Mazda 2007 Annual Report Download - page 54
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transfer to the government of the substitutional portion of employee pension fund liabilities,
which was present in the preceding year, was absent in fiscal 2006. This factor and the
difference in impairment of fixed assets had a ¥23.0 billion combined negative effect. Income
before income taxes, which includes operating income and net other expenses, improved ¥1.0
billion, to ¥118.5 billion.
Income taxes decreased ¥6.1 billion, to ¥43.0 billion, while minority interests in consolidated
subsidiaries remained essentially unchanged, at ¥1.7 billion. Consequently, consolidated net
income grew ¥7.0 billion, or 10.5%, to ¥73.7 billion. This figure takes into account the effects of
the transfer to the government of the substitutional portion of employee pension fund liabilities
and the impairment of fixed assets. Had these two factors been absent, net income would have
improved 26.2%. In fiscal 2006, the Company posted record levels of income in all categories
and posted year-on-year increases in sales and income for the sixth consecutive term. Net
income per share of common stock increased ¥1.06, from ¥51.53 in fiscal 2005 to ¥52.59 in
fiscal 2006.
At the general meeting of shareholders on June 26, 2007, cash dividends applicable to the
year of ¥6.0 per share were approved. Mazda seeks to steadily increase its dividend
payment to shareholders while taking into account operating performance in each period, the
business environment and other factors. Retained earnings are used to raise competitiveness
through capital investment, spending on R&D and other areas.
CAPITAL EXPENDITURES
Capital expenditures during year came to ¥79.6 billion, up ¥7.5 billion. Most of this spending
was earmarked for new product launches and capacity increases.
Mazda reinforced its production framework in line with ongoing efforts to drive product-led
growth. In October 2006, we raised production capacity of the MZR engine and automatic
transmission, and in the same month we commenced production of the Mazda CX-9, a seven-
passenger crossover SUV.
Mazda, Ford Motor Company and the Changan Automotive Group jointly established an
engine manufacturing company, Changan Ford Mazda Engine Co., Ltd., in Nanjing, China, which
began producing BZ series engines in April 2007. Changan Ford Mazda Automobile Co., Ltd.,
an automobile assembly plant located next to the engine plant, is moving steadily toward pro-
duction, which is slated to begin by the end of 2007.
Capital Expenditures/
Depreciation and Amortization
R&D Costs/Ratio to
Net Sales
(%)
(Billions of Yen) (Billions of Yen)
2006200520042003*2002
20062005200420032002
0
20
40
60
80
Capital expenditures
Depreciation and amortization
*Excluding the effect of a change in fiscal
years at overseas subsidiaries
0
30
60
90
120
0
1
2
3
4
R&D costs (left scale)
Ratio to net sales (right scale)