The Yokohama Rubber Co., Ltd., posted a 10.7% increase in operating income, to 4.8 billion yen, in the interim fiscal period ended September 30. That increase is over the first half of the previous year, and it benefited from a 6.1% increase in net sales, to 201.3 billion yen. Growth in unit sales of tires and progress in reducing costs more than offset increases in raw-material costs. Leading the sales growth were gains in Yokohama's tire operations in North America and in Europe. The company also registered growth in sales of tires in Japan. A decline in income taxes was the chief reason for a 12.6 billion yen increase in net income, to 13.4 billion yen.

By business segment, operating income increased 5.7% in Yokohama's Tire Group, to 3.7 billion yen, on a 7.6% increase in sales, to 145.7 billion yen, and increased 36.3% in the Multiple Business Group (diversified products), to 1.1 billion yen, on a 2.3% increase in sales, to 55.6 billion yen. The sales growth in diversified products occurred as gains in conveyor belts, high-pressure hoses, and sealants more than offset a decline in golf equipment.

Management projects that operating income in the year to March 31, 2006, will increase 9.8% over the previous year, to 23 billion yen, on an increase of 6.5% in net sales, to 447 billion yen. Their projections call for net income to increase 85.5%, to 21 billion yen. Management has proposed paying a year-end dividend of 6 yen. That is in addition to the 4 yen interim dividend announced today, and it would result in a 2 yen increase in the annual dividend.

Notes:
(1) Yokohama Rubber has prepared this information in accordance with accounting principles generally accepted in Japan.
(2) The figures presented for sales under Results by Group are net of intersegment transactions; the figures presented for operating income are inclusive of those transactions.
(3) Under Results by Region, North America refers to the United States and Canada, and Other Regions refers to Oceania, Europe, and Asia.