Table of Contents

 

 

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 February, 2017

Commission File Number: 001-31221

Total number of pages: 22

 

 

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   ☒                             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.

 

    NTT DOCOMO, INC.
Date: February 2, 2017     By:  

/S/ KATSUYUKI TAKAGI

      Katsuyuki Takagi
      Head of Investor Relations

Information furnished in this form:

 

1. Report filed on February  2, 2017 with the Director of the Kanto Local Finance Bureau of Japan pursuant to the Financial Instruments and Exchange Act of Japan


Table of Contents

NTT DOCOMO, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

MARCH 31, 2016 and DECEMBER 31, 2016

 

                                                 
       Millions of yen  
       March 31, 2016      December 31, 2016  

ASSETS

       

Current assets:

       

Cash and cash equivalents

     ¥ 354,437       ¥ 179,601   

Short-term investments

       5,872         191,042   

Accounts receivable

       237,040         230,767   

Receivables held for sale

       972,851         961,178   

Credit card receivables

       276,492         343,822   

Other receivables

       381,096         383,760   

Allowance for doubtful accounts

       (17,427      (20,103

Inventories

       153,876         143,270   

Deferred tax assets

       107,058         75,325   

Prepaid expenses and other current assets

       108,898         127,859   
    

 

 

    

 

 

 

Total current assets

       2,580,193         2,616,521   
    

 

 

    

 

 

 

Property, plant and equipment:

       

Wireless telecommunications equipment

       5,084,416         5,104,355   

Buildings and structures

       896,815         903,796   

Tools, furniture and fixtures

       468,800         463,275   

Land

       199,054         198,971   

Construction in progress

       190,261         227,849   

Accumulated depreciation and amortization

       (4,398,970      (4,407,290
    

 

 

    

 

 

 

Total property, plant and equipment, net

       2,440,376         2,490,956   
    

 

 

    

 

 

 

Non-current investments and other assets:

       

Investments in affiliates

       411,395         370,689   

Marketable securities and other investments

       182,905         196,883   

Intangible assets, net

       615,013         597,394   

Goodwill

       243,695         236,967   

Other assets

       479,103         453,509   

Deferred tax assets

       261,434         233,594   
    

 

 

    

 

 

 

Total non-current investments and other assets

       2,193,545         2,089,036   
    

 

 

    

 

 

 

Total assets

     ¥ 7,214,114       ¥ 7,196,513   
    

 

 

    

 

 

 

LIABILITIES AND EQUITY

       

Current liabilities:

       

Current portion of long-term debt

     ¥ 200       ¥ 200   

Short-term borrowings

       1,764         1,870   

Accounts payable, trade

       793,084         720,342   

Accrued payroll

       53,837         42,098   

Accrued income taxes

       165,332         69,206   

Other current liabilities

       205,602         235,065   
    

 

 

    

 

 

 

Total current liabilities

       1,219,819         1,068,781   
    

 

 

    

 

 

 

Long-term liabilities:

       

Long-term debt (exclusive of current portion)

       220,200         220,070   

Accrued liabilities for point programs

       75,182         72,246   

Liability for employees’ retirement benefits

       201,604         208,957   

Other long-term liabilities

       137,983         138,377   
    

 

 

    

 

 

 

Total long-term liabilities

       634,969         639,650   
    

 

 

    

 

 

 

Total liabilities

       1,854,788         1,708,431   
    

 

 

    

 

 

 

Redeemable noncontrolling interests

       16,221         22,791   
    

 

 

    

 

 

 

Equity:

       

NTT DOCOMO, INC. shareholders’ equity

       

Common stock

       949,680         949,680   

Additional paid-in capital

       330,482         327,228   

Retained earnings

       4,413,030         4,721,964   

Accumulated other comprehensive income (loss)

       14,888         (12,487

Treasury stock

       (405,832      (555,439

Total NTT DOCOMO, INC. shareholders’ equity

       5,302,248         5,430,946   

Noncontrolling interests

       40,857         34,345   
    

 

 

    

 

 

 

Total equity

       5,343,105         5,465,291   
    

 

 

    

 

 

 

Commitments and contingencies

       
    

 

 

    

 

 

 

Total liabilities and equity

     ¥ 7,214,114       ¥ 7,196,513   
    

 

 

    

 

 

 

See accompanying notes to consolidated financial statements (unaudited).

 

1


Table of Contents

NTT DOCOMO, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

NINE MONTHS ENDED DECEMBER 31, 2015 and 2016

Consolidated Statements of Income

 

                                                 
       Millions of yen  
         Nine Months Ended  
December 31, 2015
       Nine Months Ended  
December 31, 2016
 
       

Operating revenues:

       

Telecommunications services

     ¥ 2,099,632       ¥ 2,225,197   

Equipment sales

       657,804         586,268   

Other operating revenues

       626,024         658,128   
    

 

 

    

 

 

 

Total operating revenues

       3,383,460         3,469,593   
    

 

 

    

 

 

 

Operating expenses:

       

Cost of services (exclusive of items shown separately below)

       887,566         969,354   

Cost of equipment sold (exclusive of items shown separately below)

       634,521         592,460   

Depreciation and amortization

       457,095         334,418   

Selling, general and administrative

       718,773         731,025   
    

 

 

    

 

 

 

Total operating expenses

       2,697,955         2,627,257   
    

 

 

    

 

 

 

Operating income

       685,505         842,336   
    

 

 

    

 

 

 

Other income (expense):

       

Interest expense

       (1,219      (368

Interest income

       717         434   

Other, net

       (7,626      3,763   
    

 

 

    

 

 

 

Total other income (expense)

       (8,128      3,829   
    

 

 

    

 

 

 

Income before income taxes and equity in net income (losses) of affiliates

       677,377         846,165   
    

 

 

    

 

 

 

Income taxes:

       

Current

       207,485         199,214   

Deferred

       (37,701      60,867   
    

 

 

    

 

 

 

Total income taxes

       169,784         260,081   
    

 

 

    

 

 

 

Income before equity in net income (losses) of affiliates

       507,593         586,084   
    

 

 

    

 

 

 

Equity in net income (losses) of affiliates (including impairment charges of investments in affiliates)

       (798      5,306   
    

 

 

    

 

 

 

Net income

       506,795         591,390   
    

 

 

    

 

 

 

Less: Net (income) loss attributable to noncontrolling interests

       (14,346      (1,964
    

 

 

    

 

 

 

Net income attributable to NTT DOCOMO, INC.

     ¥ 492,449       ¥ 589,426   
    

 

 

    

 

 

 

Per share data

       

Weighted average common shares outstanding — Basic and Diluted

       3,881,483,818         3,733,198,134   
    

 

 

    

 

 

 

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

     ¥ 126.87       ¥ 157.89   
    

 

 

    

 

 

 

Consolidated Statements of Comprehensive Income

  

       Millions of yen  
       Nine Months  Ended
December 31, 2015
     Nine Months  Ended
December 31, 2016
 
       

Net income

     ¥ 506,795       ¥ 591,390   

Other comprehensive income (loss):

       

Unrealized holding gains (losses) on available-for-sale securities, net of applicable taxes

       (1,402      7,863   

Unrealized gains (losses) on cash flow hedges, net of applicable taxes

       (108      14   

Foreign currency translation adjustment, net of applicable taxes

       (10,929      (36,653

Pension liability adjustment, net of applicable taxes

       (353      997   
    

 

 

    

 

 

 

Total other comprehensive income (loss)

       (12,792      (27,779
    

 

 

    

 

 

 

Comprehensive income

       494,003         563,611   
    

 

 

    

 

 

 

Less: Comprehensive (income) loss attributable to noncontrolling interests

       (14,289      (1,560
    

 

 

    

 

 

 

Comprehensive income attributable to NTT DOCOMO, INC.

     ¥ 479,714       ¥ 562,051   
    

 

 

    

 

 

 

See accompanying notes to consolidated financial statements (unaudited).

 

2


Table of Contents

NTT DOCOMO, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

THREE MONTHS ENDED DECEMBER 31, 2015 and 2016

Consolidated Statements of Income

 

                                                 
       Millions of yen  
        Three Months Ended 
December 31, 2015
      Three Months Ended 
December 31, 2016
 

Operating revenues:

       

Telecommunications services

     ¥ 717,325       ¥ 750,704   

Equipment sales

       240,959         206,160   

Other operating revenues

       210,189         224,386   
    

 

 

    

 

 

 

Total operating revenues

       1,168,473         1,181,250   
    

 

 

    

 

 

 

Operating expenses:

       

Cost of services (exclusive of items shown separately below)

       299,919         337,119   

Cost of equipment sold (exclusive of items shown separately below)

       248,184         228,337   

Depreciation and amortization

       159,988         113,880   

Selling, general and administrative

       237,451         245,175   
    

 

 

    

 

 

 

Total operating expenses

       945,542         924,511   
    

 

 

    

 

 

 

Operating income

       222,931         256,739   
    

 

 

    

 

 

 

Other income (expense):

       

Interest expense

       (674      (11

Interest income

       333         143   

Other, net

       2,225         8,131   
    

 

 

    

 

 

 

Total other income (expense)

       1,884         8,263   
    

 

 

    

 

 

 

Income before income taxes and equity in net income (losses) of affiliates

       224,815         265,002   
    

 

 

    

 

 

 

Income taxes:

       

Current

       63,185         69,545   

Deferred

       (29,381      11,842   
    

 

 

    

 

 

 

Total income taxes

       33,804         81,387   
    

 

 

    

 

 

 

Income before equity in net income (losses) of affiliates

       191,011         183,615   
    

 

 

    

 

 

 

Equity in net income (losses) of affiliates (including impairment charges of investments in affiliates)

       (2,379      1,966   
    

 

 

    

 

 

 

Net income

       188,632         185,581   
    

 

 

    

 

 

 

Less: Net (income) loss attributable to noncontrolling interests

       (13,318      (1,562
    

 

 

    

 

 

 

Net income attributable to NTT DOCOMO, INC.

     ¥ 175,314       ¥ 184,019   
    

 

 

    

 

 

 

Per share data

       

Weighted average common shares outstanding — Basic and Diluted

       3,881,483,812         3,714,091,197   
    

 

 

    

 

 

 

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

     ¥ 45.17       ¥ 49.55   
    

 

 

    

 

 

 

Consolidated Statements of Comprehensive Income

  

       Millions of yen  
       Three Months Ended
December 31, 2015
     Three Months Ended
December 31, 2016
 

Net income

     ¥ 188,632       ¥ 185,581   

Other comprehensive income (loss):

       

Unrealized holding gains (losses) on available-for-sale securities, net of applicable taxes

       5,635         13,180   

Unrealized gains (losses) on cash flow hedges, net of applicable taxes

       (65      72   

Foreign currency translation adjustment, net of applicable taxes

       (9,948      (4,916

Pension liability adjustment, net of applicable taxes

       (120      357   
    

 

 

    

 

 

 

Total other comprehensive income (loss)

       (4,498      8,693   
    

 

 

    

 

 

 

Comprehensive income

       184,134         194,274   
    

 

 

    

 

 

 

Less: Comprehensive (income) loss attributable to noncontrolling interests

       (13,194      (1,585
    

 

 

    

 

 

 

Comprehensive income attributable to NTT DOCOMO, INC.

     ¥ 170,940       ¥ 192,689   
    

 

 

    

 

 

 

See accompanying notes to consolidated financial statements (unaudited).

 

3


Table of Contents

NTT DOCOMO, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

NINE MONTHS ENDED DECEMBER 31, 2015 and 2016

 

                                                 
       Millions of yen  
       Nine Months Ended
December 31, 2015
     Nine Months Ended
December 31, 2016
 

Cash flows from operating activities:

       

Net income

     ¥ 506,795       ¥ 591,390   

Adjustments to reconcile net income to net cash provided by operating activities–

       

Depreciation and amortization

       457,095         334,418   

Deferred taxes

       (37,701      60,867   

Loss on sale or disposal of property, plant and equipment

       17,555         24,574   

Inventory write-downs

       4,239         8,878   

Impairment loss on marketable securities and other investments

       475         2,070   

Loss on sale of a subsidiary

       13,117         —     

Equity in net (income) losses of affiliates (including impairment charges of investments in affiliates)

       798         (5,306

Dividends from affiliates

       9,464         8,413   

Changes in assets and liabilities:

       

(Increase) / decrease in accounts receivable

       21,079         4,884   

(Increase) / decrease in receivables held for sale

       (46,966      11,673   

(Increase) / decrease in credit card receivables

       (18,651      (32,410

(Increase) / decrease in other receivables

       (34,174      281   

Increase / (decrease) in allowance for doubtful accounts

       2,594         2,549   

(Increase) / decrease in inventories

       (24,828      1,544   

(Increase) / decrease in prepaid expenses and other current assets

       (7,976      (22,822

(Increase) / decrease in non-current receivables held for sale

       1,921         29,141   

Increase / (decrease) in accounts payable, trade

       (82,682      (23,224

Increase / (decrease) in accrued income taxes

       42,207         (96,056

Increase / (decrease) in other current liabilities

       37,846         28,974   

Increase / (decrease) in accrued liabilities for point programs

       (14,401      (2,936

Increase / (decrease) in liability for employees’ retirement benefits

       4,275         7,376   

Increase / (decrease) in other long-term liabilities

       4,307         5,277   

Other, net

       (11,538      (14,697
    

 

 

    

 

 

 

Net cash provided by operating activities

       844,850         924,858   
    

 

 

    

 

 

 

Cash flows from investing activities:

       

Purchases of property, plant and equipment

       (312,668      (337,446

Purchases of intangible and other assets

       (141,412      (142,444

Purchases of non-current investments

       (2,447      (2,030

Proceeds from sale of non-current investments

       4,024         5,889   

Purchases of short-term investments

       (4,000      (116,212

Redemption of short-term investments

       4,111         70,938   

Proceeds from redemption of long-term bailment for consumption to a related party

       80,000         —     

Short-term bailment for consumption to a related party

       —           (180,000

Proceeds from redemption of short-term bailment for consumption to a related party

       —           40,000   

Other, net

       (4,067      (6,777
    

 

 

    

 

 

 

Net cash used in investing activities

       (376,459      (668,082
    

 

 

    

 

 

 

Cash flows from financing activities:

       

Proceeds from short-term borrowings

       145,117         19,679   

Repayment of short-term borrowings

       (144,042      (19,526

Principal payments under capital lease obligations

       (1,055      (886

Payments to acquire treasury stock

       (0      (149,607

Dividends paid

       (271,538      (280,359

Cash distributions to noncontrolling interests

       (2,387      (3,500

Other, net

       (2,467      4,996   
    

 

 

    

 

 

 

Net cash provided by (used in) financing activities

       (276,372      (429,203
    

 

 

    

 

 

 

Effect of exchange rate changes on cash and cash equivalents

       (1,008      (2,409
    

 

 

    

 

 

 

Net increase (decrease) in cash and cash equivalents

       191,011         (174,836

Cash and cash equivalents as of beginning of period

       105,553         354,437   
    

 

 

    

 

 

 

Cash and cash equivalents as of end of period

     ¥ 296,564       ¥ 179,601   
    

 

 

    

 

 

 

Supplemental disclosures of cash flow information:

       

Cash received during the period for:

       

Income tax refunds

     ¥ 8,007       ¥ 742   

Cash paid during the period for:

       

Interest, net of amount capitalized

       1,243         323   

Income taxes

       176,118         297,562   
    

 

 

    

 

 

 

See accompanying notes to consolidated financial statements (unaudited).

 

4


Table of Contents

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) Reclassifications

Certain reclassifications have been made to the prior period’s consolidated financial statements to conform to the presentation used for the nine months ended December 31, 2016.

(b) Change in Accounting Procedures for Consolidated Quarterly Financial Results

Change in depreciation method —

Previously, DOCOMO principally used the declining-balance method for calculating depreciation of property, plant, and equipment. Effective April 1, 2016, DOCOMO adopted the straight-line method of depreciation. Data traffic has recently grown due to increased use of smartphones. As a way of addressing the rising data traffic, DOCOMO provides LTE-Advanced services, using the carrier aggregation technology which enables higher speeds and capacities for the LTE services. With the introduction of the carrier aggregation technology, DOCOMO is able to use its frequencies more efficiently, bringing stability to DOCOMO’s operation of its wireless telecommunications equipment. As a result, DOCOMO believes that the straight-line depreciation method better reflects the pattern of consumption of the future benefits to be derived from those assets being depreciated. The effect of the change in the depreciation method is recognized prospectively as a change in the accounting estimate pursuant to the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification 250, “Accounting Changes and Error Corrections.”

The change in depreciation method caused a decrease in “Depreciation and amortization” by ¥109,236 million and ¥39,806 million for the nine months ended December 31, 2016 and for the three months ended December 31, 2016, respectively. “Net income attributable to NTT DOCOMO, INC.” increased by ¥74,717 million and ¥27,227 million for the nine months ended December 31, 2016 and for the three months ended December 31, 2016, respectively. “Basic and Diluted earnings per share attributable to NTT DOCOMO, INC.” increased by ¥20.01 and ¥7.33 for the nine months ended December 31, 2016 and for the three months ended December 31, 2016, respectively.

 

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Table of Contents

NTT DOCOMO, INC. AND SUBSIDIARIES

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

 

(c) Recently issued accounting standards

Revenue from Contracts with Customers —

On May 28, 2014, the 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 FASB also issued ASU 2016-08 “Principal versus Agent Considerations (Reporting Revenue Gross versus Net),” ASU2016-10 “Identifying Performance Obligations and Licensing” and ASU2016-12 “Narrow-Scope Improvements and Practical Expedients” in March, April and May 2016, respectively, to partially amend ASU 2014-09.

On August 12, 2015, the FASB issued ASU 2015-14 “Revenue from Contracts with Customers: Deferral of the Effective Date,” and deferred the effective date of ASU 2014-09 by one year. Consequently, the standard is expected to take effect for DOCOMO on April 1, 2018. Early adoption of the standard as of April 1, 2017 would also be permitted.

DOCOMO has not yet selected a transition method and is currently evaluating the effect that the ASU will have on DOCOMO’s consolidated financial statements and related disclosures.

Recognition and Measurement of Financial Assets and Financial Liabilities —

On January 5, 2016, the FASB issued ASU 2016-01 “Recognition and Measurement of Financial Assets and Financial Liabilities,” which significantly changes the income statement impact of equity investments held by an entity, and the recognition of changes in fair value of financial liabilities when the fair value option is elected. The new standard is effective for DOCOMO on April 1, 2018. DOCOMO is currently evaluating the effect of adopting the ASU.

Lease —

On February 25, 2016, the FASB issued ASU 2016-02 “Lease,” which requires all lessees to recognize the right-of-use asset and lease liability, principally. The new standard is effective for DOCOMO on April 1, 2019. DOCOMO is currently evaluating the effect of adopting the ASU.

 

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Table of Contents

NTT DOCOMO, INC. AND SUBSIDIARIES

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

 

3. Equity:

(a) Dividends

The Companies Act of Japan (the “Companies Act”) 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 10% of the decrease in retained earnings, as a result of a dividend payment, shall be contributed to a legal reserve that can be funded up to an amount equal to 25% of capital stock. The legal reserve is available for distribution upon approval of the shareholders. In accordance with (ii) above, a provision in NTT DOCOMO, INC.’s articles of incorporation stipulates that NTT DOCOMO, INC. may, pursuant to a resolution of the Board of Directors, pay interim dividends with a record date as of September 30th of the relevant year.

In the general meeting of shareholders held on June 16, 2016, the shareholders approved cash dividends of ¥131,622 million or ¥35 per share, payable to shareholders of record as of March 31, 2016, which were declared by the Board of Directors on April 28, 2016. The source of such dividends was “Retained earnings.” NTT DOCOMO, INC. started paying the dividends on June 17, 2016.

On October 28 2016, the Board of Directors declared interim cash dividends of ¥148,810 million or ¥40 per share, payable to shareholders of record as of September 30, 2016. The source of such dividends was “Retained earnings.” NTT DOCOMO, INC. started paying the interim cash dividends on November 22, 2016.

(b) Issued shares and treasury stock

With regard to the acquisition of treasury stock, Companies Act provides that (i) it can be executed according to a resolution of the general meeting of shareholders, and (ii) the acquisition of treasury stock through open market transactions can be done according to a resolution of the Board of Directors, if the articles of incorporation contain such a provision. In accordance with (ii) above, a provision in NTT DOCOMO, INC.’s articles of incorporation stipulates that NTT DOCOMO, INC. may repurchase treasury stock through open market transactions, by a resolution of the Board of Directors, for the purpose of improving capital efficiency and implementing flexible capital policies in accordance with the business environment.

On January 29, 2016, the Board of Directors resolved that NTT DOCOMO, INC. may repurchase up to 220,000,000 outstanding shares of its common stock for an amount in total not exceeding ¥500,000 million from February 1, 2016 through December 31, 2016.

 

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NTT DOCOMO, INC. AND SUBSIDIARIES

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

 

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, 2015

       4,085,772,000         204,288,145   
    

 

 

    

 

 

 

Acquisition of treasury stock through purchase of less-than-one-unit shares

       —           43   

As of December 31, 2015

       4,085,772,000         204,288,188   
    

 

 

    

 

 

 

Acquisition of treasury stock based on the resolution of the Board of Directors

       —           120,867,062   

Retirement of treasury stock

       (127,229,000      (127,229,000
    

 

 

    

 

 

 

As of March 31, 2016

       3,958,543,000         197,926,250   
    

 

 

    

 

 

 

Acquisition of treasury stock based on the resolution of the Board of Directors

       —           56,031,000   

Acquisition of treasury stock through purchase of less-than-one-unit shares

       —           167   
    

 

 

    

 

 

 

As of December 31, 2016

       3,958,543,000         253,957,417   
    

 

 

    

 

 

 

On February 5, 2016, the Board of Directors resolved that NTT DOCOMO, INC. may acquire up to 137,578,616 outstanding shares of its common stock by way of tender offer at an amount in total not exceeding ¥350,000 million from February 8, 2016 through March 7, 2016. Based on this resolution, NTT DOCOMO, INC. repurchased 120,867,062 shares of its common stock for a total purchase price of ¥307,486 million between February 2016 and March 2016.

On April 28, 2016, the Board of Directors resolved that NTT DOCOMO, INC. may acquire up to 99,132,938 outstanding shares of its common stock by way of the Tokyo Stock Exchange Trading Network Off-Auction Own Share Repurchase Trading System (“ToSTNeT-3”) and market purchases in accordance with the discretionary dealing contract, at an amount in total not exceeding ¥192,514 million from May 2, 2016 through December 31, 2016.

Based on this resolution, NTT DOCOMO, INC. repurchased 9,021,000 shares of its common stock at ¥24,433 million using the ToSTNeT-3 on May 18, 2016, and also repurchased 47,010,000 shares of its common stock for a total purchase price of ¥125,174 million by way of market purchases in accordance with the discretionary dealing contract as of December 31, 2016.

The aggregate number and price of shares repurchased from our parent company, NIPPON TELEGRAPH AND TELEPHONE CORPORATION, were 117,924,500 shares and ¥300,000 million for the fiscal year ended March 31, 2016. NTT DOCOMO, INC. did not repurchase any shares from NIPPON TELEGRAPH AND TELEPHONE CORPORATION for the nine months ended December 31, 2016.

NTT DOCOMO, INC. also carried out compulsory acquisition of less-than-one-unit shares upon request.

 

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NTT DOCOMO, INC. AND SUBSIDIARIES

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

 

On March 25, 2016, the Board of Directors resolved that NTT DOCOMO, INC. would retire 127,229,000 shares held as treasury stock on March 31, 2016 and the share retirement on March 31, 2016 resulted in decreases of “Retained earnings” by ¥260,872 million.

The aggregate number and price of shares repurchased for the nine months ended December 31, 2015 and 2016 were as follows:

 

                                                 
       Share/Millions of yen  
         Nine months ended  
December 31, 2015
         Nine months ended  
December 31, 2016
 

Aggregate number of shares repurchased

       43           56,031,167   

Aggregate price of shares repurchased

     ¥ 0         ¥ 149,607   

The aggregate number and price of shares repurchased for the three months ended December 31, 2015 and 2016 were as follows:

 

                                                 
       Share/Millions of yen  
        Three months ended 
December 31, 2015
        Three months ended 
December 31, 2016
 

Aggregate number of shares repurchased

       —             15,670,067   

Aggregate price of shares repurchased

     ¥  —           ¥ 40,426   

 

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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 nine months ended December 31, 2015 and 2016 were as follows:

 

                                                                                                                            
       Millions of yen  
     Nine months ended December 31, 2015  
       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, 2015

     ¥ 67,620       ¥ (101    ¥ 16,871       ¥ (31,791    ¥ 52,599   
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Other comprehensive income (loss) before reclassifications

       (319      (130      (10,666      (868      (11,983

Amounts reclassified from accumulated other comprehensive income (loss)

       (1,083      22         (263      515         (809
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Other comprehensive income (loss)

       (1,402      (108      (10,929      (353      (12,792
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

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

       (6      —           63         —           57   
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Balance as of December 31, 2015

     ¥ 66,212       ¥ (209    ¥ 6,005       ¥ (32,144    ¥ 39,864   
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
       Millions of yen  
     Nine months ended December 31, 2016  
       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, 2016

     ¥ 61,624       ¥ (218    ¥ 6,281       ¥ (52,799    ¥ 14,888   
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Other comprehensive income (loss) before reclassifications

       8,846         (22      (37,235      (754      (29,165

Amounts reclassified from accumulated other comprehensive income (loss)

       (983      36         582         1,751         1,386   
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Other comprehensive income (loss)

       7,863         14         (36,653      997         (27,779
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

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

       —           —           404         —           404   
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Balance as of December 31, 2016

     ¥ 69,487       ¥ (204    ¥ (29,968    ¥ (51,802    ¥ (12,487
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

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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 December 31, 2015 and 2016 were as follows:

 

                                                                                                                            
       Millions of yen  
     Three months ended December 31, 2015  
       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 September 30, 2015

     ¥ 60,577       ¥ (144    ¥ 15,829       ¥ (32,024    ¥ 44,238   
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Other comprehensive income (loss) before reclassifications

       6,410         (70      (9,948      (286      (3,894

Amounts reclassified from accumulated other comprehensive income (loss)

       (775      5         —           166         (604
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Other comprehensive income (loss)

       5,635         (65      (9,948      (120      (4,498
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

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

       —           —           124         —           124   
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Balance as of December 31, 2015

     ¥ 66,212       ¥ (209    ¥ 6,005       ¥ (32,144    ¥ 39,864   
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
       Millions of yen  
       Three months ended December 31, 2016  
       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 September 30, 2016

     ¥ 56,313       ¥ (276    ¥ (25,035    ¥ (52,159    ¥ (21,157
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Other comprehensive income (loss) before reclassifications

       13,179         60         (5,421      (222      7,596   

Amounts reclassified from accumulated other comprehensive income (loss)

       1         12         505         579         1,097   
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Other comprehensive income (loss)

       13,180         72         (4,916      357         8,693   
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

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

       (6      —           (17      —           (23
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Balance as of December 31, 2016

     ¥ 69,487       ¥ (204    ¥ (29,968    ¥ (51,802    ¥ (12,487
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

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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 nine months ended December 31, 2015 and 2016 were as follows:

 

                                                                          
       Millions of yen
       Amounts reclassified out of accumulated other comprehensive income (loss) (*1)
       Nine months
ended
December 31,
2015
     Nine months
ended
December 31,
2016
    

Affected line items in the consolidated

statements of income

Unrealized holding gains (losses) on available-for-sale securities

     ¥ 1,463       ¥ 1,401       “Other, net” of “Other income (expense)”
       249         62       “Equity in net income (losses) of affiliates”
    

 

 

    

 

 

    
       1,712         1,463       Pre-tax amount
       (629      (480    Tax benefit (expense)
    

 

 

    

 

 

    
       1,083         983       Net-of-tax amount
    

 

 

    

 

 

    

Unrealized gains (losses) on cash flow hedges

       (33      (53    “Equity in net income (losses) of affiliates”
    

 

 

    

 

 

    
       (33      (53    Pre-tax amount
       11         17       Tax benefit (expense)
    

 

 

    

 

 

    
       (22      (36    Net-of-tax amount
    

 

 

    

 

 

    

Foreign currency translation adjustment

       263         —         “Other, net” of “Other income (expense)”
       —           (880    “Equity in net income (losses) of affiliates”
    

 

 

    

 

 

    
       263         (880    Pre-tax amount
       —           298       Tax benefit (expense)
    

 

 

    

 

 

    
       263         (582    Net-of-tax amount
    

 

 

    

 

 

    

Pension liability adjustment

       (767      (2,552    (*2)
    

 

 

    

 

 

    
       (767      (2,552    Pre-tax amount
       252         801       Tax benefit (expense)
    

 

 

    

 

 

    
       (515      (1,751    Net-of-tax amount
    

 

 

    

 

 

    

Total reclassified amounts

     ¥ 809       ¥ (1,386    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.

 

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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 December 31, 2015 and 2016 were as follows:

 

                                                                          
       Millions of yen
       Amounts reclassified out of accumulated other comprehensive income  (loss) (*1)
       Three months
ended
December 31,
2015
     Three months
ended
December 31,
2016
    

Affected line items in the consolidated
statements of income

Unrealized holding gains (losses) on available-for-sale securities

     ¥ 1,244       ¥ 28       “Other, net” of “Other income (expense)”
    

 

 

    

 

 

    
       —           (0    “Equity in net income (losses) of affiliates”
       1,244         28       Pre-tax amount
    

 

 

    

 

 

    
       (469      (29    Tax benefit (expense)
    

 

 

    

 

 

    
       775         (1    Net-of-tax amount
    

 

 

    

 

 

    

Unrealized gains (losses) on cash flow hedges

       (7      (18    “Equity in net income (losses) of affiliates”
    

 

 

    

 

 

    
       (7      (18    Pre-tax amount
       2         6       Tax benefit (expense)
    

 

 

    

 

 

    
       (5      (12    Net-of-tax amount
    

 

 

    

 

 

    

Foreign currency translation adjustment

       —           (770    “Equity in net income (losses) of affiliates”
    

 

 

    

 

 

    
       —           (770    Pre-tax amount
       —           265       Tax benefit (expense)
    

 

 

    

 

 

    
       —           (505    Net-of-tax amount
    

 

 

    

 

 

    

Pension liability adjustment

       (247      (845    (*2)
    

 

 

    

 

 

    
       (247      (845    Pre-tax amount
       81         266       Tax benefit (expense)
    

 

 

    

 

 

    
       (166      (579    Net-of-tax amount
    

 

 

    

 

 

    

Total reclassified amounts

     ¥ 604       ¥ (1,097    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.

 

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NTT DOCOMO, INC. AND SUBSIDIARIES

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

 

4. Segment information:

DOCOMO’s chief operating decision maker (the “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 has three operating segments, which consist of telecommunications business, smart life business and other businesses.

The telecommunications business includes mobile phone services (LTE(Xi) services and FOMA services), optical-fiber broadband 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 services to support our customers’ daily lives. The other businesses primarily include “Mobile Device Protection Service,” as well as the development, sales and maintenance of IT systems.

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.

 

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

 

                                                 

 

Segment operating revenues:

 

        
       Millions of yen  
       Nine months  ended
December 31, 2015
     Nine months  ended
December 31, 2016
 

Telecommunications business-

       

External customers

     ¥ 2,761,877       ¥ 2,813,130   

Intersegment

       923         822   
    

 

 

    

 

 

 

Subtotal

       2,762,800         2,813,952   

Smart life business-

       

External customers

       364,924         370,817   

Intersegment

       8,893         11,136   
    

 

 

    

 

 

 

Subtotal

       373,817         381,953   

Other businesses-

       

External customers

       256,659         285,646   

Intersegment

       8,952         9,238   
    

 

 

    

 

 

 

Subtotal

       265,611         294,884   
    

 

 

    

 

 

 

Segment total

       3,402,228         3,490,789   

Elimination

       (18,768      (21,196
    

 

 

    

 

 

 

Consolidated

     ¥ 3,383,460       ¥ 3,469,593   
    

 

 

    

 

 

 
       Millions of yen  
       Three months  ended
December 31, 2015
     Three months  ended
December 31, 2016
 

Telecommunications business-

       

External customers

     ¥ 955,486       ¥ 956,892   

Intersegment

       306         438   
    

 

 

    

 

 

 

Subtotal

       955,792         957,330   

Smart life business-

       

External customers

       124,391         127,329   

Intersegment

       3,115         4,256   
    

 

 

    

 

 

 

Subtotal

       127,506         131,585   

Other businesses-

       

External customers

       88,596         97,029   

Intersegment

       3,499         4,450   
    

 

 

    

 

 

 

Subtotal

       92,095         101,479   
    

 

 

    

 

 

 

Segment total

       1,175,393         1,190,394   

Elimination

       (6,920      (9,144
    

 

 

    

 

 

 

Consolidated

     ¥ 1,168,473       ¥ 1,181,250   
    

 

 

    

 

 

 

 

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NTT DOCOMO, INC. AND SUBSIDIARIES

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

 

Segment operating income (loss):

 

                                                 
       Millions of yen  
       Nine months  ended
December 31, 2015
       Nine months  ended
December 31, 2016
 

Telecommunications business

     ¥ 616,344         ¥ 744,186   

Smart life business

       48,984           58,651   

Other businesses

       20,177           39,499   
    

 

 

      

 

 

 

Consolidated

     ¥ 685,505         ¥ 842,336   
    

 

 

      

 

 

 
       Millions of yen  
       Three months  ended
December 31, 2015
       Three months  ended
December 31, 2016
 

Telecommunications business

     ¥ 196,175         ¥ 219,449   

Smart life business

       15,543           21,676   

Other businesses

       11,213           15,614   
    

 

 

      

 

 

 

Consolidated

     ¥ 222,931         ¥ 256,739   
    

 

 

      

 

 

 

Segment operating income (loss) is segment operating revenues less segment operating expenses.

As indicated in “Note 2. (b) Change in Accounting Procedures for Consolidated Quarterly Financial Results,” previously, DOCOMO principally used the declining-balance method for calculating depreciation of property, plant, and equipment. Effective April 1, 2016, DOCOMO adopted the straight-line method of depreciation. As a result, compared with the depreciation method used prior to April 1, 2016, operating income for the Telecommunications business segment, Smart life business segment, and Other businesses segment for the nine months ended December 31, 2016 increased by ¥109,037 million, ¥108 million and ¥91 million, respectively. Operating income for the Telecommunications business segment, Smart life business segment, and Other businesses segment for the three months ended December 31, 2016 increased by ¥39,709 million, ¥56 million and ¥41 million, respectively.

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

 

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NTT DOCOMO, INC. AND SUBSIDIARIES

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

 

5. Income taxes:

Release of valuation allowance for deferred tax assets related to DOCOMO’s subsidiaries operating multimedia broadcasting business for mobile devices —

During the three months ended December 31, 2015, DOCOMO decided to terminate the multimedia broadcasting business for mobile devices of DOCOMO’s smart life business segment effective June 30, 2016.

In connection with the termination of the multimedia broadcasting business, DOCOMO concluded that it was more likely than not that the related deferred tax assets will be realized considering the availability of prudent and feasible tax-planning strategies in the tax jurisdictions of certain subsidiaries that operated the multimedia broadcasting business for mobile devices. Subsequently, during the three months ended December 31, 2015, DOCOMO released the entirety of the valuation allowance, as of April 1, 2015, for the related deferred tax assets of those subsidiaries.

As a result, an adjustment to the beginning balance of valuation allowance for the deferred tax assets in the amount of ¥32,698 million was recorded as an income tax benefit in “Income taxes-Deferred” of the consolidated statements of income for both the nine months and the three months ended December 31, 2015.

6. 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.

 

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NTT DOCOMO, INC. AND SUBSIDIARIES

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

 

7. 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, 2016 and December 31, 2016 were as follows:

 

                                                                                                   
       Millions of yen  
       March 31, 2016  
       Total        Level 1        Level 2        Level 3  

Assets:

                   

Available-for-sale securities

                   

Equity securities (domestic)

     ¥ 86,530         ¥ 86,530         ¥ —           ¥ —     

Equity securities (foreign)

       83,947           83,947           —             —     

Debt securities (foreign)

       5           5           —             —     
    

 

 

      

 

 

      

 

 

      

 

 

 

Total available-for-sale securities

       170,482           170,482           —             —     
    

 

 

      

 

 

      

 

 

      

 

 

 

Derivatives

                   

Foreign exchange forward contracts

       16           —             16           —     
    

 

 

      

 

 

      

 

 

      

 

 

 

Total derivatives

       16           —             16           —     
    

 

 

      

 

 

      

 

 

      

 

 

 

Total

     ¥ 170,498         ¥ 170,482         ¥ 16         ¥ —     
    

 

 

      

 

 

      

 

 

      

 

 

 

Liabilities:

                   

Derivatives

                   

Foreign currency option contracts

     ¥ 2,415         ¥ —           ¥ 2,415         ¥ —     

Foreign exchange forward contracts

       5           —             5           —     
    

 

 

      

 

 

      

 

 

      

 

 

 

Total derivatives

       2,420           —             2,420           —     
    

 

 

      

 

 

      

 

 

      

 

 

 

Total

     ¥ 2,420         ¥ —           ¥ 2,420         ¥ —     
    

 

 

      

 

 

      

 

 

      

 

 

 

There were no transfers between Level 1 and Level 2.

 

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NTT DOCOMO, INC. AND SUBSIDIARIES

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

 

                                                                                                   
       Millions of yen  
       December 31, 2016  
       Total        Level 1        Level 2        Level 3  

Assets:

                   

Available-for-sale securities

                   

Equity securities (domestic)

     ¥ 91,367         ¥ 91,367         ¥ —           ¥ —     

Equity securities (foreign)

       86,827           86,827           —             —     

Debt securities (foreign)

       5           5           —             —     
    

 

 

      

 

 

      

 

 

      

 

 

 

Total available-for-sale securities

       178,199           178,199           —             —     
    

 

 

      

 

 

      

 

 

      

 

 

 

Derivatives

                   

Foreign exchange forward contracts

       4           —             4           —     
    

 

 

      

 

 

      

 

 

      

 

 

 

Total derivatives

       4           —             4           —     
    

 

 

      

 

 

      

 

 

      

 

 

 

Total

     ¥ 178,203         ¥ 178,199         ¥ 4         ¥ —     
    

 

 

      

 

 

      

 

 

      

 

 

 

Liabilities:

                   

Derivatives

                   

Foreign currency option contracts

     ¥ 998         ¥ —           ¥  998         ¥ —     

Foreign exchange forward contracts

       1           —             1           —     
    

 

 

      

 

 

      

 

 

      

 

 

 

Total derivatives

       999           —             999           —     
    

 

 

      

 

 

      

 

 

      

 

 

 

Total

     ¥ 999         ¥ —           ¥ 999         ¥ —     
    

 

 

      

 

 

      

 

 

      

 

 

 

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

 

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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 nine months ended December 31, 2015 and 2016 were as follows:

 

                                                                                                                            
       Millions of yen  
       Nine months ended December 31, 2015  
       Total        Level 1        Level 2        Level 3        Gains (losses)
(before  taxes)
 

Assets:

                        

Receivables held for sale

     ¥ 817,997         ¥ —           ¥ 817,997         ¥ —           ¥ (7,461
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 

 

                                                                                                                            
       Millions of yen  
       Nine months ended December 31, 2016  
       Total        Level 1        Level 2        Level 3        Gains (losses)
(before  taxes)
 

Assets:

                        

Receivables held for sale

     ¥ 798,949         ¥ —           ¥ 798,949         ¥ —           ¥ (6,801
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 

DOCOMO’s assets that were measured at fair value on a nonrecurring basis for the three months ended December 31, 2015 and 2016 were as follows:

 

                                                                                                                            
       Millions of yen  
       Three months ended December 31, 2015  
       Total        Level 1        Level 2        Level 3        Gains (losses)
(before  taxes)
 

Assets:

                        

Receivables held for sale

     ¥ 499,827         ¥ —           ¥ 499,827         ¥ —           ¥ (6,030
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 

 

                                                                                                                            
       Millions of yen  
       Three months ended December 31, 2016  
       Total        Level 1        Level 2        Level 3        Gains (losses)
(before  taxes)
 

Assets:

                        

Receivables held for sale

     ¥ 501,327         ¥ —           ¥ 501,327         ¥ —           ¥ (5,510
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 

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.

 

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Table of Contents

NTT DOCOMO, INC. AND SUBSIDIARIES

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

 

8. Subsequent event:

None

 

21

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