Financial Highlights2011 2012 2013Fiscal year (billions of yen): Net sales 216.6 209.6 206.0Operating income 11.4 3.8 4.3Net income (loss) 5.3 (3.2) 0.5Capital investment 5.1 14.3 19.8Depreciation and amortization 9.8 9.8 8.6Research and development* 1.3 1.7 2.3Year-end (billions of yen): Total assets 186.0 181.0 186.6Net assets 54. 6 49.8 53.8Associates (number) 7,659 7,800 8,279Per share data (yen): Net income (loss) per share?basic 39.75 (24.25) 3.90Cash dividends per share 10.00 10.00 10.00Key financial indicator (%): Return on equity (ROE) 11.6 (7.1) 1.2Business OverviewAutomotive disc brakes supplied by Akebono have gained the overwhelming support of customersin Japan and around the world owing to their advanced safety features and reliabilityas well as noise, vibration and harshness (NVH) performance. Customers’ safety and peaceof mind are also supported by Akebono’s other advanced technologies, which include brakesfor motorcycles and rolling stock-based transport, such as the bullet train. Furthermore, as aglobal supplier of brake friction materials, Akebono is expanding its activities in the marketsfor forklifts and wind power generators. The Company is also making practical use of controlanalysis technologies for the development of sensors and construction quality certificationtesting equipment, leveraging its advances made in brake technology.In line with “akebono’s Corporate Mission,” the Company contributes to society throughunique ideas and approaches based on its Corporate Goals and aims to establish a peerlessposition with an indispensable presence in a borderless society. Akebono is also promotingfundamental structural reorganization, guided by “akebono’s Declaration for the 21stCentury,” which serves as its stance and code of conduct for realizing the Corporate Mission.Business Environment and Operating ResultsDuring fiscal 2012,1 the global economy was supported by recoveries in consumer spendingin the United States resulting from lower long-term interest rates as part of the strategy ofquantitative monetary easing, but was negatively impacted by the fiscal restraint implementedby various countries in Europe. With regard to Asia, the speed of the expansion in theChinese economy slowed, but brisk economic growth in other regions within ASEAN continued.Within Japan, the lower long-term interest rates and rapid weakening of the yen resultingfrom the drastic policy of monetary easing to eliminate deflation implemented by the newPrime Minister Shinzo Abe from the third quarter led to anticipation of an economic recovery.The automobile industry benefitted from favorable sales recorded by vehicle manufacturersin North America, although it was impacted by continued negative growth in the Europeanmarkets. Within Asia, the ASEAN region saw growth in both vehicle production and sales onthe back of economic expansion, despite slower growth in automobile sales in China. InJapan, a rebound from the recovery demand from the Great East Japan Earthquake duringthe first half and eco-car subsidies and tax reductions from the government contributed tolarge increases in the number of vehicles produced compared with fiscal 2011, but exportsto China and Europe declined during the second half.Under these circumstances, declines in exports and weaker overseas economies contributedto a 1.7% year-on-year decline in consolidated sales to ?206.0 billion. With regardto profits, a decline in orders was offset by successful efforts to improve the profitability ofNorth American operations and operating and ordinary incomes rose 12.5% and 62.2%year-on-year to ?4.3 and ?3.4 billion, respectively. At the same time, net income recoveredfrom a net loss of ?3.2 billion in fiscal 2011 to ?0.5 billion in fiscal 2012.(Billions of yen)060120180240206.0159.6130.6216.6209.62009 2010 2011 2012 2013Net Sales(Million units)0481210.018.86 8.99 9.279.552009 2010 2011 2012 2013Number of Vehicles Produced in Japan*Please see page 57 for total R&D related expenses, including R&D costs and expenses associated with day-to-day improvement activities.Financial Review for the Fiscal Year Ended March 31, 2013Akebono Brake Industry Co., Ltd. and Consolidated Subsidiaries Years Ended March 31