Summary of Business Results for the First Quarter of the Fiscal Year Ending December 31, 2012

Yamaha Motor Co., Ltd. (the "Company") has released its business results for the first quarter (January 1 through March 31) of the fiscal year ending December 31, 2012. Due to sales decreases in the motorcycle business in Asia and Central and South America, and the effects of the appreciation of the yen on foreign exchange offsetting increases in the motorcycle business in the U.S., the Marine products business, Power products and Other products segments, net sales remained at similar levels with a slight decrease of 0.8% from the same period of the previous fiscal year to 315.9 billion yen.
On the income front, operating income fell 39.7% from the same period of the previous fiscal year to 12.4 billion yen, ordinary income dropped 35.4% to 17.0 billion yen, and net income for the quarter fell 14.3% to 11.5 billion yen due to factors such as yen appreciation, reversal of accrual for product liability in the same period of the previous fiscal year and increased investment in development for future growth. However, these results exceeded initial forecasts by 8.1% for operating income (initial forecast of 11.5 billion yen), 41.7% for ordinary income (forecast of 12.0 billion yen) and 188.2% for first quarter net income (forecast of 4.0 billion yen).
On the foreign exchange front, the average exchange rate of the yen during the period under review appreciated by three yen from the same period of the previous fiscal year against the U.S. dollar, to 79 yen, and by nine yen against the euro, to 104 yen.

In the Motorcycles segment, net sales increased in the United States due to a recovery in demand, while demand in Europe remained depressed but the release of new models sustained net sales at a similar level to same period of the previous fiscal year. Among the emerging markets, net sales increased in Thailand, Vietnam and India due to growth in overall demand. In Indonesia, net sales decreased due to effects from factors such as the timing in the shift to new products (fuel-injected models) and a more strict credit sales environment. Brazil also felt the effects of tightening credit sales, etc. with a decrease in net sales as well. As a result, the number of motorcycles sold decreased by 5.4% from the same period of the previous fiscal year to 1.6 million units. This decrease in unit sales plus the effect of the appreciation of the yen caused a decrease of 4.5% in net sales from the same period of the previous fiscal year to 209.9 billion yen and a 59.0% decrease in operating income to 5.4 billion yen.
In the Marine segment, there was an increase in sales of outboard motors and personal watercraft in the U.S. due to a recovery in demand. There was also continued growth in demand for outboard motors in Russia, Central and South America, Asia and other regions. As a result, overall net sales rose 7.8% from the same period of the previous fiscal year to 54.6 billion yen, but operating income only grew by 0.6% to 4.2 billion yen due to the effects of the appreciation of the yen.
In the Power products segment, sales of all-terrain vehicles (ATVs) remained on the same level as the previous year and there was an increase in sales of generators in Japan due an increased awareness of preparedness for natural disasters. These results offset the negative effects of yen appreciation to bring an overall increase of 1.7% in net sales for the segment from the same period of the previous fiscal year to 22.1 billion yen. Due to the reversal of accrual for product liability totaling 3.1 billion yen in the same period of the previous fiscal year and other factors, operating income decreased 0.7 billion yen against the same period of the previous fiscal year, resulting in an operating loss of 0.1 billion yen.
In the Industrial Machinery and robots segment, net sales of surface mounters increased, due to increased demand in Asia owing to the growth in production of smart phones and tablet devices. However, with the continued overall trend toward reduced facility/equipment investment, net sales decreased in Japan and the developed markets of North America and Europe. As a result, overall net sales dropped 8.8% from the same period of the previous fiscal year to 7.6 billion yen, while factors such as increased development costs caused a 54.4% decrease in operating income to 0.8 billion yen.
In the Other products segment, net sales of automobile engines increased from the same period of the previous fiscal year when production was hindered by the effects of the 3.11 earthquake and tsunami disaster, while net sales of electrically power assisted bicycles remained on par with same period of the previous fiscal year. Due to these and other factors, the overall result for the Other products segment was a 19.3% increase in net sales from the same period of the previous fiscal year to 21.7 billion yen, while operating income increased 142.7% to 2.1 billion yen.

Concerning the forecast for the consolidated financial targets for the first six months and full twelve months of the fiscal year ending December 31, 2012, currently no revision has been made in the forecast announced on February 15, 2012. Concerns about another worsening of the financial crisis in Europe, the high cost of crude oil and the trends in demand in the emerging economies make it difficult to forecast business conditions in the second quarter and beyond.
These forecasts are based on the assumption that the U.S. dollar will trade at 77 yen during the fiscal year (an appreciation of three yen from fiscal 2011) and the euro at 100 yen (an appreciation of 11 yen).