㩷Outline of Financial Results for the 1st Quarterof Fiscal 2008 (Consolidated)
For Immediate Release
Company Name :URL:
Representative:
ContactforInquiries :July 31, 2007

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 1st Quarter of Fiscal 2008 (from April 1, 2007 to June 30, 2007)
Note that all amounts have been rounded off to the nearest million yen, unless otherwise specified(Unit: Millions of yen, except for per share figures)(1) Consolidated Results of Operations     Net sales

Operating income

Ordinary income

st318,232(3.4%)

3,510(67.4%)

1 Quarter of FY2007

st329,534

9.9%

10,768834.7%

9,645

Fiscal 2007

1,494,817-

47,906-42,215

1 Quarter of FY2008

Net income (loss) per
share, basic (Yen)(0.46)

-

st

6.42

6.41

1 Quarter of FY2007

627 (93.5)

(332)

--

4,598

-

-

31,899-Net income (loss) pershare, diluted (Yen)st

1 Quarter of FY2008

Net income (loss)

Fiscal 2007
44.46
44.44
Note: Percentagest figures in the net sales, operating income, ordinary income and net income columns represent changes
from prior 1 quarter period.
 (2) Consolidated Financial Position(Unit: Millions of yen, except for per share figures)

Total assets

Net asstets

Shareholders’ equity tototal assets (%)

1 Quarter of FY2008

1,313,918

493,840

37.5 %

686.19Fiscal 2007

1,316,041

495,70337.5 %

687.81stNet assets pershare (Yen)

2. Projections (Consolidated) for Fiscal 2008 (from April 1, 2007 to March 31, 2008)(Unit: Millions of yen, except for per share figures, percentage figures in parentheses indicate a change from the previous fiscal year/period)

Net sales

Operating income

Ordinary income

Half year

690,000(1.2%)

10,000 (44.8%)

5,000 (64.0%)

Full year

1,550,000

3.7%

35,000 (26.9%)

30,000 (28.9%)

Net income
0 (100.0%)
16,000(49.8%)

Net income per share,
basic (Yen)
0.00
22.28

Note: Please refer to page 2, “3. Qualitative Information on Projection for Fiscal 2008 (From April 1, 2007 to March 31,2008) ” of [Qualitative Information, Financial Statements etc.] for more details.
3. Other(1) Changes in significant subsidiaries during the year
(Changes in subsidiaries resulting in changes in scope of consolidation): No(2) Adoption of simplified accounting practices
Income taxes are calculated using a simplified accounting method.

: Yes(3) Accounting policy change from prior year

: No

The above projections are made based on available information and assumptions as of July 31, 2007, and are subject tothe uncertainties of future operations. Therefore, actual results could differ materially from those anticipated.

㧙㧙

㩷
[Qualitative Information, Financial Statements, etc.]
1. Qualitative Information on Consolidated Operating Performance
Consolidated sales for the first quarter of the fiscal year ending March 2008 fell 11.3 billion yen (-3.4%) year-onyear basis to 318.2 billion yen. This was because although we launched full model changed All-New Subaru Imprezain June 2007, it contributed little in this quarter, and the Automobile division saw a decline in unit sales both in Japanand overseas.
Regarding the profit, in addition to the gain on currency exchange because of the weak yen, we worked to reducethe cost of materials and SG&A and other expenses. However, these efforts could not offset a deterioration in thesales volume and mix in the Automobile division, and operating income thus dropped 7.3 billion yen (-67.4%) yearon-year basis to 3.5 billion yen while ordinary income fell 9.0 billion yen (-93.5%) year-on-year basis to 0.6 billion yen.
We recorded a net loss of 0.3 billion yen (versus net income of 4.6 billion yen for the same period of the previous
fiscal year).
2. Qualitative Information on Consolidated Financial Position
Total assets as of the end of the first quarter of the fiscal year ending March 2008 were 1,313.9 billion yen, down 2.1
billion yen compared with the end of the previous fiscal year ended March 2007.
Liabilities were 820.1 billion yen, down 0.3 billion yen from the end of the previous fiscal year.
Net assets were 493.8 billion yen, down 1.9 billion yen from the end of the previous fiscal year.
3. Qualitative Information on Projection for Fiscal 2008 (From April 1, 2007 to March 31, 2008)
Regarding the future outlook, for the first half of the fiscal year ending March 2008, despite the deterioration in thesales mix in the Automobile division, we are maintaining our initial sales forecast as we expect the gain on currency
exchange due to the weak yen to continue on from the first quarter. However, we will revise our forecast for operating
income to 10.0 billion yen and for ordinary income to 5.0 billion yen, with the increases of 5.0 billion yen and 4.0 billion
yen, respectively, over our previous forecasts.
Meanwhile, regarding the outlook for the full fiscal year, while taking our first-half guidance into account, we areforecasting the same figures as those we announced in April. This is because in addition to there being difficulty inforecasting domestic sales in the Automobile division owing to a sluggish demand in the domestic market, there isalso uncertainty about exchange rate and raw material price trends.
The following table shows the differences between our earnings forecast for the first half announced in the previous
April 27, 2007 financial statement and our current forecast for the same period.
(First Half)
SalesPrevious projection (A)Operating
IncomeOrdinary Income

Net Income
Per Share

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

690,000

5,000

1,0000Current revised
690,000
10,0005,0000projection (B)Increase and
5,000
4,000
decrease (B-A)
Change of
100.0
400.0
percentage (%)
Actual results of thefirst half of the698,676
18,126
13,883
11,604
FY2007
The above earnings estimates are calculated based on an assumed exchange rate of US$1/¥120.00.

㧙㧙

(yen)

0.00
0.00
16.19

㩷4. Consolidated Financial Statements(1) Summary of Consolidated Balance Sheets(Unit: Millions of yen)
stFiscal 2007

1 Quarter of 2008(as of March 31, 2007)(as of June 30, 2007)

Changes
Increase/(Decrease)

AmountAmountAmount%Cash and time deposits

52,40635,762(16,644)

Notes and accounts receivable, trade99,29088,796(10,494)

Marketable securities

32,017

26,737(5,280)Inventories

224,919

245,928

21,009Deferred tax assets

27,07229,0922,020

Short-term loans

101,184

116,434

15,250Other59,501

51,886(7,615)

Allowance for doubtful accounts(1,713)(1,644)69

Total current assets

594,676592,991(1,685)

Buildings and structures

129,280

128,928(352)

Machinery, equipment and vehicles

122,828

124,053

1,225

Land

174,835

175,821986

Construction in progress

18,33515,304(3,031)

Leased assets

59,89660,596700

Other45,41041,619(3,791)

Total property, plant and equipment, net

550,584

546,321(4,263)

Goodwill

19,092

19,324232

Other

16,10015,839(261)

Total intangible assets

35,19235,163(29)

Investment securities

85,81989,9704,151

Long-term loans

3,696

3,696

0

Deferred tax assets

20,825

20,587

(238)

Other

28,47228,587

115

Allowance for doubtful accounts(3,223)(3,397)(174)

Total investments and other assets

135,589

139,443

3,854

2.8

Total fixed assets

721,365

720,927

(438)

(0.1)

1,316,041

1,313,918(2,123)(0.2)

ASSETSΣ Current assets(0.3)

㸈 Fixed assets
1. Property, plant and equipment, net(0.8)

2. Intangible assets(0.1)

3. Investments and other assets

Total assets

㧙㧙

㩷
(Unit: Millions of yen)
Fiscal 2007

1st Quarter of 2008(as of March 31, 2007)(as of June 30, 2007)

Changes
Increase/(Decrease)

AmountAmountAmount%Notes and accounts payable, trade190,394

170,941(19,453)

Short-term borrowings

172,454

175,031

2,577

Commercial paper

11,00017,0006,000

Current portion of bonds

10,00010,000-Accrued income taxes

4,572

4,640

68

Accrued expenses

55,78950,366(5,423)

Accrued bonus

15,24723,041

7,794

Accrued warranty claims

23,93423,491

(443)

Other

80,27790,554

10,277

Total current liabilities

563,667

565,0641,397

Bonds

90,00090,000-Long-term debts

60,40057,181(3,219)Deferred tax liabilities on revaluation of land

703

-

(703)

Accrued pension and severance benefits
Accrued directors’ severance and retirement
benefits
Provision for loss on guarantees

45,51645,704

188

987

669

(318)

745

745

-

821

769

(52)

Other

57,49959,946

2,447

Total long-term liabilities

256,671

255,014(1,657)(0.6)

Total liabilities

820,338

820,078

(260)

0.0

Common stock

153,795

153,795-

Capital surplus

160,104

160,101(3)Retained earnings

214,831

211,668(3,163)Less-treasury stock, at cost

(40,511)(40,504)

7

Total shareholders' capital

488,219

485,060(3,159)22,18225,6073,425

290-(290)(16,687)(17,821)(1,134)

5,785

7,786

2,001

34.6

1,699

994

(705)

(41.5)

495,703493,840(1,863)(0.4)

1,316,041

1,313,918(2,123)(0.2)

LIABILITIES AND NET ASSETS㸇 Current liabilities

0.2

㸈 Long-term liabilities

Negative goodwill

NET ASSETS㸇 Shareholders' capital㸈 Valuation, translation, andotheradjustments
Net unrealized holding gains on securities
Revaluation reserve for land
Translation adjustments
Total valuation, translation, and otheradjustments
Υ Minority interest in consolidated
subsidiaries
Total net assets
Total liabilities and net assets

㧙㧙

(0.6)

㩷
(2) Summery of Consolidated Statements of Income(Unit: Millions of yen)
stst

1 Quarter ofFY2007

1 Quarter ofFY2008(ended June 30, 2006)(ended June 30, 2007)

AmountAmountAmount%Amount329,534
247,044
82,49071,722

318,232
243,266
74,96671,456(11,302)(3,778)(7,524)
(266)

(3.4)
(1.5)
(9.1)
(0.4)

1,494,817
1,142,674
352,143304,237

10,7683,510(7,258)(67.4)

47,906

Φ Non-operating income
Interest and dividends income
Amortization of negative goodwill
Exchange gain
Gain on revaluation of derivatives
Equity income from affiliated companies
Other

1,027
544
1,634
1,132

1,283
345
394
1,287

256
(544)
345
(1,634)394
155

Total non-operating income

4,337

3,309

(1,028)

945
565
3,950
5,460

1,066
4,300
826
6,192

9,645

627

Σ Net sales
Τ Cost of sales
Gross profitΥ Selling, general and administrative expenses
Operating income

Χ Non-operating expenses
Interest expenses
Exchange loss
Loss on revaluation of derivatives
Other
Total non-operating expenses
Ordinary income

Changes
Increase/(Decrease)

Fiscal 2007
(ended March 31, 2007)

3,864
2,175
4,268
1,549
5,949
(23.7)

17,805

121
3,735(3,124)
732

13.4

4,017
11,90672
7,501
23,496(9,018)(93.5)

42,215

Ψ Extraordinary gains
Gain on sale of property, plant and equipment
498435
6,673
Gain on sale of investment securities
1,397
1,397
58
Prior period adjustment
1,451
Gain on transfer of the substitutional portion of
2,423
the employee’s pension fund
Other
83
83
104
Total extraordinary gains
49
1,564
1,515
10,709
Ω Extraordinary losses
Loss on sale and disposal of property, plant
332
288
(44)
4,774
and equipment
Loss on sale of investment securities
18
Loss on devaluation of investment securities
335
Impairment loss on property, plant and550
equipment
Allowance for losses on guarantees
745
Loss on liquidation of affiliated companies
913
Total extraordinary losses
332
288(44)(13.3)
7,335
Income before income taxes and minority interest
9,362
1,903
(7,459)(79.7)
45,589Tax expense
4,769
2,253(2,516)(52.8)
13,642
Minority interest in income of consolidated subsidiaries(48)
Minority interest in loss of consolidated subsidiaries
518
13260.0
Net income (loss)
4,598(332)(4,930)31,899Note: In the 1st quarter of FY2007, ¥345 million of equity income from affiliated companies was included in "Other (¥1,132
million)" of "Non-operating income", and ¥3,148 million of exchange loss was included in "Other (¥3,950 million)" of "Nonoperating expenses".

㧙㧙㩷
(3) Segment Information[Business segment information]
1st Quarter of FY2008 (from April 1, 2007 to June 30, 2007)
Automobile Industrial
products AerospacesΣ. Net sales and operating income
Net sales
286,227(1) Outside customer
768(2) Inter-segment
286,995
Total sales
286,866
Operating cost and expense
129
Operating income

11,1293
11,132
10,831
301(Unit: Millions of yen)
Elimination Consolidat
andcorporate ed total

OtherTotal

2,066
1,577
3,643
3,414
229

318,232
2,349
320,581
317,699
2,882

18,810118,811
16,5882,223

1st Quarter of FY2007 (from April 1, 2006 to June 30, 2006)
Automobile Industrial
products AerospacesΣ. Net sales and operating income
Net sales
297,672(1) Outside customer
700(2) Inter-segment
298,372
Total sales
291,002
Operating cost and expense
7,370
Operating income

13,116
4
13,12012,492
628

Total

2,399
620
3,019
2,473
546

329,534
1,330
330,864
320,294
10,570[Geographical segment information]
1st Quarter of FY2008 (from April 1, 2007 to June 30, 2007)

Σ. Net sales and operating income(loss)Net sales(1) Outside customer(2) Inter-segment
Total sales
Operating cost and expense
Operating income (loss)

JapanNorth
America

Other

Total

183,832
65,494249,326
240,500
8,826

121,575
3,889
125,464
130,103(4,639)12,82591
12,916
12,769147

318,232
69,474
387,706
383,372
4,334

1st Quarter of FY2007 (from April 1, 2006 to June 30, 2006)

Σ. Net sales and operating income(loss)Net sales(1) Outside customer(2) Inter-segment
Total sales
Operating cost and expense
Operating income (loss)

JapanNorth
America

192,892
62,876
255,768
244,355
11,413

132,791647
133,438
134,325
(887)

㧙㧙

Other

3,851
69
3,920
3,781
139

Total

329,534
63,592
393,126
382,461
10,665318,232
318,232
314,722
3,510(Unit: Millions of yen)
Elimination Consolidat
andcorporate ed total

Other

16,347
6
16,353
14,3272,026(2,349)(2,349)(2,977)628(1,330)(1,330)(1,528)
198

329,534
329,534
318,766
10,768(Unit: Millions of yen)
Elimination
Consolidatedand
total
corporate(69,474)(69,474)(68,650)(824)

318,232
318,232
314,722
3,510(Unit: Millions of yen)
Elimination Consolidated
and
total
corporate(63,592)(63,592)(63,695)
103

329,534
329,534
318,766
10,768㩷[Overseas net sales]
1st Quarter of FY2008 (from April 1, 2007 to June 30, 2007)
North America
Overseas net sales(Unit: Millions of yen)
Europe132,618

34,477

OtherTotal

38,769205,864

Consolidated net sales
Percentage of overseas net sales overconsolidated sales (%)

318,232
41.7%

10.8%

12.2%

1st Quarter of FY2007 (from April 1, 2006 to June 30, 2006)
North America
Overseas net sales

144,070(Unit: Millions of yen)

Europe30,893

OtherTotal

33,239208,202

Consolidated net sales
Percentage of overseas net sales overconsolidated sales (%)

64.7%

329,534
43.7%

9.4%

㧙㧙

10.1%

63.2%

<Reference for the 1st Quarter of FY2008 Consolidated Financial Results>(July 31,2007)
Fuji Heavy Industries Ltd.

(in 100 millions of yen)(in thousands of units)

1st Quarter of FY 2007

ACTUAL RESULTS
1st Quarter of FY 2008

FORECAST
1st HALF of FY 2008

FORECASTFY2008

Apr.2006 to Jun.2006

Apr.2007 to Jun.2007

Apr.2007 to Sep.2007

Apr.2007 to Mar.2008

3,182
1,124
2,059

-3.4 %-7.4 %-1.1 %

6,900
2,600
4,300

-1.2 %-9.2 %
4.3 %

15,500
5,600
9,900

3.7 %
-2.8 %
7.8 %

35-67.4 %100-44.8 %

350-26.9 %

300

-28.9 %

160

-49.8 %ACTUAL RESULTS

Net Sales

3,295
1,213
2,082

Domestic
Overseas
Margin Percentage

3.3%

Operating income
Margin Percentage

2.9%

Ordinary income
Margin Percentage

1.1%
108

1.4%

0.2%
960.7%
6-93.5 %1.9%

50-64.0 %㪄

1.4%

Net income
Analysis ofincrease/decreasein operating income

2.3%

46

1.0%

-3.0

㪄

0

Gain factors

Gain factors

Reduction in costs
Foreign exchange
Decrease ofexpenses and others

Gain factors

26 Foreign exchange
24 Reduction in costs
Decrease of
18 expenses and others

Loss factors
Decrease in sales mix
Increase in
R&D expenses

63 Reduction in costs
30 Foreign exchange

53
1427

Loss factors

Loss factors

138 Decrease in sales mix
Increase in
3 R&D expenses

182 Increase ofexpenses and others
19 Increase in
R&D expenses
Decrease in sales mix

119YEN/US$
104
148
114
3,492
Net sales to decrease
Net income to decrease

120YEN/US$210
310
270
3,390
Net sales to decrease
Net income to decrease

118

Domestic sales units

4544-2.1 %106-4.9 %

118YEN/US$
600
640
560
3,290
Net sales to increase
Net income to decrease
Best Net sales
218-3.9 %

Small Cars
Minicars

Overseas sales units

162979143075-9.9 %
2.2 %-4.3 %

4165
166

2.9 %
-9.2 %
6.0 %

8912936610.0 %-11.7 %
4.2 %North AmericaEurope
OthersTotal sales units

471617124401520120-13.6 %-2.5 %
20.2 %-3.5 %

913738273

1.9 %
15.6 %
7.4 %
1.4 %

215
80
71584

4.1 %
11.5 %-2.8 %
1.0 %Exchange rate
Capital investment
Depreciation and amortization

R&D expenses
Interest bearing debt
Performance ofoperation

115YEN/US$
87
146
111
3,835

*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/dearlers.

5325