Presentation of business results
for theterm ended March
2011
2011年3月期
決算説明会
富士重工業株式会社
Fuji Heavy
Industries Ltd.
2011年5月10日
May 10, 2011
http://www.fhi.co.jp/english/ir/index.html

00

A Summary of Business Results

http://www.fhi.co.jp/english/ir/index.html

11Full Year : Consolidated Automobile Sales（Thousand Units）

Actual Results
FYE March 2010
Passenger Car

Minicar75.1
96.2

Domestic Total
U.S.
CanadaRussiaEuropeAustralia
China
Others171.3

Overseas Total

391.6

Total
http://www.fhi.co.jp/english/ir/index.html

227.0
22.8
1.6
37.3
35.0
48.9
18.9

562.8

Actual Results
FYE March 2011

68.1
90.0

158.1

Increase/Decrease

-7.0
-6.2

-13.2

279.0
28.1
11.3
48.2
41.2
62.4
28.7

+51.9
+5.2
+9.8
+10.9
+6.2
+13.5
+9.8

657.0

+107.3
+94.1

498.9

Canada figures were consolidated on the calendar year basis from Jan. to Dec.

2

Total consolidated automobile sales for the fiscal year ended March 2011 was 657 thousand units,
up 94.1 thousand units compared with the previous fiscal year. The consolidated sales volume,
exceeding 600 thousand units, was a record high.
The total number of cars sold in the domestic market dipped 13.2 thousand units. Passenger car
sales dropped 7 thousand units year on year due to the discontinuation of the eco-car subsidy
program during the second half as well as the devastating earthquake that hit northeastern Japan in
March. Minicar sales also fell 6.2 thousand units.
In overseas markets, sales increased across the board by 107.3 thousand units to offset thedecreased domestic sales volume.

2

Full Year : Consolidated Statements of Income（100 million yen）

Actual Results
FYE March 2010

Actual Results
FYE March 2011

Increase/Decrease

Net Sales

14,28715,806+1,519Domestic

5,208
9,079

4,673
11,132-535+2,054

Operating Income

274

841

+568

Ordinary Income

224

822

+599

Income/Loss Before
Income Taxes andMinority Interests

-4

632

+637

Net Income/Loss

-165

503

+668

FHI Exchange Rate

¥93/$

¥86/$

-¥7/$

Overseas

http://www.fhi.co.jp/english/ir/index.html

3

Net sales for the fiscal year ended March 2011 increased by 151.9 billion yen to total
1,580.6 billion yen. Major factors behind the increase included a gain of 218.6 billion yen
due to the improvement of sales volume and mix in mainly overseas markets, which
offset a loss of 1.8 billion yen from declining sales at three internal companies, etc.. anda loss on currency exchanges totaling 64.9 billion yen due to the appreciation of the yen
against the US dollar and euro.
Operating income rose 56.8 billion yen year on year to total 84.1 billion yen. This
increase was mainly due to an improved sales volume and mix as well as reduction inmaterials costs and SG&A expenses, etc.. The gains offset currency losses from theappreciation of the yen and increased R&D expenses, which we'll look at in further detaillater on.
Ordinary income also rose 59.9 billion yen year on year to bring it to a total of 82.2 billion
yen. Further details about this will also be provided later on.
Extraordinary losses included a loss on disaster associated with the recent earthquake,a loss from adjustment of provision for product warranties in prior years, as well as thecost of retirement and dismantlement, etc. of facilities related to the termination ofminicar production. Consequently, income before income taxes and minority interests
totaled 63.2 billion yen, up 63.7 billion yen year on year.
Net income totaled 50.3 billion yen, a year-on-year increase of 66.8 billion yen, as thetaxes paid by our US and domestic subsidiaries.

3

Full Year : Analysis of Increase and Decreasein Operating Income Changes (consolidated)

Overseas:
Improvementof sales volume
and mixture, etc

Improvementof salesReduction
volume &in costmixture andothers89

FHI: +77
SIA: +1261
Decreaseof SG&A
expensesand others

831
Decrease of
fixed cost andwarranty
claims, etc（100 million yen）

Loss oncurrency
exchange-356

Increase of
R&D
expenses-57
US$: -287
Euro: -66
CA$: +1
Currency
exchange
adjustment： -4

841

274
Operating Income
FYE March 2010
http://www.fhi.co.jp/english/ir/index.html+56.8 billion

Operating Income
FYE March 20114

Now let’s look at the reasons for the year-on-year increase in operating income that took from 27.4 billion yen to 84.1 billionyen.
One of the main factors leading to the increase in operating income included a gain of 83.1 billion yen due to an
improvement of sales volume and mixture. This gain can be broken down into the following three areas. The first is a loss of
12.2 billion yen in the domestic market due to declining sales triggered by the discontinuation of the eco-car tax subsidy
programs as well as the impact of the earthquake. Next, we see an overseas market gain of 79.9 billion yen thanks toacross-the-board sales volume increases, most notably being outstanding sales of the Legacy. Finally, we had a gain of
15.4 billion yen due to inventory adjustments and others.
Reduction in cost generated a gain of 8.9 billion yen, including a gain of 7.7 billion yen at FHI and a gain of 1.2 billion yen(12 million dollars) at SIA. FHI generated a gain of 20.4 billion yen due to a reduction in cost with loss amounting to 12.7
billion yen due to increased material prices. SIA posted a gain of 5.4 billion yen (58 million dollars) due to a reduction in costand a loss of 4.2 billion yen (46 million dollars) related to rising material prices.
We also saw a decrease in SG&A expenses, etc.. that led to a gain of 6.1 billion yen. This amount can be broken down into
the following three areas. First, we see that a reduction in fixed manufacturing costs generated a gain of 9.5 billion yen, witha gain of 9.9 billion yen at FHI and a loss of 0.4 billion yen (4 million dollars) at SIA. FHI yielded a gain of 6.9 billion yen due
to decrease of depreciation of suppliers’ dies and a gain of 4.0 billion yen due to lower fixed processing cost. SIA gained 1.2
billion yen (13 million dollars) due to decrease of the depreciation of suppliers’ dies and loss of 1.6 billion yen (17 million
dollars) due to increased processing cost. Next, we saw an increase in SG&A expenses which yielded a loss of 5.0 billion
yen. FHI generated a loss of 3.7 billion yen due to increased transportation and packing costs in tandem with an increasing
sales volume. Domestic dealers also generated a gain of 3.8 billion yen due to ongoing efforts to lower SG&A expenses.
SOA, on the other hand, saw a loss of 0.4 billion yen (4 million dollars), which included a gain of 2.7 billion yen (29 million
dollars) due to reduced advertising expenses and a loss of 3.1 billion yen (33 million dollars) due to increased incentive cost.
Although the per-unit incentive was cut by 100 dollars, down from 1,100 dollars for FY2010 to 1,000 dollars for FY2011, thetotal incentive cost was up due to the increased sales volume. Our Canadian subsidiary also experienced a loss of 1.0
billion yen due to an increased sales volume resulted in pushing up the incentive cost amounts while our other subsidiaries
saw combined losses of 3.7 billion yen. Finally, the third factor includes a decrease in warranty claims costs that led to again of 1.6 billion yen.
Major factors behind the profit downturn included exchange rate fluctuations generating a loss of 35.6 billion yen. This
included a loss of 28.7 billion yen due to an approximate 7 yen appreciation against the U.S. dollar, a loss of 6.6 billion yen
due to an approximate 18 yen appreciation against the euro, and a gain of 0.1 billion yen coming from the exchange rate for
the Canadian dollar which remained flat. This figure also included a loss of 0.4 billion yen due to foreign exchange
adjustments for transactions between FHI and its overseas subsidiaries.
We saw a loss of 5.7 billion yen due to increased R&D expenses related to developing new models and more environmental
friendly features.
These factors combined brought operating income up 56.8 billion yen.

4Full Year : Net Sales by Business Segment(consolidated)（100 million yen）

Actual Results Actual Results
FYE
FYE
March 2010
March 2011

Percentage ofTotal Sales
Aerospace
5.2%

Industrial
Products
1.9%

Other
1.0%

Increase/Decrease

Automobile

12,945

14,522+1,578Aerospace

932

828

-104

Industrial
Products

239

301

+61

Other

171

155

-16

14,287 15,806+1,519Automobile
91.9%

Total
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5

Looking at net sales by business segment, we saw sales rise by157.8 billion yen
year on year thanks to an improved sales volume and mix, which offset foreignexchange losses due to the strong yen.
Sales for the Aerospace Division were down 10.4 billion yen year on year due todeclined revenue from unmanned aerial vehicle systems, etc..
Sales for the Industrial Products Division were up 6.1 billion yen due to increased
exports to overseas markets, primarily North America.

5Full Year : Operating Income by
Business Segment (consolidated)（100 million yen）

Actual Results
FYE March 2010

Actual Results
FYE March 2011

Increase/Decrease

Automobile

217

804

+587

Aerospace

48

23

-26

Industrial
Products

-24

-1

+24

Other

26

15

-11

7

1

-6

274

841

568

Elimination andCorporate

Total
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6

Looking at operating income by business segment, we see that the automobile
business saw an increase of 58.7 billion yen in operating income. This uptick comesfrom a healthy sales volume and mix, reduction in materials costs, as well as
decreased SG&A and other expenses, which offset foreign exchange losses andincreases in R&D expenses.
Operating income for the Aerospace Division was down 2.6 billion yen due todeclined revenue from unmanned aerial vehicle systems and foreign exchange
losses.
The Industrial Products Division experienced an operating loss of 0.1 billion yen
despite increased overseas exports mainly to the North American market that led toa gain of 2.4 billion yen but failed to offset foreign exchange losses.

6Full Year : Net Sales by Geographic Area
(consolidated) <Appendix>（100 million yen）

Percentage ofTotal Sales
North
America
43.0%

Other
3.6%

Japan
53.3%

Actual Results Actual Results
FYE
FYE
March 2010
March 2011

Japan

8,158

8,426

+268

North
America

5,774

6,803

+1,028

Other

355

577

+222

14,287 15,806+1,519Total

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Increase/Decrease77Full Year : Operating Income byGeographic Area (consolidated) <Appendix>（100 million yen）

Actual Results
FYE March 2010

Actual Results
FYE March 2011

Increase/Decrease

18

654

+635

321

231

-90

1

5

+4

Elimination andCorporate

-66

-49

+18

Total

274

841

+568

Japan
North America
Other

http://www.fhi.co.jp/english/ir/index.html

88Full Year : Overseas Net Sales <Appendix>（100 million yen）

Percentage ofTotal Sales

Asia
12.5%

Europe11.3%

Actual Results Actual Results
FYE
FYE
March 2010
March 2011

Increase/Decrease

North
America

6,221

7,258

+1,036

Europe

845

1,263

+418

Asia

1,015

1,389

+374

Other

998

1,223

+225

9,079 11,132+2,054

Other
11.0%

North
America
65.2%

Total
http://www.fhi.co.jp/english/ir/index.html

99Operating Results of Subsidiaries in U.S.
（million US$）SOA

Actual Results
FYE March 2010

Actual Results
FYE March 2011

Increase/
Decrease$5,319$6,758+1,439Operating Income

219

116

-103

Net Income

133

83

-50

Retail Sales

231.4

272.5

+41.1

Net Sales(Thousand units)

SIA
Net Sales

Actual Results
FYE March 2010

Actual Results
FYE March 2011

Increase/
Decrease$2,262$3,748+1,486

Operating Income

100

94

-6

Net Income

56

57

+1

104.3

164.8

+60.5

Subaru Production(Thousand units)
http://www.fhi.co.jp/english/ir/index.html

1010Non-Operating Income and Expenses（100 million yen）

Actual Results
FYE March 2010

Actual Results
FYE March 2011

Increase/Decrease

Non-Operating Income

46

74

+28

Interest and dividends income
Equity in earnings of affiliates

17
11

19
26

+15

Non-Operating Expenses

95

93

-3

Interest expenses

49

45

-4

Net

-50

-19

+31

Financial Revenue
and Expenditure

-32

-26

+7

FOREX Effects

-1

-4

-3

Net of gain and loss on valuationof derivatives

-2

6

+7

Net of FOREX gains and losses

1

-10

-11

http://www.fhi.co.jp/english/ir/index.html+2

11

Net non-operating income and expenses increased 3.1 billion yen on a year-onyear basis.
Financial revenue and expenditure rose 0.7 billion yen above the previous year’sbalance.
Foreign exchange fluctuations had a significant impact on non-operating income
and expenses mainly in the following two areas: (1) gains and losses onrevaluation of derivatives, and (2) foreign exchange gains and losses.
Net gains and losses on valuation of derivatives were up 0.7 billion yen year on
year from negative 0.2 billion yen to 0.6 billion yen.
Net foreign exchange gains decreased 1.1 billion yen year on year. This figure
included a year-on-year drop of 1.5 billion yen due to the difference between
market and hedge rates (market rate: 86 / hedge rate: 86) as well as a year-onyear increase of 0.4 billion yen due to the foreign exchange adjustments between
FHI and overseas subsidiaries

11Extraordinary Income and Loss（100 million yen）

Extraordinary Income
Extraordinary Loss
Loss on sales and retirementof noncurrent assets
Impairment loss
Loss on disaster
Loss on sales of investment securities
Loss on valuation of investment securities
Loss on prior periods adjustment
Loss on abandonment of inventories
Loss on adjustment for changes ofaccounting standard for asset retirement
obligations
Loss on reconstruction of office building
Other

Net

Actual Results
FYE March 2010

Actual Results
FYE March 2011

Increase/Decrease

12
240

28
219

+16
-21

34
179
2
5
12

15
15
74
2
4
61
-

-18
-164
+74
+0
-1
+61
-12

-

4

+4

8

7
38

+7
+29

-228

-190

http://www.fhi.co.jp/english/ir/index.html

+38

12

Net extraordinary income and loss was totaled 19.0 billion yen.
Major extraordinary loss include a 7.4 billion yen loss on disaster related to thedevastating earthquake that hit northeastern Japan this past March, a loss of 4.7
billion yen due to adjustment of provision for product warranties in prior years at
SOA, a loss of 1.3 billion yen due to adjustment of cost of sales in prior years by
the Eco Technology Company, and a loss of 2.4 billion yen from cost of
retirement and dismantlement, etc. of facilities related to the termination ofminicar production.

12

Consolidated Balance Sheets（100 million yen）

As of
March 31, 2010

As ofMarch 31, 2011

Increase/Decrease

Total Assets

12,314

11,883-430

Current Assets

6,389

6,103

-286

Noncurrent Assets

5,925

5,780

-145

Interest Bearing
Debts
Net Assets

3,676

3,306

-370

3,819

4,140

+321

Retained Earnings

1,102

1,569

+468

Shareholder’s Equity

3,806

4,127

+321

Shareholders’Equity to Total Assets

30.9%

34.7%

+3.8%

0.97

0.80

-0.17

D/E ratio
http://www.fhi.co.jp/english/ir/index.html

13

The balance sheet showed total assets declining by 43.0 billion yen year on year
to total 1,188.3 billion yen. This included a loss of approximately 36.0 billion yen
due to the strong yen.
At the end of March 2011 we saw a marked decline in notes and accounts
receivable - trade, inventories, and notes and accounts payable - trade due to theimpact of the earthquake as well as an increase in cash and deposits acquired
through long-term loans payable to secure sufficient cash on hand.
Interest-bearing debts dropped by 37.0 billion yen year on year to reach 330.6
billion yen. This decrease comes as a result of rolling over short-term loans
payable into long-term loans payable and the redemption of corporate bonds. Our
debt-to-equity ratio was 0.80.
Net assets totaled 414.0 billion yen, up 32.1 billion yen due to an increase inretained earnings.
The shareholders’ equity to total assets ratio came to 34.7%, indicating that wehave maintained a solid financial footing.

13

Full Year : Consolidated Statementsof Cash Flows（100 million yen）

Net Cash Provided by (used in)Operating Activities
Net Cash Provided by (used in )Investing Activities
Free Cash FlowsNet Cash Provided by (used in)
Financing Activities
Effect of exchange rate change
on cash and cash equivalents
Net increase (decrease) in cash
and cash equivalents
Increase (Decrease) in cash andcash equivalents resulting fromchange of scope of consolidation
Cash and Cash Equivalents at
End of Period
http://www.fhi.co.jp/english/ir/index.html

Actual Results
FYE March 2010

Actual Results
FYE March 2011

1,767

1,382

-385

-627

-511

+115

1,141

871

-270

-186

-394

-208

-8

-115

-106

947

362

-585

2

-

-2

1,915

2,277

+362

Increase/Decrease

14

Moving on to cash flows, we see that net cash provided by operating activities
remained in the black and totaled 138.2 billion yen for a drop of 38.5 billion yen year
on year, due to increased pre-tax net income while there were no major fluctuations inworking capital.
Net cash used in investment activities decreased 11.5 billion yen year on year to totala negative 51.1 billion yen due to slightly reduced investments.
Free cash flows decreased by 27.0 billion yen year on year to reach 87.1 billion yen.
Net cash used in financing activities increased 20.8 billion yen year on year to reachnegative 39.4 billion yen as a result of a decline in interest bearing debts.
Cash and cash equivalents increased 36.2 billion yen year on year to total 227.7
billion yen.

14

Net Sales & Operating Income <Appendix>
Net Sales

Net Income(100 million yen)(100 million yen)

400

4,166
4,031

300

3,625
3,391

3,411
200

3,642

3,765

235 226
65

82

4,000

4,059

153

107

-197

3Q

http://www.fhi.co.jp/english/ir/index.html

2,000

1,000

-157
FY2009
1Q 2Q

2,500

1,500

-84

-200

3,500
3,000

161

(¥95/$) (¥90/$) (¥90/$) (¥92/$) (¥８８/$) (¥８３/$) (¥８３/$)(¥103/$)(¥108/$)

-100

-300

3,706
347

100
0

4,500

3,703

2,713

119 (¥101/$) (¥91/$) (¥98/$)

5,000

4,337

FY2010
2Q
4Q
1Q

3Q

FY2011
4Q 1Q
2Q

500
3Q

4Q

0
15

15

Free Cash Flows &Shareholders’ Equity to Total Assets <Appendix>
FCF

Shareholders’Equity to
Total Assets(100 million yen)

Jun.

2008

1,500

Sep.

Dec.

Mar.
2009

Jun.

Dec.

Mar.
2010

30.9%

31.4%
33.8%
31.4%
31.4%
683

500

Sep.

Dec.

Mar.
2011

35.4%
33.6%
34.7%

31.9%

397

246

30.0%
25.0%

1,141

(162)
(227)

40.0%
35.0%

871

640

597

173

0

Jun.

45.0%

39.9%
37.7%
37.5%

1,000

(500)

Sep.

20.0%
15.0%

(470)

10.0%

(1,000)

(993)

5.0%

(1,500)0.0%

FY20091Q

FY2010

2Q

3Q

6months

9months

http://www.fhi.co.jp/english/ir/index.html

Full
Year

1Q

FY2011

2Q

3Q

6months

9months

Full
Year

1Q

2Q

3Q

6months

9months

Full
Year

16

16

Interest Bearing Debts & D/E Ratio <Appendix>
Interest
Bearing Debts

D/E ratio(100 million yen)

4,500

1.2
4,035

4,000

3,832 3,826

3,817
1.07

3,500

3,210

3,073
3,000

1.04

3,676

3,179
0.8

0.89

2,769

0.80

0.82
0.76

2,500
2,000

3,306

3,367

0.97
0.97

1

3,473

1.01

0.6

0.69

0.66
0.55

1,500

0.4

1,000
0.2
500
0

0

FY20091Q

2Q

http://www.fhi.co.jp/english/ir/index.html

FY2010
3Q

4Q

1Q

2Q

FY2011
3Q

4Q

1Q

2Q

3Q

4Q
17

17

Full Year : Non-Consolidated Automobile Sales<Appendix>（Thousand Units）

Actual Results
FYE March 2010

Actual Results
FYE March 2011

Increase/Decrease

Domestic
Production

452.7

458.8

+6.0

Domestic Sales

177.5

163.4

-14.0

Passenger Car

80.3

70.7

-9.6

Minicar

97.2

92.8

-4.5

Number of
Vehicles exported
Components forOverseas Production

279.7

330.7

+51.0

113.6

163.5

+49.9

Total

570.8

657.6

+86.8

http://www.fhi.co.jp/english/ir/index.html

1818

4Q : Consolidated Automobile Sales<Appendix>（Thousand Units）

Actual Results
4Q
FYE March 2010
Passenger Car

Minicar25.0
27.4

Domestic Total
U.S.
CanadaRussiaEuropeAustralia
China
Others52.4

Overseas Total

113.2

Total
http://www.fhi.co.jp/english/ir/index.html

66.2
5.1
1.0
10.3
10.2
14.2
6.2

165.5

Actual Results
4Q
FYE March 2011

18.4
21.5

39.9

Increase/Decrease

-6.6
-5.9

-12.4

75.1
5.1
4.0
12.3
8.4
17.2
6.9

+8.8
+0
+3.0
+2.0
-1.7
+3.0
+0.7

169.0

+15.9
+3.4

129.0

Canada figures were consolidated on the calendar year basis from Oct. to Dec.

19

19

4Q : Consolidated Statements of Income<Appendix>（100 million yen）

Actual Results
4Q
FYE March 2010

Actual Results
4Q
FYE March 2011

Net Sales

4,166

4,059

-107

Domestic

1,585
2,581

1,175
2,884

-410
+303

235
206

107
74

-128

39

-91

-130

Net Income/Loss

-12

-81

-69

FHI Exchange Rate

¥90/$

¥83/$

-¥7/$

Overseas
Operating Income
Ordinary Income
Income/Loss Before
Income Taxes andMinority Interests

http://www.fhi.co.jp/english/ir/index.html

Increase/Decrease

-131

20

20

4Q : Analysis of Increase and Decrease in
Operating Income Changes <Appendix>
Improvementof salesvolume & Reduction
in costmixture andothers18

21

FHI: +11
SIA: +7

235

Overseas:
Increase ofsales volume, etc

Operating Income
4Q
FYE March 2010
http://www.fhi.co.jp/english/ir/index.html（100 million yen）

Loss oncurrency
exchange-93

Increase of
SG&A
expensesand others-65
US$: -67
Euro: -15
CA$: -4
Currency
exchange
adjustment： -7

Increase of
R&D
expenses

Increase of
SG&A expenses
and warranty
claims, etc-12.8 billion-9107
Operating Income
4Q
FYE March 201121

Now let's look at the factors behind the year on year change in operating income for the three-month fourth
quarter period that saw earnings drop from 23.5 billion yen to 10.7 billion yen.
The factors that led to the increase in operating income included a gain of 2.1 billion yen due to an
improvement in the sales volume and mix. This gain can be broken down into the following three areas. First,
we have a loss of 9.7 billion yen from the decreased sales volumes and deteriorated sales mix in thedomestic market due to the impact of the earthquake. Next, the sales volumes were up in North America,
Russia, Europe and China, where the sales mix also improved due to the launch of the new Legacy. Finally,
we have a gain of 10.0 billion yen due to inventory adjustments and others.
We gained 1.8 billion yen due to a reduction in material cost, saving 1.1 billion yen at FHI and 0.7 billion yen
at SIA. FHI generated a gain of 6.0 billion yen with loss amounting to 4.9 billion yen due to increasedmaterial cost. SIA posted a gain of 1.2 billion yen due to a reduction in material cost and a loss of 0.6 billion
yen related to rising material prices.
Operating income declined 9.3 billion yen due to foreign exchange losses. This included a loss of 6.7 billion
yen due to an approximate 7 yen appreciation against the U.S. dollar, a loss of 1.5 billion yen due to an
approximate 18 yen appreciation against the euro, and a loss of 0.4 billion yen due to an approximate 3 yenappreciation against the Canadian dollar. A loss of 0.7 billion yen was also posted due to foreign exchange
adjustments for transactions between FHI and its overseas subsidiaries.
We also saw an increase in SG&A expenses, etc.. that led to a loss of 6.5 billion yen. This amount can be
broken down into the following three areas. First, there was a reduction of fixed manufacturing costs that led
to a gain of 2.2 billion yen at FHI and flat at SIA. FHI’s decreased fixed processing cost generated a gain of
1.8 billion yen and reduced depreciation of suppliers’ dies resulted in a gain of 0.4 billion yen. SIA lost 0.3
billion yen due to increased processing cost and gained 0.3 billion yen thanks to decrease of depreciation of
suppliers’ dies. Next we see that an increase in SG&A expenses produced a loss totaling 6.1 billion yen. FHI
generated a loss of 1.1 billion yen while domestic dealers posted a gain of 1.4 billion yen. SOA generated aloss of 1.6 billion yen (17 million dollars). This figure included a loss of 0.4 billion yen (4 million dollars) due
to increased advertising expenses and a loss of 1.2 billion yen (13 million dollars) due to increased sales
volume despite no significant year-on-year difference in the per-unit incentive, which was 1,200 dollars bothfor January through March 2010 and the same period in 2011. Our Canadian subsidiary generated a loss of
0.4 billion yen, while our other subsidiaries also saw combined losses totaling 4.4 billion yen. Finally, thethird factor includes an increase in costs associated with warranty claims that led to a loss of 2.6 billion yen.
An increase in R&D expenses led to a loss of 0.9 billion yen.
These factors combined brought operating income down 12.8 billion yen.

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Capex / Depreciation / R&D <Appendix>（100 million yen）

Actual Results Actual Results
FYE
FYE
March 2008
March 2009

Actual Results
FYE
March 2010

Actual Results
FYE
March 2011

(a)

(b)

Increase/
Decrease(b)-(a)

Capex

563

580

561

431

-131

Depreciation

655

651

571

498

-73

R&D

520

428

372

429

+57

3,045

3,817

3,676

3,306

-370

Interest
Bearing
Debt

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22

22

<Appendix> Difference from Previous Outlook

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2323

Full Year : Consolidated Automobile Sales
Plan (Feb. 2011) vs. Actual Results <Appendix>（Thousand Units）

Plan
FYE March 2011
(Feb, 2011)

Passenger Car

Minicar70.2
90.4

Domestic Total
U.S.
CanadaRussiaEuropeAustralia
China
Others160.7

Overseas Total

502.7

Total
http://www.fhi.co.jp/english/ir/index.html

278.7
28.1
11.4
49.3
42.4
63.6
29.2

663.4

Actual Results
FYE March 2011

Increase/
Decrease

68.1
90.0

158.1
279.0
28.1
11.3
48.2
41.2
62.4
28.7

498.9

657.0

-2.1
-0.4

-2.6
+0.3
±0
-0.1
-1.1
-1.3
-1.2
-0.5

-3.8
-6.4

Canada figures were consolidated on the calendar year basis from Jan. to Dec.

24

24

Full Year : Consolidated Statements of Income
Plan (Feb. 2011) vs. Actual Results <Appendix>（100 million yen）

Plan
FYE March 2011

Actual Results
FYE March 2011

Increase/
Decrease

Net Sales

16,00015,806-194

Domestic

4,800
11,200

4,673
11,132

-127
-68

850
840

841
822

-9
-18

750

632

-118

Net Income

630

503

-127

FHI Exchange Rate

¥86/$

¥86/$

±0

(Feb, 2011)

Overseas
Operating Income
Ordinary Income
Income Before
Income Taxes andMinority Interests

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2525

Full Year : Analysis of Increase and Decrease in Operating
Income Changes Plan (Feb, 2011) vs. Actual Results <Appendix>

28

2

Decrease
Gain onof R&D
currency
expensesexchange

850

US$: +19
Euro: +3
CA$: -2
Currency
exchange
adjustment： +8（100 million yen）

Reductionin cost1
FHI: -5
SIA: +6-20-20

Increase Deteriorationof SG&Aof salesexpenses volume &andand others mixture
othersIncrease of
SG&A expenses
and warranty
claims, etc

841

Domestic:
Deterioration ofsales volume and mixture
Overseas:
Deterioration of mixture, etc

Plan (Feb, 2011)
Operating Income
FYE March 2011
http://www.fhi.co.jp/english/ir/index.html-0.9 billion

Actual Results
Operating Income
FYE March 201126

Now let’s look at why the actual operating income of 84.1 billion yen fell short of our projection of 85.0 billion
announced at the end of the third quarter.
Gain on currency exchange led to an increase of 2.8 billion yen. While the exchange rate for the US dollar
was almost same as we had projected, we gained 1.9 billion yen due to a fractional point. We also gained
0.3 billion yen from a fractional point between the actual and estimated exchange rates for the euro. Whilethe exchange rate for the Canadian dollar was about the same as our projection, we lost 0.2 billion yen due
to broken number. We also experienced a gain of 0.8 billion yen due to foreign exchange adjustments fortransactions between FHI and its overseas subsidiaries.
There was a gain of 0.2 billion yen on reduced R&D expenses.
A gain of 0.1 billion yen due to a reduction in material cost in addition to a loss of 0.5 billion yen at FHI and again of 0.6 billion yen at SIA. FHI experienced a loss of 1.2 billion yen due to the impact of the earthquake
and a gain of 0.7 billion yen due to material price decrease. SIA posted a loss of 2.2 billion yen due to a
reduction in material cost and a gain of 2.8 billion yen related to material price decrease.
Factors that led to decreased operating income include a loss of 2.0 billion yen due to an increase in SG&A
and other expenses. This loss can be broken down into the following three areas. First, we see that a
reduction in fixed manufacturing costs generated a gain of 1.6 billion yen, with a gain of 1.4 billion yen
coming from FHI and another gain of 0.2 billion yen at SIA. FHI generated a gain of 1.6 billion yen due toreduced fixed processing costs and a loss of 0.2 billion yen due to an increase in depreciation of suppliers'
dies. SIA gained 0.2 billion yen due to lower fixed processing costs. The second area encompasses anincrease in SG&A expenses that led to a loss of 0.3 billion yen, with a gain of 1.5 billion yen at FHI and aloss of 0.1 billion yen at domestic dealers. SOA generated a gain of 1.3 billion yen. This figure includes again of 0.1 billion yen due to reduced advertising expenses, a gain of 0.1 billion yen owing to lower SG&A
expenses, and a loss of 1.0 billion yen due to the fact that the actual 1,200 dollar per-unit incentive was 200
dollars less than the 1,400 dollar incentive initially projected. Our Canadian subsidiary generated a gain of
0.2 billion yen while our other subsidiaries saw a combined loss of 3.2 billion yen. Finally, the third factor
includes an increase in costs associated with warranty claims that led to a loss of 3.3 billion yen.
We suffered a loss of 2.0 billion yen due to a deterioration in the sales volume and mix, etc.. This loss canbe broken down into the following three areas. First, we have a loss of 2.1 billion yen due to the domestic
sales volume falling short of the projected sales volume by 2,550 units, which can be attributed to the impactof the earthquake. Next, we lost 7.9 billion yen due to a deteriorated sales volume and mix in overseas
markets where the actual sales volume was 3,844 units less than the projection due to the effect of theearthquake. The third factor is a gain of 8.0 billion yen due to inventory adjustments, etc.
These factors combined brought operating income down 0.9 billion yen.

26

Thank you !

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