Outline of Consolidated Performance for FY2008.3 and Outlook for FY2009.3

Supplementary Information

Consolidated net sales of Yamaha Corporation (Yamaha) in FY2008.3 (April 1, 2007, to March 31, 2008) decreased 0.3%, to ¥548.8 billion. The principal causes of the decrease included the reduction in the number of companies within the scope of consolidation as a result of the sale of certain subsidiaries, which led to substantially lower sales in the electronic equipment and metal products segment and the recreation segment. In addition, lower sales were reported in the AV/IT products segment and the lifestyle-related products segment. However, sales in Yamaha’s core musical instruments segment and others segment including golf products, automobile components, and other areas were robust.

Consolidated operating income expanded 18.6%, to ¥32.8 billion. Despite declines in operating income in the AV/IT products, electronic equipment and metal products, and lifestyle-related products segments, increases were posted in operating income in the musical instruments and others segments, and the recreation business reported relative improvement in its performance with a smaller operating loss. Recurring profit declined 23.6%, to ¥32.6 billion. This was a result of the exclusion of affiliate Yamaha Motor Co., Ltd., from the scope of consolidation under the equity method and a resulting decline in equity in earnings, following the sale of a portion of Yamaha’s shares in that company, and a resulting decline in equity in earnings.

Consolidated net income increased 42.0%, to ¥39.6 billion. This was due to the reporting of extraordinary gains from the sale of stock of the previously mentioned affiliated company.

Please note that, compared with the outlook for FY2008.3, announced on February 6 at the time of the release of results for the third quarter, net sales were ¥5.2 billion below target, in part because of movements in foreign currency exchange rates. Profitwise, operating income was ¥0.7 billion lower than the forecast level, and recurring profit was ¥0.4 billion short of the target. However, net income exceeded the forecast level by ¥0.6 billion.

Although sales in Japan and North America declined, major increases were recorded in European markets and emerging economies, including China. By product, sales of pianos were firm in Europe, China, and other Asian markets. Among electronic musical instruments, sales of digital pianos and other products expanded in overseas markets, while sales of professional audio equipment also increased, principally in overseas markets. In addition, the performance of wind instruments as well as string and percussion instruments was generally smooth, and revenues from music schools and English-language schools held strong. Sales of the content distribution business declined because of the shrinkage of the polyphonic ringtone melody distribution market. Profitwise, operating income rose because of an improvement in margins on sales, including the positive impact of trends in foreign currency exchange rates.

In the audio business, sales of front surround speaker products, including digital sound projectors, expanded, but sales of AV receivers remained level with the previous fiscal year because of more-intense competition. In addition, sales of commercial online karaoke equipment declined. Sales of the segment as a whole showed a slight decline, and operating income declined, despite the favorable effect of trends in foreign currency exchange rates.

In the semiconductor business, sales of digital amplifier LSIs expanded, but overall sales declined because of lower demand for LSI sound chips for mobile phones. 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., effective November 30, 2007, Yamaha Metanix was excluded from the scope of consolidation beginning with the second half of the fiscal year under review. This resulted in a substantial decline in sales of the metal products business and a decline in sales of this segment as a whole. Operating income decreased because of deterioration in profit margins in the semiconductor business.

Sales of system kitchens held strong, but unit prices of system baths declined because of more-intense competition, thus leading to a slight overall decrease in sales of this segment. Operating income dropped because of the decline in margins accompanying the rise in prices of raw materials and the trend toward lower-priced units.

Effective October 1, 2007, 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 the fiscal year under review, these companies were excluded from the scope of consolidation. As a result, segment sales declined, but, due to the decrease in unprofitable facilities, the operating loss has diminished.

In the golf products business, strong increases were reported in both domestic sales and exports, leading to an overall increase in sales. In the metallic mold and components business, sales of magnesium parts and plastic parts as well as automobile interior wood components increased, contributing to an overall rise in segment sales for the fiscal year. Along with the increase in sales, operating income rose sharply.

Sales of Yamaha on a non-consolidated basis declined 2.3%, to ¥315.6 billion, in part because of the shifting of certain businesses to subsidiaries. Profitwise, operating income slipped 1.7%, to ¥12.3 billion, recurring profit was down 9.7%, to ¥17.9 billion, but net income expanded 448.4%, to ¥62.0 billion, as a result of extraordinary income from the sale of a portion of the shares held in Yamaha Motor.

FY2009.3 will be the second year under Yamaha’s medium-term business plan “YGP2010 (Yamaha Growth Plan 2010),” and initiatives are under way to show improvement in results and to strengthen Yamaha’s business base.

By business segment, in the musical instruments segment, sales and income are expected to rise, despite the impact of the sharp decline in the value of the U.S. dollar, as a result of a number of positive factors. These include the realignment of manufacturing bases, and implementation of measures to lower manufacturing costs, the strengthening of sales capabilities in China, Russia, and other growth markets, and the expansion of sales of high-value-added products in Japan and overseas.

In the AV/IT products business, declines are forecast in sales and income, despite the upgrading of the AV receiver product lineup and expansion in sales of front surround speakers, as a result of the weakening of the U.S. dollar and more intense competition. In the electronics devices segment (As a result of the sale of Yamaha’s electronics metal products business, the name of the former electronic equipment and metal products segment has been changed to the electronic devices segment), declines are forecast in sales and income as a result of the effects of the sale of the electronic metal products business, despite the rise of sales and income in the semiconductor business.

In the lifestyle-related products business, Yamaha is forecasting increases in sales and income as a result of the upgrading of its product lineup in this area and the development of additional business through new sales channels, principally in the field of home remodeling. In the others segment, Yamaha is forecasting increases in income from metallic molds and components as a result of reductions in manufacturing costs and other factors. Please note that following the sale of four of Yamaha’s recreation facilities, the remainder of the recreation business has been included in the others segment.

As a consequence of the factors mentioned, Yamaha is forecasting consolidated net sales of ¥540.0 billion, operating income of ¥35.0 billion, recurring profit of ¥32.0 billion, and net income of ¥20.5 billion.

Regarding dividends for FY2008.3, as part of Yamaha’s decision to enhance the return to shareholders accompanying the sale of a portion of its holdings of Yamaha Motor shares, Yamaha is scheduled to pay a special dividend of ¥20 per share for the full fiscal year in addition to the regular dividend of ¥30 per share, thus bringing the total dividend applicable to FY2008.3 to ¥50 per share (comprising an interim dividend of ¥25 per share and a dividend of ¥25 per share for the second half, with both figures including the special dividend of ¥10 per share).

For FY2009.3, Yamaha plans to pay a special dividend of ¥20 per share for the full fiscal year in addition to a regular dividend that will be ¥5 higher than in FY2008.3, thus bringing the total dividend applicable to FY2009.3 to ¥55 per share (comprising an interim dividend of ¥27.5 and a dividend of ¥27.5 per share for the second half, with both figures including the special dividend of ¥10 per share).

At the meeting today of the Board of Directors of Yamaha Corporation, it was decided that, as part of the policy to enhance the return to shareholders accompanying the sale of a portion of its holdings of Yamaha Motor shares, Yamaha will conduct an acquisition of its own shares. All of the shares acquired will be cancelled. The details of the share acquisition are as follows.

• Class of shares to be purchased: Yamaha’s common shares
• Total number of shares to be acquired: 10 million (upper limit)
• Total amount of shares to be acquired: ¥18.0 billion (upper limit)
• Period for the share acquisition: May 1, 2008, to September 30, 2008

Sales and profit figures in the text have, in principle, been rounded up to the nearest 0.1 billion yen. Figures in parentheses are, in principle, percentage changes from the same period of the previous year.

For further information, please contact

Yamaha Corporation

Corporate Communications Division, Public Relations Group

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