Tetsuya Otake

Hello, everyone. Welcome to the Financial Results Conference Call for the Fiscal Year 2014 Second Quarter. I am Nobukatsu Takano [ph] from the Accounting division of Toyota Motor Corporation. Today, we have Mr. Tetsuya Otake, Managing Officer in charge of the Accounting Group of Toyota Motor Corporation; and Ms. Midori Ota [ph], our interpreter with us. The agenda of today's conference call is as follows: first, Mr. Otake will briefly discuss the highlights of Toyota's earnings results; and then Ms. Ota will take over the rest of the presentation. This will take about 10 minutes. After the presentation, you are welcome to ask questions. Please note that the presentation contains forward-looking statements that reflect our plans and expectations, and our actual results may be materially different from these statements. A complete cautionary statement concerning forward-looking statements is included on Page 2 of today's presentation material, and a complete cautionary statement concerning insider trading is included on Page 3. Both of the statements can be downloaded from our Internet homepage. Now I'd like to turn the call over to Mr. Otake.

Hello, everyone. Thank you for joining us today. This is Tetsuya Otake. I'd like to discuss Toyota's financial results for the past half of the fiscal year ending March 2014. Please see Slide 5. Our consolidated vehicle sales for the past half of this fiscal year decreased by 48,000 units to 4,468,000 units compared to the same period last year. In Japan, sales were 1,101,000 units, down 91,000 units from the first half of the last fiscal year when eco car subsidies boosted demand. In North America, where the new car market has been solid, sales increased by 37,000 units to 1,298,000 units, driven by new models such as RAV4, Avalon. In Asia, sales decreased by 60,000 units to 780,000 units, mainly as a result of the expiry of the first-time car buyer tax rebate in Thailand and the slowdown of demand in India. In other regions, the Middle East and Central and South America, in particular, contributed that sales increased by 71,000 units year-on-year. Please see Slide 6. Our consolidated financial performance of the first half of this fiscal year resulted in net revenues of JPY 12,537,400,000,000; operating income of JPY 1,255,400,000,000; a pretax income of JPY 1,343,500,000,000; and net income of JPY 1,006,000,000,000. This represents an increase of both revenues and earnings by comparison to the same period last year. Now I'd like to hand the rest of today's presentation over to Ms. Ota, our interpreter.

Next, using Slide 7, I would like to explain the major factors impacting net income from the same period last year. Net income increased by JPY 452.3 billion to JPY 1,006,000,000,000 compared to the first half of the previous fiscal year. The left side of Slide 7 shows the major factors, which impacted operating income. In addition to the impact of the weaker yen, operating income increased due to our joint efforts with our suppliers and distributors for profit improvement through cost reduction and marketing activities, such as enhancement of the model mix. As summarized in Slide 8, our consolidated financial performance for the second quarter resulted in net revenues of JPY 6,282,100,000,000; operating income of JPY 592 billion; pretax income of JPY 619.3 billion; and net income of JPY 438.4 billion. For your information, Slide 9 summarizes the major factors which impacted the second quarter net income year-on-year. Next, with Slide 10, I would like to explain operating income for the first half of this fiscal year by region. In Japan, operating income reached the highest level ever for first half of the fiscal year, due to favorable foreign exchange rates and the progress in our cost reduction activities. In North America, operating income improved due to increased vehicle production and sales and cost reduction efforts. Across Europe, Asia and other regions, we secured positive growth of operating income compared to the same period last year. For your information, Slide 11 summarizes operating income for the second quarter by region. Next, please see Slide 12 for financial services. Operating income, excluding valuation gains and losses related to interest rate swaps increased by JPY 14.7 billion to JPY 162.5 billion for the first half-year of this fiscal year compared to the same period last year. Although the costs related to…