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48 Yamaha Annual Report 2005
goal, formulated in the YSD50 medium-term business plan, to reduce the balance of actual
interest-bearing debt to zero a full two years ahead of target.
* The balance of actual interest-bearing debt is defined as the sum of borrowings and convertible bonds, less
cash and bank deposits.
Shareholders’ Equity
Shareholders’ equity rose by ¥15.5 billion compared with the previous year-end, to ¥275.2 bil-
lion. This was mainly the result of net income and unrealized gains on holdings in equity-
method affiliates. There was also a reduction in the reserve for land revaluation following the
application of asset-impairment accounting. The shareholders’ equity ratio was 54.4% as of
March 31, 2005. Return on equity (net income divided by shareholders’ equity) equaled 7.4%.
Cash Flows
Net cash provided by operating activities in fiscal 2005 totaled ¥39.6 billion. This figure was
¥18.8 billion lower than in the previous year, primarily due to reduced net income and the
increase in inventories.
Net cash used in investing activities totaled ¥12.9 billion. Compared with the previous year’s
figure of ¥18.8 billion, the reduction in cash outflow of ¥5.9 billion was primarily due to proceeds
from sales of investment securities and property despite higher capital investment levels.
Net cash used in financing activities decreased to ¥8.4 billion. This was mainly due to the
repayment of long- and short-term debt, refunds of resort membership deposits, and an
increase in dividend payments to shareholders. Cash outflow was reduced substantially by
¥41.8 billion from the previous year. Cash used in financing activities in the previous year
totaled ¥50.1 billion, reflecting such factors as the redemption of convertible bonds, repay-
ments of long- and short-term debt and the payment of KiroroTM member deposits due to the
expiration of the deferment period.
Including a net positive effect of ¥1.1 billion due to foreign exchange rate movements and
a net cash decrease due to a decline in the number of subsidiaries excluded from the scope
of consolidation, the year-end balance of cash and cash equivalents totaled ¥50.4 billion, a
year-on-year increase of ¥19.1 billion.
Capital Expenditures and Depreciation
Capital investment levels continued to rise, increasing by 7.3% year-on-year to ¥22.7 billion.
Capital spending in the musical instruments business increased by ¥1.2 billion to ¥11.3 bil-
lion, reflecting investments in molds for new products and the establishment of new Yamaha
music schools. Capital spending in the electronic equipment and metal products business
increased by ¥0.6 billion to ¥5.0 billion, mainly reflecting the renovation of production equip-
ment at Yamaha Kagoshima Semiconductor Inc. Capital spending in the recreation segment
amounted to ¥2.3 billion, representing a year-on-year increase of ¥1.5 billion. This was due
principally to investment in the HaimurubushiTM resort to expand the number of guest rooms.
Depreciation and amortization expense increased by ¥1.4 billion compared with the previous
year to ¥19.0 billion.
Shareholders’ Equity and ROE
(Millions of Yen, %)
275,2007.4
0
(ROE)
ROE Shareholders’ Equity
2001 2002 2003 2004 2005
Capital Investment and Depreciation
(Millions of Yen)
2001 2002 2003 2004 2005
18,958
22,702
Musical Instruments/AV/IT
Electronic Equipment and Metal Products
Other Segments
Depreciation
Capital Investment