Summary of Business Results for the Fiscal Year Ended December 31, 2004 Results far exceeded the targets specified in the medium-term management plan NEXT 50.

Yamaha Motor raised its net sales for the sixth straight year and expanded profits for the fourth consecutive year, based on a converted 12-month accounting period, while increasing its dividend payment for the third year running.

Yamaha Motor Co., Ltd. (the Company) adopted an irregular nine-month accounting period for the fiscal year ended December 31, 2004, due to a change in its annual closing date from March 31 to December 31, effective this fiscal year. Accordingly, the Company’s consolidated business results for the fiscal year ended December 31, 2004 are an aggregation of twelve-month business results for January 1, 2004 through December 31, 2004 for certain of the Company’s consolidated subsidiaries - mainly in Europe and Asia - with nine-month business results for April 1, 2004 through December 31, 2004 for Yamaha Motor Co., Ltd. and other of its consolidated subsidiaries, principally in Japan and North America. Based on this accounting period, Yamaha Motor’s consolidated net sales for the fiscal year ended December 31, 2004 amounted to 1,012.0 billion yen. In terms of profits, the Company’s operating income, recurring profit and net income stood at 70.1 billion yen, 70.4 billion yen and 38.2 billion yen, respectively. Thus, the business results for the fiscal year under review were almost the same as the performance for the previous 12-month period, exceeding one trillion yen in net sales and 70 billion yen in both operating income and recurring profit. Reflecting these favorable results, the Company will propose increasing the dividend payment for the third consecutive year - to 14 yen - at the Ordinary General Meeting of Shareholders.
On the exchange rate front, the average purchasing value of the yen during the period appreciated by 5 yen against the U.S. dollar, to 109 yen, and depreciated by 5 yen against the euro, to 133 yen.

The reference figures provided by a 12-month conversion (an aggregation of the business results for the period from April 1, 2004 through December 31, 2004, and those in the previous fourth quarter, from January 1, 2004 through March 31, 2004) were 1,176.8 billion yen in net sales and 88.8 billion yen in operating income. Compared with the figures for the previous fiscal year (from April 1, 2003 through March 31, 2004), net sales and operating income increased by 15.3 percent and 21.4 percent, respectively. This means that net sales rose for the sixth straight year, while operating income climbed for the fourth consecutive year, both achieving record highs. During the period under review, the average purchasing value of the yen appreciated by 6 yen against the U.S. dollar, to 108 yen, and depreciated by 4 yen against the euro, to 132 yen.

Broken down by business segment, motorcycle, marine product, power product and “other products” sales totaled 580.8 billion yen, 177.9 billion yen, 163.2 billion yen, and 90.0 billion yen, respectively. Based on the 12-month conversion, this performance would equal motorcycle sales of 637.3 billion yen, an 18.9 percent increase from the previous year; marine product sales of 227.2 billion yen, an 8.2 percent increase; power product sales of 197.6 billion yen, an 8.9 percent increase; and sales of “other products” amounting to 114.6 billion yen, a 23.5 percent increase. Thus, the Company achieved sales expansion in all its business segments. This favorable performance is attributable to sales increases in four areas: the motorcycle business in Asia, Europe and the United States; outboard motors in the marine product segment; ATVs (all-terrain vehicles) as well as all-new side-by-side vehicles in the power product segment; and the IM (industrial robots) business in the “other products” segment.

Regarding operating income by business segment, figures for the motorcycle, marine product, power product and “other products” businesses stood at 21.9 billion yen, 14.0 billion yen, 22.8 billion yen and 11.5 billion yen, respectively. On a 12-month basis, this performance would correlate to motorcycle operating income of 26.2 billion yen, a 21.3 percent increase from the previous year; marine product operating income of 20.2 billion yen, a 22.4 percent increase; power product operating income of 26.6 billion yen, a 6.4 percent increase; and “other products” operating income of 15.9 billion yen, a 57.4 percent increase. Thus, operating income on a 12-month basis also rose in all business segments compared to the previous year. This excellent income performance was mainly attributable to a rise in gross profit totaling 50.4 billion yen, in line with the sales expansion; a change in the product mix and other factors amounting to 3.7 billion yen; and cost reduction of 9.5 billion yen, although there were factors negatively impacting operating income, including an increase in selling, general and administrative expenses totaling 37.5 billion yen; and a loss from currency translation into yen, amounting to 10.4 billion yen.
At the fiscal year-end, the number of consolidated subsidiaries stood at 96, a decrease of one from the previous fiscal year-end, while the number of affiliates accounted for by the equity method was 51, an increase of 10 from the previous fiscal year-end.

In NEXT 50, Yamaha Motor aimed to create a stronger corporate structure, capable of withstanding exchange rate fluctuations, by focusing on key management issues of “attaining growth,” “improving profitability” and “enhancing the financial structure,” based on a companywide profit-oriented approach. Improved business performance - led mainly by the motorcycle, ATV, outboard motor, and IM businesses - combined with cost reductions achieved by the system-supplier system and the restructuring of low-profitability businesses - resulted in figures that far exceeded the targets specified in NEXT 50. According to the 12-month conversion reference figures for the fiscal year ended December 31, 2004, net sales, operating income and equity ratio surpassed the final targets specified in NEXT 50 - by 12.0 percent, to 1,176 billion yen; by 26.9 percent, to 88.8 billion; and by 9.5 points, to 38.3 percent, respectively - while interest-bearing debt decreased by 79.4 billion yen, to 120.6 billion yen. This outstanding performance has significantly enhanced the Company’s financial structure, in turn improving its rating.

Management Outlook
New medium-term management plan NEXT 50 - Phase II
Following the conclusion of the NEXT 50 plan, Yamaha Motor initiated a new medium-term management plan - NEXT 50 - Phase II - to run over the three-year period from January 1, 2005 through December 31, 2007. NEXT 50 - Phase II is designed to solidify the Company’s profitable business foundation, expedite ongoing reforms, and ultimately bring further growth and profitability. By implementing the new plan, the Company aims to attain 1,450 billion yen in consolidated net sales, 120 billion yen in both consolidated operating income and recurring profit, an 8.3 percent recurring profit ratio, a 14.7 percent ROE, and a 48.3 percent equity ratio, while lowering interest-bearing debt to 50.0 billion yen (zero in real terms). Basic policy Building on the profitable structure it has established during the previous medium-term management plan, the Company will implement a business strategy designed to balance value, profitability and growth, making Yamaha the market’s exclusive brand. Specifically, by creating value that differentiates Yamaha from other brands in the market, the Company will further its profit-oriented approach to establishing a stable corporate foundation, while moving aggressively to maximize opportunities for business growth. Through these efforts, the Company will fulfill its responsibilities to stakeholders - including shareholders, customers, employees and society at large - to continue delivering value - and a value system - that can really touch people’s hearts. Management issues
(1)	Value: creating value that differentiates Yamaha The Company aims to attain both further growth and profitability through four commitments: enhancing customer value by focusing on a branding strategy; maintaining and increasing social value, by fulfilling its corporate social responsibilities; raising shareholder value; and vitalizing Yamaha Motor’s personnel and organizations by promoting the SMART* program, among other measures. *SMART stands for Strategic, Measurable, Accountable, Return Max and Timely.
(2)	Profitability: continuing the profit-oriented approach The Company is continuing with the profit-oriented approach established in the original NEXT 50, aiming to steadily expand profits for businesses in Europe and the United States; maintain and expand the high profitability of the IM business; continue and enhance cost reduction realized through the implementation of the system-supplier system groupwide; and promote high-value-added marketing, centering in Japan, the United States, Europe and Asia.
(3)	Growth: maximizing opportunities for business growth Building on its solid, profitable business structure, the Company will strive to maximize its opportunities for business growth, by expanding the motorcycle business in the ASEAN region; restructuring the business foundation in Brazil, India and China, while developing the Russian market; and entering new business domains, including the biotechnology and electric vehicles businesses.

In the fiscal year ending December 31, 2005, Yamaha Motor expects to achieve substantial growth. On a consolidated basis, the Company forecasts 1,230 billion yen in net sales; 90 billion yen in operating income; 90 billion yen in recurring profit, and 47 billion yen in net income.
Comparing these forecasts with the previous year’s results on a 12-month basis, net sales and operating income are expected to rise by 4.5 percent and by 1.4 percent, respectively. Net sales are projected to increase for the seventh consecutive year and operating income for the fifth consecutive year, both representing record highs.
All of the business performance forecasts highlighted above are based on the assumption that one U.S. dollar will trade at 102 yen over the period (an appreciation of six yen from the previous year), and one euro will equal 133 yen (an appreciation of one yen from the previous year).

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