19. OPERATING SEGMENT INFORMATION

The operating segments presented below are defined as components of the enterprise for which separate financial information is available and regularly reviewed by the Company’s chief operating decision maker. The Company’s chief operating decision maker utilizes various measurements to assess segment performance and allocate resources to the segments.

During the three years ended March 31, 2009, 2010 and 2011, Makita’s operating structure included the following geographical operating segments: Japan Group, Europe Group, North America Group, Asia Group, and Other Group. Segment information is determined by the location of the Company and its relevant subsidiaries, as reported to the Company’s chief operating decision maker.

Major countries or regions in each geographic area:


Europe:		Germany, United Kingdom, Italy, France, Finland
North America:		United States, Canada
Asia:		China, Singapore
Other regions:		Australia, Brazil, United Arab Emirates

Makita evaluates the performance of each operating segment based on U.S. GAAP information. Segment profit and loss is measured in a consistent manner with consolidated operating income, which is earnings before income taxes excluding interest and dividend income, interest expense, foreign currency transaction exchange gains and losses, realized gains and losses on investment securities, and other. Segment assets are based on total assets attributable to the segment.

The accounting policies used by the segments are the same as those used in the preparation of the consolidated financial statements. Inter-segment sales are made at estimated arm’s-length prices and are included as a reconciling item to total consolidated sales in the below tables. Eliminations include intercompany sales between operating segments, net intercompany receivables and intercompany profit in inventory from products sold between segments.

Segment Products and Services

Makita is a manufacturer and wholesaler of electric power tools and other tools. The operating segments derive substantially all of their revenues from the sale of electric power tools and parts and repairs.

Year ended March 31, 2009


	Yen in millions
	Japan		Europe		North America		Asia		Other regions		Total Segment		Corporate and Eliminations		Consolidated
Sales:
External customers	¥	63,859	¥	137,230	¥	42,446	¥	9,954	¥	40,545	¥	294,034	¥	-	¥	294,034
Inter-segment		56,371		4,154		4,690		86,697		121		152,033		(152,033)		-

Total		120,230		141,384		47,136		96,651		40,666		446,067		(152,033)		294,034

Operating expenses		112,109		121,668		46,291		84,438		35,816		400,322		(156,363)		243,959
Segment income		8,121		19,716		845		12,213		4,850		45,745		4,330		50,075
Other income (expenses)		-		-		-		-		-		-		-		(5,632)
Income before income taxes		-		-		-		-		-		-		-		44,443
Long-lived assets		44,114		11,395		2,231		11,302		3,827		72,869		(173)		72,696
Segment assets		235,252		110,897		33,533		48,311		36,134		464,127		(127,483)		336,644
Capital expenditures		6,682		5,245		359		3,045		1,856		17,187		(141)		17,046
Depreciation and amortization		5,084		1,534		586		1,493		268		8,965		(78)		8,887
Government Grants	¥	-	¥	-	¥	-	¥	-	¥	122	¥	122	¥	-	¥	122

Year ended March 31, 2010


	Yen in millions
	Japan		Europe		North America		Asia		Other regions		Total Segment		Corporate and Eliminations		Consolidated
Sales:
External customers	¥	55,767	¥	109,484	¥	34,547	¥	9,007	¥	37,018	¥	245,823	¥	-	¥	245,823
Inter-segment		33,309		2,809		1,847		57,820		98		95,883		(95,883)		-

Total		89,076		112,293		36,394		66,827		37,116		341,706		(95,883)		245,823

Operating expenses		89,719		99,418		36,034		57,947		34,942		318,060		(102,627)		215,433
Segment income		(643)		12,875		360		8,880		2,174		23,646		6,744		30,390
Other income (expenses)		-		-		-		-		-		-		-		3,128
Income before income taxes		-		-		-		-		-		-		-		33,518
Long-lived assets		41,214		14,887		1,983		10,732		4,543		73,359		(159)		73,200
Segment assets		232,226		110,009		30,281		58,148		39,229		469,893		(120,054)		349,839
Capital expenditures		3,800		4,817		198		1,541		543		10,899		(62)		10,837
Depreciation and amortization		4,693		1,351		431		1,497		397		8,369		(61)		8,308
Impairment loss		1,605		-		-		-		-		1,605		-		1,605
Government Grants	¥	-	¥	-	¥	-	¥	-	¥	339	¥	339	¥	-	¥	339

Year ended March 31, 2011


	Yen in millions
	Japan		Europe		North America		Asia		Other regions		Total Segment		Corporate and Eliminations			Consolidated
Sales:
External customers	¥	62,194	¥	115,554	¥	37,573	¥	12,365	¥	44,944	¥	272,630	¥	-		¥	272,630
Inter-segment		51,230		3,171		2,979		101,216		116		158,712		(158,712	)		-

Total		113,424		118,725		40,552		113,581		45,060		431,342		(158,712	)		272,630

Operating expenses		102,905		105,361		38,698		100,575		38,646		386,185		(155,464	)		230,721
Segment income		10,519		13,364		1,854		13,006		6,414		45,157		(3,248	)		41,909
Other income (expenses)		-		-		-		-		-		-		-			821
Income before income taxes		-		-		-		-		-		-		-			42,730
Long-lived assets		39,400		15,630		1,732		11,210		4,166		72,138		(100	)		72,038
Segment assets		236,821		123,140		30,539		72,264		47,145		509,909		(137,402	)		372,507
Capital expenditures		2,781		3,718		214		2,878		235		9,826		(84	)		9,742
Depreciation and amortization		4,225		1,226		355		1,432		377		7,615		(58	)		7,557
Impairment loss		-		262		-		-		-		262		-			262
Government Grants	¥	-	¥	-	¥	-	¥	-	¥	1,327	¥	1,327	¥	-		¥	1,327

Year ended March 31, 2011

	U.S. Dollars in thousands
	Japan		Europe		North America		Asia		Other regions		Total Segment		Corporate and Eliminations			Consolidated
Sales:
External customers	$	749,325	$	1,392,217	$	452,687	$	148,976	$	541,494	$	3,284,699	$	-		$	3,284,699
Inter-segment		617,229		38,205		35,892		1,219,470		1,397		1,912,193		(1,912,193	)		-

Total		1,366,554		1,430,422		488,579		1,368,446		542,891		5,196,892		(1,912,193	)		3,284,699

Operating expenses		1,239,819		1,269,410		466,242		1,211,747		465,614		4,652,832		(1,873,061	)		2,779,771
Segment income		126,735		161,012		22,337		156,699		77,277		544,060		(39,132	)		504,928
Other income (expenses)		-		-		-		-		-		-		-			9,891
Income before income taxes		-		-		-		-		-		-		-			514,819
Long-lived assets		474,699		188,313		20,867		135,060		50,194		869,133		(1,205	)		867,928
Segment assets		2,853,265		1,483,614		367,940		870,651		568,012		6,143,482		(1,655,446	)		4,488,036
Capital expenditures		33,506		44,795		2,578		34,675		2,832		118,386		(1,013	)		117,373
Depreciation and amortization		50,904		14,771		4,277		17,253		4,542		91,747		(699	)		91,048
Impairment loss		-		3,157		-		-		-		3,157		-			3,157
Government Grants	$	-	$	-	$	-	$	-	$	15,988	$	15,988	$	-		$	15,988

Makita’s current revenues from external customers by geographic area are set forth below.

Consolidated Net Sales by geographic area


	Yen in millions, except for percentage amounts												U.S. Dollars in thousands
	Year ended March 31,												U.S. Dollars in thousands
	2009				2010				2011				2011
Japan	¥	46,222	15.7	%	¥	42,697	17.4	%	¥	46,065	16.9	%	$	555,000
Europe		137,113	46.6			109,106	44.4			115,977	42.5			1,397,313
U.S.A.		33,250	11.3			26,292	10.7			27,691	10.2			333,627
North America (excluding U.S.A)		9,039	3.1			8,217	3.3			9,420	3.4			113,494
Asia (excluding Japan)		21,995	7.5			18,373	7.5			23,073	8.5			277,988
Other		46,415	15.8			41,138	16.7			50,404	18.5			607,277

Total	¥	294,034	100	%	¥	245,823	100	%	¥	272,630	100	%	$	3,284,699

No single external customer accounted for 10% or more of Makita’s net sales for each of the year ended Mar 31, 2009, 2010 and 2011.

Consolidated Net Sales by Product categories


	Yen in millions, except for percentage amounts												U.S. Dollars in thousands
Fiscal year	2009				2010				2011				2011
Power Tools	¥	214,703	73.0	%	¥	173,998	70.8	%	¥	194,706	71.4	%	$	2,345,856
Gardening Equipments, Household and Other Products		36,916	12.6			34,145	13.9			38,391	14.1			462,542
Parts, Repairs and Accessories		42,415	14.4			37,680	15.3			39,533	14.5			476,301

Total	¥	294,034	100	%	¥	245,823	100	%	¥	272,630	100	%	$	3,284,699