4. Consolidated Statements of Cash Flows [Note] Significant Matters Pertaining to the Preparation of Consolidated Financial Statements The consolidated financial statements of NTT have been prepared in conformity with accounting principles generally accepted in the United States of America (Accounting Principles Board Opinions, Statements of Financial Accounting Standards, etc). Application of New Accounting Standard Accounting for Conditional Asset Retirement Obligations Effective April 1, 2005, NTT Group adopted the Financial Accounting Standards Board ("FASB") Interpretation No. 47 ("FIN 47") "Accounting for Conditional Asset Retirement Obligations - an interpretation of FASB Statement No. 143." FIN 47 provides guidance relating to the identification of and financial reporting for legal obligations to perform an asset retirement activity. The Interpretation requires recognition of a liability for the fair value of a conditional asset retirement obligation when incurred if the liability's fair value can be reasonably estimated. The adoption of FIN 47 did not have an impact on the results of operations or the financial position of NTT Group. [Reference] Details of "Operating revenues" classified by the corresponding previous period's service categories Copyright (c) 2006 Nippon telegraph and telephone corporation