KDDI : Announcement Regarding the Company Split (Simplified Absorption-Type Company Split) with Consolidated Subsidiaries

January 13,2023

KDDI Corporation

At the Board of Directors meeting held on January 13, 2023, KDDI decided to transfer the au One Net business of "au HIKARI" Mansion in the Chubu area operated by KDDI to Chubu Telecommunications Co., Ltd. ("ctc"), our consolidated subsidiary through an absorption-type split ("Company Split"), and we plan to conclude an absorption-type split agreement with ctc on February 3, 2023.
A portion of the disclosure-related matters and content have been omitted because it is a simplified absorption-type company split where the business will be split off into wholly owned subsidiaries of KDDI.

1. Purpose of the Company Split

In 2003, we launched our FTTH business for customers living in condominiums; and for the past 20 years, we have expanded our services for detached houses, expanded our service areas, and increased the speed and added value of our services to meet customer needs. Many customers continue to use au HIKARI, and the number of FTTH service subscriptions for the entire KDDI Group is 5.09 million. In the Chubu region, we acquired ctc as the subsidiary in 2008, and have been expanding our business in the region. In December 2021, our FTTH service "Commufa-hikari" exceeded 1 million subscriptions.

By transferring this business to ctc, through this company split, we will focus the Group's FTTH business in the Chubu region on ctc, improve services to customers, and establish a structure that can immediately respond to the needs of customers with close ties to the region. This will enable the Group as a whole to continue to grow our FTTH business.

2. Summary of the Company Split

3. Approach to the Calculation of the Allotment of Shares in Relation to the Company Split

The calculation of the shares to be delivered to us by ctc in the Company Split was based on the ctc's equity value after considering performance trends such as revenues, expenses, profits, and cash flow - and other factors - in addition to the results of the calculation of the value of the business. The decision was made after discussion and negotiation with ctc. No significant increase or decrease in profit is expected in the business forecast, which is the premise for the calculation. Although the impact of the transaction on consolidated business performance is expected to be minimal at this time, we expect it to contribute to earnings growth over the medium to long term.

4. Outline of the Companies Involved in the Company Split

Splitting Company	Succeeding Company
(1) Name	KDDI Corporation	Chubu Telecommunications Co., Inc.
(2) Location of the Head Office	2-3-2 Nishi-Shinjuku, Shinjuku-ku, Tokyo	1-10-10 Nishiki Naka-ku, Nagoya-shi, Aichi
(3) Name and Title of the Representative	Makoto Takahashi, President, Representative Director	Yasuaki Miyakura, President, Representative Director
(4) Summary of Business	Telecommunications business	Telecommunications business
(5) Stated Capital	141,852 million yen	38,816 million yen
(6) Date of Establishment	June 1, 1984	June 3, 1986
(7) Number of Issued Shares	2,304,179,550 shares	2,062,992.6 shares
(8) Fiscal Year-End	March 31	March 31
(9) Major Shareholders and Shareholding Ratio	The Master Trust Bank of Japan, Ltd. (trust account) 15.53% KYOCERA Corporation 14.54% Toyota Motor Corporation 13.74% Custody Bank of Japan, Ltd. (trust account) 5.64%	KDDI Corporation 80.5% Chubu Electric Power Co., Inc. 19.5%

(10) Financial Condition and Business Results for the Previous Consolidated Fiscal Year and the Previous Business Year

KDDI Corporation (International Financial Reporting Standards) (consolidated)
Fiscal Term	Fiscal year ended March 2022
Equity attributable to owners of the parent (million yen)	4,982,586
Total assets (million yen)	11,084,379
Equity per share attributable to owners of the parent (yen)	2,249.27
Operating revenue (million yen)	5,446,708
Operating income (million yen)	1,060,592
Profit for the year before income tax (million yen)	1,064,497
Profit for the year attributable to owners of the parent (million yen)	672,486
Basic earnings per share (yen)	300.03

Chubu Telecommunications Co., Inc. (Japanese GAAP) (non-consolidated)
Fiscal Term	Fiscal year ended March 2022
Total assets (million yen)	190,307
Total equity (million yen)	164,451
Operating revenue (million yen)	99,424
Operating income (million yen)	24,861
Ordinary income (million yen)	25,314
Net income (million yen)	17,509

5. Outline of the Splitting Business Sectors

6. Status After the Company Split

After the Company Split, there will be no change in the name, head office location, position or name of the representative, business, stated capital, or fiscal term of KDDI, ctc, as a result of the Company Split.

7. Future Outlook

The impact of the Company Split on KDDI's consolidated operating results will be minor because it is a corporate split in which KDDI and its wholly owned subsidiaries form business companies.