Annual Report - Makita Corporation Global Site

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In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities- an amendment of FASB Statement No. 133”, which amends and expands the current disclosures required by SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities”. SFAS No. 161 requires entities to provide greater transparency on how and why an entity uses derivative instruments, how derivative instruments and related hedged items are accounted for under SFAS No. 133, and how derivative instruments and related hedged items affect an entity’s financial position, results of operations and cash flows. SFAS No. 161 does not change the existing standards relative to recognition and measurement of derivative instruments and hedging activities. SFAS No. 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008 and is required to be adopted by Makita, in this fiscal year. In December 2008, the FASB issued FSP FAS No. 132(R)-1, “Employers’ Disclosures about Postretirement Benefit Plan Assets”. FSP 132(R)-1 requires additional disclosures about plan assets including investment policies, fair value of each major category of plan assets, development of fair value measurements and concentrations of risk. FSP 132(R)-1 is effective for fiscal years ending after December 15, 2009 and is required to be adopted by Makita in the year ending March 31, 2010. Makita is currently evaluating these additional disclosure requirements, but Makita does not expect the adoption of FSP 132(R)-1 will have an impact on its consolidated results of operations and financial condition. B. Liquidity and capital resources Makita’s principal sources of liquidity are cash on hand, cash provided by operating activities and borrowings within credit lines. As of March 31, 2009, Makita held cash and cash equivalents amounting to ¥34,215 million and the Company’s subsidiaries had credit lines up to ¥16,079 million, of which ¥110 million was used and ¥15,969 million was unused and available. As of March 31, 2009, Makita had ¥239 million in short-term borrowing, which included bank borrowings and the current portion of capital lease obligations. Short-term borrowing was used for daily operations at the subsidiaries. The amount excluding current maturities of long-term indebtedness was ¥110 million, a decrease of 93% or ¥1,472 million from FY2008. For further information regarding Makita’s short-term borrowings, including the average interest rates, see Note 11 to the accompanying consolidated financial statements. The Company’s subsidiaries are financed by loans within the Makita Group—from subsidiaries with surplus funds to subsidiaries that lack funds—and the variation in interest expense is insignificant. As of March 31, 2009, Makita’s total short-term borrowings and long-term indebtedness amounted to ¥1,057 million, representing a decrease of 59.8% from ¥2,632 million reported for FY2008. Makita’s ratio of indebtedness to shareholders’ equity was down by 0.4 points to 0.4%. This decrease was mainly due to a decrease of long-term borrowing, which decreased from ¥908 million to ¥818 million. Makita expects to continue to incur additional indebtedness from time to time as required to finance working capital needs. Makita has no potentially significant refinancing requirements in FY2009 and thereafter. Makita has historically maintained a high level of liquid assets. Management estimates that the cash and cash equivalents level of ¥34,215 million as of March 31, 2009, together with Makita’s available credit facilities, cash flow from operations and funds available from long-term and short-term debt financing, will be sufficient to satisfy its future working capital needs, capital expenditure and research and development through FY2010 and thereafter. Makita requires operating capital mainly to purchase materials required for production, to conduct research and development, to respond to cash flow fluctuations related to changes in inventory levels and to cover the payment cycle of receivables from wholesalers. Makita further requires funds for capital expenditures, mainly to expand production facilities and purchase metal molds. Makita also requires funds for financial expenditures, primarily to pay dividends and to repurchase its own stock. 35
Maintaining the level of Makita’s production and marketing activities requires capital investments of approximately ¥10 billion annually. Please see “– Fiscal Year 2009 – Capital Expenditures” below for a description of Makita’s principal capital expenditures for FY2009 and the main planned expenditures for FY2010. As part of the Company’s policy to maximize shareholder return, the Company distributed to its shareholders an interim dividend of ¥30 per share in November 2008, and a year-end dividend of ¥50 per share in June 2009. During FY2009, the Company repurchased six million shares of its own stock for approximately ¥17.6 billion. At the Ordinary General Meeting of Shareholders held in June 2009, the Company’s shareholders approved a cash dividend of ¥50 per share. The total cash dividend payments amount to ¥6,888 million, and were made in June 2009. In 2007, Makita acquired all outstanding shares of Fuji Robin Industries, Ltd.(currently Makita Numazu Corporation) for approximately ¥2.7 billion in cash and 81,456 Makita shares. Makita financed the cash portion of the purchase price from internal sources. Makita believes it will continue to be able to access the capital markets on terms and for amounts that will be satisfactory to it and as necessary to support the business and to engage in hedging transactions on commercially acceptable terms. While Makita had received an A+ rating from Standard & Poor’s Financial Services LLC through the end of FY2008, starting FY2009, Makita no longer requests ratings from rating agencies in consideration of its cost reduction efforts. Makita believes that because its financial health is ensured by a high equity ratio, there is little need for financing through bank borrowings or corporate bonds issuances. 36
Page 9 and 10: UNITED STATES SECURITIES AND EXCHAN
Page 11: Indicate by check mark whether the
Page 17 and 18: Exchange rates (Japanese yen amount
Page 19 and 20: In particular, currency exchange ra
Page 21 and 22: Makita may not be able to protect i
Page 23 and 24: Item 4. Information on the Company
Page 25 and 26: Products The following table sets f
Page 27 and 28: Principal Markets, Distribution and
Page 29 and 30: In recent years, in the U.S. power
Page 31 and 32: C. Organizational structure As of M
Page 33 and 34: Item 4A. Unresolved Staff Comments
Page 35 and 36: Currency Fluctuations Makita is aff
Page 37 and 38: In Asia, sales were favorable in th
Page 39 and 40: As the Company operates using only
Page 41 and 42: FY2008 compared to FY2007 Net Sales
Page 43 and 44: Selling, General and Administrative
Page 45 and 46: CRITICAL ACCOUNTING POLICIES As dis
Page 47 and 48: performs comprehensive market resea
Page 49: For the balance of deferred income
Page 53 and 54: Makita also expects a longer period
Page 55 and 56: FY2008 Cash Flows Net cash provided
Page 57 and 58: Makita has developed the Optimum Ch
Page 59 and 60: G. Safe harbor All information is n
Page 61 and 62: Shinichiro Tomita Current Position:
Page 63 and 64: The Company had an unfunded retirem
Page 65 and 66: The total number of shares of the C
Page 67 and 68: To the knowledge of the Company, it
Page 69 and 70: According to this basic policy, the
Page 71 and 72: C. Markets See Item 9.A. D. Selling
Page 73 and 74: The Companies Act specifically requ
Page 75 and 76: Restriction on dividends from Surpl
Page 77 and 78: than 8 weeks from the day of such d
Page 79 and 80: purchase price or any other conside
Page 81 and 82: however, affect transactions betwee
Page 83 and 84: Japanese Taxation The following is
Page 85 and 86: treated as U.S. source ordinary inc
Page 87 and 88: A Non-U.S. Holder generally will no
Page 89 and 90: Item 11. Quantitative and Qualitati
Page 91 and 92: PART II Item 13. Defaults, Dividend
Page 93 and 94: Report of Independent Registered Pu
Page 95 and 96: The Board of Statutory Auditors of
Page 97 and 98: position of the chief executive off
Page 99 and 100: of the voting rights represented at
Page 101 and 102:
Makita Corporation and Subsidiaries
Page 103 and 104:
MAKITA CORPORATION AND SUBSIDIARIES
Page 105 and 106:
Page 107 and 108:
Page 109 and 110:
1. DESCRIPTION OF BUSINESS MAKITA C
Page 111 and 112:
(g) Property, Plant and Equipment a
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(p) Impairment of Long-Lived Assets
Page 115 and 116:
are accounted for under SFAS No. 13
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Yen (millions) Gross Unrealized Hol
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The following table shows the gross
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Maturities of debt securities class
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9. INCOME TAXES Income before incom
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Significant components of deferred
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10. RETIREMENT AND TERMINATION BENE
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Measurement date The Company uses a
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11. SHORT-TERM BORROWINGS AND LONG-
Page 133 and 134:
13. OTHER COMPREHENSIVE INCOME (LOS
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14. U.S. dollars (thousands) Tax be
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16. FAIR VALUE MEASUREMENTS In this
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The amount of gain or (loss) recogn
Page 141 and 142:
(f) Limitation The fair value estim
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There are no individually material
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Annual Report - Makita Corporation Global Site

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