For New Technology NetworkRBusiness Results
For ｔhe Six Months Ended September 30, 2004

November 9, 2004
NTN Corporation

This presentation and comments made in this conference or during the Q&A session include forward-looking
statements about our expectations for our future performance and our future business strategies. They
represent the best judgment of the management of the company based on the information currently available.
There can be no assurance that future results will meet any expectation, estimate or projection conveyed bythese statements or comments. Actual results may differ materially from our projections depending on variousfactors such as changes in product demand, exchange rates and interest rates.

1/25

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Today s Agenda

RI ． Progess of “Rapid Advance 21” and futurestrategies
by Yasunobu Suzuki, President
II. Business results for the six months ended
September 30, 2004 and forecast for FY2004
ending March 2005(Consolidated)by Tatsuo Kondo, Director
Ⅲ． Q&A Session
2/25

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Progress of “ Rapid Advance21” and Future Strategies
November 9, 2004
NTN Corporation
Yasunobu Suzuki, President
This presentation and comments made in this conference or during the Q&A session include forwardlooking statements about our expectations for our future performance and our future businessstrategies. They represent the best judgment of the management of the company based on theinformation currently available. There can be no assurance that future results will meet any
expectation, estimate or projection conveyed by these statements or comments. Actual results may
differ materially from our projections depending on various factors such as changes in productdemand, exchange rates and interest rates.

3/25

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1.Trend in Consolidated Interim Results andForecast for FY2004
Trend in Interim Sales and Operating
Income(100 million yen）

2000
240
1950

220
1,949

1900

200
1,901

1850

180

1800

162

1,819

158

1750
1,755

160
140

134

1700

120113

1650
1HFY2003

RForecast of Net Sales and Operating
Income for FY2004(100 million yen)

3,900
500
3,850
450
3,850
3,800
3, 800
400
3,750
350
3,700
320
3,700
310
300
3,650
280
3,600
250
announced inannounced inannounced in1 20042 3 Aug.,4 20045 6 Nov.,7 20048
May,100
2HFY2003

Sales

4/25

For New Technology Network1HFY2004 2HFY2004(Plan)

Operating Income

Sales Operating Income
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２．Sales Expansion of Strategic Products（ＣＶＪｓ）

For New Technology Network＜Interim−Trend in sales by region＞

R100 ｍｉｌｌｉｏｎ yen

600
500
400
300
200
100
0556

544

524

506

21

30

40

117

130

134

116

145

146

155

165

224

227

225

235

1HFY2003

2HFY2003

1HFY2004

2HFY2004 (Plan)

20

Japan

N. America

EuropeAisa & Other

1600＜Fullyear−Sales forecast by region＞
1400

1,360
85

270

275

460

540

540

450455

460

80

80

416570260

260247245250

291

320

320

460

451

450

460

440

1000

1,345801,100

1,030

600

1,250

1,080

1200800

1,2404002000FY2003
FY2004
Forecast
1234Actuaｌ
announced in May Nov.
Japan

5/25

FY2005Plan567
announced in May
Nov.

N. America

EuropeFY2006 Plan
8910
announced in May
Nov.
Asia & Other(Exchange Rates） FY2003(Actual)： US$=Yen113, EURO=Yen133
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1H FY2004(Actual)： US$=Yen110,EURO=Yen133 2H FY2004 (Plan): US$=Yen105, EURO=Yen130

For New Technology Network

２．Sales Expansion of Strategic Products(Axle units）＜Interim-Trend in sales by region＞

R100 million yen200169148151

710912696649626472

1H FY2003

2H FY2003

1H FY2004(Plan)
2H FY2004

138150791007350915730JapanN. America

EuropeAsia & Other

500 year-Sales forecast by region＞
＜Full
450
400
350
300
250
200
1502861419142100
500111

FY2003
1Actuaｌ

320

32015251827145

139

135

136

FY2004
Forecast
34announced in MayNov.
2Japan6/25385

385

2530

30
35180

175

150145

FY2005Plan
67announced in May Nov.

5N. America

Europe445445

30353540205

205

175165

FY2006
Plan
910announced in MayNov.
8Asia & Other(Exchange Rates） FY2003(Actual)： US$=Yen113, EURO=Yen133
1H FY2004(Actual)： US$=Yen110,EURO=Yen133 2H FY2004 (Plan): US$=Yen105, EURO=Yen130
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２．Sales Expansion of Strategic Products

For New Technology Network(Needle roller bearing/needle bearings)
R＜Interim-Trend in sales by region＞
250200150

172

100 million yen
183

174

36303235142142148166

1H FY2003

2H FY2003

1H FY2004

2H FY2004

100502020Japan

Overseas

500＜Full year-Sales forecast by region＞
420450415385385400105346105713507562300250200314315310310150284100500FY2003
FY2004
Forecast123456FY2005 Plan
7Actuaｌannounced in May
Nov.
announced in May
Nov.
Japan(Plan)

460460145145315315

FY2006 Plan
8910
announced in May
Nov.

Overseas(Exchange Rates） FY2003(Actual)： US$=Yen113, EURO=Yen133
1H FY2004(Actual)： US$=Yen110,EURO=Yen133 2H FY2004 (Plan): US$=Yen105, EURO=Yen130

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3. Expansion of Fluid Dynamic Bearing Business

For New Technology Network

Factory for Fluid Dynamic Bearing
Production Built in Thailand

REstablish mass production
facility to cope withincreased demand

NTN MANUAFCTURING (THAILAND) CO., LTD.
Exterior view of fluid dynamic bearing
production plant

Fluid dynamic bearing
unit
Sintered alloy
Fluid dynamicbearing

Resinhousing

Parts for 1‑inch HDD motors produced by NTN at
its Thai plant

8/25

Gain global standard status for
our fluid dynamic bearing
unit for small HDD● Expanded application to HDDs
smaller than 1 inch
・PDA (Personal Digital Assistant )・Music Player
・Digital camera
・Mobile phone

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3. Expansion of Fluid Dynamic Bearing BusinessFor New Technology NetworkＮＴＮ‘s Fluid Dynamic Bearing
Business and its Future Prospect
Forecast of production capacity by size
10,000/month

3.5 inch

Future prospect

1.5 inch or less

1500
1000
500
0
as of March 31,2004

100 million
yen/ FY

as of March 31, 2005

as of March 31, 2006

as of March 31, 2007

● Production capacity
Total NTN Group production capacity
including all sizes to be expanded to 14
million units per month by the end of2006● Sales
1H FY2004 Actual：1.4 billion yen
FY2004 Forecast：3.8 billion yen

Fluid Dynamic Bearing Business
Forecast of total sales100※ ¥10 billion sales targeted for theyear ending March 2007

500FY2003

9/25

RFY2004

FY2005

FY200640% share of global market targetedfor fluid dynamic bearing units
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4. Expansion of China Business（Establishment of Changzhou NTN：Sales expansion ofbearings used in automobiles）
Established CHANGZHOU NTN-GUANGYANG Corporation(Changzhou-NTN) (August, 2004)■ Sales in FY2006 5 billion yen■ Establish Development Engineering
Center in 2006

10/25

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4. Expansion of China Business(Sales expansion of bearings used in Industrial machinery, etc.）
Joint business with Luoyang Bearing■ Objectives of the joint venture with Luoyang Bearing
Sales expansion of bearings used in Industrial machinery, etc.
Enhance competitiveness in global market (quality, price, delivery)
Strengthen production and sales in China market/supply bearings to theglobal market

Basic framework of joint venture operations
to be completed by March 2005
11/25

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５．”Monozukuri”* Revolution〈Production started at NTN Mie Corporation〉
Model factory
embodying MonozukuriOperations started inOctober 2004*”MONOZUKURI” is a comprehensive concept of value creation activities at NTN as a manufacturing company.

12/25

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Business Results for the Six Monthｓ Ended
September 30, 2004 and Forecast for FY2004
ending March 2005 (Consolidated)
November 9, 2004
NTN Corporation
Tatsuo Kondo, Director
This presentation and comments made in this conference or during the Q&A session include forwardlooking statements about our expectations for our future performance and our future business strategies.
They represent the best judgment of the management of the company based on the information
currently available. There can be no assurance that future results will meet any expectation, estimate orprojection conveyed by these statements or comments. Actual results may differ materially from ourprojections depending on various factors such as changes in product demand, exchange rates andinterest rates.

13/25

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Ⅱ．Business Results for the Six Months
14/48
Ended September 30,2004(Consolidated)
and Forecast for FY2004 ending March 2005(Consolidated)
R

1. Business Results and Challenges(1) Major Achievements and Challenges(2) Consolidated Statements of Operations
2. Sales(1) Sales by Business Segment(2) Sales by Region
3. Analysis of Operating Income(1) First Half of FY2004(2) Full Year for FY2004
4. Sales and Operating Income (Margin) by Geographic Segment
5. Inventory and Interest Bearing Debt
6. Capital Expenditure and Depreciation
7. Cash Flows
14/25

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1. Business Results and Challenges(1) Major achievements and Challenges

15/48
R☆ Highlights for 1H of FY2004〇 Achieved "Rapid Advance 21" Targets･ Improvement in Consolidated Operating Margin→ Enhanced Profitability
8.3% operating margin achieved (YoY 6.4%)･ Improvement in ROA and ROE→ Improved Efficiency in Asset Utilization
ROA 3.7% (2.7% for 1H FY2003)
ROE 11.8% (9.3% for 1H FY2003)☆ Challenges for FY2004〇 Implementation of Measures to Increase Corporate Value
Three consecutive years of increased revenue and earnings

15/25

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1. Business Results and Challenges(2) Consolidated Statements of Operations

16/48
R100 million yen
Full Year

FY2003

1H

2H①Full Year

FY2004(March 2004)

1H②③2HYoY Increase/Decrease(March 2005)

1H of FY2004

Full Yearof FY2004④③−①④−②

Sales

1,755

1,819

3,574

1,901

1,949

3,850

146276

Operating
Income113134247

158

162

320

4673

OperatingMargin

6.4%

7.4%

6.9%

8.3%

8.3%

8.3%

1.9%

1.4%

Ordinary
Income99108208

1431322754467

Extraordingary
Income/loss−△ 26△ 26−−−−Net Income

64471108783170

2360

118.1
133.5

108.3
131.8

113.2
132.7

109.8
133.3

105.0
130.0

107.4
131.6

△ 8.3
△ 0.2△ 5.8
△ 1.0

ROA

2.7%

2.0%

2.4%

3.7%

3.4%

3.5%

1.0%

1.1%

ROE

9.3%

6.6%

8.0%

11.8%

10.9%

11.4%

2.5%

3.4%

Inventory Turnover
Ratio (Times)

3.9

4.4

4.3

4.4

4.7

4.7

0.5

0.4

26

Exchange Rates
ＵＳ＄ＥＵＲＯ

16/25

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2. Sales(1) Sales by Business Segment

17/48
R

1H FY2004
Bearings：Althrough down in North America due to weak dollar,
up in Japan, Europe and Asia
：Up in North America, Europe and Asia (Start of mass production operations at China)
CVJｓ
Precision Equipment ：Up in Japan due to growing market for digital appliances and devices

FY2004：Increased sales projected in all regions despite weaker dollar
Bearings：Up in Japan, North America and China
CVJｓ
Precision Equipment ：Digital home appliance sales expected to expand(100 million yen)

Full Year

FY2003

1H FY2003

2H FY2003①Bearings
CVJs
Precision Equipment
Total

17/25

1,121506
128
1,755

1,165524130
1,819

Full Year

FY2004('04/3)

1H FY2004

②③

2,286
1,030258
3,574

1,217544140
1,901

2H FY2004

1,2635561301,949

YoY Increase/Decrease('05/3)

1H FY2004(③-①)④

Volume

2,480
1,100
270
3,8501245113188

FY2004(④-②)

Exchange
Exchange
VolumeRateRate△28△13△1△42237 △4391 △2113 △1341 △65

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2. Sales(2) Sales by Region
1H of FY2004

Japan
North Ameria
EuropeAsia and Other

FY2004

Japan
North Ameria
EuropeAsia and other

2H①Japan
North America
EuropeAsia & Other(Total)

18/25

855
439
283
178
1,755

R

Increase in bearings for automobiles and precision equipment
Increase in CVJs for automobiles and bearings for general machine
despite weaker dollar
Increase in CVJs for automobiles
Mass production of fluid dynamic bearings and CVJs in China,increased sales to auto makers in Asean region
Increase in bearings and CVJs for automobiles
Increase in CVJs for automobiles and bearings for general machine
despite weaker dollar
Increase in bearings for automobiles
Increase in bearings and CVJs
(100 million yen)
Full Year FY2004

FY200３

1H FY2003

18/48

907
422
300
191
1,819('04/3)

1H②③

1,762861
582
369
3,574933
450
3062121,901

Full Year

2H('05/3)④952
460294244
1,949

1,8859106004553,850

YoY Increase/Decrease
1H FY2004③-①
2H FY2004④-②
ExchangeExchang
VolumeVolumeRatee Rate77
43 △3224044 △10188 △42123
93 △4423 △5101 △15341 △65

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3. Analysis of Operating Income(1) 1H of FY2004

19/48
R(100 million yen)

Volume57

VolumeExchange Rates
Sale Prices
Productivity
Variable Costs
Operating Cost
Consolidation Adjustment
Total57△ 14△ 25339△ 10△446

Productivity
33
Variable Costs9158113

Exchange Rates△ 141H FY2003

19/25Consolidation
Operating Cost Adjustment△ 10△4Sale Prices△ 251H FY2004
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3. Analysis of Operating Income(2) Full Year of FY2004

20/48
R(100 million yen)
103
△ 20

VolumeExchange Rates
Sale Prices
Productivity
Variable Costs
Operating CostConsolidation Adjustment
Total△ 485715△ 26△873

Volume103

Productivity
57247

FY2003

20/25320

Variable Costs
15

Exchange Rates△ 20Sale Prices△ 48Consolidation
Operating Cost Adjustment△8△ 26FY2004

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4. Sales and Operating Income by Geographic Segment

21/48
R

(100 million yen)・SalesJapan

North America

3,000600

2,500500

2,000
1,292

1,353

1,417

1,543441426

1H FY2003

2H FY2003

458458452400

1,500300

1,000200

500

10000
1H FY2003

2H FY2003

1H FY2004

2H FY2004

1H FY2004

2H FY2004

・Operating Income
Japan

North America

200

10.0%

8.0%

30
108

1001126.0%

4.0%

Operating Income
50

2.0%

00.0%
1H FY2003

222H FY2003

1H FY2004

2H FY2004

6.0%

18209077

21/25

10.0%

8.0%150

Operating Margin

40124.0%12102.0%

00.0%
1H FY2003

2H FY2003

1H FY2004

2H FY2004

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4. Sales and Operating Income by Geographic Segment

22/48
R(100 million yen)・SalesEuropeAsia&Other
300

400
310

303

310284

300

200

174
133200

156

116
100

10000
1H FY2003

2H FY2003

1H FY2004

1H FY2003

Forecast for2H FY2004

・Operating IncomeEurope
2510.0%30208.0%2515131515

Forecast for2H FY2004

6.0%

10.0%
8.0%

20151510114.0%

52.0%

00.0%
1H FY20032H FY2003

1H FY2004

Forecast for2H FY2004

6.0%4.0%91022/25

1H FY2004

Asia & Other16
Operating Income
Operating Margin

2H FY2003

52.0%

500.0%
1H FY2003

2H FY2003

1H FY2004

Forecast for2H FY2004

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5. Inventory and Interest-bearing Debt

23/48
R・Inventory

・Interest-bearing Debt
Investory（Japan）
Inv.Turnover Ratio(100 million yen)
1,000

5.0

Investory（Japan）
Debt Dependence Ratio(100 million yen)
2,000

40.0%

1,800

900
800

4.0700

1,600

38.0%

1,4006003.0500

1,20036.0%

1,000

400

2.0300

800

34.0%

600

200

1.0100400

32.0%20000.0
as of September 30, as of March 31, as of September 30, as of March 31,
2003
2004
2004
2005
Forecast

030.0%
as of September as of March 31, as of September as of March 31,
30, 2003
2004
30, 2004
2005
Forecast

100 million yen
as of September as of March as of September
30, 2003
31, 2004
30, 2004

as of March 31,
2005 Forecast

1,798

1,641

1,698

1,700

(410)
(415)

(1,295)(503)(1,123)(518)(1,120)(577)(1,140)(560)

4.7times

Debt Dependence
Ratio

38.6%

35.6%

34.8%

33.9%

908

836

874

825

（ Japan ）（ Overseas ）

(466)
(442)

(434)
(402)

(454)
(419)

3.9times

4.3times

4.4times

23/25

as of September as of March 31, as of September
30, 2003
2004
30, 2004

Interest-bearing
Debt（ Japan ）（ Overseas ）Inventory

Inv. Turnover Ratio

100 million yen

as of March 31,
2005 Forecast

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6.Capital Expenditure and Depreciation

24/48
R

(100 million yen)

Capital Expenditure（Japan）(Overseas)

Depreciation（Japan）(Overseas)

24/25

YoY Increase/Decrease

1H ofFY2003①Full Year ofFY2003②

1H ofFY2004③

Full Year of
FY2004 Forecast④

1H of FY2004

Full Year of FY2004③−①④−②179(95)(84)

381(176)(205)

258(139)(119)

530(280)(250)

79(44)(35)

149(104)(45)

1H of FY2003

Full Year of
FY2003

1H ofFY2004

Full Year of
FY2004 Forecast①②③116(69)(47)

240(148)(92)

116(71)(45)

YoY Increase/Decrease
1H of FY2004

Full Year of FY2004④③−①④−②255(160)
(95)

0(2)
(△ 2)

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7. Cash Flows

25/48（100 millon yen)
FY2003
2HFull Year

FY20041H△ 42253211270△ 2041620253△ 2044150270

II. Cash Flows from Investing Activities

△ 147

△ 203

△ 350

△ 221

III. Cash Flows from Financing Activities

205△ 145609

IV. Effect of Exchange Rate Changes on Cash and Cash Equivalents△52△3511△ 92△ 8163-12270

1H
I. Cash Flows from Operating Activities
Amount Paid Through Early Retirement Program
Excluding the impact of the above

V. Increase in Cash and Cash Equivalents

300200162

ＣＦ CF from Operating Activities
ＣＦ CF from Investing Activities
ＣＦ Difference

253-510051150△ 300514△ 147
Excludes payments of 204of early retiremet benefits

1H FY2003

25/2549502△ 100△ 20011△ 203△ 221

2H FY2003

1H FY2004

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R