Listed company name: YASKAWA Electric Corporation
http://www.yaskawa.co.jp/en/
President: Koji Toshima
Stock exchange listings: Tokyo, Fukuoka
Stock ticker number: 6506

1. Summary of Results for the First Half of Fiscal Year 2005
    (March 21, 2005 to September 20, 2005)
    (Note: This document was translated from the financial statement submitted to the Tokyo Stock
     Exchange for the period stated above. The figures under one million are rounded off.)

(1) Summary of Consolidated Statements of Income
	(Millions of yen, except raito and per share data)
	6 months ended September 20, 2005	6 months ended September 20, 2004	Change	Year ended March 20, 2005
Net sales	146,101	146,053	0.0%	309,615
Operating income	8,161	7,048	15.8%	17,527
Ordinary income	8,189	7,200	13.7%	17,414
Net income	2,748	2,160	27.2%	1,860
Earnings per share (basic)	11.88	9.34	-	7.80
Earnings per share (diluted)	10.93	8.69	-	7.30

(2) Summary of Consolidated Financial Position
	(Millions of yen, except ratio and per share data)
	6 months ended September 20, 2005	6 months ended September 20, 2004	Year ended March 20, 2005
Total assets	264,849	267,802	254,438
Shareholders' equity	41,120	37,933	38,366
Shareholders' equity ratio (%)	17.1	14.2	15.1
Shareholders' equity per share	182.10	163.96	165.63

(3) Summary of Consolidated Statements of Cash Flows
	(Millions of yen)
	6 months ended September 20, 2005	6 months ended September 20, 2004	Year ended March 20, 2005
Net cash provided by (used in) operating activities	7,850	(5,994)	5,789
Net cash provided by (used in) investing activities	(3,576)	(4,716)	(2,242)
Net cash provided by (used in) financing activities	(6,027)	10,621	(2,823)
Cash and cash equivalents at end of period	16,275	16,982	17,906

(4) Scope of consolidation and application under equity method accounting
	Total consolidated subsidiaries: 62 companies Non-consolidated subsidiaries to which equity method accounting is applied: 3 companies Affiliated companies to which equity method accounting is applied: 18 companies

(5) Changes in scope of consolidation and application under equity method accounting
	Consolidated (new): 0 (eliminated): 0 Affiliated companies (new): 0 (eliminated): 0

2. Projected Consolidated Results for the Fiscal Year Ending March 20, 2006

		(Millions of yen)
		Year ending March 20, 2006
	Net sales	314,000
	Ordinary income	22,000
	Net income	8,000

3. Management Policies

Fundamental Management Policies
YASKAWA Electric Corporation, along with its subsidiaries and affiliated companies, has long held to its policy of committing ourselves to the development of society and the well-being of all people through business achievements. To accomplish these goals, YASKAWA Group follows three principles below.

• giving priority to product quality and developing cutting-edge technology in which we can take price throughout the world
• improving management efficiency and ensuring enough profit to stay competitive
• responding to the market needs and committing ourselves to serving the customers the best we can
  

Taking into consideration the increasing interest in the creation of corporate value, YASKAWA Group's priority is to improve capital efficiency for greater financial returns to our shareholders. In order to do so, we will continue to provide products and services of great value to our customers in view of enhancing customer satisfaction. We will also continue our efforts to improve employee satisfaction so that our employees feel more loyal and proud to work at YASKAWA. We believe that these activities will result in increased corporate value, greater profitability, and a larger financial return on your investment.

Policy on Profit Distribution
Regarding profit distribution, our goal is to secure continuous and stable cash dividends to our shareholders. We base our decision for profit distribution on the integrated consideration of our business performance, the financial conditions, and the business environment.

Policy on Reduction of Share Trading Unit Size
Based on the share prices and liquidity, we decide on our policy on share trading unit size. Our belief is that YASKAWA Electric Corporation currently has sufficient liquidity. In consideration also of our current share price and the additional costs incurred in reducing the share trading unit size, we do not feel that reducing the unit size would create any additional value for the Company or for our shareholders. We will continue to monitor stock market trends and make any decisions for the benefit of our shareholders.

Management Goals
Our business performance is evaluated mainly by the following indicators: the Return-on-Equity (ROE), ordinary income ratio, and Debt-to-Equity (D/E) ratio. YASKAWA Group seeks to maximize earnings on invested shareholders' equity, which benefits all stakeholders including our employees and not to mention our shareholders. We also aim to structure the Company in such a way that it will remain profitable even in the rapidly changing business environments. We achieve this management structure by improving profitability and strengthening our credit rating to facilitate fund-raising.

Business Strategies
YASKAWA Group is currently completing a three-year business plan, Win 21 Plus, which is now in its final year. The plan focuses on obtaining higher results from the structural reforms in four areas of business, management, and finance as well as in corporate organization, worked on earlier in the previous business plan Win 21. We thereby attain efficient business operations and strengthen our competitiveness.

[Targets of Win 21 Plus]
The basic policy of Win 21 Plus is to promote real structural change in the finance and business areas that reflect the post-mechatronics shift and to turn the systematic reforms in management and corporate structure into ones that are truly effective. By reinforcing these reforms through cross-functional activities, the Company will create a new cost model, advance market strategies and innovation, and create a new business model, which are the goals of Win21 Plus. As we attain these goals, we aim to structure the Company in such a way that we can remain profitable even if faced with demand changes greater than 30%.

The basic targets outlined in Win 21 Plus are as follows.

• To double added value productivity
• To increase ordinary income ratio to 10%
• To reduce Debt/Equity ratio to 1.0 or less

The financial targets outlined in Win 21 Plus are as follows.
	Fiscal Year 2005 Target (consolidated)	Fiscal Year 2005 Target (unconsolidated)
Net Sales (million yen)	300,000	160,000
Ordinary Income (million yen)	30,000	16,000
Ordinary income Rate (%)	10.00	10.00
Beginning Employee Count	7,450	2,600

Management Initiatives and Challenges
YASKAWA Group will make sure that timely marketing of semiconductor- and LCD-related products takes advantage of recoveries in these markets, which are expected to have mid- to long-term growth. We will at the same time penetrate into the growing automobile-related market and continue our effort to expand our global market.

In order to establish the Company as a high-earning enterprise, we will focus our marketing efforts on new cost-efficient products and on high-profit markets.

In order to enhance productivity, our efforts are focused on shortening lead-time and advancing cost-reduction measures, including global production. Also, our new robot factory will enable monthly production of 2000 units. These activities will help us improve profitability in a sustainable manner.

In view of expanding business opportunities, we strengthened coordination between the marketing strategies and product development strategies. From the beginning of the second half of this fiscal year, we established new business promotion division to capture the market by enhanced marketing efforts, and to enable timely introduction of strategic new products.

As for our long-term policy, we are accelerating the development and the fostering of new core technologies for the next generation of products to improve our competitiveness and make sustainable growth a certainty for our business. We thereby aim to create brand value, which is dependent upon quality as well as technology.

Governance Policy and Actions
    Basic Premise on Governance
The social and economic conditions surrounding our businesses are ever changing. We aim to respond to these changes with quick decision-making. Legal compliance and corporate ethics are also high priorities. We believe these will help us ensure sound business operations and that the stakeholder value is thereby enhanced. At the same time, we commit ourselves to establishing better relationships with all of our stakeholders, including our shareholders, customers, clients, local communities and employees. The Company will enrich its corporate governance as we strengthen, improve and further develop the system of how our current shareholders' meetings, board of directors, auditors and certified public accountants operate. Furthermore, the Disclosure Committee ensures swift and accurate disclosure of information and makes our management open and transparent.

    Governance Status and Actions
An auditing system is being adopted to oversee the managerial decision-making, the execution thereof and assessment. YASKAWA Electric Corporation also adopts an external director and two external auditors in order to assure compliance. No people from within the Company who are involved in the auditing system nor our external director and auditors are interested parties in either financing or trading relationships with the Company.

In addition to the Board of Directors regularly holding scheduled meetings, special meetings will be held
accordingly to make decisions on important managerial issues and legal issues, and to oversee the business operations.

Shin Nihon is the auditing firm for YASKAWA Electric Corporation. As part of the contract for auditing services, we are required to provide accurate management information. The auditors provide an environment in which an open and impartial point of view can be attained. In any situation where the auditors' judgment is necessary, the Company will consult with the auditors to receive the necessary support.

We also consult with the legal counsel and receive legal advice whenever we find it necessary do so.

In regard to our company activity standards, the Company has enacted the Corporate Charter along with the Corporate Code of Conduct. In order to progress and promote the corporate-wide observance, enlightenment and abiding structure of the YASKAWA Electric Corporate Code of Conduct, the chairman of the board of directors was named chairman of the Corporate Ethics Committee.

During the past first half of this fiscal year, the Board of Directors met a total of five times to make decisions on important managerial issues and legal issues, and to oversee the business operations. On May 10, 2005, we held an analyst presentation as part of our Investor Relations program.

4. Business Performance During the First Half of Fiscal Year 2005

During the first half of fiscal year 2005, the economic conditions of our main markets in Europe, North America, and Asia were all positive. The Japanese economy was also boosted by increased corporate capital expenditures, improvements in employment conditions, and a gain in personal consumption, however some concerns arose over the soaring crude oil prices.

In the midst of this economic environment, YASKAWA Group's mid-term business plan Win 21 Plus, aimed at turning YASKAWA into a highly profitable enterprise is now in its final year. Its target on sales was achieved one year ahead last year, and this year we are strengthening our business competitiveness and establishing a firm corporate structure necessary to achieve high profitability and to enable continued efficient business operations.

Especially since last year the Company has focused on policies targeted at increasing added value and expanding business through market strategy and innovation. We strengthened our sales operations, introduced strategic new products in a timely manner, and focused our promotion efforts in high-profit markets and customers to raise profitability.

As a result, even though the sales remained almost the same compared to the corresponding period last year, to end the period at ¥146,101 million, operating income rose by 15.8% to ¥8,161 million. Ordinary income also rose by 13.7% to ¥8,189 million and net income rose as well by 27.2% to ¥2,748 million.

Results by Business Segment

Motion Control
The Motion Control segment has worked on strengthening sales operations and enforced cost reduction measures by enhancing global production and procurement in order to raise profitability.

The sales of AC servomotors did not recover up to the extent enjoyed in the corresponding period last year as the demand in the semiconductor- and LCD-related market experienced slow recovery. However, the markets for machine tools and metal working machinery were robust, and the sales remained almost the same as the corresponding period last year. The AC Drive market was also comparatively positive.
The overall results for the Motion Control segment, when compared to the corresponding period last year, show sales increasing by 0.3% to ¥61,520 million and operating income decreasing by 7.5% to ¥4,611 million.
This is attributed to factors such as reduced sales of high added-value products in this period.

Robotics Automation
In order to make sure we meet high demand continuing from last year, we strengthened our production system.

We also focused our promotion efforts on core products with an already competitive advantage and large market shares. The sales of robots for arc welding, spot welding and painting continued to be robust in the automobile-related market.

As for the robots for LCD panel transfer, we made sure timely introduction and promotion of a new model designed to handle ever-larger panels. As for the semiconductor-related market, we were in joint projects with our customers to develop robots for semiconductor production equipments for clean and vacuum environments, and also developed relationship with new customers.

As a result, sales in Robotics Automation rose by 7.6% to ¥54,342 million compared to the corresponding period last year, and operating income dramatically increased by 59.7% to ¥4,408 million.

System Engineering
The System Engineering segment progressed reforms in the profit structure by focusing especially on its core businesses and competitive businesses areas. Although the business of automation systems for wastewater process equipments was affected by intense competition, we took in the demand for steel plant renovation, which emerged as the demand for steel materials grew. We also promoted new system instruments such as high-voltage AC Drives and control systems for elevators to develop new markets.

As a result, sales in System Engineering decreased by 9.9% to ¥14,413 million compared to the corresponding period last year, however the operating loss decreased by ¥298 million to ¥1,860 million.

Information Technologies
The Information Technologies segment was affected by the worsening price conditions for its products and services, and reduced sales in high added-value businesses in information services. The computer peripherals market also showed a decrease in demand for floppy disk drives.

This led to sales in this segment decreasing by 5.7% to ¥11,025 million and operating income decreasing by 67.8% to ¥197 million compared to the corresponding period last year.

Other
The Other segment includes businesses such as logistic services and temporary staffing services.
Sales in this segment decreased by 26.2% to ¥4,799 million, however operating income increased by 4.4% to ¥822 million compared to the corresponding period last year.

5. Balance Sheet Highlights

Assets
At the end of the first half of this fiscal year, current assets decreased by ¥20,153 million to ¥165,716 million compared to the corresponding date of last year, while trade notes and account receivables decreased by ¥14,973 million.
As for fixed assets, intangible fixed assets decreased by ¥4,908 million, and investments and other assets increased by ¥3,715 million. Total fixed assets decreased by ¥800 million to ¥81,133 million.
Total assets therefore decreased by ¥20,953 million to end the first half of this fiscal year at ¥246,849 million.

Liabilities
Current liabilities decreased by ¥27,065 million o ¥127,962 million due to the arrival of redemption of bond worth ¥15,000 million. Trade notes and account payables of ¥4,350 million as well as short-term bank loans of ¥3,201 million were paid.
Regarding long-term liabilities, long-term debt decreased by ¥1,091 million and accrued retirement benefits increased by ¥3,271 million. As a result, total long-term liabilities at the end of the first half of this fiscal year increased by ¥1,795 million to ¥72,778 million.
Total liabilities at the end of the first half of this fiscal year therefore decreased by ¥25,269 million to ¥200,741 million compared to the corresponding date last year.

Equity
Capital surplus decreased by ¥2,988 million and retained earnings increased by ¥5,369 million. As a result, shareholder's equity at the end of the first half of this fiscal year increased by ¥4,186 million compared to the corresponding date last year to ¥42,120 million.

6. Cash Flow

Cash flows from operating activities ended at a positive ¥7,850 million. Even though there were a decrease in trade payables and an increase in the payment of income tax, more trade receivables were collected.
Cash flows from investing activities ended at a negative ¥3,576 million due to purchases of tangible fixed assets.
Free cash flow, which is a sum of cash flows from operating and investing activities, was at a positive ¥4,274 million.
Cash flows from financing activities ended at a negative ¥6,027 million as repayments were made for interest-incurring debt.
As a result of these activities, the balance of cash and cash equivalents at the end of the first half of this fiscal year was at ¥16,275 million, down by ¥707 million compared to the corresponding date of last year.

Cash Flow Indicator Trends

Cash Flow Indicator Trends for the YASKAWA Group are shown below.
	Fiscal Year 2003		Fiscal Year 2004		Fiscal Year 2005
	End of first half	End of full year	End of first half	End of full year	End of first half
Shareholders' equity ratio (%)	13.4	14.7	14.2	15.1	17.1
Shareholders' equity ratio based on market value (%)	75.0	75.8	48.6	56.5	81.0
Repayment of debt (years)	6.8	4.3	-	13.4	9.2
Interest coverage ratio (times)	7.8	12.2	-	4.9	12.8

7. Outlook for Fiscal Year 2005

Although the IT-related sector is almost through with inventory adjustments, the forecast as of now is clouded by uncertainties remaining over the economic prospects caused by the prolonged high prices of crude oil, the concern for the economic slowdown in the U.S., and the rising material prices.

Forecasted business results for the fiscal year 2005 are shown below.
Fiscal Year 2005 Consolidated		(millions of yen)
	Fiscal Year 2005 (forecast)	Year-on-year Change
Net Sales	314,000	4,385
Operating Income	22,200	4,673
Ordinary income	22,200	4,586
Net Income	8,000	6,140

Fiscal Year 2005 Unconsolidated		(millions of yen)
	Fiscal Year 2005 (forecast)	Year-on-year Change
Net Sales	192,000	619
Operating Income	8,500	4,723
Ordinary income	12,000	3,967
Net Income	3,500	7,482

Warning
The information within this document is made as of the date of writing. Any forward-looking statements are made according to the assumptions of management and are subject to change as a result of risks and uncertainties. YASKAWA Electric undertakes no obligation to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise.

[Appendix]

1.First Half Consolidated Balance Sheet (summary)
2.First Half Consolidated Statements of Income (summary)
3.First Half Consolidated Statements of Cash Flows (summary)
4.Segment Information