Edgar Filing: NTT DOCOMO INC

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Form 6-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR

15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of November, 2014

Commission File Number: 001-31221

Total number of pages: 20

NTT DOCOMO, INC.

(Translation of registrant’s name into English)

Sanno Park Tower 11-1, Nagata-cho 2-chome

Chiyoda-ku, Tokyo 100-6150

Japan

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F x Form 40-F ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Information furnished in this form:

1.	Report filed on November 10, 2014 with the Director of the Kanto Local Finance Bureau of Japan pursuant to the Financial Instruments and Exchange Act of Japan

NTT DOCOMO, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

MARCH 31, 2014 and SEPTEMBER 30, 2014


	Millions of yen
	March 31, 2014			September 30, 2014
ASSETS
Current assets:
Cash and cash equivalents	¥	526,920		¥	215,937
Short-term investments		19,561			31,973
Accounts receivable		281,509			202,320
Receivables held for sale		787,459			834,160
Credit card receivables		220,979			227,658
Other receivables		315,962			312,622
Allowance for doubtful accounts		(15,078	)		(12,983	)
Inventories		232,126			164,410
Deferred tax assets		61,592			53,629
Prepaid expenses and other current assets		95,732			103,909

Total current assets		2,526,762			2,133,635

Property, plant and equipment:
Wireless telecommunications equipment		4,975,826			5,007,023
Buildings and structures		897,759			901,857
Tools, furniture and fixtures		553,497			545,603
Land		201,121			200,578
Construction in progress		158,173			158,718
Accumulated depreciation and amortization		(4,228,610	)		(4,281,665	)

Total property, plant and equipment, net		2,557,766			2,532,114

Non-current investments and other assets:
Investments in affiliates		424,531			407,540
Marketable securities and other investments		171,875			180,636
Intangible assets, net		665,960			634,441
Goodwill		262,462			259,897
Other assets		629,174			660,423
Deferred tax assets		269,500			266,313

Total non-current investments and other assets		2,423,502			2,409,250

Total assets	¥	7,508,030		¥	7,074,999


LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	¥	248		¥	219
Short-term borrowings		9,495			7,755
Accounts payable, trade		798,315			605,415
Accrued payroll		54,294			54,008
Accrued income taxes		175,683			126,935
Other current liabilities		167,951			158,048

Total current liabilities		1,205,986			952,380

Long-term liabilities:
Long-term debt (exclusive of current portion)		220,603			220,500
Accrued liabilities for point programs		113,001			95,946
Liability for employees’ retirement benefits		160,666			164,098
Other long-term liabilities		114,261			125,817

Total long-term liabilities		608,531			606,361

Total liabilities		1,814,517			1,558,741

Redeemable noncontrolling interests		14,869			14,961

Equity:
NTT DOCOMO, INC. shareholders’ equity
Common stock		949,680			949,680
Additional paid-in capital		732,875			732,875
Retained earnings		4,328,389			4,463,508
Accumulated other comprehensive income (loss)		9,590			7,129
Treasury stock		(377,168	)		(684,862	)
Total NTT DOCOMO, INC. shareholders’ equity		5,643,366			5,468,330
Noncontrolling interests		35,278			32,967

Total equity		5,678,644			5,501,297

Commitments and contingencies

Total liabilities and equity	¥	7,508,030		¥	7,074,999

See accompanying notes to consolidated financial statements (unaudited).

NTT DOCOMO, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

SIX MONTHS ENDED SEPTEMBER 30, 2013 and 2014

Consolidated Statements of Income


	Millions of yen
	Six Months Ended September 30, 2013			Six Months Ended September 30, 2014
Operating revenues:
Mobile communications services	¥	1,491,726		¥	1,387,759
Equipment sales		399,424			441,868
Other operating revenues		307,821			343,349

Total operating revenues		2,198,971			2,172,976

Operating expenses:
Cost of services (exclusive of items shown separately below)		516,630			555,623
Cost of equipment sold (exclusive of items shown separately below)		325,966			381,838
Depreciation and amortization		339,097			323,431
Selling, general and administrative		544,123			512,498

Total operating expenses		1,725,816			1,773,390

Operating income		473,155			399,586

Other income (expense):
Interest expense		(791	)		(505	)
Interest income		856			720
Other, net		8,552			4,261

Total other income (expense)		8,617			4,476

Income before income taxes and equity in net income (losses) of affiliates		481,772			404,062

Income taxes:
Current		180,162			130,116
Deferred		3,409			11,783

Total income taxes		183,571			141,899

Income before equity in net income (losses) of affiliates		298,201			262,163

Equity in net income (losses) of affiliates		(1,048	)		(3,684	)

Net income		297,153			258,479

Less: Net (income) loss attributable to noncontrolling interests		3,247			1,043

Net income attributable to NTT DOCOMO, INC.	¥	300,400		¥	259,522


Per share data
Weighted average common shares outstanding — Basic and Diluted		4,146,760,100			4,144,776,164

Basic and Diluted earnings per share attributable to NTT DOCOMO, INC.	¥	72.44		¥	62.61

Consolidated Statements of Comprehensive Income


	Millions of yen
	Six Months Ended September 30, 2013			Six Months Ended September 30, 2014
Net income	¥	297,153		¥	258,479
Other comprehensive income (loss):
Unrealized holding gains (losses) on available-for-sale securities, net of applicable taxes		14,130			6,427
Unrealized gains (losses) on cash flow hedges, net of applicable taxes		(9	)		39
Foreign currency translation adjustment, net of applicable taxes		15,568			(8,932	)
Pension liability adjustment, net of applicable taxes		397			(78	)

Total other comprehensive income (loss)		30,086			(2,544	)

Comprehensive income		327,239			255,935

Less: Comprehensive (income) loss attributable to noncontrolling interests		3,140			1,126

Comprehensive income attributable to NTT DOCOMO, INC.	¥	330,379		¥	257,061

See accompanying notes to consolidated financial statements (unaudited).

NTT DOCOMO, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

THREE MONTHS ENDED SEPTEMBER 30, 2013 and 2014

Consolidated Statements of Income


	Millions of yen
	Three Months Ended September 30, 2013			Three Months Ended September 30, 2014
Operating revenues:
Mobile communications services	¥	741,868		¥	687,098
Equipment sales		186,943			234,881
Other operating revenues		156,586			175,694

Total operating revenues		1,085,397			1,097,673

Operating expenses:
Cost of services (exclusive of items shown separately below)		265,591			290,036
Cost of equipment sold (exclusive of items shown separately below)		148,712			204,582
Depreciation and amortization		172,457			156,248
Selling, general and administrative		272,953			256,861

Total operating expenses		859,713			907,727

Operating income		225,684			189,946

Other income (expense):
Interest expense		(312	)		(225	)
Interest income		429			316
Other, net		3,487			1,551

Total other income (expense)		3,604			1,642

Income before income taxes and equity in net income (losses) of affiliates		229,288			191,588

Income taxes:
Current		100,895			66,315
Deferred		(13,472	)		2,061

Total income taxes		87,423			68,376

Income before equity in net income (losses) of affiliates		141,865			123,212

Equity in net income (losses) of affiliates		(1,345	)		(127	)

Net income		140,520			123,085

Less: Net (income) loss attributable to noncontrolling interests		1,871			56

Net income attributable to NTT DOCOMO, INC.	¥	142,391		¥	123,141


Per share data
Weighted average common shares outstanding — Basic and Diluted		4,146,760,100			4,142,813,793

Basic and Diluted earnings per share attributable to NTT DOCOMO, INC.	¥	34.34		¥	29.72

Consolidated Statements of Comprehensive Income


	Millions of yen
	Three Months Ended September 30, 2013			Three Months Ended September 30, 2014
Net income	¥	140,520		¥	123,085
Other comprehensive income (loss):
Unrealized holding gains (losses) on available-for-sale securities, net of applicable taxes		2,866			2,527
Unrealized gains (losses) on cash flow hedges, net of applicable taxes		23			12
Foreign currency translation adjustment, net of applicable taxes		(334	)		(2,253	)
Pension liability adjustment, net of applicable taxes		251			(100	)

Total other comprehensive income (loss)		2,806			186

Comprehensive income		143,326			123,271

Less: Comprehensive (income) loss attributable to noncontrolling interests		1,822			76

Comprehensive income attributable to NTT DOCOMO, INC.	¥	145,148		¥	123,347

See accompanying notes to consolidated financial statements (unaudited).

NTT DOCOMO, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

SIX MONTHS ENDED SEPTEMBER 30, 2013 and 2014


	Millions of yen
	Six Months Ended September 30, 2013			Six Months Ended September 30, 2014
Cash flows from operating activities:
Net income	¥	297,153		¥	258,479
Adjustments to reconcile net income to net cash provided by operating activities–
Depreciation and amortization		339,097			323,431
Deferred taxes		3,409			11,783
Loss on sale or disposal of property, plant and equipment		14,205			20,765
Equity in net (income) losses of affiliates		1,048			3,684
Changes in assets and liabilities:
(Increase) / decrease in accounts receivable		59,100			78,450
(Increase) / decrease in receivables held for sale		(54,088	)		(46,701	)
(Increase) / decrease in credit card receivables		(5,696	)		(3,816	)
(Increase) / decrease in other receivables		(12,860	)		1,109
Increase / (decrease) in allowance for doubtful accounts		(4,197	)		1,985
(Increase) / decrease in inventories		(6,036	)		65,670
(Increase) / decrease in prepaid expenses and other current assets		(16,924	)		(7,744	)
(Increase) / decrease in non-current receivables held for sale		(9,139	)		(27,941	)
Increase / (decrease) in accounts payable, trade		(64,600	)		(108,705	)
Increase / (decrease) in accrued income taxes		39,648			(48,659	)
Increase / (decrease) in other current liabilities		(4,081	)		(3,808	)
Increase / (decrease) in accrued liabilities for point programs		(13,294	)		(17,055	)
Increase / (decrease) in liability for employees’ retirement benefits		4,783			3,448
Increase / (decrease) in other long-term liabilities		(40	)		11,850
Other, net		12,165			8,099

Net cash provided by operating activities		579,653			524,324

Cash flows from investing activities:
Purchases of property, plant and equipment		(250,922	)		(279,159	)
Purchases of intangible and other assets		(105,767	)		(93,574	)
Purchases of non-current investments		(13,834	)		(1,743	)
Proceeds from sale of non-current investments		3,268			411
Acquisitions of subsidiaries, net of cash acquired		(8,611	)		—
Purchases of short-term investments		(34,602	)		(30,058	)
Redemption of short-term investments		32,576			17,551
Short-term bailment for consumption to a related party		(70,000	)		—
Other, net		(4,534	)		(6,798	)

Net cash used in investing activities		(452,426	)		(393,370	)

Cash flows from financing activities:
Repayment of long-term debt		(4,748	)		(131	)
Proceeds from short-term borrowings		7,252			11,252
Repayment of short-term borrowings		(19,097	)		(12,936	)
Principal payments under capital lease obligations		(1,104	)		(873	)
Payments to acquire treasury stock		—			(307,694	)
Dividends paid		(124,387	)		(124,427	)
Other, net		(1,019	)		(5,564	)

Net cash provided by (used in) financing activities		(143,103	)		(440,373	)

Effect of exchange rate changes on cash and cash equivalents		2,250			(1,564	)

Net increase (decrease) in cash and cash equivalents		(13,626	)		(310,983	)
Cash and cash equivalents as of beginning of period		493,674			526,920

Cash and cash equivalents as of end of period	¥	480,048		¥	215,937

Supplemental disclosures of cash flow information:
Cash received during the period for:
Income tax refunds	¥	877		¥	1,525
Cash paid during the period for:
Interest, net of amount capitalized		795			456
Income taxes		140,790			178,980

See accompanying notes to consolidated financial statements (unaudited).

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. Basis of presentation:

The accompanying quarterly consolidated financial statements of NTT DOCOMO, INC. and its subsidiaries (“DOCOMO”) were prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). Certain disclosures required by U.S. GAAP have been omitted. Since DOCOMO’s American Depositary Shares were listed on the New York Stock Exchange in March 2002, DOCOMO has prepared its consolidated financial statements pursuant to the terminology, forms and preparation methods required in order to issue American Depositary Shares, which are registered with the Securities and Exchange Commission of the United States of America.

2. Summary of significant accounting and reporting policies:

(a) Recently issued accounting standards

Revenue from contracts with customers —

On May 28, 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09 “Revenue from Contracts with Customers (Topic 606),” which requires an entity to recognize the amount to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective for DOCOMO on April 1, 2017. Early adoption is not permitted.

DOCOMO is evaluating the effect that the ASU will have on DOCOMO’s quarterly consolidated financial statements and related disclosures. DOCOMO has not yet selected a transition method nor has it determined the effect of the standard on DOCOMO’s ongoing financial reporting.

(b) Change in accounting estimate

Effective July 1, 2014, DOCOMO revised its estimate of the expected useful life of a part of software for telecommunications network and internal-use software based on the actual utilization of the software to reflect an extended expected useful life to up to 7 years. This modification complies with FASB Accounting Standards Codification Topic 250, Accounting Changes and Error Corrections, and will be applied going forward as a change in accounting estimates.

The positive impact from this change in accounting estimate for the six months ended September 30, 2014 and for the three months ended September 30, 2014 on “Income before income taxes and equity in net income (losses) of affiliates,” “Net income attributable to NTT DOCOMO, INC.” and “Basic and Diluted earnings per share attributable to NTT DOCOMO, INC.” is ¥18,448 million, ¥11,844 million, and ¥2.86, respectively.

(c) Reclassifications

Certain reclassifications have been made to the prior period’s consolidated financial statements to conform to the presentation used for the six months ended September 30, 2014.

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

3. Equity:

(a) Dividends

The Corporate Law of Japan provides that (i) dividends of earnings require approval at a general meeting of shareholders, (ii) interim cash dividends can be distributed upon the approval of the board of directors, if the articles of incorporation provide for such interim cash dividends and (iii) an amount equal to at least 10% of decrease in retained earnings by dividends payment be appropriated from retained earnings to a legal reserve up to 25% of capital stock. The legal reserve is available for distribution upon approval of the shareholders. In accordance with the above (ii), the provision that NTT DOCOMO, INC. may, subject to resolution of the Board of Directors, pay interim dividends with its record date as of September 30 of each year, is stipulated in NTT DOCOMO, INC.’s articles of incorporation.

In the general meeting of shareholders held on June 19, 2014, the shareholders approved cash dividends of ¥124,403 million or ¥30 per share, payable to shareholders of record as of March 31, 2014, which were declared by the board of directors on April 25, 2014. The source of dividends was “Retained earnings.” NTT DOCOMO, INC. started paying the dividends on June 20, 2014.

On October 31, 2014, the board of directors declared interim cash dividends of ¥118,957 million or ¥30 per share, payable to shareholders recorded as of September 30, 2014. The source of interim cash dividends will be “Retained earnings.” NTT DOCOMO, INC. plans to start paying the interim cash dividends on November 20, 2014.

(b) Issued shares and treasury stock

With regard to the acquisition of treasury stock, the Corporate Law of Japan provides that (i) it can be done according to the resolution of the general meeting of shareholders, and (ii) the acquisition of treasury stock through open market transactions can be done according to the resolution of the board of directors if the articles of incorporation contain such a provision. In accordance with (ii), the provision that NTT DOCOMO, INC. may acquire treasury stock through open market transactions by a resolution of the Board of Directors is stipulated in NTT DOCOMO, INC.’s articles of incorporation in order to improve capital efficiency and to implement flexible capital policies in accordance with the business environment.

On April 25, 2014, the board of directors resolved that NTT DOCOMO, INC. may repurchase up to 320 million outstanding shares of its common stock for an amount in total not to exceed ¥500,000 million during the period from April 26, 2014 through March 31, 2015.

The changes in the number of issued shares and treasury stock were as follows. NTT DOCOMO, INC. has not issued shares other than shares of its common stock.


	Number of issued shares		Number of treasury stock
As of March 31, 2013		4,365,000,000		218,239,900

As of September 30, 2013		4,365,000,000		218,239,900

As of March 31, 2014		4,365,000,000		218,239,900

Acquisition of treasury stock based on the resolution of the board of directors		—		181,530,121

As of September 30, 2014		4,365,000,000		399,770,021

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

As mentioned above, the meeting of the board of directors approved share repurchase plans as follows:


		Shares	Millions of yen
Date of the meeting of the board of directors	Term of repurchase	Approved maximum number of treasury stock to be repurchased	Approved maximum budget for share repurchase
August 6, 2014	August 7, 2014 - September 3, 2014	206,489,675	¥350,000

Aggregate number and price of shares repurchased are summarized as follows:


	Shares/Millions of yen
	Six months ended September 30, 2014		Three months ended September 30, 2014
Aggregate number of shares repurchased		181,530,121		181,530,121
Aggregate price of shares repurchased	¥	307,694	¥	307,694

Aggregate number and price of shares repurchased from our parent company, NIPPON TELEGRAPH AND TELEPHONE CORPORATION (NTT), for the six months ended September 30, 2014 and for the three months ended September 30, 2014 are 176,991,100 shares and ¥300,000 million.

On October 31, 2014, the board of directors resolved to approve an implementation of NTT DOCOMO, INC.’s repurchase of up to 138,469,879 outstanding shares of its common stock for an amount in total not to exceed ¥192,306 million during the period from November 1, 2014 through March 31, 2015.

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

(c) Accumulated other comprehensive income (loss)

Changes in accumulated other comprehensive income (loss) —

Changes in accumulated other comprehensive income (loss), net of applicable taxes, for the six months ended September 30, 2013 and 2014 were as follows:


	Millions of yen
	Six months ended September 30, 2013
	Unrealized holding gains (losses) on available-for-sale securities			Unrealized gains (losses) on cash flow hedges			Foreign currency translation adjustment			Pension liability adjustment			Total
Balance as of March 31, 2013	¥	36,372		¥	(80	)	¥	(49,907	)	¥	(35,497	)	¥	(49,112	)

Other comprehensive income (loss) before reclassifications		14,406			(36	)		15,488			—			29,858
Amounts reclassified from accumulated other comprehensive income (loss)		(276	)		27			80			397			228

Other comprehensive income (loss)		14,130			(9	)		15,568			397			30,086

Less: other comprehensive (income) loss attributable to noncontrolling interests		0			—			(107	)		—			(107	)

Balance as of September 30, 2013	¥	50,502		¥	(89	)	¥	(34,446	)	¥	(35,100	)	¥	(19,133	)


	Millions of yen
	Six months ended September 30, 2014
	Unrealized holding gains (losses) on available-for-sale securities			Unrealized gains (losses) on cash flow hedges			Foreign currency translation adjustment			Pension liability adjustment			Total
Balance as of March 31, 2014	¥	45,038		¥	(97	)	¥	(12,437	)	¥	(22,914	)	¥	9,590

Other comprehensive income (loss) before reclassifications		6,427			61			(8,932	)		(69	)		(2,513	)
Amounts reclassified from accumulated other comprehensive income (loss)		—			(22	)		—			(9	)		(31	)

Other comprehensive income (loss)		6,427			39			(8,932	)		(78	)		(2,544	)

Less: other comprehensive (income) loss attributable to noncontrolling interests		(0	)		—			83			—			83

Balance as of September 30, 2014	¥	51,465		¥	(58	)	¥	(21,286	)	¥	(22,992	)	¥	7,129

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

Changes in accumulated other comprehensive income (loss), net of applicable taxes, for the three months ended September 30, 2013 and 2014 were as follows:


	Millions of yen
	Three months ended September 30, 2013
	Unrealized holding gains (losses) on available-for-sale securities			Unrealized gains (losses) on cash flow hedges			Foreign currency translation adjustment			Pension liability adjustment			Total
Balance as of June 30, 2013	¥	47,636		¥	(99	)	¥	(34,075	)	¥	(35,351	)	¥	(21,889	)

Other comprehensive income (loss) before reclassifications		3,142			10			(414	)		—			2,738
Amounts reclassified from accumulated other comprehensive income (loss)		(276	)		13			80			251			68

Other comprehensive income (loss)		2,866			23			(334	)		251			2,806

Less: other comprehensive (income) loss attributable to noncontrolling interests		(0	)		(13	)		(37	)		—			(50	)

Balance as of September 30, 2013	¥	50,502		¥	(89	)	¥	(34,446	)	¥	(35,100	)	¥	(19,133	)


	Millions of yen
	Three months ended September 30, 2014
	Unrealized holding gains (losses) on available-for-sale securities			Unrealized gains (losses) on cash flow hedges			Foreign currency translation adjustment			Pension liability adjustment			Total
Balance as of June 30, 2014	¥	48,938		¥	(70	)	¥	(19,053	)	¥	(22,892	)	¥	6,923

Other comprehensive income (loss) before reclassifications		2,527			23			(2,253	)		(95	)		202
Amounts reclassified from accumulated other comprehensive income (loss)		—			(11	)		—			(5	)		(16	)

Other comprehensive income (loss)		2,527			12			(2,253	)		(100	)		186

Less: other comprehensive (income) loss attributable to noncontrolling interests		(0	)		—			20			—			20

Balance as of September 30, 2014	¥	51,465		¥	(58	)	¥	(21,286	)	¥	(22,992	)	¥	7,129

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

Reclassifications out of accumulated other comprehensive income (loss) to net income —

Amounts reclassified out of accumulated other comprehensive income (loss) to net income and affected line items in the consolidated statements of income for the six months ended September 30, 2013 and 2014 were as follows:


	Millions of yen
	*Amounts reclassified out of accumulated other comprehensive income (loss)(1)**
	Six months ended September 30, 2013			Six months ended September 30, 2014			Affected line items in the consolidated statements of income
Unrealized holding gains (losses) on available-for-sale securities	¥	456		¥	—		“Other, net” of “Other income (expense)”

		456			—		Pre-tax amount
		(180	)		—		Tax benefit (expense)

		276			—		Net-of-tax amount

Unrealized gains (losses) on cash flow hedges		(42	)		34		“Equity in net income (losses) of affiliates”

		(42	)		34		Pre-tax amount
		15			(12	)	Tax benefit (expense)

		(27	)		22		Net-of-tax amount

Foreign currency translation adjustment		(7	)		—		“Other, net” of “Other income (expense)”

		(7	)		—		Pre-tax amount
		(73	)		—		Tax benefit (expense)

		(80	)		—		Net-of-tax amount

Pension liability adjustment		(619	)		14		(*2)

		(619	)		14		Pre-tax amount
		222			(5	)	Tax benefit (expense)

		(397	)		9		Net-of-tax amount

Total reclassified amounts	¥	(228	)	¥	31		Net-of-tax amount

(*1)	Amounts in parentheses indicate decreased effects on net income.

(*2)	Amounts reclassified out of pension liability adjustment are included in the computation of net periodic pension cost.

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

Amounts reclassified out of accumulated other comprehensive income (loss) to net income and affected line items in the consolidated statements of income for the three months ended September 30, 2013 and 2014 were as follows:


	Millions of yen
	*Amounts reclassified out of accumulated other comprehensive income (loss)(1)**
	Three months ended September 30, 2013			Three months ended September 30, 2014			Affected line items in the consolidated statements of income
Unrealized holding gains (losses) on available-for-sale securities	¥	456		¥	—		“Other, net” of “Other income (expense)”

		456			—		Pre-tax amount
		(180	)		—		Tax benefit (expense)

		276			—		Net-of-tax amount

Unrealized gains (losses) on cash flow hedges		(20	)		17		“Equity in net income (losses) of affiliates”

		(20	)		17		Pre-tax amount
		7			(6	)	Tax benefit (expense)

		(13	)		11		Net-of-tax amount

Foreign currency translation adjustment		(7	)		—		“Other, net” of “Other income (expense)”

		(7	)		—		Pre-tax amount
		(73	)		—		Tax benefit (expense)

		(80	)		—		Net-of-tax amount

Pension liability adjustment		(392	)		7		(*2)

		(392	)		7		Pre-tax amount
		141			(2	)	Tax benefit (expense)

		(251	)		5		Net-of-tax amount

Total reclassified amounts	¥	(68	)	¥	16		Net-of-tax amount

(*1)	Amounts in parentheses indicate decreased effects on net income.

(*2)	Amounts reclassified out of pension liability adjustment are included in the computation of net periodic pension cost.

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

4. Segment information:

DOCOMO’s chief operating decision maker (“CODM”) is its board of directors. The CODM evaluates the performance and makes resource allocations of its segments based on the information provided by DOCOMO’s internal management reports. DOCOMO realigned its conventional five operating segments, which consist of mobile phone business, credit services business, home shopping services business, internet connection services business for hotel facilities, and miscellaneous businesses into three operating segments, which consist of mobile communications business, smart life business and other businesses from the first quarter of this fiscal year in order to clearly define its business management of the mobile communications fields where DOCOMO is taking steps to reinforce its competitiveness, and the new business fields where DOCOMO is striving for its further expansion of revenue sources by making “Smart Life” a reality toward the establishment of a new path to grow.

The mobile communications business includes mobile phone services (Xi services and FOMA services), satellite mobile communications services, international services and the equipment sales related to these services. The smart life business includes video and music distribution, electronic books and other services offered through DOCOMO’s “dmarket” portal, as well as finance/payment services, shopping services and various other life-related services. The other businesses primarily includes “Mobile Phone protection and delivery services”, as well as development, sales and maintenance of IT systems.

In connection with this realignment, segment information for the six months ended September 30, 2013 and the three months ended September 30, 2013 has been restated to conform to the presentation for the six months ended September 30, 2014 and the three months ended September 30, 2014.

Accounting policies used to determine segment operating revenues and operating income (loss) are consistent with those used to prepare the consolidated financial statements in accordance with U.S. GAAP.

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

Segment operating revenues:


	Millions of yen
	Six months ended September 30, 2013			Six months ended September 30, 2014
Mobile communications business-
External customers	¥	1,888,457		¥	1,823,431
Intersegment		910			560

Subtotal		1,889,367			1,823,991
Smart life business-
External customers		168,220			197,283
Intersegment		5,640			7,695

Subtotal		173,860			204,978
Other businesses-
External customers		142,294			152,262
Intersegment		5,857			5,873

Subtotal		148,151			158,135

Total		2,211,378			2,187,104
Elimination		(12,407	)		(14,128	)

Consolidated	¥	2,198,971		¥	2,172,976


	Millions of yen
	Three months ended September 30, 2013			Three months ended September 30, 2014
Mobile communications business-
External customers	¥	927,408		¥	918,462
Intersegment		574			368

Subtotal		927,982			918,830
Smart life business-
External customers		85,810			101,179
Intersegment		2,801			4,153

Subtotal		88,611			105,332
Other businesses-
External customers		72,179			78,032
Intersegment		3,205			2,933

Subtotal		75,384			80,965

Total		1,091 ,977			1,105,127
Elimination		(6,580	)		(7,454	)

Consolidated	¥	1,085,397		¥	1,097,673

Segment operating income (loss):


	Millions of yen
	Six months ended September 30, 2013			Six months ended September 30, 2014
Mobile communications business	¥	466,689		¥	384,573
Smart life business		7,776			12,333
Other businesses		(1,310	)		2,680

Total		473,155			399,586
Elimination		—			—

Consolidated	¥	473,155		¥	399,586

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)


	Millions of yen
	Three months ended September 30, 2013			Three months ended September 30, 2014
Mobile communications business	¥	223,246		¥	181,439
Smart life business		2,506			5,745
Other businesses		(68	)		2,762

Total		225,684			189,946
Elimination		—			—

Consolidated	¥	225,684		¥	189,946

As indicated in “Note2. (b) Change in accounting estimate,” effective July 1, 2014, DOCOMO has revised its estimate of the useful life of a part of software for telecommunications network and internal-use software based on the actual utilization of the software to reflect an extended expected useful life. As a result, compared with the method used prior to July 1, 2014, operating income for the Mobile communications business segment, Smart life business segment, and Other businesses segment for the six months ended September 30, 2014 and the three months ended September 30, 2014 increased by ¥17,630 million, ¥473 million, and ¥345 million, respectively.

Operating income is operating revenues less operating expenses.

DOCOMO does not disclose geographical information since the amounts of operating revenues generated outside Japan are immaterial.

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

5. Contingencies:

(a) Litigation

DOCOMO is involved in litigation and claims arising in the ordinary course of business. DOCOMO believes that none of the litigation or claims outstanding, pending or threatened against DOCOMO would have a materially adverse effect on DOCOMO’s results of operations, financial position or cash flows.

(b) Guarantees

DOCOMO enters into agreements in the normal course of business that provide guarantees for counterparties. These counterparties include subscribers, related parties, foreign wireless telecommunications service providers and other business partners.

DOCOMO provides subscribers with guarantees for product defects of cellular phone handsets sold by DOCOMO, but DOCOMO is provided with similar guarantees by the handset vendors and no liabilities were recognized for these guarantees.

Though the guarantees or indemnifications provided in transactions other than those with the subscribers are different in each contract, the likelihood of almost all of the performance of these guarantees or indemnifications are remote and amount of payments DOCOMO could be claimed for is not specified in almost all of the contracts. Historically, DOCOMO has not made any significant guarantee or indemnification payments under such agreements. DOCOMO estimates the fair value of the obligations related to these agreements is not significant. Accordingly, no liabilities were recognized for these obligations.

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

6. Fair value measurements:

Fair value is defined as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” U.S. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value according to observability. The inputs are described 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

Level 3—unobservable inputs for the asset or liability

DOCOMO also distinguishes assets and liabilities measured at fair value every period on a recurring basis from those measured on a nonrecurring basis in certain circumstances.

(a) Assets and liabilities measured at fair value on a recurring basis

DOCOMO’s assets and liabilities measured at fair value on a recurring basis include available-for-sale securities and derivatives.

DOCOMO’s assets and liabilities that were measured at fair value on a recurring basis at March 31, 2014 and September 30, 2014 were as follows:


	Millions of yen
	March 31, 2014
	Total		Level 1		Level 2		Level 3
Assets:
Available-for-sale securities
Equity securities (domestic)	¥	81,598	¥	81,598	¥	—	¥	—
Equity securities (foreign)		77,172		77,172		—		—
Debt securities (foreign)		5		5		—		—

Total available-for-sale securities		158,775		158,775		—		—

Derivatives
Interest rate swap agreements	¥	25	¥	—	¥	25	¥	—
Foreign currency option contracts		272		—		272		—

Total derivatives		297		—		297		—

Total	¥	159,072	¥	158,775	¥	297	¥	—

Liabilities:
Derivatives
Foreign exchange forward contracts	¥	2	¥	—	¥	2	¥	—

Total derivatives		2		—		2		—

Total	¥	2	¥	—	¥	2	¥	—

There were no transfers between Level 1 and Level 2.

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)


	Millions of yen
	September 30, 2014
	Total		Level 1		Level 2		Level 3
Assets:
Available-for-sale securities
Equity securities (domestic)	¥	87,046	¥	87,046	¥	—	¥	—
Equity securities (foreign)		80,654		80,654		—		—
Debt securities (foreign)		5		5		—		—

Total available-for-sale securities		167,705		167,705		—		—

Derivatives
Interest rate swap agreements	¥	14	¥	—	¥	14	¥	—
Foreign exchange forward contracts		1		—		1		—
Foreign currency option contracts		894		—		894		—

Total derivatives		909		—		909		—

Total	¥	168,614	¥	167,705	¥	909	¥	—

Liabilities:
Derivatives
Foreign currency option contracts	¥	157	¥	—	¥	157	¥	—

Total derivatives		157		—		157		—

Total	¥	157	¥	—	¥	157	¥	—

There were no transfers between Level 1 and Level 2.

Available-for-sale securities

Available-for-sale securities include marketable equity securities and debt securities, which are valued using quoted prices in active markets for identical assets. Therefore, these securities are classified as Level 1.

Derivatives

Derivative instruments are foreign exchange forward contracts and foreign currency option contracts, which are valued based on observable market data. Therefore, these derivatives are classified as Level 2.

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

(b) Assets and liabilities measured at fair value on a nonrecurring basis

Certain assets and liabilities are measured at fair value on a nonrecurring basis in certain circumstances.

DOCOMO may be required to measure fair value of receivables held for sale, long-lived assets, equity securities whose fair values are not readily determinable, and other assets or liabilities on a nonrecurring basis.

DOCOMO’s assets that were measured at fair value on a nonrecurring basis for the six months ended September 30, 2013 and 2014 were as follows:


	Millions of yen
	Six months ended September 30, 2013
	Total		Level 1		Level 2		Level 3		Gains (losses) (before taxes)
Assets:
Receivables held for sale	¥	538,591	¥	—	¥	538,591	¥	—	¥	(7,575	)


	Millions of yen
	Six months ended September 30, 2014
	Total		Level 1		Level 2		Level 3		Gains (losses) (before taxes)
Assets:
Receivables held for sale	¥	624,030	¥	—	¥	624,030	¥	—	¥	(6,675	)

DOCOMO’s assets that were measured at fair value on a nonrecurring basis for the three months ended September 30, 2013 and 2014 were as follows:


	Millions of yen
	Three months ended September 30, 2013
	Total		Level 1		Level 2		Level 3		Gains (losses) (before taxes)
Assets:
Receivables held for sale	¥	414,294	¥	—	¥	414,294	¥	—	¥	(6,674	)


	Millions of yen
	Three months ended September 30, 2014
	Total		Level 1		Level 2		Level 3		Gains (losses) (before taxes)
Assets:
Receivables held for sale	¥	465,976	¥	—	¥	465,976	¥	—	¥	(6,251	)

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

Receivables held for sale

Receivables held for sale are measured at the lower of cost or fair value.

Receivables held for sale are classified as Level 2. DOCOMO measures the fair value of the receivables held for sale by discounting, at LIBOR-based discount rates, estimated future cash flows while taking into account factors such as default probabilities and loss severity of similar trade receivables.

7. Subsequent event:

On October 31, 2014, the board of directors resolved to approve an implementation of NTT DOCOMO, INC.’s repurchase of outstanding shares of its common stock. Related information is disclosed in “Note 3 Equity.”

NTT DOCOMO, INC.

Date: November 10, 2014

/S/ KATSUYUKI TAKAGI

Katsuyuki Takagi

Head of Investor Relations