Date: May. 13, 2002

III  Consolidated results & cash flows

1. Consolidated results

Overview of consolidated results in fiscal 2001

The world economy in fiscal 2001 was clouded by a global recession stemming from the collapse of the IT-bubble and compounded by concern about the impact of the September 11 terrorist attacks in the United States. These worries were tempered towards the end of fiscal 2001, however, with glimpses of progress being made in inventory adjustments and other encouraging economic indices pointed towards recovery, chiefly in the United States and the countries of Asia.

       The Japanese economy, meanwhile, continued to struggle as capital spending declined, unemployment rose and as personal consumption and stock prices remained at depressed levels.

       The Japanese automotive industry in fiscal 2001 saw total vehicle sales of 5,820,000 units, a decrease of 3% over fiscal 2000. This was due to the weakening in consumer purchasing sentiment caused, in part, by the September terrorist attacks. Sales of domestically produced vehicles were 5,550,000 units, 3% down on fiscal 2000. Sales of imported vehicles were 270,000 units, 1% down. Japan's auto makers exported 4,250,000 vehicles in fiscal 2001, 3% down on the previous year.

       In this market environment, MMC introduced several new models with distinctive personalities and worked to strengthen and improve its sales and after-sales service organization in order to reflect better the needs and the requirements of the customer.

       For fiscal 2001, the Company reports consolidated sales volume of 1,405,000 vehicles, 2.7% down on fiscal 2000, and sales revenue of 3,200.7 billion yen, 2.3% down. Lower vehicle sales in Japan and Europe were countered to an extent by strong sales in Asia and other countries.

       Profits earned by the Company in fiscal 2001 were: operating profit of 40.2 billion yen, ordinary income of 11.9 billion yen and net income of 11.3 billion yen. These profits were the result of far-reaching reforms implemented in the corporate organization and culture. These profits also stem from the efforts made by the MMC group of companies to achieve the targets set forth in the Mitsubishi Motors Turnaround Plan, which, introduced in April 2001, provides the roadmap for returning the group to profitability and to setting it back on the road to growth. The Company also broke even in its consolidated net income, a major Turnaround target for fiscal 2001.

2. Segment information

(1) By business

Sales from the automotive business for fiscal 2001 were 3,106.4 billion yen, producing an operating profit of 49.9 billion yen.

       Revenues from financial services business were 99.3 billion yen, producing an operating loss of 5 billion yen.

(2) By geographical region

Sales in Japan were 2,198.8 billion yen, a decrease of 238.1 billion yen over fiscal 2000. Operating profit was 22.8 billion yen, an improvement of 84 billion yen.

       Sales in North America were 896.7 billion yen, a decrease of 14.5 billion yen over fiscal 2000. Operating profit stood at 45.5 billion yen, an increase of 12 billion yen.

       Sales in Europe were 543.1 billion yen, an increase of 147.8 billion yen over fiscal 2000. Operating loss was 18 billion yen, an improvement of 12.3 billion yen.

       Sales in Asia were 157.7 billion yen, an increase of 4.8 billion yen over fiscal 2000. Operating profit was 500 million yen, an improvement of 2.4 billion yen.

       Sales in other regions were 228.4 billion yen, a decrease of 1.9 billion yen over fiscal 2000. Operating loss was 2.3 billion yen, an improvement of 6.8 billion yen.

3. Dividend payment

MMC regrets to announce that it intends once again to defer payment of year-end dividend. The Company apologizes sincerely to its shareholders and asks for their continuing understanding and patience.

4. Cash flows

Net cash provided by operating activities in fiscal 2001 was 92 billion yen. Net cash used on the acquisition and disposal of tangible fixed assets in investment activities was 4.9 billion yen. Net cash used in financing activities was 112.6 billion yen as a result of outlays for repayment of loans and redemption of bonds. The year-end balance of cash and cash equivalents was 95.2 billion yen, a decrease of 20.7 billion yen on fiscal 2000.

5. Consolidated forecast for fiscal 2001

It is generally considered that any recovery in personal consumption seen in the Japanese economy in fiscal 2002 will be very limited in scope as the employment market remains depressed. In the automotive industry, with little prospect of any expansion in market size, the Company expects to be operating in a difficult business environment, with competition intensifying and with increasing demands for the industry to address environmental and other social issues speedily and efficiently.

       While fluctuations in the major currencies, price reductions required by intensifying market competition, the degree to which domestic consumption in Japan will recover and other factors make accurate forecasting difficult, the Company offers the following forecast for its consolidated operations in fiscal 2002, based on data and information currently available.

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Copyright 2002 by Mitsubishi Motors Corporation.