Targets for FY2004 and FY2006 Note: Numerical targets in Fusion 05 have been set forth in Japanese yen. However, they are written in U.S. dollars (exchange rate: ¥100=US$1.00) in the English version of Fusion 05. 7 FINANCIAL HIGHLIGHTS MANAGEMENT PERSPECTIVE TOPICS REVIEW OF OPERATIONS FINANCIAL SECTION CORPORATE DATA attracts people, capital, and information. Maximize corporate value  through a management style  emphasizing cash flow. Become a global and truly  first-rate company. Target for FY2006 1. Achieve the global number one or two position in the air conditioning market (including after-sales service business but excluding refrigeration business). 2. Achieve the global number one or two position in the fluorochemicals market. (Target: achieve annual net sales of $10 billion) 4. Overseas business ratio More than 50% 5. Innovation business ratio$^{*4}$  More than 40% 6. Dramatic enhancement of Daikin technology 7. Hone our own brand of fast and flat management and elevate it into a corporate  culture worthy of worldwide admiration by fusing time-tested Daikin traditions  with a forward-looking competitive edge that encourages each employee to  perform with self-derived determination and enthusiasm.  3. Earn a credit rating of AA or better and reduce interest-bearing debt ratio  to 20% or less. Minimum  requirements  to expand Challenging target:  to achieve sales of  $10 billion in FY2006 *1  Assumption for annual GDP growth  rate in Japan is 1% to 2%; target to be  reconsidered if the actual GDP growth  rate differs from our assumption In all eight virtual internal companies in FY2003 More than 40% More than 30% (+$150 million) to $170 million 7% 20% 16% 10% 80% $6,700 million to $7,300 million ($7,000 million$^{*1}$) AA *3 +$800 million $10 billion (Assuming PER$^{*2}$=25X) $670 million to $730 million ($700 million$^{*1}$) Future aim to secure number one positions globally *2  Price earnings ratio *3  By Rating and Investment  Information, Inc. Overseas business 40% Innovation business 30% Overlap 3% Domestic business 33% Overseas business 50% Innovation business 40% Overlap 15% Domestic business 25%