On May 7, we released our financial results of the fiscal year ended March 31, 2010, recorded net sales 1,428.7 billion yen, operating income 27.4 billion yen, ordinary income 22.4 billion yen and net loss 16.5 billion yen. As above, we returned to profitability of operating income and ordinary income.

Consolidated financial results of the FYE 2010 (100 million yen)

One year ago, we had to prepare to stay mired in the red for the second fiscal year running due to decrease of automobile sales units and a fall in revenue. However, we could rapidly achieve business recovery after implementing adjustment of production and shipment during April to June 2009 to reduce the automobile inventory. Then we got more than 50 thousand units of automobile sales increase and 60.0 billion yen improvement of both operating income and ordinary income compared to the original financial plan of FYE 2010 announced on May 2009. We deeply regret that we suspended year-end dividends of FYE 2010 as we recorded net loss 16.5 billion yen due to the impairment loss of Industrial products division.

Since the negative impact on the sales by worsening real economy along with the global credit crunch in third quarter of FYE 2009 began, we recorded decrease of revenue and profit for the following nine months. However we have returned to increase sales and profitability since second quarter of FYE 2010 as the new Legacy was launched globally, healthy sales in U.S. and China were boosted as well as the group-wide cost reduction by our employees and affiliate companies showed the effect. Especially in fourth quarter (from January to March 2010), even though the foreign exchange rate was 90 yen to the U.S. dollar, we achieved a recorded operating income of 23.5 billion yen since we started to release our quarterly consolidated financial results in FYE 2005.

Those improvements in business performance were the results of pursuit of our mid-tem business plan since April 2007. We believe that our plan is in the right direction, which is including five challenges such as "To provide a distinctive Subaru experience for drivers and passengers", "To increase sales globally", "To strengthen competitiveness in quality and cost", "To also grow through the business alliance with Toyota" and "To grow the level of employees competence and so enhance the organization" with the philosophy of customers come first. We appreciate our customer's acknowledgement for our challenge in that plan. As this fiscal year is the final year of our mid-term business plan, we buckle ourselves to promote and complete the plan.

In the products side, we have aimed to integrate the pleasure of driving and environmental responsibility with the slogan "To provide a distinctive Subaru experience for drivers and passengers". Those products have made a respectable showing all over the world. Our all models were recently awarded 2010 "Top Safety Pick" by the Insurance Institute of Highway Safety (IIHS) in the U.S. Furthermore, the LEGACY was awarded "GRANDPRIX 09/10" in Japan New Car Assessment program (JNCAP) for fiscal 2009. It was rated as the safest passenger car in the collision safety performance tests for driver's and front passenger's seats as well as pedestrian head protection performance test during fiscal 2009.
Regarding the alliance with Toyota group, we have started to sell Pleo and Lucra supplied by Daihatsu Motor Co., Ltd on an OEM basis in the domestic market. Additionally, our joint development of FR sporty compact car with Toyota Motor Corporation proceeds smoothly for the launch.

In these circumstances, the consolidated automobile sales plan is expected to 630 thousand units in FYE 2011 as the year of "Going Forward" and also the final year of our mid-term business plan. That figure is the best record since FYE 2000 when we started our consolidated financial results release. Net sales is expected to be1,470.0 billion yen, operating income is to be 43.0 billion yen, ordinary income is to be 38.0 billion yen and net income is to be 23.0 billion yen. In addition, it is very regrettable that we have suspended our dividends for a year and half, however, we will make a resumption of dividends for 9 yen per share annually in accordance with our stable dividend policy in our mid-term business plan.

Consolidated financial plan of the FYE 2011 (100 million yen)

		Actual results FYE 2010 (A)	Plan FYE 2011 (B)	Increase / Decrease (B) – (A)
Net sales		14,287	14,700	+413
Operating income		274	430	+156
Ordinary income		224	380	+156
Net income		-165	230	+395
Consolidated automobile sales (1000 units)		562.8	630.0	+67.1
FHI exchange rate		¥93/US$	¥90/US$	-¥3/US$
Cash dividends per share		¥0	¥9	+¥9
	End of 1st half	¥0	¥4.5	+¥4.5
	Year end	¥0	¥4.5	+¥4.5

We have strengthened our financial and business position, through the structural changes. Furthermore, in this fiscal year, we will reinforce our foundations of business performance to aim to go to next step. We will plan our growth strategy to realize our management vision to be "a compelling company with the strong market presence" in our next business plan.
I appreciate your continuous support and expectation for our company.

May 2010
President and CEO
Ikuo Mori