Nissan Motor Company, Ltd.

for

Student Managed Investment Portfolio

by

Michael Gossner

Outline of Presentation

Company Snapshot

Company Outlook

News and Events

Industry Comparison and Outlook

Financial and Risk Evaluation

Recommendation

Company Snapshot

Stock: Nissan Motor Co., Ltd. (ADR)

Ticker: NSANY

Industry: Auto Makers

52 Week Range: $12.76 - $16.70

Price as of 03/06/03: $13.96

Company Snapshot

Designs, produces and sells more than 2.5 million passenger cars and commercial vehicles in more than 190 countries.

In April of 2000 the company implemented the “Nissan Revival Plan.” Upon attainment of the goals, the Company embarked upon NISSAN 180

Major production sites - Japan, United States, Mexico, the United Kingdom and Spain.

Company Snapshot

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S&P 500

Nissan

Company Outlook

NISSAN 180

Company Outlook

Renault - Nissan Alliance

Nissan 32.5 Liter V-6 Engine

Renault Vel Satis with Engine

News and Recent Events

December 2002 - Domestic production, overseas production, domestic sales and exports all rose over 2001's levels. First time in 13 years these four indexes have simultaneously surpassed the previous year's results.

January 2003 - Nissan's domestic production, overseas production, domestic sales and exports all rose over the same month last year, marking the first time in four months, since September 2002, that these four indexes have simultaneously registered year-on-year growth.

News and Recent Events

January 2003 - Combined Renault and Nissan sales came to 5,139,505 units in 2002, up 2.9% over 2001.

Nissan and Renault sold a total of 2,735,530 and 2,403,975 vehicles, respectively. The Renault-Nissan Alliance global market share came to 9.1% (4.2% for the Renault group and 4.9% for Nissan), ranking the Alliance among the world's five leading automakers.

News and Recent Events

February 2003 - Announced that its patented pre-crash seatbelt technology will be made available to competitors through a licensing process.

News and Recent EventsFebruary 2003 - Announced the domestic launch of the all-new Teana, which has been developed around the concept of "a luxury sedan for sophisticated drivers."

News and Recent EventsFebruary 2003 - Announced the domestic launch of the fully redesigned Skyline Coupe.  Models equipped with automatic and manual transmission were put on the market across the country.

News and Recent EventsJanuary 2003 - Nissan reveals all-new 2004 full-size truck and Triant concept at NAIAS

News and Recent EventsJanuary 2003 - Nissan Reveals All-New 2004 Maxima and Quest, Infiniti FX45 at NAIAS

Industry OutlookUniversity of Michigan - Auto sales should top 16.6 million units this year [2002]; retreat only slightly to 16.5 million units in 2003 and reach 16.6 million units in 2004 once more. Sales should remain "fairly steady”

IRN Inc. - Zero-percent financing automakers have offered over the past 12 months has lost its marketing punch. Ford an GM have acknowledged that sales have gone soft.

Industry Outlook

"It's profitless prosperity that we've got going on here…" - Michael Robinet, CSM Worldwide

The biggest issue facing automakers is what David Cole, Center for Automotive Research in Ann Arbor, Mich., calls the industry's "heinous competition."

Industry Comparison

Stock Mkt Cap SalesNissan Motor ADR 33,065.0 49,396Industry Average 5,507 12,081Toyota Motor ADR 88,421 114,133Honda Motor ADR 35,371 60,911DaimlerChrysler AG 29,376 136,142General Motors 17,525 184,057Ford Motor 14,203 163,518

Industry Comparison

Financial Statements and

Analysis

Financial Analysis

1997 1998 1999 2000 2001 2002 2003

Sales (Million) 49358 54583 56388 49110 46588 54400 56800

Operating Margin 10.40% 9.20% 8.60% 10.70% 13.90% 14% 13%

Depreciation 3819.6 4134.7 4099.6 2904.8 2818.2 2700 2700

Net Profit 382 -229.9 -6456 2670 2799 3500 3100

Income Tax Rate 30.1 NMF NMF NMF NMF 30 30

Net Profit Margin 0.80% NMF NMF 5.40% 6% 6.40% 5.40%

Nissan Revival Plan Nissan 180

Value Line Estimations

Financial AnalysisNissan 180 UpdateOperating Income (1st Half FY 2002) - 84.5% increase from 1st

half FY 2001

Consolidated Operating Margin (1st Half FY 2002) - Industry Leading 10.6%

Revenues (1st Half FY 2002) - 10.3% Increase

Global Sales Volume (1st Half FY 2002) - 7.5% Increase

Net Income (1st Half FY 2002) - 24.9% Increase

Financial Analysis

Data Taken From Value Lin and Marketgude

Nissan IndustryQuick Ratio 0.82 0.7Current Ratio 1.17 1.3Return on Assets 5.55 2.1Return on Investment 10.04 3.7Return on Equity 28.87 8.17Beta 0.54 1.24P/E Ratio 8.7 7.99Relative P/E Ratio 0.55 1

Financial Analysis - Valuations

LAST YEAR 2002 YearNUMBER OF SHARES OUTSTANDING (Mil.) 4,517.00 Millions of SharesMARKET PRICE OF STOCK / SHARE $13.93 Dollars Per Share $35.00 Price of StockNET INCOME AFTER TAXES $2,798.00 Millions of Dollars Expected inTOTAL SALES OR REVENUES $46,588.00 Millions of Dollars 5 yearsBOOK VALUE OF EQUITY (FROM BALANCE SHEET) $12,186.00 Millions of DollarsRISK FREE RATE (T- Bill) 2.50% Annual Percentage RateDIVIDENDS PAID (TOTAL AMOUNT PAID) $209.00 Millions of DollarsSTOCK REPURCHASES (TOTAL AMOUNT PAID) $0.00 Millions of DollarsREQUIRED INFORMATION FOR CALCULATION OF REQUIRED RATE OF RETURNBETA OF STOCK 0.54MARKET RISK PREMIUM (5%-6% Historically) 5.50% Expected Market Risk Premium %REQUIRED INFORMATION FOR VARIABLE GROWTH RATE VALUATIONSEXPECTED GROWTH RATE (EARNINGS OR DIVIDENDS & STOCK REPURCHASES) 7.0000% 7.0000% 6.0000% 4.0000% 4.0000%

COMPUTER-GENERATED CALCULATIONS

EARNINGS PER SHARE $0.62LAST CASH DIVIDEND & STOCK REPURCHASE PAYMENT PER SHARE $0.05

EXPECTED ANNUAL GROWTH RATE (EARNINGS OR DIVIDENDS & STOCK REPURCHASES) 5.43% Geometric Mean of Annual Rates

EXPECTED EARNINGS PER SHARE IN 5 YEARS $0.60SUSTAINABLE RATE OF GROWTH 21.25% (ROE * (1-Payout Ratio))

REQUIRED RATE OF RETURN (k) 5.47% CAPMREQUIRED RATE OF RETURN (k) 5.78% Dividend Discount ModelREQUIRED RATE OF RETURN (k) 5.62% Average of CAPM and DDM

COMPUTER-GENERATED CALCULATIONS

STOCK VALUE - ZERO GROWTH MODEL $0.82 Not applicable for most stocksSTOCK VALUE - CONSTANT GROWTH MODEL $24.76STOCK VALUE - VARIABLE GROWTH MODEL $3.20STOCK VALUE - DIVIDEND & EARNINGS MODEL $26.85STOCK VALUE - PRICE / EARNINGS MODEL $30.59

AVERAGE PRICE $21.35

Must be positive values in each cell

All Data Required

Required Data

Financial Analysis - Valuations

Name of Company Nissan Motor Co., Ltd. Estimate Free Cash Flow Estimate Weighted Average Cost of CapitalCurrent Sales ($) $46,588.00 8.220% Cost of Equity Capital

Insert Initial Free Cash Flow (Computer) $1,836.07 Computer Calculates EBIT Margin (%) 7.80% 7.500% Before Tax Cost of DebtInsert Initial Growth Rate 8.00% See Note 1 EBIT $3,633.86 5.500% Market Risk Premium (RM-RF)Insert Terminal Growth Rate 4.00% See Note 2 Plus - Depreciation $3,372.00 77.500% Debt Ratio (Total Debt/Total Assets)Insert Weighted Average Cost of Capital 5.91% Computer Calculates Less - Capital Expenditures $2,375.00 0.540 BetaHow Many Years is Growth Projected 8 Years 0 Up to 20 Less - Net Change in Working Capital $1,701.00 5.250% Risk-free Rate (Use L-T Treasury Rate)Number of Shares of Common Stock 4,517.00 Equals Operating Cash Flow $2,929.86 5.912% = Weighted Average Cost of CapitalTax Rate 30.10% Less Taxes $1,093.79 See Note 3

Total Debt Outstanding $41,480.00 Equals Free Cash Flow $1,836.07

Year 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16Free Cash

Flow$0 $1,983 $2,142 $2,313 $2,498 $2,698 $2,914 $3,147 $3,398 $0 $0 $0 $0 $0 $0 $0 $0

Terminal Value

$184,810 $0 $0 $0 $0 $0 $0 $0 $0

Total FCF $0 $1,983 $2,142 $2,313 $2,498 $2,698 $2,914 $3,147 $188,208 $0 $0 $0 $0 $0 $0 $0 $0Discounted

FCF $0 $1,872 $1,909 $1,947 $1,985 $2,024 $2,064 $2,105 $118,868 $0 $0 $0 $0 $0 $0 $0 $0

Net Present Value of FCF

$132,774

Net Present Value of FCF Minus Debt

$91,294

Per Share Value $20.21

Notes:1. Terminal Value is growing perpetuity of final year's Free Cash Flow [(FCF) / (WACC - Growth Rate)]2. If Number of years of projected growth is "0", then Net Present Value of Free Cash Flows is growing perpetuity of Free Cash Flow [(FCF*(1+Growth Rate) / (WACC - Growth Rate)

Note: Terminal Growth Rate Must be less than WACC for projections of 1 or more years; for valuations based

on 0 years of projections, WACC must be > Growth RateFREE CASH FLOW VALUATION MODEL

Financial Analysis - Valuation

Financial Analysis - Valuation

Basic Stock Valuation - $21.35

Free Cash Flow Valuation - $20.21

Valuation By Comparables - $21.77

ValuePro.Net - $24.95

Average Intrinsic Value - $22.07

Risk Analysis

76% Of all U.S. TickersAre More Risky ThanNissan

RiskGrade: 118Minimum:109Maximum:195Average:158

Recommendation

Buy (To Be Continued..) Strong Performance Resulting from Nissan

Revival Plan Strong Expected Performance from Nissan

180 Industry Outlook favors International Auto-

Makers over Domestic Producers Undervalued Stock and Solid Financials