OREANDA-NEWS. April 28, 2011. In the consolidated and unconsolidated financial results for the year ended March 31, 2011, Mazda Motor Corporation (“Mazda”) has recognized extraordinary losses and set up a valuation allowance against its deferred tax assets as described in the following.

1. Extraordinary loss (Consolidated) Reserve for loss from business of affiliates: Ґ8,533 million
Mazda estimated a loss from business of a foreign affiliate that Mazda is expected to incur and accrued Ґ8,533 million as an extraordinary loss in the consolidated statement of operations for the year ended March 31, 2011.

2. Extraordinary losses (Unconsolidated)
1) Allowance for loss from business of affiliates: Ґ36,800 million
Mazda estimated a loss from business of foreign affiliates that Mazda is expected to incur and accrued Ґ36,800 million as an extraordinary loss in the unconsolidated statement of operations for the year ended March 31, 2011.

2) Valuation loss on investment securities for affiliates: Ґ7,216 million
Among the investment securities of affiliates Mazda holds, for a certain foreign subsidiary whose net assets severely had deteriorated to the extent a recovery is not expected, Mazda recognized a valuation loss of Ґ7,216 million as an extraordinary loss in the unconsolidated statement of operations for the year ended March 31, 2011.
3. Valuation allowance for deferred tax assets
The effects of the major earthquake in northeast Japan on Mazda's business performance in the next fiscal year and onward are uncertain. Accordingly, Mazda has assessed the likelihood of realizability of deferred tax assets. As a result, Mazda wrote off a part of its deferred tax assets by Ґ56,697 million, and recognized it in the deferred portion of income taxes in the consolidated and unconsolidated statement of operations for the fiscal year ended March 31, 2011.
4. Effects on financial performance
The extraordinary losses and valuation allowance for deferred tax assets discussed above were reflected in the consolidated and unconsolidated financial statements of Mazda for the year ended March 31, 2011 that have been released today.