FY2008 3rd Quarter Consolidated Financial Results
For the Nine Months Ended December 31, 2007
February 4, 2008

Company NameURL
Representative
Contact for Inquiries::::Fuji Heavy Industries Ltd. (Tokyo Stock Exchange First Section, Code No.7270)
http://www.fhi.co.jp/english/ir/
Ikuo Mori, President and CEO
Kazuto Sakamoto, General Manager of Administration Department Phone +81-3-3347-2005

1. Performance in the 3rd Quarter of FY 2008 (from April 1, 2007 to December 31, 2007)
Note that all amounts have been rounded off to the nearest million yen, unless otherwise specified(1) Consolidated Results of Operations(Unit: Millions of yen, except for per share figures)

Net sales
3rd Quarter of FY 2008
3rd Quarter of FY 2007
FY 2007

1,105,309
1,058,733
1,494,817

Operating income
4.4 %
1.9 %
-

36,61335,75347,906

Ordinary income

2.4 %(4.8 %)-

32,71230,18842,2158.4 %(3.2 %)-Net income
17,877
24,66931,899(27.5%)
92.5 %-

Note: Percentage figures in the net sales, operating income, ordinary income and net income columns represent changes from prior 3rd quarter period.

3rd Quarter of FY 2008
3rd Quarter of FY 2007
FY 2007

Net income per share,basic (Yen)
24.89
34.40
44.46

Net income per share,diluted (Yen)
34.38
44.44

(2) Consolidated Financial Position

3rd Quarter of FY 2008
FY 2007

Total assets

Net assets

1,277,216
1,316,041

501,080495,703

2. Dividends
FY 2007
FY 2008
FY 2008 (Forecast)(Unit: Millions of yen, except for per share figures)

Shareholders’ equity tototal assets
39.2 %
37.5 %Net assets per share(Yen)
696.30687.81(unit: Yen)

Cash dividends per share
Semi-annual
Year-end
Annual
4.50
4.50
9.00
4.50
9.00
4.50

3. Forecast of Consolidated Results for FY 2008 (from April 1, 2007 to March 31, 2008)
There is no change in the earnings forecast released on October 31, 2007.

4. Other(1) Changes in significant subsidiaries during the 3rd Quarter of FY 2008

: No

(Changes in subsidiaries resulting in changes in scope of consolidation)(2) Adoption of simplified accounting practices: Yes(3) Changes in Accounting principles, procedures and presentation etc.

: Yes

Note: Please refer to page 2, “4. Other” of [Qualitative Information, Financial Statements, etc.] for more details.

The above projections are made based on available information and assumptions as of February 4, 2008, and are subject to theuncertainties of future operations. Therefore, actual results could differ materially from those anticipated.

－1－[Qualitative Information, Financial Statements, etc.]
1. Qualitative Information on Consolidated Operating Performance
Consolidated sales for the third quarter of the fiscal year ending March 2008 were up ¥46.6 billion, or 4.4% over the same
period of the previous fiscal year to ¥1,105.3 billion. Although sales in the Japanese market have been sluggish in theAutomobile Division, this increase was achieved due to factors such as increased sales volume in overseas markets and foreignexchange differences with our foreign subsidiaries. Regarding the profit, in addition to the gain on currency exchange becauseof the weak yen, we worked to reduce the cost of materials, SG & A and other expenses. So we were able to cover thedecreased sales volume and mix in the Automobile Division. Operating income was up ¥0.9 billion, or 2.4% over the same
period of the previous fiscal year to ¥36.6 billion, and an ordinary income was up ¥2.5 billion, or 8.4% over the same period of
the previous fiscal year to ¥32.7 billion. However, net income was down ¥6.8 billion, or 27.5% over the same period of theprevious fiscal year to ¥17.9 billion due to decreased gains on sales of fixed assets and similar causes.

2. Qualitative Information on Consolidated Financial Position
Total assets as of the end of the third quarter of this fiscal year ending March 2008 were ¥1,277.2 billion, which was adecrease of ¥38.8 billion from the previous fiscal year.
Liabilities were down to ¥776.1 billion, which was a decrease of ¥44.2 billion from the previous fiscal year.
Net assets were ¥501.1 billion, which was an increase of ¥5.4 billion over the previous fiscal year.

3. Qualitative Information on Projection for Fiscal 2008 (From April 1, 2007 to March 31, 2008)
At the current time, the fiscal projection remains the same as presented in the FY2008 First Half Consolidated Financial
Results (October. 31, 2007).

4. Other(1) Changes in significant subsidiaries during the 3rd Quarter of FY 2008
(Changes in subsidiaries resulting in changes in scope of consolidation)

Nothing(2) Adoption of simplified accounting practices
Income taxes are calculated using a simplified accounting method.

(3) Changes in Accounting principles, procedures and presentation etc.
In FY 2008, the Company and domestic consolidated subsidiaries changed their depreciation / amortization method for fixed
assets acquired on or after April 1, 2007 to conform to the enacted revisions to the tax depreciation schedules under theCorporate Tax Law and related tax regulations. The effects of this change were to decrease operating income by ¥1,324
million, and to decrease ordinary income and income before income taxes and minority interest by ¥1,330 million each ascompared to the respective amounts that would have been reported under the previous method.
In addition, during FY 2008, the Company and domestic consolidated subsidiaries started to depreciate the residual bookvalue of fixed assets acquired on or before March 31, 2007 on a straight-line basis over a 5-year period commencing in theyear following a year in which those assets have reached their depreciation limit under the previous depreciation / amortization
method. This change resulted in a decrease in operating income of ¥1,742 million, and a decrease in both ordinary income andincome before income taxes and minority interest of ¥1,781 million, as compared to the respective amounts that would havebeen reported had the change not been implemented.

－2－5. Consolidated Financial Statements(1) Consolidated Balance Sheets(Unit: millions of yen)

FY 2007(as of March 31, 2007)

Amount3rd Quarter ofFY 2008(as of December 31, 2007)

AmountChanges
Increase / (Decrease)
Amount%[ASSETS]Ⅰ Current assets
Cash and time deposits

52,40647,548(4,858)Notes and accounts receivable, trade99,29082,433(16,857)

Marketable securities

32,017

18,690(13,327)

Inventories
Deferred tax assets

224,919
27,072

253,288
22,64628,369(4,426)

Short-term loans

101,184

99,433(1,751)

Other

59,501

56,065(3,436)

Allowance for doubtful accounts(1,713)(1,499)214

Total current assets

594,676

578,604(16,072)

129,280

127,778(1,502)

Machinery and vehicles
Land

122,828
174,835126,979
179,690

4,151
4,855

Construction in progress

18,335

7,819(10,516)

Leased assets

59,89653,216(6,680)Other45,41037,085(8,325)

Total property, plant and equipment, net

550,584

532,567(18,017)(2.7)

Ⅱ Fixed assets
1. Property, plant and equipment, net
Buildings and structures

2. Intangible assets
Goodwill(3.3)

19,092

18,847

(245)

Other

16,10013,600(2,500)Total intangible assets

35,19232,447(2,745)

3. Investments and other assets
Investment securities

85,81980,740(5,079)Long-term loans

3,696

3,910

214

Deferred tax assets
Other

20,82528,472

21,91930,167

1,094
1,695

Allowance for doubtful accounts(3,223)(3,138)85

Total investments and other assets

135,589

133,598(1,991)(1.5)

Total fixed assets

721,365

698,612(22,753)(3.2)

1,316,041

1,277,216(38,825)(3.0)

Total assets－3－(7.8)

(Unit: Millions of yen)

FY 2007(as of March 31, 2007)

Amount3rd Quarter of
FY 2008(as of December 31, 2007)

AmountChanges
Increase / (Decrease)
Amount%[LIABILITIES AND NET ASSETS]
Ⅰ Current liabilities
Notes and accounts payable, trade
Short-term borrowings
Commercial paper
Current portion of bonds
Accrued income taxes
Accrued expenses
Accrued bonus
Accrued warranty claims
Other

190,394
172,454
11,00010,0004,572
55,78915,24723,93480,277

181,879
177,836
20,00030,0005,282
50,645
7,777
23,321
71,065(8,515)5,382
9,000
20,000710(5,144)(7,470)(613)(9,212)563,667

567,805

4,138

Ⅱ Long-term liabilities
Bonds

90,00060,000(30,000)

Long-term debts

60,40043,788(16,612)

703

-

(703)

45,51644,260(1,256)

Accrued directors’ severance and retirement benefits
Provision for losses on guarantees

987
745

729
745

(258)
-

Negative goodwill

821

-

(821)

Other

57,49958,8091,310

Total long-term liabilities

256,671

208,331(48,340)(18.8)

820,338

776,136(44,202)(5.4)

Ⅰ Shareholders' capital
Common stock

153,795

153,795-

Capital surplus

160,104

160,099(5)

Retained earnings

214,831226,623

11,792Less-treasury stock, at cost

(40,511)(40,529)(18)

Total shareholders' capital

488,219499,988

11,76922,182

20,346(1,836)290-(290)(16,687)(20,256)(3,569)5,785

90(5,695)(98.4)

1,699

1,002(697)(41.0)

Total net assets

495,703

501,080

5,377

1.1

Total liabilities and net assets

1,316,041

1,277,216(38,825)(3.0)

Total current liabilities

Deferred tax liabilities on revaluation of land
Accrued pension and severance benefits

Total liabilities

0.7[NET ASSETS]

Ⅱ Valuation, translation, and other adjustments
Net unrealized holding gains on securities
Revaluation reserve for land
Foreign currency translation adjustments
Total valuation, translation, and other adjustments
Ⅲ Minority interest in consolidated subsidiaries

－4－

2.4

(2) Consolidated Statements of Income(Unit: Millions of yen)

3rd Quarter ofFY 2007

3rd Quarter ofFY 2008

AmountAmountChanges
Increase/ (Decrease)(ended December 31, 2006) (ended December 31, 2007)
Amount%Fiscal 2007
(ended March 31, 2007)

AmountⅠ Net sales
Ⅱ Cost of sales
Gross profit

1,058,733
796,228
262,505

1,105,309
844,586
260,723

46,57648,358(1,782)

4.4
6.1
(0.7)

1,494,817
1,142,674
352,143

Ⅲ Selling, general and administrative expenses

226,752

224,110(2,642)(1.2)

304,237

Operating income

35,75336,613860

2.4

47,906

Ⅳ Non-operating income
Interest and dividend income
Amortization of negative goodwill
Gain on revaluation of derivatives
Equity income from affiliated companies
Other

2,581
1,631
1,393
4,003

4,053
85
412
2,847

1,472
(1,631)85(981)(1,156)

3,864
2,175
4,268
1,549
5,949

Total non-operating income

9,6087,397(2,211) (23.0)

17,805

Ⅴ Non-operating expenses
Interest expenses
Foreign exchange losses
Loss on revaluation of derivatives
Other
Total non-operating expenses

2,994
99
12,08015,173

3,086
4,144
399
3,669
11,298

92
4,144
300
(8,411)(3,875) (25.5)

4,017
11,90672
7,501
23,496

Ordinary income

30,18832,712

2,524

42,215

6,492

1,115

(5,377)6,673

81,451-

1,433
1,557
280

1,425
106
280

58
1,451-

2,423-(2,423)

2,423

154
10,528163
4,548

9(5,980) (56.8)

104
10,709

3,306

3,087

(219)

4,774

290

-

(290)

18
335

108

1,593

1,485

550

914
19
4,637

6
4,686(914)
(13)
49

1.1

745
913
7,335

36,07932,574(3,505)(9.7)

45,58911,25914,696

3,437

30.5

13,642(151)(1)(150) (99.3)(48)

24,66917,877(6,792) (27.5)

31,899Ⅵ Extraordinary gains
Gain on sale of property, plant andequipment
Gain on sale of securities
Prior period adjustment
Gain on sale of loans receivable
Gain on transfer of the substitutional
portion of the employees’ pension fund
Other
Total extraordinary gains
Ⅶ Extraordinary losses
Loss on sale and disposal of property, plantand equipment
Loss on sale of securities
Loss on devaluation of securities
Impairment loss on property, plant andequipment
Allowance for losses on guarantees
Loss on liquidation of affiliated companies
Other
Total extraordinary losses
Income before income taxes and minority
interest
Tax expense
Minority interest in income of consolidated
subsidiaries

Net income

8.4

Note: “Gain on revaluation of derivatives” included in “Other” non-operating income of 4,003 million yen in 3rd Quarter of FY 2007 is 947 million yen.
“Foreign exchange loss” included in “Other” non-operating expenses of 12,080 million yen in 3rd Quarter of FY 2007 are 7,676 million yen.

－5－(3) Segment Information[Information by business segment information]
3rd Quarter of FY2008 (from April 1, 2007 to December 31, 2007)
Industrial
Aerospace
Automobiles products

Other

TotalNet sales(1) Outside customers(2) Inter-segment
Total sales
Operating cost and expense
Operating income

7,689
4,880
12,56911,858711

1,105,309
7,039
1,112,348
1,077,529
34,8191,004,358
2,147
1,006,505
977,879
28,62630,646
11
30,657
29,910
747(Unit: Millions of yen)

62,616
1
62,61757,882
4,735

Elimination Consolidated
and corporate
total

3rd Quarter of FY2007 (from April 1, 2006 to December 31, 2006)
Industrial
Automobiles products
Aerospace

Other

Total

Net sales(1) Outside customers(2) Inter-segment
Total sales
Operating cost and expense
Operating income

8,994
1,851
10,845
9,078
1,767

1,058,733
4,135
1,062,868
1,027,517
35,351

945,930
2,255
948,185920,366
27,81938,261
16
38,27736,653
1,624(7,039)(7,039)(8,833)
1,794

1,105,309
1,105,309
1,068,696
36,613(Unit: Millions of yen)

65,54813
65,561
61,4204,141

Elimination Consolidated
and corporate
total(4,135)(4,135)(4,537)402

1,058,733
1,058,733
1,022,980
35,753[Information by Geographical segment]
3rd Quarter of FY2008 (from April 1, 2007 to December 31, 2007)

Net sales(1) Outside customers(2) Inter-segment
Total sales
Operating cost and expense
Operating income

Japan

North America

618,863
199,605
818,468
793,274
25,194

447,078
14,049461,127455,129
5,998(Unit: Millions of yen)

Other

Total

Eliminationand corporate

Consolidated
total

39,368342
39,71038,634
1,076

1,105,309
213,996
1,319,305
1,287,037
32,268(213,996)(213,996)(218,341)
4,345

1,105,309
1,105,309
1,068,696
36,613

Other

Total

Eliminationand corporate

Consolidated
total

22,586205
22,791
22,110681

1,058,733
194,413
1,253,146
1,221,395
31,751(194,413)(194,413)(198,415)
4,002

1,058,733
1,058,7331,022,980
35,7533rd Quarter of FY2007 (from April 1, 2006 to December 31, 2006)

Net sales(1) Outside customers(2) Inter-segment
Total sales
Operating cost and expense
Operating income

Japan

North America

638,653
187,601
826,254799,119
27,135

397,494
6,607
404,101
400,166
3,935－6－(Unit: Millions of yen)

[Overseas net sales]
3rd Quarter of FY2008 (from April 1, 2007 to December 31, 2007)(Unit: Millions of yen)

North America

Europe

Other

Total

483,350

125,485

127,071735,906

Overseas net sales
Consolidated net sales

1,105,309

Percentage of overseas net sales over consolidated sales

43.7 %

11.4 %

11.5 %

3rd Quarter of FY2007 (from April 1, 2006 to December 31, 2006)

Overseas net sales(Unit: Millions of yen)

North AmericaEurope

OtherTotal

428,988

106,998

105,076

641,062

Consolidated net sales
Percentage of overseas net sales over consolidated sales

66.6%

1,058,733
40.5%－7－10.1%

9.9 %

60.5 %

<Reference for the 3rd Quarter of FY2008(Apr. 2007 to Dec. 2007) Consolidated Financial Results>(Feb. 4, 2008)

Fuji Heavy Industries Ltd.
(in 100 millions of yen)

RESULTSRESULTSRESULTSFORECAST(in thousands of units)

3rd Quarter of FY2007

3rd Quarter of FY2008

FY2007

FY2008Apr. 2006 to Dec. 2006

Apr. 2007 to Dec. 2007

Net Sales

10,587

Apr. 2006 to Mar. 2007

11,0534,4 %Apr. 2007 to Mar. 2008

14,9484.4 %

15,600

Domestic

4,177

3,694

(11.6) %

5,762

5,300

(8.0) %

Overseas

6,411

7,359

14.8 %

9,186

10,30012.1 %

400(16.5) %350(17.1) %170(46.7) %Margin Percentage

3.4%

Operating Income
Margin Percentage

358
2.9%

Ordinary Income
Margin Percentage

Net Income

3.3%

2.4 %

366

479

3.0%

302
2.3%

8.4 %

327

422

Gain factors

in Operating Income

Foreign exchange

1.1%

2.1%

179

Factors of Change

2.2%

2.8%

1.6%

247

2.6%

3.2%

(27.5) %319
Gain factors
65

Reduction in cost

63

Reduction in cost

55

Decrease of expenses and others6

Decrease of expenses and others

54

Loss factors
Loss factors

Decrease in sales mix

101

Decrease in sales mix

155

Increases in R&D expenses

43

Increases in R&D expenses

10

Foreign exchange

4Foreign Exchange Rate
YEN/US$116

118117115

Capital investment

374

405

596

600

Depreciation and amortization

437

478

589

640

R&D Expenses

373

384

507

550

Interest bearing debt

3,721

3,316

3,439

3,290

Performance of operation

Net Sales to increase

Net Sales to increase

Net Income to decrease

Net Income to decrease

Best Net Sales

Best Net Sales

Domestic Sales

160

144(10.1) %

227

204

(10.3) %Passenger Cars

56

51(8.7) %8178(3.4) %Minicars

10493(10.8) %146

125(14.1) %Export246

273

10.9 %

351

389

10.8 %

North America

141

149

6.1 %

207

215

4.2 %

71Europe

5258

11.0 %

85

18.6 %

Other5365

23.3 %

7389

21.9 %

417

2.6 %

578

593

2.5 %

Units Total

406* Figures of Total Sales are the sum of retail sales units of the Japanese subsidiary dealers,
wholesale units of the overseas subsidiary distributors, and wholesale units of FHI to other distributors/dealers.
* Exchange rate is the non-consolidated base of Fuji Heavy Industries Ltd..