Our Heart and Technology for the Future

Financial Results Briefing
Fiscal 2007 (Ended May 2008)

July 17, 2008
Teruyuki Oosawa, President
Toyo Denki Seizo K.K.

90th Anniversary
Toyo Denki was established in 1918 with the intention of
producing electrical equipment for railroad rolling stock in Japan.
With the motor drive technology that the company has developedsince its founding at the core of its competitive advantage, Toyo
Denki is addressing the challenges of making the next generationof high-speed railroads and the recycling society a reality. Thecompany has also been working aggressively to expand overseas
to grow its business.
Toyo Denki marked the 90th anniversary of its founding on June20, 2008.

ProgramPresident’s Briefing: About 25 minutes
1. Overview of Financial Results for Year Ended May 2008
2. Outlook for Financial Results for Year Ended May 2009
3. Status and Strategies, by Business Segment
4. Other
Q&A: About 30 minutes

1. Overview of Financial Results for Year Ended May 2008
1-1. Overview of Consolidated Financial Results(Unit: Million yen)

Fiscal 2006 Fiscal 2007

Year-on yearchangeNotes

Orders received

37,64938,873+1,224

Transportation Business performed
strongly

Net sales

36,571

38,130+1,559

Transportation Business performed
strongly, Industrial Systems was flat

Operating income

1,928

1,391-537%

5.3%

3.6%

Ordinary income

1,967

1,197%

5.4%

3.1%

Net income

(151)

532%

－1.4%

(3.33)

11.84

Net income pershare (yen)

-770
+683

401K special loss not posted+15.17

Note: % indicates ratio to net sales.

41. Overview of Financial Results for Year Ended May 2008
1-2. Overview of Non-Consolidated Financial Results(Unit: Million yen)

Fiscal 2006 Fiscal 2007

Year-on yearchangeNotes

Orders received

31,66332,963+1,300

Transportation Business performed
strongly

Net sales

30,75532,283+1,528

Transportation Business performed
strongly, Industrial Systems was flat

Operating income

1,074315-759%

3.5%

1.0%

Ordinary income

1,336

392%

4.3%

1.2%

Net income

(288)

200%

－0.6%(6.34)

4.46

Net income pershare (yen)

-944
+488

401K special loss not posted+10.80Note: % indicates ratio to net sales.

51. Overview of Financial Results for Year Ended May 2008
1-3. Consolidated Financial Position

Comparative Consolidated Statement of Financial Position(Unit: Million yen)
May 31, 2007

May 31, 2008

Year-on-yearchange35,76335,371-392

Current assets

20,837

21,705+867

Fixed assets

14,926

13,665-1,260Total liabilities

21,00921,641

+632

4,725

5,505+780

Net assets

14,754

13,729-1,025Equity ratio

41.3%

38.8%

－Net assets per share (yen)324.79308.51-16.28

Total assets

Of which, interest
bearing debt

Notes

Aggregate market value ofsecurities declined
Acquisition of treasury
stock61. Overview of Financial Results for Year Ended May 2008
1-4. Factors in Change of Consolidated Operating Income

FactorDetails

Revenuegrowth(1) Transportation Business: Up 500 million yen(2) Information Systems: Down 300 million yen

Gross profit(1) Soaring raw materials prices(2) Increase in projects requiring new design
work

Manufacturing
efficiency(1) Disruptions in Transportation Business
manufacturing processes in 1Q and 2Q(2) Brought back on track in mid-2QNotes(1) No progress inpassing costs alongin product prices7

2. Outlook for Full Year Financial Results for Year Ending May 20092-1. Order Environment
Comments

Market overall

Transportation BusinessIndustrial Systems
Information Systems

Sub-prime loan problem has hurt the U.S. economy andthe effects are spilling over into the global economy
No progress in passing soaring raw materials costs along
in product prices
Emergence of a cautious attitude toward capital
investment(1) Environmental issues lent momentum(2) Domestic market solid for time being(3) Overseas, need for development of urban
transportation networks is strong, especially in China(1) Deteriorating economic conditions brought restraint
in capital investment.
(2) Trend of structural decline for social infrastructure(1) Market expanding in medium to long term with IC
card adaptations
82. Outlook for Full Year Financial Results for Year Ending May 20092-2. Consolidated Forecast(Unit: Million yen)

Fiscal 2007

Fiscal 2008

Year-on-yearchangeOrders received

38,87344,000+5,127

Net sales

38,13040,000+1,870

Operating income

1,391

2,000+609%

3.6%

5.0%

Ordinary income

1,197

1,800%

3.1%

4.5%

Net income

532

900%
Net income pershare (yen)

1.4%

2.3%

11.84

20.22

Notes
Increase inIndustrial Systems
sector is expected

+603
+368

+8.38

Note: % indicates ratio to net sales.

92. Outlook for Full Year Financial Results for Year Ending May 20092-3. Non-consolidated Forecast(Unit: Million yen)

Fiscal 2007

Fiscal 2008

Year-on-yearchangeOrders received

32,96338,000+5,037

Net sales

32,28334,000+1,717

Operating income

315

1,200+885%

1.0%

3.5%

Ordinary income

392

1,400%

1.2%

4.1%

Net income

200

700%
Net income pershare (yen)

0.6%

2.1%

4.46

15.73

Notes
Increase inIndustrial Systems
sector is expected+1,008+500+11.27

Note: % indicates ratio to net sales.

102. Outlook for Full Year Financial Results for Year Ending May 20092-4. Anticipated Factors in Change of Consolidated Operating IncomeFactor

Trend

Details

Revenue growth

Positive

Industrial Systems up 500 million yen,
Information Systems down 100 million yen

Improvement ingross profit

Positive
Negative(1) Projects requiring new design investment in a lull
(2) Soaring raw materials prices

Manufacturing
efficiency－Selling, general andadministrative
expenses

Negative
Negative

Maintain present levels of efficiency(1) Growth in personnel costs related to anticipatory
investment(2) Higher development costs

11Reference: Changes in Consolidated Net Sales and Operating Income(Unit: Billion yen)

4540

Net sales(Scale: left)
Operating income (Scale: right)

90th anniversary ofcompany’s founding inJune 2008

36.5

34.7

35
30

15
40.0
38.1

32.4
28.7

29.0

30.2

1025
20
155

105

2 .5 3
1 .8 5

2 .5 91 .7 7

1.92

2 .0

1 .4

0.37

00
2001

2002

(Project 0)

2003

2004

Grow Up 123

2005

2006

2007

2008

Innovation 9012Reference: Changes in Consolidated Capital Expenditure and Depreciation Expenses(Unit: Million yen)

1,400
Capital expenditure
Depreciation expenses

1,200

1,173

1,000
819

800

800730800666562

600
400

507
385

329
274374334371406

20720002001

2002(Project 0)

2003

2004

Grow Up 123

2005

2006

2007

2008

Innovation 90
13

Reference: Changes in Consolidated Research and Development Expenses(Unit: Million yen)

1,000
900
900

811807

2006

2007

800
700
600

675665

2004

2005

546

500

425

400
256

300
200
10002001

2002(Project 0)

2003

Grow Up 123

2008

Innovation 9014

Reference: Changes in Consolidated Personnel Expenses and Number of Employees(Unit: Million yen)

(Unit: People)

1,220

16,0001,200
14,00012,00010,000

Employees (End of year)

1,080
1,002
8,881

1,071

1,064

1,081

1,087

9,196

9,518

9,615

9,676

1,023
8,788

1,100
10,050

1,000

8,037
8,000

900

6,000
800
4,000

Personnel expenses

700

2,000
0600
2001

2002

(Project 0)

2003

2004

2005

Grow Up 123

2006

2007

2008

Innovation 90
15

3. Status and Strategies, by Business Segment
3-1. Transportation Business Segment(a) Consolidated financial results for year
ended May 2008

(Unit: Million yen)

Fiscal 2006

Fiscal 2007

Yearon-yearchange

Orders received

18,90021,932+3,032

Net sales

17,22919,781+2,552

Operating income

514544+30%

3.0%

2.8%(b) Forecast for consolidated financial
results for year ending May 2009
(Unit: Million yen)

Fiscal 2008

Yearon-yearchangeOrders received

21,000-932

Net sales

20,000+219

Operating income

1,000+456%

5.0%

Note: % indicates ratio to net sales.

Note: % indicates ratio to net sales.

Analysis of factors in year-on-year change

Plans and strategies for year ending May 2009

Orders received:

Orders received:

Non-JR private railways and overseas werestrong, orders for Chengdu subway
Domestic was solid

Net sales:
Operating income:Positive factors: Growth in revenues and improved
manufacturing efficiency
Negative factors: Soaring raw materials prices; increase inprojects requiring new design work together
with falling sales prices

Generally flat,
domestic to remain solid
Slight increase

Net sales:
Operating income:Positive factors: Projects requiring new design
investment in a lull
Negative factors: Soaring raw materials prices16

3. Status and Strategies, by Business Segment
3-1. Transportation Business Segment(1) Received order for electrical equipment for high-speed cars for theKeisei Electric Railway's Narita New Rapid Line· Keisei Electric Railway is developing a new type AE Skyliner railway car in anticipationof the fiscal 2012 (forecast) commencement of operations of the Narita New Rapid Line· These cars will travel the new access route at a maximum speed of 160 km per hour,
traveling from Nippori Station to Airport Terminal 2 Station in only 36 minutes· Received order for control units, traction motors, drive gear units, and pantographs17

3. Status and Strategies, by Business Segment
3-1. Transportation Business Segment(2) Keihan Electric Railway's new type-3000 railway cars (cars that continue
onto the Nakanoshima Line) scheduled to commence operations· Completed 48 new type-3000 cars, for use on six trains that will continue onto theNakanoshima Line schedule to open on October 19, 2008
· Received order for all electrical equipment, including control units, traction motors,auxiliary power supply apparatus, drive gear units, pantographs, monitoring devices, etc.

18

3. Status and Strategies, by Business Segment
3-1. Transportation Business Segment(3) Beijing Subway Olympic Line Number 10 commences operations· Beijing Subway Olympic Line Number 10 (providing access to the Olympic compound,for which Toyo Denki received the contract in 2005) is in the final phase of test
operations, preparing for the scheduled July 20 commencement of commercial
operations19

3. Status and Strategies, by Business Segment
3-1. Transportation Business Segment(4) Received order for electrical equipment for JR East E5 Series Shinkansen(bullet train) cars
· In preparation for the opening of Tohoku Shinkansen Shin-Aomori Station, JR East isworking to complete a next-generation Shinkansen car capable of speeds up to 320
kilometers per hour by 2009
· Aiming for high speeds, comfort, and noise reduction· This line is expected to greatly reduce travel time between the Tokyo metropolitan area,
the Tohoku region, and Hokkaido· Toyo Denki received order for traction motors, drive gear units, auxiliary power supply
apparatus, pantographs, etc.

20

3. Status and Strategies, by Business Segment
3-1. Transportation Business Segment(5) Aiming for low energy consumption

E3 Solution System
Introduced trolley voltage
compensation system forstreetcars

Toyo Denki supplied converter units,
drive inverter units, auxiliary power
supply apparatus, gear units, traction
motors, and pantographs for the hybrid
light rail vehicle (LRV) unveiled by theRailway Technical Research Institute21

3. Status and Strategies, by Business Segment
3-1. Transportation Business Segment(6) Changzhou Ruiyang Transmission Technology Co., Ltd., plantcommenced operations in January 2008
· Expanded gear unit production capacity· Toyo Denki's Chinese subsidiaries have entered the market independently, working on
subway projects in Tianjin and Guangzhou

Gear unit

New plant in operation in January 200822

3. Status and Strategies, by Business Segment
3-2. Industrial Systems Segment(a) Consolidated financial results for year
ended May 2008

(Unit: Million yen)

Fiscal 2006

Fiscal 2007

Yearon-yearchangeOrders received

16,686

14,623-2,063

Net sales

15,69015,901

Operating income

1,002

798%

6.4%

5.0%

(b) Forecast for consolidated financial
results for year ending May 2009
(Unit: Million yen)

Fiscal 2008

Yearon-yearchangeOrders received

21,000+6,377+211

Net sales

18,000+2,099-204

Operating income

1,000+202%

5.6%

Note: % indicates ratio to net sales.

Note: % indicates ratio to net sales.

Analysis of factors in year-on-year change

Plans and strategies for year ending May 2009

Orders received:

Orders received:

Declined as a result of contracting capital
investment
FlatNet sales:
Operating income:Positive factors: Improved manufacturing efficiency
Negative factors: Lower gross profit ratio★ Orders received and net sales lagged behind forecasts

Net sales:

Focus on testing equipment for
automotive development.
Increase as a result of growth inorders received

Operating income:Positive factors: Revenue growth
Negative factors: Soaring raw materials prices;increase in selling, general andadministrative expenses

23

3. Status and Strategies, by Business Segment
3-2. Industrial Systems Segment(1) At the Hannover Messe 2008 in Germany (April 21 - 25, 2008), Toyo
Denki displayed demonstration models of its VF62CE, VF64, and VF66B
inverters, and its ED motor (IPM Synchronous motor)

24

3. Status and Strategies, by Business Segment
3-2. Industrial Systems Segment(2) Newly developed Intelligent Inverter VF66 Series, which brings together
several motor drive technologies, went on sale in January 2008
Features of VF66 Series(1) Operation of ED motor (IPM synchronous motor), inverter
motor or general purpose motor possible(2) Control options from V/f control, sensorless vector control,and vector control with sensor also possible(3) Achieves substantial CO2 reduction and energy conservation
when combined with ED motor(4) Inverter easily customized with PLC containing variety offunctions(5) Reduction in maintenance costs due to use of long life
components(6) Design and adjustment possible using PC(7) Compatible with all kinds of open networks

VF66 inverter25

3. Status and Strategies, by Business Segment3-3. Information Systems Segment(a) Consolidated financial results for yearended May 2008(b) Forecast for consolidated financial
results for year ending May 2009

(Unit: Million yen)

Fiscal 2006

Fiscal 2007

Yearon-yearchangeOrders received

2,063

2,318+225

Net sales

3,650

2,447

Operating income

412

49%

11.3%

2.0%

(Unit: Million yen)

Fiscal 2008

Yearon-yearchangeOrders received

2,000-318-1,203

Net sales

2,000-447-363

Operating income

0-49%

0.0%

Note: % indicates ratio to net sales.

Note: % indicates ratio to net sales.

Analysis of factors in year-on-year change
Orders received: Station operating system IC compatible
equipment was solid
Net sales:
PASMO, Suica related equipment in theTokyo metropolitan area settled for the time
being
Operating income:Positive factors: No significant factors
Negative factors: The effect of revenue contraction was a
decline of 300 million yen; manufacturing
efficiency worsened

Plans and strategies for year ending May 2009
Orders received:

Station operating system IC
compatible equipment solid

Operating income:Positive factors: Improvements in manufacturing
efficiency
Negative factors: Due to the effect of revenue
contraction, a decline of 100
million yen26

3. Status and Strategies, by Business Segment
3-3. Information Systems Segment(1) Growth in the IC-card-related
business(2) Commenced sales of radio
facility data collection system

 Response to the nationwide adoption of IC  Batteryless, wirelesstrain tickets
 Possible application in measuring
 Entry into other fields by finding newenergy-saving effects
applications for station operation equipment

Station operating
systems

ElectricMoney
Security

Current sensor

PC

RS-232C
outputPower sensor

CRM
Analog sensor

Receiver unitSpecial
low-power
radio

Various monitoring
equipment27

3. Status and Strategies, by Business Segment
3-3. Information Systems Segment(3) Aggressive pursuit of growth in the remote monitoring business Energetically expanding the market on the basis of performance to dateMovingMovingequipment
equipment
monitoring
monitoring

Transportation industry

Railway and automobile traffic(buses and taxis)

RemoteRemotemonitoring
monitoring
systemsystemAgriculture
Facilities
Facilitiesandandequipment
equipment
monitoring
monitoring

Greenhouse traceability

Social infrastructure

Small water supply system28

4. Other
4-1. Corporate Social Responsibility
In November 2007, the Toyo Denki Group asked each employee for CSR ideas, togive each person a chance to take more initiative. From the more than 200
submissions, the following activities have been launched.
Fiscal 2007:■ Distributed environmental housekeeping books (May 2008)
To promote household energy conservation, distributed Toyo Denki's originalenvironmental housekeeping book to Toyo Denki Group employees
Fiscal 2008:■ PR for CSR activities (from June 2008)
Providing information on CSR activities in our main businesses, environmental
initiatives, and social contribution programs on Toyo Denki's redesigned Web page
■ Hold plant tours for railway research associations (July and August 2008)
To promote understanding of Toyo Denki's principal activities and products,
railway research associations from five Tokyo metropolitan area universities will be
invited for plant tours29

4. Other
4-2. Overseas Sales(1) The overseas sales ratio rose, but the goal by end fiscal 2008 is tobring it back up to 15%(2) Toyo Denki will continue to aggressively enter markets in urban
transportation in China and the U.S. and electricity generation inAsia(Unit: Million yen)

Fiscal 2007

Fiscal 2003

Fiscal 2004

Fiscal 2005

Fiscal 2006

Overseas sales

3,723

5,387

4,986

4,117

5,061

Consolidated sales

30,17534,66832,45436,571

38,130Overseas sales asproportion ofconsolidated sales (%)

12.3

15.5

15.4

11.3

13.3

30

4. Other
4-3. Dividends(1) Toyo Denki’s fundamental policy calls for a stable dividend(2) In addition to strategic allocation to research and development,
capital expenditure, and overseas expansion with the objectivesof future business expansion and strengthening of themanagement base, internal reserves are used to strengthen thecompany's financial position(Unit: Yen)

Fiscal2003
Annual dividend
per share

3.00

Fiscal
2004

5.00

Fiscal
2005

6.00

Fiscal
2006

Fiscal
2007

6.00

6.00

Fiscal2008

6.00(Forecast)

Note: Toyo Denki holds approximately 4.4% of its common stock issued andoutstanding.

31