ANNUAL REPORT 2017 01 CONTENTS This annual report presents the results of Nissan Motor Corporation’s business activities for fiscal 2017. Viewing this Report This Annual Report is an interactive PDF. You can use the navigation tabs and buttons to access the information you need. l Section Tabs CONTENTS CORPORATE FACE TIME TOP MESSAGE Click the tabs to jump to the top page of each section. l Navigation Buttons l Link Buttons Go back one page Jump to information on the web Return to previously viewed page Go forward one page Financial Data To obtain more detailed financial information, please visit our IR website. website This annual report contains forward-looking statements on Nissan’s plans and targets, and related operating investment, product planning and production targets. Please note that there can be no assurance that these targets and plans will actually be achieved. Achieving them will depend on many factors, including Nissan’s activities and development as well as the dynamics of the automobile industry worldwide and the global economy. For further information, please contact: Nissan Motor Co., Ltd. Investor Relations Department 1-1, Takashima 1-chome, Nishi-ku, Yokohama-shi, Kanagawa 220-8686, Japan Tel: +81 (0)45-523-5520 Fax: +81 (0)45-523-5771 E-mail: nissan-ir@mail.nissan.co.jp Global Corporate Communications Department Global Communications Division Tel: +81 (0)45-523-5552 Fax: +81 (0)45-523-5770 Cover photo: NOTE e-POWER NISSAN MOTOR CORPORATION ANNUAL REPORT 2017 02 VISION Nissan: Enriching People’s Lives Nissan has a clear vision for the future, and − with our Alliance partner, Renault − we are working with passion to achieve it. Our mission is to enrich people’s lives, building trust with our employees, customers, dealers, partners, shareholders and the world at large. MISSION Nissan provides unique and innovative automotive products and services that deliver superior measurable values to all stakeholders* in alliance with Renault. * Our stakeholders include customers, shareholders, employees, dealers and suppliers, as well as the communities where we work and operate. NISSAN MOTOR CORPORATION ANNUAL REPORT 2017 03 FINANCIAL HIGHLIGHTS Net sales*1 Ordinary income Net income attributable to owners of parent Comprehensive income Net assets Total assets Net assets per share Basic net income per share Diluted net income per share*3 Net assets as a percentage of total assets Return on equity Price earnings ratio Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Cash and cash equivalents at end of fiscal year Employees*4 ( ) represents the average number of part-time employees not included in the above numbers For the years ended Mar. 31, 2017 Mar. 31, 2016 Mar. 31, 2015 Mar. 31, 2014 Mar. 31, 2013 2016 2015 2014 2013 2012*2 Millions of yen Millions of yen Millions of yen Millions of yen Millions of yen Millions of yen Yen Yen Yen % % Times Millions of yen Millions of yen Millions of yen Millions of yen Number 11,720,041 12,189,519 11,375,207 10,482,520 8,737,320 864,733 663,499 615,950 862,272 523,841 75,107 694,232 457,574 719,903 527,189 389,034 796,533 504,421 341,117 721,860 5,167,136 5,140,745 5,247,262 4,671,528 4,036,030 18,421,008 17,373,643 17,045,659 14,703,403 12,442,337 1,242.90 1,132.61 1,152.83 1,035.06 165.94 165.94 26.4 13.8 6.47 125.00 124.99 27.2 11.0 8.33 109.15 109.14 28.4 10.0 11.21 92.82 92.82 29.5 9.6 9.91 1,335,473 927,013 692,747 728,123 890.38 81.39 — 30.0 9.9 11.08 412,257 (1,377,626) (1,229,280) (1,022,025) (1,080,416) (838,047) 320,610 1,241,124 137,250 (19,366) 138,917 (19,716) 530,606 992,095 152,421 (19,007) 154,700 (19,343) 245,896 802,612 149,388 (20,381) 151,710 (20,748) 396,925 832,716 142,925 (21,750) 147,939 (22,642) 433,817 711,901 130,274 (22,442) 136,625 (23,307) Notes: *1 Net sales are presented exclusive of consumption tax. *2 Effective from fiscal 2013, International Financial Reporting Standards (IFRS) 11 Joint Arrangements, which was released on May 12, 2011, and International Accounting Standards (IAS) 19 Employee Benefits, which was released on June 16, 2011, have been applied in some foreign subsidiaries and affiliates, and key financial data and trends for fiscal 2012 are adjusted. *3 Diluted net income per share for fiscal 2012 is not presented because the Company had no securities with dilutive effects. *4 Staff numbers, which are presented as the lower numbers in the “Employees” line, include those of unconsolidated subsidiaries accounted for by the equity method as reference data. NISSAN MOTOR CORPORATION ANNUAL REPORT 2017 04 Key figures for fiscal 2016 (China JV Equity Basis) Net sales in the fiscal year 2016 decreased by 469.5 billion yen to 11.72 trillion yen. Operating profit was 742.2 billion yen, for a profit margin of 6.3%. Under the forecast of consolidated operating results after fiscal 2013, the consolidation method for Dongfeng Motor Co., Ltd. has been changed from proportionate consolidation to the equity method in comparison with the results until fiscal 2012 by the adoption of IFRS11. Net Sales (Billions of yen) 15,000 12,000 9,000 6,000 3,000 0 12,406.3 11,434.8 11,375.2 10,482.5 9,629.6 13,365.6 12,842.3 12,189.5 Operating Profit (Billions of yen) 1,000 718.6 605.7 589.6 523.5 498.4 11,720.0 800 600 400 200 0 935.5 882.4 793.3 742.2 Net Income (Billions of yen) 800 600 400 200 0 663.5 663.5 523.8 523.8 457.6 457.6 389.0 389.0 342.4 2012 2013 2014 2015 2016 (FY) 2012 2013 2014 2015 2016 (FY) 2012 2013 2014 2015 2016 (FY) Management pro forma basis* China JV Equity basis Management pro forma basis* China JV Equity basis Management pro forma basis* China JV Equity basis Free Cash Flow (Auto Business) Net Cash (Auto Business) Dividend per Share (Billions of yen) (Billions of yen) 800 600 400 200 0 710.5 677.1 497.6 481.2 352.3 365.8 248.6 208.1 199.7 2,000 1,500 1,000 500 0 1,803.9 1,645.8 1,635.0 1,524.5 1,390.1 1,502.9 1,133.7 1,015.9 915.9 (Yen) 50 40 30 20 10 0 48 42 33 30 25 2012 2013 2014 2015 2016 (FY) 2012 2013 2014 2015 2016 (FY) 2012 2013 2014 2015 2016 (FY) Management pro forma basis* China JV Equity basis Management pro forma basis* China JV Equity basis * Based on continuation of proportionate consolidation of China JV NISSAN MOTOR CORPORATION ANNUAL REPORT 2017 MESSAGE FROM THE CHAIRMAN Carlos Ghosn Chairman of the Board 05 Leading Nissan as chief executive has been one of the privileges of my career. I was proud to have built a highly capable management team, which has enabled me to evolve my role to focus more on the expansion and stewardship of the Alliance. I was pleased the Board of Directors, at my recommendation, voted to appoint Hiroto Saikawa, who has served as co-CEO since October, as CEO. Under Mr. Saikawa’s leadership, I am confident the management team has the talent and experience to continue to meet Nissan’s strategic and operational goals. As your chairman, I will supervise and guide the company, both independently and within the Renault-Nissan Alliance, which now includes Mitsubishi Motors. The Alliance is today one of the largest automotive groups by unit sales. I am committed to supporting its continued expansion and sustainable growth, ensuring that each member company benefits from the competitive advantage our combined scale is delivering. Nissan stands at the heart of the Alliance. As we look to a future shaped by urbanization, population growth and climate change, our growth will depend upon our ingenuity in electrification, autonomous technologies, connectivity and mobility services. Nissan is well-positioned to deliver in these areas. Our brand family, including Infiniti and Datsun, and our product portfolio ranging from Dear Fellow Shareholders performance cars to light commercial vehicles and entry-level models, will enable Nissan to play a In 1999, when I arrived to Japan, Nissan was on the brink of bankruptcy, selling 2.3 million cars, and So while I am very proud of the progress we have made since 1999, I am now looking to the owing 20 billion USD in debt. Today, we sell 5.6 million cars, with over 15 billion USD in cash. Nissan is future, contributing to Nissan’s journey as chairman of its board. major role in the next generation of mobility. also a core member of the largest automotive alliance in the world. We now have every advantage, and no handicap. There is no limit to what we can achieve. This transformation is a credit to the contributions of all of our employees, suppliers, partners and dealers over the last 18 years. We have had to make tough decisions, and navigate many disruptions, including the Lehman shock, industry consolidation, and technological change. But together, we have realized the products and technologies, business efficiencies, and cash-flow to deliver sustainable growth and returns to shareholders. Carlos GhosnChairman of the BoardNissan Motor Co., Ltd.NISSAN MOTOR CORPORATION ANNUAL REPORT 2017 MESSAGE FROM THE CEO Hiroto Saikawa President and Chief Executive Officer 06 solutions that our customers will want and value. To create the value that customers expect, through the Alliance, Nissan employees of Japan and from all around the world are working together with Renault, and our newest partner, Mitsubishi Motors. Nissan is a Japanese company with a long history. At the same time, we are a global company with great diversity. Nissan also boasts advanced technologies, a robust financial base, and a global business network, as well as top-quality talent with high morale in Japan and overseas. We will utilize these assets to further drive the evolution in the industry. I would like to thank all of you for the warm and continued support. Progresses in FY2016 Despite a challenging business climate including foreign exchange headwinds, Nissan enjoyed steady growth in production and sales volume while enhancing operational efficiency in FY2016. This resulted in solid financial results for the last financial year. Our new product offensive continued around the world. Nissan’s retail volumes reached a record high with 5.63 million units. The company achieved steady growth with sales To achieve Nissan’s corporate vision of “enriching people’s lives,” we are committed to delivering exceeding 3 million units in the last six months of the fiscal year, up 7.3% over the same unique and innovative vehicles and mobility services with value that is recognized by our customers. period of the previous year. The environment surrounding the automobile is undergoing rapid changes driven by We introduced new technologies as a step to advance Nissan Intelligent Mobility, which is the technological innovation. Nissan is actively working on innovation by bringing ingenuity into the core of Nissan’s brand strategy. In the autonomous driving area, Nissan launched the new Serena, a areas of vehicle engineering, development, and production, as well as into sales and services, and minivan equipped with the world’s first ProPILOT technology. In terms of electrification, we we will further accelerate these efforts. introduced the Note e-POWER, the first application of a new type of electric vehicle powertrain that “The power comes from inside.” This phrase embodies the efforts of all Nissan employees. I has been well received by the market. In the connected and new mobility services area, we began strongly believe that corporate growth cannot be achieved without highly-motivated and ambitious working with a new partner to be ready for the development and field testing of driverless cars. employees. We will continue to harness the power that is inside Nissan to realize and provide These initiatives show that Nissan is making progress toward future mobility. NISSAN MOTOR CORPORATION ANNUAL REPORT 2017 07 The Renault-Nissan Alliance took another big step forward in the last 12 months. With the We will continue advancing Nissan Intelligent Mobility, backed by our technology DNA, and addition of Mitsubishi Motors as the third full member in October, the Alliance has become one of expressing a strong face for our brand. These initiatives include global commercialization of new the world’s largest automotive groups with annual unit sales of almost 10 million. Alongside the technologies such as the ProPILOT and e-POWER as well as the introduction of the new Nissan Alliance, the company is actively engaged in building new partnerships beyond the traditional auto LEAF, which will be launched first in Japan followed by North America and Europe. industry to drive our Nissan Intelligent Mobility strategy. The auto industry is entering a period of tremendous technological innovation that will lead to During the six years of the Nissan Power 88 mid-term plan – which came to an end at the end changing markets and car usage. Nissan is embracing the opportunity to evolve in terms of of the last fiscal year – we significantly increased our production capacity and revenues while technologies and business by making the best use of our Alliance strengths. enhancing operation efficiency and profitability. We were successful in developing our business Thank you again for your support. footprint, which provides a strong foundation for further business growth in the next mid-term plan. FY2017 Priorities In Fiscal 2017, the company is starting to move toward the next level of growth based on the solid foundations built during the Nissan Power 88 mid-term plan. Our future strategy will be based on the following three themes: n Delivering steady growth; n Introducing new technologies and products to further promote Nissan Intelligent Mobility; and n Fully leveraging benefits from our global Alliance to realize these priorities. We are forecasting global sales volume of 5.83 million units for FY2017, assuming the company’s continued steady growth. Volumes are expected to rise in all regions, particularly in China and Japan where sales are picking up. Hiroto SaikawaPresident and Chief Executive OfficerNissan Motor Co., Ltd.NISSAN MOTOR CORPORATION ANNUAL REPORT 2017 08 We also maintained our intense focus on driving cost efficiency through our entire value chain. For FY16, these improvements coupled with our sales growth lifted our year-over-year operating profit by 230.8 billion yen – or 29.1% - to 1.024 trillion yen. This, however, was not enough to entirely offset the foreign exchange effects on our business, which had negative impact of 281.9 billion yen. Net Income for the year set a new record: rising 26.7% to 663.5 billion yen. This was partly driven by the gain we realized from the sale of Nissan’s interests in Calsonic Kansei during the fiscal year. Nissan also generated automotive free cash flow of 677.1 billion yen and continued to strengthen the balance sheet, ending the year with a net cash position of 1.64 trillion yen for our automotive business. On a management pro-forma basis which includes the proportional consolidation of our Chinese joint venture – consistent with the methodology used in developing the Nissan Power 88 Mid-term Plan objectives – FY16 operating profit reached 882.4 billion yen on revenues of 12.84 trillion yen. Looking at FY16 results on a constant currency basis – i.e., removing the year-over-year adverse impact of foreign exchange changes – operating profit would have risen to 1.19 trillion yen resulting in an Operating Profit margin of 8.3% – this would have met the margin target under the Nissan Power 88 plan. For the current FY17 fiscal year, we expect another year of steady growth with Nissan unit sales projected to rise by 3.6% to 5.83 million units. While we anticipate rising sales in all regions, our growth will be primarily driven by China, North America and Japan. Overall, we expect Nissan to achieve a global market share of 6.2%. At the financial level, we are forecasting net revenues of 11.8 trillion yen for the 12 months ending March 31, 2018. Operating profit is projected to reach 685 billion yen – representing a margin of 5.8% – after taking into account continued currency headwinds and increased investments in new technologies, research and product development. Net income is expected to reach 535 billion yen. Based on our outlook of continued solid profitability and free cash flow generation, Nissan is maintaining a progressive dividend policy and we are forecasting a 5 yen increase in the FY17 full-year dividend to 53 yen per share. This represents a 10.4% increase on the fiscal 2016 dividend. At this forecast level, the annual dividend will have more than doubled since the start of our Nissan Power 88 mid-term plan six years ago. Furthermore, we completed the buyback of 300 million shares in fiscal 2016. This combined with our dividend growth reflects our continued policy of delivering attractive returns for our shareholders. In summary, Nissan has emerged at the end of the Power 88 mid-term plan as a stronger and more profitable company than when we started. Our products, technologies, operating efficiency and financial discipline position us well to continue to profitably grow the company and to provide attractive shareholder returns as we meet the challenges ahead. MESSAGE FROM THE CFO Joseph G. Peter Chief Financial Officer Nissan delivered another solid year of improvement in FY16 (12 month period to March 31, 2017). For the year, Nissan generated operating profit of 742.2 billion yen on net revenues of 11.72 trillion yen (under the equity accounting basis for our joint venture in China). These results were delivered despite challenging foreign exchange conditions and slowing unit sales in some regions, particularly in emerging markets. While the reported results for Revenue and Operating Profit are below the prior year’s actuals, the shortfall is completely explained by the substantial negative year-over-year FX impacts, which were not offset entirely by solidly improved underlying operational performance driven by the combination of growing unit sales and continued efficiencies on the cost side of the business. Specifically on the sales front, our global unit sales grew 3.7% reaching 5.63 million units, up from 5.42 million in the previous year and establishing a new all-time record. Our performance reflected particularly healthy unit sales in the second half of the fiscal year, when we sold more than 3 million units. Of the key markets in which we operate, Nissan saw solid growth in North America, and especially the US where unit sales rose 4.2% to 1.58 million units, equivalent to a market share of 9%. We saw healthy growth in Europe, excluding Russia, as unit sales rose by 7.2% to 683,000 vehicles. And in China, where our results are measured on a calendar year basis, unit sales increased 8.4% to more than 1.35 million units, representing a market share of 5%. Encouragingly, we also saw signs of improvement in Japan in the second half of the fiscal year, where we increased our market share in registered cars to 14%. Growth in these areas helped offset volatile conditions in emerging markets. Joseph G. PeterChief Financial OfficerNISSAN MOTOR CORPORATION ANNUAL REPORT 2017 09 Nissan Intelligent Mobility makes our cars more exciting by: More confidence through increased safety, control and comfort for all on board. More exhilaration through driving pleasure that is also clean and efficient. Nissan Intelligent Driving Nissan Intelligent Power Serena ProPILOT Nissan IDS Concept Sensing image Autonomous drive technology ProPILOT on-road test Battery Electric Vehicle e-POWER e-Bio Fuel-Cell Nissan Intelligent Integration More connected by conveniently linking our cars and the wider society. Energy management system (Vehicle to Home) Energy management system (Vehicle to Building) NISSAN MOTOR CORPORATION ANNUAL REPORT 2017 FISCAL 2016 SALES PERFORMANCE AND FISCAL 2017 SALES OUTLOOK Global demand in fiscal 2016 reached 91.81 million vehicles, up 5.3% from fiscal 2015. Nissan’s global sales volume climbed 3.7% to 5.63 million vehicles and global market share was 6.1%. For fiscal 2017, Nissan expects to grow faster than the industry as a whole. We anticipate that total industry volumes will increase by 2.4% to 94.02 million units. Our global retail volumes are expected to rise by 3.6% to 5.83 million units. This would equate to a global market share of 6.2%, an increase of 0.1 percentage points compared to 2016. Sales Performance and Sales Outlook by Regions (Units: thousands) 6,000 5,000 4,914 5,188 5,318 5,423 5,626 5,830 4,000 3,000 2,000 1,000 0 6.2 % 6.2 % 6.2% 6.2% 6.1% 6.2% FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 (Forecast) Japan China North America Europe Other Markets Market Share 10 Fiscal 2016 Sales Volume by Regions Japan Serena ProPILOT Note e-POWER China Total Sales Volume: 557 thousand units Venucia T90 Total Sales Volume: 1,355 thousand units North America Europe Rogue Total Sales Volume: 2,130 thousand units Qashqai Total Sales Volume: 776 thousand units Other Markets Datsun redi-GO KICKS Total Sales Volume: 808 thousand units NISSAN MOTOR CORPORATION ANNUAL REPORT 2017 FISCAL YEAR 2016 FINANCIAL REVIEW AND FISCAL YEAR 2017 OUTLOOK Fiscal Year 2016 Financial Performance (China JV Equity Basis) Impact on Operating Profit 11 Net revenue For the year ended March 31, 2017, consolidated net revenues decreased 3.9%, to 11.72 trillion yen due to currency headwinds. Net Sales (Billions of yen) 15,000 10,482.5 11,375.2 13,365.6 12,406.3 12,842.3 11,800.0 11,434.8 9,629.6 10,000 (Billions of yen) 793.3 +254.3 +258.9 +22.8 –5.8 –40.9 12,189.5 11,720.0 –258.5 742.2 –281.9 5,000 0 2012 2013 2014 2015 2016 (Forecast) 2017 (FY) Management pro forma basis* China JV equity basis FY15 O.P. Volume/mix Marketing & selling exp. Cost items* R&D exp. Mfg exp. Other items FOREX FY16 O.P. Net income Consolidated net income increased 26.7% from fiscal year 2015 to 663.5 billion yen for the fiscal year. * Including purchasing cost reduction, raw material and product enrichment. Operating profit Consolidated operating profit totaled 742.2 billion yen, resulting in an operating profit margin of 6.3%. In comparison to the previous fiscal year’s consolidated operating profit, the variance was due to the following factors: l Volume and mix produced a positive impact of 254.3 billion yen. Operating Profit l The increase in marketing and selling expenses resulted in a 258.5 billion yen negative movement. (Billions of yen) l Cost items including purchasing cost reduction efforts, lower raw material costs and product enrichment resulted in savings of 258.9 billion yen. 1,000 800 605.7 l R&D expenses had a positive impact of 22.8 600 523.5 498.4 935.5 882.4 718.6 793.3 742.2 685.0 589.6 billion yen. l Manufacturing expenses increased by 5.8 billion yen. l Other items had a negative impact of 40.9 billion yen. 400 200 0 2012 2013 2014 2015 2016 (Forecast) 2017 (FY) l Foreign exchange rates had a negative impact Management pro forma basis* of 281.9 billion yen. China JV equity basis Net Income (Billions of yen) 800 600 400 342.4 663.5 523.8 535.0 457.6 389.0 200 0 2012 2013 2014 2015 2016 (Forecast) 2017 (FY) Management pro forma basis* China JV equity basis * Based on continuation of proportionate consolidation of China JV NISSAN MOTOR CORPORATION ANNUAL REPORT 2017 Financial Position (China JV Equity Basis) Balance sheet At March 31, 2017, current assets increased 6.7% to 11.463 trillion yen compared to the end of the prior fiscal year. This was mainly attributable to the increase in sales finance receivables by 687.4 billion yen and cash on hand and in banks by 203.7 billion yen. Fixed assets increased 5.0% to 6.958 trillion yen compared to the end of the prior fiscal year. This was mainly attributable to the increase in investment securities and machinery, equipment and vehicles, net by 265.0 billion yen and 159.8 billion yen, respectively. As a result, total assets increased 6.0% to 18.421 trillion yen compared to March 31, 2016. At March 31, 2017, current liabilities increased 4.3% to 7.054 trillion yen compared to the end of the prior fiscal year. This was mainly due to the increase in accrued expenses by 130.6 billion yen. Long-term liabilities increased 13.4% to 6.199 trillion yen compared to the end of the prior fiscal year. This was mainly due to the increase in bonds and long-term borrowings by 523.2 billion yen and 347.9 billion yen, respectively. As a result, total liabilities increased 8.3% to 13.254 trillion yen compared to March 31, 2016. At March 31, 2017, net assets increased 0.5% to 5.167 trillion yen compared to the end of the prior fiscal year. This was mainly attributable to the increase in retained earnings by 198.4 billion yen despite the increase in translation adjustments (loss) by 105.5 billion yen. Free cash flow and net cash (auto business) For fiscal year 2016, automotive free cash flow was a positive 677.1 billion yen. As a result, automotive net cash was 1.635 trillion yen at the end of the period. 12 Long-term credit rating Nissan’s long-term credit rating with Rating & Investment Information, Inc. (R&I) is A+ with a positive outlook. The Standard & Poor’s (S&P) long-term credit rating for Nissan is A with a stable outlook. Nissan’s credit rating with Moody’s is A2 with a stable outlook. Corporate Ratings Aa3 A1 A2 A3 Baa1 Baa2 Baa3 Ba1 R&I Moody’s S&P AA– A+ A A– BBB+ BBB BBB– BB+ 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 NISSAN MOTOR CORPORATION ANNUAL REPORT 2017 13 Sales finance Due to the increase in retail sales, total financial assets for the sales finance segment increased 8.8% to 10.571 trillion yen in fiscal year 2016 from 9.720 trillion yen in fiscal year 2015. The sales finance segment generated 183.9 billion yen in operating profits in fiscal 2016 and 232.1 billion yen in fiscal year 2015. Dividend Nissan’s strategic actions reflect not only its long-term vision as a global company to create sustainable value but also the Company’s commitment to maximizing total shareholder returns. As a result, the total dividend for fiscal year 2016 was 48 yen per share. The dividend payment plan for fiscal year 2017 is 53 yen per share, given the business outlook, Investment policy Capital expenditures ensure the Company’s future competitiveness. In fiscal year 2016, capital expenditures totaled 469.3 billion yen, which was 4.0% of net revenues. R&D expenditures totaled 490.4 billion yen. R&D Expenditures (Billions of yen) 457.8 5.2% 5.2% 500.6 506.1 531.9 490.4 525.0 4.8% 4.8% 4.4% 4.4% 4.4% 4.4% 4.2% 4.2% 4.4% 4.7% risks and opportunities for the year. Dividend per share (Yen) 60 45 30 15 0 48 42 53 30 33 25 2012 2013 2014 2015 2016 (Outlook) 2017 (FY) 600 450 300 150 0 2012 2013 2014 2015 2016 (Forecast) 2017 (FY) Fiscal Year 2017 Outlook (China JV Equity Basis) Capital Expenditures (Billions of yen) 600 450 300 150 0 468.7 5.4% 5.4% 536.3 5.1% 5.1% 463.1 479.0 469.3 4.1% 4.1% 3.9% 3.9% 4.0% 4.0% 510.0 4.3% 4.3% 2012 2013 2014 2015 2016 (Forecast) 2017 (FY) China JV equity basis % of net sales (China JV equity basis) For fiscal year 2017, Nissan expects its global sales to increase 3.6% from the prior fiscal year to 5.83 million units. Based on this sales forecast, the Company’s financial forecast, using a foreign exchange rate assumption of 108 yen to the dollar, is as follows: Nissan’s Fiscal 2017 Outlook n Net sales n Operating profit n Net income 11.80 trillion yen 685.0 billion yen 535.0 billion yen NISSAN MOTOR CORPORATION ANNUAL REPORT 2017 14 FINANCIAL STATEMENTS Consolidated balance sheets (China JV Equity basis) Assets Current assets Cash on hand and in banks Trade notes and accounts receivable Sales finance receivables Securities Merchandise and finished goods Work in process Raw materials and supplies Deferred tax assets Other Allowance for doubtful accounts Total current assets Fixed assets Property, plant and equipment Buildings and structures, net Machinery, equipment and vehicles, net Land Construction in progress Other, net Total property, plant and equipment Intangible fixed assets Investments and other assets Investment securities Long-term loans receivable Net defined benefit assets Deferred tax assets Other Allowance for doubtful accounts Total investments and other assets Total fixed assets Total assets FY2015 As of March 31, 2016 FY2016 As of March 31, 2017 (Millions of yen) FY2015 As of March 31, 2016 FY2016 As of March 31, 2017 (Millions of yen) 918,771 837,704 6,653,237 73,384 857,818 86,313 330,435 251,689 825,080 (86,858) 10,747,573 645,945 3,182,514 625,152 196,718 566,573 5,216,902 130,877 893,688 7,747 4,691 187,106 186,962 (1,903) 1,278,291 6,626,070 17,373,643 1,122,484 808,981 7,340,636 121,524 911,553 73,409 288,199 156,457 746,650 (107,344) 11,462,549 609,769 3,342,305 599,626 177,394 546,127 5,275,221 127,807 1,158,676 16,036 8,456 176,354 197,757 (1,848) 1,555,431 6,958,459 18,421,008 Liabilities Current liabilities Trade notes and accounts payable Short-term borrowings Current portion of long-term borrowings Commercial papers Current portion of bonds Lease obligations Accrued expenses Deferred tax liabilities Accrued warranty costs Other Total current liabilities Long-term liabilities Bonds Long-term borrowings Lease obligations Deferred tax liabilities Accrued warranty costs Net defined benefit liability Other Total long-term liabilities Total liabilities Net assets Shareholdersʼ equity Common stock Capital surplus Retained earnings Treasury stock Total shareholdersʼ equity Accumulated other comprehensive income Unrealized holding gain and loss on securities Unrealized gain and loss from hedging instruments Adjustment for revaluation of the accounts of the consolidated subsidiaries based on general price level accounting Translation adjustments Remeasurements of defined benefit plans Total accumulated other comprehensive income Share subscription rights Non-controlling interests Total net assets Total liabilities and net assets 1,479,689 1,037,271 1,350,894 499,875 357,998 14,916 981,989 51 106,536 934,968 6,764,187 969,987 2,755,896 14,460 691,809 138,107 424,123 474,329 5,468,711 12,232,898 605,814 805,646 4,150,740 (148,684) 5,413,516 64,030 (4,486) (13,945) (582,363) (155,487) (692,251) 502 418,978 5,140,745 17,373,643 1,578,594 980,654 1,339,982 430,019 368,101 31,565 1,112,591 2 110,086 1,102,626 7,054,220 1,493,159 3,103,803 20,398 601,398 128,394 369,346 483,154 6,199,652 13,253,872 605,814 817,464 4,349,136 (140,697) 5,631,717 57,778 7,154 (13,945) (687,841) (133,016) (769,870) 391 304,898 5,167,136 18,421,008 NISSAN MOTOR CORPORATION ANNUAL REPORT 2017 Consolidated statement of income (China JV Equity basis) Net sales Cost of sales Gross profit Selling, general and administrative expenses Advertising expenses Service costs Provision for warranty costs Other selling expenses Salaries and wages Retirement benefit expenses Supplies Depreciation and amortization Provision for doubtful accounts Amortization of goodwill Other Total selling, general and administrative expenses Operating income Non-operating income Interest income Dividends income Equity in earnings of affiliates Derivative gain Miscellaneous income Total non-operating income Non-operating expenses Interest expense Exchange loss Credit liquidation costs Miscellaneous expenses Total non-operating expenses Ordinary income FY2015 (From April 1, 2015 to March 31, 2016) 12,189,519 9,796,998 2,392,521 (Millions of yen) FY2016 (From April 1, 2016 to March 31, 2017) 11,720,041 9,422,551 2,297,490 342,213 130,530 137,941 234,456 393,739 16,137 3,901 45,056 63,586 5,111 226,573 1,599,243 793,278 26,467 5,966 122,524 37,683 11,726 204,366 24,806 96,452 9,702 4,412 135,372 862,272 313,406 79,125 131,059 251,378 402,202 20,809 4,083 50,773 88,550 1,818 212,059 1,555,262 742,228 15,868 9,416 148,178 33,419 20,914 227,795 14,128 65,289 10,906 14,967 105,290 864,733 Special gains Gain on sales of fixed assets Gain on sales of investment securities Gain on sales of shares of subsidiaries and affiliates Insurance income Gain on transfer of business Other Total special gains Special losses Loss on sales of fixed assets Loss on disposal of fixed assets Loss on sales of investment securities Impairment loss Quality related costs Other Total special losses Income before income taxes Income taxes-current Income taxes-deferred Total income taxes Net income Net income attributable to non-controlling interests Net income attributable to owners of parent 15 FY2015 (From April 1, 2015 to March 31, 2016) (Millions of yen) FY2016 (From April 1, 2016 to March 31, 2017) 9,011 23,338 ― 5,287 ― 4,762 42,398 4,937 13,274 ― 42,087 90,700 20,738 171,736 732,934 149,920 30,221 180,141 552,793 28,952 523,841 7,114 ― 111,502 7,204 9,788 1,459 137,067 9,256 11,253 3,865 5,532 ― 6,737 36,643 965,157 275,818 (11,179) 264,639 700,518 37,019 663,499 NISSAN MOTOR CORPORATION ANNUAL REPORT 2017 16 Consolidated statement of cash flows (China JV Equity basis) FY2015 (From April 1, 2015 to March 31, 2016) (Millions of yen) FY2016 (From April 1, 2016 to March 31, 2017) FY2015 (From April 1, 2015 to March 31, 2016) (Millions of yen) FY2016 (From April 1, 2016 to March 31, 2017) Cash flows from operating activities Income before income taxes Depreciation and amortization (for fixed assets excluding leased vehicles) Depreciation and amortization (for long term prepaid expenses) Depreciation and amortization (for leased vehicles) Impairment loss Increase (decrease) in allowance for doubtful receivables Provision for residual value risk of leased vehicles (net changes) Quality related costs Interest and dividends income Interest expense Equity in losses (earnings) of affiliates Loss (gain) on sales of fixed assets Loss on disposal of fixed assets Loss (gain) on sales of investment securities Loss (gain) on sales of shares of subsidiaries and affiliates Loss (gain) on transfer of business Decrease (increase) in trade notes and accounts receivable Decrease (increase) in sales finance receivables Decrease (increase) in inventories Increase (decrease) in trade notes and accounts payable Retirement benefit expenses Payments related to net defined benefit assets and liabilities Other Subtotal Interest and dividends received Proceeds from dividends income from affiliates accounted for by equity method Interest paid Income taxes paid Net cash provided by operating activities 732,934 424,881 18,666 389,339 42,087 16,669 53,737 90,700 (32,433) 111,906 (122,524) (4,074) 13,274 (23,338) ― ― 15,171 (830,209) (17,244) 217,587 13,581 (29,854) 55,978 1,136,834 33,222 144,961 (110,439) (277,565) 927,013 965,157 391,798 22,910 426,349 5,532 22,959 63,049 ― (25,284) 119,310 (148,178) 2,142 11,253 3,865 (111,502) (9,788) (42,584) (765,894) (32,660) 296,060 26,707 (24,517) 190,498 1,387,182 24,467 127,772 (117,213) (86,735) 1,335,473 Cash flows from investing activities Net decrease (increase) in short-term investments Purchase of fixed assets Proceeds from sales of fixed assets Purchase of leased vehicles Proceeds from sales of leased vehicles Payments of long-term loans receivable Collection of long-term loans receivable Purchase of investment securities Proceeds from sales of investment securities Proceeds from (payments for) sales of subsidiariesʼ shares resulting in changes in the scope of consolidation Proceeds from (payments for) purchase of subsidiariesʼ shares resulting in changes in the scope of consolidation Net decrease (increase) in restricted cash Proceeds from transfer of business Other Net cash used in investing activities Cash flows from financing activities Net increase (decrease) in short-term borrowings Proceeds from long-term borrowings Proceeds from issuance of bonds Repayments of long-term borrowings Redemption of bonds Proceeds from non-controlling shareholders Purchase of treasury stock Proceeds from sales of treasury stock Repayments of lease obligations Cash dividends paid Cash dividends paid to non-controlling interests Net cash provided by financing activities Effects of exchange rate changes on cash and cash equivalents Increase in cash and cash equivalents Cash and cash equivalents at beginning of the period Increase due to inclusion in consolidation Cash and cash equivalents at end of the period 4,855 (531,251) 80,320 (1,385,990) 560,861 (3,018) 8,285 (24,869) 25,192 ― (6,354) 44,839 ― (2,150) (1,229,280) 420,085 1,824,367 270,592 (1,545,177) (212,033) 4,914 (28,325) 303 (23,093) (157,239) (23,788) 530,606 (45,107) 183,232 802,612 6,251 992,095 (2,119) (503,745) 72,814 (1,293,840) 512,375 (1,581) 2,096 (270,228) ― 97,055 ― 4,779 9,582 (4,814) (1,377,626) 16,119 1,724,688 878,641 (1,369,795) (344,009) 1,275 (277,419) 128 (26,265) (182,803) (99,950) 320,610 (34,875) 243,582 992,095 5,447 1,241,124 NISSAN MOTOR CORPORATION ANNUAL REPORT 2017 17 EXECUTIVES DIRECTORS OF THE BOARD AND AUDITORS CORPORATE OFFICERS Representative Directors Directors Auditors Carlos Ghosn Chairman of the Board Hiroto Saikawa Greg Kelly Kimiyasu Nakamura Toshiyuki Shiga Hidetoshi Imazu Hideyuki Sakamoto Jean-Baptiste Duzan Toshiyuki Nakamura Fumiaki Matsumoto Rey Bernard Motoo Nagai Celso Guiotoko Shigetoshi Andoh (As of June 30, 2017) CHAIRMAN OF THE BOARD EXECUTIVE COMMITTEE MEMBERS Carlos Ghosn Hiroto Saikawa Joseph G. Peter Philippe Klein Jose Munoz Yasuhiro Yamauchi Kimiyasu Nakamura Hideyuki Sakamoto Chairman of the Board Carlos Ghosn President and Chief Executive Officer Hiroto Saikawa* Executive Vice President Kimiyasu Nakamura* TCSX (Total Customer Satisfaction Function) Chief Financial Officer (CFO) Joseph G. Peter* Finance IR Control M&A Support Global Sales Finance Business Unit Administration for Affiliated Companies, Global IS/IT Chief Planning Officer (CPLO) Philippe Klein* Global Product Planning Global Program Management Global Market Intelligence Vehicle Information Technology Executive Vice President Hideyuki Sakamoto* Product Engineering Executive Vice President Fumiaki Matsumoto* Manufacturing & SCM Operations Executive Vice President Daniele Schillaci* Global Marketing & Sales Global Dealer Network Global Product Marketing Zero Emission Vehicle & Battery Business Region: Japan, Asia, Oceania Chief Performance Officer (CPO) Jose Munoz* Region: North America Responsible for 6 management committees Executive Vice President Tsuyoshi Yamaguchi Alliance Technology Development Chief Competitive Officer (CCO) Yasuhiro Yamauchi* Senior Vice Presidents Hitoshi Kawaguchi Corporate Vice Presidents Joji Tagawa Takao Asami Yusuke Takahashi Jun Seki Hiroshi Karube Jose Luis Valls Roel De Vries Takashi Hata Paul Willcox Tony Laydon Kunio Nakaguro Roland Krueger Mitsuro Antoku Arun Bajaj Toshihiro Hirai Asako Hoshino Hiroshi Nagaoka Rakesh Kochhar Akihiro Otomo Hari Nada Atul Pasricha Noboru Tateishi Kent O’Hara Alfonso Albaisa Leon Dorssers Peyman Kargar Atsuhiko Hayakawa Yoshikazu Nakai Kinichi Tanuma Haruhiko Yoshimura Makoto Uchida Yukio Ito Catherine Perez Jose Roman Carlos Servin Fellows Haruyoshi Kumura Shunichi Toyomasu (As of June 30, 2017) Fumiaki Matsumoto Daniele Schillaci * Executive Committee Members NISSAN MOTOR CORPORATION ANNUAL REPORT 2017 NISSAN’S EIGHT SUSTAINABILITY STRATEGIES Through its business activities, Nissan aims not only to create economic value but also to actively contribute to the sustainable development of society. In order to achieve this goal, Nissan has defined eight sustainability strategies. By steadily advancing these strategies and by being transparent on progress and challenges faced, Nissan is able to fulfill its responsibilities to society and build trust. 1 ENVIRONMENT Nissan aims to lead a social transformation aimed at bringing about a sustainable mobility society by reducing vehicles’ environmental impact throughout their lifecycle and expanding the lineup of effective green products and technologies. website Click here for more information on the 2017 Sustainability Report. CORPORATE VISION NISSAN: ENRICHING PEOPLEʼS LIVES SUSTAINABILITY STRATEGIES NISSAN MOTOR CORPORATION 2 SAFETY 1 ENVIRONMENT 3 PHILANTHROPY 5 VALUE CHAIN 7 ECONOMIC CONTRIBUTIONCON 4 QUALITY 6 EMPLOYEES 8 CORPORATE GOVERNANCE & INTERNAL CONTROL DEVELOPMENT OF A SUSTAINABLE SOCIETY 2 SAFETY Nissan develops innovative technology and plays an active role in safety promotion, making the automobile society safer for all. 3 PHILANTHROPY Nissan carries out social contribution activities as a corporate citizen, focusing on the environment, education and humanitarian support. 4 QUALITY Nissan provides top-level quality in its products and services around the world. 5 VALUE CHAIN Nissan promotes ethical, environmentally sound actions in all stages of the supply chain. 6 EMPLOYEES Nissan aims to form an attractive organization where diverse human resources can achieve personal growth through experience in global business. 7 ECONOMIC CONTRIBUTION Nissan aims for sustainable, profitable growth, contributing to economic development for all of society. 8 CORPORATE GOVERNANCE & INTERNAL CONTROL Nissan aims to conduct fair, impartial and efficient business activities, having a high degree of transparency and consistency by adhering to the applicable laws and corporate rules. 18 Click below for more information about Nissan’s eight strategies. website website website website website website website website website Click here for more information about Nissan’s risk management. NISSAN MOTOR CORPORATION ANNUAL REPORT 2017