Explanation of factors leading to increase in operating income, which went from 15.5 billion to 20.7 billion yen.
Factors leading to profit increase:
Cost of materials was reduced by 3.7 billion yen--2.7 billion at FHI and 1 billion at SIA. SG&A expenses and others were reduced by 0.7 billion yen. Fixed manufacturing costs were reduced by 4.7 billion yen. Although fixed costs rose due to the launch of the new model at SIA and increases in the depreciation costs for the B9 Tribeca dies, these were offset by a decrease in depreciation costs for the FHI Legacy dies. SG&A expenses rose by 1.9 billion yen. This was due to increased incentives at SOA, even though advertising and incentives were reduced at Subaru dealers in Japan. Warranty expenses were increased by 0.9 billion yen due to no reversal of allowance for recalls.

Gains on the exchange rate were 8.4 billion yen. The yen weakened about 13 yen to the U.S. dollar, producing a gain of 7.2 billion yen, while it weakened 16 yen to the Canadian dollar producing a 0.6 billion yen gain. Additionally, due to the strong Canadian dollar against the U.S. dollar there was 0.4 billion yen gain on shipments from SIA for a total of 1 billion yen. There was an approximately 3 yen drop in the yen against the Euro for a gain of 0.2 billion yen.

Factors leading to profit decrease:
Research and development costs rose 0.7 billion yen due to development on new models.
Sales volume and mixture resulted in a negative 6.9 billion yen. Domestic sales were at minus 7.8 billion yen due mainly to the R1, R2 and Legacy sales drop, but also to the deterioration of sales mixture of the Legacy. Overseas, the number of units sold increased to 1.1 billion yen. This includes a 5 billion yen loss in FHI sales due to costs associated with improving specifications to meet environmental and safety regulations which could not be reflected in the sticker price. Inventory adjustments and others resulted in a decrease of 0.2 billion yen.

These factors combined led to an increase of 5.2 billion yen in operating income.