Outline of Consolidated Performance for the Third Quarter of FY2008.3* and Revision of the Outlook for FY2008.3 as a Whole

Supplementary Information

Consolidated net sales from the first quarter through the third quarter of the fiscal year (April 1, 2007, to December 31, 2007) rose 3.0% year on year to ¥428.9 billion. This increase reflected the decline in the value of the yen and robust performances in the musical instruments and the others businesses, including golf products and parts. These performances more than offset the decrease in revenues stemming from the decline in the number of consolidated subsidiaries in the electronic equipment and metal products segment and the recreation segment following the sale of Yamaha’s equity interest in those companies in the second half of the fiscal year.

Consolidated operating income rose 32.1%, to ¥35.5 billion, despite declines in profitability in the electronic equipment and metal products segment and the lifestyle-related products segments, owing to improvement in profitability in the recreation segment due to the decline in the number of consolidated subsidiaries, major increases in profitability in the musical instruments segment, and higher profits in the others business. Consolidated recurring profit declined 8.2%, to ¥35.3 billion, because of the sale of a portion of Yamaha’s equity interest in Yamaha Motor Co., Ltd., which led to the exclusion of the latter company from the scope of consolidation under the equity method and a consequent decline in equity in earnings of unconsolidated subsidiaries and affiliates.

Consolidated net income through the third quarter was up a sharp 41.0% year on year to ¥42.2 billion, because of the recognition of extraordinary gains on the sale of shares of associated companies.

Sales on a consolidated basis for the third quarter on a stand-alone basis (October 1, 2007, to December 31, 2007) posted a decline of 2.5% year on year, to ¥148.2 billion owing to the exclusion of certain companies from consolidation from the second half of the fiscal year, but consolidated operating income rose 9.0%, to ¥14.2 billion.

* The year ending March 31, 2008

Sales of acoustic pianos, wind instruments, electronic musical instruments such as digital pianos, and commercial audio equipment increased. Segment sales also benefited from higher music school revenues and the positive effect of yen depreciation, thus resulting in a rise in overall sales compared with the same period of the previous year. Operating income also rose year on year, and various factors, including the effect of trends in foreign currency rates, and the beneficial impact of cost reductions brought a major increase compared with a year earlier.

Although the segment benefited from foreign currency trends, sales of mainstay home theater equipment were weak and revenues from commercial online karaoke equipment declined. As a result, overall sales for the segment declined and operating income posted a slight increase.

Accompanying the sale of 90% of the shares Yamaha held in Yamaha Metanix Corporation, which was a consolidated subsidiary engaged in the electronics metals business, to DOWA Metaltech Co., Ltd., Yamaha Metanix was excluded from the scope of consolidation beginning with the second half of the current fiscal year. In addition, sales of semiconductors decreased because of declining demand for LSI sound chips for mobile phones, thus leading to an overall drop in segment sales. Operating income showed a major decrease because of lower semiconductor sales and lower profit margins.

Overall sales of this segment declined because of a drop in the number of housing starts owing to more stringent inspections for confirmation of construction plans under the revised Building Standards Law and a decline in unit prices due to more intense competition in the market for housing fixtures and equipment. Operating income decreased because of increases in prices of materials and declining margins due to the trend toward lower-priced units.

Yamaha sold the operating assets of four of its recreation facilities (Kiroro, Toba Hotel International, Nemunosato, and Haimurubushi) and all the shares of the companies managing these facilities to Mitsui Fudosan Resort Co., Ltd., and, beginning with the second half of FY2008.3, these companies have been excluded from the scope of consolidation. As a result segment sales declined. Profitwise, as a consequence of the sale of unprofitable facilities, the operating loss has diminished.

Segment sales as a whole rose above those of the same period of the previous year as a result of strong performance of golf products, increased production of magnesium and plastic parts, and robust performance of automotive interior component sales. Operating income rose sharply because of the increase in sales and reduction in manufacturing costs through improvement in production yields and other measures.

Compared with conditions at the time of the previous projection for FY2008.3, issued on October 31, 2007, trends in the operating environment have become significantly less transparent because of deterioration in market conditions. The previous projection (on a consolidated basis) called for net sales of ¥558.0 billion, operating income of ¥33.5 billion, recurring profit of ¥32.0 billion, and net income of ¥38.0 billion. Yamaha’s revised outlook now projects net sales of ¥554.0 billion, operating income of ¥33.5 billion, recurring income of ¥33.0 billion, and net income of ¥39.0 billion.

Note: Figures have been rounded to the nearest ¥0.1 billion.

For further information, please contact

Yamaha Corporation

Corporate Communications Division, Public Relations Group

• TEL. +81-3-5488-6601
• FAX. +81-3-5488-5060