NEWARK, NJ-August 11, 2000 - IDT Corporation (NASDAQ: IDTC) announced today that following discussions with the U.S. Securities and Exchange Commission (SEC), the Company has changed its accounting for several non-cash items. These changes were associated with the accounting for the Company's acquisition of InterExchange, Inc. in May 1998 and the timing of the gain recognized as a result of the conversion of its Net2Phone subsidiary's preferred stock into common stock in conjunction with Net2Phone's August, 1999 initial public offering. As a result, the Company has amended its financial results for the Fiscal Years ended July 31, 1998 and 1999, and for the first three quarters of the Fiscal Year ended July 31, 2000.

In acquiring InterExchange in May 1998, IDT originally valued its share of common stock issued to InterExchange shareholders at a discount to the market price due to lock-up provisions, and expensed $25.0 million of acquired in-process research and development. IDT has now eliminated the discount on the common stock, reduced the value of the in-process research and development to $17.9 million and allocated a portion of the purchase price to core technology and assembled workforce.

These changes had no effect on revenues or gross margin, but increased pretax income by $4.6 million for the year ended July 31, 1998, and reduced pretax income by $10.1 million and $7.6 million for the year ended July 31, 1999, and for the nine month period ended April 30, 2000, respectively. Going forward, the Company will record additional amortization expense.

In addition, the Company has revised the timing of the recognition of the gain realized as a result of the conversion of its Net2Phone subsidiary's preferred stock into common stock in conjunction with Net2Phone's initial public offering. A gain of $21.6 million was originally recorded in the fourth quarter of Fiscal 1999, and is now instead being recognized in the first quarter of Fiscal 2000. The recorded amount of the gain, $21.6 million, is unchanged. Therefore, the result of this change was a decrease of $21.6 million in pre-tax income in the fourth quarter of Fiscal 1999 and an increase in pre-tax income of the same amount in the first quarter of Fiscal 2000. This change had no impact on operating cash flows in either period.

None of the accounting changes discussed above have had or will have an impact on sales, gross profits or operating cash flows in past or future periods. For further detail, please refer to the Company's amended Form 10-K for the fiscal year ended July 31, 1999, and amended Forms 10-Q for each of the quarterly periods ended October 31, 1999, January 31, 2000 and April 30, 2000, which are being filed today.

IDT CORPORATION

IDT is a leading facilities-based multinational carrier that combines its position as an international telecommunications operator with its experience as an Internet service provider to provide a broad range of telecommunications services to its wholesale and retail customers worldwide.

Through its own telecommunications backbone and network infrastructure IDT provides its customers with integrated and competitively priced international and domestic long distance, pre-paid calling cards, Internet access and Digital Subscriber Line (DSL) service. The Company's Ventures division is developing several innovative telecom and Internet related businesses. Through its IDT Investments subsidiary, IDT has equity interests in several telecom and Internet-related companies

Norman Rosenberg
VP, Finance & Capital Markets
201/530-4001

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