Operating income decreased to 9.1 billion yen, from 12.2 billion yen achieved last year .
Factors which increased income included improvement of sales volume & mixture and others, amounting to 14.7 billion yen. The increase is classified into three factors: (1) an increase of 2.6 billon in domestic operating income due to increased sales volume of the new model Forester; (2) an increase of 5.3 billion yen in overseas operating income, with improved sales volume and mixture; and (3) an increase of 6.8 billion yen from Others.
A 1.5 billion yen increase from reduction in cost, net of raw material price raise, which consisted of -0.3 billion yen from FHI and +1.8 billion yen from SIA. This includes 1.3 billion yen from soaring raw material prices for steel plates and of precious metals and crude oil.
Meanwhile, factors which decreased operating income include increased SG&A expenses of 13.5 billion yen, which are classified into four items. First, (1) an increase of 4.7 billion yen in fixed manufacturing costs (-5.7 billion yen from FHI and +1.0 billion yen from SIA). (2) 7.7 billion yen due to increased SG&A expenses; specifically, domestic SG&A expenses increased by 4.6 billion yen. Meanwhile, overseas operating income decreased by 3.1 billion yen, mainly due to SOA’s increased SG&A expenses (2.5 billion yen). SG&A grew due to SOA’s incentives increasing by about $100 per unit over the corresponding 4th quarter a year earlier, and increased advertisement expense. Overseas subsidiaries in Others also had increased SG&A expenses. (3) Accrued warranty claims increased to 0.4 billion yen due to increased overseas sales; and (4) Others was -0.7 billion yen.

Loss on currency exchange was 5.5 billion yen. The yen appreciated by about 11 yen against the US dollar, resulting in loss of 6.3 billion yen. The yen depreciated by about 3 yen against Euro, resulting in gain of 0.5 billion yen. The yen depreciated by about 6 yen against the Canadian dollar, resulting in gain of 0.3 billion yen.

Increased R&D expenses resulted in -0.3 billion yen (13.3 billion yen →13.6 billion yen). We are working to boost R&D efficiency.

As a result of the above, operating income decreased by 3.1 billion yen.