (34,277) (262,214)
hensive income to retained earnings — — — (2,176) 2,176 — — —
Retirement of treasury stock 23 — — 103,235 (103,235) — — — —
Changes due to business combination — — — — — — 3,324 3,324
Changes in interests in subsidiaries — (4,802) — — — (4,802) (8,701) (13,503)
Other — (274) 1,291 — — 1,017 — 1,017
other transactions — (5,169) (45,474) (333,348) 2,176 (381,816) (39,655) (421,470)
As of March 31, 2019 ¥141,852 ¥284,409 ¥(383,728) ¥4,144,133 ¥ (3,174) ¥4,183,492 ¥429,440 ¥4,612,932
Millions of U.S. dollars

Accumulated
other com- Non-
Common Capital Treasury Retained prehensive controlling
Notes stock surplus stock earnings income Total interests Total equity
As of April 1, 2018 $1,278 $2,609 $(3,048) $33,087 $ 74 $34,000 $3,221 $37,222
Cumulative effects of changes in
accounting policies — — — 1,689 — 1,689 264 1,953
Restated balance 1,278 2,609 (3,048) 34,776 74 35,689 3,486 39,175
Profit for the year — — — 5,565 — 5,565 752 6,317
Other comprehensive income — — — — (122) (122) (11) (133)
Total comprehensive income — — — 5,565 (122) 5,443 741 6,184
other transactions
Cash dividends 24 — — — (2,054) — (2,054) (309) (2,363)
hensive income to retained earnings — — — (20) 20 — — —
Retirement of treasury stock 23 — — 930 (930) — — — —
Changes due to business combination — — — — — — 30 30
Changes in interests in subsidiaries — (43) — — — (43) (78) (122)
Other — (2) 12 — — 9 — 9
other transactions — (47) (410) (3,003) 20 (3,440) (357) (3,797)
As of March 31, 2019 $1,278 $2,562 $(3,457) $37,338 $(29) $37,693 $3,869 $41,562

Consolidated Statement of Cash Flows
Millions of
Notes 2018 2019 2019
Cash flows from operating activities
Profit for the period before income tax ¥ 955,147 ¥1,010,275 $ 9,102
Depreciation and amortization 6, 7 546,815 562,402 5,067
Impairment loss 8 13,069 2,737 25
Share of (profit) loss of investments accounted for using
the equity method 9 (4,592) (4,780) (43)
Loss (gain) on sales of non-current assets 149 538 5
Interest and dividends income 28 (3,527) (3,571) (32)
Interest expenses 28 9,701 8,694 78
(Increase) decrease in trade and other receivables (219,125) (271,723) (2,448)
Increase (decrease) in trade and other payables 44,914 23,008 207
(Increase) decrease in inventories (12,185) (1,544) (14)
Increase (decrease) in retirement benefit liabilities (9,790) 1,346 12
Other 43,064 (6,326) (57)
Cash generated from operations 1,363,639 1,321,055 11,902
Interest and dividends received 6,149 6,375 57
Interest paid (17,048) (9,106) (82)
Income tax paid (302,783) (290,689) (2,619)
Income tax refund 11,447 1,971 18
Net cash provided by (used in) operating activities 1,061,405 1,029,607 9,277
Cash flows from investing activities

Purchases of property, plant and equipment (361,102) (399,531) (3,600)
Proceeds from sales of property, plant and equipment 1,299 848 8
Purchases of intangible assets (199,776) (202,607) (1,825)
Purchases of other financial assets (7,002) (13,191) (119)
Proceeds from sales/redemption of other financial assets 2,565 1,767 16
Acquisitions of control over subsidiaries 4 (66,751) (13,274) (120)
Purchases of stocks of associates (4,688) (83,799) (755)
Proceeds from sales of stocks of subsidiaries and associates 1,898 (1,507) (14)
Other (289) (3,285) (30)
Net cash provided by (used in) investing activities (633,847) (714,578) (6,438)
Cash flows from financing activities

Net increase (decrease) of short-term borrowings 31 27,574 (10,274) (93)
Proceeds from issuance of bonds and long-term borrowings 31 95,000 456,000 4,108
Payments from redemption of bonds and repayments of
long-term borrowings 31 (56,101) (302,151) (2,722)
Repayments of lease obligations 31 (27,210) (28,616) (258)
Payments from purchase of subsidiaries’ equity from
non-controlling interests (1,158) (14,191) (128)
Proceeds from stock issuance to non-controlling interests 22,164 159 1
Payments from purchase of treasury stock 23 (150,000) (150,000) (1,351)
Cash dividends paid (219,885) (227,700) (2,052)
Cash dividends paid to non-controlling interests (48,553) (34,177) (308)
Purchase of debt instruments (Note 1) 31 (95,000) — —
Other (1) (0) (0)
Net cash provided by (used in) financing activities (453,168) (310,951) (2,802)
Effect of exchange rate changes on cash and
cash equivalents 31 (163) (314) (3)
Net increase (decrease) in cash and cash equivalents 31 (25,773) 3,763 34
Cash and cash equivalents at the beginning of the year 14, 31 226,607 200,834 1,809
Cash and cash equivalents at the end of the year 14, 31 ¥ 200,834 ¥ 204,597 $ 1,843
Notes: 1. During the fiscal year ended March 31, 2018, KDDI purchased the beneficiary right to preferred shares issued by a subsidiary of the KDDI Group (These shares are treated as
financial liabilities because the issuer has an obligation to deliver cash to holders of preference shares).
2. The notes 1 to 41 are an integral part of these consolidated financial statements.

Notes to Consolidated Financial Statements

1 Reporting Entity
KDDI CORPORATION (“the Company”) was established as a limited and joint ventures. The Company is the ultimate parent company of
company in accordance with Japanese Company Act. The location the Group.
of the Company is Japan and the registered address of its head- The Group’s major business and activities are “Personal Services,”
quarter is 2-3-2, Nishishinjuku, Shinjuku-ku, Tokyo, Japan. The “Life Design Services,” “Business Services” and “Global Services.”
Company’s consolidated financial statements as of and for the year For the details, please refer to “(1) Outline of reporting segments” of
ended March 31, 2019 comprise the Company and its consolidated “5. Segment information.”
subsidiaries (“the Group”) and the Group’s interests in associates
2 Basis of Preparation
(1) Compliance of consolidated financial statements with IFRSs of carrying amounts of assets and/or liabilities in the subsequent fis-
cal years and the underlying assumptions are as follows:
The Group’s consolidated financial statements have been prepared
in accordance with IFRSs as prescribed in Article 93 of Ordinance i. Estimates of useful lives and residual values of property, plant
on Consolidated Financial Statements as they satisfy the require- and equipment, intangible assets, finance lease assets
ment of a “specific company” set forth in Article 1-2 of Ordinance on Property, plant and equipment is depreciated primarily using the
Consolidated Financial Statements. straight-line method, based on the estimated useful life that reflects
the period in which the asset’s future economic benefits are expect-
(2) Basis of measurement ed to be consumed. The depreciation charge for the period could
increase if an item of property, plant and equipment becomes obso-
The Group’s consolidated financial statements have been prepared lete or repurposed in the future and the estimated useful life
under the historical cost basis except for the following significant becomes shorter.
items on the consolidated statement of financial position: Intangible asset with a finite useful life is amortized on a straight-
• Derivative assets and derivative liabilities (measured at fair value) line basis in principle to reflect the pattern in which the asset’s future
• Financial assets or financial liabilities at fair value through profit or economic benefits are expected to be consumed by the Group.
loss Estimated useful life of the customer relationships acquired in a busi-
• Financial assets at fair value through other comprehensive income ness combination is determined based on the cancellation rate. The
• Assets and liabilities related to defined benefit plan (measured at intangible assets related to the customer relationships are amortized
the present value of the defined benefit obligations, net of the fair over the useful life. Should actual sales volumes fail to meet initial
value of the plan asset) projected volumes due to changes in the business environment etc.,
or should actual useful life in the future be less than the original esti-
(3) Presentation currency and unit of currency mate, there is a risk that amortization expenses for the reporting
period may increase.
The Group’s consolidated financial statements are presented in The content related to estimates of useful lives and residual values
Japanese yen, which is the currency of the primary economic envi- of property, plant and equipment, intangible assets, finance lease
ronment of the Company’s business activities (“functional currency”), assets are described in “3. Significant accounting policies (5) Property,
and are rounded to the nearest million yen. plant & equipment, (7) Intangible asset and (8) Leases,” “6. Property,
The consolidated financial statements presented herein are plant and equipment” and “7. Goodwill and intangible assets.”
expressed in Japanese yen and, solely for the convenience of the
readers, have been translated into U.S. dollars at the rate of ii. Impairment of property, plant and equipment and intangible
¥110.99=U.S.$1, the approximate exchange rate on March 31, assets including goodwill
2019. These translations should not be construed as representations The Group conducts impairment tests to property, plant and equip-
that the Japanese yen amounts actually are, have been or could be ment and intangible assets including goodwill. Calculations of recov-
readily converted into U.S. dollars at this rate or any other rate. erable amounts used in impairment tests are based on assumptions
set using such factors as an asset’s useful life, future cash flows, pre-
(4) Use of estimates and judgement tax discount rates and long-term growth rates. These assumptions
are based on the best estimates and judgments made by manage-
The preparation of consolidated financial statements in accordance ment. However, these assumptions may be affected by changes in
with IFRSs requires management to make judgments, estimates and uncertain future economic conditions, which may have a material
assumptions that affect the application of accounting policies and impact on the consolidated financial statements in future periods.
the reported amounts of assets and liabilities, income and expenses. The method for calculating recoverable amounts is described in
The estimates and assumptions are based on the management’s “3. Significant accounting policies (9) Impairment of property, plant
best judgments, through their evaluation of various factors that were and equipment, goodwill and intangible assets” and “8. Impairment
considered reasonable as of the period-end, based on historical of property, plant and equipment, goodwill and intangible assets.”
experience and by collecting available information. By the nature of
the estimates or assumptions, however, actual results may differ iii. Evaluation of inventories
from those estimates and assumptions. Inventories are measured at historical cost. However, when the net
The estimates and assumptions are reviewed on an ongoing basis. realizable value (“NRV”) at the reporting date falls below the cost,
The effect of adjusting accounting estimates is recognized in the fis- inventories are subsequently measured based on NRV, with the dif-
cal year in which the estimates are adjusted and in the subsequent ference in value between the cost and NRV, booked as cost of
fiscal years. Estimates that may have a risk of significant adjustment sales. Slow-moving inventories and those outside the normal

operating cycle are calculated at NRV that reflects future demand obligations as of the current year end date. Expenditures necessary
and market trends. The Group may experience substantial losses in for settling the obligations are calculated by taking all possible future
cases where NRV drops as a result of deterioration in the market results into account; however, they may be affected by unexpected
environment against the forecast. events or changes in conditions which may have a material impact
The content and amount related to evaluation of inventories are on the Group’s consolidated financial statements in future periods.
described in “3. Significant accounting policies (15) Inventories” and The nature and amount of recognized provisions are stated in
“10. Inventories.” “3. Significant accounting policies (17) Provisions” and “33. Provisions.”
iv. Recoverability of deferred tax assets (5) Application of new standards and interpretations
In recognizing deferred tax assets, when judging the possibility of
the future taxable income, the Group estimates the timing and The Group applies the new standards and interpretations listed
amount of future taxable income based on the business plan. below from the fiscal year ended March 31, 2019.
The timing when taxable income arises and the amount of such • IFRS 15 “Revenue from Contracts with Customers”
income may be affected by changes in uncertain future economic • IFRIC 22 “Foreign Currency Transactions and Advance
conditions. If there are differences between the actual amounts and Consideration”
estimated amounts, this may have a material impact on the consoli-
dated financial statements in future periods. Application of IFRS 15
The content and amount related to deferred tax assets are The Group has applied the following standard from the fiscal year
described in “3. Significant accounting policies (24) Income taxes” ended March 31, 2019.
and “16. Deferred tax and income taxes.” IFRS Newly established contents
Revenue from contracts with New standard for accounting
v. Measurement of defined benefit obligations IFRS 15 customers procedure and presentation
The Group has in place various post-retirement benefit plans, includ- (Newly established in May 2014) regarding revenue recognition.
ing defined benefits plans. The present value of defined benefit obli-
gations on each of these plans and the service costs are calculated The Group has applied IFRS 15 in accordance with the transition
based on actuarial assumptions. These actuarial assumptions elections available, and therefore retrospectively recognized the
require estimates and judgments on variables, such as discount cumulative effect of initially applying the standard as an adjustment
rates. The Group obtains advice from external pension actuaries to the opening balance of retained earnings as of April 1, 2018.
with respect to the appropriateness of these actuarial assumptions In accordance with IFRS 15, excluding such as interest and divi-
including these variables. dend recognized in accordance with IFRS 9, insurance revenues
The actuarial assumptions are determined based on the best esti- recognized in accordance with IFRS 4 and lease revenues recog-
mates and judgments made by management. However, there is the nized in accordance with IAS 17, revenues are recognized upon
possibility that these assumptions may be affected by changes in transfer of promised goods or services to customers in amounts
uncertain future economic conditions, or by the publication or the that reflect the consideration to which the Group expect to be enti-
amendment of related laws, which may have a material impact on tled in exchange for those goods or services based on the following
the consolidated financial statements in future periods. five step approach:
These actuarial assumptions are described in “3. Significant Step 1: Identify the contracts with customers
accounting policies (16) Employee benefits” and “17. Employee Step 2: Identify the performance obligations in the contract
benefits.” Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obliga-
vi. Collectability of trade and other receivables tions in the contract
The Group has estimated the collectability of trade and other receiv- Step 5: Recognize revenue when (or as) the entity satisfies a per-
ables based on the credit risk. Fluctuations in credit risk of customer formance obligation
receivables may have a significant effect on the amounts recognized We recognize the incremental costs for obtaining contracts with
the allowance for receivables on the consolidated financial state- customers and the costs incurred in fulfilling a contract with a cus-
ments in future periods. tomer as an asset if those costs are expected to be recoverable.
The content and amount related to collectability of trade and other The incremental costs for obtaining contracts are those costs that
receivables are described in “3. Significant accounting policies the Group incurs to obtain a contract with a customer that it would
(12) Impairment of financial assets” and “32. Financial Instruments.” not have incurred if the contract had not been obtained.
Depending on the business model applied, the new standards
vii. Valuation technique of financial assets at fair value without affect the following issues in particular.
quoted prices in active markets. - In the case where the Group sells mobile handsets to customers
The Group has used valuation techniques to utilize the inputs unob- and simultaneously enters into communications service contracts
servable in the market when assessing the fair value of certain finan- with the customers, accounting might change as a result of com-
cial instruments. Unobservable input may be affected by changes in bination of contracts and allocating the transaction prices to per-
uncertain future economic conditions, which may have a material formance obligations.
impact on the consolidated financial statements in future periods if it - Under IFRS 15, expenses for sales commissions are capitalized
becomes necessary to review. and recognized over the estimated customer retention period. On
The content and amount related to fair value of financial assets first-time application of the standard, both total assets and equity
are described in “3. Significant accounting policies (11) Financial increase due to the capitalization of contract assets.
instruments and (13) Derivatives and hedge accounting” and - Deferral, i.e., later recognition of revenue in cases where “materi-
“33. Fair value of financial instruments.” al rights” are granted, such as offering additional discounts for
future purchases of further products.
viii. Provisions
The Group recognizes provisions, including asset retirement obliga-
tions and provisions for point program, in the consolidated state-
ment of financial position. These provisions are recognized based on
the best estimates of the expenditures required to settle the obliga-
tions, taking into account risks and uncertainty related to the

A reconciliation of the adjustments from the application of IFRS 15 relative to IAS 18 on relevant financial statement line items in the
Consolidated Statement of Income and Consolidated Statement of Financial Position is as follows.
Millions of yen
IAS 18 IFRS 15 Retained
carrying amount carrying amount earnings effect
March 31, 2018 Reclassification Remeasurements April 1, 2018 April 1, 2018
Goodwill ¥526,601 ¥ — ¥ (5,633) ¥520,967 ¥ (5,633)
Deferred tax assets 106,050 — (73,425) 32,625 (73,425)
Contract costs — 84,868 275,984 360,851 275,984
Other non-current assets 65,477 (56,358) — 9,119 —
Other current assets 133,531 (28,510) — 105,021 —
Deferred tax liabilities 80,298 — 26,768 107,066 (26,768)
Contract liabilities — 243,655 (46,612) 197,043 46,612
Other non-current liabilities 129,679 (123,275) — 6,404 —
Other current liabilities 297,932 (120,379) — 177,553 —
Non-controlling interests 357,554 — 29,302 386,856 (29,302)
Millions of U.S. dollar
IAS 18 IFRS 15 Retained
carrying amount carrying amount earnings effect
March 31, 2018 Reclassification Remeasurements April 1, 2018 April 1, 2018
Goodwill $4,745 $ — $ (51) $4,694 $ (51)
Deferred tax assets 955 — (662) 294 (662)
Contract costs — 765 2,487 3,251 2,487
Other non-current assets 590 (508) — 82 —
Other current assets 1,203 (257) — 946 —
Deferred tax liabilities 723 — 241 965 (241)
Contract liabilities — 2,195 (420) 1,775 420
Other non-current liabilities 1,168 (1,111) — 58 —
Other current liabilities 2,684 (1,085) — 1,600 —
Non-controlling interests 3,221 — 264 3,486 (264)
The comparison of the application of IFRS 15 relative to IAS 18 on the impacted financial statement line items in Consolidated Statement of
Income and Consolidated Statement of Financial Position are as follows.
Millions of yen
IAS 18 carrying amount IFRS 15 carrying amount
Operating revenue ¥5,100,453 ¥5,080,353
Cost of sales 2,884,870 2,867,413
Gross profit 2,215,583 2,212,940
Selling, general and administrative expenses 1,269,326 1,210,470
Operating income 957,515 1,013,729
Profit for the period 663,718 701,126
Owners of the parent 583,482 617,669
Non-controlling interests 80,236 83,457
Basic earnings per share (yen) 244.76 259.10
Diluted earnings per share (yen) 244.68 259.01
Goodwill 545,328 539,694
Deferred tax assets 105,834 15,227
Contract costs — 412,838
Other non-current assets 62,367 10,117
Other current assets 152,292 125,162
Deferred tax liabilities 72,289 100,680
Contract liabilities — 193,511
Other non-current liabilities 125,756 6,746
Other current liabilities 345,583 225,810
Retained earnings 3,922,478 4,144,133

IAS 18 carrying amount IFRS 15 carrying amount
Operating revenue $45,954 $45,773
Cost of sales 25,992 25,835
Gross profit 19,962 19,938
Selling, general and administrative expenses 11,436 10,906
Operating income 8,627 9,134
Profit for the period 5,980 6,317
Owners of the parent 5,257 5,565
Non-controlling interests 723 752
Basic earnings per share (yen) 2 2
Diluted earnings per share (yen) 2 2
Goodwill 4,913 4,863
Deferred tax assets 954 137
Contract costs — 3,720
Other non-current assets 562 91
Other current assets 1,372 1,128
Deferred tax liabilities 651 907
Contract liabilities — 1,743
Other non-current liabilities 1,133 61
Other current liabilities 3,114 2,035
Retained earnings 35,341 37,338
(6) Standards not yet adopted
The following new standards and amendments announced by the approval date of the consolidated financial statements are not mandatory
as of March 31, 2019. They have not been early adopted by the Group.
Mandatory adoption
(from the fiscal year To be adopted by
Standard The title of standard beginning) the Group from Outline of new standards and amendments
IFRS 3 Amendments to IFRS 3 January 1, 2019 Fiscal year ending These amendments require that a company remeasures its previously held
(Business combinations) March 31, 2020 interest in a joint operation when it obtains control of the business.
IFRS 9 Amendments to IFRS 9 January 1, 2019 Fiscal year ending These amendments confirm that when a financial liability measured at amor-
(Financial instruments) March 31, 2020 tised cost is modified without this resulting in de-recognition, a gain or loss
on prepayment features should be recognised immediately in profit or loss.
with negative compensation The gain or loss is calculated as the difference between the original contrac-
tual cash flows and the modified cash flows discounted at the original effective
interest rate. This means that the difference cannot be spread over the remain-
ing life of the instrument which may be a change in practice from IAS 39.
IFRS 11 Amendments to IFRS 11 January 1, 2019 Fiscal year ending These amendments require that a company does not remeasure its previously
(Joint arrangements) March 31, 2020 held interest in a joint operation when it obtains joint control of the business.
IFRS 16 Leases January 1, 2019 Fiscal year ending IFRS 16 describes that revision of current accounting standard for lease and
March 31, 2020 disclosure.
Specifically, IFRS 16 introduces a single lessee accounting model and
requires a lessee to recognize its right to use the underlying leased asset and
a lease liability representing its obligation to make lease payments for all leas-
es with a term of more than 12 months as principal.
IFRS 17 Insurance contracts January 1, 2021 Fiscal year ending IFRS 17 will replace IFRS 4, which currently permits a wide variety of practic-
March 31, 2022 es in accounting for insurance contracts. IFRS 17 will fundamentally change
the accounting by all entities that issue insurance contracts and investment
contracts with discretionary participation features.
IFRIC 23 Uncertainty over income tax January 1, 2019 Fiscal year ending IFRIC 23 provides guidance how to recognise and measure deferred and current
treatments March 31, 2020 income tax assets and liabilities where there is uncertainty over tax treatment.
IAS 12 Amendments to IAS 12, January 1, 2019 Fiscal year ending These amendments require that a company accounts for all income tax con-
(Income taxes) March 31, 2020 sequences of dividend payments in the same way.
IAS 19 Amendments to IAS 19, January 1, 2019 Fiscal year ending These amendments require an entity to:
(Employee benefits) March 31, 2020 • use updated assumptions to determine current service cost and net inter-
on plan amendment, est for the reminder of the period after a plan amendment, curtailment or
curtailment or settlement settlement; and
• recognise in profit or loss as part of past service cost, or a gain or loss on
settlement, any reduction in a surplus, even if that surplus was not previ-
ously recognised because of the impact of the asset ceiling.

Mandatory adoption
(from the fiscal year To be adopted by
Standard The title of standard beginning) the Group from Outline of new standards and amendments
IAS 23 Amendments to IAS 23, January 1, 2019 Fiscal year ending These amendments require that a company treats as part of general borrow-
(Borrowing costs) March 31, 2020 ings any borrowing originally made to develop an asset when the asset is
ready for its intended use or sale.
IAS 28 Amendments to IAS 28 January 1, 2019 Fiscal year ending These amendments clarify that companies account for long-term interests in
(Investments in associates), March 31, 2020 an associate or joint venture to which the equity method is not applied using
on long term interests in IFRS 9.
associates and joint ventures
All the standards and amendments above will be reflected to the obligations related to operating and financial leases must be record-
consolidated financial statements for the relevant fiscal year ed in consolidated financial statements.
described above. The Company is currently evaluating the impact of The Group will not restate comparative information and plans to
the application and estimate is currently not available. recognize the cumulative impact of applying these standards as an
adjustment of the retained earnings balance at the beginning of the
(IFRS 16 “Leases”) fiscal year on April 1, 2019.
In January 2016, the IASB issued IFRS 16 “Leases.” The Group will With the application of these standards to operating and financial
apply IFRS 16 from the consolidated fiscal year ending March 31, leases (mainly those for land and structures for office space and
2020. base stations) taken out by the Group, as a result of examining
The main change this will have on the Group due to its business operating lease contracts in accordance with the Standard, the
model is that IFRS 16 requires that the right to employ a lease asset Group expects that right-of-use assets and lease liabilities on the ini-
and the payment obligations for lease-related fees are recognized as tial application date will increase approximately ¥310 billion each.
right-of-use assets and lease obligations in the consolidated state- Moreover, KDDI expects the impact on consolidated statement of
ment of financial position. Currently, under IAS 17, payment income to be minor.
3 Significant Accounting Policies

The principal accounting policies applied in the preparation of these (d) Unification of reporting period
consolidated financial statements are set out below. These policies The consolidated financial statements include the financial state-
have been consistently applied to all the reporting periods present- ments of subsidiaries whose closing dates are different from that of
ed, unless otherwise stated. the Company. For the preparation of the consolidated financial
statements, such subsidiaries prepare financial statements based on
(1) Basis of consolidation the provisional accounts as of the Company’s closing date. As for
KDDI Summit Global Singapore Pte. LTD, due to the environment
i. Subsidiaries encompassing local accounting in the areas where subsidiaries
(a) Consolidation of subsidiaries KDDI Summit Global Myanmar Co., Ltd. are located, preliminary
Subsidiaries are all entities over which the Group has control. An results were not obtained by the Company’s closing date for subsid-
entity is consolidated as the Group controls it when the Group is iary reporting, and reporting periods were not unified. However, due
exposed to, or has rights to, variable returns from its involvement to improvement for financial reporting in the fiscal year ended March
with the entity and has the ability to affect those returns through its 31, 2019, the reporting periods are unified.
power over the entity. Subsidiaries are consolidated from the date
when control is obtained and deconsolidated from the date when ii. Associates
control is lost. Associates are entities over which the Group does not have control
Intragroup balances and transactions, and unrealized gain or loss but has significant influence over the financial and operating policies
arising from intragroup transactions are eliminated in preparation of through participation in the decision-making of those policies.
the consolidated financial statements. Investments in associates are accounted for using the equity meth-
The accounting policies of subsidiaries have been changed to od of accounting. Under the equity method, investment in an asso-
conform to the Group’s accounting policies, when necessary. ciate is initially recorded at cost and its amount is adjusted to
recognize the Group’s share of the profit or loss and other compre-
(b) Changes in ownership interest in a subsidiary that do not hensive income of the associate from the date on which it has signif-
result in a change of control icant influence until the date when it ceases to have the significant
Transactions with non-controlling interests that do not result in loss influence is lost.
of control are accounted for by the Group as equity transactions. If the ownership interest in an associate is reduced but significant
The difference between fair value of any consideration paid and the influence is retained, only a proportionate share of the amount previ-
proportion acquired of the carrying amount of the subsidiary’s net ously recognized in other comprehensive income is reclassified to
assets is recorded in equity. Gains or losses on disposals to non- profit or loss, where appropriate. When the Company’s share of
controlling interests without losing control are also recorded in equity. losses in an associate equals or exceeds its carrying amount of
interest in the associate, the Group does not recognize further loss-
(c) Disposal of a subsidiary es, unless it has incurred legal or constructive obligations or made
When the Group ceases to have control, any retained interest in the payments on behalf of the associate.
entity is remeasured to its fair value on the date when control is lost, The Group’s investment in associates includes goodwill recog-
with the changes in the carrying amount recognized in profit or loss. nized on acquisition. Accordingly, goodwill is not recognized and not
The fair value will be the initial carrying amount when the retained tested for impairment separately. Gross amount of investments in
interests are subsequently accounted for as associate, joint venture associates is tested for impairment as a single asset. Specifically,
or financial asset. In addition, any amounts previously recognized in the Group evaluates whether there is objective evidence which indi-
other comprehensive income in respect of that entity are accounted cates that the investment may be impaired or not on a quarterly
for as if the Group had directly disposed of the related assets or lia- basis. When objective evidence that the investments in associates
bilities. This may mean that amounts previously recognized in other are impaired exists, those investments are tested for impairment.
comprehensive income are reclassified to profit or loss.

Unrealized gains or losses on transactions between the Group (3) Segment information
and its associates are eliminated to the extent of the Group’s interest
in the associates. The accounting policies of associates have been Operating segments are reported in a manner consistent with the
changed to conform to the Group’s accounting policies, when internal reporting provided to the chief operating decision-maker.
necessary. The chief operating decision-maker is responsible for allocating
resources and assessing performance of the operating segments.
iii. Joint arrangements The board of directors that makes strategic decisions has been
The Group enters into joint arrangements when the Group has joint identified by the Group as the chief operating decision-maker.
control of a business or entity.
Joint control is the contractually agreed sharing of control of an (4) Foreign currency translation
arrangement, which exists only when the decisions about the rele-
vant activities that significantly affect the returns of the arrangement i. Functional currency and presentation currency
require the unanimous consent of the parties sharing control. Foreign currency transactions of each group company have been
For the purpose of accounting, joint arrangements are classified translated into their functional currencies at the exchange rate pre-
as either joint operations or joint ventures. A joint operation is a joint vailing at the dates of transactions upon preparation of their financial
agreement whereby parties that have joint control of the arrange- statements. The consolidated financial statements of the Group are
ment have rights to the assets and obligations for the liabilities relat- presented in Japanese yen, which is the functional currency of the
ing to the arrangement. A joint venture is a joint arrangement Company.
whereby the parties that have joint control of the arrangement have
rights to the net assets of the arrangement. ii. Foreign currency transactions
When a joint arrangement is classified as a joint operation, the Foreign currency transactions are translated at the spot exchange
Group’s share of the assets, liabilities, revenue and expenses in rela- rate of the date of transaction or the rate that approximates such
tion to the arrangement are recorded directly in the financial state- exchange rate. Monetary assets and liabilities denominated in for-
ments. On the other hand, when a joint arrangement is classified as eign currencies are translated at the exchange rate prevailing at the
a joint venture, net assets related to the arrangement are recorded in fiscal year end date. Non-monetary items at fair value denominated
the financial statements using the equity method. in foreign currencies are translated at an exchange rate as of the
date when their fair values are measured.
Exchange differences arising from the translation and settlement
(2) Business combination of monetary assets and liabilities denominated in foreign currencies
are recognized as profit or loss. However, exchange differences aris-
The Group accounts for business combinations by applying the ing from the translation of equity instruments measured through
acquisition method. Consideration transferred to acquire subsidiar- other comprehensive income and qualifying cash flow hedges are
ies is the fair values of the assets transferred, the liabilities incurred recognized as other comprehensive income.
by former owners of the acquiree and the equity interests issued by
the Group. Consideration transferred also includes fair values of any iii. Foreign operations
assets or liabilities resulting from a contingent consideration arrange- For the purpose of the presentation of the consolidated financial
ment. Each identifiable asset acquired, liability and contingent liability statements, the assets and liabilities of the Group’s foreign opera-
assumed in a business combination is generally measured at its tions, including goodwill, identified assets and liabilities, and their fair
acquisition-date fair value. value adjustments resulting from the acquisition of the foreign opera-
Non-controlling interests are identified separately from those of tions, are translated into presentation currency at the exchange rate
the Group and are measured as the non-controlling shareholders’ prevailing at the fiscal year end date. Income and expenses of for-
proportionate share of the acquiree’s identifiable net assets. For eign operations are translated into Japanese yen, the presentation
each acquisition, the Group recognizes the acquiree’s non-control- currency, at the average exchange rate for the period, unless the
ling interests either at fair value or as the non-controlling interest’s exchange rates fluctuate significantly during the period.
proportionate share of the amount recognized for acquiree’s identifi- Exchange differences arising from translation of foreign opera-
able net assets. tions’ financial statements are recognized as other comprehensive
Acquisition-related costs, including finder’s fees, legal, due-diligence income. In cases of disposition of whole interests of foreign opera-
and other professional fees, are charged to expense when incurred. tions, and certain interests involving loss of control or significant
Where the aggregate amount of consideration transferred, the influence, exchange differences are accounted for as profit or loss
amount of any non-controlling interest in the acquiree and the acqui- on disposal of foreign operations.
sition-date fair value of the acquirer’s previously held equity interest
in the acquiree exceeds the fair value of the identifiable net assets (5) Property, plant and equipment
acquired, such excess is recorded as goodwill. Where the aggregate
amount of consideration transferred, the amount of any non-control- i. Recognition and measurement
ling interest in the acquiree and the acquisition-date fair value of the Property, plant and equipment of the Group is measured on a his-
acquirer’s previously held equity interest in the acquire is less than torical cost basis and carried at its cost less accumulated deprecia-
the fair value of acquired subsidiary’s net assets, such difference is tion and impairment losses. The acquisition cost includes costs
recognized directly in profit or loss as a bargain purchase. directly attributable to the acquisition of the asset and the initial esti-
If the initial accounting for a business combination is not complete mated costs related to disassembly, retirement and site restoration,
by the end of the reporting period in which the business combina- as well as borrowing costs eligible for capitalization.
tion occurs, the Group recognizes in its financial statements provi- In cases where components of property, plant and equipment
sional amounts for the items for which the accounting is incomplete. have different useful lives, each component is recorded as a sepa-
Subsequently, the Group retrospectively adjusts the provisional rate property, plant and equipment item.
amounts recognized on the date when control is obtained as mea- Subsequent costs are included in the asset’s carrying amount or
surement period adjustments to reflect new information obtained recognized as a separate asset, as appropriate, only when it is prob-
about facts and circumstances that existed as of the date when able that future economic benefits associated with the item will flow
control is obtained and, if known, would have affected the amounts to the Group and the cost of the item can be measured reliably. All
recognized for the business combination. However, the measure- other repairs and maintenance are recognized as expenses during
ment period shall not exceed one year from the date when control the financial period in which they are incurred.
is obtained.

ii. Depreciation and useful lives ii. Depreciation and useful lives
Property, plant and equipment is depreciated mainly using the Intangible assets are amortized using the straight-line method over
straight-line method over the estimated useful lives of each compo- their estimated useful lives. Estimated useful lives of major compo-
nent. The depreciable amount is calculated as the cost of an asset nents of intangible assets are as follows. Intangible assets with
less its residual value. Land and construction in progress are not indefinite useful lives are not amortized.
depreciated. In cases where components of property, plant and Software 5 years
equipment have different useful lives, each component is recorded Customer relationships 4–29 years
as a separate property, plant and equipment item. Assets related to program supply 22 years
The estimated useful lives of major components of property, plant Others 5–20 years
and equipment are as follows:
Communication equipment The amortization methods, estimated useful lives are reviewed at
Machinery 9 years the end of each reporting period, and if there are any changes
Antenna equipment 10–21 years made, those changes are applied prospectively as a change in an
Toll and local line equipment 10–21 years accounting estimate.
Other equipment 9–27 years
Buildings and structures 10–38 years (8) Lease
Others 5–22 years
i. Assets subject to lease
The depreciation methods, estimated useful lives and residual val- At the inception of the lease contract, the assessment whether an
ues are reviewed at the end of each reporting period, and if there are arrangement is a lease or contains a lease is made based on the
any changes made, those changes are applied prospectively as a substance of the agreement. Assets are subject to lease if the imple-
change in an accounting estimate. mentation of an agreement depends on use of certain assets or
groups of assets, and the right to use the assets is given under such
iii. Derecognition agreement.
Property, plant and equipment is derecognized on disposal. The
profit or loss arising from the derecognition of an item of property, ii. Classification of lease
plant and equipment is included in profit or loss when the item is Lease transactions are classified as finance leases whenever all the
derecognized. risks and rewards of ownership of assets are substantially trans-
ferred to the Group (lessee). All other leases are classified as operat-
(6) Goodwill ing leases.
Goodwill is the excess of the cost of acquisition over the fair value of iii. Finance lease
the Group’s share of the identifiable net assets of the acquiree on In finance lease transactions, leased assets are recognized as an
the date of acquisition. asset in the consolidated statement of financial position at the lower
For the purpose of impairment testing, goodwill acquired in a of the fair value of the leased property or the present value of the
business combination is allocated to each of the CGUs, or groups of aggregated minimum lease payments, each determined at the
CGUs, that is expected to benefit from the synergies of the combi- inception of the lease, less accumulated depreciation and impair-
nation. Each unit or group of units to which the goodwill is allocated ment losses. Lease obligations are recognized as “Other short-term
represents the lowest level within the entity at which the goodwill is financial liabilities” and “Other long-term financial liabilities” in the
monitored for internal management purposes. consolidated statement of financial position. Lease payments are
Goodwill is measured at cost less any accumulated impairment apportioned between the financial cost and the reduction of the
losses. Goodwill is not amortized. Instead, it is tested for impairment lease obligations based on the effective interest method. Finance
annually and if events or changes in circumstances indicate a poten- cost is recognized in the consolidated statement of income. Assets
tial impairment. For the impairment, please refer to “ (9) Impairment held under finance leases are depreciated using straight-line method
of property, plant and equipment, goodwill and intangible assets.” over their estimated useful lives if there is reasonable certainty that
the ownership will be transferred by the end of the lease term; other-
(7) Intangible assets wise the assets are depreciated over the shorter of the lease term or
their estimated useful lives.
i. Recognition and measurement
The Group applies the cost method in measuring intangible assets, iv. Operating lease
excluding goodwill. Those assets are carried at its cost less accu- In operating lease transactions, lease payments are recognized as
mulated amortization and impairment losses. an expense using the straight-line method over the lease terms.
Intangible assets acquired separately are measured at cost at ini-
tial recognition. Intangible assets acquired in a business combination (9) Impairment of property, plant and equipment, goodwill and
are recognized separately from goodwill and are measured at fair intangible assets
value at the acquisition date when such assets meet the definition of
intangible asset and are identifiable, and their fair values can be At the end of each reporting period, the Group determines whether there
measured reliably. is any indication that carrying amounts of property, plant and equipment
Expenditure on research activities to obtain new science technol- and identifiable intangible assets may be impaired. If any indication
ogy or technical knowledge and understanding is recognized as an exists, the recoverable amount of the asset or the cash-generating unit
expense when it is incurred. to which the asset belongs is estimated. For goodwill and intangible
Expenditure on development is recognized as intangible asset in assets with indefinite useful lives, the impairment test is undertaken
the case where the expenditure is able to be measured reliably, annually or more frequently if events or circumstances indicate that they
product or production process has commercial and technical feasi- might be impaired. A cash-generating unit is the smallest group of
bility, the expenditure probably generates future economic benefits, assets that generates cash inflows that are largely independent of the
the Group has intention to complete the development and use or cash inflows from other assets or groups of assets.
sell the asset, and has enough resources for their activities. In other The recoverable amount is the higher of fair value less costs of
cases, the expenditure is recognized as expense when it is incurred. disposal or value in use. In assessing value in use, the estimated

future cash flows are discounted to their present value using a pre- (i) Financial assets measured at amortized cost
tax discount rate that reflects the time value of money and the risks A financial asset that meets both the following condition is classified
specific to the asset. as a financial asset measured at amortized cost.
When the impairment test shows that the recoverable amount of • The financial asset is held within the Group’s business model
the cash-generating unit is less than its carrying amount, the impair- whose objective is to hold assets in order to collect contractual
ment loss is allocated first to reduce the carrying amount of any cash flows.
goodwill allocated to the cash-generating unit or group of units, and • The contractual terms of the financial asset give rise on specified
then to the other assets of the unit or group of units pro rata on the dates to cash flows that are solely payments of principal and inter-
basis of the carrying amount of each asset in the unit or group of est on the principal amount outstanding.
units. Any impairment loss for goodwill is recognized in profit or loss
and is not reversed in subsequent periods. A financial asset measured at amortized cost is initially recognized
For assets other than goodwill, the Group determines at the end at fair value plus transaction cost directly attributable to the asset.
of each reporting period whether there is any indication that an After initial recognition, carrying amount of the financial asset mea-
impairment loss recognized in prior years has decreased or extin- sured at amortized cost is determined using the effective interest
guished. An impairment loss is reversed when there is an indication method, net of impairment loss, if necessary.
that the impairment loss may be reversed and there has been a
change in the estimates used to determine an asset’s recoverable (ii) Equity instruments measured at fair value through other com-
amount. When an impairment loss recognized is reversed, carrying prehensive income
amount of the asset or cash-generating unit is increased to its The Group makes an irrevocable election to recognize changes in
updated estimated recoverable amount. A reversal of an impairment fair value of investments in equity instruments through other com-
loss is recognized, to the extent the increased carrying amount does prehensive income, not through profit or loss. A gain or loss from fair
not exceed the lower of the recoverable amount or the carrying value changes will be shown in other comprehensive income and
amount (net of depreciation and amortization) that would have been will not be reclassified subsequently to profit or loss.
determined had no impairment loss been recognized. A reversal of An equity instrument measured at fair value through other com-
an impairment loss is recognized as other income. prehensive income is recognized initially at fair value plus transaction
cost directly attributable to the asset. After initial recognition, the
(10) Non-current assets held for sale or disposal group asset is measured at fair value with changes in fair value included as
“financial asset at fair value through other comprehensive income” in
An asset or group of assets of which the carrying amount is expect- other comprehensive income. Accumulated gains or losses recog-
ed to be recovered primarily through a sales transaction rather than nized through other comprehensive income are directly transferred
through continuing use is classified into “Assets held for sale.” To to retained earnings when equity instrument is derecognized or its
qualify for classification as “non-current assets held for sale,” the fair value substantially decreased.
sale of a non-current asset must be highly probable and it must be Dividends are recognized as “finance income” in profit or loss.
available for immediate sale in its present condition. Also, manage-
ment must be committed to a plan to sell the asset in which the sale (iii) Financial assets measured at fair value through profit or loss
is to be completed within one year from the date of classification. When any of the above-mentioned conditions for classification of
When the Group is committed to a sale plan involving loss of con- financial assets is not met, a financial asset is classified as “at fair
trol of a subsidiary, and the criteria set out above are met, all assets value through profit or loss” and measured at fair value with changes
and liabilities of the subsidiary are classified as held for sale, regard- in fair value recognized in profit or loss.
less of whether the Group will retain a non-controlling interest in its A financial asset measured at fair value through profit or loss is rec-
former subsidiary after the sale. ognized initially at fair value and its transaction cost is recognized in
Assets held for sale is measured at the lower of its “carrying profit or loss when incurred. A gain or loss on a financial asset mea-
amount” and “fair value less cost to sell.” Property, plant and equip- sured at fair value through profit or loss is recognized in profit or loss,
ment and intangible assets classified as “assets held for sale” are and presented in “finance income” or “finance cost” in the consoli-
not depreciated or amortized. dated statement of income for the reporting period in which it arises.
The Group does not designate any debt instrument as at fair value
(11) Financial instruments through profit or loss to remove or significantly reduce an account-
ing mismatch.
i. Financial assets
(a) Recognition and measurement of financial assets (c) Derecognition of financial assets
The Group recognizes a financial asset when it becomes a party to The Group derecognizes its financial asset if the contractual rights to
the contractual provisions of the instrument. The Group initially rec- the cash flows from the investment expire, or the Group transfers
ognizes trade and other receivables on the date of transaction. At substantially all the risks and rewards of ownership of the financial
initial recognition, the Group measures a financial asset at its fair asset. Any interests in transferred financial assets that are created or
value plus, in the case of financial asset not measured at fair value continuously retained by the Group are recognized as a separate
through profit or loss, transaction costs that are directly attributable asset or liability.
to the acquisition of the financial asset. Transaction cost of a finan-
cial asset measured at fair value through profit or loss is recognized ii. Non-derivative financial liabilities
as profit or loss. (a) Recognition and measurement of financial liabilities
The Group recognizes financial debt when the Group becomes a
(b) Classification of non-derivative financial assets party to the contractual provisions of the instruments. The measure-
Classification and measurement model of non-derivative financial ment of financial debt is explained in (b) Classification of financial
assets are summarized as follows. The Group classifies financial liabilities.
assets at initial recognition as financial assets measured at amor-
tized cost, equity instruments measured at fair value through other
comprehensive income or financial assets measured at fair value
through profit or loss.

(b) Classification of financial liabilities At the inception of the hedge and on an ongoing basis, the Group
Financial liabilities measured at amortized cost assess whether the derivative used in hedging transaction is highly
A financial liability other than those measured at fair value through effective in offsetting changes in cash flows of the hedged item.
profit or loss is classified as a financial liability measured at amor- Specially, when the Group assess whether the hedge relationship
tized cost. A financial liability at amortized cost is initially measured is effective, the Group assess whether all of the following require-
at fair value less transaction cost directly attributable to the issuance ments are met:
of the financial liability. After initial recognition, the financial liability is (i) There is an economic relationship between the hedged item
measured at amortized cost based on the effective interest rate method. and the hedging instrument
(ii) The effect of credit risk does not dominate the value changes
(c) Derecognition of financial liabilities that result from that economic relationship;
The Group derecognizes a financial liability when the financial liability (iii) The hedge ratio of the hedging relationship is the same as that
is distinguished, i.e. when the contractual obligation is discharged or resulting from the quantity of the hedged item that the entity
cancelled or expired. actually hedges and the quantity of the hedging instrument that
the entity actually uses to hedge that quantity of hedged item.
iii. Presentation of financial assets and liabilities
Financial assets and liabilities are offset and the net amount is pre- Hedge effectiveness is assessed on an ongoing basis and about
sented in the consolidated statement of financial position only when whether the hedging criteria described above are met.
the Group currently has a legally enforceable right to set off the rec- The effective portion of changes in the fair value of derivatives that
ognized amounts and intends either to settle on a net basis, or to are designated and qualify as cash flow hedges is recognized in
realize the asset and settle the liability simultaneously. other comprehensive income. The ineffective portion is recognized in
profit or loss. Cumulative profit or loss recognized through other
(12) Impairment of financial assets comprehensive income is transferred to profit or loss on the same
period that the cash flows of hedged items affects profit or loss.
The Group recognizes 12-month expected credit loss as provision If a hedging relationship ceases to meet the hedge effectiveness
for doubtful receivables (non-trade receivables) when there is no sig- requirement relating to the hedge ratio but the risk management
nificant increase in the credit risk since initial recognition. When there objective for that designated hedging relationship remains the same,
is a significant increase in credit risk since initial recognition, expect- an entity should adjust the hedge ratio of the hedging relationship so
ed credit losses for such remaining life of the financial assets are that it meets the qualifying criteria again (rebalancing).
recognized as provision for doubtful receivables. Whether credit risk After rebalancing, in cases where no longer meet the require-
is significantly increased or not is determined based on the changes ments of hedge accounting or hedging instruments are expired,
in default risk. To determine if there is a change in default risk, follow- sold, terminated or exercised, hedge accounting will be
ing factors are considered. However, the Group always measures discontinued.
provision for trade receivables which do not include any material In the case that the hedge accounting is discontinued, the cumu-
financial component at an amount equal to lifetime expected lative profit or loss on the hedging instrument that has been recog-
credit losses. nized in other comprehensive income when the hedge was effective
• External credit rating of the financial asset will remain in other comprehensive income until the forecast transac-
• Downgrade of internal credit rating tion occurs. When forecast transactions are no longer expected to
• Operating results, such as decrease in sales, decrease in working arise, accumulated amount of profits or losses recorded in equity is
capital, asset deterioration and increase in leverage transferred to profit or loss.
• Reduced financial support from the parent company or associated Aggregated fair values of hedging instrument derivatives whose
companies maturities are over 12 months are classified as non-current assets or
• Delinquencies (Overdue information liabilities, and those whose maturities are less than 12 months are
Expected credit losses are measured based on the discounted classified as current assets or liabilities.
present value of the differences between the contractual cash flows
and the cash flows expected to be received. (14) Cash and cash equivalents
(13) Derivatives and hedge accounting In the consolidated statement of cash flows, cash and cash equiva-
lents consist of cash, demand deposits and short-term investments
Derivatives are initially recognized at fair value as on the date on with maturities of three months or less that are readily convertible to
which the derivative contracts are entered into. After initial recogni- cash and subject to insignificant risk of change in value and bank
tion, derivatives are remeasured at fair value at the end of each overdrafts. In the consolidated statement of financial position, bank
reporting period. overdrafts are shown within in current liabilities.
The Group utilizes derivatives consisting of exchange contracts
and interest swaps to reduce foreign currency risk and interest rate (15) Inventories
risk etc.
The method of recognizing the resulting gain or loss depends on Inventories mainly consist of mobile handsets and materials / work
whether the derivative is designated as a hedging instrument, and if in progress related to construction.
so, the nature of the item being hedged. Inventories are measured at the lower of cost and net realizable
The Group designates derivatives as cash flow hedge (hedges to value. The cost is generally calculated using the moving average
the exposure to variability in cash flows that is attributable to a par- method and comprise all costs of purchase and other costs incurred
ticular risk associated with a recognized asset or liability or a highly in bringing the inventories to their present location and condition.
probable forecast transaction). Net realizable value represents the estimated selling price in the ordi-
At the inception of the transaction, the Group documents the rela- nary course of business less any estimated cost to sell.
tionship between the hedging instrument and the hedged item,
along with their risk management objectives and strategies to con-
duct various hedge transactions.

(16) Employee benefits ii. Executive compensation BIP trust and stock-granting
ESOP trust
i. Defined benefit plans The Group has introduced the executive compensation BIP (Board
The Group primarily adopts defined benefit plans. Incentive Plan) trust and a stock-granting ESOP (Employee Stock
The asset or liability recognized on the consolidated statement of Ownership Plan) trust. These plans are accounted for as equity-set-
financial position in relation to the defined benefit pension plans tled share based payment and the shares of the Company held by
(defined benefit asset or liability) is the present value of the defined the trust are included in treasury stock. The fair value of the shares
benefit obligation less fair value of the plan assets at the end of the of the Company at the grant date is recognized as expenses over
reporting period. The defined benefit obligation is determined annu- the period from the grant date to the vesting date, with a corre-
ally by independent actuaries using the projected unit credit method. sponding increase in capital surplus. The fair value of the shares of
The discount rates are on the basis of the market yields of high- the Company granted is determined by adjusting the market value,
quality corporate bonds at the end of the reporting period, that are taking into account the expected dividend yield of the shares.
denominated in the currency in which the benefit will be paid, which
is corresponding to estimated timing and amount of future benefits (19) Equity
are to be paid.
Defined benefit cost includes service cost, net interest on the net i. Common stock
defined benefit liability (asset), and remeasurements of the net Common stocks are classified as equity. Proceeds from the
defined benefit liability (asset). Service cost and net interest are rec- Company’s issuance of common stocks are included in common
ognized in profit or loss. Net interest is determined using the dis- stock and capital surplus and its direct issue costs are deducted
count rate described above. The remeasurements comprise from capital surplus.
actuarial gains and losses and the return on plan assets (excluding
amounts included in net interest). Actuarial gains and losses are rec- ii. Treasury stock
ognized immediately in other comprehensive income when incurred, When the Group acquires treasury stocks, the consideration paid,
and past service costs are recognized as profit or loss. net of direct transaction costs and tax, is recognized as a deduction
The Group recognizes remeasurements of all the net defined ben- from equity. When the Group sells treasury stocks, differences
efit liability (asset) resulting from its defined benefit plans in other between the carrying amount and the consideration received upon
comprehensive income and reclassifies them immediately to sale are recognized as capital surplus.
retained earnings.
(20) Revenue
ii. Defined contribution plans
Certain subsidiaries of the Group adopt defined contribution plans. i. Mobile telecommunications services
Contribution to the defined contribution plans are recognized as The Group generates revenue mainly from its mobile telecommuni-
expenses for the period over which employees provide services. cations services and sale of mobile handsets. The Group enters into
In addition, certain subsidiaries of the Group participate in multi- mobile telecommunications service agreements directly with cus-
employer pension plans, and recognize the payments made during tomers or indirectly through distributors, and also sells mobile hand-
the fiscal year as profit or loss and contribution payable as a liability. sets to its distributors.
Revenue from the mobile telecommunications services primarily
iii. Short-term employee benefits consists of basic monthly charges and communication fees (“the
Short-term employee benefits are measured at the amounts expect- mobile telecommunication service fees”), and commission fees such
ed to be paid when the liabilities are settled and recognized as an as activation fees. The mobile telecommunication service fees and
expense. Bonus and paid annual leave accruals are recognized as a commission fees such as activation fees are recognized on a flat
liability in the amount estimated to be paid under these plans, when rate basis and on a measured rate basis when the services are pro-
the Group has legal or constructive obligations to pay them and reli- vided to the customers, whereupon the performance obligation is
able estimates of the obligation can be made. fulfilled. Discounts of communication charges are deducted from the
mobile telecommunications service fees on a monthly basis.
(17) Provisions Furthermore, the consideration for transactions related to revenue
from mobile telecommunications services is received between the
Provisions are recognized when the Group has legal or constructive billing date and approximately one month thereafter.
obligations as a result of past events, it is probable that outflows of Revenue from the sale of mobile handsets comprises proceeds
economic benefits will be required to settle the obligations, and reli- from the sale of mobile handsets and accessories to customers or
able estimates of the obligation can be made. To determine the distributors.
amount of a provision, the estimated future cash flows are discount- The business flows of the above transactions consist of “Indirect
ed using a pretax discount rate that reflects the time value of money sales,” wherein the Company sells mobile handsets to distributors
and the risks specific to the liability where necessary. Unwinding of and enters into communications service contracts with customers
the discount over time is recognized in finance cost. through those distributors, and “Direct sales,” wherein the Company
and certain subsidiaries of the Company sell mobile handsets to
(18) Share-based payment customers and enter into communications service contracts directly
with the customers. Revenue in each case is recognized as
i. Stock options described below.
The Group has equity-settled stock option plans as incentive plans Revenue from the sale of mobile handsets is received within
for its directors and employees. Stock options are measured at fair approximately one month following the sale to the distributor or
value at the grant date, which is calculated using the Black-Scholes other vendor.
or other models.
The fair value of stock options at the grant date is recognized as
an expense over the vesting period, based on the estimated number
of stock options that are expected to vest, with corresponding
amount recognized as increase in equity.

(a) Indirect sales present the gross amount of the consideration received from cus-
As the distributor has the primary obligation and inventory risk for tomers, or the net amount of the consideration received from cus-
the mobile handsets, the Group sells to the distributors, the Group tomers less payments paid to a third party. The Group evaluates
considers distributors as the principals in each transaction. Revenue whether the Group has the primary obligation for providing the
from the sale of mobile handsets is recognized when mobile hand- goods and services under the arrangement or contract, the invento-
sets are delivered to distributors, which is when control over the ry risk, latitude in establishing prices, and the credit risk. However,
mobile handsets is transferred to the distributor and the perfor- the presentation being on a gross basis or a net basis does not
mance obligation is fulfilled. Certain commission fees paid to distrib- impact profit for the year.
utors are deducted from revenue from the sale of mobile handsets. The Group considers itself to be an agent for payment agency
services, advertisement services and certain content services
(b) Direct sales described above because it earns only commission income based
In direct sales transactions, revenue from the sale of mobile hand- on pre-determined rates, does not have the authority to set prices
sets and revenue from service fees, including mobile telecommuni- and solely provides a platform for its customers to perform content-
cations service fees, are considered to be bundled. Therefore, related services. The Group thus does not control the service before
contracts that are concluded for a bundled transaction are treated control is transferred to the customer. Therefore, revenue from these
as a single contract for accounting purposes. The total amount of services is presented on a net basis.
the transaction allocated to revenue from the sale of mobile hand- The consideration for these transactions is received within
sets and mobile telecommunications service fees is based on the approximately one to three months after the performance obligation
proportion of each component’s independent sales value. The has been fulfilled.
amount allocated to mobile handset sales is recognized as revenue
at the time of sale, which is when the performance obligation is iv. Global services
determined to have been fulfilled. The amount allocated to mobile Global services mainly comprise solution services, data center ser-
telecommunications service fees is recognized as revenue when the vices and mobile telephone services.
service is provided to the customer, which is when the performance Revenue from data center services comprise the service charges
obligation is determined to have been fulfilled. the Group receives for using space, electricity, networks or other
In both direct and indirect sales, activation fees and handset amenities at its self-operated data centers in locations around the
model exchange fees are deferred as contract liabilities upon enter- world. In general, contracts cover more than one year, and revenue
ing into the contract. They are not recognized as a separate perfor- is recognized for the period over which the services are provided.
mance obligation, but combined with mobile telecommunications The consideration for these transactions is basically billed before
services. They are recognized as revenue over the period when the performance obligation is fulfilled and is received approximately
material renewal options exist. one month after billing.
The consideration of these transactions is received in advance, Revenue from mobile telephone services comprises revenue from
when the contract is signed. mobile handsets and mobile telecommunication services. Revenue
Points granted to customers through the customer loyalty pro- from the sale of mobile handsets is recognized at the time of sale of
gram are allocated to transaction prices based on the independent the handsets, when the performance obligation is determined to
sales values of benefits to be exchanged based on the estimated have been fulfilled. Revenue from mobile telecommunication services
point utilization rate, which reflects points that will expire due to is recognized at the time the services are provided to the customer,
future cancellation or other factors. The points are recognized as when the performance obligation is determined to have been fulfilled.
revenue when the customers utilize those points and take control of
the goods or services, which is when the performance obligation is v. Solution services
considered fulfilled. Revenue from solution services primarily consists of revenues from
equipment sales, engineering and management services (“the solu-
ii. Fixed-line telecommunications services tion service income”). The solution service income is recognized
(including the CATV business) based on the consideration received from the customers when the
Revenue from fixed-line telecommunications services primarily con- goods or the services are provided to the customers and the perfor-
sists of revenues from voice communications, data transmission, mance obligation is fulfilled.
FTTH services, CATV services and related installation fees. Payment for any performance obligation is received between the
The above revenue, excluding installation fee revenue, is recorded billing date and approximately one month later.
when the service is provided, fulfilling the performance obligation.
Installation fee revenue is recognized over the estimated average (21) Finance income and costs
contract period based on the percentage remaining.
The consideration for these transactions is received between the Finance income mainly comprises interest income, dividend income,
billing date and approximately the following month. exchange gains and changes in fair value of financial assets at fair
value through profit or loss. Interest income is recognized using the
iii. Value-added services effective interest method. Dividend income is recognized when the
Revenue from content services mainly comprises revenue from infor- right to receive payment (shareholders’ right) is established.
mation fees, revenue arising from payment agency services, revenue Finance costs mainly comprise interest expense, exchange losses
through advertising businesses, agency fees on content services, and changes in fair value of financial assets at fair value through
and revenue from the energy business, etc. Revenue from informa- profit or loss. Interest expense is recognized using the effective inter-
tion fees is the revenue from membership fees for the content pro- est method.
vided to customers on websites that the Group operates or that the
Group jointly operates with other entities. Revenue arising from pay- (22) Other non-operating profit and loss
ment agency services comprises the revenue from fees for collecting
the receivables of content providers from customers as the agent of Other non-operating profit and loss includes gain and loss on invest-
content providers together with the telecommunication fees. Electric ment activities. Specifically, gain and loss on step acquisitions, gain
power revenue is the revenue generated from electric power retail and loss on sales of stocks of subsidiaries and associates and gain
services. These revenues are recognized as the service is delivered and loss on deemed disposal are included.
based on the nature of each contract.
The Group may act as an agent in a transaction. To report reve-
nue from such transactions, the Group determines whether it should

(23) Borrowing costs extent that it is probable that taxable profit will be available against
which the deductible temporary differences etc. can be utilized.
Borrowing costs directly attributable to the acquisition and construc- Deferred tax liabilities are recognized on taxable temporary differenc-
tion of a qualifying asset, which takes a substantial period of time es. Carrying amount of deferred tax assets is reviewed at the end of
before it is ready for its intended use or sale, are capitalized as part each reporting period and reduced to the extent that it is no longer
of the cost of such asset. All other borrowing costs are recognized probable that sufficient taxable profit will be available to realize all or
as expenses in the period they incurred. part of the benefit of the deferred tax assets.
Deferred tax assets and liabilities are measured at the tax rates
(24) Income taxes that are expected to apply in the period when the temporary differ-
ences will reverse, based on tax laws that have been enacted or
Income taxes are composed of current and deferred taxes and rec- substantively enacted by the end of reporting period.
ognized in profit or loss, except for taxes related to items that are Deferred tax assets and deferred tax liabilities are offset when
recognized directly in equity or in other comprehensive income. there is a legally enforceable right to offset current tax assets against
Current tax is measured at the amount expected to be paid to or current tax liabilities, and income taxes are levied by the same taxa-
recovered from the taxation authorities on the current year’s taxable tion authority on the same taxable entity.
income, plus adjustments to the amount paid in prior years. To
determine the current tax amount, the Group uses the tax rates and (25) Dividends
tax laws that have been enacted or substantively enacted by the
end of the fiscal year in the countries in which the Group operates For the purpose of the consolidated financial statements, dividends
and earns taxable income or losses. to owners of the parent company are recognized as a liability for the
Deferred tax assets and liabilities are, using asset and liability period over which the dividends are approved by the owners of the
method, recognized on temporary differences between the carrying parent company.
amounts of assets and liabilities on the consolidated financial state-
ments and their tax basis, and tax loss carryforwards and tax cred- (26) Earnings per share
its. However, no deferred tax assets and liabilities are recognized on
following temporary differences: The Group discloses basic and diluted earnings per share (attribut-
• Taxable temporary differences arising from the initial recognition of able to owners of the parent) related to common stock.
goodwill; Basic earnings per share is calculated by dividing profit for the year
• Temporary differences arising from the initial recognition of assets attributable to common stockholders of the parent by the weighted
and liabilities related to transactions other than business combina- average number of common stocks outstanding during the reporting
tion, that affects neither the accounting profit nor the taxable profit period, adjusted for the number of treasury stocks acquired.
(loss); and For the purpose of calculating diluted earnings per share, net profit
• Taxable temporary differences associated with investments in sub- attributable to owners of the parent and the weighted average num-
sidiaries and associates, where the Group is able to control the ber of common stocks outstanding, adjusted for the number of trea-
timing of the reversal of the temporary difference and it is probable sury stocks, are further adjusted based on the assumption that all
that the temporary difference will not reverse in the foreseeable dilutive potential common stocks are fully converted. Potential com-
future. mon stocks of the Group are related to BIP trust and ESOP trust.
Deferred tax assets are recognized on all deductible temporary
differences, unused tax loss carryforwards and tax credits to the
4 Business Combinations
ENERES Co., Ltd. iii. Name and business description of the acquire
i. Overview of business combination (as of March 31, 2019)
On December 27, 2018, the Company acquired additional shares in Company Name ENERES Co., Ltd.
ENERES Co., Ltd. (“ENERES”) through a public tender. As a result, Establishment Date April, 2008
ENERES and its consolidated subsidiaries became the Company’s
Head Office 2-5-1 Kanda Surugadai, Chiyoda-ku, Tokyo
consolidated subsidiaries on the same date.
Prefecture
President and name Representative Director and President, Masahiro
ii. Main objectives of business combination
Kobayashi
Through this business combination, KDDI aims to realize a three-
Description of Business Corporate customer services (energy agent services)
way alliance centering on ENERES and including KDDI and Electric
New energy supplier services (wholesale power
Power Development Co., Ltd., which possess a wealth of knowl-
trade and supply-and-demand management servic-
edge about the electric power business. We will swiftly respond to es for retail power suppliers)
changes in the business environment leveraging each company’s
Paid-in Capital 2,893 million yen
strengths. By spurring innovation to create business opportunities,
we aim to enhance the corporate value of ENERES and expand the
Group’s electric power business. iv. The proportion of acquired equity interest with voting rights
Share of voting rights held just before the acquisition: 29.73%
Share of additional voting rights acquired on
the combination date: 20.40%
Share of voting rights after the acquisition: 50.13%
v. Acquisition date
December 27, 2018

vi. Consideration transferred and its components

Millions of yen Millions of U.S. dollars
As of acquisition date December 27, 2018 2019 2019
Fair value of equity held prior to acquisition ¥10,151 $ 91
Cash payment 6,966 63
Total consideration transferred A ¥17,117 $154
¥254 million (U.S.$2 million) of acquisition-related costs for the business combination is recognized as selling, general and administrative
expenses in the Consolidated Statement of Income.
vii. Fair value of assets and liabilities, non-controlling interests and goodwill on the acquisition date
Non-current assets
Property, plant and equipment (Note 1) ¥ 5,330 $ 48
Intangible assets (Note 1) 3,948 36
Other long-term financial assets 1,377 12
Other non-current assets 468 4
Total non-current assets 11,123 100
Current assets
Trade and other receivables (Note 2) 18,967 171
Cash and cash equivalents 3,073 28
Other current assets 1,877 17
Total non-current assets 23,918 215
Total assets ¥35,041 $316
Borrowings and bonds payable ¥ 1,224 $ 11
Other long-term financial liabilities 644 6
Other non-current liabilities 1,460 13
Total non-current liabilities 3,328 30
Current liabilities
Borrowings and bonds payable 6,508 59
Trade and other payables 16,581 149
Other current liabilities 2,512 23
Total current liabilities 25,601 231
Total liabilities ¥28,929 $261
Net assets B ¥ 6,111 $ 55

Non-controlling interests (Note 3) C 3,194 29
Goodwill (Note 4) A – (B–C) ¥14,199 $128
Regarding this business combination, we conducted provisional treatment because the allocation of the acquisition cost was not deter-
mined in the consolidated third quarter of the fiscal year ended March 31, 2019. However, following the determination of the allocation in the
fiscal year ended March 31, 2019, the amount of goodwill on the acquisition date decreased ¥1,094 million (U.S.$10 million). This was due to
increases in intangible assets, deferred tax liabilities and non-controlling interests of ¥3,146 million (U.S.$28 million), ¥963 million (U.S.$9 mil-
lion) and ¥1,089 million (U.S.$10 million), respectively.
Notes: 1. The analysis of property, plant and equipment and intangible assets
The main components of property, plant and equipment are equipment and property.
The main components of intangible assets are customer related assets, trademarks and software.
2. Estimation of fair values of acquired receivables, contractual amounts receivables and amounts not expected to be collected
As for the fair value of ¥18,967 million (U.S.$171 million) of acquired receivables and other receivables, the total amount of contracts is ¥18,967 million
(U.S.$171 million) and the estimate of the contractual cash flows not expected to be collected at the acquisition date is none.
3. Non-controlling interests
Non-controlling interests are measured by multiplying the net assets of the acquiree that can be identified on the acquisition date by the ratio of non-
controlling interests after the business combination.
4. Goodwill
Goodwill reflects excess earning power expected from the collective human resources related to the future business development and its synergy with
the existing businesses. There is no item deductible from the taxable income related to the recognized goodwill.

viii. Consideration for expenditures due to the acquisition of control over the subsidiary
Cash consideration transferred ¥(6,966) $(63)
Cash and cash equivalents held by the acquiree at the acquisition of control 3,073 28
Cash payment for the acquisition of control over the subsidiary ¥(3,893) $(35)
ix. Gain on step acquisitions

The equity in ENERES that KDDI held prior to the acquisition date was remeasured at the fair value on the acquisition date. As a result, we
recognized a gain on step acquisitions of ¥2,999 million (U.S.$27 million) due to the business combination. This income is recorded as other
non-operating profit and loss in the consolidated statement of income.
x. Revenue and loss for the year of the acquiree

Revenue and loss for the year of the acquiree after the acquisition date, which are recorded on the consolidated statement of income for the
year ended March 31, 2019 are ¥22,972 million (U.S.$207 million) and ¥206 million (U.S.$2 million), respectively.
xi. Consolidated revenue and consolidated profit for the year assuming that the business combination was completed at the begin-
ning of the fiscal year (Pro forma information)
Revenue and profit for the quarter in pro forma information (unaudited) related to the consolidated results, assuming that the acquisition of
control by business combination was effective on April 1, 2018, are ¥5,131,610 million (U.S.$46,235 million) and ¥701,387 million (U.S.$6,319
million), respectively.
5 Segment Information
(1) Outline of reporting segments
The reporting segments of the Group are units of the Group of outsourcing (BPO) business and dispatch business are being
which separate financial information is available, and which are peri- expanded targeting corporate customers. The KDDI Group aims to
odically monitored for the board of directors to determine the alloca- further expand its solutions business for corporate customers and
tion of the business resource and evaluate the performance results. bolster its competitive edge by realizing mutual customer referrals
The Group has four reportable segments: Personal Services seg- leveraging its customer base.
ment, Value Services segment, Business Services segment and Accordingly, the segment information for the fiscal year ended
Global Services segment. The Group’s reportable segments are the March 31, 2019 has been presented based on the segment classifi-
same as its business segments. Also, the name of segment of cation after this change.
“Value” is changed to “Life Design” from fiscal year ending March In addition, beginning in the fiscal year ending March 31, 2020,
31, 2019 due to the changes in organization of the company as of the four reporting segments of Personal Services, Life Design
April 1, 2019. Services, Business Services, and Global Services will be reorganized
“Personal” provides services for individual customers in Japan. into the two reporting segments of Personal
These include mobile communications services, device sales such Services and Business Services based on their management
as smartphones and tablets, FTTH services, and CATV services, as approach, consolidating them based on the allocation of manage-
well as non-telecommunications services including product sales, ment resources and their performance evaluations.
energy services and education services.
* ENERES Co., Ltd. be made into consolidated subsidiary of the Company
“Value” includes the commerce business, financing business, set- from the equity-method affiliate company in December 2018.
tlement services, and contents services such as video, music, and
information distribution. (2) Calculation method of revenue, income or loss, assets and
“Business” provides services for corporate customers in Japan. other items by reporting segment
These include mobile and fixed-line communications services and
device sales, as well as the solutions business, such as network, Accounting treatment of reported business segments is consistent
application, and cloud services. with “Note 3. Significant accounting policies.”
“Global” provides services for customers overseas. These include Income of the reporting segments is based on the operating
mobile communications services for individual customers and ICT income.
solution services for corporate customers, such as data centers. Inter segment transaction price is determined by taking in to con-
In the fiscal year ended March 31, 2019, the reporting segment sideration the price by arm’s length transactions or gross costs after
for the business operations of the consolidated subsidiary KDDI price negotiation.
Evolva Inc. was transferred from “Others” to “Business.” This Assets and liabilities are not allocated to reporting segments.
change reflects that KDDI Evolva Inc.’s core business process

(3) Information related to the amount of revenue, income or loss and other items by reporting segment
The Group’s segment information is as follows:
For the year ended March 31, 2018

Millions of yen
Reporting segment Amounts
on the
consolidated
Life Other Adjustment financial
Personal design Business Global Subtotal (Note 1) Total (Note 2) statements
Revenue
Revenue from
external customers ¥3,793,280 ¥402,873 ¥591,053 ¥220,499 ¥5,007,705 ¥ 34,273 ¥5,041,978 ¥ — ¥5,041,978
Inter-segment
revenue or transfers 106,325 118,863 158,918 28,203 412,308 71,000 483,308 (483,308) —
Total 3,899,605 521,736 749,971 248,702 5,420,013 105,273 5,525,286 (483,308) 5,041,978
Segment income 732,931 104,045 84,467 31,907 953,351 10,224 963,575 (782) 962,793
Finance income and
finance cost (Net) (7,950)
Other non-operating
profit and loss 305
Profit for the year
before income tax ¥ 955,147
Other items
Depreciation and
amortization 468,485 21,859 46,189 11,674 548,206 1,374 549,580 (2,971) 546,609
Impairment loss 11,075 988 963 40 13,066 3 13,069 — 13,069
Share of profit of
investment
accounted for
using the equity
method 1,227 553 601 90 2,471 2,121 4,592 — 4,592
Notes: 1. “Other” does not constitute reporting segments, and includes construction and maintenance of facilities, call center, and research and development of
leading-edge technology.
2. Adjustment of segment income shows the elimination of inter-segment transactions.

Millions of yen
on the
consolidated
Life Global Other Adjustment financial
Personal design Business (Note 3) Subtotal (Note 1) Total (Note 2) statements
Revenue
Revenue from
external customers ¥3,805,937 ¥447,209 ¥618,557 ¥181,175 ¥5,052,878 ¥27,475 ¥5,080,353 ¥ — ¥5,080,353
Inter-segment
revenue or transfers 105,292 132,165 178,306 27,615 443,378 71,705 515,082 (515,082) —
Total 3,911,229 579,374 796,863 208,790 5,496,255 99,180 5,595,435 (515,082) 5,080,353
Segment income 756,298 112,832 103,992 34,368 1,007,489 7,041 1,014,530 (801) 1,013,729
Finance income and
finance cost (Net) (6,430)
Other non-operating
profit and loss 2,975
Profit for the year
before income tax ¥1,010,275
Other items
Depreciation and
amortization 482,341 24,500 45,271 12,120 564,232 1,435 565,667 (3,385) 562,282
Impairment loss 305 1 291 2,141 2,737 — 2,737 — 2,737
Share of profit of
investment
accounted for
using the equity
method 135 1,908 608 68 2,718 2,061 4,780 — 4,780

3. As for KDDI Summit Global Singapore Pte. Ltd., due to the environment encompassing local accounting in the areas where subsidiaries KDDI Summit
Global Myanmar Co., Ltd. are located, preliminary results were not obtained by the Company’s closing date for subsidiary reporting, and reporting peri-
ods were not unified. However, due to improvement for financial reporting in the fiscal year ended March 31, 2019, the reporting periods are unified.

on the
consolidated
Life Global Other Adjustment financial
Personal design Business (Note 3) Subtotal (Note 1) Total (Note 2) statements
Revenue
Revenue from
external customers $34,291 $4,029 $5,573 $1,632 $45,526 $248 $45,773 $ — $45,773
Inter-segment
revenue or transfers 949 1,191 1,607 249 3,995 646 4,641 (4,641) —
Total 35,239 5,220 7,180 1,881 49,520 894 50,414 (4,641) 45,773
Segment income 6,814 1,017 937 310 9,077 63 9,141 (7) 9,134
Finance income and
finance cost (Net) (58)
Other non-operating
profit and loss 27
Profit for the year
before income tax $ 9,102
Other items
Depreciation and
amortization 4,346 221 408 109 5,084 13 5,097 (30) 5,066
Impairment loss 3 0 3 19 25 — 25 — 25
Share of profit of
investment
accounted for
using the equity
method 1 17 5 1 24 19 43 — 43
3. As for KDDI Summit Global Singapore Pte. Ltd., due to the environment encompassing local accounting in the areas where subsidiaries KDDI Summit
Global Myanmar Co., Ltd. are located, preliminary results were not obtained by the Company’s
(4) Information by product and service
Information by product and service is described in “Note 25. Revenue.”
(5) Information by region
i. Revenue
Description is omitted as the revenue from external customers in Japan accounts for most of the revenue on the consolidated statement of income.
ii. Non-current assets (excluding financial assets, deferred income tax assets and retirement benefit assets)
Description is omitted as Non-current assets located in Japan accounts for most of such assets on the consolidated statement of financial
position.
(6) Information by major customer
Description is omitted as the revenue from a specific external customer is less than 10% of the revenue on the consolidated statement of income.

6 Property, Plant and Equipment

(1) Movements of property, plant and equipment
Movements of acquisition costs, accumulated depreciation and accumulated impairment loss of the property, plant and equipment are as follows:
Acquisition costs
Millions of yen
Communication Buildings and Construction in
equipment structures Land progress Other Total
As of April 1, 2017 ¥4,735,152 ¥604,203 ¥276,142 ¥158,309 ¥532,785 ¥6,306,590
Acquisition 48,474 3,127 329 358,146 9,665 419,742
Transfer from construction in progress 258,131 16,649 1,751 (328,000) 51,470 —
Acquisition by business combination — 3,437 1,455 — 253 5,145
Disposal (88,173) (18,169) (75) (7,869) (43,723) (158,009)
Exchange differences (1,070) 1,952 391 566 2,562 4,400
Other 502 455 (746) (3,360) (983) (4,132)
As of March 31, 2018 4,953,016 611,653 279,246 177,792 552,028 6,573,735
Acquisition 69,726 3,557 438 415,879 15,021 504,621
Transfer from construction in progress 281,513 14,361 1,767 (358,286) 60,644 —
Acquisition by business combination — 2,093 966 — 4,148 7,207
Disposal (92,285) (7,683) (378) (2,190) (19,221) (121,756)
Exchange differences (670) (1,269) (263) (146) (1,139) (3,488)
Other (538) (1,539) 58 (1,698) 378 (3,340)
As of March 31, 2019 ¥5,210,763 ¥621,173 ¥281,833 ¥231,351 ¥611,858 ¥6,956,979
As of April 1, 2018 $44,626 $5,511 $2,516 $1,602 $4,974 $59,228
Acquisition 628 32 4 3,747 135 4,547
Transfer from construction in progress 2,536 129 16 (3,228) 546 —
Acquisition by business combination — 19 9 — 37 65
Disposal (831) (69) (3) (20) (173) (1,097)
Exchange differences (6) (11) (2) (1) (10) (31)
Other (5) (14) 1 (15) 3 (30)
As of March 31, 2019 $46,948 $5,597 $2,539 $2,084 $5,513 $62,681
Accumulated depreciation and accumulated impairment loss

Millions of yen
As of April 1, 2017 ¥(3,191,523) ¥(365,761) ¥(4,084) ¥ (691) ¥(316,086) ¥(3,878,145)
Depreciation (295,008) (20,097) — — (53,910) (369,015)
Disposal 65,096 15,769 0 — 41,626 122,491
Impairment loss (10,644) (646) — (399) (166) (11,856)
Exchange differences 739 150 — (0) (903) (15)
As of March 31, 2018 (3,431,340) (370,586) (4,083) (1,090) (329,439) (4,136,539)
Depreciation (298,256) (22,346) — — (56,882) (377,484)
Disposal 79,500 6,556 1 — 17,377 103,435
Impairment loss (532) (110) — (49) (34) (725)
Exchange differences 242 (87) — 0 361 516
As of March 31, 2019 ¥(3,650,387) ¥(386,574) ¥(4,082) ¥(1,139) ¥(368,617) ¥(4,410,798)

As of April 1, 2018 $(30,916) $(3,339) $(37) $(10) $(2,968) $(37,269)
Depreciation (2,687) (201) — — (512) (3,401)
Disposal 716 59 0 — 157 932
Impairment loss (5) (1) — 0 0 (7)
Exchange differences 2 (1) — 0 3 5
As of March 31, 2019 $(32,889) $(3,483) $(37) $(10) $(3,321) $(39,740)
Note: The depreciation of the property, plant and equipment is included in “cost of sales” and “selling, general and administrative expenses” in consolidated state-
ment of financial positions.
The carrying amounts of the property, plant and equipment are as follows:
Carrying amount
Millions of yen
As of April 1, 2017 ¥1,543,629 ¥238,441 ¥272,058 ¥157,618 ¥216,699 ¥2,428,445
As of March 31, 2018 ¥1,521,676 ¥241,067 ¥275,163 ¥176,701 ¥222,589 ¥2,437,196
As of March 31, 2019 ¥1,560,377 ¥234,600 ¥277,752 ¥230,211 ¥243,241 ¥2,546,181
As of March 31, 2019 $14,059 $2,114 $2,502 $2,074 $2,192 $22,941
(2) Property, plant and equipment rented under finance lease
The carrying amount of finance lease assets included in property, plant and equipment (less accumulated depreciation and accumulated
impairment loss) is as follows:
As of March 31 2018 2019 2019
In-home customer premises equipment ¥69,629 ¥68,078 $613
Other 7,562 7,968 72
Total ¥77,191 ¥76,046 $685
(3) Property, plant and equipment pledged as collateral
For the amount of property, plant and equipment pledged as collateral for liabilities including borrowings, please refer to “Note 15. Borrowings
and bonds payable.”
(4) Property, plant and equipment with limited ownership
There is no property, plant and equipment with limited ownership.
(5) Property, plant and equipment under construction
Expenditures included in the carrying amount of property, plant and equipment under construction are presented as construction in progress
in the table above.
(6) Capitalization of borrowing costs
There are no significant borrowing costs included in the acquisition costs of the property, plant and equipment for the years ended March 31,
2018 and 2019.

7 Goodwill and Intangible Assets

(1) Movements of goodwill and intangible assets
The movements of the acquisition costs, accumulated amortization and accumulated impairment loss of the intangible assets are as follows:
Acquisition costs
Millions of yen
Intangible assets
Customer Program
Goodwill Software related supply related Other Total
As of April 1, 2017 ¥481,377 ¥659,517 ¥311,543 ¥36,363 ¥652,873 ¥2,141,673
Individual acquisition — 114,152 — — 78,289 192,441
Acquisition by business combination 51,809 111 9,002 — 17,146 78,068
Disposal (228) (70,408) — — (29,138) (99,774)
Exchange differences (338) (212) — — (252) (802)
Other (1,760) (597) — — (5,790) (8,147)
As of March 31, 2018 530,860 702,563 320,545 36,363 713,129 2,303,458
Decrease by changes in
accounting policies (5,633) — — — — (5,633)
Individual acquisition — 111,126 — — 77,720 188,847
Acquisition by business combination 23,925 389 3,146 — 303 27,764
Disposal (6,401) (74,296) — — (39,896) (120,593)
Other (3) (153) — — (10,738) (10,894)
As of March 31, 2019 ¥542,339 ¥739,412 ¥323,691 ¥36,363 ¥740,381 ¥2,382,187
Intangible assets
Customer Program
As of April 1, 2018 $4,783 $6,330 $2,888 $328 $6,425 $20,754
Decrease by changes in
accounting policies (51) — — — — (51)
Individual acquisition — 1,001 — — 700 1,701
Acquisition by business combination 216 4 28 — 3 250
Disposal (58) (669) — — (359) (1,087)
Other 0 (1) — — (97) (98)
As of March 31, 2019 $4,886 $6,662 $2,916 $328 $6,671 $21,463
Accumulated amortization and impairment

Millions of yen
Intangible assets
Customer Program
As of April 1, 2017 ¥(3,504) ¥(386,945) ¥(47,577) ¥(6,611) ¥(296,685) ¥(741,322)
Amortization — (103,497) (19,226) (1,653) (53,217) (177,594)
Impairment loss (956) (232) — — (24) (1,213)
Disposal and sales — 67,902 — — 27,884 95,786
Exchange differences 200 115 — — 275 591
As of March 31, 2018 (4,259) (422,657) (66,804) (8,264) (321,767) (823,752)
Amortization — (108,197) (20,607) (1,653) (54,341) (184,798)
Impairment loss (1,964) (39) — — (8) (2,011)
Disposal and sales 3,578 72,770 — — 38,240 114,588
Exchange differences — 119 — — 199 318
As of March 31, 2019 ¥(2,645) ¥(458,004) ¥(87,441) ¥(9,917) ¥(337,678) ¥(895,655)

Intangible assets
Customer Program
As of April 1, 2018 $(38) $(3,808) $(602) $(74) $(2,899) $(7,422)
Amortization — (975) (186) (15) (490) (1,665)
Impairment loss (18) (0) — — (0) (18)
Disposal and sales 32 656 — — 345 1,032
Exchange differences — 1 — — 2 3
As of March 31, 2019 $(24) $(4,127) $(788) $(89) $(3,042) $(8,070)
Note: The amortization of intangible assets is included in “cost of sales” and “selling, general and administrative expenses” in Consolidated Statement of financial
positions.
The carrying amounts of goodwill and intangible assets are as follows:

Carrying amount
Millions of yen
Intangible assets
Customer Program
As of April 1, 2017 ¥477,873 ¥272,572 ¥263,965 ¥29,752 ¥356,188 ¥1,400,351
As of March 31, 2018 ¥526,601 ¥279,905 ¥253,741 ¥28,099 ¥391,361 ¥1,479,707
As of March 31, 2019 ¥539,694 ¥281,408 ¥236,280 ¥26,446 ¥402,703 ¥1,486,532
Intangible assets
Customer Program
As of March 31, 2019 $4,863 $2,535 $2,129 $238 $3,628 $13,393
(2) Total expenditures related to research and development expensed during the period
Research and development costs expensed as selling, general and administrative expenses for the years ended March 31, 2018 and 2019
are ¥20,132 million (U.S.$181 million) and ¥23,728 million (U.S.$214 million).
(3) Intangible assets with indefinite useful lives
Intangible assets with indefinite useful lives described above as of March 31, 2018 and 2019 are ¥63,379 million (U.S. $571 million).
The details of intangible assets are trademark rights that were acquired through business combinations. As these trademark rights exist as
long as businesses are continued, useful lives of these intangible assets are assumed to be indefinite.
8 Impairment of Property, Plant and Equipment, Goodwill and Intangible Assets

(1) Recognition of impairment loss
The Group recognized impairment loss of ¥13,069 million (U.S.$118 million) and ¥2,737 million (U.S.$25 million) for the years ended March
31, 2018 and 2019 respectively. The Group mainly recognized impairment loss for the assets and asset groups listed below. In addition, in the
fiscal year ended March 31, 2019, the impact on the consolidated financial statements was insignificant and therefore omitted.

Location Use Class Impairment loss
Communication facilities, Mainly, telecommunications Machinery, Local line facilities
and idle assets (Tokyo other) business and other ¥10,008 $90
Due to declining revenue, the future recovery of investments in certain services was determined to be unlikely and the book value was
reduced to the recoverable amount. This resulted in recognition of an impairment loss of ¥10,008 million (U.S.$90 million). The impairment
loss was recorded as cost of sales in the consolidated statement of income and recorded mainly in personal segment. The impairment loss
consists of ¥9,641 million (U.S.$87 million) for machinery and ¥367 million (U.S.$3 million) for others.
The recoverable amount of these assets was estimated at their value in use, with future cash flows discounted at a rate of 6.20% and at the
estimated period of 2 years.

(2) Impairment test of cash generating units including goodwill and intangible assets with indefinite useful lives
The Group tests for impairment of goodwill and intangible assets with indefinite useful lives at least annually, and whenever there is an indica-
tion of impairment.
The total carrying amounts of the goodwill and intangible assets with indefinite useful lives allocated to cash generating units or cash gener-
ating unit groups are as follows:
Goodwill
Cash generating unit or cash generating unit group Millions of yen Millions of U.S. dollars
As of March 31 2018 2019 2019
Jupiter telecommunication Co., Ltd. CATV business ¥280,771 ¥280,771 $2,530
Jupiter Shop Channel Co., Ltd. 92,577 92,577 834
AEON HD 37,014 36,860 332
ENERES Co., Ltd. — 14,199 128
BIGLOBE Inc. 19,705 14,072 127
Other 96,533 101,216 912
Total ¥526,601 ¥539,694 $4,863
Intangible assets with indefinite useful lives
Cash generating unit or cash generating unit group Millions of yen Millions of U.S. dollars
As of March 31 2018 2019 2019
BIGLOBE Inc. ¥26,374 ¥26,374 $238
Jupiter Shop Channel Co., Ltd. 19,859 19,859 179
AEON HD 17,146 17,146 154
Total ¥63,379 ¥63,379 $571
The recoverable amount of goodwill and intangible assets with indefinite useful lives allocated to cash generating units or group of cash
generating units is calculated using value in use.
In assessing value in use, the estimated future cash flows arisen from cash generating units or group of cash generating units are discount-
ed to their present value. When the Group calculates the future cash flows and discount future cash flows, growth rates on different types of
forecasted revenue and forecasted change to corresponding major cost such as cost of sales and pre-tax discount rates are used as signifi-
cant factors.
Forecast of cash flows used as a basis to estimate future cash flows is based on the recent business plan approved by the management,
and the forecast is 5 years. After 5 years, certain growth rate of profit before tax after consideration of a long-term average growth rate for the
market is used.
The growth rates of estimated profit before tax in projection period which are used to calculate value in use of cash generating units are as follows.
Cash generating unit or cash generating unit group

As of March 31 2018 2019
Jupiter telecommunication Co., Ltd.
CATV business 0.7% 0.7%
Jupiter Shop Channel Co., Ltd. 0.0% 0.0%
AEON HD 0.0% 0.0%
ENERES Co., Ltd. — 0.0%
BIGLOBE Inc. 0.0% 0.0%
Other 0.0–14.9% 0.0–9.4%
The growth rates used in estimated cash flows of each cash generating unit or group of cash generating units reflect the status of the coun-
try and the industry to which the CGU belongs, and does not exceed the long-term average growth rate for the market.
The pre-tax discount rates which are used to calculate value in use of cash generating units or cash generating units group to which good-
will and intangible assets with indefinite useful lives is allocated are as follows.
Cash generating unit or cash generating unit group

As of March 31 2018 2019
Jupiter telecommunication Co., Ltd.
CATV business 4.8% 5.2%
Jupiter Shop Channel Co., Ltd. 5.3% 5.6%
AEON HD 5.5% 3.8%
ENERES Co., Ltd. — 7.9%
BIGLOBE Inc. 3.6% 4.5%
Other 1.9%–23.2% 2.3%–22.2%

Although goodwill and intangible assets with indefinite useful lives have a risk of impairment when major assumptions used for impairment
test change, the Group has determined that a significant impairment loss is not probable in the cash generating units or cash generating unit
group regardless of the reasonable change of the growth rate and/or discount rate used for impairment test.
9 Investments Accounted for Using the Equity Method

(1) The carrying amounts of Investments accounted for using the equity method

As of March 31 2018 2019 2019
Interests in associates ¥64,165 ¥139,713 $1,259
Interests in joint ventures 34,027 34,287 309
Total ¥98,192 ¥174,000 $1,568
(2) Summarized financial information of associates and joint ventures
i. Associates
Profit for the year, other comprehensive income and comprehensive income of associates accounted for using the equity method are as follows.
As of and for the years ended March 31, 2018 and 2019, there is not individually significant associate accounted for using the equity method.
For the year ended March 31 2018 2019 2019
Profit for the year ¥3,926 ¥3,690 $33
Other comprehensive income, net of tax 68 (524) (5)
Total comprehensive income for the year ¥3,993 ¥3,166 $29
ii. Joint ventures

Profit for the year, other comprehensive income and comprehensive income of joint ventures accounted for using the equity method is as follows.
As of and for the years ended March 31, 2018 and 2019, there is not individually significant joint venture accounted for using the equity method.
Profit for the year ¥666 ¥1,090 $10
Other comprehensive income, net of tax (241) (830) (7)
Total comprehensive income for the year ¥425 ¥ 260 $ 2
10 Inventories
(1) The analysis of inventories
The analysis of inventories is as follows:

As of March 31 2018 2019 2019
Finished goods and manufactured goods ¥87,564 ¥87,751 $791
Work in progress 1,133 2,119 19
Other 511 718 6
Total ¥89,207 ¥90,588 $816
There is no inventory to be sold after more than 12 months from March 31, 2018 and 2019, respectively.
(2) Write down of the inventories expensed during the period
Write down of the inventories expensed during the period is as follows:

Write down of the inventories expensed (Note) ¥8,681 ¥5,709 $51
Note: Write down is recognized as costs of sales.
(3) Inventories pledged as collateral
There are no inventories pledged as collateral.

11 Trade and Other Receivables

The analysis of trade and other receivables is as follows:
As of March 31 2018 2019 2019
Current
Trade receivables
Accounts receivable—trade and notes receivable ¥1,648,337 ¥1,894,889 $17,073
Account receivable—other (Note) 67,339 91,417 824
Loss allowance (20,273) (20,751) (187)
Total ¥1,695,403 ¥1,965,554 $17,709
Note: Accounts receivable-other is mainly consisted of the receivable related to payment agency service.
The amounts of trade and other receivables expected to be recovered after more than twelve months from March 31, 2018 and 2019,
respectively are ¥349,233 million (U.S.$3,147 million) and ¥531,323 million (U.S.$4,787 million).
The amount of the trade and other receivables on the consolidated statement of financial position is presented less loss allowance.
12 Other Financial Assets

The analysis of other financial assets is as follows:
As of March 31 2018 2019 2019
Non-current assets (Other long-term financial assets)
Financial assets at fair value through profit or loss
Derivative financial assets ¥ 301 ¥ 150 $ 1
Financial assets at fair value through other comprehensive income
Equity instruments
Equities 110,071 117,894 1,062
Financial assets at amortized cost
Debt instruments
Security deposits 41,926 44,387 400
Long-term accounts receivables 43,715 10,556 95
Lease receivables 80,443 89,750 809
Other 3,439 392 4
Loss allowance (43,210) (10,104) (91)
Sub total 236,684 253,025 2,280
Current assets (Other short-term financial assets)
Derivative financial assets 179 149 1
Financial assets at amortized cost
Debt instruments
Lease receivables 21,569 29,832 269
Short-term investment 4,654 4,640 42
Other 3,772 7,342 66
Sub total 30,173 41,963 378
Total ¥266,857 ¥294,989 $2,658

13 Other Assets
The analysis of other non-current assets and other current assets is as follows:
As of March 31 2018 2019 2019
Non-current assets
Long-term prepaid expenses ¥ 62,460 ¥ 8,207 $ 74
Other 3,018 1,909 17
Sub total 65,477 10,117 91
Current assets
Prepaid expenses 83,924 58,863 530
Advance payment 10,753 11,602 105
Other 38,853 54,697 493
Sub total 133,531 125,162 1,128
Total ¥199,008 ¥135,278 $1,219
14 Cash and Cash Equivalents

The analysis of cash and cash equivalents is as follows:
As of March 31 2018 2019 2019
Cash in hand and deposits held at call with banks ¥195,019 ¥199,922 $1,801
Term deposits with original maturities of three months or less 5,815 4,675 42
Total ¥200,834 ¥204,597 $1,843
Cash and cash equivalents in consolidated statement of cash flow ¥200,834 ¥204,597 $1,843
15 Borrowings and Bonds Payable

(1) The analysis of borrowings and bonds payable
The analysis of borrowings and bonds payable is as follows:

Millions of yen Millions of U.S. dollars Average
interest
rate
As of March 31 2018 2019 2019 (%) (Note) Due (Year)
Non-current
Bonds payable (excluding current portion) ¥ 159,784 ¥ 219,491 $ 1,978 0.542% 2020–2028
Long-term borrowings (excluding current portion) 544,494 821,487 7,401 0.469% 2020–2029
Sub total 704,278 1,040,978 9,379 — —
Current
Current portion of bonds payable 10,017 60,000 541 1.705% —
Current portion of long-term borrowings 290,542 58,574 528 0.406% —
Short-term borrowings 29,000 32,000 288 0.064% —
Sub total 329,559 150,574 1,357 — —
Total ¥1,033,837 ¥1,191,553 $10,736 — —
Note: Average interest rate represents weighted average interest rate to the ending balance of the borrowings and other debts.

(2) Terms of issuing bonds payable
The summary of terms of issuing bonds payable is as follows:

Millions of U.S.
Millions of yen dollars
Interest
As of March As of March As of March rate
Entity Description Issuance date 31, 2018 31, 2019 31, 2019 (%) Collateral Due
KDDI Corp. 9th series of February 26, 9,997 — — 2.046% Unsecured December 20,
unsecured notes 2009 (9,997) (—) (—) per year 2018
KDDI Corp. 15th series of May 29, 19,999 180 1.969% Unsecured May 29,
unsecured notes 2009 19,991 (19,999) (180) per year 2019
KDDI Corp. 18th series of March 4, 39,989 360 1.573% Unsecured December 20,
unsecured notes 2010 39,973 (39,989) (360) per year 2019
KDDI Corp. 19th series of September 6, 1.151% Unsecured June 19,
unsecured notes 2010 39,964 39,981 360 per year 2020
KDDI Corp. 20th series of December 13, 0.803% Unsecured December 20,
KDDI Corp. 21st series of September 10, 0.669% Unsecured September 20,
KDDI Corp. 22nd series of July 12, 2018 0.310% Unsecured July 12, 2028
unsecured notes — 29,901 269 per year
KDDI Corp. 23rd series of November 22, 0.110% Unsecured November 22,
unsecured notes 2018 — 39,901 360 per year 2023
KDDI Corp. 24th series of November 22, 0.250% Unsecured November 21,
KDDI Corp. 25th series of November 22, 0.395% Unsecured November 22,
iret, Inc. 1st series of June 27, 31 12 0 0.330% Unsecured June 27,
unsecured notes 2016 (19) (12) (0) per year 2019
Note: The amounts in ( ) presents the current portion of the bonds payable.
(3) Assets pledged as collateral and secured liabilities
Assets pledged as collateral and secured liabilities are as follows:
(Consolidated subsidiaries)
Assets set aside as issuance deposits as prescribed in Article 14, Paragraph 1 of Payment Services Act are as follows:
As of March 31 2018 2019 2019
Government bonds ¥3,001 ¥3,001 $27
Assets set aside as issuance deposits as prescribed in Article 15 of Payment Services Act are as follows:
As of March 31 2018 2019 2019
Deposit ¥— ¥35,000 $315
Assets pledged as collateral are as follows:

As of March 31 2018 2019 2019
Property, plant and equipment ¥ 75 ¥1,138 $10
Stocks of subsidiaries and associates (Note) 768 768 7
Other short-term financial assets 77 35 0
Total ¥919 ¥1,940
(of which, assets denominated in foreign currency) (U.S.$0 million (U.S.$0 million
and other) and other) $17

Obligations underlying to these assets pledged as collateral are as follows:
As of March 31 2018 2019 2019
Accounts payable ¥ — ¥330 $ 3
Long-term borrowings (Note) 98 118 1
Current portion of long-term borrowings 86 122 1
Trade and other payables 1 — —
Total ¥185 ¥569 $ 5
Note: Stocks of Kagoshima Mega Solar Power Corporation, an affiliate accounted for using the equity method, are pledged as collateral for its borrowings from
financial institutions.
The amounts of borrowings as of March 31, 2018 and 2019 are ¥16,820 million (U.S.$152 million) and ¥15,424 million (U.S.$139 million), respectively.
These amounts are not included in long-term borrowings in the above table.
Certain subsidiaries of the Group have financed from financial institutions due to acquisitions and others. Except for certain loan agreements
on insignificant amount of borrowings, these borrowings are subject to financial covenants such as maintenance of shareholder’s equity, net
asset and surplus of profit as prescribed in the terms of each agreement. The amounts of borrowings as of March 31, 2018 and 2019 are
¥397,350 million (U.S.$3,580 million) and ¥457,248 million (U.S.$4,120 million), respectively.
Except for the borrowings above, there is no financial covenant on borrowings and bonds payable which has a significant effect on the
Group’s financial activities. For the fair value and amounts by due dates of borrowings and bonds payable, please refer to “Note 32. Financial
instruments” and “Note 33. Fair value of financial instruments.”
16 Deferred Tax and Income Taxes

(1) Movement by major cause of deferred tax assets and deferred tax liabilities
The balance of and the movement in recognized deferred tax assets and deferred tax liabilities are as follows:

Millions of yen
Recognized Acquisition
Recognized Recognized as other by business
As of April 1, as profit or directly in comprehen- combina- As of March
2017 loss equity sive income tions Other (Note) 31, 2018
Deferred tax assets
Accrued bonuses ¥ 9,959 ¥ 63 ¥ — ¥ — ¥ 101 ¥ (16) ¥ 10,107
Accrued business tax 7,950 (304) — — 270 (39) 7,877
Write down of inventories 5,189 (256) — — 99 — 5,032
Loss allowance 9,980 (601) — — 14 (3) 9,390
Unrealized gain on inventories 502 (141) — — 0 (141) 220
Deferred points 22,208 (5,500) — — — — 16,708
Difference of useful life between accounting
and tax laws 10,233 10,914 — — 565 3 21,715
Disposal loss on fixed assets 5,289 (564) — — — (1) 4,724
Impairment loss 36,788 (10,992) — — — (0) 25,796
Retirement benefit liabilities 7,767 (2,577) — (1,930) 75 436 3,771
Accrued expenses 4,281 (369) — — 22 0 3,934
Advanced received 33,101 (4,143) — — 12 141 29,112
Other 50,484 (3,151) — (427) 146 (1,123) 45,929
Total ¥203,732 ¥(17,621) ¥ — ¥(2,357) ¥1,304 ¥ (742) ¥184,315
Deferred tax liabilities
Retained profits of foreign related companies ¥ 353 ¥ 539 ¥ — ¥ — ¥ — ¥ — ¥ 893
Special reserves 581 (160) — — — — 421
Appraisal gain on equity instruments 5,890 129 453 3,495 — (0) 9,967
Difference of depreciation/ amortisation method
and useful life between accounting and tax laws 34,627 (12,518) — — — — 22,110
Identifiable intangible assets 104,868 (5,181) — — 7,720 — 107,407
Other 8,863 8,286 — 8 526 83 17,767
Total ¥155,183 ¥ (8,905) ¥453 ¥ 3,503 ¥8,246 ¥ 83 ¥158,563
Note: “Other” includes exchange differences on foreign operations.


Millions of yen
Impact by Recognized Acquisition
changes in Recognized Recognized as other by business
As of April 1, accounting as profit or directly in comprehen- combina- As of March
2018 policies loss equity sive income tions Other (Note) 31, 2019
Deferred tax assets
Accrued bonuses ¥ 10,107 ¥ — ¥ 3 ¥— ¥ — ¥ — ¥ 1 ¥ 10,111
Accrued business tax 7,877 — 476 — — 5 31 8,389
Write down of inventories 5,032 — (248) — — — 47 4,831
Loss allowance 9,390 — (300) — — — 1 9,091
Unrealized gain on inventories 220 — (91) — — — — 130
Deferred points 16,708 — 2,494 — — — 0 19,203
Difference of useful life between
accounting and tax laws 21,715 — 742 — — 2 418 22,876
Disposal loss on fixed assets 4,724 — (2,166) — — — 1 2,559
Impairment loss 25,796 — (5,661) — — — (13) 20,122
Retirement benefit liabilities 3,771 — (1,831) — 1,569 — 684 4,194
Accrued expenses 3,934 — 1,655 — — 0 183 5,773
Advanced received 29,112 (29,112) — — — — — —
Contract liabilities — 41,446 65,076 — — — (66) 106,457
Other 45,929 — 8,098 13 70 3 20 54,133
Total ¥184,315 ¥ 12,334 ¥68,248 ¥13 ¥ 1,639 ¥ 10 ¥1,307 ¥267,867
Retained profits of foreign
related companies ¥ 893 ¥ — ¥ 859 ¥— ¥ — ¥ — ¥ — ¥ 1,752
Special reserves 421 — (109) — — — 69 381
Appraisal gain on equity
instruments 9,967 — (394) — (1,436) — (330) 7,807
Difference of depreciation/
amortisation method and
useful life between accounting
and tax laws 22,110 — (7,806) — — — 103 14,406
Identifiable intangible assets 107,407 — (5,312) — — 933 — 103,028
Contract costs — 112,527 81,775 — — — (151) 194,151
Other 17,767 — 13,051 — 23 — 955 31,796
Total ¥158,563 ¥112,527 ¥82,065 ¥— ¥(1,413) ¥933 ¥ 646 ¥353,321

Impact by Recognized Acquisition
changes in Recognized Recognized as other by business
As of April 1, accounting as profit or directly in comprehen- combina- As of March
2018 policies loss equity sive income tions Other (Note) 31, 2019
Deferred tax assets
Accrued bonuses $ 91 $ — $ 0 $— $— $— $0 $ 91
Accrued business tax 71 — 4 — — 0 0 76
Write down of inventories 45 — (2) — — — 0 44
Loss allowance 85 — (3) — — — 0 82
Unrealized gain on inventories 2 — (1) — — — — 1
Deferred points 151 — 22 — — — 0 173
Difference of useful life between
accounting and tax laws 196 — 7 — — 0 4 206
Disposal loss on fixed assets 43 — (20) — — — 0 23
Impairment loss 232 — (51) — — — (0) 181
Retirement benefit liabilities 34 — (16) — 14 — 6 38
Accrued expenses 35 — 15 — — 0 2 52
Advanced received 262 (262) — — — — — —
Contract liabilities — 373 586 — — — (1) 959
Other 414 — 73 0 1 0 0 488
Total $1,661 $ 111 $615 $ 0 $ 15 $ 0 $12 $2,413
Retained profits of foreign
related companies $ 8 $ — $ 8 $— $ — $— $— $ 16
Special reserves 4 — (1) — — — 1 3
Appraisal gain on equity
instruments 90 — (4) — (13) — (3) 70
Difference of depreciation/
amortisation method and
useful life between accounting
and tax laws 199 — (70) — — — 1 130
Identifiable intangible assets 968 — (48) — — 8 — 928
Contract costs — 1,014 737 — — — (1) 1,749
Other 160 — 118 — 0 — 9 286
Total $1,429 $1,014 $739 $— $(13) $ 8 $ 6 $3,183
Note: “Other” includes exchange differences on foreign operations.
(2) The analysis of deferred tax assets and deferred tax liabilities
Deferred tax assets and deferred tax liabilities on the consolidated statement of financial position are as follows:
As of March 31 2018 2019 2019
Deferred tax assets ¥106,050 ¥ 15,227 $ 137
Deferred tax liabilities 80,298 100,680 907
Deferred tax assets, net ¥ 25,752 ¥ (85,454) $(770)
The Group evaluates the recoverability of deferred tax assets at recognition by considering the possibility to utilize a part or all of deductible
temporary differences or tax loss carryforwards for future taxable income.
The Group considers the planned reversal of deferred tax liabilities as well as expected future taxable income and tax planning for evaluating
the recoverability of deferred tax assets, and recognizes deferred tax assets to the extent that future taxable income is expected.
Deferred tax assets for tax losses in certain subsidiaries are ¥8,402 million (U.S.$76 million) and ¥5,027 million (U.S.$45 million), respectively,
as of March 31, 2018 and 2019.
All deferred tax assets related to these losses were determined recoverable as taxable income exceeding the tax losses is expected.

(3) Deductible temporary differences, net operating loss carryforwards and tax credit carryforwards, unaccompanied by the recogni-
tion of deferred tax assets
As a result of evaluating the recoverability of the deferred tax assets above, the Group has not recognized deferred tax assets on certain
deductible temporary differences and tax loss carryforwards. The amounts of deductible temporary differences, net operating loss carryfor-
wards and tax credit carryforwards, unaccompanied by the recognition of deferred tax assets are as follows:
As of March 31 2018 2019 2019
Deductible temporary differences ¥14,228 ¥ 8,274 $ 75
Tax loss carryforwards 42,209 26,077 235
Total ¥56,437 ¥34,351 $309
Expiration of tax loss carryforwards for which deferred tax assets have not been recognized is as follows:
As of March 31 2018 2019 2019
1st year ¥ 277 ¥ 204 $ 2
2nd year — — —
3rd year — 1,176 11
4th year 10,156 514 5
5th year and thereafter 31,776 24,183 218
Total ¥42,209 ¥26,077 $235
(4) Income taxes
The analysis of income taxes is as follows:

Current tax expenses
Current tax expenses on the profit for the year ¥296,512 ¥302,349 $2,724
Adjustments in respect of prior years ( ( ): refund) (225) (276) (2)
Previously unrecognized tax loss carryforwards of prior years that is used
to reduce current tax expenses (11,051) (6,742) (61)
Sub total 285,235 295,332 2,661
Deferred tax expenses
Origination and reversal of temporary differences 9,502 15,427 139
Impact of change of tax rates (344) — —
Previously unrecognized tax loss carryforwards of prior years that is used
to reduce deferred tax expenses (167) (143) (1)
Review of the collectability of deferred tax assets (275) (1,467) (13)
Sub total 8,716 13,817 124
Total ¥293,951 ¥309,149 $2,785
(5) Income taxes recognized in other comprehensive income
Income taxes recognized in other comprehensive income are described in “Note 30. Other comprehensive income.”
(6) Reconciliation of effective tax rates
Reconciliation of statutory effective tax rates and actual tax rates for the years ended March 31, 2018 and 2019 is as follows. The actual tax
rate shows the ratio of income taxes incurred by all Group companies to the profit before income tax for the year.
For the year ended March 31 2018 2019

Statutory income tax rate 31.6% 31.6%
Non-taxable dividends received (0.3%) (0.2%)
Impact of tax differences of foreign subsidiaries 0.0% 0.0%
Tax credit (0.2%) (0.1%)
Utilisation of previously unrecognised tax loss (0.6%) (0.5%)
Other 0.3% (0.1%)
Average actual tax rate to incur 30.8% 30.6%

17 Employee Benefits
The Group operates defined benefit pension plans and lump-sum In accordance with Defined Benefit Corporate Pension Act and
retirement plans (unfunded) as its defined benefit plans, as well as other laws, the Group is obliged to pay contributions to the Fund
defined contribution pension plans. which pays pension benefits. Trustee of the Fund is obliged to com-
The Group and its certain consolidated subsidiaries adopt point ply with laws, appointments by Minister of Ministry of Health, Labour
system in their retirement benefit plans, where the amount of bene- and Welfare or Head of Regional Bureau of Health and Welfare, by
fits is calculated based on the accumulated points granted in pro- law of the Fund and resolutions of the board of representatives, as
portion to the employees’ entitlement and wage ranks. well as to accomplish its duties related to the management and
Management, operation and benefit of the assets are mainly operation of the funded money. It is prohibited for the trustee to
controlled by legally independent KDDI Corporate Pension Fund harm the appropriate management and operation of the funded
(the “Fund”). money for the interest of itself or a third party other than the Fund.
(1) Defined benefit pension plans
i. The amounts on the consolidated statement of financial position

The amounts related to the defined benefit pension plans on the consolidated statement of financial position are as follows:

As of March 31 2018 2019 2019
Present value of the defined benefit obligations (funded) ¥389,514 ¥405,369 $3,652
Present value of the defined benefit obligations (unfunded) 13,489 10,330 93
Fair value of plan assets (390,993) (402,343) (3,625)
Status of the funding ¥ 12,010 ¥ 13,356 $ 120
Retirement benefit liabilities ¥ 12,010 ¥ 13,356 $ 120

Net retirement benefit liabilities ¥ 12,010 ¥ 13,356 $ 120
ii. Movement in the defined benefit obligations and plan assets

The movement in the defined benefit obligations is as follows:
The movement in the present value of the defined benefit obligations
Opening balance ¥396,687 ¥403,003 $3,631
Current service cost 15,085 14,850 134
Interest expense 2,105 1,949 18
Sub total 413,876 419,803 3,782
Remeasurements
Amount from change in financial assumptions (931) 9,309 84
Amount from change in demographic assumptions 71 181 2
Benefit payments (12,710) (13,567) (122)
Exchange differences (6) (2) (0)
New consolidation 2,539 — —
Other 165 (25) (0)
Ending balance ¥403,003 ¥415,699 $3,745

The movement in the plan assets is as follows:

Changes in fair value of the plan assets
Opening balance ¥(374,887) ¥(390,993) $(3,523)
Interest income (2,331) (2,863) (26)
Remeasurements
Return on plan assets (5,493) (4,470) (40)
Benefit payments 11,724 12,303 111
Contribution to the plans
Contribution from employers (16,206) (16,357) (147)
New consolidation (3,753) — —
Other (47) 36 0
Ending balance ¥(390,993) ¥(402,343) $(3,625)
The weighted average duration of the defined benefit obligations for the years ended March 31, 2018 and 2019 is 17.1 years and 16.9
years, respectively.
iii. Components of plan assets

KDDI Corporate Pension Fund manages its funded money to secure corporate bonds, designs corresponding manager structure, selects
long term return required to cover the benefit of pensions and lump- managing trustee and invests.
sum payments over the future. Based on this, our investment policy In accordance with the provision of Defined Benefit Corporate
is to basically analyse the risk/return characteristics by asset and Pension Act, bylaw of the Fund requires to recalculate the amount of
evaluate the correlation among assets in order to invest in a diversi- contributions at least every 5 years with a financial year end as a
fied portfolio. basis date to maintain balanced finances in the future. It is reviewed,
Specifically, it sets policy asset allocation with the efficient combi- as necessary, if there is a significant change in the circumstances
nation of various assets including equities and government and surrounding the Fund.
The fair value of the plan assets as of March 31, 2018 and 2019 consists of the components below:
As of March 31 2018 2019 2019
Without Without Without
With quoted quoted With quoted quoted With quoted quoted
prices in prices in prices in prices in prices in prices in
active active active active active active
markets markets Total markets markets Total markets markets Total
Equities ¥ 56,542 ¥ — ¥ 56,542 ¥ 62,709 ¥ — ¥ 62,709 $ 565 $ — $ 565
Debt securities 189,322 — 189,322 182,584 — 182,584 1,645 — 1,645
Other (Note) 60,906 84,223 145,129 62,768 94,283 157,050 566 849 1,415
Total ¥306,770 ¥84,223 ¥390,993 ¥308,061 ¥94,283 ¥402,343 $2,776 $849 $3,625
Note: Other includes hedge funds, private equities and cash.
iv. The analysis of expenses related to defined benefit plans

The amount of expenses recognized related to defined benefit plans is as follows:
Current service cost ¥15,085 ¥14,850 $134
Interest expense 2,105 1,949 18
Interest income (2,331) (2,863) (26)
Total ¥14,859 ¥13,937 $126
The expenses above are included in the “Cost of sales” and “Selling, general and administrative expenses” in the consolidated statement of
income.
v. Actuarial assumptions
Major actuarial assumption at the end of each period is as follows:
As of March 31 2018 2019
Discount rate 0.6% 0.6%
Other than the component above, actuarial assumptions also include expected salary growth rate, mortality and expected retirement rate.

vi. Sensitivity analysis of actuarial assumptions
The movement in the defined benefit obligations due to changes in discount rates by the ratio below at the end of each period is as follows.
This analysis assumes that actuarial assumptions other than those subject to the analysis are constant, but in reality, the movement of other
actuarial assumptions may change.
Discount rates
As of March 31 2018 2019 2019
0.5% increase ¥(28,008) ¥(28,892) $(260)
0.5% decrease 31,635 32,648 294
Note: Amounts shown in parentheses represent decrease of defined benefit obligations.
vii. Contributions to the plan assets in the next financial year

The policy of the Group is to contribute the necessary amount to the plan in order to meet the minimum funding requirement, based on relat-
ed regulations. The Group estimates the contributions to the plan assets for the year ended March 31, 2019 to be ¥10,007 million (U.S. $90
million).
(2) Defined contribution pension plans
The amount of expenses recognized related to defined contribution pension plans is as follows:
Expenses related to defined contribution pension plans ¥2,691 ¥3,112 $28
The expenses above are included in the “Cost of sales” and contribution pension plans. The expenses on the consolidated
“Selling, general and administrative expenses” in the consolidated statement of income for the years ended March 31, 2018 and 2019
statement of income. are ¥1,681 million and ¥1,724 million (U.S. $16 million), respectively.
Certain Group subsidiaries participate in a multiemployer plan, The Group can reduce its costs and practical burden related to
Sumisho Rengo Corporation Pension Fund. administration and finance operation by participating in this fund and
Sumisho Rengo Corporation Pension Fund is a fund-type corpo- reduce a risk to discontinue a pension plan, while the fund is co-
rate pension established in accordance with Defined Benefit operated by multiple companies and the Group cannot necessarily
Corporate Pension Act, and co-operated by multiple Sumitomo reflect its intent.
Shoji Group companies. The certain Group subsidiaries cannot cal- The financial position of the fund based on the latest annual report
culate the reasonable amount of pension assets corresponding to (closed by pension accounting) is as follows. The fund does not
the amount of their contributions, and therefore the amount of con- accept or succeed other funds, and does not incur benefit obliga-
tributions is recognized as retirement benefit expenses as defined tions by other employers.
(i) Status of funding in the overall plan

Pension assets ¥(37,224) ¥(40,452) $(364)
Benefit obligations for the purpose of calculating pension financials 33,896 36,881 332
Difference (3,328) (3,571) (32)
Ratio of the funded pension assets 109.8% 109.7%
Difference consists of: Surplus (3,328) (3,571) (32)
(ii) Ratio of contributions by the Group to the fund

Contributions by the Group ¥(1,443) ¥(1,481) $(13)
All contributions to the fund (2,380) (2,439) (22)
Ratio to the all contributions to the fund 60.6% 60.7%
In accordance with the provision of Defined Benefit Corporate Pension Act, bylaw of the Fund requires to recalculate the amount of contribu-
tions every 5 years with a financial year end as a basis date to maintain balanced finances in the future. It is reviewed, as necessary, if there is
a significant change in the circumstances surrounding the Fund.
(iii) Contributions to the multiemployer plans in the next financial year

The Group estimates the contributions to the multiemployer plans for the year ended March 31, 2019 to be ¥1,724 million yen (U.S. $16 million).

18 Trade and Other Payables

The analysis of the trade and other payables is as follows:
As of March 31 2018 2019 2019
Current liabilities
Accounts payable (Note) ¥435,613 ¥493,409 $4,446
Accounts payable—trade 142,758 146,016 1,316
Accrued expenses 32,019 32,033 289
Other obligations 336 512 5
Total ¥610,726 ¥671,969 $6,054
Note: Accounts payable is mainly consisted of the payable for capital investments and sale commission.
The amounts of trade and other payables expected to be settled after more than twelve months from the March 31, 2018 and 2019,
respectively are ¥6,867 million and ¥6,508 million (U.S. $59 million).
19 Other Financial Liabilities

The analysis of other financial liabilities is as follows:
As of March 31 2018 2019 2019
Non-current liabilities (Other long-term financial liabilities)
Financial liabilities at fair value through profit or loss
Derivative financial liabilities ¥ 5,885 ¥ 5,835 $ 53
Financial liabilities at amortized cost
Lease obligations 60,096 57,399 517
Long-term account payables (Note) 2,496 3,258 29
Sub total 68,478 66,493 599
Current liabilities (Other short-term financial liabilities)
Derivative financial liabilities 34 14 0
Financial liabilities at amortized cost
Lease obligations 24,683 26,759 241
Sub total 24,717 26,773 241
Total ¥93,195 ¥93,265 $840
20 Provisions
(1) Movements of provisions
Changes in provisions are as follows:

Millions of yen
Asset retirement Provision for
obligation customer points Other provisions Total
As of April 1, 2017 ¥ 7,000 ¥23,363 ¥4,249 ¥34,612
Increase during the year 4,096 36,921 — 41,017
Decrease during the year (intended use) (1,893) (31,249) (484) (33,626)
Decrease during the year (reversal) (8) (9) — (17)
As of March 31, 2018 9,194 29,027 3,765 41,986
Increase during the year 26,056 33,963 — 60,020
Decrease during the year (intended use) (2,260) (31,219) (128) (33,607)
Decrease during the year (reversal) — — — —
As of March 31,2019 ¥32,990 ¥31,771 ¥3,637 ¥68,399
Non-current liabilities ¥30,358 ¥ — ¥3,637 ¥33,996
Current liabilities 2,632 31,771 — 34,403

Asset retirement Provision for
obligation customer points Other provisions Total
As of March 31, 2018 $ 83 $262 $34 $378
Increase during the year 235 306 — 541
Decrease during the year (intended use) (20) (281) (1) (303)
Decrease during the year (reversal) — — — —
As of March 31,2019 $297 $286 $33 $616
Non-current liabilities $274 $ — $33 $306
Current liabilities 24 286 — 310
(2) Components of provisions purpose of sales promotions. In anticipation of the future use of
such points by customers, the Group has recorded these points
The main components of provisions of the Group are as follows: which are mainly granted by using au WALLET prepaid card, apps
and product sales services provided by other companies to debt as
i. Asset retirement obligation a provision for customer points. The Group has measured the
Asset retirement obligations are recognized by the reasonably esti- amounts of provision for customer point at an estimated amount to
mated amount required for the removal of equipment, such as base be used in the future based on historical experience.
stations, certain offices, data centers and network centers. The esti- There is an inherent uncertainty regarding the extent of usage of
mate is based on the assumption at present and is subject to such points by customers, and once the points expire, the custom-
changes depending on revised future assumptions. ers forfeits the right to use them.
ii. Provision for customer points iii. Other Provisions

The Group has operated points programs, including the au WALLET Other provisions include provision for warranties for completed
point program, and grants points to customers of the Group, for the construction.
21 Other Liabilities
The analysis of other liabilities is as follows:
As of March 31 2018 2019 2019
Long-term advances received ¥122,022 ¥ — $ —
Other 7,658 6,746 61
Sub total 129,679 6,746 61
Current liabilities
Deposits payable 102,976 146,821 1,323
Accrued bonuses 30,487 30,409 274
Consumption tax payable 21,241 24,599 222
Advances received 113,395 — —
Other 29,834 23,980 216
Sub total 297,932 225,810 2,035
Total ¥427,612 ¥232,556 $2,095
22 Share-based Payment (Stock Grant Plans)

The Company has several stock compensation plans (hereafter, the operating performance and corporate value over the medium to long
“Plan”) for directors, executive officers, and administrative officers term. This ESOP Trust is being introduced as an incentive plan to
(excluding directors residing overseas, outside directors and part- enhance corporate value over the medium to long term by increas-
time directors) that have entered into engagement agreements with ing awareness among the Company’s managers of operating perfor-
the Company (hereafter, “Directors and Other Executives”). mance and stock price.
As for the directors, the Company and its certain consolidated Under BIP and ESOP, the right (the number) for stock granted is
subsidiaries have adopted the Board Incentive Plan (BIP). As for the vested based on achievement based of KPI (Key Performance
Companies’ senior management, the Company has adopted the Indicators) annually.
Employee Stock Ownership Plan (ESOP). The expenses for the stock grant plans recognized in the consoli-
BIP (Board Incentive Plan) is being initiated in order to link com- dated statement of operations for the year ended March 31, 2018
pensation for Directors and Other Executives with shareholder value and 2019, respectively were ¥1,225 million and ¥1,334 million (U.S.
and to increase their awareness of contributing to increases in $12 million).

(1) KDDI CORPORATION

Fair value of granted date (Note 1)
The number of
granted (stock) Granted date (Yen) (U.S. dollar) Vesting conditions
BIP trust 131,955 March 8, 2017 ¥2,842.03 $26 (Note 2)
ESOP trust 299,002 March 8, 2017 2,842.03 26 (Note 2)
Notes: 1. With respect to stock grants, fair values are measured based on observable market prices. Moreover, the expected dividends are incorporated into the
measurement of fair values.
2. Vesting conditions are basically subject to continued service from grant date to vesting date.

The number of
BIP trust 202,395 August 1, 2018 ¥3,027.80 $27 (Note 2)
ESOP trust 235,157 August 1, 2018 3,027.80 27 (Note 2)
(2) Okinawa Cellular Telephone Company
In the fiscal year ended March 31, 2019, consolidated subsidiary Okinawa Cellular Telephone Company has introduced BIP trust and ESOP
trust. The stocks of Okinawa Cellular Telephone Company are granted by the institution.

The number of
BIP trust 2,392 June 14, 2018 ¥4,113.81 $37 (Note 2)
ESOP trust 2,913 April 25, 2018 4,013.83 36 (Note 2)
23 Common Stock and Other Equity Items

(1) Common stock and capital surplus
The number of authorized stock, outstanding stock, common stock and the balance of capital surplus in each consolidated fiscal year are as follows:
Shares Millions of yen
Authorized stock Outstanding stock Common stock Capital surplus
Balance as of March 31, 2017 4,200,000,000 2,620,494,257 ¥141,852 ¥298,046
Increase and decrease during the period (Note 3) — (33,280,732) — (8,467)
Balance as of March 31, 2018 4,200,000,000 2,587,213,525 141,852 289,578
Increase and decrease during the period (Note 3) — (55,209,080) — (5,169)
Balance as of March 31, 2019 4,200,000,000 2,532,004,445 ¥141,852 ¥284,409
Shares Millions of U.S. dollars
Authorized stock Outstanding stock Common stock Capital surplus
Balance as of March 31, 2018 4,200,000,000 2,587,213,525 $1,278 $2,609
Increase and decrease during the period (Note 3) — (55,209,080) — (47)
Balance as of March 31, 2019 4,200,000,000 2,532,004,445 $1,278 $2,562
Notes: 1. Common stocks are no par value.
2. Outstanding stocks are fully paid.
3. Decrease in the number of outstanding stock and capital surplus was mainly due to the cancellation of treasury stocks.
Capital surplus consists of the following items.
(i) Capital reserve

The Companies Act of Japan (“the Companies Act”) requires that at least 50% of the proceeds upon issuance of stocks are credited to com-
mon stock and the remainder of the proceeds is credited to capital reserve.

(ii) Other capital surplus
Other capital surplus mainly includes disposal of treasury stock and surplus arising from capital transaction such as merger. Also, since
changes in interests in subsidiaries are treated as capital transaction, the goodwill or negative goodwill generated through the transaction is
recognized as capital surplus.
(2) Treasury stock
Changes in the number of treasury stock during each consolidated fiscal year are as follows::
Number of treasury Amount
stock (Shares) (Millions of yen)
Balance as of April 1, 2017 162,641,408 ¥(237,014)
Increase and decrease during the period
Purchase of treasury stock (Note 1) 52,479,820 (150,000)
Cancellation of treasury stock (33,280,732) 48,709
Disposal of treasury stock (Note 2) (31,194) 51
Balance as of March 31, 2018 (Note 3) 181,809,302 (338,254)
Cancellation of treasury stock (55,209,080) 103,235
Disposal of treasury stock (Note 2) (685,774) 1,291
Balance as of March 31, 2019 (Note 3) 180,953,773 ¥(383,728)
Number of treasury Amount
stock (Shares) (Millions of U.S. dollars)
Balance as of March 31, 2018 (Note 3) 181,809,302 $(3,048)
Cancellation of treasury stock (55,209,080) 930
Disposal of treasury stock (Note 2) (685,774) 12
Balance as of March 31, 2019 (Note 3) 180,953,773 $(3,457)
Notes: 1.Of the increase in the number of treasury stock as of March 31, 2018 and 2019, 52,479,700 shares and 55,039,300 shares were mainly due to the pur-
chase from the market.
2. Decrease in the number of treasury stock was due to grant to beneficiaries of executive compensation BIP trust and stock grants ESOP trust.
3. In the balance of treasury stock as of March 31, 2018 and 2019, Company’s stocks owned by executive compensation BIP trust and stock grants
ESOP trust are included.
(3) Retained earnings
The Companies Act provides that 10% of the dividend of retained earnings shall be appropriated as legal capital surplus or as legal retained
earnings until their aggregate amount equals 25% of common stock. The legal retained earnings may be used to eliminate or reduce a deficit
or be transferred to retained earnings upon approval at the general meeting of shareholders.
(4) Changes in accumulated other comprehensive income
Changes in each component of accumulated other comprehensive income are as follows:
i. Changes in each component of accumulated other comprehensive income

For the year ended March 31, 2018:
Millions of yen
Changes measured
in fair value of
financial assets at
Translation fair value through
differences on other comprehensive Changes in fair value Remeasurements of
foreign operations income of cash flow hedge benefit pension plan Total
Balance as of April 1, 2017 ¥(12,064) ¥12,460 ¥(2,996) ¥ — ¥ (2,601)
Amount incurred during the year 2,404 8,054 (691) 4,177 13,945
Reclassified to consolidated
statement of income 518 — 1,332 — 1,851
Transferred to retained earnings — (835) — (4,177) (5,012)
Balance as of March 31, 2018 ¥ (9,141) ¥19,679 ¥(2,355) ¥ — ¥ 8,183
Note: Amounts presented above are net of tax. Income taxes related to each component of other comprehensive income are set out in “Note 30. Other compre-
hensive income.”


Millions of yen
Changes measured
in fair value of
financial assets at
Balance as of April 1, 2018 ¥ (9,141) ¥19,679 ¥(2,355) ¥ — ¥ 8,183
Amount incurred during the year (5,392) (4,445) (1,022) (3,427) (14,286)
statement of income (388) — 1,142 — 754
Transferred to retained earnings — (1,251) — 3,427 2,176
Balance as of March 31, 2019 ¥(14,922) ¥13,983 ¥(2,235) ¥ — ¥ (3,174)
Changes measured
in fair value of
financial assets at
Balance as of April 1, 2018 $ (82) $177 $(21) $— $ 74
Amount incurred during the year (49) (40) (9) (31) (129)
statement of income (3) — 10 — 7
Transferred to retained earnings — (11) — 31 20
Balance as of March 31, 2019 $(134) $126 $(20) $— $(29)
Note: Amounts presented above are net of tax. Income taxes related to each component of other comprehensive income are set out in “Note 30. Other compre-
hensive income.”
ii. The analysis of accumulated other comprehensive income

Accumulated other comprehensive income includes following items.
(a) Translation differences on foreign operations

This represents the exchange differences incurred upon consolidation of the foreign operations’ financial statements denominated in foreign
currencies.
(b) Changes in fair value of financial assets at fair value through other comprehensive income
This represents the valuation differences on fair value of financial assets at fair value through other comprehensive income.
(c) Changes in fair value of cash flow hedge

This represents the effective portion of changes in fair value of derivative transactions designated as cash flow hedge which is used by the
Group to avoid the risk of future cash flows fluctuation.
(d) Remeasurements of defined benefit pension plan

Remeasurements of defined benefit pension plan are mainly the effects of differences between the actuarial assumptions at the beginning of
the year and their actual results, and the effects of changes in actuarial assumptions.
24 Dividends
Dividends to common shareholders are as follows:
(1) Dividends paid

Aggregate amount of
dividends Dividends per share
Resolution Type (Millions of yen) (Yen) Record date Effective date
June 21, 2017
General meeting of shareholders
(Note 1, 2) Common stock ¥110,603 ¥45 March 31, 2017 June 22, 2017
November 1, 2017
Board of directors (Note 1, 2) Common stock 109,096 45 September 30, 2017 December 4, 2017

Aggregate amount of
Resolution Type (Millions of yen) (Yen) Record date Effective date
June 20, 2018
(Note 1, 2) Common stock ¥108,243 ¥45 March 31, 2018 June 21, 2018
November 1, 2018
Aggregate amount of
Resolution Type (Millions of U.S. dollars) (U.S. dollars) Record date Effective date
June 20, 2018
(Note 1, 2) Common stock $ 975 $0 March 31, 2018 June 21, 2018
November 1, 2018
Notes: 1. Dividends of the Company’s shares owned by executive compensation BIP trust and stock grants ESOP trust are not included in aggregate amount of
the dividends above.
2. Other than that above, there are dividends paid by the Company to beneficiaries of executive compensation BIP trust and stock grants ESOP trust in
the year ended March 31, 2019.
(2) Dividends whose record date is in the current fiscal year but whose effective date is in the following fiscal year are as follows:

Aggregate amount Dividends
of dividends Source of per share
Resolution Type (Millions of yen) dividends (Yen) Record date Effective date
June 20, 2018
General meeting of shareholders Retained
(Note 1, 2) Common stock ¥108,243 earnings ¥45 March 31, 2018 June 21, 2018

Resolution Type (Millions of yen) dividends (Yen) Record date Effective date
June 19, 2019
(Note 1, 2) Common stock ¥129,308 earnings ¥55 March 31, 2019 June 20, 2019
Resolution Type (Millions of U.S. dollars) dividends (Yen) Record date Effective date
June 19, 2019
(Note 1, 2) Common stock $1,165 earnings $0 March 31, 2019 June 20, 2019
Notes: 1. Dividends of the Company’s shares owned by executive compensation BIP trust and stock grants ESOP trust are not included in aggregate amount of
the dividends above.
2. Other than that above, there are dividends paid by the Company to beneficiaries of executive compensation BIP trust and stock grants ESOP trust in
the year ended March 31, 2019.

25 Revenue
(1) Division of profit
The Group divides profit from contracts with customers into five categories depending on the contract: mobile telecommunications services,
fixed-line telecommunications services, value-added services, global services and other services. Profit from each segment is divided as follows:

Amount Amount
Segment Product / Service (Millions of yen) (Millions of U.S. dollars)
Personal Services ¥3,805,937 $34,291
Mobile telecommunications 1,774,186 15,985
Fixed-line telecommunications 799,905 7,207
Others 1,231,846 11,099
Life Design 447,209 4,029
Value-added 205,841 1,855
Others 241,368 2,175
Business Services 618,557 5,573
Mobile telecommunications 231,505 2,086
Fixed-line telecommunications 279,129 2,515
Others 107,922 972
Global Services 181,175 1,632
Others 27,475 248
Total ¥5,080,353 $45,773
Profit from contracts with customers 5,021,196 45,240
Profit from other sources 59,157 533
Note: The amounts presented exclude inter-segment transactions.
(2) Outstanding contract balances
The Group’s assets and contract liabilities from contracts with customers are as follows:
Millions of yen Millions of U.S. dollars Millions of yen Millions of U.S. dollars
April 1, 2018 April 1, 2018 March 31, 2019 March 31, 2019
Receivables from contracts with customers ¥1,592,072 $14,344 ¥1,810,042 $16,308
Contract liabilities 197,043 1,775 193,511 1,743
The contract liabilities are earned from activation fees related to mobile communications services and “au HIKARI” brand services. Points
granted to customers through the customer loyalty program are allocated to transaction prices based on the independent sales values of ben-
efits with the advance payment.
Regarding profit recognized in the fiscal year under review, ¥130,694 million (U.S. $1,178 million) was included in outstanding contract liabil-
ities at the beginning of the fiscal year. This is immaterial to the amount of profit recognized from performance obligations fulfilled (or partially
fulfilled) in previous periods.
(3) Transaction amounts allocated to remaining performance obligations
As of March 31, 2019, the transaction amounts allocated to remaining performance obligations amounted to ¥153,830 million (U.S. $1,386
million). Most of these performance obligations comprise earnings from activation fees related to mobile communications services and “au
HIKARI” brand services, and they are expected to be recognized as profit within approximately five years, when the services are provided and
performance obligations are fulfilled. In addition, the Group adopts the simplified method from paragraph 121 of IFRS 15 as a practical expedi-
ent and has not included information related to remaining performance obligations that have an original expected duration of one year or less.
(4) Assets recognized from the costs to obtain or fulfill contracts with customers
The Group’s assets recognized from contract costs are as follows:

Millions of yen Millions of U.S. dollars Millions of yen Millions of U.S. dollars
April 1, 2018 April 1, 2018 March 31, 2019 March 31, 2019
Costs to obtain contracts ¥316,810 $2,854 ¥361,437 $3,256
Costs to fulfill contracts 44,041 397 51,401 463
The portion expected to be recovered from the incremental costs to obtain contracts with customers and the costs directly related to fulfilling
contracts is capitalized and recorded under contract costs in the consolidated statement of financial position. Incremental costs to obtain
contracts comprise costs to obtain contracts with customers that would not have been incurred had the contracts not been obtained.
Incremental costs to obtain contracts that are capitalized are mainly sales commissions to agencies incurred when contracts are obtained.
Costs to fulfill contracts mainly comprise necessary set-up and other fees incurred between the receipt of an application and the start of ser-
vices. These capitalized costs comprise incremental costs that would not have been incurred had telecommunications contracts not been

obtained. Furthermore, when capitalizing these costs, only the amount expected to be recovered is recognized after taking into account the
estimated contract period for the telecommunications contracts. The resulting assets are amortized on a straight-line basis over two to three
years in line with the main estimated contract period for users of each service.
The Group determines the recoverability of capitalized contract costs when they are capitalized and reevaluates this each quarter.
Specifically, the Group determines whether or not the book value of the assets exceeds the remaining amount of consideration the company
expects to receive based on the telecommunications contract over the estimated contract period less the costs directly related to providing
the service that have not yet been recognized as expenses. If the scenario used in estimates and assumptions changes, an impairment loss
related to the asset is recognized in net profit or loss. This could therefore have a material impact on the value of assets capitalized from con-
tract costs. Accordingly, the Group regards these estimates as material.
The amortization costs incurred from these assets in the fiscal year under review amounted to ¥176,228 million (U.S. $1,588 million), and
there was no impairment loss.
26 Expenses by Nature
Expenses by nature that constitute cost of sales and selling, general and administrative expenses are as follows:
Handset sales cost, repair cost ¥ 848,591 ¥ 814,261 $ 7,336
Depreciation and amortization 546,609 562,282 5,066
Communication equipment usage fee and rentals 462,970 427,755 3,854
Staff cost 402,269 422,979 3,811
Sales commission 391,055 308,510 2,908
Operations outsourcing 326,005 322,737 2,780
Power retail sales cost 136,059 220,041 1,983
Rent 73,808 77,551 699
Utilities 60,915 65,389 589
Other (Note) 844,738 856,375 7,716
Total ¥4,093,018 ¥4,077,882 $36,741
Note: Other is mainly consisted of advertising expense and maintenance costs for communication equipment, etc.
27 Other Income and Other Expense

(1) The analysis of other income
The analysis of other income is as follows:

Compensation income, etc. ¥ 1,001 ¥ 687 $ 6
Subsidy income, etc. 547 583 5
Income from recovery of bad debts 683 761 7
Other 9,811 8,109 73
Total ¥12,041 ¥10,140 $91
(2) The analysis of other expense
The analysis of other expense is as follows:

Reduction entry of land contribution for construction ¥ 32 ¥ — $—
Loss on sale of fixed assets 684 600 5
Other 2,085 3,061 28
Total ¥2,801 ¥3,661 $33

28 Finance Income and Finance Cost

(1) The analysis of finance income
The analysis of finance income is as follows:

Interest income:
Financial assets at amortized cost ¥1,008 ¥1,256 $11
Dividend income:
Financial assets at fair value through other comprehensive income 2,479 2,279 21
Other 548 47 0
Total ¥4,035 ¥3,582 $32
(2) The analysis of finance cost
The analysis of finance cost is as follows:

Interest expense:
Financial liabilities at amortized cost ¥ 8,081 ¥ 7,574 $68
Derivatives 1,620 1,120 10
Loss on foreign currency exchange 1,846 128 1
Other 437 1,189 11
Total ¥11,985 ¥10,012 $90
29 Other Non-operating Profit

The analysis of other non-operating profit is as follows:
Gain on step acquisitions ¥ — ¥2,999 $27
Gain or loss on sales of stocks of subsidiaries and affiliates 305 (24) (0)
Total ¥305 ¥2,975 $27
30 Other Comprehensive Income

Amounts arising during the year, amounts transferred to profit and tax effect included in other comprehensive income of the Group are as follows:
Items that will not be reclassified subsequently to profit or loss
Remeasurement of the net defined benefit liability (asset)
Gain (loss) arising during the year ¥ 6,062 ¥ (5,020) $ (45)
Tax effect (1,930) 1,569 14
After tax effect 4,132 (3,451) (31)
Net change in financial assets at fair value through other comprehensive income
Gain (loss) arising during the year 11,854 (4,655) (42)
Tax effect (3,495) 1,436 13
Share of investments accounted for using the equity method
Gain (loss) arising during the year (149) (1,267) (11)
After tax effect (149) (1,267) (11)
Total 12,342 (7,937) (72)

Items that may be reclassified subsequently to profit or loss
Changes in fair value of cash flow hedge
Gain (loss) arising during the year ¥ 36 ¥ (1,295) $ (12)
Transferred to profit for the year 1,332 1,142 10
Before tax effect 1,368 (154) (1)
Tax effect (435) 47 0
After tax effect 933 (106) (1)
Exchange differences on translating foreign operations
Gain (loss) arising during the year 996 (6,232) (56)
Transferred to profit for the year 518 (388) (3)
Before tax effect 1,515 (6,620) (60)
Share of investments accounted for using the equity method
Gain (loss) arising during the year (25) (88) (1)
Transferred to profit for the year — — —
After tax effect (25) (88) (1)
Total 2,423 (6,814) (61)
Total other comprehensive income ¥14,766 ¥(14,751) $(133)
31 Cash Flow
An analysis of net debt and the movements in net debt for the periods presented are as follows:
Millions of yen
Hedge
assets held
Cash/current Borrowings Borrowings for borrow.
bank Finance due within due after Preferred Due after
account leases 1 year 1 year Bonds shares 1 year
Net debt as of April 1, 2017 ¥226,607 ¥89,171 ¥ 1,883 ¥775,848 ¥189,747 ¥95,000 ¥(7,183)
Cash flows (25,610) (27,210) 27,574 58,918 (20,019) (95,000) —
Acquisitions — 20,934 — — — — —
Foreign exchange adjustments (163) 14 49 10 — — —
Fair value movements — — — — — — 1,301
Other non-cash movements — 1,869 (506) 259 73 — —
Net debt as of March 31, 2018 200,834 84,779 29,000 835,036 169,801 — (5,882)
Cash flows 4,077 (28,616) (10,274) 43,868 109,981 — —
Acquisitions — 24,696 — — — — —
Movements by a subsidiary or other business
fluctuations caused by gain or loss — — 13,274 1,168 — — —
Foreign exchange adjustments (314) (12) — (11) — — —
Fair value movements — — — — — — 72
Other non-cash movements — 3,311 — — (290) — —
Net debt as of March 31, 2019 ¥204,597 ¥84,158 ¥32,000 ¥880,061 ¥279,492 ¥ — ¥(5,810)
Hedge
assets held
Cash/current Borrowings Borrowings for borrow.
bank Finance due within due after Preferred Due after
account leases 1 year 1 year Bonds shares 1 year
Net debt as of April 1, 2018 $1,809 $764 $261 $7,524 $1,530 $— $(53)
Cash flows 37 (258) (93) 395 991 — —
Acquisitions — 223 — — — — —
Movements by a subsidiary or other business
fluctuations caused by gain or loss — — 120 11 — — —
Foreign exchange adjustments (3) (0) — (0) — — —
Fair value movements — — — — — — 1
Other non-cash movements — 30 — — (3) — —
Net debt as of March 31, 2019 $1,843 $758 $288 $7,929 $2,518 $— $(52)

32 Financial Instruments
(1) Risk management
The Group’s operating activities are subject to influence from the The Group directly writes off the gross carrying amount of the
business and financial market environment. Financial instruments credit-impaired financial assets when all or part of the financial
held or assumed in the course of business are exposed to risks assets are evaluated to be uncollectible and determined that it is
inherent in those instruments. Such risks include (i) Credit risk, (ii) appropriate to be written off as a result of credit check.
Liquidity risk and (iii) Market risk. The Group has a risk management The Group’s receivables have no significantly concentrated credit risk
program in place to minimize effects on the Group’s financial posi- exposure to any single counterparty or any group of counterparties.
tion and results of operations through establishing an internal man- The Group considers that there is substantially low credit risk
agement system and using financial instruments. Specifically, the resulting from counterparty default because counterparties of the
Group manages these risks by using methods as described below. Group’s derivatives and bank transactions are limited to high credit
quality financial institutions. For surplus investments and derivative
i. Credit risk management transactions, the finance and accounting department, following
(a) Credit risks of financial assets owned by the Company internal rules of each Group company and accompanying regula-
Credit risk is the risk that a party to the Group’s financial instrument tions that prescribe details, arranges to have each transaction
will cause a financial loss for the Group by failing to discharge its approved by an authorized person as designated in the authoriza-
contractual obligation. Specifically, the Group is exposed to the fol- tion regulation on a transaction-to-transaction basis so that the
lowing credit risks. Trade, lease and other receivables of the Group Group can minimize credit risk. Counterparties to those transactions
are exposed to the credit risk of our customers. The debt securities are limited to financial institutions with high credit rating.
held for surplus investment are exposed to the issuer’s credit risk
related to the deterioration of its financial condition. In addition, Measurement of expected credit losses on trade receivables
derivatives used by the Group to hedge exchange risk and interest As trade receivables do not contain a significant financing compo-
rate risk and bank balances are exposed to the credit risk of the nent, the Group measures loss allowance at an amount equal to the
financial institutions that are counterparties to these transactions. lifetime expected credit losses until the trade receivables are recov-
ered. With regard to performing trade receivables, loss allowance is
(b) Responses to the risk owned by the Company recognized by estimating the expected credit losses based on his-
With regard to credit risks to the customer, the Group has a system torical credit loss experience and forward-looking information for the
in place for assessing credit status as well as performing term admin- age of each trade receivables.
istration and balance management for each counterparty based on
the credit management guidelines of each Group company. Measurement of expected credit losses on lease and other
With regard to lease and other receivables, the Group determines receivables
there has been a significant increase in credit risk of the financial When credit risk related to lease and other receivables has not
assets since initial recognition in case the cash collection of the increased significantly since the initial recognition at the end of the
financial assets was delayed (as well as the case of request for reporting period, the Group calculates the amount of loss allowance
grace period) after the trade date. However, even when late pay- of the financial instruments by estimating the 12-month expected
ment or request for grace period occurs, the Group does not deter- credit losses collectively based upon both historical credit loss expe-
mine that there has been a significant increase in credit risk if such rience and forward-looking information.
late payment or request for grace period would be attributable to On the other hand, when a significant increase in credit risk since
temporary cash shortage, the risk of default would be low, and the initial recognition as of the end of fiscal year is presumed, the Group
objective data such as external credit ratings reveals their ability to estimates the lifetime credit losses on the financial instruments indi-
fulfil the obligation of contractual cash flow in the near future. vidually and measures the amount of loss allowance based on his-
With regard to debt securities, the Group determines there has torical credit loss experience and forward-looking information.
been a significant increase in its credit risk since initial recognition
when the Group evaluates the risk of default is high based upon rat- Measurement of the expected credit losses on other investments
ing information provided by major rating agencies. (debt securities)
Expected credit loss is recognised and measured thorough trans- When credit risk related to debt securities has not increased signifi-
actions and financial information available in the course of such cantly since initial recognition at the end of the reporting period, the
credit risk management, while taking macroeconomic condition Group calculates the amount of loss allowance of the financial
such as the number of bankruptcies and actual or expected signifi- instruments by estimating the 12-month expected credit losses.
cant changes in the operating results of the debtor into consider- On the other hand, when a significant increase in credit risk since
ation. Regardless of the analysis above, a significant increase in initial recognition as of the end of fiscal year is presumed, the Group
credit risk is presumed if a debtor is more than 30 days past due in estimates the lifetime credit losses on the financial instruments and
making a contractual payment. measures the amount of loss allowance based on historical credit
A default occurs when a debtor to a financial asset fails to make loss experience and forward-looking information.
contractual payments within 90 days of when they fall due.

(c) Quantitative and qualitative information on the amounts arising from expected credit losses
Loss allowance for trade receivables
Millions of yen
Lifetime expected credit loss
Collective
Balance as of April 1, 2017 ¥63,937
Increase during the year 27,526
Decrease during the year (reversal) (10,394)
Decrease during the year (intended use) (17,421)
Other (unwinding of discounts and exchange differences) (327)
Balance as of March 31, 2018 63,321
Increase during the year 28,096
Decrease during the year (reversal) (9,696)
Decrease during the year (intended use) (17,744)
Other (unwinding of discounts and exchange differences) (33,122)
Balance as of March 31, 2019 ¥30,855
Lifetime expected credit loss
Collective
Balance as of March 31, 2018 $571
Increase during the year 253
Decrease during the year (reversal) (87)
Decrease during the year (intended use) (160)
Other (unwinding of discounts and exchange differences) (298)
Balance as of March 31, 2019 $278
Loss allowance and reversal of loss allowance are recorded in “selling, general and administrative expenses” in the consolidated statement
of income. Fair value of trade and other receivables is described in “Note 33. Fair value of financial instruments.”
There is no contractual, uncollected balance for financial assets written off during the fiscal year ended March 31, 2018 and 2019 respec-
tively, for which collecting efforts are still being made.
There are no significant loss allowances for lease receivables, other receivables and other investments (debt securities).
(d) Maximum exposure to credit risks

The Group’s maximum exposure to credit risks is as follows:
The Group’s maximum credit risk exposure (gross) represents the amount of the maximum exposure with respect to credit risks without taking
into account any collateral held or other credit enhancement. On the other hand, the Group’s maximum credit risk exposure (net) represents the
amount of the maximum exposure with respect to credit risks reflecting the mitigation effect of the collateral held or other credit enhancement.
Maximum exposure for trade receivables

Millions of yen
More than 30 days More than 90 days
Current past due past due Total
Gross carrying amount ¥1,680,800 ¥10,227 ¥68,363 ¥1,759,391
Expected loss rate 0.6% 20.7% 74.9% —
Loss allowance 10,003 2,116 51,203 63,321

Millions of yen
Gross carrying amount ¥1,947,732 ¥8,418 40,711 ¥1,996,862
Loss allowance 11,684 1,798 17,374 30,855
Gross carrying amount $17,549 76 367 $17,991
Loss allowance 105 16 157 278
Note: There is no collateral and other credit enhancement owned by the Group.

ii. Liquidity risk management

The Group is exposed to liquidity risk that the Group may be unable to meet the obligations such as notes and trade payables.
The Group finances necessary funds through bank borrowings and bond issuances, in the context of its capital expenditure project mainly
to conduct telecommunications businesses. Any excess funds incurred are invested in short-term deposits etc.
Most of the trade and other payables are payable within one year. The Group’s current liabilities including such trade payables are exposed
to liquidity risk at the time of settlement, however, the Group avoids the risk using methods such as monthly financial planning review con-
ducted by each Group company. In addition, to manage liquidity risk, the Group aims for continuously stable cash management through mon-
itoring account activity by preparing monthly cash flow projection, and maintains liquidity at certain level. At March 31, 2019, the Group has
short-term deposits etc. which is considered to be readily convertible into cash to address liquidity risk. Please refer to “Note 14. Cash and
cash equivalents” for details.
Long-term financing is conducted following approval by the Board of Directors of the annual financial plan prepared by the finance and accounting
department. The Group minimizes its liquidity risk by entering into a number of long- and short-term unextended commitment line contracts
with domestic dominant financial institutions and leading financial institutions in foreign countries in addition to uncommitted credit facilities.
(a) Maturity analysis

Following tables represent analysis of the Group’s non-derivative financial liabilities and derivative financial liabilities to be settled on a net basis
by category based on respective remaining periods to contractual maturity at the end of each fiscal year. Amounts shown in the tables below
are contractual undiscounted cash flows.
As of March 31, 2018

Millions of yen
Over one Over two Over three Over four
Carrying Contractual Within year to years to years to years to Over
amount cash flow one year two years three years four years five years five years
Non-derivative financial liabilities
Trade and other payables ¥ 610,726 ¥ 610,726 ¥603,858 ¥ 1,261 ¥ 720 ¥ 444 ¥ 730 ¥ 3,712
Short-term borrowings 29,000 29,000 29,000 — — — — —
Long-term borrowings 835,036 844,809 294,226 61,094 111,640 48,893 36,030 292,926
Bonds payable 169,801 175,985 12,149 61,740 40,671 442 442 60,542
Lease payment 84,779 87,206 25,654 22,988 18,435 11,207 5,861 3,061
Sub total 1,729,341 1,747,725 964,888 147,083 171,466 60,985 43,063 360,240
Derivative financial liabilities (Note)
Exchange contracts 38 38 34 3 0 — — —
Interest rate swaps 5,882 5,882 — 224 — 928 — 4,729
Sub total 5,920 5,920 34 228 0 928 — 4,729
Total ¥1,735,261 ¥1,753,645 ¥964,922 ¥147,311 ¥171,466 ¥61,914 ¥43,063 ¥364,969
Note: Credits and debts resulted from derivative transactions are presented on a net basis.

Millions of yen
Trade and other payables ¥ 671,969 ¥ 671,969 ¥665,461 ¥ 1,056 ¥ 690 ¥ 546 ¥ 540 ¥ 3,675
Short-term borrowings 32,000 32,000 32,000 — — — — —
Long-term borrowings 880,061 891,023 61,322 115,725 75,631 152,445 149,695 336,205
Bonds payable 279,492 286,254 62,031 40,962 733 733 70,733 111,064
Lease payment 84,158 89,004 28,517 24,528 16,060 10,287 6,263 3,349
Sub total 1,947,680 1,970,250 849,331 182,270 93,114 164,010 227,231 454,293
Exchange contracts 39 39 14 17 8 1 — —
Interest rate swaps 5,810 5,810 — 741 — — 2,479 2,590
Sub total 5,849 5,849 14 757 8 1 2,479 2,590
Total ¥1,953,529 ¥1,976,100 ¥849,345 ¥183,027 ¥93,122 ¥164,011 ¥229,710 ¥456,883

Trade and other payables $ 6,054 $ 6,054 $5,996 $ 10 $ 6 $ 5 $ 5 $ 33
Short-term borrowings 288 288 288 — — — — —
Long-term borrowings 7,929 8,028 553 1,043 681 1,374 1,349 3,029
Bonds payable 2,518 2,579 559 369 7 7 637 1,001
Lease payment 758 802 257 221 145 93 56 30
Sub total 17,548 17,752 7,652 1,642 839 1,478 2,047 4,093
Exchange contracts 0 0 0 0 0 0 — —
Interest rate swaps 52 52 — 7 — — 22 23
Sub total 53 53 0 7 0 0 22 23
Total $17,601 $17,804 $7,652 $1,649 $839 $1,478 $2,070 $4,116
Note: Credits and debts resulted from derivative transactions are presented on a net basis.
iii. Market risk management

Market risk management consists of (a) Exchange risk management, (b) Interest rate risk management and (c) Price risk management of equi-
ty instruments.
(a) Exchange risk

The Group is exposed to exchange rate fluctuation risk (“exchange risk”) resulted from translating foreign currency denominated trade receiv-
ables arising from transactions that the Group conducted using non-functional currencies into their functional currencies at the exchange rate
prevailing at the end of reporting period.
The Group also operates in foreign countries. Currently, the Group is developing international businesses through capital contribution and
establishment of joint ventures in Asia (Singapore and China etc.), North America and Europe etc. As a result of these international operating
activities, the Group is exposed to various exchange risks primarily related to U.S. dollar and Hong Kong dollar.
Certain subsidiary hedges exchange fluctuation risk by adopting forward exchange contracts as derivative transactions. The purpose is to
fix the exchange fluctuation for broadcasting right related to foreign program. For derivative transactions, the Company develops implementa-
tion plans on a transaction-to-transaction basis following internal rules approved by the Board of Directors, and obtains approval as stipulated
in the authorization regulation, before conducting the transactions. The Group’s policy is to use derivative transactions only to avoid risk and
conduct no speculative transactions in order to gain trading profits.
(i) Sensitivity analysis of exchange rate

Sensitivity analysis of the impact of the 10% appreciation of Japanese yen against U.S. dollar and Hong Kong dollar at the end of each fiscal
year against profit before tax of the Group is as follows.
This analysis is on presumption that all other variables (balance, interest etc.) are held constant, and the sensitivity analysis below does not
contain impacts of translation of financial instruments denominated in functional currencies, and impacts of translation of revenues and
expenses, assets and liabilities of foreign operations into presentation currency.
Profit before tax
U.S. dollar ¥(2,343) ¥(3,070) $(28)
Hong Kong dollar (725) (681) (6)
Total ¥(3,068) ¥(3,750) $(34)
At the end of each fiscal year, impact against the Group’s profit or loss, in cases where Japanese yen depreciated 10% against U.S. dollar
and Hong Kong dollar, would be equal and opposite figures presented above on presumption that all other variables are held constant.
(ii) Derivatives (forward foreign exchange contracts)

Details of major exchange contracts existed at March 31, 2018 and 2019 are as follows:
Derivatives designated as hedges

Certain subsidiaries of the Group is to apply hedge accounting to foreign exchange risk
2018 2019 2019
Contractual amount Fair value Contractual amount Fair value Contractual amount Fair value
Over Over Over
As of March 31 Total one year Assets Liabilities Total one year Assets Liabilities Total one year Assets Liabilities
Forward foreign
exchange contracts ¥7,023 ¥2,144 ¥479 ¥19 ¥7,672 ¥6,261 ¥270 ¥36 $69 $56 $2 $0


As of March 31 2018 2019 2019
Carrying amount ¥ 460 ¥ 235 $ 2
Contractual amount 7,023 7,672 69
Maturity date April 2018– April 2019– April 2019–
November 2022 March 2023 March 2023
Hedge ratio (Note 1) 1 1 0
Change in intrinsic value of outstanding hedging instrument 43 (225) (2)
Change in value of hedge item used to determine hedge effectiveness (43) 225 2
Notes: 1. Since the Group is engaged in the foreign exchange contracts in the same currency as the purchase transaction of contents to occur in the future with
a high possibility, hedge ratio of foreign exchange contracts is one-to-one.
2. The Group does not have non-effective portion of the hedge.
Derivatives not designated as hedges

2018 2019 2019
Over Over Over
Forward foreign
exchange contracts ¥4,032 ¥— ¥— ¥19 ¥13,006 ¥— ¥39 ¥4 $117 $— $0 $0
(b) Interest rate risk

Interest rate risk is defined as the risk that market interest rate fluctuation results in changes in fair value of financial instruments or future cash
flows arising from financial instruments. Interest rate risk exposure of the Group mainly relates to payables such as borrowings or bonds, and
receivables such as interest-bearing deposits. As amount of interest is influenced by market interest rate fluctuation, the Group is exposed to
interest rate risk resulting from changes in future cash flows of interest.
The Group finances funds through bond issuance at fixed interest rate in order to avoid future interest payment increase, primarily resulting
from rising interest rate.
Certain subsidiaries stabilize their cash flows by using interest rate swap transactions to minimize interest rate risk on borrowings.
(i) Sensitivity analysis of interest rate

Sensitivity analysis of the impact of the 1% increase of interest rate at the end of each fiscal year against profit before tax of the Group is as
follows. This analysis is on presumption that all other variables (balance, exchange rate etc.) are held constant.
Profit before tax ¥(11) ¥(8) $(0)
Amounts shown in parentheses represent negative impact against profit of the Group.
(ii) Derivatives (interest swap contracts)

In interest swap contracts, the Group enters into agreements to exchange the differences between fixed rate and floating rate interest
amounts calculated by reference to an agreed notional principal amount. Using these contracts, the Group minimizes its risk of cash flows
fluctuation arising from floating rate borrowings.
Derivatives designated as hedges

2018 2019 2019
Over Over Over
Interest rate swap ¥330,000 ¥330,000 ¥— ¥5,882 ¥230,000 ¥230,000 ¥— ¥5,810 $2,072 $2,072 $— $52
As of March 31 2018 2019 2019
Carrying amount ¥ (5,882) (5,810) (52)
Contractual amount 330,000 230,000 2,072
Maturity date December 2018– December 2020– December 2020–
December 2025 December 2025 December 2025
Hedge ratio (Note 1) 1 1 0
Change in intrinsic value of outstanding hedging instrument 1,301 72 1
Change in value of hedge item used to determine hedge effectiveness (1,301) (72) (1)
Notes: 1. Since the Group runs the borrowing (hedged item) and interest rate swap transaction (hedging instrument) in the same amount, hedge ratio of interest
rate swap transaction is one-to-one.
2. The Group does not have any non-effective portion of the hedge.

(c) Price risk management of equity instruments
Price risk of equity instruments is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in mar-
ket prices (other than those arising from interest rate risk or currency risk). The Group is exposed to such price risk as it holds equity instruments.
To manage price risk arising from those equity instruments, the corporate finance and accounting department documents policies of invest-
ment in the equity instruments and the entire Group complies with those policies. For material investments, it is obliged to report to and obtain
approval from the Board of Directors in a timely manner. To manage those equity instruments, the Group continuously reviews its holdings
through monitoring market value and financial condition of the issuer (counterparty) taking into account the market condition and the relation-
ship with the counterparty.
(i) Sensitivity analysis of price of equity instruments

Sensitivity analysis of the impact of the 10% decrease of price of equity instruments at the end of each fiscal year against other comprehen-
sive income of the Group (before tax effect) is as follows:
This analysis is on presumption that all other variables (balance, exchange rate etc.) are held constant.
Accumulated other comprehensive income (before tax effect) ¥(8,072) ¥(8,009) $(72)
Amounts shown in parentheses represent negative impact against other comprehensive income of the Group.
(2) Capital management
The Group seeks to realize sustainable medium- and long-term along with maintaining current fund-raising capability and ensuring
growth and maximize its corporate value. To achieve those objec- financial soundness. Major performance benchmarks used by the
tives, the Group’s basic policy for equity risk management is to Group to manage its equity are Ratio of equity attributable to owners
maintain adequate equity structure while monitoring capital cost, of the parent and debt / equity ratio (“D/E ratio”).
Ratio of equity attributable to owners of the parent and D/E ratio at the end of each fiscal year are as follows:
As of March 31 Unit 2018 2019
Ratio of equity attributable to owners of the parent (Note 1) % 57.4 57.1
D/E ratio (debt/equity ratio) (Note 2) ratio 0.30 0.30
Notes: 1. Ratio of equity attributable to owners of the parent: Equity attributable to owners of the parent/Total assets ×100
2. D/E ratio (debt/equity ratio): Interest bearing debt/Equity attributable to owners of the parent
As of March 31, 2019, there is no material capital controls applicable to the Group (excluding general rules such as the Companies Act etc.).
(3) Classification of financial assets and financial liabilities
Classification of financial assets and financial liabilities of the Group is as follows:

Millions of yen
Carrying amount
Financial assets at
fair value through Financial assets at
Financial assets at other comprehensive fair value through
amortized cost income profit or loss Total
Financial assets
Non-current assets
Other long-term financial assets ¥ 126,313 ¥110,071 ¥301 ¥ 236,684
Current assets
Trade and other receivables 1,695,403 — — 1,695,403
Other short-term financial assets 29,994 — 179 30,173
Cash and cash equivalents 200,834 — — 200,834
Total ¥2,052,544 ¥110,071 ¥479 ¥2,163,094
Millions of yen
Carrying amount
Financial liabilities at
fair value through Financial liabilities at
Financial liabilities at other comprehensive fair value through
Financial liabilities
Borrowings and bonds payable ¥ 704,278 ¥— ¥ — ¥ 704,278
Other long-term financial liabilities 62,593 — 5,885 68,478
Current liabilities
Borrowings and bonds payable 329,559 — — 329,559
Trade and other payables 610,726 — — 610,726
Other short-term financial liabilities 24,683 — 34 24,717
Total ¥1,731,838 ¥— ¥5,920 ¥1,737,757

Millions of yen
Carrying amount
Financial assets at
Financial assets
Non-current assets
Other long-term financial assets ¥ 134,981 ¥117,894 ¥150 ¥ 253,025
Current assets
Trade and other receivables 1,965,554 — — 1,965,554
Other short-term financial assets 41,814 — 149 41,963
Total ¥2,346,946 ¥117,894 ¥299 ¥2,465,140
Millions of yen
Carrying amount
Borrowings and bonds payable ¥1,040,978 ¥— ¥ — ¥1,040,978
Other long-term financial liabilities 60,657 — 5,835 66,493
Current liabilities
Other short-term financial liabilities 26,759 — 14 26,773
Total ¥1,950,937 ¥— ¥5,849 ¥1,956,787
Carrying amount
Financial assets at
Financial assets
Non-current assets
Other long-term financial assets $ 1,216 $1,062 $ 1 $ 2,280
Current assets
Trade and other receivables 17,709 — — 17,709
Other short-term financial assets 377 — 1 378
Total $21,146 $1,062 $ 3 $22,210
Carrying amount
Borrowings and bonds payable $ 9,379 $— $— $ 9,379
Other long-term financial liabilities 547 — 53 599
Current liabilities
Other short-term financial liabilities 241 — 0 241
Total $17,578 $— $53 $17,630

(4) Financial assets at fair value through other comprehensive income
The Group owns the equity instruments above as investment to maintain and strengthen the business relationship with investees, and there-
fore classifies them as financial assets at fair value through other comprehensive income.
i. The analysis and fair value by description of financial assets at fair value through other comprehensive income
The analysis and dividends received related to financial assets at fair value through other comprehensive income are as follows:
As of March 31 2018 2019 2019
Fair value
Listed equities ¥ 80,720 ¥ 80,090 $ 722
Unlisted equities 29,350 37,804 341
Total ¥110,071 ¥117,894 $1,062
Dividends received
Listed equities ¥1,970 ¥2,054 $19
Unlisted equities 488 201 2
Total ¥2,458 ¥2,255 $20
Major description of investments in financial assets at fair value through other comprehensive income is as follows:
As of March 31 2018 2019 2019
Listed equities
TOYOTA MOTOR CORPORATION ¥ 54,562 ¥ 51,860 $ 467
PIA Corporation 7,630 7,199 65
GREE, Inc. 4,840 3,616 33
East Japan Railway Company 2,946 3,190 29
Japan Airport Terminal Co. Ltd. 2,476 2,847 26
HEROZ, Inc. — 2,382 21
COLOPL, Inc. 2,361 1,752 16
ALBERT Inc. — 1,466 13
Internet Initiative Japan Inc. 906 933 8
SPACE SHOWER NETWORKS INC. 1,265 940 8
Other 3,735 3,905 35
Sub total 80,720 80,090 722
Unlisted equities
A-Fund, L.P. 4,785 6,645 60
Finatext Ltd. — 5,099 46
COMMUNITY NETWORK CENTER INCORPORATED 4,295 3,492 31
GO GAME PTE. LTD. — 1,746 16
Other 20,270 20,823 188
Sub total 29,350 37,804 341
Total ¥110,071 ¥117,894 $1,062
ii. Financial assets at fair value through other comprehensive income disposed during the period
The Group sells its financial assets at fair value through other comprehensive income as a result of periodic review of portfolio and for the man-
agement of risk assets. Fair value at the disposal date, accumulated gains / losses arising from sale and dividends received are as follows:
Fair value at the disposal date ¥2,754 ¥1,945 $18
Accumulated gains / losses arising from sale 1,578 1,085 10
Dividends received 21 25 0
iii. Reclassification to retained earnings

The Group reclassifies accumulated gains or losses arising from changes in the fair value of financial assets at fair value through other com-
prehensive income into retained earnings, when it disposes the investments, etc. Accumulated gains or losses, net of tax, reclassified from
other comprehensive income into retained earnings are ¥835 million (U.S.$8 million) and ¥1,251 million (U.S.$11 million), respectively, for the
years ended March 31, 2018 and 2019.

33 Fair Value of Financial Instruments

The financial instruments that are measured at fair value are classified into 3 levels of fair value hierarchy according to the observability and
significance of the inputs used for measurement. The levels of the fair value hierarchy are defined as follows:
• Level 1: Quoted prices in active markets for identical assets or liabilities
• Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly
• Level 3: Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs)
The Group determines the hierarchy of the levels on the basis of the lowest level input that is significant to the fair value measurement.
(1) The fair value of financial assets and financial liabilities that are measured at fair value on a recurring basis.
i. The hierarchy of the fair value

The following table presents the classification by fair value hierarchy of the financial assets and financial liabilities recognized at fair value on the
consolidated statement of financial position.

Millions of yen
Level 1 Level 2 Level 3 Total
Recurring fair value measurements
Financial assets:
Other financial assets
Financial assets at fair value through
other comprehensive income
Equities ¥80,720 ¥ — ¥29,350 ¥110,071
Derivatives
Exchange contracts — 479 — 479
Financial liabilities:
Other financial liabilities
Derivatives
Interest rate swaps — 5,882 — 5,882

Millions of yen
Financial assets:
Equities ¥80,090 ¥ — ¥37,804 ¥117,894
Derivatives
Derivatives
Interest rate swaps — 5,810 — 5,810

Financial assets:
Equities $722 $— $341 $1,062
Derivatives
Derivatives
Interest rate swaps — 52 — 52
Any significant transfers of the financial instruments between levels are evaluated at each period end. There was no significant transfer of
the financial instruments between levels for the years ended March 31, 2018 and 2019.
ii. Measurement method of the fair value of financial assets and (b) Derivatives
financial liabilities (i) Exchange contracts
(a) Equities The fair value of forward foreign exchange contracts is determined
Listed equities are based on the prices on exchange and within level using forward exchange rates at the end of each fiscal year, with the
1 of fair value hierarchy. resulting value discounted back to present value. The financial
Unlisted equities are calculated by the valuation technique based assets and financial liabilities related to exchange contracts are clas-
on the discounted future cash flows, valuation technique based on sified as level 2 of fair value hierarchy.
the market prices of the comparative companies, valuation tech-
nique based on the net asset value and other valuation techniques, (ii) Interest rate swaps
and are within the level 3 of fair value hierarchy. Unobservable input Interest rate swaps are calculated by the present value of the future
such as discount rates and valuation multiples are used for fair value cash flows discounted using the interest rate adjusted for the
measurements of unlisted equities, adjusted for certain illiquidity dis- remaining period until maturity and credit risk. The financial assets
counts and non-controlling interest discounts, if necessary. and financial liabilities related to interest rate swaps are classified as
the level 2 of fair value hierarchy.
iii. Reconciliation of level 3

The following table presents the movement of financial instruments within level 3 for the year ended March 31, 2018.
Millions of yen
Financial assets at
fair value through
Equities
As of April 1, 2017 ¥23,460
Acquisition 4,941
Loss recognized on other comprehensive income 2,235
Sale (1,285)
Other (2)
As of March 31, 2018 ¥29,350

The following table presents the movement of financial instruments within level 3 for the year ended March 31, 2019.
Millions of yen
Financial assets at
fair value through
Equities
As of April 1, 2018 ¥29,350
Acquisition 10,723
Gain recognized on other comprehensive income (1,159)
Sale (1,861)
Other 751
As of March 31, 2019 ¥37,804
Financial assets at
fair value through
Equities
As of April 1, 2018 $264
Acquisition 97
Gain recognized on other comprehensive income (10)
Sale (17)
Other 7
As of March 31, 2019 $341
iv. Evaluation process of level 3

Fair value measurements of unlisted equities are performed by a management department independent from sales departments in accordance
with the prescribed rules. Fair value measurements including fair value models are examined for the adequacy by periodically evaluating the
business descriptions and the availability of business plans of the companies issuing the equities, as well as comparative listed companies.
v. Quantitative information related to assets classified as level 3

Information related to evaluation technique and significant unobservable inputs of assets measured at fair value on a recurring basis classified
as level 3 is as follows:

Fair value
Millions of yen Millions of U.S. dollars Valuation technique Unobservable inputs Range
Equities ¥29,350 $276 Income approach Discount rate 5.6%–11.2%

Fair value
Millions of yen Millions of U.S. dollars Valuation technique Unobservable inputs Range
Equities ¥37,804 $341 Income approach Discount rate 5.7%–11.2%
vi. Sensitivity analysis related to the changes in significant unobservable inputs

For financial instruments classified as level 3, no significant changes in fair value are expected to occur as a result of changing unobservable
inputs to other alternative assumptions that are considered reasonable.
(2) The fair value of financial assets and financial liabilities that are not measured at fair value but disclosed on the fair value.
i. The hierarchy of the fair value

The following are the fair value of financial assets and financial liabilities that are not measured at fair value but disclosed on the fair value. The
financial assets and financial liabilities that are measured at amortized cost are included.

Millions of yen
Fair value
Carrying amount Level 1 Level 2 Level 3 Total
Financial assets
Government bonds ¥ 3,001 ¥ 3,069 ¥ — ¥ — ¥ 3,069
Lease receivables 102,012 — — 100,209 100,209
Borrowing and bonds payable
Borrowings 835,036 — 839,655 — 839,655
Bonds payables 169,801 174,263 31 — 174,294
Lease payments 84,779 — 86,619 — 86,619
Notes: 1. Borrowings, bonds payable and lease payments in the table above contain their current portion.
2. Short-term financial assets and short-term financial liabilities are not included in the table above because their fair values are similar to the carrying amounts.

Millions of yen
Fair value
Financial assets
Government bonds ¥ 3,001 ¥ 3,027 ¥ — ¥ — ¥ 3,027
Borrowings 880,061 — 888,704 — 888,704
Bonds payables 279,492 283,602 12 — 283,614
Lease payments 84,158 — 85,909 — 85,909
2. Short-term financial assets and short-term financial liabilities are not included in the table above because their fair values are similar to the carrying
amounts.

Fair value
Financial assets
Government bonds $ 27 $ 27 $ — $ — $ 27
Borrowings 7,929 — 8,007 — 8,007
Bonds payables 2,518 2,555 0 — 2,555
Lease payments 758 — 774 — 774
2. Short-term financial assets and short-term financial liabilities are not included in the table above because their fair values are similar to the carrying
amounts.

ii. Measurement method of the fair value of financial assets and fixed interest rates, fair value is estimated by discounting the total of
financial liabilities principal and interest using the current interest rate adjusted for the
(a) Government bonds remaining maturity period of the borrowings and credit risk.
The fair value of government bonds is estimated based on quoted Borrowings are classified as level 2 of fair value hierarchy.
price. Government bonds are classified as level 1 of fair value hierarchy.
(d) Bonds payables
(b) Lease receivables For bonds payable with quoted price, the fair value is estimated
Fair value of lease receivables is measured at the present value of based on quoted price. For bonds payable without quoted price, the
total expected lease receivables, discounted by the rate of interest fair value is calculated by the present value of future cash flows dis-
to be used when the lessor newly contracts a similar lease transac- counted using the interest rate adjusted for the remaining maturity
tion. Inputs of lease receivables are not based on observable market period and credit risk. Bonds payables with quoted price are classi-
data. Therefore, the levels of the fair value hierarchy are classified as fied as level 1 of fair value hierarchy and bonds payables without
level 3. The discount rate is 6.7% as of March 31, 2018 and 6.2% quoted price are classified as level 2 of fair value hierarchy.
as of March 31, 2019.
(e) Lease payments
(c) Borrowings The fair value of lease obligations is estimated by the future cash
For borrowings with variable interest rates, the carrying amount is flows discounted using the interest rate of a borrowing with the
used as fair value, as the rates reflect the market interest rate within identical remaining maturity period and conditions. Lease payments
a short term and there is no significant change expected in the are classified as level 2 of fair value hierarchy.
Group entities’ credit conditions after financing. For borrowings with
34 Commitments
(1) Purchase commitments
As of March 31, 2018 and 2019, the Group’s commitments to purchase property, plant and equipment, intangible assets and other are as follows:
Property, plant and equipment ¥216,275 ¥164,407 $1,481
Intangible assets 53,089 68,188 614
Total ¥269,364 ¥232,596 $2,096
Note: These amounts above don’t reflect contents of all contracts that the Group is expected to enter into in the future.
(2) Lease commitments
The Group enters into lease contracts for property, plant and equipment in the ordinary course of business. Gross minimum lease payments
under non-cancellable lease contracts are set out in “Note 36. Lease.”
35 Earnings per Share

(1) Basic earnings per share
Basic earnings per share and its calculation basis are as follows:
Profit for the year attributable to owners of the parent ¥572,528 ¥617,669 $5,565
Number of weighted average common stocks outstanding
(Thousands of shares) 2,430,662 2,383,892 21,478
Basic earnings per share (Yen and U.S. dollar) ¥235.54 ¥259.10 $2.33
(2) Diluted earnings per share
Diluted earnings per share and its calculation basis are as follows:
Profit for the year attributable to owners of the parent ¥572,528 ¥617,669 $5,565
Adjustment of profit — — —
Profit used in calculation of diluted earnings per share 572,528 617,669 5,565

Thousands of shares Millions of U.S. dollars
Number of weighted average common stocks outstanding 2,430,662 2,383,892 $21,478
Effect of dilutive potential common stocks
BIP trust and ESOP trust 971 796 7
Number of weighted average common stocks during the year 2,431,632 2,384,689 $21,486
Yen U.S. dollars
Diluted earnings per share ¥235.45 ¥259.01 $2.33
Note: In the calculation of basic earnings per share and diluted earnings per share, the Company’s stocks owned by the executive compensation BIP trust and a
stock-granting ESOP trust are included in treasury stock. Therefore, the number of those stocks is deducted in calculating the number of common stocks
outstanding at the end of the year and weighted average common stocks outstanding during the year.
36 Lease
(1) Lease as a lessee
i. Finance lease
Finance lease of the Group mainly relates to in-home customer premises equipment for CATV and communication.
(a) Future gross minimum lease payments

Future gross minimum lease payments of the leased assets recognized based on finance lease contracts, their present value and future
finance costs by due date are as follows:
Present value of future gross
Future gross minimum lease payments minimum lease payments
Millions of Millions of
Millions of yen U.S. dollars Millions of yen U.S. dollars
As of March 31 2018 2019 2019 2018 2019 2019
Within one year ¥25,654 ¥28,517 $257 ¥24,683 ¥26,759 $241
Over one year to five years 58,491 57,138 515 57,090 54,155 488
Over five years 3,061 3,349 30 3,007 3,244 29
Total ¥87,206 ¥89,004 $802 ¥84,779 ¥84,158 $758
Less: Future finance cost (Note) ¥ 2,427 ¥ 4,846 $ 44
Present value of lease obligation 84,779 84,158 758
Note: Difference between future gross minimum lease payments and their present value represents interest portion of the finance lease.
(b) Details of the lease contracts

Some of the Group’s lease contracts contain terms of renewal or purchase options. However, the Group does not have any lease contracts
that contain sublease contracts or contingent rents and escalation clauses, provision in a contract for increasing the contracted price, and
restrictions imposed by lease arrangements, such as those concerning dividends, additional debt and further leasing.
Fair values of the Group’s lease obligations are set out in “Note 33. Fair value of financial instruments.”
ii. Operating lease

Operating lease of the Group mainly relates to lease of land and buildings for base station.
(a) Gross minimum lease payments and contingent rent

For the years ended March 31, 2018 and 2019, gross minimum lease payments and contingent rents of cancellable or non-cancellable oper-
ating leases recognized as expenses are as follows:
Gross minimum lease payments ¥135,443 ¥151,333 $1,363
Contingent rents 247 288 3
Total ¥135,690 ¥151,621 $1,366
Lease payments are included in “Costs of sales” or “Selling, general and administrative expenses” in the consolidated statement of income.

(b) Unexpired lease payments under non-cancellable operating lease

At the end of each fiscal year, analysis of future gross minimum lease payments under non-cancellable operating leases of the Group by due
date is as follows:
As of March 31 2018 2019 2019
Within one year ¥14,374 ¥17,805 $160
Over one year to five years 34,555 41,173 371
Over five years 6,926 24,960 225
Total ¥55,855 ¥83,938 $756
(c) Details of the lease contracts

Some of the lease contracts contain terms of renewal. However, the Group does not have any lease contracts that contain purchase option,
sublease contracts, escalation clauses (provision in a contract for increasing the contracted price) and restrictions imposed by lease arrange-
ments, such as those concerning dividends, additional debt and further leasing.

(2) Lease as a lessor
i. Finance lease
One of the company’s consolidated subsidiaries, KDDI Summit Global Myanmar Co., Ltd. (KSGM) operates telecommunication business in
Myanmar jointly with Myanmar Posts & Telecommunications (MPT), a government organization in Myanmar. KSGM leases telecommunication
equipment to MPT classified as finance lease in the joint operation.
Future gross minimum lease payments receivable

Future gross lease payments receivable under the finance leases held by the Group and their present value and future finance income are as follows:
Present value of future gross
Future gross minimum lease payments minimum lease payments
Millions of Millions of
Millions of yen U.S. dollars Millions of yen U.S. dollars
As of March 31 2018 2019 2019 2018 2019 2019
Within one year ¥ 27,659 ¥ 36,967 $ 333 ¥ 21,569 ¥ 29,832 $ 269
Over one year to five years 86,993 98,669 889 75,332 86,829 782
Over five years 5,416 3,095 28 5,111 2,921 26
Total ¥120,068 ¥138,732 $1,250 ¥102,012 ¥119,582 $1,077
Less: Future finance income ¥ 18,056 ¥ 19,150 $ 173
Net investment in the lease 102,012 119,582 1,077
Less: Present value of unguaranteed
residual value — — —
Present value of lease obligation 102,012 119,582 1,077
37 Non-cash Transactions
For the years ended March 31, 2018 and 2019, non-cash transactions, i.e. financial transactions that do not require the use of cash and cash
equivalents, comprise acquisition of property, plant and equipment resulted from new finance leases of ¥20,934 million (U.S.$189 million) and
¥24,696 million (U.S.$223 million), respectively.

38 Major Subsidiaries
(1) Organizational structure
Major subsidiaries of the Group are as follows. Unless otherwise stated, they have share capital consisting solely of ordinary shares that are
held directly by the group, and the proportion of ownership interests held equals the voting rights held by the group. The country of incorpora-
tion or registration is also their principal place of business.
The proportion of voting
rights (%)
As of As of
March 31, March 31,
Company name Segment Location Key business 2018 2019
Naha-shi, Telecommunications services
Okinawa Cellular Telephone Company Personal Services 51.5 51.6
Okinawa (au mobile phone services)
Jupiter Telecommunications Co., Ltd. Chiyoda-ku, Management of CATV operators and
Personal Services 50.0 50.0
(Note 1) Tokyo broadcasting service providers
Chuo-ku, Management of CATV (broadcasting 92.7 92.8
J:COM West Co., Ltd. Personal Services
Osaka and telecommunication business) (92.7) (92.8)
Chiyoda-ku, Management of CATV (broadcasting 100.0 100.0
J:COM East Co., Ltd. Personal Services
Tokyo and telecommunication business) (100.0) (100.0)
Minato-ku,
UQ Communications Inc. (Note 2) Personal Services Wireless broadband services 32.3 32.3
Tokyo
Shinagawa-ku, Telecommunications services under
BIGLOBE Inc. Personal Services 100.0 100.0
Tokyo Telecommunications Business Act
Okayama-shi, Operation of language schools
AEON Holdings Corporation of Japan Personal Services 100.0 100.0
Okayama starting with English conversation
Naka-ku,
Personal Services Telecommunications services under
Chubu Telecommunications Co., Inc. Nagoya-shi, 80.5 80.5
Business Services Telecommunications Business Act
Aichi
Chuo-ku,
Wire and Wireless Co., Ltd. Personal Services Wireless broadband services 95.2 95.2
Tokyo
Life Design Minato-ku, Credit card services and payment
KDDI Financial Service Corporation 90.0 90.0
Services Tokyo agency services
Life Design Minato-ku, Holding company of internet service
Syn.Holdings, Inc 78.7 82.3
Services Tokyo companies
Life Design Minato-ku, Issuance and sales of server based
WebMoney Corporation 100.0 100.0
Services Tokyo e-money
Life Design Chuo-ku, 55.0 55.0
Jupiter Shop Channel Co., Ltd. Mail order services
Services Tokyo (50.0) (50.0)
Life Design Chiyoda-ku, 100.0 100.0
Jupiter Entertainment Co.,Ltd. Management of TV channels
Services Tokyo (100.0) (100.0)
Life Design Chiyoda-ku,
ENERES Co., Ltd. Energy information business 30.0 100.0
Services Tokyo
Shibuya-ku, IT support services for small and
KDDI Matomete Office Corporation Business Services 95.0 95.0
Tokyo medium-sized companies
Shinjuku-ku, Call center, temporary personnel
KDDI Evolva, Inc. Business Services 100.0 100.0
Tokyo services
Chiyoda-ku, Exchange port providing services for 63.8 63.8
Japan Internet Exchange Co., Ltd. Business Services
Tokyo internet service providers (6.9) (6.9)
Construction, maintenance and
Shibuya-ku,
KDDI Engineering Corporation Other operation support for communica- 100.0 100.0
Tokyo
tion equipment
Technology research and product
Fujimino-shi,
KDDI Research, Inc. Other development related to 91.7 91.7
Saitama
telecommunication services
Kawasaki-shi, Construction and maintenance of
Kokusai Cable Ship Co.,Ltd. Other 100.0 100.0
Kanagawa submarine cable
Design, construction, operation
Japan Telecommunication Engineering Shinjuku-ku,
Other s upport and maintenance for 74.3 74.3
Service Co., Ltd. Tokyo
communication equipment
New York, NY Diversified Telecommunications
KDDI America, Inc. Global Services 100.0 100.0
U.S.A. s ervices in US
Diversified Telecommunications 100.0 100.0
KDDI Europe Limited Global Services London, U.K.
s ervices in Europe (4.2) (4.2)

The proportion of voting

rights (%)
As of As of
March 31, March 31,
Company name Segment Location Key business 2018 2019
Sales, maintenance and operation of
KDDI China Corporation Global Services Beijing, China 85.1 85.1
communication equipment in China
Diversified Telecommunications
KDDI Singapore Pte Ltd Global Services Singapore 100.0 100.0
s ervices in Singapore
TELEHOUSE Holdings Limited Global Services London, U.K. Holding Company 100.0 100.0
TELEHOUSE International Corporation 92.8 92.8
Global Services London, U.K. Data center services in Europe
of Europe Ltd. (92.8) (92.8)
KDDI Summit Global Singapore Pte. Ltd. Global Services Singapore Holding Company 50.1 50.1
Telecommunication business in
Yangon, 100.0 100.0
KDDI Summit Global Myanmar Co., Ltd. Global Services collaboration with Myanma Posts &
Myanmar (100.0) (100.0)
Telecommunications (MPT)
Ulaanbaatar, Diversified Telecommunications 63.9 98.8
Mobicom Corporation LLC Global Services
Mongolia s ervices in Mongolia (63.9) (98.8)
Numbers in parentheses represent indirect voting rights.
Notes: 1. The Group does not own majority of voting rights of Jupiter Telecommunications Co., Ltd. (“Jupiter Telecom”). However, the Group owns 50% of the
voting rights of Jupiter Telecom and has the power to govern its financial and operating policies. Accordingly, Jupiter Telecom is controlled by the Group
and included in the consolidated financial statements.
2. The Group does not own majority of voting rights of UQ Communications Inc. (“UQ”). However, UQ is consolidated by the Group because UQ is consid-
ered to be controlled by the Group on the grounds that the Group is the largest shareholder of UQ, the Group’s directors became majority of the board
members and they have the executive power in the UQ’s Board of Directors, and the operations of UQ are significantly dependent on the Company.
(2) Financial statements of subsidiaries with material non-controlling interest for the Group
i. Jupiter Telecommunication Co Ltd. (“Jupiter telecom”).

As of March 31 2018 2019
The proportion of ownership interests held by non-controlling interests 50.0% 50.0%
The proportion of ownership interests by non-controlling interests held equals the voting rights by non-controlling interests.
Amounts before adjustments to internal transactions of the Group are as follows:
(a) Consolidated statements of financial position

As of March 31 2018 2019 2019
Current assets ¥163,632 ¥ 131,216 $1,182
Non-current assets 970,524 1,024,411 9,230
Current liabilities 235,366 144,491 1,302
Non-current liabilities 589,657 647,298 5,832
Total equity ¥309,133 ¥ 363,839 $3,278
Amounts equivalent to the interests in total equity of Jupiter Telecom attributable to the Group, and the non-controlling interests are as follows:
As of March 31 2018 2019 2019
Interests attributable to owners of the parent ¥116,309 ¥149,177 $1,344
Non-controlling interests 192,824 214,662 1,934
Total ¥309,133 ¥363,839 $3,278
(b) Consolidated statements of income and comprehensive income

Revenue ¥783,219 ¥815,461 $7,347
Profit for the year before income tax 124,812 118,926 1,072
Income taxes 39,798 38,612 348
Profit, net of tax 85,014 80,314 724
Other comprehensive income 1,094 (183) (2)
Total comprehensive income ¥ 86,108 ¥ 80,131 $ 722

Amounts equivalent to the profit for the year and comprehensive income attributable to the Group, and the non-controlling interests are as
follows:
Profit for the year attributable to owners of the parent ¥42,214 ¥40,379 $364
Profit for the year attributable to non-controlling interests 42,800 39,935 360
Sub total 85,014 80,314 724
Other comprehensive income attributable to owners of the parent 539 (61) (1)
Other comprehensive income attributable to non-controlling interests 555 (123) (1)
Sub total 1,094 (183) (2)
Total comprehensive income attributable to owners of the parent 42,753 40,318 363
Total comprehensive income attributable to non-controlling interests 43,355 39,812 359
Total ¥86,108 ¥80,131 $722
For the years ended March 31, 2018 and 2019, dividends paid by Jupiter Telecom to non-controlling interests were ¥46,200 million
(U.S.$416 million) and ¥32,600 million (U.S.$294 million), respectively.
(c) Consolidated statement of cash flows

Cash flows from operating activities (net) ¥171,810 ¥170,705 $1,538
Cash flows from investing activities (net) (77,348) (90,563) (816)
Cash flows from financing activities (net) (103,652) (118,748) (1,070)
Increase (decrease) of cash and cash equivalents (9,191) (38,606) (348)
ii. UQ Communications
As of March 31 2018 2019
The proportion of ownership interests held by non-controlling interests 67.7% 67.7%
The proportion of ownership interests by non-controlling interests held equals the voting rights by non-controlling interests.
Amounts before adjustments to internal transactions of the Group are as follows:
(a) Statements of financial position

As of March 31 2018 2019 2019
Current assets ¥ 62,885 ¥ 80,827 $ 728
Non-current assets 276,875 317,912 2,864
Current liabilities 79,445 80,906 729
Non-current liabilities 216,460 226,177 2,038
Total equity (Note) ¥ 43,855 ¥ 91,657 $ 826
Amounts equivalent to the interests in total equity of UQ Communications attributable to the Group, and the non-controlling interests are as follows:

As of March 31 2018 2019 2019
Interests attributable to owners of the parent ¥33,952 ¥48,999 $441
Total ¥43,855 ¥91,657 $826
(b) Statement of income and comprehensive income

Revenue ¥317,871 ¥313,185 $2,822
Profit for the year before income tax 54,199 48,284 435
Income taxes 11,794 10,199 92
Profit, net of tax 42,405 38,086 343
Other comprehensive income — — —
Total comprehensive income ¥ 42,405 ¥ 38,086 $ 343

Amounts equivalent to the interests of net profit and comprehensive income attributable to the Group, and the non-controlling interests are as
follows:
Profit for the year attributable to owners of the parent ¥13,511 ¥12,115 $109
Profit for the year attributable to non-controlling interests 28,894 25,970 234
Sub total 42,405 38,086 343
Other comprehensive income attributable to owners of the parent — — —
Other comprehensive income attributable to non-controlling interests — — —
Sub total — — —
Total comprehensive income attributable to owners of the parent 13,511 12,115 109
Total comprehensive income attributable to non-controlling interests 28,894 25,970 234
Total ¥42,405 ¥38,086 $343
(c) Statement of cash flows

Cash flows from operating activities (net) ¥76,495 ¥63,632 $573
Cash flows from investing activities (net) (53,895) (49,614) (447)
Cash flows from financing activities (net) (22,595) (14,047) (127)
Increase (decrease) of cash and cash equivalents 5 (29) (0)
39 Related Party Transactions

(1) Related party transactions

There are no significant related party transactions and balances to be disclosed, and the most common terms used by other entities include
something like such transactions are negotiated in the ordinary course of business.

There are no significant related party transactions and balances to be disclosed, and the most common terms used by other entities include
something like such transactions are negotiated in the ordinary course of business.
(2) Remuneration of key management
Remuneration of key management is as follows:

Short-term employee benefits ¥716 ¥704 $6
Share-based payment 111 184 2
Total ¥827 ¥887 $8
Remuneration of key management represents remuneration to directors and audit & supervisory board members of the Company, including
outside directors and audit & supervisory board members.

40 Subsequent Events
KDDI incorporated an intermediate financial holding company, au Cancellation of treasury stocks
Financial Holdings Corporation, in order to strengthen its settlement The Board of Directors of KDDI at its meeting held on May 15, 2019,
and financial business and introduced the “Smart Money Concept” resolved that KDDI will cancel a portion of its treasury stock pursu-
which ensures customer satisfaction by providing comprehensive ant to Article 178 of the Companies Act of Japan, as stated below.
smartphone-centric settlements and financial transactions.
In addition, KDDI transferred five companies (Jibun Bank (1) Type of shares to be canceled: Shares of common stocks
Corporation, which became a consolidated subsidiary on April 1,
2019, and the consolidated subsidiaries of KDDI Financial Service (2) Number of shares to be canceled: 176,630,845 shares
Inc., WebMoney Corporation, KDDI Asset Management Co., Ltd., (6.98% of the total issued shares before cancellation)
and au Reinsurance Corporation) to au Financial Holdings
Corporation. By reorganizing these companies, we aim to maximize (3) Date of cancellation: May 23, 2019
synergies and enhance product competitiveness by accelerating
their decision making processes and enhancing governance. Reference: After the cancellation, the number of treasury stocks
will be 0.18% of the total number of issued shares.
Making Jibun Bank Corporation a consolidated subsidiary Total number of issued shares after the cancellation:
KDDI acquired the 608,614 shares issued via third party allocation 2,355,373,600 shares
by Jibun Bank Corporation (“Jibun Bank”) on April 1, 2019. As a Total number of treasury stocks after the cancellation:
result, KDDI owns 1,408,614 shares (63.78%) in Jibun Bank, mak- 4,322,928 shares(*)
ing Jibun Bank a consolidated subsidiary.
* These are only shares of KDDI shares owned by the executive’s compen-
KDDI now provides Jibun Bank with access to the big data, digital
sation BIP Trust Account and ESOP Trust Account.
marketing resources and customer base that it has cultivated to
date. We also continually create points of contact with customers
Repurchase of treasury stocks
and help strengthen the service offerings for customers’ different life
The Board of Directors of KDDI at its meeting held on May 15, 2019,
stages with the aim of maximizing the corporate value of Jibun Bank.
resolved that KDDI will repurchase its own shares pursuant to Article
The consideration for the acquisition is ¥25,000 million (U.S.$225 156 of the Companies Act of Japan, which applies pursuant to
million). Due to the limited time between the acquisition date and the Article 165, Paragraph 3, of that law.
submission date of the earnings report for the fiscal year ended
March 31, 2019, the accounting process regarding said acquisition (1) Reason for repurchase of KDDI’s own shares
of shares has not been completed and we have not disclosed To implement flexible capital policies in response to the change
detailed data regarding the accounting treatment of the business in the business environment and to provide shareholders
combination. return.
(2) Details of matters relating to the repurchase
Beginning the tender offer for shares of kabu.com Securities (a) Type of shares to be repurchased:
Co., Ltd. by the wholly owned KDDI subsidiary LDF LLC Shares of common stock
On February 12, 2019, KDDI announced that its wholly owned sub- (b) Total number of shares to be repurchased:
sidiary LDF LLC (“LDF”) would make a public tender for shares of Up to 73,000,000 shares
kabu.com Securities Co., Ltd. (“kabu.com Securities”). (Ratio to the shares outstanding: 3.10%)
Because the preparations to begin this tender offer have been (c) Total amount of repurchase price: Up to ¥150 billion
concluded, KDDI and LDF have decided to begin the tender offer for (U.S.$1,351 million)
the ordinary shares of and subscription rights to kabu.com (d) Repurchase period: From May 16, 2019 to December 23,
Securities on April 25, 2019. 2019
The tender offer has completed as of June 13, 2019. The Tender (e) Repurchase method: Market purchases through the Tokyo
Offer Report was submitted by LDF as of June 14, 2019. According Stock Exchange
to the report, the number of tenders converted in shares are
126,503,498 shares and LDF purchased all of the shares. As a eference: Own shares held by KDDI as of March 31, 2019
R
result, kabu.com Securities becomes an equity method affiliated Total number of shares outstanding: 2,351,050,672 shares
company of KDDI. Total number of treasury stocks(*):180,953,773 shares
After the completion of the tender offer and related procedures,
the final shareholding ratios of kabu.com Securities are expected to * The number of treasury stocks listed includes the 4,322,928 shares of
be as below. KDDI shares owned by the executives’ compensation BIP Trust Account
and ESOP Trust Account.
Shareholding ratios
Mitsubishi UFJ Securities Holdings Co., Ltd. 52.96%
before change
LDF LLC 0.00%
(As of April 25, 2019)
Shareholding ratios
Mitsubishi UFJ Securities Holdings Co., Ltd. 52.96%
after the tender offer
LDF LLC 37.96%
(As of June 20,2019)
Shareholding ratios Mitsubishi UFJ Securities Holdings Co., Ltd. 51.00%
after change LDF LLC 49.00%
41 Approval of the Consolidated Financial Statements

The consolidated financial statements for the year ended March 31, 2019 have been approved by the Board of Directors on June 20, 2019.


Corporate Overview
Company Name KDDI CORPORATION
Date of June 1, 1984 (The KDDI CORPORATION was established in October 2000 through the merger of
Establishment DDI CORPORATION, KDD Corporation, and IDO CORPORATION.)
Business Objective Telecommunications business
Head Office Garden Air Tower, 10-10, Iidabashi 3-chome, Chiyoda-ku, Tokyo 102-8460, Japan
Registered Place
3-2, Nishi-Shinjuku 2-chome, Shinjuku-ku, Tokyo 163-8003, Japan
of Business
President Makoto Takahashi
Capital ¥141,852 million
Number of
41,996 (consolidated)
Employees
Stock Information
SE Code 9433 Breakdown of Shareholding by Investor Type
Number of Shares
4,200,000,000 shares Financial Institutions 25.38%
Authorized Other Companies 29.55%
Number of Shares 2,532,004,445 shares 2,532 million

Securities Firms 5.08%
Issued and (Note) Following a cancellation of treasury stock on Individuals and Others
May 16, 2018, the total number of issued shares (including treasury stock)
Outstanding decreased by 55,209,080 shares. Foreign Companies, etc. 28.72%
11.27%
Number of
229,439 shareholders
Shareholders
Major Shareholders
Number of Ratio of Controlling Ratio of Voting

Name of Corporate Entity
Shares Held Share Note 1 (%) (%)
KYOCERA Corporation 335,096,000 13.23 14.22
Toyota Motor Corporation 298,492,800 11.78 12.67
The Master Trust Bank of Japan, Ltd. (Trust Account) 217,873,800 8.60 9.25
Japan Trustee Services Bank, Ltd. (Trust Account) 128,821,400 5.08 5.46
JP MORGAN CHASE BANK 380055 40,664,620 1.60 1.72
JP Morgan Securities Japan Co., Ltd. 37,066,776 1.46 1.57
Japan Trustee Services Bank, Ltd. (Trust Account 7) 34,294,300 1.35 1.45
Japan Trustee Services Bank, Ltd. (Trust Account 5) 33,936,100 1.34 1.44
State Street Bank West Client – Treaty 505234 29,209,675 1.15 1.24
JP MORGAN CHASE BANK 385151 27,073,419 1.06 1.14
(Note 1) The above ratio of controlling shares is calculated including treasury stocks (176,630,845 shares) (Note 2). KDDI excludes treasury stocks from the list of major shareholders above.
(Note 2) For accounting purposes the Company’s shares held in an executive remuneration Board Incentive Plan Trust account and Employee Stock Ownership Plan Trust account (4,322,980
shares as of March 31, 2019) are added to the number of treasury shares. These shares do not have voting rights.
* “iPhone” is a registered trademark of Apple Inc. in the U.S. and other countries
The trademark of iPhone was used under license from AIPHONE CO., LTD.
* Other company and product names are registered trademarks or trademarks of their respective companies
Regarding the disclaimer related to corporate governance (from page 34)

Please note that the following is an English translation of the Japanese version (as of August 1, 2019), prepared for your reference and convenience only and without any warranty as to its
accuracy or otherwise. In the event of any discrepancy, the Japanese original shall prevail.

KDDI CORPORATION
INTEGRATED REPORT 2019
INTEGRATED
REPORT
KDDI CORPORATION
https://www.kddi.com/english/ 2019

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INTEGRATED

The KDDI Group Mission Statement

The KDDI Group values and cares about

1 The company the customer can feel closest to

Business Strategy Financial Target

1.5 times in 6 years

40% payout ratio

Strengthen Management Infrastructure

 Practicing the KDDI Group Philosophy  Thoroughly managing profitability by segment

KDDI CORPORATION INTEGRATED REPORT 2019

WEB Financial Information WEB Non-Financial Information

Investor Relations Sustainability Research & Development

Editorial Policy: Disclosure of Financial and Non-Financial Information

Disclaimer Regarding Forward-Looking Statements

KDDI CORPORATION INTEGRATED REPORT 2019 01

The Path of Value Creation

2000 2002 FY2004.3-FY2008.3 2011

(Operating income*2: Billions of yen)

02 KDDI CORPORATION INTEGRATED REPORT 2019

Mobile ID subscriptions 26.95 million

Touchpoints both online

Approx. 2,300 au shops

2014 2015 2016 2017 2018 2019 2020 (E)

KDDI CORPORATION INTEGRATED REPORT 2019 03

KDDI’s Value Creation Cycle

KDDI’s Surrounding Business Environment

Social (Society / Culture) Manufactured capital

*1 MNO (Mobile Network Operator)

Medium-Term Targets (FY2017.3-FY2019.3)

Achieve continuous growth and enhance shareholder return

Strategies (2) Maximize the “au Economic Zone”

• Target operating income; CAGR*2 of 7%

• Lift dividend payout ratio from “above 30%” to “above 35%

*2 CAGR (Compound Average Growth Rate)

04 KDDI CORPORATION INTEGRATED REPORT 2019

of value Strengthening the life design domain

Medium-Term Management Plan (FY2020.3-FY2022.3) Page 06

Medium-Term Management Plan Summary

We achieve sustainable profit growth and further strengthen shareholder returns

KDDI CORPORATION INTEGRATED REPORT 2019 05

Medium-Term Management Plan (FY2020.3-FY2022.3)

Sustaining Profit Growth and

Our Growth Story

06 KDDI CORPORATION INTEGRATED REPORT 2019

Pag e 26 Special Feature 3: Business Expansion through Collaboration with Partners

Operating revenue of Operating revenue of new Business

Target ¥1.5 trillion Target ¥1trillion

FY2019.3 FY2022.3 FY2019.3 FY2022.3

03: Capital expenditures and cost reductions

KDDI CORPORATION INTEGRATED REPORT 2019 07

Risks and Growth Opportunities

The business environment surrounding KDDI is constantly changing.

Main Risks Measures to Avoid Risks

 ompetition and Rapid Shifts in Markets

 elecommunications Security and

 elecommunications Sector Regulations

08 KDDI CORPORATION INTEGRATED REPORT 2019

KDDI CORPORATION INTEGRATED REPORT 2019 09

Interview with Management

Mobile ID subscriptions 26.95 million

Approx. 2,300 au shops

Pag e 26 Special Feature 3: Business Expansion through Collaboration with Partners

ompetition and Rapid Shifts in Markets

elecommunications Security and

elecommunications Sector Regulations

* Mobile Network Operator.