Financial Overview

(in millions of JPY)

	FY2009	FY2008	Rate of change (%)	Factors
Overall
Sales	769,682	1,017,071	(24.3)	-
Operating income	425	22,370	(98.1)	-
Ordinary income	(252)	11,109	-	-
Current net income	(19,413)	(11,954)	-	-
Mechanical Components Division
Sales	678,446	830,608	(18.3)	-Sales of steering systems, bearings and driveline components all fell mainly due to a decrease in automotive sales.
Operating income	10,229	10,837	(5.6)	-

Contracts

-The Company announced that the Company has developed an electronically controlled coupling "Intelligent Torque Control Coupling (ITCC)" with improved durability dedicated to four-wheel drive large size vehicles and started its volume production for installation on the Toyota Lexus "RX" model.

-The Company announced development of a torque-responsive limited slip differential (TORSEN) for sports cars that was selected by Toyota for application in the partially upgraded Lexus IS-F.

-The Company developed a new driveline component "Torque tube" with the aim of improving driving performance of a high performance sports car with a configuration of FR (Front engine - Rear wheel drive). The new product will be installed on the "Lexus LFA" FR sports model whose production is slated to start late in 2010.
>>>See R&D for more details

Acquisitions

-The Company announced that it has agreed to acquire the assets of the Needle Roller Bearings business of The Timken Company, a major U.S. supplier of roller bearings based in Ohio, for approximately 29 billion yen. The transfer will include 12 manufacturing facilities in Europe, the U.S. and China, 3 development centers and approximately 3,400 employees. While the needle roller bearing accounts for 20 percent in the global market for automobiles, the share of the product for automobiles in the sales of the Company has been staying low at around 10 percent. The transaction is expected to enhance the company's capabilities to market and supply needle roller bearings targeting automakers in Europe and the U.S., as well as Japanese makers operating locally in such regions. Timken's sales for 2008 of the bearings business stood at 620 million dollars or 58.9 billion yen. By the acquisition, the Company is expected to achieve the top position in the market of automobile bearings in the world. The deal is scheduled to be closed at the end of December.(From an article in the Nikkan Jidosha Shimbun on July 31, 2009)

>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)

Outlook for FY2010

(in billions of JPY)

	FY2010 (forecast)	FY2009 (actual)	Year-on-year Fluctuation
Sales	870.0	769.6	100.4
-Mechanical Components Division	759.0	678.4	80.6
Operating income	30.0	0.4	29.6
Ordinary income	29.0	(0.2)	29.2
Net income	12.0	(19.4)	31.4
Investment Expenditure	28.0	25.2	2.8

Sales by Region

(in billions of JPY)

	FY2010 (forecast)	FY2009 (actual)	Year-on-year Fluctuation
Japan	470.0	437.1	32.9
Europe	150.0	134.7	15.3
North America	124.0	94.1	29.9
Asia and Oceania	110.0	90.9	19.1
Others	16.0	12.7	3.3

R&D Expenditure

(in millions of JPY)

	FY2009	FY2008	FY2007
Overall	27,410	29,056	30,857

R&D Facilities in Japan

Facility	Location
R&D center	Nara Pref., Osaka Pref., Aichi Pref.

Product Development

Chassis technologies
-The Company announced that it has developed a string of new chassis technologies, which contribute to making lighter and more compact vehicles with improved driving stability. The new products are new torque sensing differentials for luxury four-wheel-drive vehicles, hub unit bearings which offer a 50 percent improvement in rigidity level compared with conventional products, and steering shafts incorporating the world's first technology. The Company aims to boost sales by introducing these advanced techniques that meet requirements of the market. (From an article in the Nikkan Jidosha Shimbun on May 2, 2009)

Electronically controlled coupling
-The Company announced that the Company has developed an electronically controlled coupling "Intelligent Torque Control Coupling (ITCC)"with improved durability dedicated to four-wheel drive large size vehicles and started its volume production for installation on the Toyota Lexus "RX"model. High performance oil developed exclusively for ITCC constrains clutch wear and assures maintenance of temperatures at stable levels. Silicon containing diamond-like carbon coatings (DLC-Si) on the surface of the pilot clutch has enhanced durability by eight times, and the number of clutch discs has increased from 7 to 12. Application of this mechanism can reduce the weight of the four-wheel drive system by 15 percent and improve its load capacity by 2.1 times compared with conventional systems. (From an article in the Nikkan Jidosha Shimbun on May 26, 2009)

Electric column-type tilt and telescopic power steering system
-The Company announced that the Company has developed jointly with Aisin Seiki an electric column-type tilt and telescopic power steering system for heavy-duty and upper class vehicles, and started its mass production. This electric tilt and telescopic-type power steering allows the steering column to be adjusted by push button high or low, front or rear to an optimal position, as well as to be retracted automatically when a driver gets on or off the vehicle. The Company has integrated this function with the electric power steering for the first time in the world. It is aiming to expand sales of this system to automakers in and out of Japan. (From an article in the Nikkan Jidosha Shimbun on Sep. 8, 2009)

Torque-responsive limited slip differential
-The Company announced development of a torque-responsive limited slip differential (TORSEN) for sports cars that was selected by Toyota for application in the partially upgraded Lexus IS-F launched in August. As a result of raising capacity of the gear specification, TORSEN was optimized for application in sports cars and its weight and size were reduced by 8% and 6% respectively compared with the Company's previous product. (From an article in the Nikkan Jidosha Shimbun on Sep. 29, 2009)

Dual-pinion type electric power steering system
-The Company announced development of a dual-pinion type electric power steering (DP-EPS) system featuring both improved engine room packaging and high output, which make it applicable on medium-sized vehicles. Its production will begin in Europe in the latter half of 2011. Its output is 20% higher than that of the conventional its pinion type EPS. By separating the assist mechanism (motor/reducer unit) from the steering wheel shaft, the layout in the engine room has been improved. The DP-EPS has adopted a structure allowing the assist mechanism free positioning around and along the rack bar. (From an article in the Nikkan Jidosha Shimbun on Oct. 5, 2009)

Low-torque thrust needle roller bearing
-The Company announced development of a low-torque thrust needle roller bearing applicable to downsized transmissions. By using the high-precision stamping technology, the roller is now kept by one annular disk although two annular disks were necessary in the previous structure. The new product is 20 to 30% lighter in weight and up to 60% lower in friction compared to the previous product. The Company plans to start its volume production in 2010 in an aim to achieve 200,000 unit sales per month with the target annual sales amount of 200 million yen. Its prospective customers are automakers and transmission manufacturers. (From an article in the Nikkan Jidosha Shimbun on Oct. 16, 2009)

Ball bearing capable of high-speed rotation for hybrid transmissions
-The Company announced that it has developed a ball bearing capable of high-speed rotation for hybrid transmissions to compensate the reduced output resulting from smaller hybrid transmission motors. The Company adopted a retainer in which two opposing retainer parts made of resin elastically fit together from the two sides of the balls. This suppresses deformation caused by centrifugal forces and enables high-speed rotation. The annual sales from this product is targeted at 300 million yen for FY2015. (From a press release on Oct. 16, 2009)

Torque tube
-The Company developed and displayed at the 41st Tokyo Motor Show a new driveline component "Torque tube" with the aim of improving driving performance of a high performance sports car with a configuration of FR (Front engine - Rear wheel drive). The new product will be installed on the "Lexus LFA" FR sports model whose production is slated to start late in 2010. The LFA adopts the transaxle layout of placing the engine in the front and the transmission close to rear wheels to keep optimal weight balance between the front and rear. This type of structure is likely to produce loss in power transmission. The Company has solved this problem by increasing rigidity of the system through connection of the engine and the transmission with high tensile steel tubes. (From an article in the Nikkan Jidosha Shimbun on Oct. 30, 2009)

Capital Expenditure

(in millions of JPY)

	FY2009	FY2008	FY2007
Overall	25,248	51,104	58,912
Mechanical Components Division	22,432	44,204	54,411

New Equipment Installations

(As of Mar. 31, 2010)

Plant	Location	Type of facility	Estimated amount of investment (in million JPY)	Project Period
				From	To
Kokubu Plant	Osaka, Japan	Facility for manufacturing mechanical components	1,300	Apr. 2010	Mar. 2011
Tokushima Plant	Tokushima Pref., Japan	Facility for manufacturing mechanical components	1,000	Apr. 2010	Mar. 2011
Tadomisaki Plant	Aichi Pref., Japan	Facility for manufacturing mechanical components	900	Apr. 2010	Mar. 2011
Daibea Co., Ltd. Head Office & Izumi Plant	Osaka, Japan	Facility for manufacturing mechanical components	700	Apr. 2010	Mar. 2011
JTEKT Automotive Dijon Saint- Etienne S.A.S.	South Carolina, USA	Facility for manufacturing mechanical components	1,300	Jan. 2010	Dec. 2010