NTT INC. Annual Report DOCOMO, 2010 Year Ended March 31, 2010 31, Ended March Year FromFrom StreStrengngthth NTT DOCOMO, INC. to Strength to Strength Annual Report 2010 Year Ended March 31, 2010 Printed in Japan page 123 Stock Information Annual Report 2010 Key message Stock Information “From Strength to Strength” As of March 31, 2010 The environment for mobile communications is about to undergo a massive global change Stock Listings Number of Shares Tokyo Stock Exchange, First Section listed October 1998 Authorized: 188,130,000 with the appearance of even faster communication networks, enriched content including (Securities code: 9437) Issued: 43,790,000 video services, and an increasing attention on smartphones. We welcome this change as a New York Stock Exchange listed March 2002 (Ticker symbol: DCM) chance to leverage our strength to achieve further growth. Number of Shareholders London Stock Exchange listed March 2002 330,101 In this annual report, we take a look at the business base that DOCOMO has built, our (Ticker symbol: NDCM) forward-looking strategies, and our everyday initiatives for growth. Distribution of Ownership among Shareholders Transfer Agent Mitsubishi UFJ Trust and Banking Corporation, Corporate Agency Department 4-5, Marunouchi 1-chome, Chiyoda-ku, Tokyo 100-8212, Japan Tel: +81-3-3212-1211 ■ NTT 63.12% On The Cover ■ Foreign Corporations 12.55% ■ Financial Institutions 11.69% Depositary for American Depositary Receipts (“ADRs”) docomo PRIME series F-04B ■ Individuals and Others 6.50% The Bank of New York Mellon Corporation ■ Treasury Stock 4.99% DOCOMO has introduced the world’s first separable handset 101 Barclay Street, New York, NY 10286, U.S.A. ■ Other Corporations 1.15% allowing the display and keyboard to be operated indepen- (excluding NTT) dently. When these two sections are positioned together, the U.S. Callers: (888) BNY ADRS unit operates as a sliding type handset. Separating them Non-U.S. Callers: +1-201-680-6825 allows the user to use their email, address book and other * The figures are based on the list of shareholders and records of actual share ownership as of March 31, 2010. functions while talking on the phone. This top-of-the-line Major Shareholders handset also features a 12.2 megapixel camera. Percentage of Total Number of Shares Held Issued Shares (%) NIPPON TELEGRAPH AND TELEPHONE CORPORATION 27,640,000 63.12 Japan Trustee Services Bank, Ltd. (Trust Account) 1,052,867 2.40 The Master Trust Bank of Japan, Ltd. (Trust Account) 984,277 2.25 Japan Trustee Services Bank, Ltd. (Trust Account 9) 276,314 0.63 State Street Bank and Trust Company 241,287 0.55 State Street Bank and Trust Company 505225 197,177 0.45 SSBT OD05 Omnibus Account China Treaty Client 190,878 0.44 The Bank of New York Mellon as Depositary Bank for Depositary Receipt Holders 155,425 0.36 CBLDN Legal + General Assurance Pensions Management Limited 153,874 0.35 Mellon Bank N.A. as Agent for its Client Mellon Omnibus US Pension 150,051 0.34 Total 31,042,150 70.89 * Treasury stocks are not included. Stock Price and Trading Volume Stock price/Nikkei average stock price Trading volume (Thousands of yen) (Thousands of shares) 300 6,000 30 250 5,000 25 200 4,000 20 Unless specifically stated otherwise, information in this annual report is as of July 2010. FORWARD-LOOKING STATEMENTS 150 3,000 As used in this annual report, references to “DOCOMO”, “the Company”, “we”, “our”, This annual report contains forward-looking statements. These forward-looking state- 15 “our group” and “us” are to NTT DOCOMO, INC. and its consolidated subsidiaries ments are based on our current predictions, plans, expectations, acknowledgements except as the context otherwise requires. and estimates based on the information obtained by us until the date of this annual 100 2,000 10 Names of companies or products presented in this annual report are the trademarks or report. The projections of figures such as the outlook for results in this annual report registered trademarks of their respective organizations. require us to make certain assumptions that are indispensable for making such projec- 50 1,000 tions in addition to the definitive and precisely recognized historical facts. These forward- 5 DEFINITION OF TERMS looking statements are subject to certain inherent risks, uncertainties and other factors “Fiscal 2009” refers to our fiscal year ended March 31, 2010, and other fiscal years are that could cause our actual results to differ from the outlook for or projections of such 0 0 0 2005/4 2006/4 2007/4 2008/4 2009/4 referred to in a corresponding manner. results or figures. — High . Low (left) • Closing price (left) — Nikkei averages (left) Trading volume (right) Annual Report 2010 NTT DOCOMO, INC. page 1 Contents Contents page 2-9 Current Strength to Further Strength >> What is DOCOMO’s business model? What approach will DOCOMO take to the new forward movement of the market? We explain how we view the movement as an opportunity to leverage our accumulated strengths and business base to achieve further growth. 2 Introduction 8 Operating Data 6 Ten-Year Summary of Selected Financial Data page 10-19 Leveraging Our Strength for Growth >> What are DOCOMO’s key strategies for leveraging its strengths? President and Chief Executive Officer Ryuji Yamada introduces DOCOMO’s grand design for further growth. 10 President’s Message 12 Interview with the President page 20-35 Current Development with Our Strength >> What is the status of the businesses, and what are DOCOMO’s important initiatives at present? We give a general summary of our performance and businesses over fiscal 2009, and an overview of DOCOMO’s various initiatives. 20 Performance Overview 24 Review of Operations –Main Initiatives– 22 Review of Operations –At a Glance– page 36- 44 Management System and CSR 36 Corporate Governance 42 Corporate Social Responsibility (CSR) 40 Internal Control 44 Board of Directors and Corporate Auditors 41 Information Management page 45- 115 Financial Section 46 CFO Message 83 Notes to Consolidated Financial Statements 47 Operating and Financial Review and 113 Financial Statement Schedule Prospects 114 Report of Independent Registered Public Accounting Firm 72 Risk Factors 115 Reconciliations of the Disclosed Non-GAAP Financial Measures 78 Consolidated Financial Statements to the Most Directly Comparable GAAP Financial Measures page 116-123 Corporate Data 116 Organizational Structure 122 Corporate Information 117 Subsidiaries and Affiliates 123 Stock Information 118 The Year in Review Annual Report 2010 NTT DOCOMO, INC. page 2 Introduction Introduction DOCOMO is always at the forefront of the times, in tune with the mobile phone market and with our customers. The progress of the mobile phone and the building of DOCOMO’s unique strengths and solid business base are one and the same story. DOCOMO’s progress has been a process of finding opportunities for growth by reading the changes in the market, and using them as the means to leverage the assets we have cultivated. This section explains the businesses that DOCOMO is focused on, and how we will develop in the years ahead. DOCOMO and the Mobile Phone Market The mobile phone started with an idea—being able to converse with people anytime, anywhere. DOCOMO’s pursuit of the potential of the mobile phone has driven Japan’s mobile phone market. In the 30 or so years since mobile phone services were launched in Japan, people’s lifestyles have undergone dramatic changes, becoming more convenient and comfortable in step with the times. How should mobile phones evolve to fit more closely with the lifestyles of our customers? DOCOMO has been actively proposing lifestyles enhanced by mobile phones, focusing on their ability to connect users with others, and their characteristic of being a per- sonalized item carried by each individual. Through a continued determination to meet challenges head-on, DOCOMO has realized a level of mobile phone utility that society had once only dreamed of, providing services and information tailored to individual customers including i-mode, giving customers access to email and the internet, Osaifu-Keitai, with a function for making payments using a mobile phone handset, and enabling customers to transmit video or watch TV. Drawing forth the full potential of the mobile phone to create new high-value-added services—this is the unchanging axis of DOCOMO’s business. CurrentCurrent StrengthStrength toto FurtherFurther StrengthStrength NTT DOCOMO, INC. Annual Report 2010 page 3 Introduction DOCOMO’s Strengths DOCOMO continues to move at the head of the times and take on new challenges. What gives us the power to do this? As a company that supports the abundant lifestyles of its customers that are enabled by mobile phones, we believe it is important to have a business perspective that looks beyond the mobile phone business. We are promoting a business model that includes handset manufacturers, content providers, and other periph- eral business fields, all connected to the central pillar of DOCOMO. By advancing this model, we have estab- lished a sort of business eco-system in an environment that encourages participation from a variety of players. This has allowed DOCOMO to propose diversified services. The model has also enabled us to build mobile communication platforms such as i-mode, thereby leading the world in creating a revenue platform in the field of data communications. DOCOMO is currently working hard to fuse mobile phones with a host of lifestyle tools, taking this business model as the base. The mobile phone is also realizing its potential for expanded application as a platform for credit, e-commerce and logistics services, and is soon to fulfill a role in the field of healthcare as a means of providing social support services.