News Release wrhb070802b

2. Transfer of Substituitional Portion of Employee Pension Fund

(1) Submission of Extraordinary Report

On April 17, 2007, the NTT Kosei-Nenkin-Kikin ("NTT Plan"), in which NTT and some domestic affiliates participate, filed a request with the Minister of Health, Labor and Welfare under the Defined-Benefit Corporate Pension Law to be relieved of the obligations related to past services to disburse NTT Plan benefits covering the substitutional portion. Approval was granted on July 1, 2007.

Though, under U.S. GAAP, on a consolidated basis, gain or loss on transfer of such portion of the NTT Plan will be recognized when the entire transfer of benefit obligations and related plan assets has been completed, pursuant to Article 24-5 Paragraph 4 of the Securities and Exchange Law and the provisions of Article 19, Paragraph 2, Item 19 of Cabinet Office Ordinance Concerning Corporate Disclosures, an extraordinary report on the transfer of the substitutional portion of the NTT Plan was submitted to the Kanto Local Finance Bureau on August 2, 2007. For more information, please see Consolidated Statements of Cash Flows and Non-Consolidated Comparative Statements of Cash Flows.

Based on preliminary calculations, assuming that payment of an amount equivalent to the plan assets to be transferred was made on March 31, 2007, the impact of the transfer on NTT's consolidated financial statements is projected to be a decrease in operating expenses of approximately 340.0 billion yen.

(2) Review of Earnings Forecasts

With respect to the impact this transfer will have on consolidated earnings, since the date of the transfer and the settlement amount are undetermined and changes in the depreciation methods used by NTT's major subsidiaries (which may result in an increase in operating expense) and other factors are expected to affect consolidated earnings in this fiscal year, NTT plans to modify its full-year forecasted results at the semi-annual period ending September 30, 2007.