Our Heart and Technology for the FutureInterim Financial Results Briefing
Fiscal 2007 (Ending May 2008)(Excerpts)

January 24, 2008
Teruyuki Oosawa, President
Toyo Denki Seizo K.K.

90th Anniversary
Toyo Denki will mark the 90th anniversary of its founding on June20, 2008.
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 cultivatedsince its founding as the core, Toyo Denki is addressing thechallenges of making the next generation of high-speed railroadsand the recycling society a reality. Furthermore, the company has
also been working aggressively to expand overseas to grow itsbusiness.

ProgramPresident’s Briefing: About 25 minutes
1. Overview of Interim Financial Results for Year Ending May 2008
2. Outlook for Full Year Financial Results for Year Ending May 2008
3. Status and Strategies, by Business Segment
4. Other

Q&A: About 30 minutes

1. Overview of Interim Financial Results for Year Ending May 2008
1-1. Overview of Consolidated Financial Results(Unit: Million yen)
Fiscal 2006
Interim period

Fiscal 2007
Interim period

Year-on yearchangeOrders received

17,27021,603+4,333

Net sales

16,134

16,922+788

Operating income

441(43)

-484%

2.7%

Ordinary income451−(154)

-605%

2.8%

Net income(1,037)−(452)+585−−(22.83)(9.98)%Net income pershare (yen)NotesTransportation Business segment
strongTransportation and Industrial Systems
segments solid+12.854

1. Overview of Interim Financial Results for Year Ending May 2008
1-2. Overview of Non-consolidated Financial Results(Unit: Million yen)
Fiscal 2006
Interim period

Fiscal 2007
Interim period

Year-on yearchangeOrders received

14,662

18,787+4,125Net sales

13,27813,910+632

Operating income

76(530)

-606%

0.6%

Ordinary income325−(366)

-691%

2.5%

Net income(854)−(449)-405%−−(18.81)(9.91)Net income pershare (yen)NotesTransportation Business segment
strongTransportation and Industrial Systems
segments solid+8.90
5

1. Overview of Interim Financial Results for Year Ending May 2008
1-3. Consolidated Financial Position
Comparative Consolidated Statement of Financial Position(Unit: Million yen)
Year-on-year May 31, 2007changeNov. 30, 2006

Nov. 30, 2007

34,44935,032+583

35,763Current assets

19,537

20,364+827

20,837

Fixed assets

14,911

14,667-243

14,926

Total liabilities

20,43421,509+1,07521,009

4,797

5,825

+1,028

4,865

Net assets

14,015

13,523-489

14,754Equity ratio

40.7%

38.6%

41.3%

Net assets per share (yen)308.42301.11−-7.31

Total assets

Of which, interest
bearing debt

324.796

1. Overview of Interim Financial Results for Year Ending May 2008
1-4. Factors in Decline of Consolidated Operating Income

FactorDetails

NotesCostmanagement(1) Disruption of production processes inTransportation Business segment(2) Impact of hike in raw materials prices(3) Decline in gross profit margin(1) in line with projections
from 2Q fiscal 2007

Accounting
treatment

Adoption of more rigorous accounting
treatment

Adopting as much as
possible during fiscal 2007

New design
projects

Overlapping of projects with high proportionof new design and development, such as
Shinkansen, overseas, and environmentallyfriendly products employing batteries, inTransportation Business segment.

Largely resolved in fiscal2007

7

2. Outlook for Full Year Financial Results for Year Ending May 2008
2-1. Order Environment
Comments
Market overall

Negative economic factors expanding sharply due toconcerns over repercussions of US sub-prime loan issue

Transportation Businesssegment(1) Low correlation with economic trends(2) Domestic market solid for time being(3) Overseas, need for development of urban
transportation networks, particularly in China, strong

Industrial Systems
segment(1) Vulnerable to impact of economic trends(2) Tone of expansion for testing equipment for
automotive development regardless of economictrends(3) Trend of structural decline for social infrastructure

Information Systems
segment(1) Market expanding in medium to long term with IC
card adaptations
82. Outlook for Full Year Financial Results for Year Ending May 2008
2-2. Consolidated Outlook(Unit: Million yen)

Fiscal 2006

Fiscal 2007
Initial projections

Fiscal 2007
Revised figures

Comparisonwith projections

Orders received

37,64941,00041,000No change

Net sales

36,57139,00039,000No change

Operating income

1,928

2,300

1,200

-1,100%

5.3%

5.9%

3.0%

Ordinary income

1,967

2,200

1,000%

5.4%

5.6%

2.5%

Net income(151)

1,200

500%

−

3.0%

1.2%

(3.33)

26.41

11.03

Net income pershare (yen)-1,200-700-15.3892. Outlook for Full Year Financial Results for Year Ending May 2008
2-2. Non-consolidated Outlook(Unit: Million yen)

Fiscal 2006

Fiscal 2007
Initial projections

Fiscal 2007
Revised figures

Comparison
with projections

Orders received

31,66334,80034,800No change

Net sales

30,75532,50032,500No change

Operating income

1,074

1,500

300

-1,200%

3.5%

4.6%

0.9%

Ordinary income

1,336

1,600

400%

4.3%

4.9%

1.2%

Net income(288)

1,000200%

−

3.0%

0.6%

(6.34)

22.01

4.41

Net income pershare (yen)-1,200-800
-17.6
10

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

90th anniversary ofcompany’s founding inJune 2008

50
45

Net sales (Scale: left)

40

Operating income (Scale: right)
34.7

3530

28.7

29.0

30.2

15
45.0

39.0
36.5
32.4

10

25
20
4.50

15
2.53

10
5

1.85

2.59

1.77

5

1.92
1.20

0.37
00
2001

2002

(Project 0)

2003

2004

2005

Grow Up 123

2006

2007

2008

Innovation 9011

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

1,400
Capital expenditure
Depreciation expenses

1,200

1,200

1,173

1,200

1,000
800
600
400

573

543
385329306 334

650

600
507

371

406

210
20011802001

2002(Project 0)

2003

2004

Grow Up 123

2005

2006

2007

2008

Innovation 90
12Reference: Changes in Consolidated Research and Development Expenses(Unit: Million yen)

1,400
1,200

1,200
1,000

900
788

800
600

675665

2004

2005

546
425

400
25620002001

2002(Project 0)

2003

Grow Up 123

2006

2007

2008

Innovation 9013

Reference: Changes in Consolidated Personnel Expenses(Unit: Million yen)

(Unit: People)
1 ,4 0 0

16,000
Personnel (End of year)

1,200

14,00012,00010,000

1,023

1,080

1,071

1,064

1,250
1 ,2 0 0

1,081

1 ,0 0 0

1,002
8,881
8,037

8,000

8,788

9,196

9,518

9,615
800
600

6,000
4,000

400

Personnel expenses

200

2,000

002001

2002(Project 0)

2003

2004

2005

Grow Up 123

2006

2007

2008

Innovation 90

14

3. Status and Strategies, by Business Segment
3-1. Transportation Business Segment(a) Interim consolidated financial results
for year ending May 2008(b) Outlook for full year consolidated
results for year ending May 2008

(Unit: Million yen)

Fiscal 2006
Interimperiod

Fiscal 2007
Interimperiod

Year-onyearchangeOrders received

7,836

11,900+4,064

Net sales

8,194

8,941

Operating income

253(208)%

3.1%−(Unit: Million yen)

Fiscal 2007

Year-onyearchangeOrders received

20,000+1,100+747

Net sales

18,000+771-461

Operating income

100-312%

0.6%

Analysis of factors in year-on-year change
Orders received: Domestic and overseas both strong, orders
for Chengdu subway
Net sales:
Domestic solid, overseas flat
Operating income: Cost cutting projections not achieved,Overlapping of projects with high proportionof new design, such as Shinkansen, overseas
and environmentally friendly products
Expansion in advance investment forbusiness expansion

Plans and strategies for year ending May 2008
Orders received:- Expansion of sales- In particular, strengthening of domestic private
railways and overseas expansion- Boosting expanded sales of environmentallyfriendly (energy conservation) products
Operating income:- Improving plant profit and loss through boosted
productivity and cost cutting
New product development

153. Status and Strategies, by Business Segment3-1. Transportation Business Segment(2) Introduction of Trolley Voltage Compensation System for Streetcars

Trolley Voltage Compensation
System equipment

Kagoshima City Transportation Bureau’slatest Light Rail Vehicle (LRV) rolling stock16

3. Status and Strategies, by Business Segment
3-1. Transportation Business Segment(3) Toyo Denki supplied converter units, drive inverter units, auxiliary
power supply apparatus, gear units, traction motors, and pantographs
for the hybrid LRV unveiled by the Railway Technical ResearchInstitute on October 25.

Running on batteries(Without pantograph)With pantographPhotographs supplied by Railway Technical Research Institute17

3. Status and Strategies, by Business Segment
3-1. Transportation Business Segment(4) October 12: Order for rolling stock electrical equipment for Chengdu
subway line 1 in Sichuan Province, China. Total contract: About 3.5 billion
yen with main products including electrical equipment for rolling stock(running control units, traction motors, gear units, low voltage power units,and communications systems) and brake units for rolling stock.

Beijing:
726 cars
Chengdu: 102 cars
Total:

828 carsSigning ceremony18

3. Status and Strategies, by Business Segment
3-1. Transportation Business Segment(5) Changzhou Ruiyang Transmission Technology Co., Ltd., plant operatingfrom January 2008.
Expanding production of gear units.

Gear unit

January 2008 new plant operation19

3. Status and Strategies, by Business Segment
3-2. Industrial Systems Segment(a) Interim consolidated financial results
for year ending May 2008(b) Outlook for full year consolidated
results for year ending May 2008

(Unit: Million yen)

Fiscal 2006
Interimperiod

Fiscal 2007
Interimperiod

Year-onyearchangeOrders received

8,288

8,463+175

Net sales

6,673

7,352

Operating income75304%

1.1%

4.1%

(Unit: Million yen)

Fiscal 2007

Year-onyear change

Orders received

18,500+1,814+679

Net sales

18,500+2,810+229

Operating income

1,000-2%

5.4%

Analysis of factors in year-on-year change

Plans and strategies for year ending May 2008

Orders received:
Processing equipment strong
Net sales:
Testing equipment solid
Operating income: Rising sales contributing

Expanding orders and increasing value added:- Increased market share of testing equipment for
automotive development- Development of next-generation inverter- Expanded sales of ED motor (IPM synchronous motor)- Expanded dedicated sales network for invertors- Increased value added by shortening production times20

3. Status and Strategies, by Business Segment
3-2. Industrial Systems Segment(1) Toyo Denki exhibited at System Control Fair 2007. Displayed ED motor,
UF motor, and ultra high-speed motors used in testing equipment for
automotive development which bring together the company’s motor drive
technology, showcasing its line-up of intelligent invertors.
(November 13 – 16, 2007)

Toyo Denki booth,
System Control Fair

Motor used in testing equipment for
automotive development(Low inertia, low torque: 750kW)
21

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, to go 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 lifecomponents(6) Design and adjustment possible using PC(7) Compatible with all kinds of open networks

VF66 inverter22

3. Status and Strategies, by Business Segment
3-3. Information Systems Segment(a) Interim consolidated financial results
for year ending May 2008(b) Outlook for full year consolidated
results for year ending May 2008

(Unit: Million yen)

(Unit: Million yen)

Fiscal 2006
Interimperiod

Fiscal 2007
Interimperiod

Year-onyearchange

Orders received

1,146

1,239+93

Orders received

2,500+437

Net sales

1,267627-640

Net sales

2,500-1,150

Operating income

113(139)-252

Operating income

100-312%

8.9%

−%

4.0%

Fiscal 2007

Year-onyearchange

Analysis of factors in year-on-year change

Plans and strategies for year ending May 2008

Orders received:

Efforts aimed at business expansion:- Development of remote monitoring technology
and market development- Development of IC compatible equipment andmarket development

Station operating system IC
compatible equipment solid
Net sales:
PASMO, Suica related equipment
settled for the time being
Operating income: Effect of declining sales

233. Status and Strategies, by Business Segment
3-3. Information Systems Segment(1) Toyo Denki exhibited at Maintenance Techno Show 2007
Demonstrations of the radio facility data collection system and theremote monitoring system (location information on mobile electronic
lock and monitoring and control of status of facilities and equipment),
which assist with labor savings for on site inspections of electricalequipment. (November 6 – 9, 2007)

Toyo Denki booth,
Maintenance Techno Show 2007

Remote monitoring andcontrol system terminal
μTOP

Radio facility datacollection system,
μTURTLE24

3. Status and Strategies, by Business Segment
3-3. Information Systems Segment(2) Expanding sales of remote monitoring equipment
Main applications: Monitoring, data collection and control forfacilities and moving equipment
User’s facilities

User
Data center(ASP)
Cellular phone Internet

Cellularphone
networkμTOP
Moving equipment(Position, status,abnormality detection)

PC
Facilities and equipment(Status and abnormality detection)25

4. Other
4-1. Capital Expenditure
Toyo Denki has decided to make a total of 2.4 billion yen in capital
expenditure with the aims of expanding production capacity anddevelopment and design capabilities (scheduled for completion in May 2010).

Planned site of
new R&D center

Toyo Denki’s Yokohama works
26

4. Other
4-2. Overseas Sales(Unit: Million yen)

Fiscal 2003

Fiscal 2004

Fiscal 2005

Fiscal 2006

Fiscal 2007
Interim period

Overseas sales

3,723

5,387

4,986

4,117

2,652

Consolidated sales

30,17534,66832,45436,571

16,922

Overseas sales asproportion of
consolidated sales (%)

12.3

15.5

15.4

11.3

15.7

27

4. Other
4-3. Dividends(1) Toyo Denki’s fundamental policy is 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 thefinancial position.
(Unit: Yen)

Fiscal
2002
Annual dividend
per share

2.50

Fiscal2003

3.00

Fiscal
2004

5.00

Fiscal
2005

6.00

Fiscal
2006

6.00

Fiscal2007

6.00

28