The following is a summary of the business performance for the interim period and forecast for the fiscal year ending in March 1997.

1. Business performance for the interim period

During the interim period under review, the Japanese economy continued to make a gradual recovery. Combined with the gradual economic expansion, primarily in the United States and East Asia, the demand for international telephone to and from the United States and China increased. Overall, international telephone traffic rose 10%.

KDD's operating revenues were up 1.0% to 166,500 million yen from the same period last year. Of this amount, 139,100 million yen, or roughly the same as the figure for the same period last year, came from telephone service. The rate reduction in November 1995 and the introduction of KDD Volume Saver in June 1996 curtailed any increase in telephone revenues.

Operating expenses rose 2.8% from the same period last year to 156,000 million yen. Consequently, income before taxes fell 18.3% to 14,400 million yen and net income for the term fell 13.6% to 8,300 million yen. KDD therefore experienced an increase in revenues and decrease in profits.

Note: The figures shown in this press release are those derived using the newly adopted accounting practice.

2. Forecast for the fiscal year as a whole

KDD expects to see the overall increase in international telephone traffic to drop to 9% for the fiscal year as a whole due to the slowdown in Asian economies.

KDD's performance forecasts for the fiscal year as a whole are 334,000 million yen in operating revenues, 277,000 million yen in telephone revenues, 24,000 million yen in income before taxes, and 12,000 million yen in net income. The forecasts show that revenues will be higher and profits will be lower than last fiscal year. The forecasts take into account the effects of the scheduled international telephone rate reduction. KDD filed today a request with the Ministry of Posts and Telecommunications for approval on the rate cut.

3. Future Business Policies

KDD plans to actively pursue overseas operations to prepare itself for changes in the business environment, including the increase in competition, as it sees deregulation become a global trend. At the same time, KDD plans to make its operations even more efficient, reduce telecommunication rates, and develop and improve services to enhance customer convenience.

[Summary of interim financial results for the fiscal year ending in March 1997]

(Unit: hundreds of millions of yen)

	This Term	Preceding term	Increase/Decrease(%)
Operating revenues	1,665	1,648	1.0
Telephone revenues	1,391	1,389	0.1
Other revenues	274	259	5.8
Operating expenses	1,560	1,518	2.8
Operating income	104	130	20.1
Income before taxes	144	177	18.3
Net income	83	96	13.6

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

[Forecast for the fiscal year ending in March 1997]

(Unit: hundreds of millions of yen)

Operating revenues	3,340	3,315	0.7
Telephone revenues	2,770	2,773	0.1
Income before taxes	240	312	23.2
Net income	120	138	13.4

(Reference)

	Operating revenues	Preceding term	Increase/Decrease(%)
Operating revenues	1,214	1,257	3.4
Telephone revenues	952	1,006	5.4
Other revenues	261	250	4.4
Operating expenses	1,109	1,126	1.5
Operating income	104	130	20.1
Income before taxes	144	177	18.3
Net income	83	96	13.6

[Forecast for the fiscal year ending in March 1997]

(Unit: hundreds of millions of yen)

	This Term	Preceding term	Increase/Decrease(%)
Operating revenues	2,440	2,483	1.7
Telephone revenues	1,890	1,960	3.6
Income before taxes	240	312	23.2
Net income	120	138	13.4

(Attachment 1) Summarized interim financial results for the fiscal year ending in March 1997

Fiscal 1996 Mid-Term Financial Report
(April 1, 1996 - September 30, 1996) 

1. Business Results

Operating revenues (Growth rate over 1995 mid-term)
  1996 mid-term     166,511 million yen(32.4%)
  1995 mid-term     125,736 million yen
  1995              248,333 million yen

Operating income (Growth rate over 1995 mid-term)
  1996 mid-term      10,425 million yen(20.1%)
  1995 mid-term      13,045 million yen
  1995               23,665 million yen

Ordinary income (Growth rate over 1995 mid-term)
  1996 mid-term      14,486 million yen(18.3%)
  1995 mid-term      17,742 million yen
  1995               31,248 million yen 

Net income (Growth rate over 1995 mid-term)
  1996 mid-term       8,300 million yen(13.6%)
  1995 mid-term       9,612 million yen
  1995               13,859 million yen

Earnings per share
  1996 mid-term      129.15 yen
  1995 mid-term      149.56 yen
  1995               215.63 yen

2. Dividend
                 Interim dividend      Annual dividend
                    per share             per share
  1996 mid-term      25.00 yen
  1995 mid-term      25.00 yen
  1995                                      50.00 yen

3. Financial Statement

Total assets
  1996 mid-term      571,009 million yen
  1995 mid-term      551,306 million yen
  1995               546,404 million yen

Stockholders' equity
  1996 mid-term      352,855 million yen
  1995 mid-term      343,657 million yen
  1995               346,296 million yen

Stockholders' equity ratio
  1996 mid-term       61.8%
  1995 mid-term       62.3%
  1995                63.4%

Stockholders' equity per share
  1996 mid-term      5,489.97 yen
  1995 mid-term      5,346.85 yen
  1995               5,387.92 yen

        
4. Forecast for Fiscal 1996
   (April 1, 1996 - March 31, 1997)

Operating revenues    334,000 million yen
Ordinary income        24,000 million yen
Net income             12,000 million yen
Annual dividend per share     50.00 yen
(Term-end dividend)           25.00 yen

Note: Annual earnings per share are projected at 86.70 yen.