FINANCIAL HIGHLIGHTS MANAGEMENT PERSPECTIVE TOPICS REVIEW OF OPERATIONS FINANCIAL SECTION CORPORATE DATA Clearly set quantitative targets for the next three years in order to align  the direction of all of our employees. Resolutely carry out reforms through  quantitative management reforms because this is an era of uncertainty.  1 2 Focus on realizing dynamic development. Thoroughly implement Ratio Management, which pursues both an increase  in profitability and an expansion of business scale by: 3 Pursue Daikin's best practices by promoting a fusion of time-tested Daikin  traditions and evolving fast and flat management responding to the times  with a forward-looking competitive edge. 4 1. For the period through fiscal 2004, set ratio management targets for each virtual internal company  and for each year as medium-term targets and strive to achieve those set targets. 2. At the same time, for the period after fiscal 2004, set targets for fiscal 2006 with appropriate  emphasis on management reforms for the transition period, including the posture that we aim to  achieve, and structural reform, so that we may define the goals that will take us in the direction  we are headed. 3. Refine tools that enable us to achieve our quantitative targets in an era of drastic changes.  1. Realize ordinary profit twice that of fiscal 2001 through expanding sales by fiscal 2004. 2. Achieve the global number one or two position in the air conditioning business and  fluorochemicals business. 1. Achieving Ratio Management quantitative targets, 2. Emphasizing free cash flow and Daikin value added, and  3. Expanding business scale and realizing a paradigm shift of our business structure. 8 DAIKIN INDUSTRIES, LTD. ANNUAL REPORT 2001 Nine Key Points