Consolidated Business Results Summary, First Nine Months, Fiscal Year 2015 Ending December 31

November 6, 2015

Consolidated business results

IWATA, November 6, 2015 –Yamaha Motor Co., Ltd. (Tokyo: 7272) announces consolidated business results for the first nine months of the fiscal year.
Net sales were 1,214.2 billion yen, an increase of 89.6 billion yen (8.0%) compared with the same period the previous fiscal year.Operating income was 100.0 billion yen, an increase of 29.0 billion yen (+40.8%) compared with the same period the previous fiscal year.
Developed markets delivered sales and income increases thanks to sales increases of global models and products in the higher price range as well as the effect of yen depreciation on exports in the motorcycle business segment, and increased sales of large models and the effect of yen depreciation in the marine business segment. In emerging markets, increased sales in Vietnam, the Philippines, and Taiwan, as well as increased sales of products in the higher price range and the effect of cost reductions absorbed the reduction in unit sales in Indonesia and Brazil, meaning that net sales increased over the previous fiscal year, and operating income was maintained at a level equivalent to that of the previous fiscal year.
Ordinary income was 101.2 billion yen (an increase of 25.8 billion yen/34.1% against the same period the previous fiscal year), and net income for the period was 49.0 billion yen (a decrease of 3.5 billion yen/6.6%).
Net income for the period was affected by a recognition of an estimated expected taxation payment amount of 34.9 billion yen in the U.S.A. due to an income distribution adjustment between Japan and the U.S.A. based on the progress of U.S.-Japan bilateral discussions regarding the 'Advance Pricing Agreement' (APA) (*). Through one-off factors such as the additional recognition of 16.6 billion yen of deferred tax assets, net income decreased by 18.3 billion yen.
For the first nine months consolidated accounting period, the U.S. dollar traded at 121 yen (a depreciation of 18 yen from the same period the previous fiscal year), and the euro at 135 yen (an appreciation of 5 yen).

(*)Regarding transfer pricing relating to transactions between Yamaha Motor and its U.S. subsidiaries from the December 2009 fiscal year to the December 2013 fiscal year, an APA application was made in 2008 based on the U.S.-Japan Tax Treaty to competent authority regarding determination of arm’s length price etc. Due diligence in each country and Mutual Agreement Procedure (MAP) between both competent authorities for taxation have subsequently continued, and recently, due to the progress of the MAP, it is forecast that written confirmation will be received that Yamaha Motor's income will be decreased, and the income of its U.S. subsidiaries will be increased.
Due to this, additional taxation payments such as corporate taxes are forecast at U.S. subsidiaries, and therefore, 34.9 billion yen has been recognized in the Consolidated Statements of Income of the first nine months consolidated accounting period as an estimation of "Income taxes for prior periods."

Results by Business Segment

Motorcycles

Global net sales of motorcycle products were 771.3 billion yen (an increase of 47.3 billion yen/6.5% compared with the same period in the previous fiscal year), and operating income was 28.9 billion yen (an increase of 11.3 billion yen/63.7%).
Unit sales increased in developed markets such as North America and Europe thanks to the effect of new product launches such as the 'YZF-R1' and the 'MT-09 TRACER'.
Unit sales in emerging markets such as Vietnam, the Philippines, and Taiwan increased, but decreased in Indonesia and Brazil due to market slumps etc.
Net sales increased thanks to sales of products in the higher price range in emerging markets and the effect of new products. Operating income also increased with factors generating increased income, such as the effect of sales increases, cost reductions, yen depreciation etc., absorbing negative factors such as increases in development costs and currency depreciation in emerging markets.

Marine

Net sales in the marine business segment were 232.7 billion yen (an increase overall of 23.5 billion yen/11.2% compared with the same period in the previous fiscal year), and operating income was 50.2 billion yen (an increase of 12.6 billion yen/33.3%).
Increases in sales and income were achieved thanks to increased unit sales of large outboard motors and water vehicles in North America, as well as the effects of yen depreciation, and the resulting operating income ratio was over 20%.

Power Products

Net sales of power products were 110.6 billion yen (an increase of 13.6 billion yen/14.1% compared with the same period in the previous fiscal year), and operating income was 9.0 billion yen (an increase of 3.5 billion yen/64.0%).
Sales and income increased thanks to the effect of new recreational off-highway vehicle (ROV) product launches in North America.

Industrial Machinery & Robot Products

Net sales in the industrial machinery and robots business segment were 36.4 billion yen (an increase of 6.9 billion yen/23.5% compared with the same period in the previous fiscal year), and operating income was 6.5 billion yen (an increase of 1.8 billion yen/38.2%).
Increases in sales and income were achieved thanks to an increase in surface mounter unit sales in Japan and Asia.

Other Products

Net sales in the other products business overall were 63.2 billion yen (a decrease of 1.8 billion yen/2.8% compared with the same period in the previous fiscal year), and operating income was 5.4 billion yen (a decrease of 0.1 billion yen/2.2%).
Domestic shipment and overseas export unit sales of electrically power assisted bicycles both increased, but shipments of automotive engines decreased.

Forecast of consolidated business results

Regarding the anticipated consolidated business results for the entire fiscal year ending December 31, 2015, net sales are expected to be below the initial forecast due to the decrease in unit sales in emerging markets. Conversely, operating income and ordinary income are expected to exceed the initial forecast thanks to solid developed-market businesses. Due to one-off factors such as the recognition of an estimated expected taxation payment in the U.S. due to income distribution adjustment between Japan and the U.S., net income is expected to be below the initial forecast.

The exchange rates for the fourth quarter of the fiscal year are based on the U.S. dollar at 115 yen (no changes from the initial plan, and a depreciation of 1 yen compared with the same period the previous fiscal year), and the euro at 130 yen (no changes from the initial plan, and an appreciation of 13 yen compared with the same period the previous fiscal year). The exchange rates for the entire fiscal year are based on the U.S. dollar at 119 yen (a depreciation of 1 yen compared with the initial forecast, and a depreciation of 13 yen compared with the same period the previous fiscal year), and the euro at 134 yen (a depreciation of 2 yen compared with the initial forecast, and an appreciation of 6 yen compared with the same period the previous fiscal year).

Dividends

Recognizing that shareholders' interests represent one of the Company's highest management priorities, the Company has been striving to meet shareholder expectations by working to maximize its corporate value through a diversity of business operations worldwide. The Company aims to maintain a balance between proactive investment for growth, and returns to shareholders and the repayment of borrowings, and provide dividends that reflect comprehensive consideration of the business environment, including trends in business performance and retained earnings, while maintaining a minimum payout ratio of 20% of consolidated net income.
Regarding dividends for the period, while there are changes in the anticipated consolidated business results for the fiscal year ending December 31, 2015, the forecast dividend for the year will be maintained at the initial forecast of 44 yen per share, and the final dividend will therefore be 22 yen per share.