Financial Results for Q3 Fiscal Year Ending March 31, 2015 January 29, 2015 NEC Corporation (http://www.nec.com/en/global/ir) Index I. Financial Results for Q3, FY15/3 II. Financial Forecasts for FY15/3 l Financial Results for Q3, FY15/3 (Appendix) l Financial Forecasts for FY15/3 (Appendix) l Reference (Financial data) Page 2 © NEC Corporation 2015 I. Financial Results for Q3, FY15/3 Q3 Results Summary of Financial Results for Q3 ▐ (3months/9months) 9 months cumulative profit improved significantly l 9 months cumulative sales of existing business increased by approx. 2% (Billions of Yen) 9 months <April to December> FY14/3 FY15/3 FY14/3 FY15/3 Actual Actual Actual Actual YoY YoY Net Sales 700.4 677.2 - 3.3% 2,083.5 2,002.0 - 3.9% Operating Income 23.4 14.1 - 9.2 23.7 35.6 + 11.9 % to Net Sales Ordinary Income % to Net Sales Net Income/Loss % to Net Sales Free Cash Flow Note: Page 4 Q3 <October to December> 3.3% 20.0 2.9% 11.1 1.6% 0.8 2.1% 19.7 1.1% - 0.3 2.9% 10.3 0.3% - 0.8 1.5% -62.4 5.5 -15.1 -0.7% - 63.1 -94.1 1.8% 36.4 1.8% 22.8 + 37.8 1.1% -75.7 Average exchange rates for Q3 (October to December) of FY15/3: 1$= ¥110.42, 1€= ¥140.08 Average exchange rates for 9 months (April to December) of FY15/3: 1$= ¥104.97, 1€= ¥139.65 (Assumed exchange rates for 2H of FY15/3 as of October 30, 2014: 1$= ¥105, 1€= ¥135) Average exchange rates for Q3 (October to December) of FY14/3: 1$= ¥99.04, 1€= ¥133.58 Average exchange rates for 9 months (April to December) of FY14/3: 1$= ¥98.42, 1€= ¥130.15 © NEC Corporation 2015 + 30.9 + 18.4 Q3 Results Summary for Q3 Results by Segment (3months/9months) (Billions of Yen) Net Sales Public Operating Income % to Net Sales Net Sales Enterprise Operating Income/Loss % to Net Sales Net Sales Telecom Carrier Operating Income % to Net Sales Net Sales System Platform Operating Income % to Net Sales Net Sales Others Operating Income/Loss % to Net Sales Adjustment Total 10.7% 60.7 -0.2 -0.3% 172.7 12.4 7.2% 185.7 8.0 4.3% 117.3 0.8 0.7% 8.7% 61.2 0.5 6.9% + 0.8% + 0.7 0.9% 170.8 8.8 - 1.1% - 3.6 506.7 31.8 6.3% - 8.2% - 3.6 2.6% 93.3 -3.1 190.8 0.5 0.3% 5.1% 170.5 4.4 9 months <April to December> FY14/3 FY15/3 YoY Actual Actual 467.3 525.9 + 12.5% 32.1 37.7 + 5.6 536.4 9.8 1.8% - 20.5% - 4.0 -3.4% 382.2 -11.0 -2.9% 7.2% 187.9 2.8 - 1.5% + 2.3 1.5% 503.3 25.4 - 0.7% - 6.4 5.0% 515.9 13.1 - 3.8% + 3.3 2.5% 269.1 -5.9 - 29.6% + 5.1 -2.2% Operating Loss -15.2 -12.3 + 3.0 -39.5 -37.5 + 2.0 Net Sales 700.4 23.4 677.2 14.1 - 3.3% - 9.2 2,083.5 23.7 2,002.0 35.6 - 3.9% + 11.9 Operating Income % to Net Sales Page 5 Q3 <October to December> FY14/3 FY15/3 YoY Actual Actual 164.0 181.4 + 10.6% 17.6 15.8 - 1.8 3.3% 2.1% © NEC Corporation 2015 1.1% 1.8% Q3 Results Public Business (3months) Billions of Yen (YoY) (Billions of Yen) YoY 181.4 Sales ▐ Sales (+10.6%) r Increased due to steady sales from the public area 164.0 149.2 ▐ Operating Income +10.6% Operating Income +9.9% Ratio 5.9% 10.7% 8.7% 17.6 15.8 8.9 FY13/3 FY14/3 FY15/3 <Oct-Dec> <Oct-Dec> <Oct-Dec> 15.8 (-1.8) s Decreased compared to the last fiscal year when there were high profit projects Operating Income Page 6 181.4 © NEC Corporation 2015 Q3 Results Enterprise Business (3months) Billions of Yen (YoY) (Billions of Yen) YoY Sales 61.2 60.7 59.0 Operating Income Ratio 0.3% -0.3% 0.9% Page 7 -0.2 0.5 FY13/3 FY14/3 FY15/3 <Oct-Dec> <Oct-Dec> <Oct-Dec> (+0.8%) 0.5 (+0.7) r Improved from sales increase and higher cost efficiency Operating Income /Loss 0.2 61.2 r Increased for the retail and services industries ▐ Operating Income +0.8% +2.8% ▐ Sales © NEC Corporation 2015 Q3 Results Telecom Carrier Business (3months) Billions of Yen (YoY) (Billions of Yen) YoY Sales 172.7 166.3 170.8 +3.8% 5.1% 17.9 Page 8 8.8 (-3.6) s Decreased from an increase in SDN related investments, etc. 7.2% TOMS : Telecom Operations and Management Solutions SDN 12.4 (-1.1%) s Almost flat in Japan and international sales ▐ Operating Income 10.8% Operating Income 170.8 r Remained solid for TOMS and submarine cable systems -1.1% Operating Income Ratio ▐ Sales 8.8 FY13/3 FY14/3 FY15/3 <Oct-Dec> <Oct-Dec> <Oct-Dec> © NEC Corporation 2015 : Software-Defined Networking Q3 Results System Platform Business (3months) Billions of Yen (YoY) (Billions of Yen) YoY Sales ▐ Sales (-8.2%) s Decreased in business PCs and other hardware 185.7 170.5 167.3 ▐ Operating Income +11.0% Operating Income Ratio -8.2% 4.3% 2.6% 2.5% 8.0 4.2 4.4 FY13/3 FY14/3 FY15/3 <Oct-Dec> <Oct-Dec> <Oct-Dec> 4.4 (-3.6) s Decreased from sales decline and yen depreciation Operating Income Page 9 170.5 © NEC Corporation 2015 Q3 Results Others (3months) Billions of Yen (YoY) (Billions of Yen) YoY Sales 180.1 Operating Income /Loss 117.3 0.8 Page 10 93.3 -3.4% 9.7 (-20.5%) -3.1 (-4.0) s Decreased due to deconsolidation of business, etc. -20.5% 0.7% 93.3 s Decreased due to deconsolidation of NEC BIGLOBE, Ltd., etc. ▐ Operating Loss Operating Income -34.9% Ratio 5.4% ▐ Sales -3.1 FY13/3 FY14/3 FY15/3 <Oct-Dec> <Oct-Dec> <Oct-Dec> © NEC Corporation 2015 Q3 Results Net Income Change ( October to December / Year on Year) (3months) (Billions of Yen) FY14/3 Q3 <Oct-Dec> 11.1 Others Telecom Carrier System Platform Public Enterprise Adjustment Decrease of operating income -9.2 -4.0 -3.6 -3.6 -1.8 +0.7 +3.0 Gain on sales of subsidiaries and affiliates' stocks Income taxes Others -0.4 Improved nonoperating income/loss +8.9 Income from foreign exchange gains +3.9 Equity in earnings of affiliates +0.7 Page 11 © NEC Corporation 2015 FY15/3 Q3 <Oct-Dec> 10.3 -6.2 +5.3 Q3 Results Notable Actions and Outcomes-1/2 (3months) ▐ SDN l Applied SDN to develop the network for the new town building of Nishihara Town in Okinawa Prefecture, Japan l Began commercial deployment of vMVNO solutions for a MVNO in Japan l Cooperating with KT Corp., a major telecommunication service provider in South Korea ▐ BIG DATA l Cooperating with Texas State University in a social infrastructure project including water management ▐ Safety l Delivered face recognition solutions to Lemon Tree Hotels in India l Delivered ID verification system to Tapirs Corp. using face recognition technologies vMVNO： Virtualized MVNO MVNO ： Mobile Virtual Network Operator Page 12 © NEC Corporation 2015 Notable Actions and Outcomes- 2/2 Q3 Results (3months) ▐ Expanding Global Business l Won a contract as a system supplier for the world’s first South Atlantic Cable System the l Signed MOU with the Singapore Economic Development Board to collaborate on cyber security, smart energy, health care and IoT l Won TOMS contract from Optus, an integrated telecommunications service provider in Australia l Won an end-user computing contract from the Northern Territory Government of Australia l Set up ICT rooms at schools and community centers in Colombia IoT : Internet of Things Page 13 © NEC Corporation 2015 Ⅱ. Financial Forecasts for FY15/3 Full Year Forecasts Summary of Financial Forecasts for FY15/3 ▐ Attain 120 billion yen in operating income (Sales increase by approx. 4% with existing core businesses) (Billions of Yen) Full Year Q4 <January to March> FY14/3 FY15/3 Actual Forecasts YoY FY14/3 FY15/3 Actual Forecasts YoY Difference from October 30 Net Sales 959.6 998.0 + 4.0% 3,043.1 3,000.0 - 1.4% 0.0 Operating Income 82.5 84.4 + 1.9 106.2 120.0 + 13.8 0.0 3.5% 4.0% 69.2 90.0 + 20.8 0.0 2.3% 3.0% 33.7 35.0 + 1.3 0.0 1.1% 1.2% % to Net Sales Ordinary Income % to Net Sales Net Income % to Net Sales 8.6% 63.7 6.6% 48.8 5.1% 8.5% 53.6 - 10.0 5.4% 12.2 - 36.6 1.2% Note: Assumed exchange rates for Q4, FY15/3 1$=¥115, 1€=¥140 * Forecasts as of January 29, 2015 Page 15 © NEC Corporation 2015 Full Year Forecasts Financial Forecasts for FY15/3 by Segment (Billions of Yen) Net Sales Public Operating Income % to Net Sales Net Sales Enterprise Operating Income % to Net Sales Net Sales Telecom Carrier Operating Income % to Net Sales Net Sales System Platform Operating Income % to Net Sales Net Sales Others Operating Income/Loss % to Net Sales Adjustment Operating Loss Net Sales Total Operating Income % to Net Sales Q4 <January to March> FY14/3 FY15/3 YoY Actual Forecasts 271.0 274.1 + 1.1% 26.5 35.3 + 8.8 9.8% 81.5 6.0 7.4% 219.0 28.5 13.0% 244.3 20.9 8.6% 143.7 9.6 6.7% 12.9% 87.1 6.2 7.9% + 6.9% + 0.2 7.1% 266.7 40.6 + 21.8% + 12.1 725.8 60.3 8.3% + 6.1% + 1.0 8.5% 110.9 6.9 272.3 6.5 2.4% 15.2% 259.1 21.9 FY14/3 Actual 738.4 58.6 780.8 30.7 3.9% - 22.8% - 2.7 6.2% 525.9 -1.4 -0.3% Full Year FY15/3 Forecasts 800.0 73.0 YoY Difference from October 30 + 8.3% + 14.4 0.0 0.0 + 1.0% + 2.5 0.0 0.0 + 6.1% + 5.7 0.0 0.0 - 0.7% + 4.3 0.0 0.0 - 27.7% + 2.4 0.0 0.0 9.1% 275.0 9.0 3.3% 770.0 66.0 8.6% 775.0 35.0 4.5% 380.0 1.0 0.3% -9.1 -26.5 - 17.5 -48.6 -64.0 - 15.4 0.0 959.6 82.5 998.0 84.4 + 4.0% + 1.9 3,043.1 106.2 3,000.0 120.0 - 1.4% + 13.8 0.0 0.0 8.6% 8.5% 3.5% 4.0% * Forecasts as of January 29, 2015 Page 16 © NEC Corporation 2015 Full Year Forecasts Public Business Billions of Yen (YoY) (Billions of Yen) YoY Sales 680.7 +8.3% 9.1% Operating Income FY13/3 (+8.3%) r Increase due to steady sales mainly from government and public areas ▐ Operating Income 73.0 (+14.4) r Improve due to sales increase, cost reductions and fewer loss-making projects 7.9% 7.2% 49.0 800.0 800.0 738.4 Operating Income +8.5% Ratio ▐ Sales 73.0 58.6 FY14/3 FY15/3 Forecast(*) * Forecasts as of January 29, 2015 Page 17 © NEC Corporation 2015 Full Year Forecasts Enterprise Business Billions of Yen (YoY) (Billions of Yen) YoY Sales 275.0 272.3 251.6 Operating Income Ratio 2.2% Operating Income 5.5 FY13/3 275.0 3.3% (+1.0%) r Increase due to steady sales from the retail and services industries ▐ Operating Income +1.0% +8.2% ▐ Sales 9.0 (+2.5) r Improve due to sales increase and higher cost efficiency 2.4% 9.0 6.5 FY14/3 FY15/3 Forecast(*) * Forecasts as of January 29, 2015 Page 18 © NEC Corporation 2015 Full Year Forecasts Telecom Carrier Business Billions of Yen (YoY) (Billions of Yen) YoY Sales +6.1% Operating Income +2.3% Ratio 10.1% 8.3% 8.6% FY13/3 (+6.1%) r Japan: Remain flat ▐ Operating Income 66.0 (+5.7) r Improve due to sales increase from international businesses Operating Income 71.6 770.0 r International: Increase in TOMS, mobile backhaul and submarine cable systems 770.0 725.8 709.3 ▐ Sales 60.3 FY14/3 66.0 FY15/3 Forecast(*) * Forecasts as of January 29, 2015 Page 19 © NEC Corporation 2015 Full Year Forecasts System Platform Business Billions of Yen (YoY) (Billions of Yen) YoY Sales 744.4 780.8 775.0 +4.9% -0.7% 3.9% Operating Income 32.7 FY13/3 775.0 30.7 FY14/3 4.5% (-0.7%) s Decrease due to decline in business PCs while servers and software increase ▐ Operating Income Operating Income Ratio 4.4% ▐ Sales 35.0 (+4.3) r Improve from integration with NEC Fielding, Ltd. and sales increase of servers and software 35.0 FY15/3 Forecast(*) * Forecasts as of January 29, 2015 Page 20 © NEC Corporation 2015 Full Year Forecasts Others Billions of Yen (YoY) (Billions of Yen) YoY Sales ▐ Sales 380.0 (-27.7%) s Decrease due to deconsolidation following sale of stock of NEC BIGLOBE, Ltd., etc. 685.7 -23.3% ▐ Operating Income Operating Income 525.9 Ratio -27.7% 2.5% Operating Income/ Loss -0.3% 380.0 0.3% 1.0 (+2.4) r Increase due to improvement in mobile phones and energy business, despite impact from deconsolidation of some businesses 16.9 -1.4 FY13/3 FY14/3 1.0 FY15/3 Forecast(*) * Forecasts as of January 29, 2015 Page 21 © NEC Corporation 2015 Full Year Forecasts Net Income Change (Year on Year) (Billions of Yen) Public Telecom Carrier System Platform Enterprise Others Adjustment +14.4 +5.7 +4.3 +2.5 +2.4 -15.4 Decrease in provision for contingent loss Improved non-operating income/loss +7.0 Improved operating income +13.8 Decrease in gain on sales of subsidiaries and affiliates’ stocks FY14/3 FY15/3 Forecast(*) 33.7 35.0 Others -19.6 * Forecasts as of January 29, 2015 Page 22 © NEC Corporation 2015 Summary NEC aims to achieve its full-year forecasts for the third consecutive year and assure stable dividends. We will work to close FY2015/3 successfully and achieve the Mid-term Management Plan 2015 * Forecasts as of January 29, 2015 Page 23 © NEC Corporation 2015 © NEC Corporation 2015 Page2011 25 © NEC Corporation © NEC Corporation 2015 Financial Results for Q3, FY15/3 (Appendix) Q3 Results Results for Q3 by Segment ( three-year transition) (3months) (Billions of Yen) Operating Income/Loss Net Sales 24.4 722.0 Public Enterprise Telecom Carrier System Platform Others Page 27 149.2 59.0 166.3 700.4 164.0 60.7 172.7 677.2 Enterprise 8.9 0.2 181.4 Telecom Carrier 17.9 Public 61.2 170.8 System Platform 4.2 Others 9.7 23.4 17.6 15.8 12.4 167.3 185.7 180.1 117.3 93.3 FY13/3 FY14/3 FY15/3 <Oct-Dec> <Oct-Dec> <Oct-Dec> 0.5 8.8 8.0 -0.2 0.8 4.4 -3.1 -15.2 -12.3 -16.4 Adjustment 170.5 14.1 Enterprise FY13/3 FY14/3 FY15/3 <Oct-Dec> <Oct-Dec> <Oct-Dec> © NEC Corporation 2015 Enterprise Others Q3 Results Financial Results for Q3 by Segment (3months) (Billions of Yen) Operating Income/Loss Net Sales Others Public 14% 27% Enterprise Sales for Q3 FY15/3 9% Operating Income for Q3, FY15/3 Public 14.1 15.8 Telecom Carrier 677.2 8.8 System Platform 25% Enterprise 0.5 Telecom Carrier 25% Page 28 © NEC Corporation 2015 System Platform 4.4 Others -3.1 Q3 Results Sales Change (Year on Year) (3months) (Billions of Yen) Almost flat in Japan and overall international sales: TOMS and submarine cable systems show solid sales Steady sales for the public area FY14/3 Q3 <Oct-Dec> Telecom Carrier -1.9 Public +17.4 (-1.1%) (+10.6%) Decrease in business PCs and other hardware System Platform -15.2 (-8.2%) 700.4 FY15/3 Q3 <Oct-Dec> Enterprise +0.5 (+0.8%) Increase in the retail and services industries Others -24.0 Deconsolidation of NEC BIGLOBE, Ltd. Page 29 677.2 © NEC Corporation 2015 Q3 Results Operating Income Change (Year on Year) FY14/3 Q3 <Oct-Dec> 23.4 (Billions of Yen) Decreased from FY14/3 when there were high profit projects Public -1.8 Decreased from an increase in SDN related investments, etc. Telecom Carrier -3.6 Enterprise +0.7 Decreased due to sales decrease and yen depreciation System Platform -3.6 Improved due to higher cost efficiency Adjustment +3.0 Improved due to sales increase and higher cost efficiency Others -4.0 Business deconsolidation Page 30 (3months) © NEC Corporation 2015 FY15/3 Q3 <Oct-Dec> 14.1 Results for 9 Months by Segment ( three-year transition ) Q3 Results (9months) (Billions of Yen) Operating Income/Loss Net Sales 71.8 2,169.8 Public Enterprise Telecom Carrier System Platform Others Page 31 426.2 177.9 509.0 534.5 522.3 23.3 2.1 Public 2,083.5 467.3 190.8 506.7 536.4 2,002.0 Enterprise 525.9 Telecom Carrier 187.9 503.3 515.9 48.8 System Platform 15.9 Others 27.0 -45.3 Adjustment 382.2 269.1 FY13/3 FY14/3 FY15/3 <Apr-Dec> <Apr-Dec> <Apr-Dec> 23.7 35.6 32.1 37.7 0.5 2.8 31.8 25.4 9.8 -11.0 13.1 -5.9 -39.5 -37.5 FY13/3 FY14/3 FY15/3 <Apr-Dec> <Apr-Dec> <Apr-Dec> © NEC Corporation 2015 Others Q3 Results Financial Results for 9 Months by Segment (9months) (Billions of Yen) Operating Income/Loss Net Sales Operating Income for 9 months, FY15/3 Others 14% Public 26% Enterprise Sales for 9 months, FY15/3 System Platform 9% Public 37.7 35.6 Telecom Carrier 25.4 System Platform 2,002.0 13.1 26％ Enterprise 2.8 Telecom Carrier 25% Page 32 © NEC Corporation 2015 Others -5.9 Q3 Results Sales Change ( April to December / Year on Year) (9months) (Billions of Yen) Increase in international sales with TOMS and mobile backhaul, decrease in Japan Decrease in manufacturing industry FY14/3 9 months <Apr-Dec> Telecom Decrease in hardware Enterprise Carrier -2.9 (-1.5%) -3.5 System Platform Deconsolidation of (-0.7%) -20.6 (-3.8%) NEC BIGLOBE, Ltd. Others -113.1 2,083.5 Public +58.6(+12.5%) FY15/3 9 months <Apr-Dec> Steady sales from government and public areas Page 33 and NEC Mobiling. Ltd. © NEC Corporation 2015 2,002.0 Q3 Results Operating Income Change ( April to December / Year on Year) (9months) (Billions of Yen) Increase from higher profits in mobile phone business, while impact from deconsolidation Cost efficiency FY15/3 9 months <Apr-Dec> Increase in SDN Investments, etc. Cost efficiency Telecom Enterprise Carrier +2.3 -6.4 FY14/3 9 months Adjustment Others +2.0 +5.1 <Apr-Dec> 23.7 System Platform +3.3 Public +5.6 Sales increase Page 34 © NEC Corporation 2015 Cost efficiency 35.6 Net Income/Loss Change ( April to December / Year on Year) Business structure improvement Expenses Income taxes Minority interests in income/loss Gain on sales of subsidiaries and affiliates’ stocks Foreign exchange gains +4.6 Equity in earnings of affiliates +2.7 Subsidy income +1.8 (9months) (Billions of Yen) +11.4 +9.4 +7.5 -22.5 Improvement in non-operating income +19.0 Others +7.0 FY15/3 9 months <Apr-Dec> 22.8 FY14/3 9 months <Apr-Dec> -15.1 Increase in Operating Income +11.9 Page 35 Q3 Results Public Others System Platform Enterprise Adjustment Telecom Carrier © NEC Corporation 2015 +5.6 +5.1 +3.3 +2.3 +2.0 -6.4 Q3 Results International Sales (3months/9months) (Billions of Yen) YoY Greater China, APAC EMEA 8.6% 4.9% 167.0 Q3 91.9 Q3 1H 33.4 58.5 The Americas 7.4% 54.5 Japan 79.1% 171.8 56.2 +3.1% 97.9 34.0 +1.7% 1H 112.4 115.6 152.5 149.4 Q3 50.3 52.4 1H 102.2 96.9 +4.3% 63.9 FY14/3 FY15/3 9 months 9 months FY14/3 FY15/3 9 months 9 months FY14/3 FY15/3 9 months 9 months Q3 <October to December> FY14/3 FY15/3 YoY Actual Actual International sales ％ to Net Sales 138.2 142.6 19.7% 21.1% + 3.2% 9 months <April to December> FY14/3 FY15/3 YoY Actual Actual 411.3 419.1 19.7% 20.9% + 1.9% * Sales are classified by country or region based on customer locations. The rates of circle graphs are calculated by 9 months. Page 36 © NEC Corporation 2015 Q3 Results Financial Position Data (Billions of Yen) End of March 2014 Difference from March 2014 End of December 2013 2,505.3 2,534.9 + 29.5 2,541.9 Net Assets 767.7 783.0 + 15.3 817.1 Interest-bearing debt 575.2 636.4 + 61.3 686.2 Shareholders' Equity 695.9 722.0 + 26.0 712.3 Equity ratio(%) 27.8% 28.5% + 0.7pt 28.0% D/E ratio (times) 0.83 0.88 - 0.05pt 0.96 Net D/E ratio (times) 0.53 0.63 - 0.10pt 0.72 206.6 180.5 - 26.1 170.2 Total Assets Balance of cash and cash equivalents Page 37 End of December 2014 © NEC Corporation 2015 Q3 Results <Ref.> Balance Sheet (At the end of December, 2014) (Billions of Yen) Total Assets 2,534.9 <Compared to end of March 2014> (+29.5) Compared to end of March 2014 Current Assets 1,511.4 Liabilities 1,751.9 +8.5 +14.2 Increase in inventories while collection of accounts receivable-trade Noncurrent Assets 1,023.5 +21.1 Net Assets 783.0 +15.3 Increase in stocks of subsidiaries and affiliates Page 38 Increase in net profit © NEC Corporation 2015 Free Cash Flow (Billions of Yen) Cash flow from operating activities Free cash flow 150 94.1 -M&A -Fund for Renesas Electronics Corp. +Gain from sale of stocks 50 42.0 55.2 -Acquisition of trust beneficiary rights +Gain from sale of stocks 0 -3.1 -M&A -33.4 -37.3 -50 -89.7 -92.7 FY13/3 <Apr-Dec> -94.1 FY14/3 <Apr-Dec> -38.9 -42.3 -56.8 -150 -Business structure improvement +Gain from sale of LCD panel patent +Remeasurements of defined benefits plans 143.7 -Business structure improvement +Gain from sale of LCD panel patent +Remeasurements of defined benefits plans 100 -100 Cash flow from investing activities -75.7 -M&A -Fund for Renesas Electronics Corp. +Gain from sale of stocks FY15/3 <Apr-Dec> -101.7 FY13/3 -Acquisition of trust beneficiary rights -Acquisition of NEC Fielding, Ltd. +Sale of NEC BIGLOBE, Ltd. +Gain from sale of stocks FY14/3 FY15/3 (Forecasts) * Forecasts as of January 29, 2015 Page 39 © NEC Corporation 2015 Financial Forecasts for FY15/3 (Appendix) Financial Forecasts for FY15/3 by Segment (three-year transition) Full Year Forecasts (Billions of Yen) Net Sales 3,071.6 Public 680.7 Enterprise 251.6 Telecom Carrier System Platform Others 709.3 744.4 Operating Income/Loss 120.0 114.6 3,043.1 738.4 272.3 725.8 780.8 3,000.0 800.0 106.2 Public 49.0 Enterprise 5.5 Telecom Carrier 275.0 71.6 73.0 58.6 6.5 60.3 770.0 775.0 685.7 525.9 380.0 FY13/3 FY14/3 FY15/3 Forecasts(*) System Platform 32.7 Others 16.9 Adjustment - 61.0 30.7 - 1.4 - 48.6 FY13/3 FY14/3 9.0 66.0 35.0 1.0 - 64.0 FY15/3 Forecasts(*) * Forecasts as of January 29, 2015 Page 41 © NEC Corporation 2015 Full Year Forecasts Financial Forecasts for FY15/3 by Segment (Billions of Yen) Net Sales Operating Income Others Public 12% 27% Telecom Carrier Public 73.0 66.0 Operating Income Forecast for FY15/3 120.0 Enterprise 9% Sales Forecast for FY15/3 System Platform 35.0 3,000.0 Enterprise System Platform 9.0 26% Others 1.0 Telecom Carrier 26% * Forecasts as of January 29, 2015 Page 42 © NEC Corporation 2015 Full Year Forecasts Sales Change (Year on Year) (Billions of Yen) Telecom Decrease from a decline in business PCs, Carrier despite an increase in servers and software +44.2 System Platform -5.8 （-0.7%） (+6.1%) Japan: Remain flat International: Increase mainly in TOMS, mobile backhaul and submarine cable system Increase in the retail and services industries Decrease in mobile phone shipments Enterprise +2.7 (+1.0%) Deconsolidation of NEC BIGLOBE, Ltd. and NEC Mobiling, Ltd. Others -145.9 FY14/3 3,043.1 Public +61.6 (+8.3%) FY15/3 Forecast(*) 3,000.0 Steady sales from government and public areas * Forecasts as of January 29, 2015 Page 43 © NEC Corporation 2015 Full Year Forecasts Operating Income Change (Year on Year) (Billions of Yen) Deconsolidation of NEC BIGLOBE, Ltd. and NEC Mobiling, Ltd. Strategic investment increase Improve from mobile phone business and energy business Improve from integration with NEC Fielding, Ltd. and sales increase in servers and software Improve from sales increase and higher cost efficiency Adjustment -15.4 System Platform +4.3 Enterprise +2.5 Others +2.4 FY15/3 Forecast(*) 120.0 Telecom Carrier +5.7 FY14/3 Improve due to sales increase mainly in international business 106.2 Public +14.4 Improve due to sales increase, cost reduction and fewer loss-making projects * Forecasts as of January 29, 2015 Page 44 © NEC Corporation 2015 Full Year Forecasts Capital Expenditure, Depreciation and R&D Expenses (Billions of Yen) FY13/3 FY14/3 FY15/3 Actual Actual Forecasts Capital Expenditure 45.6 Depreciation R&D expenses % to Net Sales YoY YoY 40.8 50.0 + 22.5% 51.2 45.2 50.0 + 10.7% 151.7 142.7 150.0 + 5.1% 4.9% * 4.7% 5.0% * Not including acquisition of trust beneficiary rights Capital Expenditure 45.6 50.0 Depreciation 51.2 45.2 40.8 R&D expenses 50.0 151.7 150.0 142.7 +5.1% +10.7% ＋22.5％ ％ to Net Sales 4.9% FY13/3 FY14/3 FY15/3 Forecast(*) FY13/3 FY14/3 FY15/3 Forecast(*) FY13/3 4.7% FY14/3 5.0% FY15/3 Forecast(*) * Forecasts as of January 29, 2015 Page 45 © NEC Corporation 2015 Full Year Forecasts <Ref.> Major differences between IFRS and J-GAAP As released on July 30, 2014 (Note) The following figures are calculated to estimate differences in the amounts for pension expenses and goodwill, the two major items which differ in IFRS and J-GAAP, for the FY15/3 financial outlook if IFRS is applied. These differences in the amounts are calculated based on assumptions as of the date on which they were made. Furthermore, the differences in the two accounting methods are not limited to these two major items. Notably, they are not audited by the accounting auditors and NEC does not undertake any obligation to update or revise the figures as the circumstances change. These estimated figures are disclosed voluntarily as references for investors only. NEC has NOT made a decision to adopt IFRS at the present, and continues to disclose materials required by the regulations in J-GAAP. (Billions of Yen) FY15/3 Full Year Amortization of Amortization unrecognized obligation of Goodwill for pension Operating Income 14.0 Non-Operating Income / Loss 10.4 Net Income 19.0 18.0 © NEC Corporation 2015 - 18.0 ＊ In calculating pension cost by IFRS, actuarial gains or losses in pension expenses are not amortized nor is goodwill amortized annually. Page 46 Total 37.0 * Forecasts as of July 30, 2014 Reference (Financial data) Net Sales, Operating Income/Loss (Billions of Yen) 8.6% 6.8% 4.8% 3.9% 3.0% Operating Income Ratio 3.4% YoY 3.3% -1.2% 2.1% -1.2% -3.4% 959.6 901.8 Net Sales 816.3 +6.4% 722.0 631.5 -2.5% 743.0 +5.4% 640.1 598.7 -9.0% +7.9% -3.0% +1.4% -5.6% Operating Income/ Loss 677.2 -2.3% -3.3% -6.5% 82.5 55.2 42.8 24.4 22.2 28.6 23.4 -21.8 -7.9 14.1 -7.1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 <Apr-Jun> <Jul-Sep> <Oct-Dec> <Jan-Mar> <Apr-Jun> <Jul-Sep> <Oct-Dec> <Jan-Mar> <Apr-Jun> <Jul-Sep> <Oct-Dec> FY13/3 Page 48 726.1 700.4 FY14/3 © NEC Corporation 2015 FY15/3 International Sales 20.5% 18.9% International Sales Ratio 16.7% 19.7% 20.8% 16.8% 21.1% 16.4% 15.4% 14.2% 157.8 152.3 151.1 138.2 136.2 International Sales (Billions of Yen) 20.9% 121.1 128.4 120.8 +11.8% +22.9% +3.2% +8.1% +11.2% -0.8% +14.1% -1.9% 97.4 125.3 142.6 +3.7% +24.0% -15.4% Q1 Q2 <Apr-Jun> <Jul-Sep> Q3 FY13/3 Page 49 Q4 <Oct-Dec> <Jan-Mar> Q1 Q2 Q3 Q4 Q1 Q2 Q3 <Apr-Jun> <Jul-Sep> <Oct-Dec> <Jan-Mar> <Apr-Jun> <Jul-Sep> <Oct-Dec> FY14/3 © NEC Corporation 2015 FY15/3 YoY Sales, Operating Income (Public) 10.1% 8.8% 8.0% 10.7% 10.2% 9.8% (Billions of Yen) 8.7% YoY 5.9% 0.3% 0.1% 271.0 254.5 Operating Income Ratio 1.1% +6.5% +3.7% 198.1 Sales 176.7 162.0 149.2 126.6 +12.3% +15.7% 8.9 20.3 17.6 14.2 0.1 +10.6% 26.5 +10.1% Operating 14.3 Income +12.1% +9.9% 25.8 +1.7% 15.8 1.6 0.4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 <Apr-Jun> <Jul-Sep> <Oct-Dec> <Jan-Mar> <Apr-Jun> <Jul-Sep> <Oct-Dec> <Jan-Mar> <Apr-Jun> <Jul-Sep> <Oct-Dec> FY13/3 Page 50 146.4 +9.1% +2.4% 114.9 181.4 164.0 FY14/3 © NEC Corporation 2015 FY15/3 Sales, Operating Income/Loss (Enterprise) 7.4% 6.7% 4.5% 4.4% 0.3% 0.9% - 3.3% - 4.1% 81.5 73.7 71.3 68.8 Sales YoY - 0.3% - 5.3% Operating Income Ratio (Billions of Yen) 5.6% +7.2% 59.0 +18.9% 60.7 +3.7% 58.7 72.3 +10.7% 61.2 +1.3% 54.4 50.0 +2.8% +17.4% +16.1% +0.8% -7.4% +12.1% Operating Income/ Loss 4.6 -2.7 0.2 -2.4 3.1 4.0 -1.8 -0.2 0.5 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 <Apr-Jun> <Jul-Sep> <Oct-Dec> <Jan-Mar> <Apr-Jun> <Jul-Sep> <Oct-Dec> <Jan-Mar> <Apr-Jun> <Jul-Sep> <Oct-Dec> FY13/3 Page 51 6.0 3.3 FY14/3 © NEC Corporation 2015 FY15/3 Sales, Operating Income (Telecom Carrier) (Billions of Yen) YoY 13.0% 11.3% 9.7% 7.7% 6.8% 10.8% 8.2% 7.2% 3.6% Operating Income Ratio 5.1% 2.9% 219.0 200.3 187.5 Sales 155.1 166.3 +3.3% +10.6% 154.0 172.7 +9.4% 181.5 +0.8% +3.8% 28.5 22.7 18.2 17.9 13.8 12.3 12.4 8.8 5.6 4.3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 <Apr-Jun> <Jul-Sep> <Oct-Dec> <Jan-Mar> <Apr-Jun> <Jul-Sep> <Oct-Dec> <Jan-Mar> <Apr-Jun> <Jul-Sep> <Oct-Dec> FY13/3 Page 52 -1.1% -2.0% -0.7% Operating Income 170.8 151.0 -4.0% +6.0% +11.7% 12.7 180.0 FY14/3 © NEC Corporation 2015 FY15/3 Sales, Operating Income/Loss (System Platform) (Billions of Yen) 8.6% 8.0% 6.6% 4.3% 3.5% 4.3% 2.5% - 4.2% Operating Income Ratio 209.9 204.1 163.1 167.3 +11.6% +10.8% Operating Income/ Loss +16.4% 193.1 185.7 166.9 157.7 -5.4% +11.0% 178.5 170.5 -7.5% -8.2% +5.9% -3.3% 20.9 16.8 13.5 8.0 8.4 4.2 -1.8 2.5 -6.6 6.2 4.4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 <Apr-Jun> <Jul-Sep> <Oct-Dec> <Jan-Mar> <Apr-Jun> <Jul-Sep> <Oct-Dec> <Jan-Mar> <Apr-Jun> <Jul-Sep> <Oct-Dec> FY13/3 Page 53 244.3 -2.7% +1.3% 2.6% 1.5% - 1.1% Sales YoY FY14/3 © NEC Corporation 2015 FY15/3 Sales, Operating Income/Loss (Others) (Billions of Yen) 10.8% 6.7% 5.4% Operating Income Ratio - 1.6% - 2.4% 2.3% 0.7% -3.4% - 6.2% - 6.1% - 6.9% 193.8 Sales 148.4 180.1 163.4 -5.7% 143.1 +10.4% -18.7% -34.2% 143.7 121.8 -3.5% -37.2% Operating Income/ Loss 117.3 -12.1% 95.8 93.3 -21.3% -20.5% 80.0 -34.9% -44.1% 21.0 9.7 -3.6 9.6 -10.1 -9.9 0.8 -2.0 -4.9 2.2 -3.1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 <Apr-Jun> <Jul-Sep> <Oct-Dec> <Jan-Mar> <Apr-Jun> <Jul-Sep> <Oct-Dec> <Jan-Mar> <Apr-Jun> <Jul-Sep> <Oct-Dec> FY13/3 Page 54 YoY FY14/3 © NEC Corporation 2015 FY15/3 Exchange Rate (Yen) 150 Euro/Yen Exchange Rate (Actual) Assumed Exchange Rate 145 140 135 130 Average Exchange Rate ¥139.65 125 125 120 Dollar/Yen Exchange Rate (Actual) 115 Assumed Exchange Rate 110 105 100 Average Exchange Rate ¥104.97 95 4/1 Page 55 4/30 5/30 6/30 7/31 8/29 © NEC Corporation 2015 9/30 10/31 11/28 12/31 Stock Price (Yen) 18,000 December 9: R&D Briefing July 30: Q1 Earnings release 17,500 420 October 30: Q2 Earnings release 400 17,000 380 16,500 July 2: Introduction of space business 360 16,000 April 28: Full year earnings release 15,500 340 15,000 320 14,500 July 23: Ordinary general meeting of shareholders 300 NEC 14,000 the Nikkei Stock 13,500 280 4/1 Page 56 4/30 5/30 6/30 7/31 8/29 © NEC Corporation 2015 9/30 10/31 11/28 12/30 CAUTIONARY STATEMENTS: This material contains forward-looking statements pertaining to strategies, financial targets, technology, products and services, and business performance of NEC Corporation and its consolidated subsidiaries (collectively "NEC"). Written forward-looking statements may appear in other documents that NEC files with stock exchanges or regulatory authorities, such as the Director of the Kanto Finance Bureau, and in reports to shareholders and other communications. NEC is relying on certain safe-harbors for forward-looking statements in making these disclosures. Some of the forward-looking statements can be identified by the use of forward-looking words such as "believes," "expects," "may," "will," "should," "seeks," "intends," "plans," "estimates," "targets," "aims," or "anticipates," or the negative of those words, or other comparable words or phrases. You can also identify forward-looking statements by discussions of strategy, beliefs, plans, targets, or intentions. Forward-looking statements necessarily depend on currently available assumptions, data, or methods that may be incorrect or imprecise and NEC may not be able to realize the results expected by them. 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Among the factors that could cause actual results to differ materially from such statements include (i) global economic conditions and general economic conditions in NEC’s markets, (ii) fluctuating demand for, and competitive pricing pressure on, NEC’s products and services, (iii) NEC’s ability to continue to win acceptance of NEC’s products and services in highly competitive markets, (iv) NEC’s ability to expand into foreign markets, such as China, (v) regulatory change and uncertainty and potential legal liability relating to NEC’s business and operations, (vi) NEC’s ability to restructure, or otherwise adjust, its operations to reflect changing market conditions, (vii) movement of currency exchange rates, particularly the rate between the yen and the U.S. dollar, (viii) the impact of unfavorable conditions or developments, including share price declines, in the equity markets which may result in losses from devaluation of listed securities held by NEC, and (iv) impact of any regulatory action or legal proceeding against NEC. 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