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Summary of Business Results for the Fiscal Year Ended December 31, 2008

February 12, 2009

Consolidated business results

Yamaha Motor Co., Ltd. (the "Company") announced its consolidated business results for the fiscal year ended December 31, 2008 (fiscal 2008). Net sales decreased 8.7 percent from the previous year, to 1,603.9 billion yen, operating income fell 61.9 percent, to 48.4 billion yen, ordinary income dropped 58.0 percent, to 58.9 billion yen, and net income declined 97.4 percent, to 1.9 billion yen.

On the foreign exchange front, the average exchange rate of the yen against the U.S. dollar during fiscal 2008 appreciated by 15 yen from the previous year, to 103 yen, and appreciated by eight yen against the euro, to 153 yen.

Reflecting these results, the Company will propose the payment of 25.50 yen per share of common stock as the annual cash dividends for fiscal 2008 at the Ordinary General Meeting of Shareholders.

Broken down by business segment, motorcycle sales, which had been decreasing in advanced nations, particularly in Europe and the United States, has seen still more rapid deceleration beginning in the fourth quarter of fiscal 2008. Motorcycle sales, which had been robust in Southeast Asia and Latin America until the third quarter, have also turned downward since the fourth quarter. In total, motorcycle sales dipped 2.6 percent, to 1,028.8 billion yen. Marine product sales fell 17.6 percent, to 238.8 billion yen, due mainly to significant sales declines for outboard motors and personal watercraft in the United States. Power product sales dropped 19.7 percent, to 213.3 billion yen, reflecting substantial sales decreases for all-terrain vehicles and other power products in the United States. Sales in the "other products" segment decreased 15.2 percent, to 123.0 billion yen, due principally to reduced surface mounter sales.

Meanwhile, operating income from the motorcycle business, marine product business, power product business and the "other products" business dropped 46.7 percent from the previous year, to 33.6 billion yen; 78.5 percent, to 6.1 billion yen; 83.9 percent, to 3.6 billion yen; and 62.1 percent, to 5.1 billion yen; respectively.

Positive factors affecting operating income were a decrease in selling, general and administrative expenses totaling 20.4 billion yen from the previous year; cost reductions in procurement operations totaling 11.7 billion yen; an increase in gross profit totaling 2.1 billion yen; and a decline in research and development expenses totaling 0.2 billion yen. However, these positive factors were more than offset by the negative impact of exchange rate fluctuations totaling 54.4 billion yen; hikes in raw material prices totaling 16.7 billion yen; an increase in depreciation expenses totaling 4.7 billion yen; and the negative impact of a change in the product mix and related factors, including production cutbacks in Japan, which totaled 37.2 billion yen.

The number of consolidated subsidiaries at the end of the fiscal year under review increased by two from the end of the previous year, to 113, while the number of companies accounted for by the equity method decreased by five, to 33.

Forecast business results for the fiscal year ending December 31, 2009

The Company's business conditions for the fiscal year ending December 31, 2009 (fiscal 2009) are expected to remain extremely harsh, reflecting significant further declines in demand amid the worldwide recession, coupled with the continuing strength of the yen against major currencies.

In this environment, the Company will focus on countermeasures including urgent expense reduction and urgent cost reduction projects, significant reduction of capital expenditures, and medium-term structural reforms.

Reflecting these anticipated developments, the Company forecasts its consolidated business results for fiscal 2009 as follows: 1,250.0 billon yen in net sales; 30.0 billion yen in operating loss; 29.0 billion yen in ordinary loss; and 42.0 billion yen in net loss.

These forecasts are based on the assumption that the U.S. dollar will trade at 90 yen during the period (an appreciation of 13 yen from fiscal 2008), and the euro at 120 yen (an appreciation of 33 yen from fiscal 2008).

Based on projected financial performance for foreseeable future, the Company plans to announce its cash dividends for fiscal 2009 at the same time it discloses the consolidated business results for the second quarter of fiscal 2009.

Revision of the medium-term management plan

The Company has decided to revise its medium-term management plan (2008 through 2010), originally announced February 2008, due to dramatic changes in business conditions. It will announce the new plan at an appropriate time.


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