Financial Overview

(in millions of JPY)

	FY2009	FY2008	Rate of Change (%)	Factors
Sales	130,604	159,649	(18.2)	1)
Operating income	4,663	(6,289)	-	-
Ordinary income	2,670	(7,900)	-	-
Current net income	2,061	(16,277)	-	-

Factors
1)
<Japan>
-Although the Company received more orders than originally expected buoyed by a rebound in automobile sales, which were positively impacted by introduction of tax incentive programs for eco cars, its sales were down by 12.0% to 83.1 billion yen compared with the previous tern.

<North America>
-Despite mild recovery trends in automobile sales supported in part by the U.S. government 's cash for clunkers incentive programs, the Company failed to compensate for a substantial decline in order intakes that occurred last year. Furthermore, the stronger yen drove down sales by 34.5% to 35.8 billion yen compared with the previous year.

<Europe>
-Due to a decline in orders by sluggish sales of automobiles in almost all markets in Europe, the Company's sales fell 26.3 % from a year earlier to 4.2 billion yen

<Asia>
-All the operations in the three Asian countries marked a substantial improvement in performance. In Indonesia, orders increased steadily, although sales in the yen decreased for the stronger yen, while those in the local currency increased. In China, the Company achieved a substantial increase in revenue due to a surge in orders from leading Japanese automakers. In Thailand, orders showed a sustainable growth. Despite a decline in the value of the yen due to the high yen, sales value in the value of the local currency increased. As a result, sales in Asia as a whole increased 4.8% from the previous year to15.8 billion yen.

Recent Developments in Japan

-The Company has completed optimization of its production structure. Transfer of production from Akebono Brake Iwaki and Akebono Brake Miharu completed at the end of September 2009 and at the end of December respectively. Reorganization from three to two locations at Akebono Brake Sanyo also completed at the end of March 2010. Akebono Brake Iwaki was transferred to Akebono Brake Iwatsuki and Akebono Brake Fukushima. Akebono Brake Miharu moved its production mainly to Akebono Brake Iwatsuki, while Akebono Brake Sanyo moved its Soja Plant to to two plants in Kibi.

-The Company announced it will absorb two wholly-owned subsidiaries for brake performance assessment and consulting services to the parent company in an attempt to enhance efficiency in group management and comprehensive capabilities. The two companies: Akebono Tec Corporation based in Iwaki, Fukushima Prefecture and Akebono Management Service based in Chuo-ku, Tokyo will be absorbed by the simplified merger procedure. (From an article in the Nikkan Jidosha Shimbun on Jan. 21, 2010)

-The Company will consider installing brake parts originally designed for use in emerging markets also in vehicles to be sold in developed countries. When it comes to development of brake parts targeting the new markets, the Company puts a high priority on meeting local requirements such as high durability and low cost. It is set to study the possibility of diverting the technology to advanced markets, where downsizing of auto parts is becoming increasingly important. It plans to carry out the survey by looking closely into the specifications that meet the requirements for each market and vehicle model. After careful scrutiny, the Company is willing to share its brake parts among its global market wherever possible, with the aim of reducing overall cost and improving profitability. (From an article in the Nikkan Jidosha Shimbun on Feb. 25, 2010)

Recent Developments Outside Japan

<North America>
-The Company and Germany's Robert Bosch announced that they are now in talks to transfer part of Bosch's brake business in North America to the Company is likely to buy Bosch's foundation brake business in the region, which includes disc brake and drum brake parts. Bosch is the second largest shareholder of the Company next to Toyota, holding a more than 10 percent equity share in the Japanese brake supplier. In addition to having capital ties, it has also been licensing out technology to the Company. Since there is surplus capacity for brake foundation products in North America, the Akebono-Bosch alliance is working on integrating their business so as to optimize their supply capacity in the market. (From an article in the Nikkan Jidosha Shimbun on Aug. 31, 2009)

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

R&D Expenditure

(in millions of JPY)

	FY 2009	FY 2008	FY 2007
Overall	1,129	2,638	2,439

R&D Activities

<Japan>
-Development of friction materials for passenger cars is focused on both high-performance and low-cost pads. 

-In development of disc and drum brakes, high performance and low cost are also very important issues. By sweeping innovation by a total review of development activities, the Company is seeking a complete standardization and sharing of components. Based on these activities, it is conducting products development.  

-Akebono Research & Development Centre is engaged in activities mainly in three areas: (1) development of materials and processes, (2) development of future friction materials, (3) evaluations and analyses. Development items include creation of original materials of low environmental load, surface treatment technology for zero emissions and reduced volatile organic compound, adhesive technology, ceramic-based friction materials for stable friction coefficient, analysis of friction mechanism and structure of friction materials. These activities are designed to develop technologies for next-generation brakes and materials. 

<North America>
-The Company is engaged in development of the most-up-to-date  friction materials and next generation brakes most suitable to the North American market for U.S. and global automobile manufacturers.

-Locally conclusive processes from material development to mass production are offered to Japanese affiliated carmakers.

-Friction materials of excellent noise and vibration performance are developed for a wide range of models from passenger cars to pickup trucks based on environmentally friendly raw materials.

-Disc brakes are developed for a wide range of vehicles, including passenger cars, SUVs and pickup trucks.

-As the Company received transfer of some portion of the North American brake operations from Robert Bosch LLC, it established a new division in its North American development  facilities to handle wheel-end products, including disc rotors and corner modules, as well as to conduct R&D activities on wheel-end products

<Europe>
-Development in Europe is focused on friction materials. Requirements in performance are specific in Europe. Friction materials must conform to REACH (Registration, Evaluation, Authorization and Restriction of Chemicals) regulations, which are environmentally stringent regulations in Europe. They must also meet requirements for vehicles exported to Japan and the U.S. Development in Europe is required to meet a wide range of needs.

-In other countries than France where development facilities are located, the Company has a local corporation to conduct research and development activities in Germany.

Capital Expenditure

(in millions of JPY)

	FY 2009	FY 2008	FY 2007
Total	5,400	17,800	14,900

-Japan: 2.8 billion  in next generation production equipment
-North America: 21 billion  yen in next generation production equipment 
-Europe: 100 million yen in production and development equipment 
-Asia: 400 million yen in increasing production capacity

Plan for New Facilities

Company/plant (Location)	Facilities & Activities	Total investment (millions of yen)	Start date	Completion
Headquarters and and other facilities (Tokyo, Japan)	Casting production facilities, equipment for new production methods, information equipment	2,000	Apr. 2010	Mar. 2011
Development division (Saitama Pref., Japan)	Testing and R&D facilities, high-performance brake development facilities	1,000	Apr. 2010	Mar. 2011
Akebono Brake Iwatsuki Manufacturing Co., Ltd. (Saitama Pref., Japan)	Production facilities manufacturing disc brakes and drum brakes	1,500	Apr. 2010	Mar. 2011
Akebono Brake Fukushima Manufacturing Co., Ltd. (Fukushima Pref., Japan)	Production facilities  manufacturing brake linings, industrial machinery, and railway products	500	Apr. 2010	Mar. 2011
Akebono Brake Yamagata Manufacturing Co., Ltd. (Yamagata Pref., Japan)	Production facilities  manufacturing disc brake pads	500	Apr. 2010	Mar. 2011
Akebono Brake Sanyo Manufacturing Co., Ltd. (Okayama Pref., Japan)	Production facilities  manufacturing disc brakes and drum brakes	400	Apr. 2010	Mar. 2011
Akebono Research & Development Center Ltd. (Saitama Pref., Japan)	Testing and R&D facilities	100	Apr. 2010	Mar. 2011
Akebono Corporation (North America) (Kentucky, USA)	R&D facilities	500	Jan. 2010	Dec. 2010
Ambrake Corporation (Kentucky, USA)	Production facilities  manufacturing disc brakes, drum brakes and disc brake pads	1,000	Jan. 2010	Dec. 2010
Amak Brake L.L.C. (Kentucky, USA)	Production facilities manufacturing disc brakes	500	Jan. 2010	Dec. 2010
ABMA, L.L.C. (Kentucky, USA)	Production facilities  manufacturing disc brakes and drum brakes	2,000	Jan. 2010	Dec. 2010
Akebono Europe S.A.S. (Gonesse, France)	R&D facilities, production facilities  manufacturing disc brake pads	500	Apr. 2010	Mar. 2011
Akebono Corporation (Suzhou) (Suzhou, China)	Production facilities  manufacturing disc brake pads	250	Jan. 2010	Dec. 2010
Akebono Corporation (Guangzhou) (Guangzhou, China)	Production facilities  manufacturing disc brakes and drum brakes	250	Jan. 2010	Dec. 2010
PT. TriDharma Wisesa (Jakarta, Indonesia)	Facilities to produce disc brakes and disc brake parts	500	Jan. 2010	Dec. 2010
Akebono Brake Thailand Co., Ltd. (Chonburi , Thailand)	Production facilities  manufacturing disc brakes	500	Jan. 2010	Dec. 2010