1. Financial Statement

(1) Overview During the fiscal year under review, the continuing economic recovery in Japan, albeit a gradual one, and the consistent expansion of Asian, European, and American economies led to a stronger overall demand for KDD's services. Overall international telephone traffic was up 7.4%, with traffic to the United States and China showing increases from last fiscal year.

Operating revenues fell 2.8% from last fiscal year to 322,400 million yen. Of the operating revenues, telephone revenue decreased 4.6% to 264,600 million yen, due to rate reductions (in November 1995 and November 1996) and the introduction of "KDD Volume Saver" discount service (in June 1996).

Operating expenses rose 0.9% from last fiscal year to 310,600 million yen.

As a result, ordinary income decreased 33.4% to 20,800 million yen and net income dropped 26.7% to 10,100 million yen. As these figures illustrate, KDD experienced lower revenues and lower income during the term under review.

Note: The figures shown in this press release were derived using the new accounting practice.

(2) Forecast for the fiscal year ending March 1998

KDD anticipates some 9% increase in international telephone traffic in fiscal year ending March 1998. Financial forecasts for that fiscal year are 323,000 million yen in operating revenues, 261,000 million yen in telephone revenue, 17,000 million yen in ordinary income, and 9,000 million yen in net income. Compared with the fiscal year under review, KDD expects higher revenues but lower income.

2. Consolidated Statement

(1) Overview

During the fiscal year under review, the KDD Group as a whole experienced a steady growth in business. Operating revenues rose 8.3% from last fiscal year to 401,200 million yen and operating expenses increased 10.8% to 376,600 million yen.
Consequently, ordinary income fell 14.4% to 29,300 million yen and net income decreased 6.7% to 12,800 million yen. The result was therefore higher revenues and lower income.

(2) Forecast for the fiscal year ending March 1998

In the fiscal year ending March 1998, the KDD Group expects 380,000 million yen in operating revenues, 22,000 million yen in ordinary income, and 10,000 million yen in net income. Compared with the fiscal year under review, the KDD Group expects lower revenues and lower income.

3. Future Management Policies

KDD will continue its aggressive policy of overseas expansion to cope with the changes in the business environment, including increased competition, amidst the global trend of deregulation. At the same time, KDD plans to further streamline its operations and improve customer convenience by reducing communication charges and developing new services and improving existing ones.

4. Financial Results Based on the New Accounting Practice

[Financial results]

(Unit: hundreds of millions of yen)

	Fiscal Year Ended March 1997	Fiscal Year Ended March 1996	Increase/Decrease (%)
Operating revenues	3,224	3,315	2.8
Telephone revenue	2,646	2,773	4.6
Other revenues	577	542	6.6
Operating expenses	3,106	3,079	0.9
Operating income	118	236	50.1
Ordinary income	208	312	33.4
Net income	101	138	26.7

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

[Summary of consolidated financial results]

(Unit: hundreds of millions of yen)

	Fiscal Year Ended March 1997	Fiscal Year Ended March 1996	Increase/Decrease (%)
Operating revenues	4,012	3,704	8.3
Operating expenses	3,766	3,400	10.8
Operating income	246	303	18.9
Ordinary income	293	343	14.4
Net income	128	137	6.7

(Reference)

[Summary of financial results]

(Unit: hundreds of millions of yen)

	Fiscal Year Ended March 1997	Fiscal Year Ended March 1996	Increase/Decrease (%)
Operating revenues	2,363	2,483	4.8
Telephone revenue	1,812	1,960	7.5
Other revenues	550	522	5.4
Operating expenses	2,245	2,246	0.1
Operating income	118	236	50.1
Ordinary income	208	312	33.4
Net income	101	138	26.7

[Summary of consolidated financial results]

(Unit: hundreds of millions of yen)

	Fiscal Year Ended March 1997	Fiscal Year Ended March 1996	Increase/Decrease (%)
Operating revenues	3,151	2,871	9.7
Operating expenses	2,905	2,567	13.1
Operating income	246	303	18.9
Ordinary income	293	343	14.4
Net income	128	137	6.7