Consolidated Financial Results for FYE 2019

SUBARU CORPORATION
Toshiaki Okada
Corporate Executive Vice President & CFO
May 10th, 2019https://www.subaru.co.jp/en/ir/

1

NOTE)
This document is an English translation of an original Japanese document. If there are any
discrepancies between this document and the original Japanese document, the original
Japanese document prevails.

1Consolidated Financial Results for FYE 2019https://www.subaru.co.jp/en/ir/

22

FYE 2019 :Consolidated Unit Sales (by market)（Thousand Units）

Results
FYE 2018

Results
FYE 2019

Variance

Passenger cars

132.6

109.7

-22.9

Minicars

30.9

25.6

-5.3

Domestic total

163.4

135.3

-28.1

US

670.9

659.7

-11.2

Canada

56.8

56.8

+0.0

Russia

7.7

8.1

+0.4

Europe

40.2

32.1

-8.1

Australia

55.7

41.7

-13.9

China

26.9

22.8

-4.1

Others

45.2

43.3

-1.9

903.5

864.6

-38.9

1,066.9

999.9

-67.0

Overseas total
Total
https://www.subaru.co.jp/en/ir/

3First I will discuss consolidated financial results for fiscal year ended March 2019.

Results for consolidated unit sales.

Overseas, in our key market of North America, there was a contribution from the start of sales of the new
Ascent and the still-strong Crosstrek, resulting in a continuation of robust retail sales. However, consolidated
unit sales were hit by such factors as the decline in deliveries of the Forester in the first half of the fiscal year,
before the launch of its fully-redesigned version, falling by 38.9 thousand units year on year to 864.6
thousand units.

In the domestic market, the July launch of the fully redesigned Forester resulted in strong sales, but unit sales
declined by 28.1 thousand units year on year to 135.3 thousand units due to decreased sales of the Impreza,
Subaru XV and Levorg.

In addition, there was an impact from the decrease in production caused by the quality issues that occurred in
the second half of the fiscal year, with consolidated unit sales declining by 67 thousand units year on year to999.9 thousand units.

3

FYE 2019 :Consolidated Unit Sales / Complete Cars Production（Thousand Units）

Results
FYE 2018

Consolidated Unit
Sales Total

Results
FYE 2019

1,066.9

Variance

999.9

-67.0

（Thousand Units）

Results
FYE 2018

Results
FYE 2019

Variance

Production in U.S.

348.6

372.2

+23.6

Production in Japan

701.2

617.0

-84.2

Total

1,049.7

989.1

-60.6

* Production figures include Toyota 86.
https://www.subaru.co.jp/en/ir/

4

Total production fell by 60.6 thousand units from the previous year to 989.1 thousand units.

This was due to changes in plant operation schedules for the Gunma plant. The revised operation conditions
have been in place since the fall of 2018 to ensure quality-first production and inspection.

Another factor was a production halt in January 2019 caused by a defect in the Electronic Power Steering
unit.

4

FYE 2019 :Consolidated Income Statements(100 Million Yen)

Previous PlanFYE 2019(as of Feb. 7th)(b)

Results
FYE 2018(a)Results
FYE 2019(c)

Variance(c)-(a)Variance(c)-(b)Net sales(34,052)

32,327

31,20031,605-722+405

Domestic(6,686)

6,680

5,698

5,966

-714

+268

Overseas(27,367)

25,64725,502

25,639-8+137

Operating income

3,794

1,850

1,955

-1,839+105

Ordinary income

3,799

1,930

1,962

-1,837+32

Income before income
taxes

2,973

1,920

1,958

-1,015+38

Net income attributable toowners of parent

2,204

1,400

1,478

-725

+78

US$

¥111

¥110

¥111

-¥1

+¥0

EURO

¥130

¥129

¥129

-¥0

+¥0

CAN$

¥87

¥84

¥85

-¥2

+¥0

SUBARU
exchange rate

* Changed accounting policies from FYE 2019 (deducting sales incentives from net sales). The comparative year has been also recalculated under the same conditions.
* Figure in ( ) ：Net sales before deducting sales incentives

https://www.subaru.co.jp/en/ir/

5Consolidated net sales totaled 3,160.5 billion yen, a decrease of 72.2 billion from a year earlier.
The decrease consists of a 43.8 billion yen decrease from a deterioration in sales volume & mixture,primarily resulting from lower unit sales; a 23.6 billion yen decrease from SUBARU companies and others;
and currency losses of 4.8 billion yen.

Operating income totaled 195.5 billion yen, a decline of 183.9 billion yen from a year earlier,due to quality-related expenses caused mainly by recalls and lower unit sales.

Ordinary income was 196.2 billion, a decrease of 183.7 billion yen,while net income attributable to owners of parent was 147.8 billion yen, a decrease of 72.5 billion yen.

5

FYE 2019 :Analysis of Variance in Operating Income (Consolidated)
R&D
expenses(100 Million Yen)

+186

SG&A
expensesand others-987

Sales volume& mixtureand others

Cost
reduction

-107

-874
Results
Operating Income
FYE 2018-57
Results
Operating Income
FYE 2019-1,839

SG&A expenses and others
Fixed manufacturing cost

Loss oncurrency
exchange-144

Sales volume &mixture andothers-987
SG&A-114 Warranty claims -729 Domestic

SUBARU-89 SIA-55 SUBARU-42Suppliers' dies cost-85

Suppliers' dies cost

-32

Domestic
dealers

6

Fixed processing
costs

-4

Fixed processing
costs

-23

SOA (*1)-92

SCI (*2)-4

Others18-874

Cost reduction-281 SUBARU

Overseas-527

Cost reduction

Sales Incentive-83

Material cost and others

Others17

https://www.subaru.co.jp/en/ir/

Curerncy
exchange-107-14 SIA95 Cost reduction-109 Material cost and others*1 SOA: Subaru of America Inc.
*2 SCI : Subaru Canada Inc.

-57

-93

US$

36

EURO

-77
0

-129

CAN$

-13

CNY

0

Currency exchange
adjustment

81

Unrealized gain-48

6

Next I will explain the main factors behind the 183.9 billion yen decrease in operating income compared tothe previous fiscal year.

The main factors behind the decline in the operating income were increased SG&A and other expenses, anda deterioration in sales volume & mixture and others.

For SG&A and other expenses,
the occurrence of major recall costs related to valve springs and the like caused an increase in warranty
claims.

For sales volume & mixture and others,
the main factors include the decline in deliveries, lower earnings per unit due to higher environmental andother costs, and the rise in the electrified vehicle ratio.

Incentives in the U.S. increased by 4.6 billion yen.
Incentives per vehicle were 2,100 dollars, an increase of 100 dollars over the 2,000 dollars recorded in theprevious fiscal year.

6

Previous Plan FYE 2019 (as of February 7th) vs. Actual Results :Analysis of Variance in operating Income (Consolidated)
Sales volume& mixtureand others

R&D
expensesGain oncurrency
exchange

+34

+16

+109

(100 Million Yen)

SG&A
expensesand others

Cost
reduction

-16

-39

Previous Plan
Operating Income
FYE 2019(as of Feb. 7th)
Sales volume &mixture andothers109

Curerncy
exchange

Results
Operating Income
FYE 2019+105

SG&A expenses and others

16

Domestic

25

US$

34

Fixed manufacturing cost

Overseas

-40

EURO

-3

SUBARU

20 SIA

Sales Incentive

44

CAN$

3

Suppliers' dies cost-1

Suppliers' dies cost

Others80

CNY

0

Fixed processing
costs

21

Fixed processing
costs

43

-39

Cost reduction

SG&A

109

23 SUBARU
2

Domestic
dealers-3 SIA

31

Cost reduction-8 Cost reduction

15

8

Material cost and others

5 Material cost and others

-28

21

SOA (*1)-1

Currency exchange
adjustment-11

SCI (*2)

13

Unrealized gain

-7

Others

58

-191

-16

SUBARU

Warranty claims-13*1 SOA: Subaru of America Inc.
*2 SCI : Subaru Canada Inc.

https://www.subaru.co.jp/en/ir/

7

Now let’s look at the analysis of variance at the operating income level compared to the previous plans.

While warranty claims in relation to brake lights and others posted an increase,
SG&A expenses and incentives decreased. As a result, operating income increased by 10.5 billion yen.

7

FYE 2019 :Operating Results of Subsidiaries in U.S.
（Million US$）SOA

Results
FYE 2018

Results
FYE 2019

Variance

18,402

19,114+712

Operating income

356

349

-7

Net income

235

297

+62

Retail sales

651.9

684.3

+32.4

Net sales(Thousand units)

SIA

Results
FYE 2018

Results
FYE 2019

Variance

7,673

8,887

+1,214

Operating income

176

169

-7

Net income

134

134

0

348.6

372.2

+23.6

Net sales

Production(Thousand units)
https://www.subaru.co.jp/en/ir/

8

Now let us take a look at the results of our U.S. subsidiaries.

SOA retail sales were buoyed by the continued strength of the Crosstrek, andthe volume contribution from the launch of the new Ascent,rising 32.4 thousand units year on year to 684.3 thousand units.

Net sales rose by 712 million dollars year on year to 19,114 million dollars.
Operating income was supported by sales volume & mixture, an increase of 117 million,
but negatively affected by a rise in SG&A expenses of 124 million dollars,
for a total of 349 million dollars, a decline of 7 million dollars year on year.

SIA net sales rose by 1,214 million dollars year on year to 8,887 million dollars.
Operating income was boosted by sales volume & mixture, an increase of 126 million dollars,
but negatively affected by cost reduction, which was 84 million dollars lower,
and by an increase of 49 million dollars in fixed costs,
for a total of 169 million dollars, down 7 million dollars year on year.

8Capex / Depreciation / R&D / Interest Bearing Debt

(100 Million Yen)

Results
FYE 2018
(a)

Capex

Depreciation

R&D

Interest
bearing debt

Previous PlanFYE 2019(as of Feb. 7th )(b)Results
FYE 2019(c)

Variance(c)-(a)Variance(c)-(b)

1,414

1,300

1,135

-279

-165

898

930

888

-10

-42

1,211

1,060

1,027

-184

-33

862

1,000

1,004

+142

+4

* Changed accounting policies from FYE 2019.
The Company and its major domestic consolidated subsidiaries changed depreciation method of certain tangible fixed assets from the declining-balance method to the straight-line method.

https://www.subaru.co.jp/en/ir/

9

The results for capital expenditures and so on are as shown in this slide.

9

Forecasts for FYE 2020 (IFRS)SUBARU Corporation will voluntarily adopt the International Financial Reporting Standards (IFRS)
from the first quarter of the fiscal year ending March 2020. Therefore, the consolidated forecast for
the fiscal year ending March 2020 is prepared based on IFRS.
Please refer to Appendix (2) for changes in the consolidated financial statements as a result ofvoluntary adoption of IFRS .

https://www.subaru.co.jp/en/ir/

1010Key differences of JGAAP and IFRSJapanese generally accepted accounting principles

International Financial Reporting Standards(JGAAP)(IFRS)

Item

Recorded as expenses when it incurred.
R&D expenses
Included in Net cash provided by (used in)operating activities.

In case that it is satisfied with criterion of assets,
it will be amortized.
R&D expenses which is recoded as assets areincluded in Net cash provided by (used in) investing
activities.

Revenuerecognition timing

On vehicle registration basis.

On delivery-to-customer basis.

Financing lease is recorded as assets.

Operating lease is also recorded as assets.

Operating lease is included in Net cash provided by

Repayments of lease liabilities are included in Net(used in) operating activities.

cash provided by (used in) financing activities.

（Only in Japan）

Lease

https://www.subaru.co.jp/en/ir/

11

Next, we will discuss the plan for the fiscal year ending March 2020.

The Company will apply International Financial Reporting Standards (IFRS) from the first quarter of the
fiscal year ending March 2020.
In accordance with this, pages from the next page onward have been created based on IFRS.

In addition, the major changes caused by the adoption of IFRS are the following three items.
1) R&D expenses
Under IFRS, part of the R&D expenses that have been expensed as incurred under Japanese GAAP will be
posted under intangible assets and amortized.
2) Criteria for recognizing sales
This change only affects Japan, but under IFRS sales are recognized on the date that the vehicle is delivered
to the customer.
3) Leases
Certain operating leases will be posted as assets.

The details are provided in Appendix (2), so please check them later.

11

FYE2020 Plan:

Consolidated Unit Sales (by market)（Thousand Units）

Reference
Results
FYE 2019 (a)Plan
FYE 2020

Plan
FYE 2020 (b)Variance

JGAAP

IFRS

JGAAP

(b)-(a)Passenger cars (*)

109.7

112.3

110.0

+0.3

Minicars (*)

25.6

28.2

27.6

+2.0

Domestic total(*)

135.3

140.5

137.5

+2.2

US

659.7

693.2

693.2

+33.5

Canada

56.8

60.0

60.0

+3.2

Russia

8.1

8.6

8.6

+0.4

Europe

32.1

37.7

37.7

+5.6

Australia

41.7

45.9

45.9

+4.2

China

22.8

25.2

25.2

+2.4

Others

43.3

47.2

47.2

+3.9

Overseas total

864.6

917.8

917.8

+53.2

999.9

1,058.3

1,055.3

+55.4

Total

＊JGAAP : on vehicle registration basis, IFRS : on delivery-to-customer basis
https://www.subaru.co.jp/en/ir/

12

In terms of consolidated unit sales, we plan for 1,058.3 thousand units.

For year-on-year comparisons, please refer to the units, based on Japanese standards, which we haveprovided for your reference.

We are planning to achieve year-on-year gains in every market, and in the key U.S. market we plan for an
increase of 33.5 thousand units over the previous year, based mainly on strong sales of the new Ascent andthe Forester.

12

FYE 2020 Plan :Consolidated Unit Sales / Complete Cars Production（Thousand Units）

Results
FYE 2019(JGAAP)

Consolidated Unit
Sales Total

Plan
FYE 2020(IFRS)

999.9

1,058.3（Thousand Units）

Results
FYE 2019

Plan
FYE 2020

Variance

Production in U.S.

372.2

388.7

+16.6

Production in Japan

617.0

667.5

+50.5

Total

989.1

1,056.2+67.1* Production figures include Toyota 86.
https://www.subaru.co.jp/en/ir/13

In addition, we are planning an increase in production of 67.1 thousand units over the previous year, to
1,056.2 thousand units.

13

FYE 2020 Plan :Consolidated Profit Plan
Reference
Results
FYE 2019 (a)Plan
FYE 2020

Plan
FYE 2020 (b)Variance

JGAAP

IFRS

JGAAP

(b)-(a)Revenue (*1)

31,605

33,10033,020+1,415

Domestic

5,966

5,841

5,760

-206

Overseas

25,63927,26027,260+1,620Operating profit (*2)

1,955

2,600

2,500

+545

Profit before tax (*3)

1,958

2,700

2,520

+562

Profit for the period attributableto owners of parent (*4)

1,478

2,100

2,000

+522

US$

¥111

¥110

¥110

-¥1

EURO

¥129

¥120

¥120

-¥9

CAN$

¥85

¥80

¥80

-¥5

SUBARU
exchange rate

*1 : “Net sales” on JGAAP is shown as “Revenue”.
*2 : “Operating income” on JGAAP is shown as “Operating profit”.
*3 : “Income before income tax” on JGAAP is shown as “Profit before tax”.
*4 : “Net income attributable to owners of parent” on JGAAP is shown as “Profit for the period attributable to owners of parent”.
https://www.subaru.co.jp/en/ir/

14

Next we will look at the consolidated profit plan.

We are planning revenue of 3,310.0 billion yen, operating profit of 260.0 billion yen and profit for the period
attributable to owners of parent of 210.0 billion yen.

For this also, in terms of year-on-year comparisons, please refer to the figures, based on Japanese standards,
which we have provided for your reference.

14

Plan FYE 2020 :Analysis of Variance in Operating Profit (Consolidated)

SG&A
expensesand others(100 Million Yen)

Sales volume& mixtureand others

Accounting standards
difference

+252

+706

+100
R&D
expenses

Loss oncurrency
exchange

-173

-148

Results
Operating Income
FYE 2019(JGAAP)SUBARU-28 SIA-92

Plan
Operating Income
FYE 2020(JGAAP)+545

SG&A expenses and others
Fixed manufacturing cost

Cost
reduction

-77

706

Sales volume &mixture andothers252

Domestic-43

US$-64 SUBARU

29 SIA

Curerncy
exchange

Cost reduction

-148

-92

SG&A

-170

-49 SUBARU-37

Overseas

367

EURO

-31

Cost reduction

120 Cost reduction

CAN$

-38

Material cost and others-91 Material cost and others

Warranty claims

953

Plan
Operating Profit
FYE 2020(IFRS)

Suppliers' dies cost0

Suppliers' dies cost

-26

Domestic
dealers-4

Sales Incentive-65

Fixed processing
costs

-28

Fixed processing
costs

-23

SOA (*1)-54

Others-7

SCI (*2)-45

Currency exchange
adjustment-25

Others-30

Unrealized gain

10

CNY

-121
22
-143

0
*1 SOA: Subaru of America Inc.
*2 SCI : Subaru Canada Inc.

https://www.subaru.co.jp/en/ir/

15

Next we will look at the analysis of variance at the operating profit level. First I will explain the difference incomparison to the Japanese standards.

The main factors working to increase profit are the reduction in warranty claims, and an increase in unit
sales, leading to improvements in sales volume & mixture and others.

The main factors working to decrease profit are the increases in R&D expenses and SG&A expenses, theimpact of foreign exchange, and deterioration in material cost and others.

Incentives per unit in the U.S. are planned to rise 100 dollars year on year to 2,200 dollars.
In addition, because volumes are also expected to increase, expenses as a whole are predicted to increase by
10.5 billion yen.

Moreover, the difference between Japanese GAAP and IFRS accounting standards will result in a gain of
10.0 billion yen.
Within this, the impact of R&D expenses is approximately 15.0 billion yen.

15

Capex / Depreciation / R&D / Interest Bearing Debt

(100 Million Yen)

Results
FYE 2019

Plan
FYE 2020

Variance

1,135

1,400

+265

888

1,000

+112

R&D expenditures (*2)

1,027

1,200

+173

Interest bearing debt (*1)

1,004

1,450

+446

Capex (*1)

Depreciation (*1)

*1 : Leases, capex & amortization for intangible assets and lease liabilities are not included in the results and forecast above.
*2 : Research and development activity related costs incurred during the reporting period are written.
In accordance with IFRS, as a part of research and development expenditures is recorded as an intangible asset and amortized over its estimated useful life,
this amount is different from "Research and development expenses" on Consolidated Statements of Income on IFRS.
(It matches with R&D expenses in consolidated statement of income on JGAAP)
https://www.subaru.co.jp/en/ir/

16

Finally, capital expenditures, depreciation, R&D expenditures, and interest-bearing debt are as you see themhere.

As was also previously the case, leases, capital expenditures & amortization for intangible assets and leaseliabilities are not included in the results and forecast.

Research and development expenditures incurred during the reporting period are listed. This correspondswith the R&D expenses in the consolidated statement of income under Japanese GAAP.
Under IFRS, any part of these expenditures that are recognized as an asset is posted to intangible assets, andis amortized over its estimated useful life.
Please be aware that for this reason “Research and development expenses” in the consolidated statement of
profit or loss under IFRS is different.

The remaining pages contain segment information and other data for your reference.

This concludes the briefing on our financial results for the fiscal year ended March 31, 2019.
Thank you very much.

16

Appendix (1)• Consolidated Balance Sheets• Consolidated Statements of Cash Flows• Non-operating profit& Expenses and Extraordinary Income & Losses• Segment information by Business & Geographic• Overseas Net Sales• Non-consolidated Unit Sales• 4th Quarter (3 months) Consolidated Unit Sales and Income Statements• Complete Cars Production / Retail Sales Units

https://www.subaru.co.jp/en/ir/

1717

Consolidated Balance Sheets(100 Million Yen)

As of March 2018

As of March 2019

Variance

28,66529,827+1,163Current assets

17,704

18,262+558

Noncurrent assets

10,96011,565+605

13,055

13,699

+644

862

1,004

+142

15,61016,128+518

Retained earnings

12,835

13,202+366

Shareholders’ equity

15,52816,053+524

Ratio of shareholders’equity to total assets

54.2%

53.8%

-

0.06

0.06

-

Total assets

Total liabilities
Interest bearing debts
Net assets

D/E ratio＊Due to partial amendments to Accounting Standard for Tax Effect Accounting, calculation method has been changed from FYE 2019.
The comparative year has been also recalculated under the same conditions.

https://www.subaru.co.jp/en/ir/

1818

FYE 2019 :Consolidated Statements of Cash Flows(100 Million Yen)

Results
FYE 2018

Results
FYE 2019

Variance

Net cash provided by (used in)operating activities

3,663

1,740

-1,923

Net cash provided by (used in)investing activities-1,507-1,583-76

Free cash flows

2,156

157

-1,999Net cash provided by (used in)financing activities-1,709-966+743

Effect of exchange rate change
on cash and cash equivalents

-108

177

+285

Net increase (decrease)in cash and cash equivalents

338

-633

-971

Increase (decrease) in cash and cash
equivalents resulting from change ofscope of consolidation

-5

-

+5

Increase (decrease) in cash and cash equivalents
resulting from change in fiscal periodof consolidated subsidiaries

37

-

-37

7,656

7,023

-633

Cash and cash equivalents
at end of period
https://www.subaru.co.jp/en/ir/

1919FYE 2019 :Non-operating profit& Expenses and Extraordinary Income & Losses (Consolidated)（100 Million Yen）

Results
FYE 2018

Results
FYE 2019

Variance

Financial revenue and expenditure

68

129

+61

FOREX effects

-51

-72

-2１

Others

-12

-50

-38

Total non-operating profit& expenses

5

7

+2

Gain on sales of noncurrent assets

6

13

+7

Gain on sales of investment securities

46

37

-10

Loss on sales and retirement of
noncurrent assets

-54

-56

-2

-813

-

+813

-11

3

+14

-826

-4

+822

Loss related to airbags
OthersTotal extraordinary income & losses
https://www.subaru.co.jp/en/ir/

2020FYE 2019 :Net Sales and operating profitby Business Segment (Consolidated)(100 Million Yen)

Net Sales
Results
FYE 2018

Results
FYE 2019

Operating Income

Variance

Results
FYE 2018

Results
FYE 2019

Variance

Automobile(32,349)

30,62330,145

-479

3,615

1,849

-1,765

Aerospace(1,422)

1,422

1,317

-105

123

60

-62

(282)

282

144

-138

51

38

-12

7

7

+0

3,794

1,955

-1,839OthersElimination& Corporate
Total(34,052)

32,32731,605-722* Changed accounting policies from FYE 2019 (deducting sales incentives from net sales). The comparative year has been also recalculated under the same conditions.
* Figure in ( )：Net sales before deducting sales incentives

https://www.subaru.co.jp/en/ir/

21

21

FYE 2019 :Net Sales and operating profitby Geographic Area (Consolidated)(100 Million Yen)

Net Sales
Results
FYE 2018

Results
FYE 2019

Operating Income

Variance

Results
FYE 2018

Results
FYE 2019

VarianceJapan(10,118)

10,1108,990-1,121

2,950

1,147

-1,803

North
America(21,928)

20,276

21,037

+762

694

669

-25

Others(2,006)

1,941

1,578

-363

72

34

-37

79

105

+26

3,794

1,955

-1,839Elimination&
Corporate
Total(34,052)

32,32731,605-722* Changed accounting policies from FYE 2019 (deducting sales incentives from net sales). The comparative year has been also recalculated under the same conditions.
* Figure in ( )：Net sales before deducting sales incentives

https://www.subaru.co.jp/en/ir/

2222FYE 2019 :Overseas Net Sales (Consolidated)(100 Million Yen)

Results
FYE 2018

Results
FYE 2019

Variance

North America(23,058)

21,40622,017+611

Europe(1,191)

1,181

1,005

-176

Asia

(1,406)

1,351

1,164

-187

Others(1,712)

1,709

1,453

-256

Total

(27,367)

25,64725,639-8* Changed accounting policies from FYE 2019 (deducting sales incentives from net sales). The comparative year has been also recalculated under the same conditions.
* Figure in ( )：Net sales before deducting sales incentives

https://www.subaru.co.jp/en/ir/

23

23

FYE 2019 :Non-consolidated Unit Sales(Thousand Units)

Results
FYE 2018

Results
FYE 2019

Variance

Domestic production

701.2

617.0

-84.2

Domestic sales

168.9

140.7

-28.2

Passenger cars

137.2

114.4

-22.8

Minicars

31.7

26.3

-5.4

Number of exported
vehicles

556.5

491.5

-65.0

Components foroverseas production

348.1

403.0

+54.8

1,073.5

1,035.2

-38.3

Total
* Production figures include Toyota 86.
https://www.subaru.co.jp/en/ir/

24

24

4th Quarter (3 months) :Consolidated Unit Sales(Thousand Units)

Results
4th Quarter (3 months)
FYE 2018

Results
4th Quarter (3 months)
FYE 2019

Passenger cars

34.9

29.8

-5.1

Minicars

9.7

7.0

-2.7

Domestic total

44.6

36.8

-7.8

US

161.9

163.8

+1.9

Canada

12.3

9.6

-2.8

Russia

2.1

1.6

-0.5

Europe

11.7

6.2

-5.5

Australia

13.6

6.0

-7.6

China

5.4

6.1

+0.8

Others

13.4

7.6

-5.8

Overseas total

220.4

201.0

-19.5

Total

265.0

237.8

-27.3

https://www.subaru.co.jp/en/ir/

Variance

25

25

4th Quarter (3 months) :Consolidated Income Statements(100 Million Yen)

Results
4th Quarter (3 months)
FYE 2018

Results
4th Quarter (3 months)
FYE 2019

Variance

Net sales(8,406)

7,949

7,831

-118

Domestic(1,840)

1,838

1,608

-230

Overseas(6,565)

6,111

6,223

+111

Operating income

731

419

-313

Ordinary income

768

392

-376

Income before income taxes

797

378

-419

Net income attributable toowners of parent

675

296

-379

US$

¥110

¥110

+¥0

EURO

¥134

¥126

-¥8

CAN$

¥88

¥83

-¥4

SUBARU
exchange rate

* Changed accounting policies from FYE 2019 (deducting sales incentives from net sales). The comparative year has been also recalculated under the same conditions.
* Figure in ( ) ：Net sales before deducting sales incentives

https://www.subaru.co.jp/en/ir/

26

26

4th Quarter (3 months) :Analysis of Variance in Operating Income(Consolidated)
Gain oncurrency
exchange

R&D
expenses(100 Million Yen)

+58

+74

Sales volume& mixtureand others-210

Results
Operating Income
4Q (3 months)
FYE 2018
Curerncy
exchange

58

Sales volume &mixture andothers

SG&A
expensesand others

Cost
reduction

-174

-61
Results
Operating Income
4Q (3 months)
FYE 2019-313

SG&A expenses and others

-210

US$

5

Domestic-76

Fixed manufacturing cost

EURO

-5

Overseas-218 SUBARU

CAN$

-6

Sales Incentive33

Suppliers' dies cost-24

Suppliers' dies cost

Others51

Fixed processing
costs

22

Fixed processing
costs-2 SIA-15-174

Cost reduction-23-13 SUBARU-2Cost reduction

36 Cost reduction-5

Domestic
dealers

6

Material cost and others-42 Material cost and others-8

Warranty claims

CNY

0

SOA (*1)-27

Currency exchange
adjustment

49

SCI (*2)-3

Unrealized gain

15

Others3

https://www.subaru.co.jp/en/ir/-136 SUBARU

-61

SG&A

-6 SIA-55
9-64*1 SOA: Subaru of America Inc.
*2 SCI : Subaru Canada Inc.

27

27

Complete Cars Production / Retail Sales Units* Production figures include Toyota 86.
https://www.subaru.co.jp/en/ir/

28

28

Appendix (2)Changes in Consolidated Financial Statements Due to Voluntary Adoption ofInternational Financial Reporting Standards (IFRS)Information included in this material is currently under consideration.
Therefore, please be advised that our actual consolidated financial statements based on IFRS that will beannounced at a later date could differ from those described in this material.

https://www.subaru.co.jp/en/ir/

29

29

Consolidated Statements of Income

JGAAP

IFRS

Net sales

Revenue

Cost of sales

Cost of sales

Gross profit

Gross profit

Selling, general and administrative expenses

Selling, general and administrative expenses

Operating income

Research and development expenses

Non-operating income

Other income

Equity in earnings of affiliates

Other expenses

Depreciation

Share of profit (loss) of investments accounted for using equity method

Other

Operating profit

Interest income

1) "Selling, general and administrative expenses" on"Japanese Generally Accepted Accounting Principles"(hereafter "JGAAP") will be presented as "Selling,
general and administrative expenses" and "Researchand development expenses".

2) "Operating profit"on IFRS will be presented, but
components are different compared with JGAAP, apart of "Non-operating income and expense" and"Extraordinary income or loss" will be included.

Finance income

Dividends income

Finance costs

Interest expenses

Profit before tax

Foreign exchange gains or losses

Income tax expense

Gain or loss on valuation of derivatives

Profit for the period

3) "Interest income", "Dividends income", "Interest
expenses", "Foreign exchange gains or losses" and"Gain or loss on valuation of derivatives" of JGAAP
will be presented as "Finace income" and "Financecosts"

Ordinary income
Extraordinary income or loss

Profit for the period attributable toGain on sales of noncurrent assets

Owners of parent

Loss on sales and retirement of noncurrent assets

Non-controlling interests

Other4）There is no concept of “Ordinary income” on IFRS.
We calculate "Profit before tax" by adding andsubtracting "Finance income" and "Finance costs"
from "Operating profit" of IFRS.

Gain or loss on sales of investment securities
Income before income taxes
Income taxes-current
Income taxes-deferred
Net income

5） "Gain and loss on sales of investment securities"
on JGAAP will be recorded in the statement ofcomprehensive income.

Net income (loss) attributable to non-controlling interests

Net income attributable to owners of parent

https://www.subaru.co.jp/en/ir/

30

30

Consolidated statement of financial position（Assets）
JGAAP
Consolidated Balance Sheet (Assets)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Lease investment assets
Short-term investment securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Short-term loans receivable
Other
Allowance for doubtful accounts
Total current assets
Noncurrent assets
Property, plant and equipment
Buildings and structures, net
Machinery, equipment and vehicles, net
Land
Vehicles and equipment on operating leases, net
Construction in progress
Other, net
Total property, plant and equipment
Intangible assets
Other
Total intangible assets
Investments and other assets
Investment securities
Net defined benefit asset
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total noncurrent assets
Total assets

https://www.subaru.co.jp/en/ir/

IFRS
Consolidated statement offinancial position (Assets)
AssetsCurrent assets
Cash and cash equivalents
Trade and other receivables
Inventories
Income taxes receivable
Other financial assets
Other current assets
Subtotal
Assets held for sale
Total current assets
Non-current assets
Property, plant and equipment
Intangible assets and goodwill
Investment property
Investments accounted for using equity method

Other financial assets
Other non-current assets
Deferred tax assets
Total non-current assets
Total assets

1) Of "Cash and deposits" and "Short-term
investment securities" on JGAAP, Cash andsecurities that mature within three months will
be displayed as "Cash and cash equivalents."

2) "Notes and accounts receivabletrade","Lease investment assets","Short-termloans receivable" on JGAAP will be preseted as"Trade and other receivables".

3) "Merchandise and finished goods", "Work inprocess" and "Raw materials and supplies" on
JGAAP will be presented as "Inventories".
4) Operating lease transactions that wererecorded as expense on JGAAP will becapitalized as "lease assets" and are included
in "Property, plant and equipment".
5) In addition to "Intangible assets" on JGAAP,
Research and development expenses that arerecognized as assets on IFRS will becapitalized and presented as “Intangible assets
and goodwill”.
6) Of the "Property, plant and equipment"on
JGAAP, the assets provided for leasing will bepresented as "Investment property".

31

31

Consolidated statement of financial position（Liabilities and Equity）
IFRS

JGAAP
Consolidated Balance Sheet(Liabilities and Equity)
Liabilities
Current liabilities
Notes and accounts payable-trade
Electronically recorded obligations-operating
Short-term loans payable
Current portion of long-term loans payable
Income taxes payable
Accrued expenses
Provision for bonuses
Provision for product warranties
Provision for loss on construction contracts
Provision for loss on business liquidation
Other
Total current liabilities
Noncurrent liabilities
Long-term loans payable
Deferred tax liabilities
Provision for product warranties
Provision for directors' retirement benefits
Net defined benefit liability
Long-term unearned revenue
Other
Total noncurrent liabilities
Total liabilities
Net Assets
Shareholders' equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans

Consolidated statement offinancial position（Liabilities and Equity）
Liabilities and equity
Liabilities
Current liabilities
Borrowings
Trade and other payables
Other financial liabilities
Income taxes payable
Provisions
Other current liabilities
Total current liabilities
Non-current liabilities
Borrowings
Other financial liabilities
Employee benefits
Provisions
Other non-current liabilities
Deferred tax liabilities
Total non-current liabilities
Total Liabilities
EquityEquity attributable to owners of parent
Capital stock
Capital surplus
Treasury shares
Retained earnings
Other components of equity
Total equity attributable to owners of parent
Non-controlling interests
Total equity
Total liabilities and equity

1) "Notes and accounts payabletrade","Electronically recorded
obligations-operating" etc. on JGAAP will
be presented as "Trade and otherpayables".
2) "Provision for bonuses", "Provision for
product warranties", "Provision for loss on
construction contracts", "Provision forloss on business liquidation" and will bepresented as "Provisions".
3) "Provision for directors' retirement
benefits" and "Net defined benefit
liability"etc. will be presented as"Employee benefits".
4) "Provision for product warranties"etc.
on JGAAP will be presented as"Provisions".
5) "Remeasurements of defined benefit
plans" and "Remeasurements of otherpostretirement benefitsof foreign consolidated subsidiaries" on
JGAAP will be included in "Retained
earnings".
6) "Valuation difference on available-forsale securities" and "Foreign currencytranslation adjustment" on JGAAP will bepresented as "Other components ofequity".

Remeasurements of other postretirement benefits of foreign consolidated subsidiaries

Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

https://www.subaru.co.jp/en/ir/

32

32

Consolidated Statements of Cash Flows
IFRS

JGAAP
Net cash provided by (used in) operating activities
Income (loss) before income taxes

Net cash provided by (used in) operating activities
Profit before tax

Depreciation and amortization

Depreciation and amortization

Increase (decrease) in allowance for doubtful accounts

Finance income

Increase (decrease) in provision for product warranties

Finance costs

Interest and dividends income

Share of loss (profit) of investments accounted for using equity method

Interest expenses

Decrease (increase) in trade and other receivables

Loss (gain) on sales and retirement of noncurrent assets

Decrease (increase) in inventories

Loss (gain) on sales and valuation of investment securities

Increase (decrease) in trade and other payables

Decrease (increase) in operating loans receivable

Increase (decrease) in provisions and employee benefits

Decrease (increase) in notes and accounts receivable-trade

Other

Decrease (increase) in inventories

Interest received

Increase (decrease) in accrued expenses

Dividends received

SubtotalInterest and dividends income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Net cash provided by (used in) investing activities

Interest paid
Income taxes paid
Net cash provided by (used in) operating activities
Net cash provided by (used in) investing activities
Proceeds from sale of property, plant and equipment
Purchases of intangible assets and expenditure on internally generated intangible assets

Purchase of other financial assets

Purchase of short-term investment securities

Proceeds from sale and collection of other financial assets

Purchase of non-current assets
Proceeds from sales of non-current assets
Purchase of investment securities
Proceeds from sales of investment securities

Other

Proceeds from long-term borrowings
Repayments of long-term borrowings

Collection of loans receivable

Proceeds from sale of treasury shares

Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable

Purchase of treasury shares
Dividends paid to owners of parent
Repayments of lease liabilities

Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents

Net cash provided by (used in) financing activities

6) Operating lease transactions that were recorded as expense on
JGAAP will be capitalized and recorded on liabilities. Payments of theliabilities will be presented as "Repayments of lease liabilities".

Other

Purchase of treasury shares

Other, net

5) Proceeds from sales of short-term investment securities","Proceeds from sales of investment securities" and "Collection ofloans receivable" will be presented as "Proceeds from sale andcollection of other financial assets".

Net cash provided by (used in) financing activities

Repayments of long-term loans payable

Cash dividends paid

4) "Purchase of short-term investment securities", "Purchase ofinvestment securities" and "Payments of loans receivable" on JGAAP
will be presented as "Purchase of other financial assets".

Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities
Net increase (decrease) in short-term borrowings

Payments of loans receivable

Other, net

3) "Purchase of non-current assets" on JGAAP will be seperately
presented as "Purchase of property, plant and equipment" and"Purchases of intangible assets and expenditure on internallygenerated intangible assets".

Purchase of property, plant and equipment

Net decrease (increase) in time deposits

Proceeds from sales of short-term investment securities

2) "Increase (decrease) in provision for product warranties" andother provision included in "Other" in "Net cash provided by (used in)operating activities" etc. will be presented as "Increase (decrease) in
provisions and employee benefits".

Subtotal

Increase (decrease) in notes and accounts payable-trade

Other, net

1) Operating lease transactions that were recorded as expense on
JGAAP will be capitalized, and their depreciation cost will be
included in "Depreciation and amortization".
And amortization cost of research and development cost will be also
included in "Depreciation and amortization".

Cash and cash equivalents at beginning of period
Decrease in cash and cash equivalents resulting from change of scope of consolidation

Cash and cash equivalents at end of period

Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Decrease in cash and cash equivalents resulting from change of scope of consolidation

Cash and cash equivalents at end of period

https://www.subaru.co.jp/en/ir/

33

33

Forward-looking statements including projections and future strategies mentioned in this presentation are based on currently available information andassumptions and are subject to risks and uncertainties. Actual results may vary materially as a result of various factors including, without limitation, economic
conditions, market demand and fluctuations in foreign exchange rates. Investors are asked not to rely solely on the information in this presentation when they
make their final investment decisions.
https://www.subaru.co.jp/en/ir/

34

34