Financial overview

In million JPY	FY2008	FY2007	Rate of change (%)	Factors
Overall
Sales	527,099	533,984	(1.3)	-Sales decreased as a result of (1) a decline in product demand from automakers, and (2) negative currency translation.
Operating income	9,478	49,611	(80.9)	-
Ordinary income	8,731	43,231	(79.8)
Current net income	(8,985)	27,431	-	-
Bearing division
Sales	376,381	338,452	11.2	-Sales of axle bearings and needle roller bearings were strong as a result of launching mass-production of a new product for Japanese automakers operating in China. - Sales showed an increase because S.N.R. ROULEMENTS and its subsidiaries were turned into the Company's consolidated subsidiaries, and their financial results were reported this year. -Sales at the Bearing Division increased on an individual division basis, but overall, the Company's sales decreased because of less product demand outside of China, as well as negative currency translation.
Constant Velocity Joint division
Sales	124,445	165,071	(24.6)	While sales increased in China because the company launched mass-production of a new product, overall sales at the CVJ Division were down year-on-year due to lower demand in other countries and to negative currency translation.

Company acquires SNR Roulements

The Company continued its acquisition of SNR Roulements (SNR) by raising its shareholding to 51% as of April 7, 2008. The Company, by gaining control of SNR and combining technological competence, production and market development capabilities of both companies, will further strengthen its overall operational structures, especially in Europe. (From a press release on Apr. 16, 2008)

The Company announced that its manufacturing arm in Europe, NTN Transmissions Europe (NTE), will acquire on June 1, 2008 the Crezancy plant of the Setforge Group, the Company's major business partner and the largest producer of forged products in France at about 400 million yen. NTE procures about half of forged products from the Crezancy plant. This plant features high forging technologies for constant velocity joint (CVJ) parts, as it is capable of designing and manufacturing dies on its own. After the acquisition the plant will be spun off and renamed as NTN Transmissions Europe Crezancy. The new company will develop, manufacture and sell forged outer wheels for CVJs, headquartered in Crezancy, Aisne, France. Sales amount is about 2 billion yen. The number of employees is approx. 100 as of the end of 2007. (From an article in the Nikkan Jidosha Shimbun on Jun.1, 2008)

Sales Forecast by Region/Segment

( in millions of JPY )

Geographic Area	Segment	FY2008 (Actual)	FY2009 (Forecast)	Rate of Change (%)
Japan	Bearings	125,400	112,700	(10.1)
	CVJs	48,100	41,600	(13.5)
	Precision apparatus products etc.	21,100	17,800	(15.6)
	SNR	200	100	(50.0)
	Total	194,800	172,100	(11.7)
North America	Bearings	62,600	61,500	(1.8)
	CVJs	40,200	32,200	(19.9)
	Precision apparatus products etc.	900	1,400	55.6
	SNR	5,600	3,900	(30.4)
	Total	109,300	99,000	(9.4)
Europe	Bearings	43,200	32,500	(24.8)
	CVJs	23,100	20,300	(12.1)
	Precision apparatus products etc.	2,600	3,600	38.5
	SNR	72,800	69,100	(5.1)
	Total	141,700	125,400	(11.5)
Asia and others	Bearings	59,800	52,000	(13.0)
	CVJs	13,100	11,300	(13.7)
	Precision apparatus products etc.	1,700	600	(64.7)
	SNR	6,,700	4,600	(31.3)
	Total	81300	68,500	(15.7)
Total	Bearings	291,100	258,600	(11.2)
	CVJs	124,400	105,300	(15.4)
	Precision apparatus products etc.	26,300	23,500	(10.6)
	SNR	85,300	77,600	(9.0)
	Total	527,100	465,000	(11.8)

New Mid-term Business Plan "NTN 2010 for the Next Step" (From April 2009 to March 2011)

The goals are:
1) to enhance product quality based on the Company's fundamental corporate motto of "For a New Technology Network (NTN)".
2) to drive new growth during the next two years so as to achieve the Company's long-term vision.

Key performance indicators of the new mid-term business plan

	FY2008 (Actual)	FY2009 (Forecast)	FY2010 (Planned)
Sales (million yen)	527,100	465,000	490,000
Operating income (million yen)	9,500	7,500	19,000
Operating income ratio (%)	1.8	1.6	3.9
Income from ordinary business activities (million yen)	8,700	2,000	13,000
Net income (million yen)	(9,000)	500	6,500
Capital Expenditure (million yen)	49,600	18,000	18,000

<Long-term vision (FY2013)>
- Further diversify operations: the Company will work to increase the ratio of non-automotive operations to more than 50% in the next five years.
- Respond to scaled down operations : the Company will determine how to respond to a 20% drop in sales in five years.
- Initiate new business models: the Company will set new business models based on ecology, new energy, and new markets
- Launch modules designed for the EV market
- Expand the repair and MRO businesses on a global basis
- Standardize next-generation technologies worldwide

R&D expenses

( in millions of JPY )

	FY2008	FY2007	FY2006
Bearing related products	12,010	9,085	8,551
Constant-velocity joint related products	4,500	5,039	4,893
Precision apparatus products	890	880	775
Company wide	17,401	15,005	14,221

R&D achievement

Bearing
- The Company, in working on automotive transmission bearings, developed a sealed deep groove ball bearing that has reduced rotary torque by 80% compared to the performance of conventional products. Customers are currently evaluating this bearing, as the Company aims to achieve 1 billion yen annually from sales of this bearing in 2012.
- Jointly with S.N.R. ROULEMENTS, which became a consolidated subsidiary of the Company in April 2008, the Company developed a bearing with a high-resolution rotation sensor, which has 40 times as much output as a conventional rotation sensor. The Company is conducting PR activities, promoting this sensor to customers.
- The Company developed a super-low torque backup roll unit, in conducting development activities on needle bearings. This new roll unit achieved a 40% reduction in torque compared to conventional products used in tension levelers that produce thin sheets. The Company is conducting PR activities in promoting this roll unit to customers.
- In the area of axle bearings, the Company developed a V (Value) series integrated hub joint in which the hub bearing and constant-velocity joint have been integrated, becoming an independent hub joint. Customers are now evaluating these new V series hub joints.
- The Company developed a V (Value) series angular unit which is lighter and uses less materials than conventional products, but still retains the 1.4 billion yen annually from sales of these units in 2010.

The Company announced that the company and Nagoya Municipal Industrial Research Institute (Atsuta-ku, Nagoya City) jointly developed stainless steel-based corrosion-resistant, low friction oil-impregnated sintered bearings containing proper amount of manganese sulfide (MnS) with high lubrication property. This new bearing is excellent in anti-adhesion and anti-abrasion. The Company aims to expand sales of this product for applications, such as fuel pump parts, in the automotive market. Sulfur in MnS creates films with high lubricity and extreme pressure resistance when sliding. The new bearing has excellent anti-adhesion and anti-abrasion performance as well. Manganese sulfide also provides excellent corrosion resistance, because it does not inhibit creation of passivation coatings by chromium oxide contained in stainless steel. (From an article in the Nikkan Jidosha Shimbun on Apr. 9, 2008)

The Company announced development of new "super-high load capacity tapered roller bearings" with high rigidity for automobile transmissions and differential gears. The new product has eliminated a cone front face rib of the inner ring, used a new plastic retainer to retain rollers and maximized the roller length. FA heat treatment, a technology for longer service life, has also been applied. By 2014 the Company aims to achieve annual sales of one billion yen with this new bearing. (From an article in the Nikkan Jidosha Shimbun on May 23, 2008)

The Company announced that it has developed a rubber encoder with high magnetic force for a wheel rolling sensor of ABS, installed on hub bearings. The Company says that it aims to achieve 5 billion yen sales of automotive hub bearings with this encoder in 2012. The new rubber encoder is able to provide stronger magnetic force with ferrite particles in rubber materials oriented in the optimal direction. The Company also developed a new rubber forming technique to provide magnetic force to the whole forming die at the time of hot forming to align ferrite particles in the magnetic direction before rubber is hardened. Adjusting composition of rubber materials allows more ferrite particles to be blended into rubber, which improves magnetic force 25% from existing products. Utilization of these techniques makes it possible to alleviate positioning accuracy at installation and enables smaller encoders to generate power equivalent to conventional encoders. (From an article in the Nikkan Jidosha Shimbun on May 31, 2008)

Constant Velocity Universal Joint
- The Company developed a series of V (Value) constant-velocity joints (the VBJ, VDJ, and VTJ) for vehicles that will be marketed in emerging markets. The Company is conducting PR activities in promoting these joints to customers.
- The Company developed a fixed constant-velocity joint, the EUJ-S, which reduced torque transmission loss by about 30% compared to the performance of the conventional EUJ constant velocity joint having an equivalent high operating angle of 50. The Company is conducting PR activities in promoting this new joint to customers. The Company will start mass-producing it in 2011, aiming to achieve annual sales of 5 billion yen in 13 years.

The Company has announced that it has completed development of a new high efficiency low heat constant velocity joint used for the propeller shaft. The bore of a ball has been downsized and the number of balls has been increased from six in the existing products to ten. The ball rolling angle has also been slanted lower. The torque loss ratio and temperature rise have been reduced by half in comparison with current products. Its weight has also been reduced by 5 percent. The Company is set to start its mass production in 2011, and aims to generate sales of one billion yen for the year in 2013. (From an article in the Nikkan Jidosha Shimbun on Dec. 12, 2008)

Precision instrument products, etc. (Automotive components only)
- The Company is developing auto tensioners, chain tensioners, clutches, and ball screws in response to the needs for smaller, lighter products with higher performance.
- The Company developed a highly responsive hydraulic auto tensioner, which adjusts the tension of the automotive timing belt at an appropriate level and thereby contributes to reducing noise while lengthening the belt life. The Company has started mass production of this tensioner.
- The Company developed an electric actuator unit for electric parking shift mechanisms in response to the increased use of electric automotive components. The Company has started mass-producing these units.

The Company has developed a new light-weight long-life idler pulley unit to be used for an ancillary engine belt drive, using heat-resistant resin. The new resin belt unit is 65% lighter than conventional iron-made pulley units. It also boasts bearings with long life more than double conventional resin pulley units and creep resistance 2.2 times higher. The Company's annual sales target for this particular product is 400 million yen in 2010. The new pulley unit has larger bearing outer ring surface so that it releases heat more effectively and cools down sooner. The Company also developed long-life grease to make it possible to significantly improve the unit performance compared to conventional units based on resin or iron belts. Using more resin for bearing outer ring insertion part and changing design of creep guards on the outer ring also contributed to great enhancement of its resistance to creep stress created between the outer ring and the pulley. (From an article in the Nikkan Jidosha Shimbun on Jun.13, 2008)

The Company announced that it has developed a long-life ball screw for use in electric-powered actuators installed on motor vehicles, such as engine control and transmissions. The Company aims at achieving annual sales of 500 million yen in 2011. Durability of this new ball screw was enhanced by introducing a ball of larger size than the lead (the distance that a ball screw travels in a single rotation), reviewing the existing standard design, and optimizing specifications of the screw ditch. According to the Company, the long-life ball screw has 6 times longer life than the product of the same dimensions. In comparison with the ball screw with the same length of life, the new product can be made 7% smaller in axial direction and 30% lighter in weight. (From an article in the Nikkan Jidosha Shimbun on Oct. 29, 2008)

Technical license agreements (As of March 2009)

Company	Country	Contractual coverage	Contract period
National Engineering Industries Ltd.	India	Technical license related to manufacture of ball bearings etc.	1985.11.5-2011.11.1
Tung Pei Industrial, Co., Ltd.	Taiwan	Technical license related to manufacture of constant velocity joints	2003-3.26-2013.3.25
Unidrive Pty. Ltd.	Australia	Technical license related to assembly of constant velocity joints	1983.2.15-2013.6.9

Capital Expenditure

( in millions of JPY )

	FY2008	FY2007	FY2006
Overall	49,594	59,504	59,347

-Bearing Division:
The Company made a capital investment of 39 billion, 325 million yen inthe following projects: expanding its production facilities and plant buildings because it had reorganized its operations at Kuwana Works and NTN Mie Corp.; expanding production facilities and plant buildings at American NTN Bearing Mfg. Corp, and.; expanding production facilities at S.N.R. Roulements, NTN-Bower Corp. and its Okayama Works.

The Company announced that it has established a new wholly-owned subsidiary that produces and sells tapered roller bearings "NTN Akaiwa Corporation" in Akaiwa-shi, Okayama Prefecture. The new company will start plant construction in December this year and production in September 2009. A total investment is 13.5 billion yen and its initial workforce will be approximately 70, which will be gradually expanded to 180 over five years from now. At the end of fiscal 2010, the subsidiary will have monthly production capacity of 0.7 million bearings, which will be also expanded to 2 million units by the end of fiscal 2013. The plant with a floor space of approximately 22,000 square meters will be constructed at a site of approximately 66,000 square meters. (From an article in the Nikkan Jidosha Shimbun on Sep.18, 2008)

-CVJ Division:
The Company made a capital investment of 9 billion, 616 million yen to expand production facilities and make other improvements at NTN Driveshaft, Inc.


Facilities (New, Eliminated, etc.)

Name	Type of facility	Total amount (million JPY)	Start	Completion	Purpose
NTN Corporation
Kuwana Works (Kuwana City, Mie Pref.)	Facility for bearings	12,823	Nov., 2005	JUne, 2010	Increase production volume and streamline operations
Iwata Works (Iwata City, Shizuoka Pref.)	Facility for bearing, CVJ, precision apparatus products etc.	3,274	Apr., 2006	Oct., 2009	Streamline operations
Okayama Works (Bizen City, Okayama Pref.)	Facility for bearings, CVJs	12,173	Aug., 2005	Dec., 2009	Streamline operations
Nagano Works (Minowa Machi, Nagano Pref.)	Facility for bearings	1,225	Nov., 2005	Sept., 2009	Streamline operations
Subsidiaries and affiliates
NTN Mie Corp. (Kuwana City, Mie, Japan)	Facility for bearings	6,330	Apr., 2007	Apr., 2010	Increase production volume
NTN Kamiina Corp. (Kamiina-gun, Nagano, Japan)	Facility for bearings	3,240	Mar., 2007	Dec., 2009	Production increase
NTN Houdatsushimizu Corp. (Hakui-gun, Ishikawa, Japan)	Facility for bearings	7,523	Sept., 2008	Sept., 2011	New facility
NTN Driveshaft, Inc. (Columbus, Indiana, USA)	Facility for CVJs	2,082	June, 2007	Sept., 2010	Increase production volume
NTN-Bower Corp. (Macomb, Illinois, USA)	Facility for bearings	1,634	Aug., 2008	Apr., 2009	Increase production volume
NTN Transmissions Europe (Allonnes,France)	Facility for CVJs	2,738	Nov., 2007	Sept., 2009	Increase production volume
SNR Roulements (Annecy, France)	Facility for bearings	1,252	Apr., 2008	Sept., 2009	Increase production volume