Business Results
FY2003 ending March 2004
May 25, 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 themanagement of the company based on the information currently available. There can be no assurance that future results willmeet 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 product demand, exchange rates andinterest rates.

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Today’s Agenda
Ⅰ．Overview of “NEW Plan 21” and the first year of“Rapid Advance 21”
by Yasunobu Suzuki, President
Ⅱ．Business results for FY2003 ending March 2004
and forecast for FY2004 ending March 2005(Consolidated)by Tatsuo Kondo, Director
Ⅲ． Q&A Session

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Overview of “NEW Plan 21”
and first year of “Rapid Advance 21”
May 25, 2004
NTN corporation
Yasunobu Suzuki, President
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 themanagement of the company based on the information currently available. There can be no assurance that future results willmeet 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 product demand, exchange rates andinterest rates.

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１．Overview of NEW Plan 21(1) Consolidated Results
Operating Income
Sales (Yen100 million)( %: Operating margin) (Yen100 million)

4,000

300

3,500

3,574

250600Share Price (yen)

500

3,000

3,427

2,500
2,000

200

２４７6.9%

150

3,243

400
300

２０８

1,500

100

200

6.1%

1,000

50
500

８１

100

2.5%

00
Mar 02

FY2001Mar 03

FY2002Mar 04

FY2003

0FY2001

FY2002

FY2003* Share prices are average prices for the last day of fiscal year.

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１．Overview of NEW Plan 21(2) Goals for NEW Plan 21

Change High Cost StructurePursue Value-Added Products

Head Office System & GAM System / 24 Hour System / Integration of Research
Newly establish: Automotive Products Head Office, Industrial Machine
Products Head Office, Precision Equipment Div., Fluid Dynamic Bearings Div.

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１．Overview of NEW Plan 21(3) From NEW Plan 21 to Rapid Advance 21
Continuation of NEW Plan 21-Complete Restructuring of Production-Improve Technological Production Capabilities-Active Promotion of VA/VE-Raise Capital Efficiency

ValueCreation

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2. Actions During First Year of Rapid Advance 21(1) Corporate GovernanceIntroduction ofan Executive Officer System
Clarification of Function- Accelerate Operations- Enhance Efficiency

No. of Directors: 20 10
Executive Officers: 15(2) Organizational Reform
China Headquarters- Planning Dept. (Japan)- Shanghai Representative
Office (China)

7/31

Transfer IR responsibilities toManagement Planning Dept.
- Enhance Disclosure- Strength IR Functions
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2. Actions During First Year of Rapid Advance 21(3) Marketing Innovation (CVJs)
Sales

Yen100 Million

1,300
1,200
1,100
1,000900
800
7006005004003002001000989401,030 41247

184

China
５1,2401,08024565
China
２７26080
China
３８1,34580 China
４０270460540

310291320455451450440455

FY2002
Actual

FY2003
Actual

FY2004
Forecast

FY2005
Forecast

FY2006
Forecast

EuropeAsia & OtherJapan

N. America

Total

Exchange Rates

New Business

FY2002: US$=Yen122, EURO=Yen121
FY2003: US$=Yen113, EURO=Yen133
Forecast: US$=Yen105, EURO=Yen130

Europe: Tier 1, Yen100M/Year from 2H of FY2004
Europe: Japanese Makers, Yen200M/Year from 1H of FY2005
Japan: 2 Companies, Yen1.8B/Year from 2H of FY2005

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2. Actions During First Year of Rapid Advance 21(3) Marketing Innovation (Axle Units)
Sales

Yen100 Million

445450400320350300267250

11152862530151425205

1918014520015030353851431421005098111

FY2002
ActualFY2003
Actual175135150

FY2004
Forecast

FY2005
Forecast

0JapanN. America

EuropeExchange Rates

New Business

FY2002: US$=Yen122, EURO=Yen121
FY2003: US$=Yen113, EURO=Yen133
Forecast: US$=Yen105, EURO=Yen130

Japan:9/31

Asia & Other

FY2006
Forecast

Total

2nd Generation, Yen160M/Yr from 1H of FY2004
3rd Generation, Yen290M/Yr from 2H of FY2005
N. America: Big 3 1st Generation, Yen410M/Yr from 2H of FY2004
Europe:European 2nd Generation, Yen470M/Yr from 1H of FY2004
Asia:Big 3 and others, Yen210M/Yr from 1H of FY2005
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2. Actions During First Year of Rapid Advance 21(3) Marketing Innovation (Needle Bearings)
Yen100 Million

Sales

500

460

450
415385

400

145
346

350

75

317

Overseas10562300
64250
200

284310310315

FY2004
Forecast

FY2005
Forecast

FY2006
ForecastJapan253∬150100

FY2002
ActualFY2003
ActualExchange Rates

New business

FY2002: US$=Yen122, EURO=Yen121
FY2003: US$=Yen113, EURO=Yen133
Forecast: US$=Yen105, EURO=Yen130

Japan: Inc. from 2H of FY2004 → Inc. of base from higher auto production
China: Sales of Cahngzhou NTN Companies
FY2004, Yen600M/Year FY2005, Yen170M/Year
FY2006, Yen290M/Year

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2. Actions During First Year of Rapid Advance 21(4) Increased Productivity
Productivity Increase; Yen18 Billion / 3 Yrs

Yen6.1 Billion for First Year

“Productivity Increase” to Create Value

Increase Machine Productivity- Investment- Labor savings and rationalization- Increase productivity

Increase Labor Productivity- Elimination of “muri (overburden)” and “muda (waste)”thorough analysis of processes, work and operations- Change process design and layout for easier production- Review core and non-core business areas

11/31

Roll out toall factories
in Japan andoverseas
in three years

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2. Actions During First Year of Rapid Advance 21(5)Reduction of Variable Cost
Reduce Variable Cost; Yen10 Billion / 3 Years

Yen3.6 Billion for First Year

Measures : Minimization of Costs at Development and Design Stages

Cost Reduction by VA/VE- Materials VA, change of specifications- Raise output yield- Design for easier process. Parts specifications review.
- Reduction: processes and number of parts

Win Win with Suppliers- Reorganization, ISO9002/ISO14001, etc.

Reduction: defect rate, indirect materials costs,
energy costs, etc.
Procurement from optimal locations
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2. Actions During First Year of Rapid Advance 21(6) NTN Mie Corporation
Fully competitive with China → Creating a mix with NTN’s unique technologythat cannot be matched by competitors

Operations Scheduled to Start in September 2004

Goals for NTN Mie Corporation
1. NTN’s unique method of bearing production thatcannot be matched by competitors
2. Introduction of multi-kind products, variable quantityproduction
3. Diversified production methods
4. Better productivity through low-cost high-function machines
Reduction of number of machines
5. Reduction of material flow cost

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2. Actions During First Year of Rapid Advance 21(7) Launch of China Business
China Headquarters - Planning Dept. / Shanghai Representative OfficeStart of Operations¾ May 2003

Shanghai NTN(CVJs parts, axle units, needle bearings & others)

Sales from China Business¾ Jun 2003

Guangzhou NTN – Yulon Drivetrain¾ Mar 2003

NTN Nidec (Zhejiang)

FY 2003

FY 2004(Fluid dynamic bearings units)

ActualForecast

Yen6.5 Billion

Yen15 Billion(by Location)(CVJs)¾ Mar 2004

Beijing NTN-Seohan Driveshaft¾ Dec 2000

Shanghai-Tung Pei(CVJs)(Standard small ball bearings & others)

New Projects
Cahngzhou NTN (Provisional Name)(Needle bearings and other bearings used inautomobiles)

NTN-China (Sales Company)

Joint business with Luoyang Bearing(Bearings used in production machinery, etc.)

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2.Actions During First Year of Rapid Advance 21(8) Expansion of Fluid Dynamic Bearing Business
Establish Mass Production and High Income Structure
Fluid dynamic bearing unit

Targeting Production of 8 Million
Units Per Month by March 2005

Housing

Thrust bushing

Axle with flush

Bearing sleeve

NTN-Nidec (Zhejiang) Corp.
Cross-section ofspindle motor for HDD

FDB unit for 3.5-inch HDD

15/31

FDB unit with resin housing

Thai NMT (Diagram of new factory upon completion)
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16/48

Business Results for FY2003 ending March 2004
and Forecast for FY2004
ending March 2005 (Consolidated)
May 25, 2004
NTN corporation
Tatsuo Kondo, Director
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 ofthe 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 by these statements or comments. Actual results may
differ materially from our projections depending on various factors such as changes in product demand, exchange rates
and interest rates.

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II. Business Results for FY2003 ending March 2004 (Consolidated) andForecast for FY2004 ending March 2005 (Consolidated)
1. Business Results and Challenges
2. Sales and Income
3. Sales by Business Segment
4. Sales by Region
5. Results of Structural Reform
6. Structural Reform and Change in Operating Income(Compared to 2H of FY2001)
7. Analysis of Operating Income (FY2003)
8. Analysis of Operating Income (FY2004)
9. Sales and Operating Income by Geographic Segment
10. Inventory and Interest Bearing Debt
11. Capital Expenditure and Depreciation
12. Cash Flow
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1. Business Results and Challenges
Highlights for FY2003
Achieved Structural Reform Targets … Record High Profit !
・ Improvement in Consolidated Operating Profit Margin
Higher Earnings
・ Improvement in ROA and ROE
Improved Efficiency in Asset Utilization

Challenges for FY2004
Implementation of measures for increasing Corporate Value

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2. Sales and Income
Yen100 million

FY2002

FY2003

(1)

(2)

3,243

3,427

3,574

3,700

146

126

Operating Income81208247280

3933

Operating Margin(2.5%)(6.1%)(6.9%)(7.6%)(0.8%)(0.7%)

Ordinary Income
Extraordinary
Income/LossNet Income

27162

2082304622△ 34△ 100

△ 26-7426△1271101458435

124.98110.44121.98120.88113.19132.65105.00130.00△ 8.7911.77△ 8.19△ 2.65

△0.1%
0.0%
3.3

1.9%
0.6%
3.7

8.0%
2.4%
4.3

9.8%
3.0%
4.7

6.1%
1.8%
0.6

1.8%
0.6%
0.4

FY2001

Sales

Exchange Rates
ＵＳ＄ＥＵＲＯ

ROE
ROA
Inventory Turnover Ratio (Times)

20/31

FY2004
Forecast(3)YoY Increase/Decrease
FY2003
FY2004(2) - (1)(3) - (2)A39－A39－0405 © NTN corporation

3. Sales by Business Segment
FY2003

FY2004

Bearings： Although down in North America, up in Japan, Europe and Asia

CVJs

： Although down in North America and Japan due to weak dollar and lower sale prices, up in Europe

Precision Equipment： Up in Japan, steady overseas

Bearings： Although down in North America due to weak dollar, up in Japan and Asia, steady in Europe

CVJs： Up in North America and Asia, steady in Japan and Europe

Precision Equipment： Down from effects of withdrawal from ball screws businessYen100 Million
FY2001

Bearings

CVJs

Precision
Equipment（Total）

2,156
868
220
3,243

FY2002

FY2003

FY2004

YoY Increase/Decrease

Forecast

FY2003

FY2004

(1)

(2)

(3)

(2) - (1)(3) - (2)

2,207

2,286

2,380

79

94

(△ 23)(△ 62)

4150

(△ 2)

(△ 33)

26△ 18(1)(△ 1)146126(△ 23)(△ 96)

989
232
3,427

1,030
258
3,574

1,080
240
3,700

Figures in parentheses show changes from previous period due to currency effects

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4. Sales by Region
FY2003

JapanNorth America
EuropeAsia & Other：：：：

FY2004

JapanNorth America
EuropeAsia & Other：：：：

Although sales of CVJs were weak, bearings for general machine and distributors increased
Dollar weakness added to sluggish sales for general machine and distributors
Favorable sales in CVJs and bearings for automobiles
In Asia, results for automotive were favorable. Sales also increased in China by the contributionof the new company in China
Increase in bearings sales primarily for automotive. CVJs also steady
Increase in CVJs despite weaker dollar
Increase in bearings sales. CVJs also steady
Increase in bearings and CVJs sales in China and ASEAN countries

Yen100 Million
FY2001

FY2002

FY2003(1)(2)

FY2004
Forecast
(3)

1,691

1,700

1,762

1,830

62

68

North America

878

927

861

865

Europe

387

479

582

580

Asia & Other

287

322

369

425（Total）

3,243

3,427

3,574

3,700

△ 66
(△ 57)
104(48)
47(△ 14)
146(△ 23)

4(△ 62)△2(△ 13)56(△ 21)
126(△ 96)Japan

YoY Increase/Decrease
FY2003
FY2004(2) - (1)(3) - (2)Figures in parentheses show changes due to currency effects

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5. Results of Structural ReformC o s tR e d u c t i o nLogistics- FeeHR- Early retirement program

Procurement- Purchase price- Reorganization and consolidation- VA / VE- Outsourcing- Integration of distribution points

Compared against 2H of FY2001
Yen100 Million
FY2002
Cost Reduction

1H

2H

FY2003
Total

1H

2H

Reported Targets

Total(Semiannual Basis）

Procurement24507473

98

171100HR2623494772

11975

Logistics

4598122010Other347459155782139132187319200（Total）

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6. Structural Reform and Change in Operating Income(Compared to 2H of FY2001)
Yen100 Million
FY2001
2H
Operating Income(Operating Margin）

Fa

Structural Reform
VolumeExchange Rates

ct

Sale Prices
Variable Costs
HR Costso（Effect of the one time measures in 2Hof FY 2001）

Operating CostsrEffects from 3 New Companiesin ChinasConsolidation Adjustment（Total）

24/3132(2.0%)

FY2002

FY20031H

2H

1H

2H84(5.0%)5743△2△ 17△9△ 15(△8）

124(7.0%)82783△ 25△ 19△ 13(△8）

113(6.4%)
1326610△ 44△ 31△ 30(△8）

134(7.4%)
18799△4△ 62△ 50△ 37(△8）△8△1△691△ 13△4△581△ 26△3△2101

3－△852

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7. Analysis of Operating Income (FY2003)
Yen100 Million
VolumeExchange Rates
Sale Prices
Variable Costs
HR Costs
Operating Costs
New Companies in China
Consolidation Adjustment

Total

Volume44208

1H2HTotal

2312△ 27276△ 11△432921△7△ 371625△ 10△2410445△ 644331△ 21△6739

Variable Costs
43HR Costs
31
Consolidation
Adjustment
7

Exchange Rates
5247

New Companies inChina
Operating Costs△6△ 21FY2002

FY2003

Sale Prices△ 6425/31

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8. Analysis of Operating Income (FY2004)
Yen100 Million
Volume73

Exchange Rates△ 32

Sale Prices△ 50

Productivity

61

Variable Costs

10

Operating Costs
Consolidation Adjustment

Total

Volume73△533

Productivity
61280

Variable Costs
10247

Exchange Rates△ 32FY2003△ 24Operating Costs△ 24Consolidation
Adjustment△5Sale Prices△ 50FY2004

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9. Sales and Operating Income by Geographic Segment
Yen100 million

SalesJapan

North America

3,000

2,770
2,497

2,500

3,000

2,645

2,388

2,500

2,000

2,000

1,500

1,500

1,000

1,000

500

500

0929

868870FY2001

FY2002

FY2003

FY2004

0FY2001

FY2002

Operating Income

FY2003

FY2004

North America

Japan200183

OperatingIncome
OperatingMargin

890

10.0%

200

10.0%

167
8.0%
150

8.0%
150

128
6.0%
100

6.0%
100

4.0%
50

46
2.0%

4.0%

4150

24

1400.0%FY2001

27/31

FY2002

FY2003

FY20043302.0%0.0%
FY2001

FY2002

FY2003

FY2004

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9. Sales and Operating Income by Geographic Segment
Yen100 million

SalesEurope

Asia and Others

750750587
500

381580480500320249250250194
1600
FY2001

Operating Income

FY2002

FY200330Operating
Margin25

FY2001

Europe35

Operating
Income

0FY2004

10.0%30288.0%

FY2002

FY2003

FY2004

Asia and Others
10.0%

3530

26

6.0%

20

13154.0%

6.0%

192015154.0%11105102.0%

40.0%
FY20012.0%5028/318.0%

25FY2002

FY2003

FY2004

0.0%0FY2001

FY2002

FY2003

FY2004

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10. Inventory and Interest Bearing Debt
Inventory

Interest Bearing Debt
JapanJapan
Foreign
Inventory Turnover

Yen100 million

5.0600500

ForeignDebt dependence

Yen100 million

4.0

38.0%

1,200

1,000
36.0%

400

800
3.0300600

34.0%

2.0200400

2000.00
FY2001Inventory( Japan )( Foreign )Inv. Turnover Ratio

29/31

32.0%

1.0100FY2002

FY2003

FY2004

FY2001

FY2002

Yen100 Million
FY2003
FY2004
Forecast985(506)(479)
×3.3927(482)(445)
×3.7836(434)
(402)
×4.3

780
(380)
(400)
×4.7

030.0%
FY2001

FY2002

FY2003

FY2004

FY2001

FY2002

Yen100 Million
FY2003
FY2004
Forecast

Int. Bearing Debt
( Japan )( Foreign )

1,726(1,129)(597)

1,614(1,093)
(521)

1,641
(1,123)(518)

1,630(1,110)(520)

Debt Dependence Ratio

37.3%

34.6%

35.6%

33.6%

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11. Capital Expenditure and Depreciation
Yen100 Million
FY2001

Capital Expenditure

FY2003(1)(2)

FY2004
Forecast(3)21125338143012849(Japan）

(122)

(133)

(176)(220)

(43)

(44)

(Foreign )

(89)

(120)

(205)

(210)

(86)

(5)

FY2001

FY2002

FY2003(1)(2)

FY2004
Forecast(3)

244

238

240260120

Depreciation

30/31

YoY Increase/Decrease
FY2003
FY2004(2) - (1)(3) - (2)FY2002

YoY Increase/Decrease
FY2003
FY2004(2) - (1)(3) - (2)(Japan)

(159)

(148)

(148)

(160)

(△ 1)

(12)

(Foreign )

(85)

(90)

(92)

(100)

(2)

(8)

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12. Cash Flow
Yen100 Million

FY2001

FY2002

FY2003300484211－－( △ 204 )II. Cash Flows from Investing Activities△ 184△ 241△ 350

III. Cash Flows from Financing Activities△ 80△ 9960

IV. Effect of Exchange Rate Changes on Cash andCash Equivalents△ 12△3△325141△ 81

I. Cash Flows from Operating Activities(Amount Paid Through Early Retirement Program)

V. Increase in Cash and Cash Equivalents
600
500
400300484

CF fromOp. Activities

415300243

Difference200

Excludes paymentsof 204 of early
retirement benefits

20411666

211

1000C△ 100△ 200△ 300△ 184 CF fromInvesting Activities△ 400FY2001

31/31

△ 139
△ 241FY2002△ 350
FY2003
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