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ANNUAL REPORT 2003
ISUZU MOTORS LIMITED
Year ended March 31, 2003

Table of contents

  • Page 1
    ISUZU MOTORS LIMITED ANNUAL REPORT 2003 Year ended March 31, 2003

  • Page 2
    ... and financial structure. On the cover Photographs: ELF KR: Light-duty truck (Domestic specifications) Isuzu D-MAX: Isuzu's all-new pickup truck 4EE2-TC 1.7- Liter Diesel Engine: This engine has cleared Europe's Euro 4 next-generation emission standards and powers the new Opel Astra passenger car...

  • Page 3
    ISUZU MOTORS LIMITED ANNUAL REPORT 2003 F INANCIAL HIGHLIGHTS Thousands of U.S. Dollars 2001 2003 Millions of Yen Years ended March 31 2003 2002 For the Year: Net sales ...Net loss ...At Year-End: Total assets ...Shareholders' equity ...¥1,028,844 26,434 ¥1,324,144 61,084 Yen ¥1,349,449 (144,...

  • Page 4
    ... Key to this is focusing on the commercial vehicle business, making the most of our distinctive and superb diesel engine technologies. From engineering through to sales, we plan to upgrade every aspect of our operations, improving our earnings structure in the process. Japan remains a pivotal market...

  • Page 5
    ... the goals of the New Three-Year Business Plan. We will address environmental issues by making the most of our competitive advantages in front-running exhaust emission and environmental technologies. At the same time, we will make Isuzu even more competitive worldwide on both cost and quality fronts...

  • Page 6
    ... commercial vehicle market and slowing SUV sales in the U.S. They are also being taken to ensure that we achieve the ultimate goals and build on the successes to date of the Isuzu V Plan, which was instrumental in Isuzu posting positive operating income in the fiscal year ended March 31, 2002...

  • Page 7
    ISUZU MOTORS LIMITED ANNUAL REPORT 2003 Strategic Direction Direction Product / Technology Market Business Focus • Reform of sales structure/Expand sales to major cargo fleet operators • Aggressive sales expansion, leveraging brand equity • Enrich product line-up • 3rd-party alliances • ...

  • Page 8
    ... and Equipment *ISZA- Isuzu Motors America, Inc. *AIMI- American Isuzu Motors Inc. *GMICT- General Motors Isuzu Commercial Truck, LLC RESTRUCTURING THE NORTH AMERICAN SUV BUSINESS North American SUV operations have run up large losses as a result of higher selling costs and increasing inventories...

  • Page 9
    ... cars Light-duty trucks Isuzu vehicles Turbo/ Supercharger CV MD*/LD* LCV OEM-specific areas Aftertreatment Circle-L / V6/ V8 GM-specific areas DMAX ISPOL Scope of JV's activities *HD- Heavy-Duty *MD- Medium-Duty *LD- Light-Duty ISUZU STRENGTHENS TIES WITH GM IN THE POWER-TRAIN BUSINESS...

  • Page 10
    ... of light-duty trucks with such engines, given that they are frequently used for delivery services in urban areas. It was with the objective of responding to the demands of society and the times that Isuzu brought to market the 2. THE 2003 EXHAUST EMISSION REGULATIONS Japanese exhaust emission...

  • Page 11
    ... The ELF-KR series employs leading-edge clean engine technologies such as a Common Rail High-Pressure Fuel Injection System, cooled EGR, oxidization catalytic converters for removing PM, and 16 air intake valves. These innovations make possible a clean diesel engine with minimal exhaust emissions...

  • Page 12
    ..., 2003) CORPORATE GOVERNANCE The Isuzu Group is improving the recently introduced Vehicle Line Executive (VLE) system, Isuzu runs its organization along product lines (commercial vehicle, light-duty commercial vehicle and Power-Train businesses) to build a balanced earnings structure. Furthermore...

  • Page 13
    ISUZU MOTORS LIMITED ANNUAL REPORT 2003 F INANCIAL SECTION Contents Five -Year Summary ...Financial Review ...Consolidated Balance Sheets ...Consolidated Statements of Operations ...Consolidated Statements of Shareholders' Equity ...Consolidated Statements of Cash Flows ...Notes to Consolidated ...

  • Page 14
    ... MOTORS LIMITED ANNUAL REPORT 2003 Five-Year Summary Years ended March 31 Consolidated Five-Year Summary Millions of Yen 2003 2002 2001 2000 1999 Thousands of U.S. Dollars 2003 For the Year: Net sales ...Cost of sales ...Gross profit ...Selling, general and administrative expenses ...Operating...

  • Page 15
    ISUZU MOTORS LIMITED ANNUAL REPORT 2003 Financial Review Financial Targets Under the New Three-Year Business Plan, the company's medium-term management plan running from October 2002 to March 2005, Isuzu is targeting an approximate ¥384.0 billion reduction in total consolidated assets to ¥940.0 ...

  • Page 16
    ...% of shares in the company to a third party in the fiscal year ended March 31, 2002. The segment operating loss was ¥1,697 million due to restructuring costs accompanying the realignment of a North American financial services subsidiary. The miscellaneous segment recorded sales of large real estate...

  • Page 17
    ISUZU MOTORS LIMITED ANNUAL REPORT 2003 Financial Position As of March 31, 2003, total consolidated assets were ¥1,028,844 million, a decline of ¥295,300 million from a year earlier. This mainly reflects inventory reductions, more timely collection of accounts receivables, and the sale of ...

  • Page 18
    ISUZU MOTORS LIMITED ANNUAL REPORT 2003 Consolidated Balance Sheets As of March 31, 2003, 2002 and 2001 Millions of Yen Thousands of U.S. Dollars 2001 2003 Assets Current Assets: Cash and cash equivalents (Notes 2, 4) ...Receivables: Notes and accounts (Note 4) ...Less: allowance for doubtful ...

  • Page 19
    ISUZU MOTORS LIMITED ANNUAL REPORT 2003 Millions of Yen Thousands of U.S. Dollars 2001 2003 Liabilities and Shareholders' Equity Current Liabilities: Bank loans ...Current portion of bonds ...Commercial paper ...Notes and accounts payable ...Accrued expenses ...Accrued income taxes (Note 6) ......

  • Page 20
    ISUZU MOTORS LIMITED ANNUAL REPORT 2003 Consolidated Statements of Operations For the years ended March 31, 2003, 2002 and 2001 Millions of Yen 2003 2002 2001 Thousands of U.S. Dollars 2003 Net Sales ...Cost of Sales ...Gross Profit ...Selling, General and Administrative Expenses (Notes 5, 12) ...

  • Page 21
    ISUZU MOTORS LIMITED ANNUAL REPORT 2003 Consolidated Statements of Shareholders' Equity For the years ended March 31, 2003, 2002, 2001 and 2000 Millions of Yen 2003 2002 2001 2000 Thousands of U.S. Dollars 2003 Common Stock and Preferred Stock: Balance at beginning of the year ...Add: Issuance ...

  • Page 22
    ISUZU MOTORS LIMITED ANNUAL REPORT 2003 Consolidated Statements of Cash Flows For the years ended March 31, 2003, 2002 and 2001 Millions of Yen 2003 2002 2001 Thousands of U.S. Dollars 2003 Cash Flows from Operating Activities Loss before income taxes and minority interests ...Depreciation and ...

  • Page 23
    ... income taxes, included directly in shareholders' equity. Non-marketable securities classified as other securities are carried at cost. Cost of securities sold is determined by the moving average method from the fiscal year 2002. The Company has adopted the new Financial Accounting Standard for...

  • Page 24
    ISUZU MOTORS LIMITED ANNUAL REPORT 2003 The Company also changed and shortened the estimated useful lives and its scrap value of some property, plant and equipment based upon an available time since the fiscal year 2001. f) Software Costs Software used by the Company and its consolidated ...

  • Page 25
    ...of the operation to use the fixed property effectively, the Company changed its accounting method of the house rent and its income and expenses are recognized as "Net sales" and "Cost of sales" from the fiscal year 2001. Cash and time deposits on the consolidated balance sheet ...Time deposits with...

  • Page 26
    ... recognized at the date of approval from Japan's Ministry of Health, Labour and Welfare. The amount of plan assets to be returned is ¥29,150 million ($242,513 thousand) at the end of the fiscal year ended March 31, 2003. (2) Retirement benefit cost for the year ended March 31, 2003: Millions of Yen...

  • Page 27
    ... business year does not reach the amount of the preferred dividend, the shortfall will not be carried over to the next business year for accumulation. When the residual property of the Company is to be distributed, ¥800 per share of the preferred stocks shall be paid to the preferred shareholders...

  • Page 28
    ...up) of the daily closing price (including 26 quoted price) in regular transactions of common stocks of the Company at the Tokyo Stock Exchange during 30 business days (excluding days without closing price) starting from the 45th business day preceding the base date of mandatory conversion. When the...

  • Page 29
    ...) of daily closing prices (including quoted price) in regular transactions of common stocks of the Company at the Tokyo Stock Exchange during 30 business days starting from the 45th business day preceding the date of revision of conversion price (hereinafter referred to as actual value calculation...

  • Page 30
    ISUZU MOTORS LIMITED ANNUAL REPORT 2003 during 30 business days (excluding days without closing price) starting from the 45th business day preceding the base date of mandatory conversion. When the average price is lower than the floor conversion price, the Class II preferred stocks shall become ...

  • Page 31
    ... daily closing price (including quoted price) in regular transactions of common stocks of the Company at the Tokyo Stock Exchange during 30 business days (excluding days without closing price) starting from the 45th business day preceding the base date of mandatory conversion. When the average price...

  • Page 32
    ... daily closing price (including quoted price) in regular transactions of common stocks of the Company at the Tokyo Stock Exchange during 30 business days (excluding days without closing price) starting from the 45th business day preceding the base date of mandatory conversion. When the average price...

  • Page 33
    ISUZU MOTORS LIMITED ANNUAL REPORT 2003 11. Lease Transactions (1) Finance lease transactions, except for those which meet the condition that the ownership of the leased assets is substantially transferred to the lessee, were as follows: (a) As a lessee (i) Amounts equivalent to acquisition costs, ...

  • Page 34
    ISUZU MOTORS LIMITED ANNUAL REPORT 2003 12. Segment Information (1) The business segment information for the Company and its consolidated subsidiaries for the years ended March 31, 2003 and 2002 was as follows: Automotive Year ended March 31, 2003 Finance Miscellaneous Total Eliminations ...

  • Page 35
    ISUZU MOTORS LIMITED ANNUAL REPORT 2003 (2) The geographical segment information for the Company and its consolidated subsidiaries for the years ended March 31, 2003 and 2002 was as follows: Japan Year ended March 31, 2003 North America Other Total Eliminations Consolidated Millions of Yen Sales ...

  • Page 36
    ... consolidated financial position of Isuzu Motors Limited and consolidated subsidiaries at March 31, 2003, 2002 and 2001, and the consolidated results of their operations and their cash flows for the years then ended in conformity with accounting principles and practices generally accepted in Japan...

  • Page 37
    ... Truck and Bus Sdn. Bhd. Address: Kawasan Perindustrian Peramu Jaya, P.O. Box 3, 26607 Pekan Pahang, Darul Makmur, Malaysia Tel: 60-9-426-0340 Isuzu Autoparts Manufacturing Corporation Address: 114 North Main Avenue Phase III Special Economic Zone, Laguna Technopark Biñan, Laguna 4024, Philippines...

  • Page 38
    ISUZU MOTORS LIMITED ANNUAL REPORT 2003 CORPORATE DATA Isuzu Motors Limited Date of Establishment April 9, 1937 Head Office 26-1, Minami-oi 6-chome, Shinagawa-ku, Tokyo 140-8722, Japan Tel: 03-5471-1141 Facsimile: 03-5471-1043 Plants and Other Facilities Kawasaki Plant Heavy-duty trucks and buses...

  • Page 39

  • Page 40
    ISUZU MOTORS LIMITED 26 -1, Minami-oi 6-chome, Shinagawa-ku, Tokyo 140-8722, Japan Tel: 03- 5471-1141 Facsimile: 03- 5471-1043 http://www.isuzu.co.jp Printed in Japan on recycled paper