Makita Corporation
Consolidated Financial Results
for the year ended March 31, 2018
(U.S. GAAP Financial Information)(English translation of "KESSAN TANSHIN"
originally issued in Japanese)

CONSOLIDATED FINANCIAL RESULTS
FOR THE YEAR ENDED MARCH 31, 2018 (Unaudited)
April 26, 2018

Makita Corporation
Stock code: 6586
URL: http://www.makita.co.jp/
Munetoshi Goto, President, Representative Director

1. Summary operating results of the year ended March 31, 2018 (From April 1, 2017 to March 31, 2018)(1) CONSOLIDATED OPERATING RESULTS
Yen (millions)
For the year ended
For the year ended
March 31, 2017
March 31, 2018%
Net sales ......................................................................
414,999(2.0)
477,298
15.0
Operating income ........................................................
62,564(3.3)
79,762
27.5
Income before income taxes ........................................
64,738
5.3
79,67823.1
Net income attributable to Makita Corporation ...........
44,782
7.6
54,755
22.3
Comprehensive income ...............................................
36,250264.1
64,311
77.4
Yen
Earning per share
Net income attributable to
Makita Corporation common shareholders(Basic) .....................................................................
(Diluted) ..................................................................
Ratio of net income attributable to Makita Corporation
to shareholders' equity .................................................
Ratio of income before income taxes to total assets ....
Ratio of operating income to net sales ........................

164.96164.95201.70201.68

9.1%
11.2%
15.1%

10.4%
12.8%
16.7%

Note: The Company implemented a two-for-one common stock split, effective April 1, 2017. Net income attributable to Makita
Corporation common shareholders per share (basic) and net income attributable to Makita Corporation common shareholders
per share (diluted) were calculated on the assumption that the relevant stock split had been implemented at the beginning of
the previous consolidated fiscal year.

(2) SELECTED CONSOLIDATED FINANCIAL POSITION
Yen (millions)

Total assets ..................................................................
Total equity ..................................................................
Total Makita Corporation shareholders' equity ...........
Total Makita Corporation
shareholders' equity ratio to total assets (%) ...............

As ofMarch 31, 2017597,249
505,811502,170

As ofMarch 31, 2018
651,031
556,133
551,939

84.1%

84.8%
Yen

Total Makita Corporation
shareholders' equity per share......................................

1,849.88

2,033.16

Note: The Company implemented a two-for-one common stock split, effective April 1, 2017. Makita Corporation shareholders’equity per share was calculated on the assumption that the relevant stock split had been implemented at the beginning of theprevious consolidated fiscal year.

English Translation of "KESSAN TANSHIN" originally issued in Japanese1(3) CONSOLIDATED CASH FLOWS
Yen (millions)
For the year ended
For the year ended
March 31, 2017
March 31, 2018
63,351(5,015)(9,495)
142,181

Net cash provided by operating activities....................
Net cash used in investing activities ............................
Net cash used in financing activities ...........................
Cash and cash equivalents, end of the fiscal year ........

33,294(14,811)(17,743)
147,320

2. Dividend Information
Yen

Cash dividend per share:
Interim ....................................................................
Year-end ..................................................................
Total ........................................................................

For the year
ended March 31,
2017

For the year
ended March 31,
2018

For the year
ending March
31, 2019(Forecast)

18.00
82.00
100.00

10.00
51.00
61.00

10.00
(Note)(Note)Yen (millions)
Total cash dividend ......................................................
13,573
16,560
Dividend payout ratio (%) ...........................................
30.3%
30.2%
Dividend to shareholders' equity ratio (%) ..................
2.8%
3.1%
Note:
1. The Company implemented a two-for-one common stock split, effective April 1, 2017. Dividends per share forthe consolidated fiscal year ended March 31, 2017 is actual amounts paid prior to the relevant stock split.
2. While the Corporation has set forth under the Articles of Corporation of the Corporation that the record date forthe payment of dividend shall be the last day of a relevant period, at the present time, the projected amount ofdividends as of the said record date has not been determined yet. For further details, refer to “(5) Basic policy
regarding profit distribution and cash dividend” on page 6.
3. Consolidated Financial Performance Forecast for the year ending March 31, 2019
(From April 1, 2018 to March 31, 2019)
Yen (millions)
For the year ending
March 31, 2019%
Revenue ......................................................................
Operating profit ..........................................................
Profit before income taxes ..........................................
Profit attributable to owners of the parent ..................

490,000
78,50078,70054,800-

Yen
Profit attributable to owners of the parent per share ...
201.87
Note: Makita plans to voluntarily adopt International Financial Reporting Standards (IFRS) in its consolidated
financial statements from the first three-month period of the year ending March 31, 2019. The Company’s
forecast of consolidated financial performance for the year ending March 31, 2019 is prepared based on IFRS.
Accordingly, the percentage changes from results for the year ended March 31, 2018 based on U.S. GAAP
have been omitted.

4. Others
English Translation of "KESSAN TANSHIN" originally issued in Japanese2(1) Changes in important subsidiaries for the fiscal year (Changes in specified subsidiaries accompanied by changes inscope of consolidation): None
(2) Changes in accounting policies:
1. Changes due to revisions to accounting standards: Yes
2. Changes due to other reasons: None
(3) Number of shares outstanding (common stock)
1. Number of shares issued (including treasury stock):
2. Number of treasury stock:
3.Average number of shares outstanding:

As of March 31, 2018:
As of March 31, 2017:
As of March 31, 2018:
As of March 31, 2017:
For the year ended March 31, 2018:
For the year ended March 31, 2017:

280,017,520
280,017,520
8,549,592
8,556,948
271,465,951
271,463,676

Note: The Company implemented a two-for-one common stock split, effective April 1, 2017. The number of shares
outstanding (common stock) was calculated on the assumption that the relevant stock split had been
implemented at the beginning of the previous consolidated fiscal year.

Makita’s earnings releases (KESSAN TANSHIN) are not subject to an audit.
Explanation regarding proper use of business forecasts, and other significant matters
Regarding the assumptions for the forecasts and other matters, refer to “(4) Outlook for the fiscal year ending
March 31, 2019” on page 5. The financial forecast given above is based on information as available at the present
time, and includes potential risks and uncertainties. As a consequence of the factors above and other, actual results
may vary from the forecasts provided above.

English Translation of "KESSAN TANSHIN" originally issued in Japanese31. OPERATING RESULTS
1. Overview of operating results(1) Overview of operating results for the fiscal year ended March 31, 2018
Looking at the global economic situation for the year ended March 31, 2018, developed countries’ economies
gradually recovered due to steady improvement in employment and income situation, although there wereuncertainties regarding the international political situation and policies. In emerging countries, the economy ingeneral remained robust, since domestic demand and exports grew steadily in southeast Asia.
Under these circumstance, on the development side, the Makita Group launched new products, mainly lithium-ion
battery product lines, such as models with high power brushless motors featuring high power and speed equivalent
to AC powered ones, and the industry’s first dust-collecting system that is wirelessly connected to cordless tools. On
the production side, our overseas factories strove to reduce costs while raising local content ratios. To improve
product quality stability and enhance productivity, we continued to introduce facilities that require less manpower ineach factory worldwide. On the sales side, while working hard to strengthen our community-and customer-based
sales network, including the renovation of office buildings in New Zealand and Austria and the opening of sales andafter-sales service bases in Poland, Lithuania, and Vietnam, we focused on expanding the sales of cordless gardening
and cleaning tools.
Our consolidated net sales for this period increased by 15.0% from the previous year to 477,298 million yen,record-high sales, due to steady sales at home and abroad and depreciation of the yen compared with the previous
year. Operating income increased by 27.5% to 79,762 million yen (operating income ratio: 16.7%), thanks to theimprovement in the cost-of-sales ratio due to the impact of the exchange rate and a rise in net sales. Meanwhile,
income before income taxes increased by 23.1% to 79,678 million yen (income before income taxes ratio: 16.7%)
and net income attributable to Makita Corporation shareholders increased by 22.3% to 54,755 million yen (ratio of
net income attributable to Makita Corporation shareholders: 11.5%).
Net sales by region are as follows:
Net sales in Japan increased by 11.0% to 82,575 million yen compared to the previous year. This was due to robust
sales of power tools and gardening equipment, mainly lithium-ion battery products.
Net sales in Europe increased by 19.6% to 202,054 million yen. This was due to a rise in sales in Western andEastern Europe (almost in all regions).
Net sales in North America increased by 11.7% to 73,873 million yen, supported by solid housing demand.
Net sales in Asia increased by 10.0% to 44,094 million yen. This was due to recovery of sales in China.
Net sales in Central and South America increased by 20.8% to 27,922 million yen. This was because the Brazilian
economy showed signs of breaking out from stagnation.
Net sales in Oceania increased by 24.7% to 31,284 million yen due to steady sales, mainly of lithium-ion battery
products.
Net sales in the Middle East and Africa decreased by 9.9% to 15,496 million yen. This was because a fall in crude
oil prices affected the economy and political uncertainty continued.
(2) Overview of financial situation for the fiscal year ended March 31, 2018
Total assets as of the end of the year increased by 53,782 million yen to 651,031 million yen compared to theprevious year. The increase was mainly due to the increase in “Inventories” and “Accounts”.
Total liabilities increased by 3,460 million yen to 94,898 million yen compared to the previous year. This increase
was mainly due to the increase in “Income taxes payable” and “Trade notes and accounts payable”.
Total equity increased by 50,322 million yen to 556,133 million yen compared to the previous year. This increase
was due to the increase in “Retained earnings”.

English Translation of "KESSAN TANSHIN" originally issued in Japanese4(3) Overview of cash flow situation for the fiscal year ended March 31, 2018
Total cash and cash equivalents at the end of the year amounted to 147,320 million yen, increased by 5,139
million yen compared to the end of the previous year.
Net cash provided by operating activities amounted to 33,294 million yen, down 30,057 million yen over theprevious year.
Net cash used in investing activities amounted to 14,811 million yen, down 9,796 million yen over the previous
year.
Net cash used in financing activities amounted to 17,743 million yen, down 8,248 million yen over the previous
year, due to an increase in repayments of loans payable.
(4) Outlook for the fiscal year ending March 31, 2019
In the future, Makita expects that the global economy will continue to recover gradually and demand will remainrobust in markets where it has presence. However, uncertainty about the prospects for the economy is expected toremain high due to concerns over the Fed’s interest rate policy and the Trump administration’s trade policies andheightened geopolitical risks in Russia and the Middle East.
To cope with these assumed conditions, Makita will:・ Strengthen its R&D and product development capabilities, mainly rechargeable batteries and motors, to takethe initiative in expanding the market of cordless products;
・ Position cordless gardening tools as a future pillar of its business after power tools and focus its effort on thedevelopment and sales expansion of new products;
・ Implement measures to improve the efficiency of production, procurement and distribution, while taking
advantage of global production organizations; and・ Strive to raise its brand power by promoting the establishment of a sales and after-sales service network tooffer community-based and fine-tuned response to needs of customers around the world.
On the basis of these factors, Makita forecasts the following performance for the year ending March 31, 2019.
Consolidated Financial Performance Forecast for the Year Ending March 31, 2019
Yen (millions)
For the year ending
March 31, 2019
Revenue .....................................................................
490,000
Operating profit..........................................................
78,500
Profit before income taxes .........................................
78,700
Profit attributable to owners of the parent..................
54,800Note: Makita plans to voluntarily adopt International Financial Reporting Standards (IFRS) in its consolidated
financial statements from the first three-month period of the year ending March 31, 2019. The Company’s
forecast of consolidated financial performance for the year ending March 31, 2019 is prepared based on IFRS.
The Company estimates that the impact of IFRS adoption on its sales and profits will be minimal.
[Preconditions]
The above forecast is based on the assumption of exchange rates of 105 yen to the U.S. dollar, 130 yen to the euro
and 16.8 yen to the renminbi.
[Reference]
The actual exchange rate for the year ended March 31, 2018 was 110.85 yen to the U.S. dollar, 129.66 yen to the euro
and 16.74 yen to the renminbi.
FORWARD-LOOKING STATEMENTS
This document contains forward-looking statements based on Makita's own projections and estimates. The power
tools market, where Makita is mainly active, is subject to the effects of rapid shifts in economic conditions, demandfor housing, currency exchange rates, changes in competitiveness, and other factors. Due to the risks anduncertainties involved, actual results could differ substantially from the content of these statements. Therefore, thesestatements should not be interpreted as representation where such objectives will be achieved.

English Translation of "KESSAN TANSHIN" originally issued in Japanese5(5) Basic policy regarding profit distribution and cash dividend for the fiscal 2018 and 2019
Makita's basic policy on the distribution of profits is to maintain a consolidated dividend payout ratio of 30% or
greater, with a lower limit on annual cash dividends of 10 yen per share. However, in the event special
circumstances arise, computation of the amount of dividends will be based on consolidated net income attributable
to Makita Corporation after certain adjustments. With respect to repurchases of its outstanding shares, Makita aims
to implement a flexible capital policy, augment the efficiency of its capital employment, and thereby boost
shareholder profit. Also Makita continues to consider execution of own share repurchases in light of trends in stock
prices.
Makita intends to maintain a financial position strong enough to withstand the challenges associated withchanges in its operating environment and other changes and allocate funds for strategic investments aimed at
expanding its global operations.
Our forecast for dividends is as follows;
For the year ended
March 31, 2018
(Result and Forecast)

For the year ending
March 31, 2019
(Forecast)

Cash dividend per share:
Interim ......................................................................

10.00 yen

10.00 yen

Year-end ....................................................................

51.00 yen

(Note)(Note)
Total ..........................................................................
61.00 yen
Note: The Board of Directors plans to meet in April 2019 for a report on earnings for the year ending March 31, 2019.
At such time, in accordance with the basic policy regarding profit distribution mentioned above, the Board of
Directors plans to propose a dividend equivalent to at least 30% of net income attributable to Makita
Corporation. The Board of Directors will submit this proposal to the General Meeting of Shareholders
scheduled for June 2019. However, if certain special circumstances arise, computation of the amount ofdividends will be based on consolidated net income attributable to Makita Corporation after certain adjustments.

The consolidated dividend payout ratio is calculated as annual dividends per share divided by consolidated
net income attributable to Makita Corporation per share (after adjustments for special circumstances) andmultiplied by 100.
2. Basic Rationale for Selection of Accounting Standards
Makita will voluntarily adopt International Financial Reporting Standards (IFRS) from the first three-month periodof the year ending March 31, 2019.

English Translation of "KESSAN TANSHIN" originally issued in Japanese

65. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. Consolidated Balance Sheets
Yen (millions)
As of March 31, 2017
As of March 31, 2018
Composition ratio

Composition ratio

ASSETS
CURRENT ASSETS:
Cash and cash equivalents ................................................

142,181

147,320

Time deposits ....................................................................

34,32943,013

Short-term investments .....................................................

23,441

14,782

Notes .............................................................................

1,199

1,343

Accounts........................................................................

67,086

79,092Less- Allowance for doubtful receivables .....................

(1,137)(1,340)Inventories ........................................................................

167,398

196,217

Deferred income taxes ......................................................

4,723

-

Prepaid expenses and other current assets ........................

13,34916,150Total current assets ........................................................

452,569

Trade receivables-

75.8%

496,57776.3%

PROPERTY, PLANT AND EQUIPMENT, AT COST:
Land ..................................................................................

22,35822,626

Building and improvements..............................................

94,927

98,648

Machinery and equipment ................................................

91,493

98,868Construction in progress ...................................................

5,531

6,027

Sub total ......................................................................

214,309226,169

Less- Accumulated depreciation and amortization ...........

(119,802)(126,305)

Total net property, plant and equipment .........................

94,507

15.8%

99,864

15.3%

INVESTMENTS AND OTHER ASSETS:
Investments .......................................................................

34,00433,815

Goodwill ...........................................................................

721

721

Other intangible assets, net ...............................................

3,641

3,944

Deferred income taxes ......................................................

650

3,975

Other assets.......................................................................

11,157

12,135

Total investments and other assets.................................

50,173

8.4%

54,590

8.4%

Total assets ..............................................................................

597,249

100.0%

651,031100.0%English Translation of "KESSAN TANSHIN" originally issued in Japanese

7

Yen (millions)
As of March 31, 2017
As of March 31, 2018
Composition ratio

Composition ratio

LIABILITIESCURRENT LIABILITIES:
Short-term borrowings......................................................

6,579

3,411

Trade notes and accounts payable.....................................

26,34728,156

Other payables ..................................................................

7,122

7,131

Accrued expenses .............................................................

10,537

11,952

Accrued payroll ................................................................

9,431

10,731

Income taxes payable........................................................

6,944

9,720

Deferred income taxes ......................................................

3,134

-

Other liabilities .................................................................

8,178

9,497

Total current liabilities ..................................................

78,272

13.1%

80,598

12.4%

LONG-TERM LIABILITIES:
Accrued retirement and termination benefits....................

3,161

3,206

Deferred income taxes ......................................................

8,313

9,391

Other liabilities .................................................................

1,692

1,703

Total long-term liabilities ..............................................

13,1662.2%

14,3002.2%

Total liabilities ...............................................................

91,43815.3%

94,898

14.6%

EQUITYMAKITA CORPORATION SHAREHOLDERS’
EQUITY:
Common stock .................................................................

23,80523,805Additional paid-in capital.................................................

45,50145,531

Legal reserve ....................................................................

5,669

5,669

Retained earnings .............................................................

456,546

497,456

Accumulated other comprehensive loss ...........................

(17,728)(8,905)

Treasury stock, at cost ......................................................

(11,623)(11,617)

Total Makita Corporation shareholders’ equity ...................

502,170

84.1%

551,939

84.8%

NON-CONTROLLING INTEREST ...................................

3,641

0.6%

4,194

0.6%

Total equity ....................................................................

505,81184.7%

556,133

85.4%

Total liabilities and equity .......................................................

597,249

100.0%

651,031100.0%English Translation of "KESSAN TANSHIN" originally issued in Japanese82. Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
Consolidated Statements of Income
Yen (millions)
For the year ended
For the year ended
March 31, 2018
March 31, 2017
Composition ratio

Composition ratio

NET SALES ........................................................................................

414,999

100.0%

477,298

100.0%

Cost of sales .....................................................................................

267,506

64.5%

302,173

63.3%

GROSS PROFIT .................................................................................

147,49335.5%

175,125

36.7%

Selling, general, administrative and others, net ...............................

84,92920.4%

95,36320.0%

OPERATING INCOME ......................................................................

62,56415.1%

79,76216.7%

OTHER INCOME (EXPENSE):
Interest and dividend income ...........................................................

2,512

2,919

Interest expense................................................................................

(104)

(43)

Exchange losses on foreign currency transactions, net ....................

(233)(3,235)

Realized gains on securities, net ......................................................

26

299

Valuation losses on securities ..........................................................

(27)

(24)

Total other income (expense), net .................................................

2,174

0.5%

(84)

0.0%

INCOME BEFORE INCOME TAXES ...............................................

64,738

15.6%

79,678

16.7%

Income tax expense:
Current.............................................................................................

19,98824,943

Deferred...........................................................................................

(378)

(536)

Total income tax expense ............................................................

19,6104.7%

24,407

5.1%

NET INCOME ....................................................................................

45,12810.9%

55,271

11.6%

Less-Net income attributable to the non-controlling interest ..............

346

0.1%

516

0.1%

NET INCOME ATTRIBUTABLE TO MAKITA CORPORATION ...

44,78210.8%

54,755

11.5%

English Translation of "KESSAN TANSHIN" originally issued in Japanese9Consolidated Statements of Comprehensive Income
Yen (millions)
For the year ended
For the year ended
March 31, 2018
March 31, 201745,12855,271

Foreign currency translation adjustment ........................................

(19,812)

9,860

Unrealized holding gains (expense)on available-for-sale securities ...................................................

10,742(1,364)

Pension liability adjustment ...........................................................

192

544

Total other comprehensive income (loss) ...................................

(8,878)9,040

COMPREHENSIVE INCOME .......................................................

36,25064,311Less-Comprehensive income
attributable to the non-controlling interest ....................................

147

733

COMPREHENSIVE INCOME
ATTRIBUTABLE TO MAKITA CORPORATION ......................

36,10363,578NET INCOME ..................................................................................
OTHER COMPREHENSIVE INCOME (LOSS):

English Translation of "KESSAN TANSHIN" originally issued in Japanese103. Consolidated Statements of Changes in Equity
Yen (millions)
For the year ended March 31, 2017
Makita Corporation shareholders’ equity

Beginningbalance .......................

Commonstock

Additional
paid-in
capitalLegalreserve

Retainedearnings

Accumulated
othercomprehensive
income (loss)

Treasurystock

Total Makita
Corporation
shareholders’equityNoncontrollinginterest

23,80545,456

5,669

425,473(9,049)(11,602)479,752

3,618

(21)

(21)

Purchases
and disposalof treasury
stock, net ....................
Cash dividends ..........

Total
equity483,370(21)(13,709)(13,709)(124)(13,833)

44,782

44,782346

45,128(8,679)(199)(8,878)Comprehensive
income (loss) .............
Net income .............
Other
comprehensive
loss .........................

(8,679)45

Other increase ............
Ending balance ..........

23,80545,501

455,669

456,546(17,728)(11,623)45

502,170

3,641

505,811

Yen (millions)
For the year ended March 31, 2018
Makita Corporation shareholders’ equity

Beginningbalance .......................

Commonstock

Additional
paid-in
capitalLegalreserve

Retainedearnings

Accumulated
othercomprehensive
loss

Treasurystock

Total Makita
Corporation
shareholders’equityNoncontrollinginterest

23,80545,501

5,669

456,546(17,728)(11,623)

502,170

3,641

(5)

(5)

(5)

11

0

0

Purchases
and disposalof treasury
stock, net ....................
Disposal of treasury
stock, net(attributable to theexercise of stock
option) .......................

(11)

Cash dividends ..........

Total
equity505,811(13,845)(13,845)(180)(14,025)54,75554,755516

55,271

8,823

217

9,040

Comprehensive
income .....................
Net income .............
Other
comprehensive
income ....................

8,823
41

Other increase ............
Ending balance ..........

23,80545,531

41
5,669

497,456(8,905)English Translation of "KESSAN TANSHIN" originally issued in Japanese(11,617)551,93941
4,194

556,133

11

4. Consolidated Statements of Cash Flows
Yen (millions)
For the year ended
March 31, 2017

For the year ended
March 31, 2018

CASH FLOWS FROM OPERATING ACTIVITIES:Net income ......................................................................................................
Adjustments to reconcile net income to net cash
provided by operating activities-

45,12855,271

Depreciation and amortization .................................................................

8,943

9,917

Deferred income tax expense ...................................................................

(378)

(536)

Realized gains on securities, net...............................................................

(26)

(299)

Valuation losses on securities ..................................................................

27

24

Gains (losses) on disposal or sales of property, plant and equipment, net ...........

385

18

Changes in assets and liabilitiesTrade receivables...................................................................................

(4,652)(11,399)

Inventories .............................................................................................

2,525(24,173)

Trade notes, accounts payable and accrued expenses............................

9,171

2,780

Income taxes payable ............................................................................

3,472

2,755

Accrued retirement and termination benefits ........................................

(684)

(557)

Other, net ...................................................................................................

(560)

(507)

Net cash provided by operating activities..................................................

63,35133,294

Capital expenditures ........................................................................................

(13,222)(14,149)

Purchases of available-for-sale securities ........................................................

(1,217)(3,734)

CASH FLOWS FROM INVESTING ACTIVITIES:

Proceeds from sales of available-for-sale securities ........................................

30,663

11,993Purchases of held-to-maturity securities .........................................................

(8,601)(5,009)Purchases from maturities of held-to-maturity securities ................................

5,700

4,200

Proceeds from sales of property, plant and equipment ....................................

383

496

Investment in time deposit ..............................................................................

(56,437)(51,010)

Withdrawal of time deposit .............................................................................

37,38442,374

Other, net .........................................................................................................

332

28

Net cash used in investing activities ..........................................................

(5,015)(14,811)

CASH FLOWS FROM FINANCING ACTIVITIES:
Additions to borrowings with original maturitiesof three months or less, net..............................................................................
Payments on borrowings with original maturities
of more than three months ...............................................................................

4,691(3,667)(329)-

Purchase of treasury stock, net ........................................................................

(22)

(5)

Cash dividends paid ........................................................................................

(13,709)(13,845)

Other, net .........................................................................................................

(126)

(226)

Net cash used in financing activities .........................................................
EFFECT OF EXCHANGE RATE CHANGESON CASH AND CASH EQUIVALENTS......................................................

(9,495)(17,743)(6,575)4,399

NET CHANGE IN CASH AND CASH EQUIVALENTS .............................

42,266

5,139

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR...................

99,915

142,181

CASH AND CASH EQUIVALENTS, END OF YEAR ................................

142,181

147,320

English Translation of "KESSAN TANSHIN" originally issued in Japanese12

5. Notes to Consolidated Financial Statements
Notes on the assumptions for a going concern: None
Significant Accounting Policies(1) Scope of consolidation and equity method
Number of consolidated subsidiaries: 51
Major subsidiaries are as follows;
Makita Werkzeug GmbH (Germany), Makita (U.K.) Ltd.
Makita LLC (Russia), Makita France SAS, Makita Oy (Finland)
Makita U.S.A. Inc., Makita Corporation of America, Makita Canada Inc.
Makita (China) Co., Ltd., Makita (Kunshan) Co., Ltd., Makita Manufacturing (Thailand) Co., Ltd.
Makita (Australia) Pty. Ltd., Makita do Brasil Ferramentas Eletricas Ltda.
Makita Gulf FZE (UAE)(2) Significant Accounting Policies (Summary)
Consolidated financial statements are prepared in conformity with accounting principles generally accepted in the
United States of America.
1. Short-term investments and Investments
Makita classifies investments in debt and marketable equity securities as available-for-sale or held-to-maturity
securities. Makita does not hold any marketable or investment securities that are bought and held primarily forthe purpose of sale in the near term.
2. Inventories
Inventory costs include raw materials, labor and manufacturing overheads. Inventories are valued at the lowerof cost or market price, with cost determined principally based on the average cost method.
3. Property, Plant and Equipment and Depreciation
Property, plant and equipment is stated at cost. Makita has adopted the straight-line method over the estimateduseful lives for computing depreciation.
4. Income Taxes
Deferred income tax assets and liabilities are recognized for the future tax consequences attributable totemporary differences between the financial statement carrying amounts of existing assets and liabilities andtheir respective tax bases and operating loss and tax credit carry forwards. The effect on deferred income tax
assets and liabilities of a change in tax rates or laws is recognized in income in the period that includes theenactment date.
5. Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimatesand assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent assets
and liabilities at the date of the consolidated financial statements and the reported amounts of revenues andexpenses during the reporting period. Actual results could differ from those estimates.
6. Revenue Recognition
Makita recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred orservices are rendered, the sales price is fixed or determinable and collectibility is reasonably assured.
Changes in accounting principles, procedures and presentations:
In July 2015, Accounting Standards Update 2015-11 (“Simplifying the Measurement of Inventory”—ASC 330(“Inventory”)) was issued. This Update applies to all inventory except for which is measured using last-in, first-out(LIFO) or the retail inventory method, and requires an entity to measure inventory at the lower of cost and net
realizable value. The Company adopted this standard on April 1, 2017. The adoption has no effect on the Company’s
financial statements.
In November 2015, the U.S. Financial Accounting Standards Board (FASB) issued Accounting Standards Update(ASU) No. 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes.” This accounting
standard change requires that all deferred tax liabilities and assets be classified as noncurrent in a consolidated balance
sheet. Effective April 1, 2017, the Company has adopted this accounting standard. In adopting this accounting standard,
the Company did not adjust the prior period’s financial statement retrospectively.
English Translation of "KESSAN TANSHIN" originally issued in Japanese13Condensed Operating Segment Information
Yen (millions)
For the year ended March 31, 2017
North
Asia
Other area
Total
America

Eliminations

Consolidated

414,999
325,464(325,464)

414,999-

58,118740,463(325,464)

414,999

173,637

55,732

678,181(325,746)

352,435

21,056

2,386

62,282282

62,564

Eliminations

Consolidated

Japan

Europe(2) Inter-segment ........

97,797
144,791

169,204
4,238

68,0693,553

22,336
172,357

57,593525

Total .................

242,588

173,442

71,622

194,693

Operating expenses .......

218,973

159,804

70,035

Operating income ..........

23,615

13,638

1,587

Sales:(1) Externalcustomers ................

Yen (millions)
For the year ended March 31, 2018
North
Asia
Other area
Total
AmericaJapan

Europe(2) Inter-segment ........

106,862
202,827

202,364
4,811

76,325
4,388

26,139212,697

65,6081,560

477,298
426,283(426,283)

477,298-

Total .................

309,689

207,175

80,713

238,836

67,168903,581(426,283)

477,298

Operating expenses .......

278,313

188,160

78,452

214,271

61,673820,869(423,333)

397,536

Operating income ..........

31,376

19,0152,261

24,565

5,495

82,712(2,950)79,762

Sales:(1) Externalcustomers ................

Net sales by product categories
Yen (millions)
For the year ended
For the year ended
March 31, 2017
March 31, 2018
Composition ratio

Composition ratio

Increase(Decrease)(%)

Finished goods.............................................................
Parts, repairs and accessories ......................................

347,288
67,711

83.7
16.3

399,240
78,058

83.6
16.4

15.0
15.3

Total net sales..........................................................

414,999100.0

477,298

100.0

15.0

English Translation of "KESSAN TANSHIN" originally issued in Japanese

14

Information per share
Yen

Total Makita Corporation Shareholders' equity
per share ....................................................................

As ofMarch 31, 2017

As ofMarch 31, 2018

1,849.88

2,033.16
Yen

For the year ended
March 31, 2017
Earning per share
Net income attributable to
Makita Corporation common shareholders(Basic) .......................................................................
(Diluted) ....................................................................

164.96164.95For the year ended
March 31, 2018

201.70201.68

Note: The Company implemented a two-for-one common stock split, effective April 1, 2017. We calculated on theassumption that the relevant stock split had been implemented at the beginning of the previous consolidated
fiscal year.
Net income per share (Basic) is calculated on the basis of the average number of shares outstanding during theyear. Average number of shares outstanding is as follows:
For the year ended March 31, 2018: 271,465,951
For the year ended March 31, 2017: 271,463,676
Net income per share (Diluted) is calculated by adjusting for all dilutive potential ordinary shares having adilutive effect.
Significant Subsequent Events: None

English Translation of "KESSAN TANSHIN" originally issued in Japanese

15

SUPPORT DOCUMENTATION (CONSOLIDATED)
1. Consolidated Financial Results and Forecast (Note 1)
For the year ended
March 31, 2016

Yen (millions)
For the year ended
March 31, 2017(%)

Net sales ............................................................
Domestic .......................................................
Overseas........................................................
Operating income ..............................................
Income before income taxes ..............................
Net income attributable to Makita
Corporation........................................................
Earning per share (Basic)
Net income attributable to
Makita Corporationcommon shareholders (Yen) (Note2)...............
Cash dividend per share (Yen) (Note2) ...........
Dividend payout ratio (%) .................................
Number of Employees .......................................

For the year ended
March 31, 2018

(%)

(%)

423,623
68,445355,178
64,676
61,4922.1
1.0
2.4(10.1)(10.1)

414,999
74,381
340,618
62,56464,738

(2.0)
8.7
(4.1)
(3.3)
5.3

477,298
82,575
394,723
79,762
79,678

15.0
11.0
15.9
27.5
23.1

41,615(8.1)

44,782

7.6

54,75522.3

153.30101.0032.9
14,784164.96100.0030.3
15,344201.7061.00
30.2
16,137

Yen (millions)
For the year ending
March 31, 2019
(Forecast) (Note 3)(%)

Revenue ............................................................................................................
Domestic ......................................................................................................
Overseas .......................................................................................................
Operating profit ................................................................................................
Profit before income taxes ................................................................................
Profit attributable to owners of the parent ........................................................
Profit attributable to owners of the parent per share (Note2) ............................

490,000
86,000404,000
78,50078,70054,800201.87

Notes:
1. Regarding our forecast for dividends, refer to page 6.
2.The Company implemented a two-for-one common stock split, effective April 1, 2017. Net income attributable to Makita
Corporation common shareholders per share (basic) was calculated on the assumption that the relevant stock split had been
implemented at the beginning of the consolidated fiscal year ended March 31, 2016. However, dividends per share are amounts
paid prior to the relevant stock split.
3. Makita plans to voluntarily adopt International Financial Reporting Standards (IFRS) in its consolidated financial statements fromthe first three-month period of the year ending March 31, 2019. The Company’s forecast of consolidated financial performancefor the year ending March 31, 2019 is prepared based on IFRS. Accordingly, the percentage changes from results for the year
ended March 31, 2018 based on U.S. GAAP have been omitted.

English Translation of "KESSAN TANSHIN" originally issued in Japanese162. Consolidated Net Sales by Geographic Area

Japan ..............................................................................
Europe ...........................................................................
North America ...............................................................
Asia ...............................................................................
Other regions .................................................................
Central and South America ......................................
Oceania ....................................................................
The Middle East and Africa .....................................
Total...............................................................................

For the year ended
March 31, 2016

Yen (millions)
For the year ended
March 31, 2017

For the year ended
March 31, 2018

(%)

(%)

(%)

68,445
173,987
67,75941,443
71,98926,14924,653
21,187
423,623

1.0
(0.7)
18.5
4.5
(3.9)
(13.7)
3.8
1.5
2.1

74,381
168,992
66,14840,07965,39923,11025,093
17,196414,999

8.7
(2.9)
(2.4)
(3.3)
(9.2)
(11.6)
1.8(18.8)(2.0)

82,575
202,054
73,87344,09474,702
27,922
31,284
15,496477,298

11.0
19.6
11.7
10.0
14.2
20.8
24.7
(9.9)
15.0

Note: The table above sets forth Makita's consolidated net sales by geographic area based on the customer’s location
for the years presented. Accordingly, it differs from operating segment information on page 14. The table aboveshows the changes in the percentage ratio of net sales compared to the corresponding period of the previous year.
3. Exchange Rates
Yen
For the year ending
March 31, 2019

For the year ended
March 31, 2016

For the year ended
March 31, 2017

For the year ended
March 31, 2018

120.15132.6018.86

108.34118.7416.10

110.85129.66
16.74

105
130
16.8

For the year ended
March 31, 2016

For the year ended
March 31, 2017

For the year ended
March 31, 2018

USD/JPY ................................
EUR/JPY ................................
RMB/JPY ...............................

(Forecast)

4. Production Ratio (unit basis)

Domestic ...................................................................
Overseas ....................................................................

10.2%
89.8%

10.2%
89.8%

9.3%
90.7%

5. Consolidated Capital Expenditures, Depreciation and Amortization, and R&D cost
Yen (millions)

Capital expenditures ............
Depreciation andamortization ......................
R&D cost .............................

For the year ending
March 31, 2019

For the year ended
March 31, 2016

For the year ended
March 31, 2017

For the year ended
March 31, 2018

11,76913,222

14,14950,000

9,284
9,593

8,943
10,139

9,917
10,89412,00010,800English Translation of "KESSAN TANSHIN" originally issued in Japanese(Forecast)17