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Annual Report 2013
Year ended March 31, 2013

Table of contents

  • Page 1
    Annual Report 2013 Year ended March 31, 2013

  • Page 2
    ... at the same time working toward the realization of a sustainable future for both people and cars. Corporate Vision Vision Mission Value To create new value, excite and delight our customers through the best automotive products and services. With passion, pride and speed, we actively communicate...

  • Page 3
    ... Japan North America Europe China Other Markets 23 Major Product Lineup 24 Business Management System 27 Financial Section 56 Corporate Data/Stock Information Note on Model Names Unless otherwise stated, model names appearing in this annual report are those generally used in international markets...

  • Page 4
    ... Interest-bearing debt Net interest-bearing debt Cash and cash equivalents Amounts per share of common stock Net income (loss)* Equity*5 Management indexes Return on assets (ROA) Return on equity (ROE)*6 Equity ratio*6 Net debt-to-equity ratio*6 3 2009 2010 2011*7 2012 2013 2013 ¥2,535,902...

  • Page 5
    ... Net debt-to-equity ratio Research and development costs Share of net sales (Years ended March 31) * Ratios after the recognition of equity capital attributes of the subordinated loan. * Ratios after the recognition of equity capital attributes of the subordinated loan. Mazda Annual Report 2013...

  • Page 6
    ... 2012 2013 43 55 66 Australia 38 Middle East, Africa 2011 2012 2013 39 ASEAN* (*Thailand, Indonesia, Malaysia, the Philippines, Vietnam, Singapore, Brunei, Laos) Major Facilities Japan Headquarters 1 2 3 (Number of dealerships: 1,053) North America Regional headquarters /R&D Production...

  • Page 7
    ... of December 31, 2012) Distributors 29 30 Asia, Oceania Regional headquarters 31 32 Mazda South East Asia AutoAlliance (Thailand) Ford Lio Ho Motor*1 Vina Mazda Automobile Manufacturing*1 Mazda Malaysia Mazda Sales (Thailand) PT. Mazda Motor Indonesia Mazda Australia Mazda Motors of New Zealand...

  • Page 8
    ... diesel engine, it has received particularly high marks, and created a new market in Japan accounting for approximately 80% of the model mix. Given the growing global demand for the CX-5, we have increased our annual production capacity for the vehicle to 240,000 units. 6 Mazda Annual Report 2013

  • Page 9
    ... Reform Plan February 2012 April 2012 - March 2013 FY March 2016 Medium- and Long-term Outlook Announcement of Structural Reform Plan 1 Business innovation by SKYACTIV TECHNOLOGY Leveraging SKYACTIV TECHNOLOGY for steady implementation • Significant improvement in sales volume and model mix, and...

  • Page 10
    ... in the Japanese market during the March 2014 fiscal year. We also plan to commence production at our new plant in Overseas Production Strategy and Promotion of Global Alliances - Developments during the March 2013 Fiscal Year Russia Thailand • Increased production capacity for pickup trucks at...

  • Page 11
    ...under the Structural Reform Plan. Q What is your outlook for the March 2014 fiscal year? " We are forecasting revenue and profit growth to at least double the previous year's results at all levels. " With continued instability in foreign exchange markets, the protracted fiscal crisis in Europe, and...

  • Page 12
    ... income margin (%) Start of Structural Reform Plan 80% Â¥150.0 billion 6.0% or more Mix of SKYACTIV models 31% 53.9 2.4 50% 120.0 4.8 (1.9) (38.7) (Years ended March 31) 2012 79 109 2013 83 107 2014 (Plan) 2016 (Plan) US$/Yen 90 120 77 100 â,¬/Yen 10 Mazda Annual Report 2013

  • Page 13
    ...is pursuing a Building Block Strategy as part of its plan to "improve the average fuel economy of all Mazda vehicles sold worldwide 30% by 2015, compared with 2008 levels." This involves drastically improving the car's base technologies - the basic functions of the engine and transmission, body, and...

  • Page 14
    ... technologies? We anticipate that petroleum resources will still be the main energy and internal combustion engines the main drive technology in the global automobile market in 2020. We are therefore pursuing a Building Block Strategy of improving the base technologies for a car's basic performance...

  • Page 15
    ... of scale • Common use of platforms, parts, and systems with integrated planning • Design that considers production lines products, making possible common development methods and manufacturing processes by using integrated planning for models to be introduced in the future, spanning market...

  • Page 16
    ...stop M{zd{3 (Japanese name: Axela) i-ELOOP i-ACTIV SENSE HYBRID SYSTEM Initial launch date: Fall 2013 Markets: Japan, North America, Europe, etc. The Mazda3 is Mazda's core model, accounting for roughly 30% of global sales. We are significantly enhancing the model's product strength by introducing...

  • Page 17
    .... They include active safety technologies that support safe driving by helping Major Active Safety Technology (Helping prevent accidents from occurring) High Beam Control Mazda Radar Cruise Control Rear Vehicle Monitoring System Automatically switches headlights between high and low beams to help...

  • Page 18
    ...discussions on Mazda's future direction, we closely examined how we wanted to approach various technologies including hybrid vehicles, electric vehicles, and fuel-cell vehicles. We concluded that vehicles using internal combustion engines will continue to constitute the majority of the global market...

  • Page 19
    ... can accurately recognize situations, make design, and Monotsukuri Innovation will continue to evolve. We will also strive to ensure that these efforts translate to positive financial results. I ask for your continued high hopes and support for Mazda in the future. Mazda Annual Report 2013 17

  • Page 20
    ...205.3 billion, on increased wholesales and an improved model mix. Solid sales of the SKYACTIV-equipped Mazda CX-5 and new Mazda6 (Japanese name: Mazda Atenza) contributed to the improvement of the model mix. Net Sales Billions of yen 2,033.1 2,205.3 2012 2013 (Years ended March 31) Operating...

  • Page 21
    ... wholesales in all major markets, particularly in Europe and the United States. Consolidated Wholesales Thousands of units 1,053 295 4 158 370 226 1,120 291 14 191 396 228 2013 Other markets China Europe North America Japan 2014 (Outlook) (Years ended March 31) Mazda Annual Report 2013...

  • Page 22
    ...of company is Mazda?" By explaining our approach to product creation from the perspectives of SKYACTIV TECHNOLOGY, design, and safety, we aim to create a brand that has a special connection with customers. * As of April 2013. 2010 2011 2012 2013 2014 (Outlook) Sales volume Market share (Years...

  • Page 23
    ... and discounting and reduce fleet sales so as to enhance brand value. 2010 2011 2012 2013 2014 (Outlook) Sales volume in U.S. Sales volume in Canada and other markets Market share in U.S. (Years ended March 31) Europe Total demand declined 6%, to 17.20 million units, mainly as a result of...

  • Page 24
    ... 277 230 2010 2011 2012 2013 2014 (Outlook) Mazda's sales volume in the ASEAN region rose 54%, to 101,000 units. We achieved record sales in major markets, with increases of 68%, to 78,000 units in Thailand, 31%, to 12,000 units in Indonesia, and 32%, to 8,000 units in Malaysia. Total demand...

  • Page 25
    ...: Japan China North America Other markets Europe Global sales volume 40,000 Global sales volume 73,000 Sales markets Sales markets *1. Global sales volume is for the March 2013 fiscal year, sales markets are as of March 31, 2013. *2. Vehicle specifications differ by market. Mazda Annual...

  • Page 26
    ...For more information about corporate governance and CSR, please refer to "Mazda Sustainability Report 2013." http://www.mazda.com/csr/download/ auditing of business operations and accounting. Regular meetings of the full-time audit & supervisory board members and the Global Auditing Department are...

  • Page 27
    ... Profit Control and Global IT Solution; General Manager, Corporate Planning & Development Div. Tetsuya Fujimoto In charge of Financial Services; General Manager, Financial Services Div. Takahisa Sori In charge of R&D; President, Mazda Engineering & Technology Co., Ltd. Managing Executive Officers...

  • Page 28
    ... Office of General & Legal Affairs Liaison Reporting Deliberation of handling Recommendation/ advice Basic Policy on Intellectual Property Mazda's overall vision for intellectual property is to use intellectual property as a management resource in support of its business management and enterprise...

  • Page 29
    ... Changes in Equity Consolidated Statements of Cash Flows Notes to Consolidated Financial Statements Note: Results information for the March 2011 fiscal year includes 15-month results for certain overseas subsidiaries that changed their fiscal year-end. This had the result of increasing net sales by...

  • Page 30
    Eleven-Year Summary of Consolidated Financial Statements Mazda Motor Corporation and Consolidated Subsidiaries Years ended March 31 Millions of yen 2013 2012 2011 2010 2009 For the year*2: ¥2,205,270 588,042 1,617,228 651,165 347,918 618,145 1,729,296 422,038 53,936 39,101 34,...

  • Page 31
    ... 2,916,043 U.S. dollars*1 ¥ 65.21 6.00 391.82 ¥ 52.59 6.00 336.45 ¥ 51.53 5.00 284.28 % ¥ 37.63 3.00 220.22 ¥ 27.84 2.00 182.91 ¥ 19.80 2.00 159.22 $0.12 - 1.77 4.7% 17.9 27.8 4.9% 16.9 24.8 4.2% 20.0 22.3 3.1% 18.7 15.1 2.4% 16.3 12.4 2.1% 13.2 11.1 Mazda Annual Report 2013 29

  • Page 32
    ... implementation of the main measures of the Structural Reform Plan, and successive introduction in major markets of vehicles equipped with newgeneration SKYACTIV TECHNOLOGY, which thoroughly improves the base technologies of a vehicle's core performance. (Net Sales) Net sales rose ¥172.2 billion...

  • Page 33
    ... (40.3) 2009 2010 2011 2012 2013 (Years ended March 31) Total assets Equity Equity ratio * Ratios after the recognition of equity capital attributes of the subordinated loan. Cash flow from operating activities Cash flow from investing activities Free cash flow Mazda Annual Report 2013 31

  • Page 34
    ...Mazda Motor Corporation and Consolidated Subsidiaries March 31, 2013 and 201 2 Millions of yen ASSETS 2013 2012 Thousands of U.S. dollars (Note 1) 2013 Current assets: Cash and cash equivalents Trade notes and accounts...Investment securities: Affiliated companies Other (Note 4) Long-term loans ...

  • Page 35
    ... 10) Reserve for loss from business of affiliates Reserve for environmental measures Other long-term liabilities (Note 14) Total long-term liabilities Contingent liabilities (Note 11) Equity: Capital and retained earnings: Common stock (Note 12) Authorized: 6,000,000,000 shares in 2013 and 3,000,000...

  • Page 36
    ...loss) attributable to: Shareholders of Mazda Motor Corporation Minority shareholders ¥ $ ¥ $ Yen Amounts per share of common stock: Net income/(loss) (Note 2): Basic Cash dividends applicable to the year See accompanying notes. ¥11.48 ¥(57.80) - - $0.12 - 34 Mazda Annual Report 2013

  • Page 37
    ...Equity attributable to shareholders of Mazda Motor Corporation Accumulated Capital and retained earnings Minority other interests in Stock comprehenCapital Retained Treasury sive income/ acquisition consolidated surplus earnings stock Total subsidiaries rights (loss) Total equity April 1, 2012 Net...

  • Page 38
    ...Reserve for warranty expenses Employees' severance and retirement benefits Reserve for loss from business of affiliates Reserve for environmental measures Interest and dividend income Interest expense Equity in net loss/(income) of affiliated companies Loss on sale/disposition of property, plant and...

  • Page 39
    ... FINANCIAL STATEMENTS The accompanying consolidated financial statements of Mazda Motor Corporation (the "Company") and its consolidated subsidiaries have been prepared in accordance with the provisions set forth in the Financial Instruments and Exchange Law of Japan and its related accounting...

  • Page 40
    ... value. (Change in accounting estimates) Previously, useful lives and residual values of the Company's property, plant and equipment were estimated by a method equivalent to the provisions of the Corporate Tax Code of Japan. However, with regard to the useful lives, as the utility of production...

  • Page 41
    ...) sales revenues, an amount estimated based on product warranty provisions and actual costs incurred in the past, taking future prospects into consideration, is recognized. Employees' severance and retirement benefits The Domestic Companies provide various types of post-employment benefit plans...

  • Page 42
    ... 31, 2013 and 2012, only information on net income/(loss) per share of common stock is provided without information on diluted net income/(loss) per share of common stock to reflect the diluting effect in accordance with the applicable provisions of Japanese GAAP. Cash dividends per share represent...

  • Page 43
    ... exchange forward contracts on the resulting net position. Short-term investments consist mainly of certificates of deposit and other highly-liquid short-term investments. Investment securities consist mainly of stocks of our business partner companies and are subject to the risk of market price...

  • Page 44
    ... risks related to financing (i.e., risks of non-performance of payments on their due dates) The liquidity risks of the Company and its consolidated subsidiaries are managed mainly through the preparation and update of the cash schedule by the Treasury Department. Fair values of financial instruments...

  • Page 45
    ... As for listed stocks included in investment securities, their quoted prices on the stock exchange are used as their fair values. For notes on securities by classification, refer to "Securities" under Note 2, "Significant Accounting Policies", and Note 5, "Securities". Mazda Annual Report 2013 43

  • Page 46
    ... the interest rate swap contract is added to or deducted from the interest on the long-term loans payable. In such cases, the resulting net interest on the long-term loans payable is used in calculating the present value. Derivative instruments Refer to Note 15, "Derivative Financial Instruments and...

  • Page 47
    5 SECURITIES The Company and its consolidated subsidiaries had no trading or held-to-maturity debt securities at March 31, 2013 and 2012. Available-for-sale securities with market values as of March 31, 2013 and 2012 were as follows: Millions of yen As of March 31, 2013 Acquisition costs Carrying ...

  • Page 48
    ... 2012, the Company and a consolidated foreign subsidiary in the United States reduced the value of its land and buildings for selling by ¥6,408 million. As a result, the total impairment loss that was recognized in the consolidated statement of operations for the years ended March 31, 2013 and 2012...

  • Page 49
    ... amount of all retirement benefits to be paid at the future retirement dates is allocated equally to each service year using the estimated number of total service years. For the years ended March 31, 2013 and 2012, accrued pension costs related to defined contribution plans were charged to income...

  • Page 50
    ... 31 2013 2012 Thousands of U.S. dollars 2013 Gain on sale of investment in affiliates, net Reversal of investment valuation allowance Loss on retirement and sale of property, plant and equipment, net Rental income Loss on sale of receivables Loss on impairment of long-lived assets Foreign exchange...

  • Page 51
    ... allowance Equity in net income of affiliated companies Effect of adjustment of gain on sales of stock for subsidiaries and affiliates Other Effective tax rate 37.8% (31.3) (9.7) 17.1 (2.1) 11.8% For the year ended March 31, 2012, since loss before income taxes was reported, the information on...

  • Page 52
    ... periodically by the Global Auditing Department. Derivative transactions are reported, upon execution, to the Company's Chief Financial Officer, Financial Services Division General Manager, and Treasury Department General Manager. The consolidated subsidiaries also follow internal control rules and...

  • Page 53
    ... summarize fair value information as of March 31, 2013 and 2012 of derivative transactions for which hedge accounting has not been applied: Millions of yen As of March 31, 2013 Contract amount Estimated fair value Difference Contract amount Thousands of U.S. dollars Estimated fair value Difference...

  • Page 54
    ...,634 37,200 (3,747) (144) (750) (1,144) (70) 2 (83) 219 ¥(5,717) (*1) The fair value of these interest rate swaps are, in effect, included in and presented with that of the hedged item long-term loans payable. For details, refer to Note 4, "Financial Instruments." 52 Mazda Annual Report 2013

  • Page 55
    ... of corporate resources and evaluating business performance. The Company is primarily engaged in the manufacture and sale of passenger and commercial vehicles. Businesses in Japan are managed by the Company. Businesses in North America are managed by Mazda Motor of America, Inc. and the Company. And...

  • Page 56
    Notes to Consolidated Financial Statements Thousands of U.S. dollars Reportable segments For the year ended March 31, 2013 Japan North America Europe Other areas Total Adjustment (*1) Consolidated (*2) Net sales: Outside customers $ 8,467,223 Inter-segment 11,677,266 Total 20,144,489 Segment ...

  • Page 57
    Independent Auditor's Report Mazda Annual Report 2013 55

  • Page 58
    ... Motor Europe (Germany), China Engineering Support Center (China) Production sites: Japan: Hiroshima Plant (Head Office, Ujina), Hofu Plant (Nishinoura, Nakanoseki), Miyoshi Plant Overseas: China, Thailand, United States*1, Mexico*2, Colombia*3, Zimbabwe, South Africa, Ecuador, Taiwan*3, Malaysia...

  • Page 59
    Corporate Data (As of March 31, 2013) Stock Information (As of March 31, 2013) Mazda Annual Report 2013 57

  • Page 60
    Mazda Motor Corporation