2. Consolidated Results
When we, with a mind to these business environments, take a overview of the performance achieved by each business division of the KDD Group for the current fiscal year, we find that in the telecommunications business division while revenue from the international telephone decreased, affected by causes including the rate-cut and the reduction of international accounting rates, revenue from the domestic telephone increased because of a steady growth of revenue from 001 and 0070 services. With its market expanding by leaps and bounds, revenue from multimedia, a pillar of the future earnings, showed a significant upsurge. As a result, operating revenue of the entire telecommunications division reached 381.4 billion yen.
The transmission capacity sales division which started in the current fiscal earned 35 billion yen as new operating revenue from sales of the JIH Cable capacity, etc.
The communications facilities construction division which completed and delivered SEA-ME-WE3 Cable and are now constructing the optical fiber submarine cables including TAT-14, PC-1, Japan-US and China-US cables scored operating revenue of 157.8 billion yen from the undertaking.
Favored with strong trends in rental revenue from office spaces for communications equipment, etc., associated with the data center business, the real estate business division recorded operating revenue of 14 billion yen.
Other business divisions attained revenue of 8.8 billion yen from miscellaneous businesses such as sales and maintenance of communications equipment, sales of goods, and commissioned international broadcasting.
As the result of these achievements, consolidated operating revenue reached 597.3 billion yen, an increase of 47.2 % over the previous fiscal. On the expenditure side, with efforts to check the total expense through the curtailment of labor costs and sales costs, the reduction of communications equipment utilization charges, etc., operating expense reached 588.4 billion yen, bringing about operating income of 8.8 billion yen, an increase of 47.4 % over the previous fiscal.
Ordinary income and net income were 23.1 billion yen and 7.3 billion yen, respectively, as a result of posting on non-operating revenue and special income profits from sale of securities holdings, etc., on one hand, and posting on special loss costs for improving the management structure (restructure of equipment, writing down of securities holdings, etc.) investment loss allowance, special contribution to past service costs for qualified retirement annuity, etc., on the other.
As for cash flow in the current fiscal, while 45.7 billion yen was secured as cash flow through operating activities, because of vigorous capital investments in facilitating the communications infrastructure, cash flow through investment activities brought about outgoing of 70.7 billion yen. On the other hand, as cash flow from financing activities 54.0 billion yen was gained through a private placement. As a result, the cash and cash equivalent amount outstanding at the end of the fiscal was 217.5 billion yen, an increase of 28 billion yen over the previous fiscal.

3. Non-consolidated Results
The current non-consolidated results of KDD alone recorded 395.3 billion yen of operating revenue, an increase of 26.3 % over the previous fiscal, operating expense of 386.1 billion yen, an increase of 25.5%, and operating income of 9.2 billion yen, an increase of 73.2%. In addition, ordinary income was 25.2 billion yen, an increase of 168.1%, and current net income was 3.9 billion yen, a decrease of 46.0%, as compared with the previous fiscal, respectively.

4. Business Estimates
As for consolidated business estimates, KDD Group expects to score 333 billion yen of operating revenue, 7 billion yen of ordinary income, and 3 billion yen of current net income for the first half of the next fiscal.
In addition, non-consolidated performance by KDD alone for the term is expected to be 191.0 billion yen of operating revenue, 5 billion yen of ordinary income, and 2 billion yen of current net income.

5. Management Policies for the Future
KDD will promote measures for securing customer bases toward the introduction of the carrier selection service of trunk calls and international calls, and further step up work on IP-related business to push forward, making " Tela-bit Highway" as a base for the infrastructure, the development of multimedia application, image transmission technology, electronic commerce system, as well as solution businesses.
KDD's merger with DDI CORPORATION and IDO CORPORATION is due for October 1, this year. The new company after merger will vigorously pursue, making "Mobile & IP" as a central axis, and combining know-how that three companies have so far accumulated, activities including the improvement and expansion of the domestically and internationally consistent global backbone network, the provision of a nation-wide integrated-type service in mobile communications and the business categories expected to grow in the future, namely the commercialization of the next generation mobile communications (IMT-2000) and the provision of data centers.

[Summary of consolidated financial results]

(Unit: hundreds of millions of yen)

Fiscal Year Ended March 2000 Fiscal Year Ended March 1999 Increase/Decrease (%) Operating revenues 5,973 4,057 47.2 Operating expenses 5,884 3,996 47.2 Operating income 88 60 47.4 Ordinary income 231 38 503.3 Net income and loss 73 19 -

Note: The figures are rounded down to the nearest hundred million yen (the same applies to the tables below)

[Summary of non-consolidated financial results]

(Unit: hundreds of millions of yen)

Fiscal Year Ended March 2000 Fiscal Year Ended March 1999 Increase/Decrease (%) Operating revenues 3,953 3,131 26.3 Telephone revenue 2,640 2,366 11.6 Other revenue 1,313 765 71.5 Operating expenses 3,861 3,078 25.5 Operating income 92 53 73.2 Ordinary income 252 94 168.1 Net income 39 72 46.0

[Attachments]: Financial Statement Highlights Year Ended March 31, 2000