INTEGRATED REPORT 2020 Highlights Our Management Our Value Our Future Our Governance 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 fulfi ll our social responsibility, KDDI is committed to sustaining growth and enhancing corporate value over the medium and long term through measures to achieve its medium-term management plan spanning the period of April 1, 2019 to March 31, 2022 (FY20.3–FY22.3). The KDDI Group Mission Statement Brand Message The KDDI Group values and cares about the material and emotional well-being of all its employees, and delivers a thrilling customer experience by always going further than expected with the ultimate goal of achieving a truly connected society. Explore the extraordinary Company Vision The KDDI Group Mission 1 The company the customer can feel closest to Statement 2 A company that continues to produce excitement 3 Contributing to the sustainable growth of society Our Management p. 11 Medium-Term Management Plan Our Future p. 20 KDDI’s Value Creation Story Our Management p. 12 CFO Message Highlights Editorial Policy: Disclosure of Financial and 02 Consolidated Financial Highlights Non-Financial Information This report is based on multiple guidelines and frameworks, 04 Financial and Non-Financial including the principles outlined by the International Integrated Highlights Reporting Council (IIRC), providing basic information, fi nancial data, management strategy descriptions, and environmental, Our Management social, and governance (ESG) data considered particularly 06 CEO Message necessary for investors. Additional sustainability and research & 11 Medium-Term Management Plan development (R&D) information that is not contained in this report can be found on KDDI’s website, including the Sustainability 12 CFO Message Report, which contains expanded information about non-fi nancial 14 Financial Results Summary information from both environmental and social aspects. KDDI has applied International Financial Reporting Standards Our Value (IFRS) since the fi scal year ended March 31, 2016. For this report, unless otherwise stated, fi gures up to the fi scal year ended March 16 The Path of Value Creation 31, 2014, are based on Japanese GAAP and fi gures for the fi scal 18 Value Creation Process year ended March 31, 2015, onward are based on IFRS. WEB Financial Information Our Future Investor Relations 20 KDDI’s Value Creation Story • Summary of Financial Statements 22 Customer-Oriented Value Provision • Corporate Governance • Business Risks 24 “au PAY” Targets https://www.kddi.com/english/ 26 KDDI Accelerate 5.0 corporate/ir/ 28 The Sustainability Expected of a Telecommunications Company WEB Our Governance Non-Financial Information 34 Board Members 36 Messages from Outside Directors 38 Corporate Governance 43 Compliance 44 Risk Management and Internal Controls 45 Disclosure and IR Sustainability Research & Development (The Environment & Society) (R&D) https://www.kddi.com/english/ https://www.kddi.com/english/ Financial Information corporate/csr/ corporate/r-and-d/ 46 The Japanese Market and KDDI Disclaimer Regarding Forward-Looking Statements 49 Analysis of the Consolidated Statements contained in this report concerning KDDI’s plans, strategies, beliefs, expectations, or projections about the future, and other statements Statement of Income other than those of historical fact, are forward-looking statements based 50 Analysis of the Consolidated on management’s assumptions in light of information currently available Statement of Financial Position and involve risks and uncertainties. Actual results may differ materially from these statements. Potential risks and uncertainties include, but are not 51 Analysis of Capital Expenditures limited to, domestic and overseas economic conditions; fl uctuations in and Cash Flows currency exchange rates, particularly those affecting the U.S. dollar, euro, and other overseas currencies in which KDDI or KDDI Group companies 52 Performance Analysis by Segment do business; and the ability of KDDI and KDDI Group companies to 58 Consolidated Financial Statements continue developing and marketing services that enable them to secure new customers in the communications market—a market characterized 130 Corporate Overview / by rapid technological advances, the steady introduction of new services, Stock Information intense price competition, and others. KDDI CORPORATION | INTEGRATED REPORT 2020 01 Highlights Our Management Our Value Our Future Our Governance Financial Information • Consolidated Financial Highlights • Financial and Non-Financial Highlights Consolidated Financial Highlights*1 (Years ended March 31) Consolidated 2011 2012 2013 2014 Operating Revenues/Operating Revenue P. 49 ¥3,434,546 ¥3,572,098 ¥3,662,289 ¥4,333,628 Operating Income P. 49 471,912 477,648 512,669 663,245 Operating Margin 13.7% 13.4% 14.0% 15.3% EBITDA*3 936,315 908,499 959,571 1,186,069 EBITDA Margin 27.3% 25.4% 26.2% 27.4% Net Income/Profi t for the Year Attributable to Owners of the Parent P. 49 255,122 238,605 241,470 322,038 Capital Expenditures P. 51 443,677 421,568 467,020 571,799 Depreciation and Amortization 449,318 417,886 406,726 470,098 Interest-Bearing Debt P. 50 979,630 1,046,754 977,563 1,084,966 Equity Ratio/Ratio of Equity Attributable to Owners of the Parent 55.7% 51.5% 55.1% 55.1% Return on Equity/Ratio of Return on Equity Attributable to 12.4% 11.5% 11.2% 13.0% Owners of the Parent (ROE) Return on Assets/Ratio of Return on Total Assets (ROA) 12.4% 12.3% 12.7% 14.7% Earnings per Share/Basic Earnings per Share*4 (yen/U.S. dollars) 96.92 96.86 105.30 132.87 Dividends per Share*4 (yen/U.S. dollars) P. 49 23.33 26.67 30.00 43.33 Dividend Payout Ratio 24.1% 27.5% 28.5% 32.6% Net Cash Provided by (Used in) Operating Activities 717,354 725,886 523,908 772,207 Net Cash Provided by (Used in) Investing Activities (440,546) (484,507) (472,992) (546,257) Free Cash Flows*5 P. 51 276,808 241,379 50,916 225,950 Net Cash Provided by (Used in) Financing Activities (279,998) (225,931) (140,249) (105,643) Number of Consolidated Employees (people) 18,418 19,680 20,238 27,073 Number of Female Managers*6 (people) 92 113 124 140 Number of Consolidated Foreign Employees (people) — — — 2,630 7 CO2 Emissions* (t) P. 33 1,108,282 1,218,659 1,049,422 939,502 Power Consumption*8 (MWh) 1,995,042 2,190,787 1,885,703 1,686,480 *1 Terminology differences between Japanese GAAP and IFRS (adopted from the fi scal 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 ¥108.83 = U.S.$1 on March 31, 2020. *3 From the fi scal year ended March 31, 2013 and in the fi scal year ended March 31, 2015, the EBITDA calculation formula has been changed. Until the fi scal year ended March 31, 2012 (JGAAP): EBITDA = Operating income + depreciation + noncurrent assets retirement cost Until the fi scal year ended March 31, 2015 (JGAAP): EBITDA = Operating income + depreciation + amortization of goodwill + noncurrent assets retirement cost Since the fi scal 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 fi scal years have been retroactively adjusted. *5 Free cash fl ows = 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 coeffi cient for electric power consumption is 0.555kg-CO2/kWh (emissions excluding heat, steam, and hot/cold water). *8 Non-consolidated basis 02 KDDI CORPORATION | INTEGRATED REPORT 2020 Japanese GAAP IFRS Millions of Millions of yen U.S. dollars*2 2015 2015 2016 2017 2018 2019 2020 2020 ¥4,573,142 ¥4,270,094 ¥4,466,135 ¥4,748,259 ¥5,041,978 ¥5,080,353 ¥5,237,221 $48,123 741,299 665,719 832,583 912,976 962,793 1,013,729 1,025,237 9,421 16.2% 15.6% 18.6% 19.2% 19.1% 20.0% 19.6% 19.6% 1,292,597 1,284,553 1,410,971 1,524,207 1,560,061 1,598,670 1,750,861 16,088 28.3% 30.1% 31.6% 32.1% 30.9% 31.5% 33.4% 33.4% 427,931 395,805 494,878 546,658 572,528 617,669 639,767 5,879 576,197 667,714 531,434 519,365 560,831 601,757 615,054 5,652 494,570 518,708 532,442 545,177 546,609 562,282 689,473 6,335 1,002,214 1,154,116 1,235,287 1,151,650 1,118,616 1,275,711 1,680,367 15,440 57.3% 54.5% 56.3% 56.7% 57.4% 57.1% 45.8% 45.8% 14.9% 13.5% 15.5% 15.9% 15.6% 15.5% 14.9% 14.9% 14.5% 12.1% 14.5% 15.0% 15.0% 14.6% 12.1% 12.1% 170.84 158.01 197.73 221.65 235.54 259.10 275.69 2.53 56.67 56.67 70.00 85.00 90.00 105.00 115.00 1.06 33.2% 35.9% 35.4% 38.3% 38.2% 40.5% 41.7% 41.7% 962,249