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KDDI, TEPCO Agree to Integrate FTTH Business <Appendix>

Overview: FTTH Business Integration

1. Schedule
Meeting of board of directors to accept the Partition Contract
October 11, 2006 (TEPCO)
October 12, 2006 (KDDI)
Signing of the Partition Contract
October 12, 2006
Shareholders' Meeting on Partition Contract
As both companies acted according to the relevant laws (Corporate Law 784 Article 3 for TEPCO and Corporate Law 796 Article 3 for KDDI) in carrying out the partition, which is classified as a simplified partition and absorption, a shareholders' meeting on partition was not held.
Partition Date
January 1, 2007 (Scheduled)

2. Method
KDDI is the inheriting company and TEPCO is the partition company. In accordance with the partition, KDDI will allocate 144,569 common shares to TEPCO. KDDI will announce the number of treasury shares and new shares it will issue to TEPCO at a later date.

3. Structure
In order to ensure that the integration process is carried out smoothly and efficiently, KDDI will appoint Masahiro Yamamoto (Executive Vice President) as the Chairman, and TEPCO will appoint Katsutoshi Chikudate (Executive Vice President) as the vice chairman of the Integration Preparation Executive Committee.

4. Overview: KDDI and TEPCO
(As of March 31, 2006)
Company name
KDDI Corporation
Tokyo Electric Power Company
Business Area
Electric power, Telecommunications, Others
Date of Establishment
June 1, 1984
May 1, 1951
Head Office
2-3-2 Nishi Shinjuku,Shinjuku-ku, Tokyo
1-1-3 UchisaiwaichoChiyoda-ku, Tokyo
President and ChairmanTadashi Onodera
PresidentTsunehisa Katsumata
141,851 million yen
676, 434 million yen
Shares in Issue
Net Assets
1,272,524 million yen
2,555,012 million yen
Total Assets
2,451,456 million yen
13,031,464 million yen
End of Fiscal Year
March 31
March 31
No. of Employees
Major Shareholders and Equity Share
KYOCERA Corporation
Toyota Motor Corporation
The Master Trust Bank of Japan, Ltd. (Trust Account)
Japan Trustee Services Bank, Ltd. (Trust Account)
The Tokyo Electric Power Company, Incorporated
Japan Trustee Services Bank, Ltd. (Sintaku account)
The Dai-ichi Mutual Life Insurance Company
Nippon Life Insurance Company
The Master Trust Bank of Japan, Ltd. (Sintaku account)
Tokyo Metropolitan Government
Major Banks
Development Bank of Japan
Bank of Tokyo-Mitsubishi UFJ, Ltd.
Sumitomo Mitsui Banking Corporation
Mitsubishi UFJ Trust and Banking Corporation
Mizuho Corporate Bank, Ltd.
Sumitomo Mitsui Banking Corporation
Mizuho Corporate Bank, Ltd.
Bank of Tokyo-Mitsubishi UFJ, Ltd.
Current Business
The partition company will keep 212,971.4 shares of the inheriting company.
Human Resources:
The partition company will appoint 1 representative to the inheriting company to serve while concurrently performing his duties.
Business Partners:
The inheriting company will make use of the partition company's fiber optic to provide telecommunications services.

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