Report of Foreign Issuer (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 August 2014

Commission File Number 1-8910

NIPPON TELEGRAPH AND TELEPHONE CORPORATION

(Translation of registrant’s name into English)

OTEMACHI FIRST SQUARE, EAST TOWER

5-1, OTEMACHI 1-CHOME

CHIYODA-KU, TOKYO 100-8116 JAPAN

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of 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):

INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED JUNE 30, 2014

Attached are the registrant’s unaudited interim consolidated financial statements for the three months ended June 30, 2014, including the notes thereto, prepared on the basis of accounting principles generally accepted in the United States.

The attached financial statements were included in the registrant’s quarterly report which the registrant filed on August 7, 2014 with the Financial Services Agency of Japan. The registrant’s quarterly report filed with the Financial Services Agency included additional information not included in this report on Form 6-K. Such additional information is either immaterial or has been previously reported by the registrant. Most of the contents of this report on Form 6-K and the registrant’s quarterly report have previously been disclosed by the registrant in the registrant’s press release dated August 6, 2014, a copy of which was furnished under cover of Form 6-K on August 6, 2014.

The earnings projections of the registrant and its subsidiaries included in the press release contain forward-looking statements. The registrant desires to qualify for the “safe-harbor” provisions of the Private Securities Litigation Reform Act of 1995, and consequently is hereby filing cautionary statements identifying important factors that could cause the registrant’s actual results to differ materially from those set forth in the attachment.

The registrant’s forward-looking statements are based on a series of assumptions, projections, estimates, judgments and beliefs of the management of the registrant in light of information currently available to it regarding the registrant and its subsidiaries and affiliates, the economy and the telecommunications industry in Japan and overseas, and other factors. These projections and estimates may be affected by the future business operations of the registrant and its subsidiaries and affiliates, the state of the economy in Japan and abroad, possible fluctuations in the securities markets, the pricing of services, the effects of competition, the performance of new products, services and new businesses, changes to laws and regulations affecting the telecommunications industry in Japan and elsewhere, other changes in circumstances that could cause actual results to differ materially from any future results that may be derived from the forward-looking statements, as well as other risks included in the registrant’s most recent Annual Report on Form 20-F and other filings and submissions with the United States Securities and Exchange Commission.

No assurance can be given that the registrant’s actual results will not vary significantly from any expectation of future results that may be derived from the forward-looking statements included herein.

The information on any website referenced herein or in the attached material is not incorporated by reference herein or therein.

The attached material is a translation of the Japanese original. The Japanese original is authoritative.

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.


NIPPON TELEGRAPH AND TELEPHONE CORPORATION

By		/s/ Yasutake Horinouchi
Name:		Yasutake Horinouchi
Title:		Vice President Investor Relations Office

Date: August 7, 2014

NIPPON TELEGRAPH AND TELEPHONE CORPORATION

AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (UNAUDITED)


	Millions of yen
	March 31, 2014			June 30, 2014
ASSETS
Current assets:
Cash and cash equivalents	¥	984,463		¥	1,143,411
Short-term investments		38,949			58,977
Notes and accounts receivable, trade		2,509,030			2,218,792
Allowance for doubtful accounts (Note 7)		(46,893	)		(45,073	)
Accounts receivable, other		345,197			363,004
Inventories (Note 2)		415,309			450,743
Prepaid expenses and other current assets		394,294			501,788
Deferred income taxes		220,662			212,321

Total current assets		4,861,011			4,903,963


Property, plant and equipment:
Telecommunications equipment		12,959,564			12,928,320
Telecommunications service lines		15,408,604			15,460,708
Buildings and structures		6,060,129			6,064,931
Machinery, vessels and tools		1,949,903			1,942,635
Land		1,238,742			1,237,183
Construction in progress		359,014			377,199

		37,975,956			38,010,976
Accumulated depreciation		(28,136,268	)		(28,244,395	)

Net property, plant and equipment		9,839,688			9,766,581


Investments and other assets:
Investments in affiliated companies		521,634			505,960
Marketable securities and other investments		407,766			412,186
Goodwill		1,086,636			1,075,045
Software		1,309,912			1,273,229
Other intangible assets		401,194			389,442
Other assets		1,195,608			1,226,189
Deferred income taxes		661,500			654,459

Total investments and other assets		5,584,250			5,536,510


Total assets	¥	20,284,949		¥	20,207,054

The accompanying notes are an integral part of these financial statements.

– 1 –

NIPPON TELEGRAPH AND TELEPHONE CORPORATION

AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (UNAUDITED)


	Millions of yen
	March 31, 2014			June 30, 2014
LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings	¥	269,444		¥	533,610
Current portion of long-term debt		425,351			423,955
Accounts payable, trade		1,540,249			1,159,363
Current portion of obligations under capital leases		16,929			18,070
Accrued payroll		448,061			370,287
Accrued taxes on income		256,994			96,313
Accrued consumption tax		47,376			84,542
Advances received		266,743			267,045
Other		405,677			500,455

Total current liabilities		3,676,824			3,453,640

Long-term liabilities:
Long-term debt (excluding current portion)		3,483,673			3,606,248
Obligations under capital leases (excluding current portion)		35,951			35,611
Liability for employees’ retirement benefits		1,327,873			1,340,276
Accrued liabilities for point programs		130,466			117,464
Deferred income taxes		233,151			226,538
Other		446,293			459,913

Total long-term liabilities		5,657,407			5,786,050

Redeemable noncontrolling interests (Note 3)		25,912			25,803

Equity:
Nippon Telegraph and Telephone Corporation (“NTT”) shareholders’ equity
Common stock, no par value (Note 3) Authorized — 6,192,920,900 shares Issued — 1,136,697,235 shares at March 31 and June 30, 2014		937,950			937,950
Additional paid-in capital		2,827,010			2,825,430
Retained earnings (Note 3)		4,808,361			4,857,271
Accumulated other comprehensive income (loss) (Note 3)		94,966			71,254
Treasury stock, at cost (Note 3) — 26,650,807 shares at March 31, 2014 and 27,069,157 shares at June 30, 2014		(156,933	)		(159,392	)

Total NTT shareholders’ equity		8,511,354			8,532,513

Noncontrolling interests (Note 3)		2,413,452			2,409,048

Total equity		10,924,806			10,941,561

Contingent liabilities (Note 8)


Total liabilities and equity	¥	20,284,949		¥	20,207,054


	Yen
	March 31, 2014			June 30, 2014
Per share of common stock:

NTT shareholders’ equity	¥	7,667.57		¥	7,689.53

The accompanying notes are an integral part of these financial statements.

– 2 –

NIPPON TELEGRAPH AND TELEPHONE CORPORATION

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

THREE-MONTH PERIOD ENDED JUNE 30


	Millions of yen, except per share data
	2013			2014
Operating revenues:
Fixed voice related services	¥	390,972		¥	367,513
Mobile voice related services		271,251			226,276
IP/packet communications services		940,507			922,283
Sale of telecommunications equipment		231,616			227,310
System integration		487,339			587,387
Other		287,432			309,448

		2,609,117			2,640,217

Operating expenses (Note 6):
Cost of services (excluding items shown separately below)		556,644			559,455
Cost of equipment sold (excluding items shown separately below)		198,084			198,551
Cost of system integration (excluding items shown separately below)		336,601			413,138
Depreciation and amortization		456,494			462,550
Impairment loss		82			143
Selling, general and administrative expenses		712,222			708,401
Goodwill and other intangible asset impairments		64			—

		2,260,191			2,342,238

Operating income		348,926			297,979

Other income (expenses):
Interest and amortization of bond discounts and issue costs		(12,348	)		(11,716	)
Interest income		4,361			4,518
Other, net (Note 3)		15,145			15,261

		7,158			8,063

Income before income taxes and equity in earnings (losses) of affiliated companies		356,084			306,042

Income tax expense (benefit) (Note 3):
Current		119,907			98,412
Deferred		18,025			10,354

		137,932			108,766

Income before equity in earnings (losses) of affiliated companies		218,152			197,276
Equity in earnings (losses) of affiliated companies (Note 3)		3,460			(1,361	)

Net income		221,612			195,915

Less — Net income attributable to noncontrolling interests		54,895			46,950

Net income attributable to NTT	¥	166,717		¥	148,965

Per share of common stock:
Weighted average number of shares outstanding		1,179,990,268			1,109,826,049
Net income attributable to NTT	¥	141.29		¥	134.22

The accompanying notes are an integral part of these financial statements.

– 3 –

NIPPON TELEGRAPH AND TELEPHONE CORPORATION

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

THREE-MONTH PERIOD ENDED JUNE 30


	Millions of yen
	2013			2014
Net income	¥	221,612		¥	195,915
Other comprehensive income (loss), net of tax (Note 3)
Unrealized gain (loss) on securities		10,668			3,714
Unrealized gain (loss) on derivative instruments		(3,785	)		1,855
Foreign currency translation adjustments		54,735			(30,675	)
Pension liability adjustments		2,979			(988	)

Total other comprehensive income (loss)		64,597			(26,094	)

Total comprehensive income (loss)		286,209			169,821

Less — Comprehensive income attributable to noncontrolling interests		65,353			44,568

Total comprehensive income (loss) attributable to NTT	¥	220,856		¥	125,253

The accompanying notes are an integral part of these financial statements.

– 4 –

NIPPON TELEGRAPH AND TELEPHONE CORPORATION

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

THREE-MONTH PERIOD ENDED JUNE 30


	Millions of yen
	2013			2014
Cash flows from operating activities:
Net income	¥	221,612		¥	195,915
Adjustments to reconcile net income to net cash provided by operating activities —
Depreciation and amortization		456,494			462,550
Impairment loss		82			143
Deferred taxes		18,025			10,354
Goodwill and other intangible asset impairments		64			—
Losses on disposals of property, plant and equipment		17,515			20,047
Equity in (earnings) losses of affiliated companies		(3,460	)		1,361
(Increase) decrease in notes and accounts receivable, trade		190,190			295,053
(Increase) decrease in inventories		(21,552	)		(37,554	)
(Increase) decrease in other current assets		(118,086	)		(153,772	)
Increase (decrease) in accounts payable, trade and accrued payroll		(255,444	)		(313,952	)
Increase (decrease) in accrued consumption tax		1,377			37,252
Increase (decrease) in advances received		13,652			1,383
Increase (decrease) in accrued taxes on income		(126,419	)		(160,364	)
Increase (decrease) in other current liabilities		93,815			96,484
Increase (decrease) in liability for employees’ retirement benefits		20,059			11,772
Increase (decrease) in other long-term liabilities		(13,950	)		(1,512	)
Other		3,625			(21,371	)


Net cash provided by operating activities		497,599			443,789


Cash flows from investing activities:
Payments for property, plant and equipment		(426,547	)		(405,387	)
Payments for intangibles		(105,344	)		(92,833	)
Proceeds from sales of property, plant and equipment		805			11,824
Payments for purchases of non-current investments		(10,106	)		(2,179	)
Proceeds from sales and redemptions of non-current investments		2,206			3,571
Acquisitions of subsidiaries, net of cash acquired		(13,003	)		(3,631	)
Payments for purchases of short-term investments		(20,081	)		(36,137	)
Proceeds from redemptions of short-term investments		36,674			17,201
Other		(10,806	)		(19,219	)


Net cash used in investing activities	¥	(546,202	)	¥	(526,790	)

The accompanying notes are an integral part of these financial statements.

– 5 –

NIPPON TELEGRAPH AND TELEPHONE CORPORATION

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

THREE-MONTH PERIOD ENDED JUNE 30


	Millions of yen
	2013			2014
Cash flows from financing activities:
Proceeds from issuance of long-term debt	¥	201,872		¥	234,849
Payments for settlement of long-term debt		(242,615	)		(107,455	)
Proceeds from issuance of short-term debt		775,604			1,896,280
Payments for settlement of short-term debt		(536,421	)		(1,626,089	)
Dividends paid (Note 3)		(94,830	)		(99,904	)
Proceeds from sale of (payments for acquisition of) treasury stock, net		(103,410	)		(30	)
Acquisition of treasury stock by subsidiary		(2,719	)		—
Other		(46,143	)		(50,400	)


Net cash provided by (used in) financing activities		(48,662	)		247,251


Effect of exchange rate changes on cash and cash equivalents		6,561			(5,302	)


Net increase (decrease) in cash and cash equivalents		(90,704	)		158,948
Cash and cash equivalents at beginning of period		961,433			984,463


Cash and cash equivalents at end of period	¥	870,729		¥	1,143,411


Cash paid during the period for:
Interest	¥	13,102		¥	11,309
Income taxes, net	¥	254,104		¥	275,775

The accompanying notes are an integral part of these financial statements.

– 6 –

NIPPON TELEGRAPH AND TELEPHONE CORPORATION

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. Summary of significant accounting policies:

As permitted by the “Regulation Concerning the Terminology, Forms and Preparation Methods of Quarterly Consolidated Financial Statements” (Japanese Cabinet Office Ordinance No. 64 of 2007), the accompanying consolidated balance sheets at March 31 and June 30, 2014, the consolidated statements of income and the consolidated statements of comprehensive income for the three months ended June 30, 2013 and 2014 and the consolidated statements of cash flows for the three months ended June 30, 2013 and 2014 of NTT and its subsidiaries (collectively with NTT, “NTT Group”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Certain disclosures required by U.S. GAAP have been omitted.

(1) 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,” 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 NTT Group on April 1, 2017. Early adoption is not permitted.

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

(2) Earnings per Share

Basic earnings per share (“EPS”) is computed based on the average number of shares outstanding during the period and is appropriately adjusted for any free distribution of common stock. Diluted EPS assumes the dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock. Since NTT did not issue dilutive securities for the three months ended June 30, 2013 and 2014, there is no difference between basic EPS and diluted EPS.

(3) Reclassifications

Certain items for prior periods’ financial statements have been reclassified to conform to the presentation for the three months ended June 30, 2014.

– 7 –

2. Inventories:

Inventories at March 31 and June 30, 2014 comprised the following:


	Millions of yen
	March 31, 2014		June 30, 2014

Telecommunications equipment to be sold and materials	¥	228,337	¥	235,232
Projects in progress		83,015		119,183
Supplies		103,957		96,328


Total	¥	415,309	¥	450,743

– 8 –

3. Equity:

Outstanding shares and treasury stock —

Changes in NTT’s shares of common stock and treasury stock for the fiscal year ended March 31, 2014 and for the three months ended June 30, 2014 are as follows:


	Change in shares
	Issued shares			Treasury stock
Balance at March 31, 2013		1,323,197,235			137,822,603
Acquisition of treasury stock under resolution of the board of directors		—			75,294,000
Acquisition of treasury stock through purchase of less-than-one-unit shares		—			37,134
Resale of treasury stock to holders of less-than-one-unit shares		—			(2,930	)
Cancellation of treasury stock under resolution of the board of directors		(186,500,000	)		(186,500,000	)
Balance at March 31, 2014		1,136,697,235			26,650,807

Acquisition of treasury stock under resolution of the board of directors		—			413,227
Acquisition of treasury stock through purchase of less-than-one-unit shares		—			5,679
Resale of treasury stock to holders of less-than-one-unit shares		—			(556	)

Balance at June 30, 2014		1,136,697,235			27,069,157

On May 10, 2013, the board of directors of NTT resolved that NTT may acquire up to 50 million shares of its outstanding common stock for an amount in total not exceeding ¥250 billion from May 13, 2013 through March 31, 2014. Based on this resolution, NTT repurchased 48,737,200 shares of its common stock for a total purchase price of ¥250,000 million between May 2013 and October 2013, and concluded the repurchase of its common stock authorized by board of directors’ resolution.

On November 8, 2013, the board of directors of NTT resolved that NTT will cancel 186,500,000 shares held as treasury stock on November 15, 2013, and as a result of such cancellation conducted on November 15, 2013, retained earnings have decreased by ¥818,206 million.

On February 6, 2014, the board of directors of NTT resolved that NTT may acquire up to 38 million shares of its outstanding common stock at an amount in total not exceeding ¥200 billion from February 7, 2014 through March 31, 2014. Based on this resolution, NTT repurchased 26,556,800 shares of its common stock at ¥156,499 million on March 7, 2014 using ToSTNeT-3.

On May 13, 2014, the board of directors of NTT resolved that NTT may acquire up to 44 million shares of its outstanding common stock for an amount in total not exceeding ¥250 billion from July 1, 2014 through March 31, 2015.

– 9 –

Dividends —

Cash dividends paid for the three months ended June 30, 2014 were as follows:


Resolution		The shareholders’ meeting held on June 26, 2014
Class of shares		Common stock
Source of dividends		Retained earnings
Total cash dividends paid		¥99,904 million
Cash dividends per share		¥90
Record date		March 31, 2014
Date of payment		June 27, 2014

Changes in equity —

Changes in total equity, NTT shareholders’ equity and equity attributable to noncontrolling interests for the three months ended June 30, 2013 and 2014 are as follows:


	Millions of yen
	NTT shareholders’ equity			Noncontrolling interests			Total equity
Balance at March 31, 2013	¥	8,231,439		¥	2,290,564		¥	10,522,003
Dividends paid to NTT shareholders		(94,830	)		—			(94,830	)
Dividends paid to noncontrolling interests		—			(48,394	)		(48,394	)
Acquisition of treasury stock		(103,412	)		—			(103,412	)
Resale of treasury stock		2			—			2
Other equity transactions		(364	)		568			204
Net income		166,717			54,895			221,612
Other comprehensive income (loss)		54,139			10,458			64,597
Unrealized gain (loss) on securities		7,292			3,376			10,668
Unrealized gain (loss) on derivative instruments		(2,896	)		(889	)		(3,785	)
Foreign currency translation adjustments		46,916			7,819			54,735
Pension liability adjustments		2,827			152			2,979
Balance at June 30, 2013	¥	8,253,691		¥	2,308,091		¥	10,561,782

Millions of yen

NTT shareholders’
equity

Noncontrolling
interests

Total
equity

Balance at March 31, 2014

8,511,354

2,413,452

10,924,806

Dividends paid to NTT shareholders

(99,904

)

—

(99,904

)

Dividends paid to noncontrolling interests

—

(48,596

)

(48,596

)

Acquisition of treasury stock

(2,462

)

—

(2,462

)

Resale of treasury stock

—

Other equity transactions

(1,731

)

(485

)

(2,216

)

Net income

148,965

46,841

195,806

Other comprehensive income (loss)

(23,712

)

(2,164

)

(25,876

)

Unrealized gain (loss) on securities

2,263

1,451

3,714

Unrealized gain (loss) on derivative instruments

1,201

654

1,855

Foreign currency translation adjustments

(26,539

)

(3,918

)

(30,457

)

Pension liability adjustments

(637

)

(351

)

(988

)

Balance at June 30, 2014

8,532,513

2,409,048

10,941,561

– 10 –

Accumulated other comprehensive income (loss) —

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


	Millions of yen
	Unrealized gain (loss) on securities		Unrealized gain (loss) on derivative instruments			Foreign currency translation adjustments			Pension liability adjustments			Total
Balance at March 31, 2013	¥	71,976	¥	(2,560	)	¥	(5,683	)	¥	(256,665	)	¥	(192,932	)
Other comprehensive income before reclassification		10,649		(3,878	)		54,735			—			61,506
Amounts reclassified from accumulated other comprehensive income		19		93			—			2,979			3,091

Other comprehensive income		10,668		(3,785	)		54,735			2,979			64,597

Less — Comprehensive income attributable to noncontrolling interests		3,376		(889	)		7,819			152			10,458

Balance at June 30, 2013	¥	79,268	¥	(5,456	)	¥	41,233		¥	(253,838	)	¥	(138,793	)


	Millions of yen
	Unrealized gain (loss) on securities			Unrealized gain (loss) on derivative instruments			Foreign currency translation adjustments			Pension liability adjustments			Total
Balance at March 31, 2014	¥	84,711		¥	(5,982	)	¥	120,839		¥	(104,602	)	¥	94,966
Other comprehensive income before reclassification		3,721			1,842			(27,222	)		13			(21,646	)
Amounts reclassified from accumulated other comprehensive income		(7	)		13			(3,453	)		(1,001	)		(4,448	)

Other comprehensive income		3,714			1,855			(30,675	)		(988	)		(26,094	)

Less — Comprehensive income attributable to noncontrolling interests		1,451			654			(4,136	)		(351	)		(2,382	)

Balance at June 30, 2014	¥	86,974		¥	(4,781	)	¥	94,300		¥	(105,239	)	¥	71,254

– 11 –

Reclassifications out of accumulated other comprehensive income (loss) for the three months ended June 30, 2013 and 2014 are as follows:


	Millions of yen
	Amounts reclassified from accumulated other comprehensive income (loss)						Affected line items in consolidated statements of income
	2013			2014			Affected line items in consolidated statements of income
Unrealized gain (loss) on securities	¥	(18	)	¥	7		Other, net
		(1	)		(0	)	Income tax expense (benefit)

	¥	(19	)	¥	7		Net income

Unrealized gain (loss) on derivative instruments	¥	(145	)	¥	9		Other, net
		52			(8	)	Income tax expense (benefit)
		—			(14	)	Equity in earnings (losses) of affiliated companies

	¥	(93	)	¥	(13	)	Net income

Foreign currency translation adjustments		—		¥	3,453		Other, net

		—		¥	3,453		Net income

Pension liability adjustments	¥	(4,237	)	¥	1,022		*
		1,258			(21	)	Income tax expense (benefit)

	¥	(2,979	)	¥	1,001		Net income

Total	¥	(3,091	)	¥	4,448		Net income

*	Amounts reclassified from pension liability adjustments are included in the computation of net periodic pension cost.

– 12 –

4. Fair value measurements:

The inputs to valuation techniques used to measure fair value are required to be categorized by the fair value hierarchy. The fair value hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:

•

Level 1 — Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

•

Level 2 — Inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

•

Level 3 — Inputs are unobservable inputs for the asset or liability.

Assets and liabilities measured at fair value on a recurring basis as of March 31 and June 30, 2014 are as follows:


	Millions of yen
	March 31, 2014
	Fair value measurements using
	Total		Level 1 ^(*1)		Level 2 ^(*2)		Level 3 ^(*3)

Assets
Available-for-sale securities:
Domestic equity securities	¥	126,422	¥	126,419	¥	3	¥	—
Foreign equity securities		136,171		136,171		—		—
Domestic debt securities		27,745		212		24,821		2,712
Foreign debt securities		29,244		10		29,234		—
Derivatives:
Forward exchange contracts		1,048		—		1,048		—
Interest rate swap agreements		664		—		664		—
Currency swap agreements		34,805		—		34,805		—
Currency option agreements		290		—		290		—


Liabilities
Derivatives:
Forward exchange contracts		522		—		522		—
Interest rate swap agreements		2,043		—		2,043		—
Currency swap agreements		571		—		571		—
Currency option agreements		85		—		85		—

(*1)	Quoted prices for identical assets or liabilities in active markets

(*2)	Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in inactive markets, inputs derived principally from observable market data

(*3)	Unobservable inputs

There were no transfers between Level 1 and Level 2.

Level 3 reconciliation is not disclosed, since the amounts in Level 3 are immaterial.

– 13 –

Millions of yen

June 30, 2014

Fair value measurements using

Total

Level 1 ^(*1)

Level 2 ^(*2)

Level 3 ^(*3)

Assets

Available-for-sale securities:

Domestic equity securities

127,591

127,590

—

Foreign equity securities

141,793

—

Domestic debt securities

27,744

194

24,856

2,694

Foreign debt securities

28,884

28,874

—

Derivatives:

Forward exchange contracts

830

—

830

—

Interest rate swap agreements

631

—

631

—

Currency swap agreements

33,643

—

33,643

—

Currency option agreements

578

—

578

—

Liabilities

Derivatives:

Forward exchange contracts

972

—

972

—

Interest rate swap agreements

2,581

—

2,581

—

Currency swap agreements

1,078

—

1,078

—

Currency option agreements

232

—

232

—

(*1)	Quoted prices for identical assets or liabilities in active markets

(*2)	Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in inactive markets, inputs derived principally from observable market data

(*3)	Unobservable inputs

There were no transfers between Level 1 and Level 2.

Level 3 reconciliation is not disclosed, since the amounts in Level 3 are immaterial.

Available-for-sale securities —

Available-for-sale securities comprise marketable equity securities and debt securities, and financial instruments classified as available-for-sale securities. If active market prices are available, fair value is measured by quoted prices for identical assets in active markets, which is classified as Level 1. If active market prices are not available, fair value is measured by inputs derived principally from observable market data provided by financial institutions, which is classified as Level 2. In case fair value is measured by inputs derived from unobservable data, it is classified as Level 3.

Derivatives —

Derivatives comprise forward exchange contracts, interest rate swap agreements, currency swap agreements and currency option agreements. Fair value of derivatives is measured by inputs derived principally from observable market data provided by financial institutions, which is classified as Level 2.

Assets and liabilities measured at fair value on a nonrecurring basis for the three months ended June 30, 2013 and 2014 were immaterial.

– 14 –

5. Segment information:

Operating segments are components of the NTT Group 1) that engage in business activities, 2) whose operating results are regularly reviewed by NTT Group’s chief operating decision maker to make decisions on the allocation of financial resources and to evaluate business performance, and 3) for which discrete financial information is available. Accounting policies used to determine segment profit/loss are consistent with those used to prepare the consolidated financial statements in accordance with accounting principles generally accepted in the United States.

The regional communications business segment principally comprises revenues from fixed voice related services, IP/packet communications services, sales of telecommunications equipment and other operating revenues.

The long distance and international communications business segment principally comprises revenues from fixed voice related services, IP/packet communications services, system integration services and other operating revenues.

The mobile communications business segment principally comprises revenues from mobile voice related services, IP/packet communications services and sales of telecommunications equipment.

The data communications business segment comprises revenues from system integration services.

The other segment principally comprises operating revenues from such activities as building maintenance, real estate rental, systems development, leasing and research and development.

– 15 –

Operating revenues:


	Millions of yen
For the three months ended June 30	2013			2014

Operating revenues:
Regional communications business —
External customers	¥	763,216		¥	734,000
Intersegment		103,563			109,652

Total		866,779			843,652

Long distance and international communications business —
External customers		391,871			443,982
Intersegment		24,128			20,894

Total		415,999			464,876

Mobile communications business —
External customers		1,103,871			1,065,815
Intersegment		9,702			9,487

Total		1,113,573			1,075,302

Data communications business —
External customers		269,018			310,800
Intersegment		24,262			25,078

Total		293,280			335,878

Other —
External customers		81,141			85,620
Intersegment		208,437			201,588

Total		289,578			287,208
Elimination		(370,092	)		(366,699	)


Consolidated Total	¥	2,609,117		¥	2,640,217

– 16 –

Segment profit:


	Millions of yen
For the three months ended June 30	2013		2014

Segment profit:
Regional communications business	¥	43,280	¥	40,445
Long distance and international communications business		34,303		26,435
Mobile communications business		246,643		208,608
Data communications business		7,087		8,182
Other		13,744		10,521

Total segment profit		345,057		294,191
Elimination		3,869		3,788

Consolidated Total	¥	348,926	¥	297,979

Transfers between operating segments are made at arms-length prices. Operating income is operating revenue less costs and operating expenses.

There were no sales and operating revenues from transactions with a single external customer amounting to 10% or more of NTT’s revenues for the three months ended June 30, 2013 and 2014.

– 17 –

6. Research and development expenses:

Research and development expenses are charged to income as incurred and such amounts charged to income for the three months ended June 30, 2013 and 2014 were ¥57,207 million and ¥53,825 million, respectively.

7. Financing receivables:

NTT Group has certain “Financing receivables,” including loans and lease receivables. These financing receivables are mainly held by the financial subsidiaries of NTT. NTT manages these financing receivables by classifying them into “Installment sales receivable,” “Lease receivable,” “Loans receivable,” “Credit receivable” and “Others.”

The allowance for doubtful accounts against financing receivables collectively evaluated for impairment is computed based on each historical bad debt experience. The allowance for doubtful accounts against financing receivables individually evaluated for impairment is computed based on the estimated uncollectible amount based on the analysis of certain individual accounts. In addition, financing receivables that are determined to be uncollectible due to, among other factors, the condition of the debtor are written off at the time of determination.

Rollforward of allowance for doubtful accounts and recorded investment in financing receivables for the three months ended June 30, 2013 and 2014 are as follows:


	Millions of yen
	Installment sales receivable			Lease receivable			Loans receivable			Credit receivable			Others			Total
Allowance for doubtful accounts:
Balance at March 31, 2013	¥	6,829		¥	11,423		¥	6,154		¥	3,390		¥	107		¥	27,903
Provision		839			(292	)		(22	)		821			(1	)		1,345
Charge off		(645	)		(509	)		(67	)		(892	)		—			(2,113	)
Recovery		—			24			2			1			—			27
Balance at June 30, 2013		7,023			10,646			6,067			3,320			106			27,162
Collectively evaluated for impairment		6,505			4,197			962			3,238			2			14,904
Individually evaluated for impairment		518			6,449			5,105			82			104			12,258

Financing receivables:
Balance at June 30, 2013		619,681			338,248			92,499			247,167			425			1,298,020
Collectively evaluated for impairment		619,063			331,162			84,228			247,085			321			1,281,859
Individually evaluated for impairment		618			7,086			8,271			82			104			16,161

– 18 –

Millions of yen

Installment
sales
receivable

Lease
receivable

Loans
receivable

Credit
receivable

Others

Total

Allowance for doubtful accounts:

Balance at March 31, 2014

4,687

8,331

5,000

2,991

4,005

25,014

Provision

623

(82

)

(312

)

2,668

(91

)

2,806

Charge off

(98

)

(338

)

(16

)

(1,823

)

—

(2,275

)

Recovery

—

Balance at June 30, 2014

5,215

7,931

4,672

3,837

3,914

25,569

Collectively evaluated for impairment

4,987

3,019

1,243

3,837

13,087

Individually evaluated for impairment

228

4,912

3,429

—

3,913

12,482

Financing receivables:

Balance at June 30, 2014

817,333

348,628

92,958

269,882

4,108

1,532,909

Collectively evaluated for impairment

817,085

343,259

86,457

269,882

158

1,516,841

Individually evaluated for impairment

248

5,369

6,501

—

3,950

16,068

8. Contingent liabilities:

Contingent liabilities at June 30, 2014 for loans guaranteed, among other things, amounted to ¥65,052 million.

At June 30, 2014, NTT Group had no material litigation or claims outstanding, pending or threatened against it, which would be expected to have a material adverse effect on NTT’s consolidated financial position or results of operations.

9. Subsequent events:

NTT DOCOMO, INC. (“NTT DOCOMO”), a subsidiary of NTT, has announced its decision, adopted at its board of directors’ meeting held on August 6, 2014, to launch a tender offer to repurchase up to 206,489,675 shares of its outstanding common stock between August 7, 2014 and September 3, 2014. On the same day, NTT’s board of directors resolved that NTT will participate in the tender offer to sell 176,991,100 shares of its current holdings of NTT DOCOMO’s common stock. If NTT DOCOMO’s stock repurchase results in a change in NTT’s equity stake in NTT DOCOMO, NTT expects to record the transaction as a capital transaction for accounting purposes.

– 19 –

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