Financial Information: Annual Report 2005

	Notes to Consolidated Financial Statements
	NSK Ltd. and Subsidiaries For the year ended March 31, 2005

18. Segment Information

(a) Business Segment Information
Under the rapidly changing business environment, the Company reorganized its corporate structure in February 2004 from a product-oriented organization to a customer-oriented organization in order to clarify responsibilities of its global businesses as well as to accelerate the decision-making process within the Group. In line with this change, effective the year ended March 31, 2005, the Company changed its business segmentation from the bearings segment, the automotive components segment and the precision machinery and parts segment to the following segments:

Industrial Machinery Bearings segment: which includes
standard ball bearings (miniature and small-sized ball bearings, normal-sized ball bearings) and bearings for general industrial use (tapered and cylindrical roller bearings, large-sized ball bearings)
Automotive Products segment: which includes
hub unit bearings, needle roller bearings, small-sized tapered roller bearings, standard ball bearings, steering columns, electric power steering systems, and automatic transmission components
Precision Machinery and Parts segment: which includes
ball screws, linear guides, XY tables, and megatorque motors
Other segment: which includes
plant and equipment and other products.

Millions of yen
Year ended March 31, 2005	Industrial machinery bearings	Automotive products	Precision machinery and parts	Other	Total	Eliminations and other	Consolidated
Sales to third parties	¥185,473	¥316,169	¥64,186	¥15,160	¥580,989	¥ -	¥580,989
Intersegment sales   and transfers	-	-	-	8,078	8,078	(8,078)	-
Total	185,473	316,169	64,186	23,239	589,067	(8,078)	580,989
Operating expenses	165,523	300,420	59,420	21,395	546,760	(4,054)	542,706
Operating income (loss)	¥ 19,949	¥ 15,748	¥ 4,765	¥ 1,844	¥ 42,307	¥(4,024)	¥ 38,283
Total assets	¥238,574	¥233,148	¥66,178	¥20,107	¥558,009	¥70,574	¥628,583
Depreciation	¥ 10,900	¥ 13,759	¥ 3,659	¥  314	¥ 28,633	¥(1,197)	¥ 27,435
Capital expenditures	¥ 13,845	¥ 19,614	¥ 5,659	¥  192	¥ 39,312	¥(1,152)	¥ 38,160

Thousands of U.S. dollars
Year ended March 31, 2005	Industrial machinery bearings	Automotive products	Precision machinery and parts	Other	Total	Eliminations and other	Consolidated
Sales to third parties	$1,733,393	$2,954,850	$599,869	$141,682	$5,429,804	$ -	$5,429,804
Intersegment sales   and transfers	-	-	-	75,495	75,495	(75,495)	-
Total	1,733,393	2,954,850	599,869	217,187	5,505,299	(75,495)	5,429,804
Operating expenses	1,546,944	2,807,664	555,327	199,953	5,109,907	(37,888)	5,072,019
Operating income (loss)	$ 186,439	$ 147,178	$ 44,533	$ 17,234	$ 395,393	$(37,607)	$ 357,785
Total assets	$2,229,664	$2,178,953	$618,486	$187,916	$5,215,037	$659,570	$5,874,607
Depreciation	$ 101,869	$128,589	$ 34,196	$  2,935	$ 267,598	$(11,187)	$ 256,402
Capital expenditures	$ 129,393	$ 183,308	$ 52,888	$  1,794	$367,402	$(10,766)	$ 356,636

a) As described in Note 1(i), the Company and domestic subsidiaries have early adopted amended provisions to the accounting standard for retirement benefits effective the year ended March 31, 2005. As a result of the early adoption of these amendments, operating income for Industrial Machinery Bearings segment, Automotive Products segment and Precision Machinery and Parts segment increased by ¥167 million ($1,561 thousand), ¥162 million ($1,514 thousand) and ¥9 million ($84 thousand), respectively, for the year ended March 31, 2005 as compared with the corresponding amounts which would have been recorded if the previous method had been followed.

b) As described in Note 1(i), the Company’s subsidiaries in the United Kingdom have implemented early adoption of a new accounting standard for retirement benefits effective the year ended March 31, 2005. The effect of this change was to increase operating income for Industrial Machinery Bearings segment, Automotive Products segment and Precision Machinery and Parts segment by ¥186 million ($1,738 thousand), ¥30 million ($280 thousand) and ¥12 million ($112 thousand), respectively, for the year ended March 31, 2005 as compared with the corresponding amounts which would have been recorded if the previous method had been followed.

Millions of yen
Year ended March 31, 2004	Industrial machinery bearings	Automotive products	Precision machinery and parts	Other	Total	Eliminations and other	Consolidated
Sales to third parties	¥176,299	¥285,830	¥47,072	¥13,015	¥522,217	¥ -	¥522,217
Intersegment sales   and transfers	-	-	-	6,463	6,463	(6,463)	-
Total	176,299	285,830	47,072	19,479	528,681	(6,463)	522,217
Operating expenses	164,142	270,116	47,111	18,300	499,670	(3,425)	496,245
Operating income (loss)	¥ 12,157	¥ 15,713	¥ (39)	¥1,178	¥29,010	¥(3,038)	¥25,972
Total assets	¥213,612	¥245,059	¥57,160	¥15,722	¥531,554	¥90,322	¥621,877
Depreciation	¥ 11,450	¥ 13,074	¥ 3,208	¥   320	¥ 28,053	¥(1,144)	¥ 26,909
Capital expenditures	¥ 8,322	¥ 14,519	¥ 3,870	¥     76	¥ 26,789	¥  (475)	¥ 26,313

(b) Geographical Segment Information
The geographical segment information for the Company and its subsidiaries for the years ended March 31, 2005 and 2004 is summarized as follows:

Millions of yen
Year ended March 31, 2005	Japan	The Americas	Europe	Asia	Total	Eliminations and other	Consolidated
Sales to third parties	¥355,179	¥79,871	¥93,343	¥52,595	¥580,989	¥ -	¥580,989
Interarea sales   and transfers	84,280	644	6,825	11,610	103,361	(103,361)	-
Total	439,460	80,515	100,168	64,205	684,350	(103,361)	580,989
Operating expenses	408,042	77,973	95,378	60,942	642,337	(99,631)	542,706
Operating income (loss)	¥ 31,417	¥ 2,542	¥ 4,790	¥ 3,262	¥ 42,013	¥ (3,730)	¥ 38,283
Total assets	¥571,460	¥55,257	¥73,906	¥62,985	¥763,609	¥(135,025)	¥628,583

Thousands of U.S. dollars
Year ended March 31, 2005	Japan	The Americas	Europe	Asia	Total	Eliminations and other	Consolidated
Sales to third parties	$3,319,430	$746,458	$872,364	$491,542	$5,429,804	$ -	$5,429,804
Interarea sales   and transfers	787,664	6,019	63,785	108,505	965,991	(965,991)	-
Total	4,107,103	752,477	936,150	600,047	6,395,794	(965,991)	5,429,804
Operating expenses	3,813,477	728,720	891,383	569,551	6,003,150	(931,131)	5,072,019
Operating income (loss)	$ 293,617	$23,757	$ 44,766	$ 30,486	$ 392,645	$ (34,860)	$ 357,785
Total assets	$5,340,748	$516,421	$690,710	$588,645	$7,136,533	$(1,261,916)	$5,874,607

c) As described in Note 1(i), the Company and domestic subsidiaries have early adopted amended provisions to the accounting standard for retirement benefits effective the year ended March 31, 2005. As a result of the early adoption of these amendments, operating income for “Japan” segment increased by ¥339 million ($3,168 thousand) for the year ended March 31, 2005 as compared with the corresponding amount which would have been recorded if the previous method had been followed.

d) As described in Note 1(i), the Company’s subsidiaries in the United Kingdom have implemented early adoption of a new accounting standard for retirement benefits effective the year ended March 31, 2005. The effect of this change was to increase operating income for “Europe” segment by ¥229 million ($2,140 thousand) for the year ended March 31, 2005 as compared with the corresponding amount which would have been recorded if the previous method had been followed.

Millions of yen
Year ended March 31, 2004	Japan	The Americas	Europe	Asia	Total	Eliminations and other	Consolidated
Sales to third parties	¥316,028	¥73,290	¥85,390	¥47,508	¥522,217	¥ -	¥522,217
Interarea sales   and transfers	75,792	463	4,454	10,103	90,813	(90,813)	-
Total	391,820	73,753	89,845	57,611	613,031	(90,813)	522,217
Operating expenses	368,883	73,169	87,226	53,833	583,113	(86,868)	496,245
Operating income (loss)	¥ 22,937	¥   584	¥ 2,618	¥ 3,778	¥ 29,918	¥ (3,945)	¥ 25,972
Total assets	¥536,203	¥55,171	¥78,394	¥59,157	¥728,926	¥(107,049)	¥621,877

(c) Overseas Sales
Overseas sales, which include export sales of the Company and its domestic subsidiaries and sales (other than exports to Japan) of the foreign subsidiaries, for the years ended March 31, 2005 and 2004 are summarized as follows:

Millions of yen
Year ended March 31, 2005	The Americas	Europe	Asia	Total
Overseas sales	¥82,279	¥93,625	¥94,838	¥270,743
Consolidated net sales				¥580,989
Thousands of U.S. dollars
Overseas sales	$768,963	$875,000	$886,336	$2,530,308
Consolidated net sales				$5,429,804
Overseas sales as a percentage of consolidated net sales	14.2%	16.1%	16.3%	46.6%
Millions of yen
Year ended March 31, 2004	The Americas	Europe	Asia	Total
Overseas sales	¥74,885	¥85,391	¥83,295	¥243,572
Consolidated net sales				¥522,217
Overseas sales as a percentage of consolidated net sales	14.3%	16.4%	15.9%	46.6%

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