Annual Report2009
For the year ended March 31, 2009

Message from the Chairman and the President
It is our pleasure to report on JTEKT Corporation's business performance for the fiscal year throughMarch 2009.
Japan's economy suffered a dramatic decline during this period as a result of sharp increases in raw
material prices, the spreading of the financial crisis rooted in the U.S. subprime loan problem, and,particularly in the latter half, yen appreciation and falling stock prices.
Overseas as well, the economies of America and Europe receded, and even Asian economies enjoying
strong growth in recent years experienced a slowdown, evidencing the global scale of the economic
downturn this time.
Amidst such economic circumstances, the JTEKT Group during this period strove to offset thedramatic decline in production and sales volumes by energetically pursuing cost reductions, improving theefficiency of its manufacturing structures, and strengthening its quality control systems. Despite these
efforts, however, consolidated sales fell 140,523 million yen, or 12.1 percent, from the previous period to
1,017,071 million yen.
In regard to profit, the decline in sales caused by significantly reduced demand along with yen
appreciation, increases in raw material prices and other factors led to a consolidated ordinary profit of
11,109 million yen, a decrease of 61,786 million yen, or 84.8 percent, from the previous term, andconsolidated net income of negative 11,954 million yen, a decrease of 55,400 million yen from theprevious term.
An end-of-term dividend of 6 yen per share was issued, bringing the total dividend for the year to 17
yen per share (with an interim dividend of 11 yen per share).
The JTEKT Group will strive to restructure its operations, further analyze and reduce costs, develop
new products based on a concept of environmental friendliness, compactness and light weight, andstrengthen profitability in order to meet the expectations of shareholders, customers and others.
We hope for the continued support and understanding of our shareholders.

Consolidated Financial Highlights

Consolidated sales

Consolidated operating income(unit: billions of yen)

1,157

1,200
1,100

1,025

77

80

1,017

70

1,000

44

43

40

64

30

800
50

700

20
40

600

10

500

30

400

22
20

300
200

〜3/07

〜3/08

〜3/09

Net income per share

0

-11
〜3/07

〜3/08

140.51140〜3/09

Net assets per share(unit: yen)

June 2009135.58

-20

〜3/07

〜3/08

1,168.42(unit: yen)

24.00

24

1,082.87

120

22

951.66

1,000

20

19.00
17.00

18
80

Chairman
Kohshi Yoshida

800

16

60

President
Motohiko Yokoyama

14

40

600

12
10

20

6
-20

Message from the Chairman and the President

1

Consolidated Statement of Income and Retained Earnings

7

Consolidated Financial Highlights

2

Consolidated Statement of Cash Flows

7-40

Global Network

3

Nonconsolidated Balance Sheet

8-60

Introduction of New Technology and Products

5

Nonconsolidated Statement of Income

9

Consolidated Balance Sheet

6

Company Profile

10

1

8

400

0

Contents〜3/09

Cash dividends per share(unit: yen)

1,200

100

0
-10

10

100
0

(unit: billions of yen)

50

60

900

Consolidated net income(unit: billions of yen)200

4-37.22
〜3/07

〜3/08

〜3/09

2
0

〜3/07

〜3/08

〜3/09

0

〜3/07

〜3/08

〜3/09

2

North America

Global Network

Bases: 13

Japan

Transition of sales

Bases: 44

180
160
140
120
100
80
60
40
20
0

2
3
1
3
5
3
5
2
2
18

Head office
R&D centers
Sales & Marketing headquarters
Operations headquarters
Technical centers
Steering plants
Bearing plants
Driveline component plants
Machine tool plants
Sales bases / service centers

Transition of sales
600

539

500
400
300
200
100
0

〜3/07

〜3/08

〜3/07

145

〜3/08

〜3/09

JTEKT participated in the large-scale U.S. trade show IMTS
and displayed mainly machine tools for the aerospace andenergy-related industries. The JTEKT booth received more
visitors this time thanat the last show, whoshowed particularinterest in the large
machines.

634

595

154

(unit: billions of yen)

170

Participation in IMTS

(unit: billions of yen)

700

1
2
4
1
1
4

Regional headquarters
R&D centers
Steering plants
Bearing plants
Driveline component plants
Sales bases / service centers〜3/09

Torsen units: Domestic production level of
4M units reached
JTEKT in Dec 1989 manufactured its first Torsen unit, a partthat appropriately distributes engine drive force to the wheels,and now has reached a production level of 4M units in Japan.
This unique, highly regarded product provides superior driving
stability and performance and has been widely adopted amongcarmakers worldwide mainly on 4WD sports cars and SUVs.

New bearing plant opened in America
A joint ceremony was held to commemorate the opening of
Koyo Corporation of U.S.A.'s Washington Plant, its third, andNakatetsu Machining Technologies (NMT), a joint venture between
JTEKT and groupcompany NakatetsuCo., Ltd.

Nikkan Kogyo Shimbun award received
JTEKT's FH1250SX large horizontal machining
center received an award at the
Nikkan Kogyo Shimbun's 51st
new product awards.

EuropeStart of steering die-cast parts production

Asia, Oceania, other (excluding Japan) New company established in India

Bases: 22

A line-off ceremony was held to commemorate
the start of steering die-cast parts production atCzech affiliate JTEKT Automotive Czech Pardubice
S.R.O., which will provide such parts to numerous
JTEKT European affiliates. Attending werenumerous officials from CzechInvest and the cityof Pardubice.

Bases: 36

3
2
5
2
2
8

Regional headquarters
R&D centers
Steering plants
Bearing plants
Driveline component plants
Sales bases / service centers

Transition of sales
200(unit: billions of yen)Transition of sales

231

240

200

188

JTEKT was one of only 14 out of 800 suppliers
to receive an award from PSA Peugeot Citroen
at this customer's award ceremony. The award
was for superior quality in afterservice.

120
80
40

3

140

Award received from PSA Peugeot Citroen

160

0Regional headquarters
R&D centers
Steering plants
Bearing plants
Driveline component plants
Machine tool plants
Sales bases / service centers

131

Opening ceremony held for new plantin India87

A ceremony was held to commemorate theopening of JTEKT Sona Automotive India Ltd.'s
new plant in Haryana, India. Production of electric
power steering at the plant is scheduled to startin November.

80
60
40
20

〜3/07

〜3/08

〜3/09

0

Toyoda Micromatic Machinery India Limited
was established in Gurgaon, Haryana, India
jointly with a large-scale local maker of grinders
as a machine tool sales and service company
with the aim of expanding sales in the Indian
market.

(unit: billions of yen)

120

120
100

2
2
10
8
1
2
11

〜3/07

〜3/08

〜3/09

4

Financial data

Introduction of New Technology and Products

Consolidated Balance Sheet
March 31, 2009ASSETS

Development of high-rigidity
ball slide type intermediate shaft
The intermediate shaft is the part linking the steering column and gearbox.
This new type has been developed for high-power column type electric
power steering systems, which contribute to improved vehicle fuel efficiency,
and enhances driving stability. It utilizes a linear type ball slide mechanism
based on a bearing design to eliminate play and achieve high rigidity,
which enables stability during high-speed straight driving and improves
steering stability by smoothly absorbing vertical vibrations caused by roadconditions.

Development of lightweight,
low-torque hub unit bearing
for small cars
The hub unit bearing is a unit comprising the wheel bearing and peripheral
parts. This new type, which has been developed for small cars, has low torqueand is lightweight and compact, making it environmentally friendly. Measures
such as reducing the bearing flange thickness and modifying the dust cover
shape enabled weight to be reduced 20% and torque 30% in comparison
with the conventional product.

Millions of yen

Thousands of
U.S. dollars

2009

2009

Current assets:￥ 52,074 ＄ 530,124

CashTime deposits

1,133

11,533

Short-term investments

23,731

241,584

151,238

1,539,634

7,583

77,194

Notes and accounts receivable:
Trade
Unconsolidated subsidiaries and affiliates
Other
Allowance for doubtful accounts

10,299104,843

169,120

1,721,671(959)(9,756)

168,161

1,711,915

Inventories

127,7081,300,091

Deferred tax assets

12,165

123,839

Other current assets

12,318125,395

397,290

4,044,481

29,377

299,062

14,394

146,537

43,771

445,599

Buildings and structures

199,808

2,034,079

Machinery and equipment

667,116

6,791,369

5,565

56,657872,489

8,882,105

Total current assets
Investments and advances:
Investments in securities
Investments in and advances to unconsolidated
subsidiaries and affiliates

Development of electronicallycontrolled coupling (ITCC)
for large SUVs
4WD electronically controlled couplings (ITCC) are products installed in
the differentials of 4WD vehicles that instantaneously and optimally control
distribution of drive force to the front and rear wheels in accordance withroad conditions. They enable both the superior fuel efficiency of 2WD vehicles
and such desirable performance features of 4WD vehicles as smooth starting
and acceleration on slippery roads.
Measures to improve durability and enable this newly developed product's
application on large-displacement vehicles included the adoption of a speciallydeveloped high-performance oil and increasing the number of clutch plates.

Development of
two new machine tool types
JTEKT has developed two new types of machine tools: the horizontal
machining center* FH800SXL, and the complex grinder TG5 Grinding Center.
The former was developed in response to strong market demand for ahorizontal machining center capable of machining large parts for use insuch products as large engines, aircraft, and energy-related products. It canmachine parts up to 1.8 meters in diameter, 1.6 meters in height, and 3
tons in weight, considerably larger than those conventional machining
centers can handle. In addition, its reduced machining time improves
productivity, and it can machine a wide variety of materials. The TG5 Grinding
Center is a complex grinder** possessing multiple grinding wheels that arechanged automatically, making it possible to grind the outer diameters,
ends, and inner diameters of cylindrical parts on a single machine. The worldclass grinding precision and quick grinding wheel changeover capability ofthis machine make it a high-precision, highly efficient complex grinder.
* Machining center: A machine tool with numerous cutting tools that are changed automaticallyto enable multiple machining types by a single machine.
** Grinder: A machine tool that performs grinding using rotating grinding wheels. Precision issuperior to that of general cutting by lathes.

Property, plant and equipment:

Lease assets
Accumulated depreciation(620,383) (6,315,624)
252,106

2,566,481

Land

54,801

557,885

Construction in progress

18,854

191,938

325,761

3,316,304

Deferred tax assets

29,369298,987

Other assets

17,271

175,822

Total assets￥813,462 ＄8,281,193

LIABILITIES AND NET ASSETS

2009

2009

Income tax payable
Accrued expenses
Other current liabilities
Total current liabilities
Long-term debt
Accrued indemnities from retirement benefit plan
Accrued severance indemnities for members of
the board of directors and corporate auditors
Deferred tax liabilities
Other liabilities
Total liabilities
Net assets:
Shareholders' equity:
Common stock:
Authorized - 1,200,000 thousand shares
Issued - 321,406 thousand shares
Capital surplus
Retained earnings
Less: Treasury shares
Evaluation and conversion difference:
Unrealized gain on other securities
Translation adjustments on foreign currency
financial statements
Minority interests in consolidated subsidiaries
Total net assets
Total liabilities and net assets

2,454
31,612
17,819313,423

24,978321,816
181,404
3,190,704

107,969
60,435

1,099,143
615,240

3,081
2,696
2,234
489,838

31,36027,44822,744
4,986,639

36,87999,526
197,807(371)

375,437
1,013,190
2,013,713(3,782)

5,962

60,693(34,181)(347,968)
18,002
183,271323,624 3,294,554￥813,462 ＄8,281,193

Conversion rate: ￥98.23 per U.S. dollar

As of March 31, 2009, JTEKT had 97 consolidated subsidiaries and 11 affiliates accounted for by the equity method.
The main ones of each type are shown below.
KOYO MACHINE INDUSTRIES CO., LTD.
TOYOOKI KOGYO CO., LTD.
KOYO SEALING TECHNO CO., LTD.
CNK CO., LTD.
KOYO THERMO SYSTEMS CO., LTD.
KOYO ELECTRONICS INDUSTRIES CO., LTD.
KOYO SALES, LTD.
DAIBEA CO., LTD.
UTSUNOMIYA KIKI CO., LTD.
HOUKO CO., LTD.
TOYODA VAN MOPPES LTD.

5

Thousands of
U.S. dollars

Current liabilities:
Short-term loans￥ 83,979 ＄ 854,927
24,044
244,772
Current portion of long-term debt
Notes and accounts payable:
120,894 1,230,728
Trade
7,638
77,754
Unconsolidated subsidiaries and affiliates
13,681
139,274
Construction
11,302
115,051
Other
153,515 1,562,807(Consolidated subsidiaries)

FH800SXL

Millions of yen(Affiliates accounted for by the equity method)
JTEKT (THAILAND) CO., LTD.
JTEKT AUTOMOTIVE TENNESSEE-MORRISTOWN, INC.
JTEKT AUTOMOTIVE TENNESSEE-VONORE CO.
JTEKT AUTOMOTIVE LYON S.A.S.
JTEKT AUTOMOTIVE DIJON SAINT-ETIENNE S.A.S.
JTEKT AUTOMOTIVE VIRGINIA, INC.
JTEKT AUTOMOTIVE (THAILAND) CO., LTD.
KOYO CORPORATION OF U.S.A.
KOYO ROMANIA S.A.
KOYO BEARINGS (EUROPE) LTD.
TOYODA MACHINERY USA CORP.

FUJIKIKO CO., LTD.
MITSUI SEIKI KOGYO CO., LTD.

TG5 Grinding Center

6

Financial data

Financial data

Consolidated Statement of
Income and Retained Earnings
For the year ended March 31, 2009

Millions of yen

2009

Net sales

Thousands of
U.S. dollars

9,035,569

Income before income taxes

129,507

1,318,412

Depreciation and amortization

administrative expenses

107,137

1,090,679

Operating income

22,370227,733

Selling, general andSubsidiaries and affiliates

70,665(135,584)

Other

5,584

(70,043)(713,046)

134,781

1,372,100(671)(6,827)

(39)

(397)

(20,427)(207,952)

8,221

83,69333,908345,195

Other, net(221,013)

Increase in time deposits

660

6,720

Current

6,165

62,761

Increase in investments in securities

Deferred

5,733

58,360Decrease in loans receivable
Other, net

716

7,293

(11,954)(121,694)

217,333

2,212,489

Net increase due to the change
in scope of consolidation

Cash dividends
Balance at end of the year
Per share:
Net loss
Cash dividends

Net cash used in investing activities

13,851(2,562)(26,078)

302

3,071

1,200

12,212(58,977)(600,399)

585,134

719,277

Subsidiaries and affiliates

26,108

265,785

56,851

Construction

10,115102,969

332,425

Increase in long-term debt

4,249

43,250Cash dividends(8,318)(84,681)

Other, net(1,438)(14,635)

7,970

(647)

(6,586)

Net cash provided byDeferred tax assets

6,905

70,289Other current liabilities

Other current assets

5,716

58,195

216,684

2,205,885(7,708)(78,466)￥ 197,807＄2,013,713

financing activities

276,359

Exchange difference of cash and cash equivalents(12,556)(127,818)

Net increase in cash and cash equivalents(10,478)(106,663)

Yen

U.S. dollars

Cash and cash equivalents at beginning of the year

83,563

850,686￥(37.22)＄(0.38)Net increase due to the change in scope of consolidation

1,989

20,245

17.00

0.17

￥75,074＄764,268

321,146

321,146

Cash and cash equivalents at end of the year

19,296

196,435

Investments in and advances to

4,535

46,16998,2361,000,057

12,210124,295

10,627108,189

189,823

1,932,429

Long-term debt

89,000906,037

Accrued indemnities from retirement benefit plan

41,981

427,376

1,608

16,369Total current liabilities

Accrued severance indemnities for members of
the board of directors and corporate auditors

160,289

1,631,771

179,585

3,833,704

Buildings and structures

115,663

1,177,470

Net assets:

Machinery and equipment

376,585

3,833,704

Shareholders' equity:

1,441

14,669Common stock:493,689

5,025,843

Other liabilities
Total liabilities

759

7,735

323,1713,289,946

36,879375,437

Property, plant and equipment:

Lease assets(375,392) (3,821,563)

Authorized - 1,200,000 thousand shares
Issued - 321,406 thousand shares

118,297

1,204,280

Capital surplus

99,519

1,013,117

Land

39,001

397,043

Retained earnings

126,865

1,291,509

Construction in progress

8,167

83,139(333)(3,393)

165,465

1,684,462

Evaluation and conversion difference:

17,673179,913

Unrealized gain on other securities

5,463

55,615

12,157

123,765

268,3932,732,285

Deferred tax assets
27,147

Other

Accrued expenses

Accumulated depreciation
32,654￥ 48,750 ＄ 496,284

57,478417,185subsidiaries and affiliates

Increase in short-term loans

783

Net decrease due to the change ofaccouting standard

1,361

Cash flows from financing activities:

Consolidated retained earnings:
Balance at beginning of the year

65
(601,070)

2009

Trade

1,371,703

Investments in securities

6(59,043)

2009

Notes and accounts payable:

40,980Investments and advances:

Thousands of
U.S. dollars

203,604

Current portion of long-term debt

134,742(2,450)

Proceeds from sales of property,
plant and equipment

Minority interests in net income of(241)

Short-term loans

Inventories

Total current assets

Purchases of property, plant and equipment

Income taxes:

Allowance for doubtful accounts

Millions of yen

20,000Cash flows from investing activities:
Decrease in marketable securities

Income before income taxes andShort-term investments
Notes and accounts receivable:

Net cash provided byoperating activities(21,710)234,144(13,318)

Payment of income taxes(44,482)

23,000

LIABILITIES AND NET ASSETS
Current liabilities:

Inventories(82,018)(4,369)＄ 54,369

Notes and accounts receivable(8,057)(22,445)

Cash

727,445

Foreign currency exchange loss, net

Net loss

6,720

71,457

Bonuses to directors and corporate auditors

consolidated subsidiaries

660 ＄

595,972(37,202)(2,205)￥ 5,341

Current assets:￥

58,542(3,654)Equity in loss of unconsolidated

2009

Trade

Interest expense(63,272)

2009

22,445

Notes and accounts payable(6,215)

Thousands of
U.S. dollars

2,205

and affiliates

28,406

Loss on sales or disposal of property,

Millions of yen

568,301

2,790

items listed below

2009

ASSETS

55,824

Interest and dividend income

Other, net

2009

Equity in loss of unconsolidated subsidiaries

Other income (expenses):

subsidiaries and affiliates

Thousands of
U.S. dollars

Cash flows from operating activities:

887,564

plant and equipment, net

Millions of yen

2009＄10,353,981

Gross profit

March 31, 2009

For the year ended March 31, 2009

￥1,017,071

Cost of sales

Nonconsolidated Balance Sheet

Consolidated Statement of
Cash Flows

Other assets
Total assets￥591,564 ＄6,022,231

Less: Treasury shares

Total net assets
Total liabilities and net assets￥591,564 ＄6,022,231

Conversion rate: ￥98.23 per U.S. dollar

Weighted average number of common shares
outstanding (thousands)

7

8

Financial data

Company Profile

Nonconsolidated Statement of Income
For the year ended March 31, 2009

Net sales
Cost of sales

Millions of yen

Thousands of
U.S. dollars

2009

2009

￥ 588,462 ＄ 5,990,654

541,905

5,516,690

46,557473,964

46,798476,415(241)(2,451)

Interest and dividend income

9,907

100,853

Interest expense(1,379)(14,033)

Foreign currency exchange loss, net(3,381)(34,421)

Gross profit
Selling, general and administrative expenses
Operating loss

ProfileCompany nameHead office locations

Other income (expenses):

Loss on sales or disposal of property,
plant and equipment, net
Other, net
Loss before income taxes and items listed below(4,098)(41,723)(12,149)(123,675)(11,100)(112,999)(11,341)(115,450)

50

509

296

3,021

Income taxes:
Current
Deferred
Net loss￥ (11,341) ＄ (118,980)

Main business
CapitalSales
Number of employees

Members of the Board and Officers
Directors
ChairmanPresident

Per share:
Net loss
Cash dividends

Yen

U.S. dollars￥ (36.39)＄ (0.37)17.00(0.17)

Executive Vice President
Executive Vice President
Senior Executive Director
Senior Executive Director
Senior Executive Director
Senior Executive Director

Weighted average number of common shares
outstanding (thousands)

Senior Executive Director

321,162

321,162

Nagoya head office
No.7-1, Meieki 4-chome, Nakamura-ku, Nagoya, Aichi Pref., 450-8515, Japan
Osaka head office
No.5-8, Minamisemba 3-chome, Chuo-ku, Osaka, 542-8502, Japan
Manufacture and sale of steering systems, bearings,
driveline components, machine tools, etc.
36 billion yen
Consolidated: 1,017 billion yen
Nonconsolidated: 588 billion yen
Consolidated: 33,029
Nonconsolidated: 10,091

Executive Director
Executive Director
Director

Corporate auditors
Kohshi Yoshida
Motohiko Yokoyama
Shoji Ikawa
Masakazu Nagai
Nobuyoshi Hisada
Tetsuo Inui
Takaaki Suzuki
Hiroshi Itoh
Takao Yoneda
Hitoshi Shimatani
Toshihiko Daido
Takeshi Uchiyamada

Corporate Auditor
Corporate Auditor
Corporate Auditor
Corporate Auditor
Corporate Auditor

Masatake Enomoto
Hiroshi Fujii
Koichi Fukaya
Atsushi Niimi
Masaaki Kobayashi

Managing Officer
Managing Officer
Managing Officer
Managing Officer
Managing Officer
Managing Officer

Managing officers
Executive Managing Officer
Executive Managing Officer
Managing Officer
Managing Officer
Managing Officer
Managing Officer
Managing Officer
Managing Officer

Managing Officer

Masakazu Isaka
Hideo Kuwabara
Toshio Hirokawa
Hiroyuki Kaijima
Ryuichi Kakui
Yoshio Sakai
Tomizou Nakaya
Masayuki Kitamura

Managing Officer
Managing Officer
Managing Officer
Managing Officer
Managing Officer
Managing Officer
Managing Officer

Hisashi Matsumoto
Kiyohiro Iritani
Noriya Murase
Motoyasu Nakamura
Shirou Nakano
Yusuke Horiuchi
Azuma Arai
Tomokazu Takahashi
Hirokazu Takii
Masaki Kamikawa
Shinji Uetake
Hiroyuki Miyazaki
Yoshio Tsuji
Keiji Araki

Shareholder Information as of March 2009 (share quantities in units of 1,000)
1. Number of authorized shares: 1,200,000
Number of issued shares: 321,406
2. Number of shareholders: 21,535
3. Major (top 10) shareholders
Shareholder
Toyota Motor Corporation
The Master Trust Bank of Japan, Ltd.
Denso Corporation
Japan Trustee Services Bank, Ltd.
Japan Trustee Services Bank, Ltd. (4G)
Nippon Life Insurance Company
Toyota Industries Corporation
Resona Bank, Ltd.
The Sumitomo Trust and Banking Co., Ltd.
Sumitomo Mitsui Banking Corporation

9

4. Breakdown of shareholders (100% = total issued shares)

No. of shares
72,435
20,416
17,611
16,555
12,83912,361
7,493
6,749
6,729
6,366

Self-owned shares
239(0.1%)
Individuals
24,746(7.7%)

Financial organizations
119,923(37.3%)

Foreign companies
51,460(16.0%)
Japanese companies
120,402(37.5%)

Securities companies
4,634(1.4%)

10