Our Heart and Technology for the Future

Financial Results Briefing
First Half of Fiscal 2008 (Ended November 2008)

January 20, 2009
Teruyuki Oosawa, President
Toyo Denki Seizo K.K.

ProgramPresident’s Briefing: About 25 minutes
1. Overview of Financial Results for the First
Half of Fiscal 2008
2. Outlook for Full Year Financial Results forFiscal 2008
3. Status of Individual Business Segments
4. Other Topics
Q&A: About 30 minutes

1. Overview of Financial Results for the First Half of Fiscal 2008
1-1. Overview of Consolidated Financial Results(Unit: Million yen)

1H/FY2007 1H/FY2008 YoY change
Orders received

21,60318,199Net sales

16,922

16,092

Operating income

(43)

802-

5.0%

(154)

703-

4.4%

(452)

79-

0.5%

(9.98)

1.79%
Ordinary income%Net income%Net income pershare (yen)Notes
Decrease in the Industrial-3,404 Systems segment-830

Robust results in theTransportation Business, decline
in the Industrial Systems segment+845 Improvements in manufacturing
efficiency+857+531 Loss on devaluation ofinvestment securities incurred+11.77

Note: % indicates ratio to net sales.

31. Overview of Financial Results for the First Half of Fiscal 2008
1-2. Orders Received, Sales, and Operating Income by Business Segment(Unit: Million yen)Transportation
BusinessIndustrial
Systems

Information
Systems

1H/FY2007

11,900

8,463

1,239

21,603

1H/FY2008

10,704

6,200

1,294

18,199

1H/FY2007

8,941

7,353

628

16,922

1H/FY2008

9,453

5,938

700

16,092

1H/FY2007

(208)

304

(139)

(43)

1H/FY2008

946

(24)

(118)

802

Total

Orders received

Sales

Operatingincome4

1. Overview of Financial Results for the First Half of Fiscal 2008
1-3. Factors Contributing to Changes inConsolidated Operating Income (YoY)
FactorDetails

Drop in revenue

Industrial Systems: Down 400 million yen

Improvements ingross profit

Decrease in Transportation Business projects
requiring new design work

Manufacturing
efficiency(1) Transportation Business: Up 400 million yen(2) Decline attributable to the drop in Industrial
Systems sales

51. Overview of Financial Results for the First Half of Fiscal 2008
1-4. Consolidated Financial Position
Comparative Consolidated Statement of Financial Position(Unit: Million yen)

Nov. 30, 2007 Nov. 30, 2008
Total assets

YoYchangeMay 31,2008

35,032

34,775-257

35,371

Current assets

20,36421,927+1,56321,705

Fixed assets

14,667

12,847-1,82013,665

Total liabilities

21,50921,842+333

21,641

5,825

6,984

+1,1595,505

Net assets

13,523

12,932-591

13,729Equity ratio

38.6%

37.2%

–38.8%Net assets per share (yen)301.11290.79-10.32308.51

Of which, interest bearing debt

62. Outlook for Full Year Financial Results for Fiscal 2008
2-1. Consolidated Forecast(Unit: Million yen)

FY2007

FY2008Previous forecast

FY2008
Revised forecastOrders received

38,87344,00038,000-6,000

Net sales

38,13040,00035,000-5,000

Operating income

1,391

2,000

1,800-200%

3.6%

5.0%

5.1%

Ordinary income

1,197

1,800

1,600%

3.1%

4.5%

4.6%

Net income

532

900

500%

1.4%

2.3%

1.4%

Net income pershare (yen)

11.84

20.22

11.24

Net
Change-200-400-8.98

Note: % indicates ratio to net sales.

72. Outlook for Full Year Financial Results for Fiscal 2008
2-2. Orders Received, Sales, and Operating Income by Business Segment(Unit: Million yen)Orders received

SalesOrdinary income

Transportation
BusinessIndustrial
Systems

Information
Systems

FY2007

21,932

14,623

2,318

38,873

FY2008
forecast

21,00015,0002,000

38,000FY2007

19,781

15,901

2,447

38,130FY2008
forecast

20,00013,0002,000

35,000FY2007

544

798

49

1,391

FY2008
forecast

1,600

200

0

1,800

Total

8

2. Outlook for Full Year Financial Results for Fiscal 2008
2-3. Order Environment
Comments

Market overall(1) The financial crisis continues to negatively impact economic conditions inthe United States, seriously affecting the global economy(2) Substantial drop in corporate sector sales prompting a cautious approach
toward capital investment(3) Downturn in Japan’s international price competitiveness due toappreciation in the value of the yenTransportation
Business(1) The domestic market remains solid(2) Fueled by such favorable conditions as the growing recognition andconcern toward environmental issues, strong growth in overseas demandfor urban transportation network development, particularly in China

IndustrialSystems(1) Substantial drop in corporate sector sales rapidly prompting a cautious
approach toward capital investment(2) Across-the-board decline encompassing all segments

InformationSystems(1) Market expanding in medium to long term with IC card adaptations

92. Outlook for Full Year Financial Results for Fiscal 2008
2-4. Factors Contributing to Changes inConsolidated Operating Income (YoY)
FactorDetails

Drop in revenue

Industrial Systems: Down 200 million yen
Information Systems: Down 100 million yen

Improvements ingross profit(1) Decrease in Transportation Business projects
requiring new design work
(2) Slowdown in the sharp upward trend in raw
material prices

Manufacturingefficiency(1) Transportation Business: Up 200 million yen(2) Industrial Systems: Down 200 million yen(Drop in work volume)(3) Information Systems: Up 100 million yen

10Reference: Changes in Consolidated Net Sales and Operating Income(Unit: Billion45.00yen)

40.00

15.00

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

36.50

34.70
35.00
30.00

38.10
35.00

32.40
28.70

29.00

30.20
10.00

25.00
(1H)

20.00
15.00

16.10
5.00

3.70

10.00

2.53
1.85

2.59

1.77

5.00

1.92

1.40

1.80
0.80
0.00

0.00
2002/05(Project 0)

04/05

06/05

Grow Up 123

08/05

09/05

Innovation 90

11Reference: Trends in Overseas Sales (Consolidated)(1) Overseas sales share target: 15% or more by the end of fiscal 2008
(2) Toyo Denki will continue to aggressively enter markets in urban
transportation in China and the United States and the power
generating equipment markets of Asia
(Unit: Million yen)

FY2004 FY2005 FY2006 FY2007

1H/FY2008

Overseas sales

3,723

5,387

4,986

4,117

2,705

Consolidated sales

30,17534,66832,45436,571

16,092

12.3

15.5

15.4

11.3

16.8

Overseas sales as proportionof consolidated sales (%)

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

1,400

Capital expenditure
Depreciation expenses

1,173

1,200
1,000

819
730

800

666
562

600
400

800 800

385

329
274

374

334

(1H)

507
371

442 443

406

207
2000
2002/05(Project 0)

04/05

06/05
Grow Up 123

08/05

09/05

Innovation 90

13

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

900

811

807

800

800
675

700
600

665

546

500

(1H)

425

406

400
256

300
200
1000
2002/05

03/05(Project 0)

04/05

05/05

06/05

Grow Up 123

07/05

08/05

08/1109/05

Innovation 90

14

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

(Unit: Persons)

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

Employees (End of year)

1,080
1,002
8,881
8,037

1,120

1,071

1,064

1,081

1,087

9,196

9,518

9,615

9,676

1,023
8,788

1,100
9,805
1,000

8,000

900

6,000
800
4,000
Personnel expenses

700

2,000
0600
2002/05 03/05(Project 0)

04/05

05/05

Grow Up 123

06/05

07/05

08/05

09/05

Innovation 90

15

Reference: 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 objectives offuture business expansion and strengthening of the management
base, internal reserves are used to strengthen the company's
financial position(Unit: Yen)

FY2003 FY2004 FY2005 FY2006 FY2007 FY2008
Annual dividend per share

3.00

5.00

6.00

6.00

6.00

6.00
(Forecast)

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

163. Status of Individual Business Segments
3-1. Transportation Business(Unit: Million yen)

Consolidated financial results forthe first half of fiscal 2008

Forecast for consolidated financial
results for fiscal 2008
YoYchange

1HFY2007

1HFY2008

YoYchange

Orders received

11,90010,704-1,196

Orders received

21,000-932

Net sales

8,941

9,453

+512

Net sales

20,000+219

Operating income

(208)

946

+1,154

Operating income

1,600+1,056

–

10.0%

%

8.0%

%

Analysis of factors in year-on-year change
Orders received:
Domestic orders received were firm; Overseas
orders received (particularly in China) tapered off
Net sales:
Robust non-JR private railway sales
Operating income:
Increase in efficiency on the back of productivity
enhancement initiatives

FY2008CommentsOrders received:
Firm domestic and overseas (China) orders
Net sales:
Factories to continue operating at fullcapacity
Operating income:
Concerns surrounding the impact ofappreciation in the value of the yen17

3. Status of Individual Business Segments
3-1. Transportation Business(1) Recognition for contributions to the Beijing Olympic Games(Providing safe transportation and access to the Olympic compound)Toyo Denki was invited to an awards ceremony held in Beijing, China on October 10,
2008. In helping to provide uninterrupted subway transportation, the Company wasrecognized for its contributions to a successful Olympic games.

18

3. Status of Individual Business Segments
3-1. Transportation Business(2) The Keihan Nakanoshima Line — Rail services commence utilizing the 3000 series
railway car•Rail services that continue through to the Keihan Nakanoshima Line commenced onOctober 19, 2008 utilizing forty-eight 3000 series railway cars for use in six trains•Received order for all electrical equipment, including control units, traction motors,auxiliary power supply apparatus, drive gear units, pantographs, monitoring
devices, etc.

19

3. Status of Individual Business Segments
3-1. Transportation Business(3) Order received from the Dallas Area Rapid Transit (DART) Authority•Order received for 48 cars. This request follows an original order for 20 cars in 2003
•Additional cars are in preparation for the opening of a new DART line20

3. Status of Individual Business Segments
3-1. Transportation Business(4) Participation in InnoTrans 2008
Toyo Denki participated in InnoTrans 2008, the world's largest international industryconvention focusing on railway technology, held in Berlin, Germany from September
23 to 26, 2008, as a member of the Japan Overseas Railway Stock Association(JORSA) exhibit.

21

3. Status of Individual Business Segments
3-1. Transportation Business(5) APTA EXPO 2008
Toyo Denki participated in APTA EXPO 2008, held in San Diego, California U.S.A.
from October 6 to 8, 2008, organized by the American Public Transportation
Association.

22

3. Status of Individual Business Segments
3-2. Industrial Systems(Unit: Million yen)

Consolidated financial results forthe first half of fiscal 2008

Forecast for consolidated financial
results for fiscal 2008

1H
YoY
1H
FY2007 FY2008 change

Fiscal 2008

YoYchange

Orders received

8,463

6,200-2,263

Orders received

15,000+377

Net sales

7,352

5,938-1,414

Net sales

13,000-2,901

Operating income

304

(24)

-328

Operating income

200-598

%

4.1%

–%

1.5%

Analysis of factors in year-on-year change
Orders received:
Decrease across all segments
Net sales:
Overseas sales were firm; Weak in otherareas
Operating income:
Impacted by the drop in sales

Comments
Orders received:
Harsh operating environment
Net sales:
Difficult conditions reflecting the harsh
operating environment for orders
Operating income:
Impact from the drop in sales

233. Status of Individual Business Segments
3-2. Industrial Systems(1) Acquired Nippon Kaiji Kyokai (NK) Certification
Toyo Denki acquired NK certification for its marine inverter on September 22, 2008.
Machinery installed on a marine vessel is subject to rigid testing. A portion or all of thistesting process can be omitted for automated devices and equipment that haveacquired type approval certification from Nippon Kaiji Kyokai.
Image of Ship
Shipbuilding and marine
engineering products

Antenna
Radar
Direction finding equipment

Porthole

Deck craneAnchor lightLife raft
A/C
equipment
Sewagetreatment unit
Steering
engineRudder

The NK certified
VF64-25044mr

Propeller

Boiler

Hatch
cover

Oil-water
separationequipment

Plumber Generator Principal
block
engineSource: Website of the Shipbuilders’ Association of Japan

Anchor

The Nippon Kaiji
Kyokai Certificate ofType Approval24

3. Status of Individual Business Segments
3-2. Industrial Systems(2) Toyo Denki commenced sales of µGPCsH, an FA controller
Sales commenced from December 2008. Building on the specifications of the variable
speed drive system compatible programmable controller, the µGPCsH realizes
increased high-speed control and communication network expansion.

External configuration of the µGPCsH

Approx. 50cm253. Status of Individual Business Segments
3-2. Industrial Systems(3) Automa Vietnam 2008
Toyo Denki participated in the International Exhibition Fair for Automation,Measurement and Control (Automa) 2008 held in Vietnam from September 27 to 30,
2008. The Company exhibited demonstration models of its VF64, µGPCsH, Eco-drive
motor, and VF64CE and VF66B systems and equipment.

263. Status of Individual Business Segments
3-3. Information Systems(Unit: Million yen)

Consolidated financial results forthe first half of fiscal 2008

Forecast for consolidated financial
results for fiscal 2008

1H
YoY
1H
FY2007 FY2008 change

YoYchange

FY2008Orders received

1,239

1,294+55

Orders received

2,000-318

Net sales

627

700+73

Net sales

2,000-447

Operating income

(139)

(118)

+21

Operating income

0-49

––%–%

Analysis of factors in year-on-year change
Orders received:
Orders received for station operating system IC
compatible equipment were firmNet sales
Sales of PASMO- and Suica-related equipment
tapered off
Operating income:
Impacted by the drop in sales

Comments
Orders received:
Focus on orders for station operating
system IC compatible equipment
Expand sales of remote monitoring
systems27

3. Status of Individual Business Segments
3-3. Information Systems(1) Growth in the IC-card-related business Development of multifunction mobile terminal equipment
 Entry into other fields by finding new applications for station operation equipment

Station operating
systems

ElectricMoney
SecurityCRM

28

3. Status of Individual Business Segments
3-3. Information Systems(2) Aggressive pursuit of growth in the remote monitoring business Proactively develop the market
Transportation industry
MovingMovingequipment
equipment
monitoring
monitoring

RemoteRemotemonitoring
monitoring
systemsystem

Railway and automobile traffic(buses and taxis)

Agriculture
Facilities
Facilitiesand
andequipment
equipment
monitoring
monitoring

Greenhouse traceability

Social infrastructure

Small water supply systems29

4. Other Topics
4-1. Corporate Social Responsibility
 Plant tours for university-based railway
research clubs
The railway research clubs of five Tokyo
metropolitan area universities were invited toparticipate in plant tours in July and August 2008

 Onsite lectures on the environment organizedby the City of Yokohama
A series of lectures were held at elementary
schools in Yokohama in November 2008. Basedon the theme “Building Eco-Friendly Railway
Systems ― Promoting Ecological Integrity through
Increased Railway System Use” and attended byapproximately 160 year-six students, theselectures served to increase the interest ofparticipants in railways. This initiative wasreported by the Kanagawa Shimbun.

A reporter from the newspaper
publishing company gathering material30

4. Other Topics
4-2. Proposal for a Comprehensive Capital and Business Alliance
Timeline of inquiries, replies, discussions and other matters relating to the proposal
2008:
Sep. 16
Oct. 1
Oct. 10
Oct. 24
Nov. 5
Nov. 17
Nov. 25
Nov. 28
Dec. 5
Dec. 8Dec. 11
Dec. 15

Dec. 16Comprehensive capital and business alliance proposal letter received
Analysis and deliberations commence
Initial list of 81 inquiries dispatched
Initial reply received
Second list of 55 inquiries dispatched
Second reply received
Third list of 20 inquiries dispatched
Third reply received
A meeting between three parties proposed by Toyo Denki’s Independent Committee
Three-party meeting held
Objection notice issued by Toyo Denki’s employees’ union
Meeting between the two involved companies to discuss matters relating to technology, labor,
finance and management held
(11:00 am) Notification of completion of the provision of information issued by Toyo Denki(3:30 pm) In line with the expiry of the original proposal submitted on Sep. 16,
Nidec Corporation announced its decision not to extend or issue a new proposal
Toyo Denki announced its decision to discontinue all response measures31

4. Other Topics
4-5. Basic Strategies Outlined in the New Three-Year Management Plan

(1) Enhance corporate value• Increase orders• Raise production capacity(2) Bolster the Group strategy(3) Reinforce the overseas strategy(4) Strengthen new businesses(5) Fortify alliances

32