Report of Earnings and Financial Statements for theNine Months Ended December 31, 2016 (Consolidated)(Prepared pursuant to Japanese GAAP)
January 31, 2017
Listed company’s name:

Kawasaki Heavy Industries, Ltd.

Listed on:
Stock code:
URL:
Representative:
Contact:
Tel:

1st sections of the TSE, and NSE
7012
http://www.khi.co.jp/
Yoshinori Kanehana, President
Hajime Asano, Senior Manager, Accounting Department+81 3-3435-2130

Scheduled dates:
Submission of quarterly securities filing:
Commencement of dividend payments:

February 9, 2017-

Supplementary materials to quarterly earnings:
Quarterly earnings presentation:

Available
Conducted (for institutional investors and analysts)

1. Consolidated Financial Results for the Nine Months ended December 31, 2016
(April 1, 2016 – December 31, 2016)(Amounts in millions of yen rounded down to the nearest million yen)

(1) Operating Results
Net sales(Percentage figures represent changes versus the year-ago period)
Net income attributable
Operating income
Recurring profit
to owners of parent
million yen%
million yen%
million yen%

million yen%
Nine Months Ended
1,043,052(2.1)
22,875(65.7)
23,008 (65.1)
17,974
December 31, 2016
Nine Months Ended
1,065,556
4.8
66,838
10.7
66,046
1.9
29,574
December 31, 2015
Note: Comprehensive income: Nine Months Ended December 31, 2016: (227) million yen -%Nine Months Ended December 31, 2015: 31,934 million yen (49.2%)
Earnings per shareyen
Nine Months Ended
December 31, 2016
Nine Months Ended
December 31, 2015

Earnings per share– diluted
yen

10.75

-

17.70

-

(2) Financial Position
Total assets

Net assets

million yen

million yen%

December 31, 2016

1,798,417

426,077

22.9

March 31, 2016

1,620,458

445,625

26.6

Note: Shareholders’ equity:

December 31, 2016 : 412,553 million yen
March 31, 2016
: 431,368 million yen

1Equity ratio(39.2)(34.1)

2. Dividends

Record date or term

End of firstquarteryen

End of second
quarteryen

Dividend per share
End of third
End of fiscal
quarter
year
yen
yen

Year ended
5.00
March 31, 2016
Year ending
4.00
March 31, 2017
Year ending March
31, 2017 (forecast)
Note: Revisions to the most recently announced dividend forecast: None

Full year
yen

7.00

12.00

2.00

6.00

3. Forecast of Consolidated Earnings for the Year Ending March 31, 2017
(April 1, 2016 – March 31, 2017)
Net sales

Full year

million yen%

1,520,000(1.3)(Percentage figures represent changes versus the year-ago period)
Net income attributable Earnings per
Operating income
Recurring profit
share
to owners of parent
million yen%
million yen%
million yen%
yen
40,000(58.3)

33,000(64.6)

21,000(54.3)

Note: Revisions to the most recently announced earnings forecast: Yes

Notes
1) Changes affecting the status of material subsidiaries (scope of consolidation): None2) Accounting procedures specific to preparation of quarterly consolidated financial statements: Yes*For further details, see “2. Summary Information (Notes) (2)Accounting procedures specific topreparation of quarterly consolidated financial statements” on page 10 in the Accompanying
Materials.
3) Changes in accounting policies, changes in accounting estimates, and correction of errors(1) Changes in accounting policies in accord with revisions to accounting standards: None
(2) Changes in accounting policies other than (1): None
(3) Changes in accounting estimates: None
(4) Correction of errors: None

4) Number of shares issued and outstanding (common stock)(1) Number of shares issued as of period-end (including treasury stock)
December 31, 2016:
1,670,805,320 shares
March 31, 2016:
1,670,805,320 shares(2) Number of shares held in treasury as of period-end
December 31, 2016:
253,615 shares
March 31, 2016:
228,992 shares(3) Average number of shares during respective periods
Nine months ended December 31, 2016:
1,670,565,323 shares
Nine months ended December 31, 2015:
1,670,596,710 shares

Quarterly review status
This report is exempt from the quarterly review of accounts conducted in accord with Japan’s Financial

2

12.57

Instruments and Exchange Act. As of this report’s publication, the quarterly review of the quarterly
financial results had not been completed.
Appropriate Use of Financial Forecasts and Other Important Matters
Forward-Looking Statements
These materials contain various forward-looking statements and other forecasts regarding performanceand other matters. Such statements are based on information available at the time of preparation, and do
not mean that the Company promises to achieve these figures. Actual results may differ from thoseexpressed or implied by forward-looking statements due to a range of factors. For assumptions underlying
earnings forecasts and other information regarding the use of such forecasts, refer to “1. Qualitative
Information and Financial Statements (3) Consolidated earnings outlook” on page 8 in the Accompanying
Materials.
How to Obtain Supplementary Briefing Material on Quarterly Financial Results and Details of theQuarterly Financial Results Briefing
The Company plans to conduct a briefing on conference call for institutional investors and analysts on
Tuesday January 31, 2017, and to post the briefing material on quarterly financial results to be used forthe briefing on TDnet and the Company’s website simultaneously with the announcement of financial
results.

3

Accompanying Materials – Contents
1. Qualitative Information and Financial Statements

5(1) Consolidated operating results

5(2) Consolidated financial position

8(3) Consolidated earnings outlook

8

2. Summary Information (Notes)

10(1) Changes affecting the status of material subsidiaries (scope of consolidation)

10(2) Accounting procedures specific to preparation of quarterly consolidated financial statements

10(3) Changes in accounting policies, changes in accounting estimates, and correction of errors

10(4) Additional information

10

3. Consolidated Financial Statements

11(1) Consolidated balance sheets

11(2) Consolidated statements of income and comprehensive income

13(Consolidated statements of income for the nine months ended December 31, 2016)13(Consolidated statements of comprehensive income for the nine months ended December 31,

14

2016)
(3) Notes on financial statements

15(Notes on the going-concern assumption)

15(Notes on significant changes in the amount of shareholders’ equity)

15(Related to Consolidated Statements of Income)15(Segment information and others)

17

4. Supplementary Information

19(1) Consolidated cash flow statements (condensed)

19(2) Orders and sales (consolidated)

19(3) Net sales by geographic area (consolidated)

21(4) Supplementary information on earnings forecasts for the fiscal year ending March 31, 2017224

1. Qualitative Information and Financial Statements(1) Consolidated operating results
In the first nine months of the fiscal year ending March 31, 2017, the global economy continues togrow modestly in real terms, with growth centered on the U.S., where the economy remains strong.
On the other hand, the global economy is relatively lacking in vigor due to languishing crude oil
prices, and the economic slowdown in emerging countries and resource-rich countries, especiallyChina. In addition, future prospects for the real economy have become increasingly uncertain

in

conjunction with the international market turmoil caused by Brexit as well as concerns about the
expansion of protectionist policies, and other factors. Going forward, these risks with the potential todrag down the global economy must continue to be watched.
The Japanese economy remains at a standstill due to the deterioration in the external demandenvironment, lackluster personal consumption, and other factors. Going forward, the economy isexpected to grow modestly overall due to steady improvement in the income and employment
environments, but there is a possibility that economic policies enacted by countries around the world,
especially the U.S., along with other factors, could result in both rapid and significant fluctuations inforeign exchange rates. As a result, foreign exchange rates must continue to be watched carefully.
Amid such an operating environment, the Group’s orders received in the first nine months of the
fiscal year ending March 31, 2017, declined versus the same period of the previous fiscal year,
mainly in the Ship & Offshore Structure and Plant & Infrastructure segments. Net sales during theperiod were on par with the same period of the previous fiscal year overall, as the increase in sales in
the Plant & Infrastructure segment was offset by the assignment of the construction machinery
business during the same period of the previous fiscal year, along with other factors. There was a
decline in operating income, recurring profit, and net income attributable to owners of parent due toa deterioration in the Ship & Offshore Structure segment and a decline in profits in the Aerospacesegment and other segments.
As a result, the Group’s consolidated orders received declined ¥190.0 billion versus the same
period of the previous fiscal year to ¥885.3 billion, consolidated sales were on par with the same
period of the previous fiscal year at ¥1,043.0 billion, operating income declined ¥43.9 billion year on
year to ¥22.8 billion, recurring profit dropped ¥43.0 billion to ¥23.0 billion, while net income
attributable to owners of parent declined ¥11.6 billion to ¥17.9 billion.

5

Consolidated operating performance for the nine months ended December 31, 2016, issummarized by segment below.
Segment Information
Segment net sales, operating income, and orders received (billion yen)
Nine months ended December 31

2015 (A)

Orders received

Change (B – A)

2016 (B)

Nine months ended
December 31

Net

OperatingNet

OperatingNet

Operating

2015

2016

ChangeSales

incomesales

incomesales

income(A)(B)(B – A)

Ship & Offshore
Structure

72.9

(2.5)

74.9

(13.8)

1.9(11.2)

92.7

28.7(63.9)

Rolling Stock

104.5

7.7

94.9

1.6

(9.6)

(6.1)

87.4

84.7

(2.7)

Aerospace

250.5

35.6

238.1

22.7

(12.4)(12.9)

184.9

148.8

(36.1)

159.1

11.1

165.2

5.9

6.1

(5.2)

212.7

192.3

(20.3)

83.2

3.6

114.2

2.3

31.0

(1.2)

100.2

60.4

(39.8)

218.8

4.3

198.7

(2.0)

(20.1)

(6.4)

218.8

198.7

(20.1)

Machinery

94.0

5.3

103.5

6.8

9.5

1.4

95.0

115.7

20.7

Other

82.0

2.1

53.2

2.3

(28.8)

0.1

83.2

55.7

(27.5)

-

(0.6)

-

(3.1)

-

(2.4)

-

-

-

1,065.5

66.8

1,043.0

22.8(22.5)(43.9)

1,075.3

885.3(190.0)Gas Turbine &Machinery
Plant &
Infrastructure
Motorcycle &EnginePrecision

Adjustments
Total

Notes: 1. Net sales include only sales to external customers.
2. The Motorcycle & Engine segment’s orders received are equal to its net sales as production is based mainlyon estimated demand.

Ship & Offshore Structure
Consolidated orders received fell ¥63.9 billion year on year to ¥28.7 billion, due to the downturnin demand for newly-built ships.
Consolidated net sales were ¥74.9 billion, on par with the same period of the previous fiscal year.
Consolidated operating income declined ¥11.2 billion year on year to an operating loss of ¥13.8
billion, attributable to an increase in amount of allowance for doubtful accounts on trade receivablesfrom the joint venture in Brazil, an increase in provision for losses on construction contracts
resulting from the appreciation of the yen, an increase in costs, and other factors.

6

Rolling Stock
Consolidated orders received were on par with the same period of the previous fiscal year at ¥84.7
billion, as despite the decline for overseas markets, orders for linear-motor subway cars werereceived from the Tokyo Metropolitan Bureau of Transportation, along with other factors.
Consolidated net sales declined ¥9.6 billion year on year to ¥94.9 billion, due to a decline in sales
to Asia including Taiwan and Singapore, and other factors.
Consolidated operating income declined ¥6.1 billion year on year to ¥1.6 billion, due to the dropin sales, the decline in highly-profitable projects, an increase in costs, and other factors.

Aerospace
Consolidated orders received fell ¥36.1 billion year on year to ¥148.8 billion, due to the impact of
the yen’s appreciation, the decline in component parts for commercial aircraft, and other factors.
Consolidated net sales declined ¥12.4 billion year on year to ¥238.1 billion, due to the effect of
the appreciation of the yen and other factors, despite the increase in sales to the Ministry of Defense.
Consolidated operating income decreased ¥12.9 billion year on year to ¥22.7 billion, due to thedecline in profitability of component parts for commercial aircraft, and other factors.

Gas Turbine & Machinery
Consolidated orders received fell ¥20.3 billion year on year to ¥192.3 billion, due to the fact thatconcentrated orders were won for a commercial aircraft jet engine component part project weparticipated in during the same period of the previous year.
Consolidated net sales remained on par with the same period of the previous fiscal year at ¥165.2
billion, due to the increase in sales of commercial aircraft jet engine component parts, an increase inwork on gas engine power generation systems, and other factors, despite the impact of the yen’s
appreciation.
Consolidated operating income fell ¥5.2 billion year over year to ¥5.9 billion, as a result of anincrease in depreciation of development costs for a new project related to commercial aircraft jetengine component parts, and other factors.

Plant & Infrastructure
Consolidated orders received declined ¥39.8 billion year on year to ¥60.4 billion, as large orders,
including municipal refuse incineration plants for the domestic market, were received in the same
period of the previous fiscal year.
Consolidated net sales increased ¥31.0 billion year on year to ¥114.2 billion, due to an increase inconstruction work volume on a chemical plant for an overseas market.
Consolidated operating income decreased ¥1.2 billion year on year to ¥2.3 billion, due to thedecline in profitability from increase of costs, despite of revenue growth.

7

Motorcycle & Engine
Consolidated net sales declined ¥20.1 billion year on year to ¥198.7 billion, due to the impact of
the yen’s appreciation, the decline in general-purpose gasoline engines and motorcycles to emerging
countries, and other factors, despite the increase in sales of motorcycles and automobiles fordeveloped countries.
Consolidated operating income decreased ¥6.4 billion year on year to ¥2.0 billion operating loss,
due to the drop in profit resulting from the decline in sales.

Precision Machinery
Consolidated orders received increased ¥20.7 billion year on year to ¥115.7 billion, due to theincrease in hydraulic components for construction machinery and various industrial robots, alongwith other factors.
Consolidated net sales increased ¥9.5 billion year on year to ¥103.5 billion, due to the increase in
hydraulic components for construction machinery and various industrial robots, along with otherfactors.
Consolidated operating income increased ¥1.4 billion year on year to ¥6.8 billion, due to theincrease in sales.

Other Operations
Consolidated net sales fell ¥28.8 billion year on year to ¥53.2 billion, due to the assignment of theconstruction machinery business in the same period of the previous fiscal year.
Consolidated operating income was ¥2.3 billion yen on par with the same period of the previous
year.

(2) Consolidated financial position
At December 31, 2016, consolidated assets totaled ¥1,798.4 billion, an increase of ¥177.9 billion
from March 31, 2016. This was attributable to the increase in trade receivables in conjunction withthe posting of sales, the increase in inventories stemming from progress toward completion of
construction jobs, as well as capital expenditure that added to property, plant and equipment, alongwith other factors. Liabilities totaled ¥1,372.3 billion, a ¥197.5 billion increase versus March 31,
2016, due to the increase in short-term debt and other interest-bearing debt, along with other factors.
Interest-bearing debt increased ¥224.9 billion versus March 31, 2016, to ¥623.4 billion. Net assets
fell ¥19.5 billion from March 31, 2016, to ¥426.0 billion, due to a decline in foreign currencytranslation adjustment and other factors.

(3) Consolidated earnings outlook
The business environment surrounding the Group has become increasingly uncertain, as despite
the fact that the U.S. has maintained its firm economic recovery, there is growing uncertainty aboutprotectionist trade and foreign policy under the new U.S. president as well as other factors including
8

economic slowdowns in emerging countries and crude oil price movements. Given this kind ofenvironment, the Company has decided to spend more time analyzing the future outlook.
Amid this business environment, the Company has upwardly revised its consolidated net sales
forecast for the fiscal year ending March 31, 2017, by ¥10.0 billion yen (from the previous forecast
announced on October 28, 2016) to ¥1,520.0 billion. This revision is due to an expectation forincreases in sales primarily in the Plant & Infrastructure and Precision Machinery segments.
The consolidated operating income forecast has been upwardly revised by ¥6.0 billion to ¥40.0
billion, due to the expected improvement resulting from the revision of the assumed foreignexchange rate, despite the expectation for some deterioration in the Ship & Offshore Structure
segment’s profits due to a revision in costs related to the offshore work vessel destined for Norway,some deterioration in the Plant & Infrastructure segment’s profits due to progress on a large projectand cost revisions, as well as other factors. Likewise, the forecast for recurring profit has been raisedto ¥33.0 billion, while the forecast for net income attributable to owners of parent has been increasedto ¥21.0 billion.
The forecast for consolidated orders received has been revised downward by ¥70.0 billion fromthe previously announced forecast to ¥1,320.0 billion, due to sluggish demand for newly-built ships
in the Ship & Offshore Structure segment, revisions to certain projects in the Plant & Infrastructure
segment, and other factors. In addition, the Company is now forecasting ROIC of 4.7% and ROE of
4.9%.
The Company's earnings forecasts assume exchange rates of ¥110 to the US dollar and ¥120 to theeuro.

Note regarding consolidated earnings outlook
The above earnings outlook is based on information available at the time of preparation, andincludes risks and uncertainties. We therefore discourage making investment decisions depending
solely on this outlook. Actual earnings may differ materially from this outlook, due to a variety ofimportant factors stemming from changes the external environment and/or the Company’s internal
environment. Important factors that impact actual operating performance include, but are not limited
to, the economic situation surrounding the Company’s scope of business, foreign exchange rates, inparticular the yen/dollar exchange rate, tax codes and other regulatory system-related issues.

92. Summary Information (Notes)(1) Changes affecting the status of material subsidiaries (scope of consolidation)
Not applicable.

(2) Accounting procedures specific to preparation of quarterly consolidated financial statements(Calculation of tax expense)
The Company calculates tax expense by rationally estimating its effective tax rate after
application of deferred-tax accounting to pretax net income for the fiscal year, which includes thesecond quarter under review, and multiplying quarterly pretax net income by said estimated effective
tax rate. If unable to use the estimated effective tax rate, the Company calculates tax expense bymultiplying the statutory effective tax rate by quarterly pretax net income adjusted to reflect material
differences other than temporary differences.
Income taxes are reported inclusive of income tax adjustments.

(3) Changes in accounting policies, changes in accounting estimates, and correction of errors
Not applicable.

(4) Additional information(Application of the Implementation Guidance on Recoverability of Deferred Tax Assets)
The Implementation Guidance on Recoverability of Deferred Tax Assets (ASBJ Guidance No. 26,
March 28, 2016) has been applied starting with the first quarter ended December 31, 2016.

10

3. Consolidated Financial Statements(1) Consolidated balance sheets
Million yen
As of
As of
March 31, 2016
December 31, 2016
AssetsCurrent assets
Cash on hand and in banks
Trade receivables
Merchandise and finished products
Work in process
Raw materials and supplies
Other
Allowance for doubtful receivables

42,157
381,339
57,092324,915
110,956
104,019(2,578)1,017,903

53,451
496,756
68,399360,858
109,966
109,273(2,527)
1,196,179

436,557
15,475

450,686
14,649160,423(9,902)
150,521602,554
1,620,458

152,199(15,297)
136,902602,238
1,798,417

Liabilities
Current liabilities
Trade payables
Electronically recorded obligations-operating
Short-term debt
Income taxes payable
Accrued bonuses
Provision for product warranties
Provision for losses on construction contracts
Advances from customers
Other
Total current liabilities

233,979
87,798105,891
10,88925,13812,642
7,926
170,454
112,990
767,711217,166
99,141
165,419
6,107
9,812
10,705
12,879162,605
267,954951,792

Long-term liabilities
Bonds payable
Long-term debt
Provision for environmental measures
Net defined benefit liability
Other
Total long-term liabilities
Total liabilities

120,000
160,809
1,693
90,78933,828407,120
1,174,832

130,000
166,213
1,169
89,82633,338420,548
1,372,340

Total current assets
Fixed assets
Net property, plant and equipment
Intangible assets
Investments and other assets
Other
Allowance for doubtful receivables
Total investments and other assets
Total fixed assets
Total assets

11

Net assets
Shareholders’ equity
Common stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity

104,484
54,394
279,627(86)
438,419

104,484
54,393
279,217(94)
438,001

Accumulated other comprehensive income
Net unrealized gains (losses) on securities
Deferred gains (losses) on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

2,705
692
8,990
(19,439)(7,051)
14,257445,625
1,620,458

3,132(4,940)(7,197)(16,443)(25,448)
13,523426,077
1,798,417

12

(2) Consolidated statements of income and comprehensive income
Consolidated statements of income
Million yen
Nine months ended
December 31, 2015
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Salaries and benefits
R&D expenses
Other
Total selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using equity method
Gain on sale of fixed assets
Other
Total non-operating income
Non-operating expenses
Interest expense
Foreign exchange loss, net
Other
Total non-operating expenses
Recurring profit
Extraordinary profits
Gain on sale of fixed assets
Gain on transfer of businessTotal extraordinary profits
Extraordinary losses
Losses on Overseas BusinessTotal extraordinary losses
Income before income taxes
Income taxes
Net income
Net income attributable to non-controlling interests
Net income attributable to owners of parent

13

Nine months ended
December 31, 2016

1,065,556
861,785
203,771

1,043,052
877,767
165,285

38,917
28,776
69,238
136,932
66,83837,65930,86073,889142,40922,875523274(*1)2,124(*2)1,832
4,670
9,425

632
231
4,820
(*4)738
3,220
9,643

2,756
5,261
2,198
10,21766,046

2,187
1,803
5,519
9,510
23,008(*3) 901
901(*5)2,202
2,202(*1)19,298
19,29847,64916,76630,882
1,307
29,57425,2106,078
19,132
1,158
17,974

Consolidated statements of comprehensive income
Million yen
Nine months ended
December 31, 2015
Net income
Other comprehensive income
Net unrealized gains (losses) on securities
Deferred gains (losses) on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Share of other comprehensive income of entities accounted forusing equity method
Total other comprehensive income
Comprehensive Income attributable to:(details)
Owners of parent
Non-controlling interests

14

Nine months ended
December 31, 2016

30,882

19,132(341)
2,041(5,186)
7,219

449(5,601)(4,093)
3,008(2,681)(13,123)

1,052
31,934(19,360)(227)

31,282
652

(422)
195

(3) Notes on financial statements

Notes on the going-concern assumption
Not applicable.

Notes on significant changes in the amount of shareholders’ equity
Not applicable.

Related to consolidated statements of income
1. Nine months ended December 31, 2015 (April 1, 2015 – December 31, 2015)(*1) Posting Losses on Overseas Business
Posting Losses on Joint Shipbuilding Venture in Brazil(Additional information)
Posting Losses on Overseas Business (Joint Shipbuilding Venture in Brazil)
Enseada, in which KHI holds a 30% stake, has received no payments for drill ship construction
work currently in progress for more than a year due to the impact of corruption problems in
Brazil, and this has seriously eroded Enseada’s financial position and cash flow situation. As aresult, Enseada has fallen behind in its payments to KHI for the transfer of technology and for theconstruction of drill ship hull parts currently under construction at KHI Sakaide Works. Enseada
has also been unable to make progress on the repayment of loans extended by KHI.
Despite this adverse business situation, Enseada remains a going concern, and KHI continues
to cooperate with Enseada in line with the underlying joint venture agreement. However,considering the asset value of investment in and loans to Enseada as well as the recoverability oftrade receivables, KHI has decided to implement the necessary accounting treatment based on its
revaluation under relevant accounting principles.
Accounting treatment of losses on a consolidated basis for the nine months ended December
31, 2015, is presented below.
1.

Setting of allowance for doubtful receivables on tradereceivables from Enseada and loss on valuation of¥19,298 million（extraordinary losses）¥2,847 million（non-operating expenses）

inventories (work in process) destined for Enseada
2.

Losses on valuation of investments in and loans
receivable from Enseada
Total¥22,145 million(*2) Gain on sale of fixed assets
Realized gains of deferred revenue in conjunction with the sale-and-leaseback related to fixed
assets of a North American subsidiary.

15

(*3) Gain on Transfer of Business
Due to assignment of all shares of consolidated subsidiary KCM Corporation and allbusinesses of KCMJ Corporation.
2. Nine months ended December 31, 2016 (April 1, 2016 – December 31, 2016)(*4) Gain on sale of fixed assets
Realized gains of deferred revenue in conjunction with the sale-and-leaseback related to fixed
assets of a North American subsidiary.

(*5) Gain on sale of fixed assets
In conjunction with the sale of the land and building of the Company’s Tokyo office.

16

Segment information and others
Segment information
1. Nine months ended December 31, 2015 (April 1, 2015 – December 31, 2015)(1) Sales and income (loss) by reportable segment
Million yen

Ship & Offshore Structure
Rolling Stock
Aerospace
Gas Turbine & Machinery
Plant & Infrastructure
Motorcycle & Engine
Precision Machinery
Other
Reportable segment total
Adjustments*1
Consolidated total
Notes: 1. Breakdown of adjustments:

External sales

Intersegment
sales

Total sales

Operatingincome (loss)

72,999104,594
250,575
159,150
83,249218,851
94,03682,0991,065,556
1,065,556

2,157
1,217
1,041
10,833
10,277618
10,063
26,62362,832(62,832)-

75,156
105,812251,617
169,983
93,527
219,469
104,100
108,723
1,128,389(62,832)
1,065,556(2,580)7,758
35,607
11,195
3,606
4,379
5,365
2,195
67,528(689)
66,838Million yen
AmountIncomeIntersegment transactions
Corporate expenses*

(134)
(554)

Total
(689)
*Corporate expenses mainly comprise general and administrative expenses not attributed to reportablesegments.
2. Segment income adjustments are based on operating income reported on the consolidated statements
of income for the corresponding period.

(2) Impairment loss on fixed assets and goodwill by reportable segment
Not applicable.

172. Nine months ended December 31, 2016 (April 1, 2016 – December 31, 2016)(1) Sales and income (loss) by reportable segment
Million yen

Ship & Offshore Structure
Rolling Stock
Aerospace
Gas Turbine & Machinery
Plant & Infrastructure
Motorcycle & Engine
Precision Machinery
Other
Reportable segment total
Adjustments*1
Consolidated total
Notes: 1. Breakdown of adjustments:

External sales

Intersegment
sales

Total sales

Operatingincome (loss)

74,97894,964
238,100
165,251
114,273
198,702103,566
53,215
1,043,052
1,043,052

1,916
16
1,294
9,381
5,072
480
10,48627,49756,146(56,146)-

76,894
94,980239,394
174,633
119,346
199,183
114,052
80,712
1,099,199(56,146)
1,043,052(13,817)
1,655
22,701
5,959
2,335(2,038)6,864
2,371
26,032(3,157)22,875

Million yen
AmountIncomeIntersegment transactions
22
Corporate expenses*(3,179)Total(3,157)* Corporate expenses mainly comprise general and administrative expenses not attributed to reportablesegments.
2. Segment income adjustments are based on operating income reported on the consolidated statements
of income for the corresponding period.

(2) Impairment loss on fixed assets and goodwill by reportable segment
Not applicable.

18

4. Supplementary information(1) Consolidated cash flow statements (condensed)
Million yen
Nine months ended
December 31, 2015
Cash flow from operating activities
Cash flow from investing activities
Cash flow from financing activities
Cash and cash equivalents at end of period

Nine months ended
December 31, 2016

(190,735)(52,523)
235,658
40,247(147,276)(46,851)
206,284
48,719Nine months ended
December 31, 2016

Year ended
March 31, 2016

(2) Orders and sales (consolidated)
Orders received
Nine months ended
December 31, 2015
Reportable segment

million yen% of total
million yen% of total
million yen% of total
Ship & Offshore Structure
92,746
8.6
28,793
3.2
98,394
5.8
Rolling Stock87,4498.1
84,7299.5
132,133
7.8
Aerospace
184,99417.2
148,82816.8
464,286
27.4
Gas Turbine & Machinery
212,733
19.7
192,33721.7
288,903
17.0
Plant & Infrastructure
100,218
9.3
60,401
6.8
138,775
8.1
Motorcycle & Engine
218,851
20.3
198,70222.4
333,595
19.6
Precision Machinery
95,023
8.8
115,74213.0
133,191
7.8
Other
83,288
7.7
55,7686.2
104,407
6.1
Total
1,075,305
100.0
885,302100.0
1,693,687
100.0
Note: The Motorcycle & Engine segment’s orders received are equal to its net sales as production is based mainlyon estimated demand.

Net sales
Reportable segment
Ship & Offshore Structure
Rolling Stock
Aerospace
Gas Turbine & Machinery
Plant & Infrastructure
Motorcycle & Engine
Precision Machinery
Other
Total

Nine months ended
December 31, 2015
million yen% of total
72,9996.8
104,5949.8
250,575
23.5
159,150
14.9
83,2497.8
218,851
20.5
94,036
8.8
82,0997.7
1,065,556
100.0

19

Nine months ended
December 31, 2016
million yen% of total
74,978
7.1
94,9649.1
238,100
22.8
165,251
15.8
114,273
10.9
198,702
19.0
103,566
9.9
53,2155.1
1,043,052
100.0Year ended
March 31, 2016
million yen% of total
94,8886.1
146,6469.5
351,858
22.8
236,445
15.3
135,6688.8
333,595
21.6
133,175
8.6
108,8177.0
1,541,096
100.0

Order backlog
Reportable segment
Ship & Offshore Structure
Rolling Stock
Aerospace
Gas Turbine & Machinery
Plant & Infrastructure
Motorcycle & Engine
Precision Machinery
Other
Total

Year ended
March 31, 2016
million yen% of total
259,92113.4
375,72919.5
608,352
31.5
381,78719.8
255,944
13.2
26,358
1.3
17,8630.9
1,925,957
100.0

20

Nine months ended
December 31, 2016
million yen% of total
211,68911.7
370,666
20.6
513,26128.5
417,47123.2
227,005
12.6
38,534
2.1
20,416
1.1
1,799,045
100.0

Nine months ended
December 31, 2015
million yen% of total
284,42815.6
388,235
21.3
428,14123.5
392,274
21.5
272,598
15.0
27,3301.5
23,4851.2
1,816,495
100.0

(3) Net sales by geographic area (consolidated)
Nine months ended December 31, 2015 (April 1, 2015 – December 31, 2015)
Japan
United States
EuropeAsia
Other areas
Total

Million yen
40.3%
25.8%
9.0%
16.2%
8.5%
100.0%

430,093
275,104
95,990172,856
91,511
1,065,556

Nine months ended December 31, 2016 (April 1, 2016 – December 31, 2016)
Japan
United States
EuropeAsia
Other areas
Total

Million yen
41.9%
24.4%
12.2%
14.5%
6.8%
100.0%

437,252
255,144
127,796
151,377
71,4801,043,052

21

(4) Supplementary information on earnings forecasts for the fiscal year ending March 31,
20171) Consolidated earnings outlook
Billion yen

Net sales
Operating income
Recurring profit
Net income attributable toowners of parent

Outlook for the year ending March 31, 2017 (fiscal 2016)
Revised forecast
Forecast issued
Change(A)
October 28, 2016 (B)(A – B)
1,520.0
1,510.0
10.0
40.0
34.0
6.0
33.0
25.0
8.0

Orders received
Before-tax ROIC (%)

Fiscal 2015 (ended
March 31, 2016)(actual)1,541.0
95.9
93.2

21.0

16.5

4.5

46.0

1,320.0
4.7%

1,390.0
3.8%(70.0)
0.9%

9.4%

Notes: 1. Outlook’s assumed foreign exchange rates: ¥110= US$1, ¥120= 1 euro
2. Before-tax ROIC = (income before income taxes + interest expense) / invested capital.

2) Outlook by reportable segment(a) Net sales and operating income (loss)
Billion yen
Outlook for the year ending March 31, 2017 (fiscal 2016)
Revised forecast
Forecast issued
Change(A)
October 28, 2016 (B)(A – B)

Reportable segment
Ship & Offshore Structure
Rolling Stock
Aerospace
Gas Turbine & Machinery
Plant & Infrastructure
Engineering& Engine
Motorcycle
Precision Machinery
Other
Adjustments
Total

Net sales
105.0
135.0
335.0
245.0
165.0
305.0
150.0
80.0
1,520.0

Operatingincome(loss)(20.0)
2.5
25.5
11.0
3.5
10.0
12.0
3.5
(8.0)
40.0

Net sales
105.0
140.0
340.0
245.0
155.0
305.0
140.0
80.0
1,510.022

Operatingincome(loss)(20.0)
2.5
22.0
8.0
8.0
9.5
9.0
3.5
(8.5)
34.0

Net sales
(5.0)
(5.0)
10.0
10.0
10.0

Operatingincome(loss)
3.5
3.0
(4.5)
0.5
3.0
0.5
6.0

Fiscal 2015 (ended
March 31, 2016)(actual)
Net sales
94.8
146.6
351.8
236.4
135.6
333.5
133.1
108.8
1,541.0

Operatingincome(loss)
(7.9)
9.2
45.6
16.9
8.5
15.7
8.5
2.8
(3.7)
95.9

(b) Orders received

Reportable segment
Ship & Offshore Structure
Rolling Stock
Aerospace
Gas Turbine & Machinery
Plant & Infrastructure
Motorcycle & Engine
Precision Machinery
Other
Total

Outlook for the year ending March 31, 2017 (fiscal 2016)
Revised outlook
Forecast issued
Change(A)
October 28, 2016 (B)(A – B)
40.0
90.0(50.0)
170.0
170.0
220.0
220.0
255.0
255.0
100.0
120.0
(20.0)
305.0
305.0
150.0
145.0
5.0
80.0
85.0
(5.0)
1,320.0
1,390.0(70.0)

Billion yen
Fiscal 2015 (ended
March 31, 2016)(actual)
98.3
132.1
464.2
288.9
138.7
333.5
133.1
104.4
1,693.6(c) Before-tax ROIC(%)

Reportable segment
Ship & Offshore Structure
Rolling Stock
Aerospace
Gas Turbine & Machinery
Plant & Infrastructure
Motorcycle & Engine
Precision Machinery
Total

Outlook for the year ending March 31, 2017 (fiscal 2016)
Revised outlook
Forecast issued
Change(A)
October 28, 2016 (B)(A – B)(28.8)(28.8)
3.2
3.2
13.0
10.4
2.6
5.7
4.3
1.4
9.6
16.3
(6.7)
6.7
6.0
0.7
10.6
8.0
2.6
4.7
3.8
0.9

23

Fiscal 2015 (ended
March 31, 2016)(actual)(38.4)
11.7
33.9
8.8
17.5
14.1
9.5
9.4