I. Consolidated Results

 In Japan, operating income fell from 18.5 billion yen in fiscal 2000 to 3.1 billion yen. Of this 15.4 billion yen difference, 12.8 billion yen worth was accounted for by the parent company, while the remaining 2.7 billion yen originated from domestic subsidiaries.

 In the Americas, operating income fell 60% from 4.7 billion yen in fiscal 2000 to 1.9 billion yen. NSK Brasil Ltda. enjoyed an increase in profits, but NSK Corp. and NSK Precision America, Inc., created through the spinning-off of our American precision machinery and parts business, saw a 3 billion yen drop in profits. NSK Corp.'s bearings business was affected by: (1) production cuts at the Ann Arbor Plant (U.S.) due to sluggish sales to the "Big 3" motor companies; (2) fall in utilization ratio at the Clarinda Plant (U.S.) due to weak demand form the electrical tool and appliance industries; and (3) the infiltration of Chinese bearings into the U.S. market. NSK Precision America failed to produce profits this year as their sales dropped 50%.

 In Europe, operating loss increased to 6.3 billion yen. Although RHP-brand products improved their profitability as result of price increases and the effect of business restructuring measures, this was still not enough to cover the effects of the fall in utilization ratio at the Peterlee Plant (U.K.), fall in export demand for Iskra Plant (Poland) products, the increased value of the zlotchy, increased production costs at NSK Steering Systems Europe Ltd., and increased SG&A expenses at NSK Bearings Europe Ltd. In Asia, China saw a growth in profits, but the drop in sales at ISC Micro Precision SDN. BHD. (Malaysia) and NSK Korea Co., Ltd., and increased capital expenditure at the Jakarta Plant brought total operating income for the region down to 3.5 billion yen.