Report of Earnings and Financial Statements for the
Six Months Ended September 30, 2016 (Consolidated)(Prepared pursuant to Japanese GAAP)
October 28, 2016
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:

November 7, 2016
December 1, 2016

Supplementary materials to quarterly earnings:
Quarterly earnings presentation:

Available
Conducted (for institutional investors and analysts)

1. Consolidated Financial Results for the Six Months ended September 30, 2016
(April 1, 2016 – September 30, 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%
Six Months Ended
697,299(1.5)
8,491(79.9)(1,725)(242)
September 30, 2016
Six Months Ended
708,19411.8
42,305
82.4
40,292
55.1
26,878September 30, 2015
Note: Comprehensive income: Six Months Ended September 30, 2016: (24,643) million yen -%Six Months Ended September 30, 2015: 26,202 million yen 23.7%
Earnings per shareyen
Six Months Ended
September 30, 2016
Six Months Ended
September 30, 2015

Earnings per share– diluted
yen(0.14)

-

16.08

-

(2) Financial Position
Total assets

Net assets

million yen

million yen%

September 30, 2016

1,657,075

401,695

23.4

March 31, 2016

1,620,458

445,625

26.6

Note: Shareholders’ equity:

September 30, 2016 : 389,019 million yen
March 31, 2016
: 431,368 million yen

1Equity ratio

47.8

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%

1,510,000(2.0)(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
34,000(64.5)

25,000(73.1)

16,500(64.1)

Note: Revisions to the most recently announced earnings forecast: None

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)
September 30, 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
September 30, 2016:
244,902 shares
March 31, 2016:
228,992 shares(3) Average number of shares during respective periods
Six months ended September 30, 2016:
1,670,570,074 shares
Six months ended September 30, 2015:
1,670,601,905 shares

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

2

9.87

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 for institutional investors and analysts on Friday October 28,
2016, and to post the briefing material on quarterly financial results to be used for the briefing on TDnetand 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 six months ended September 30, 2016)13(Consolidated statements of comprehensive income for the six months ended September 30, 2016)13(3) Consolidated cash flow statements

14(4) 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)

16

4. Supplementary Information

18(1) Orders and sales (consolidated)

18(2) Net sales by geographic area (consolidated)

19(3) Supplementary information on earnings forecasts for the fiscal year ending March 31, 201720

4

1. Qualitative Information and Financial Statements(1) Consolidated operating results
In the first six months of the fiscal year ending March 31, 2017, the global economy continues togrow modestly, with growth centered on the U.S. 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, especially China. In addition, future economic prospects havebecome increasingly uncertain in conjunction with the international market turmoil caused by Brexit
as well as concerns about Brexit’s future negative impacts on the real economy. Going forward,these risks with the potential to drag down the global economy must continue to be watched.
The Japanese economy remains at a standstill due to the decline in external demand, lackluster
personal consumption, and other factors. Going forward, the economy is expected to grow modestly
overall due to steady improvement in the income and employment environments. However, it isdifficult to foresee a return to a weakening yen situation, as was the case until the previous period,
and there are concerns that an appreciation to under ¥100 to the U.S. dollar would negatively impact
corporate earnings, particularly among exporters, and hurt business sentiment.
Amid such an operating environment, the Group’s orders received in the fiscal first half declined
versus the same period of the previous fiscal year, mainly in the Ship & Offshore Structure and Plant& Infrastructure segments. Overall, net sales in the fiscal first half were on par with the same periodof the previous fiscal year, 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, and other factors. There was a decline in operating income due to a drop in profits in the
Ship & Offshore Structure, Aerospace, Gas Turbine & Machinery, and other segments, leading to arecurring loss and a net loss attributable to owners of parent.
As a result, consolidated orders received declined ¥200.3 billion versus the same period of theprevious fiscal year to ¥538.4 billion, consolidated sales were on par with the same period of theprevious fiscal year at ¥697.2 billion, operating income declined ¥33.8 billion to ¥8.4 billion,
recurring profit dropped ¥42.0 billion to a recurring loss of ¥1.7 billion, while net income
attributable to owners of parent declined ¥27.1 billion to a net loss of ¥0.2 billion.

5

Consolidated operating performance in the first half of fiscal year is summarized by segment
below.

Segment Information
Segment net sales, operating income, and orders received (billion yen)Six months ended September 30

2015 (A)

Orders received

Change (B – A)

2016(B)Six months ended
September 30

Net

OperatingNet

OperatingNet

Operating

2015

2016

Changesales

incomesales

incomesales

income(A)(B)(B – A)

Ship & Offshore
Structure

51.8

(3.1)

51.6

(16.4)(0.2)(13.3)

67.4

8.6(58.8)

Rolling Stock

62.7

3.5

62.3

(0.6)

(0.4)

(4.1)

65.7

57.7

(8.0)

Aerospace

166.8

25.6

168.9

20.1

2.1

(5.5)

134.6

98.9

(35.7)

103.3

8.1

106.6

2.9

3.2

(5.1)

115.8

102.6

(13.1)

55.8

2.6

78.5

1.7

22.7

(0.9)

75.0

34.3

(40.7)

143.0

0.5

128.5

(2.4)

(14.4)

(2.9)

143.0

128.5

(14.4)

Machinery

63.9

3.8

65.7

3.9

1.7

0

64.0

71.4

7.3

Other

60.5

1.2

34.9

1.3

(25.6)

0

72.8

36.2

(36.6)

-

(0.3)

-

(2.0)

-

(1.7)

-

-

-

708.1

42.3

697.2

8.4

(10.8)(33.8)

738.8

538.4

(200.3)

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 ¥58.8 billion year on year to ¥8.6 billion, due to the drop in
demand for newly-built ships.
Consolidated net sales were ¥51.6 billion, on par with the same period of the previous fiscal year.
Consolidated operating income declined ¥13.3 billion year on year to an operating loss of ¥16.4
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 declined ¥8.0 billion year on year to ¥57.7 billion, as a large orderfor North America was received in the same period of the previous fiscal year.
Consolidated net sales were on par with the same period of the previous fiscal year, as the increasein sales in the domestic market was offset by the impact of the yen’s appreciation and a decline insales in overseas markets.
Consolidated operating income declined ¥4.1 billion year on year to an operating loss of ¥0.6
billion. This result was due to the impact of the yen’s appreciation, a decline in highly-profitableprojects, higher costs, and other factors.

Aerospace
Consolidated orders received fell ¥35.7 billion year on year to ¥98.9 billion, due to the impact of
the yen’s appreciation, the decline in component parts for commercial aircraft, and other factors.
Consolidated net sales totaled ¥168.9 billion, which was on par with the previous fiscal year, due
to the increase in sales to the Ministry of Defense, a continued high level of sales of component partsfor commercial aircraft, and other factors, despite the impact of the yen’s appreciation.
Consolidated operating income decreased ¥5.5 billion year on year to ¥20.1 billion, due to thedecline in profitability of component parts for commercial aircraft, and other factors.

Gas Turbine & Machinery
Consolidated orders received fell ¥13.1 billion year on year to ¥102.6 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 ¥106.6
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 ¥5.1 billion year over year to ¥2.9 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 ¥40.7 billion year on year to ¥34.3 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 ¥22.7 billion year on year to ¥78.5 billion, due to an increase inconstruction work volume on a chemical plant for an overseas market.
Consolidated operating income decreased ¥0.9 billion year on year to ¥1.7 billion, due to thedecline in profitability from increase of construction costs, despite of revenue growth.
7

Motorcycle & Engine
Consolidated net sales declined ¥14.4 billion year on year to ¥128.5 billion, due to the impact of
the yen’s appreciation, the decline in general-purpose gasoline engines, and other factors, despite theincrease in sales of motorcycles and automobiles for developed countries.
Consolidated operating income decreased ¥2.9 billion year on year to ¥2.4 billion operating loss,
due to the drop in profit resulting from the decline in sales.

Precision Machinery
Consolidated orders received increased ¥7.3 billion year on year to ¥71.4 billion, due to theincrease in hydraulic equipment, industrial robots and other factors.
Consolidated net sales totaled ¥65.7 billion yen on a level with the same period of the previous
year.
Consolidated operating income was ¥3.9 billion yen on a level with the same period of theprevious year.

Other Operations
Consolidated net sales fell ¥25.6 billion year on year to ¥34.9 billion, due to the assignment of theconstruction machinery business in the same period of the previous fiscal year.
Consolidated operating income was ¥1.3 billion yen on a level with the same period of theprevious year.

(2) Consolidated financial position
At September 30, 2016, consolidated assets totaled ¥1,657.0 billion, an increase of ¥36.6 billion
from March 31, 2016. This was attributable to an increase in trade receivables. Liabilities as of
September 30, 2016, totaled ¥1,255.3 billion, a ¥80.5 billion increase versus March 31, 2016, due tothe increase in commercial paper and other interest-bearing debt, despite the decline in trade
payables. Interest-bearing debt increased ¥152.2 billion to ¥550.6 billion versus March 31, 2016. Net
assets fell ¥43.9 billion to ¥401.6 billion versus March 31, 2016, due to the decline in foreign
currency translation adjustments in conjunction with the yen’s appreciation, dividend payments, andother factors.

(3) Consolidated earnings outlook
The business environment surrounding the Group remains uncertain, as despite the fact that the
U.S. has maintained its firm economic recovery, there are concerns about U.S. monetary policy andthe outcome of the presidential election in November, along with worries about the economic
slowdown in emerging countries as well as crude oil price movements. Given this kind ofenvironment, the Company has decided to spend more time analyzing the future outlook.
Consequently, the Company has left its earnings forecasts for the fiscal year ending March 31,
82017, unchanged from the values previously announced on September 30, 2016. Furthermore, theCompany expects consolidated orders received of ¥1,390 billion, ROIC of 3.8%, and ROE of 3.9%.
The Company's earnings forecasts assume exchange rates of ¥102 to the US dollar and ¥114 to
the euro.

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
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 June 30, 2016.

10

3. Consolidated Financial Statements(1) Consolidated balance sheets
Million yen
As of
As of
March 31, 2016
September 30, 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

39,473430,066
51,353334,684
110,478
96,342(2,161)
1,060,239

436,557
15,475443,763
14,623

160,423(9,902)
150,521602,554
1,620,458

151,648(13,198)
138,449
596,835
1,657,075

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
3,756
87,79820,060105,891
18,71910,889310,775
25,13812,642
7,926
170,454
112,990
767,711

204,31387,385
112,083
4,624
18,26811,365
16,557
146,779
255,436856,814Long-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
146,732
1,204
88,78831,840398,565
1,255,379

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
54,394
261,001(91)
419,788

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

2,256
1,391
(16,949)(17,466)(30,768)
12,675
401,695
1,657,075

12

(2) Consolidated statements of income and comprehensive income
Consolidated statements of income
Million yen
Six months ended
September 30, 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(loss)
Extraordinary income
Gain on sale of fixed assets
Total extraordinary income
Income before income taxes
Income taxes
Net income
Net income attributable to non-controlling interests
Net income attributable to owners of parent
or Net loss attributable to owners of parent

Six months ended
September 30, 2016

708,194575,215
132,978

697,299595,267
102,03125,85819,20845,60590,67242,30525,047
20,67147,82093,539
8,491

348
178
1,348
(*1)1,376
2,392
5,644

378
171
2,945
(*1)782
1,202
5,480

1,857
4,552
1,247
7,657
40,292

1,433
10,666
3,598
15,698(1,725)40,292
12,46627,826948(*2)2,202
2,202
476
(16)
493
736

26,878(242)

Consolidated statements of comprehensive income
Millions of yen
Six months ended
September 30, 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:
Owners of parent
Non-controlling interests

13

Six months ended
September 30, 2016

27,826

493

(808)
1,129
(3,633)
699

(458)
729
(15,623)
1,999

988

(11,784)(1,623)
26,20225,506695(25,137)(24,643)(23,959)(683)

(3) Consolidated cash flow statements
Million yen
Six months ended
September 30, 2015
Cash flows from operating activities
Income before income taxes
Depreciation and amortization
Increase (decrease) in allowance for doubtful receivables
Increase (decrease) in accrued bonuses
Increase (decrease) in provision for product warranties
Increase (decrease) in provision for losses on construction contracts
Increase (decrease) in provision for environmental measures
Increase (decrease) in net defined benefit liability
Interest and dividend income
Interest expense
Share of (profit) loss of entities accounted for using equity method(Gain) loss on sale of property, plant, and equipment(Increase) decrease in trade receivables(Increase) decrease in inventories
Increase (decrease) in trade payables(Increase) decrease in advance payments
Increase (decrease) in advances received from customers(Increase) decrease in other current assets
Increase (decrease) in other current liabilities
Other
Subtotal
Cash received for interest and dividends
Cash paid for interest
Cash paid for income taxes
Net cash provided by operating activities
Cash flows from investing activities
Acquisition of property, plant, equipment and intangible assets
Proceeds from sales of property, plant, equipment and intangible
assetsAcquisition of investments in securities
Proceeds from sales of investments in securities
Acquisition of investments in subsidiaries and affiliate
Net decrease (increase) in short-term loans receivable
Payments of long-term loans receivable
Proceeds from collection of long-term loans receivable
Other
Net cash used for investing activities
Cash flows from financing activities
Increase (decrease) in short-term debt, net
Proceeds from long-term debt
Repayment of long-term debt
Proceeds from issuance of bonds
Redemption of bonds payable
Cash dividends paid
Cash dividends paid to non-controlling interests
Other
Net cash used for financing activities
Effect of exchange rate changes
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Increase (decrease) in cash and cash equivalents due to changes of
consolidation period of subsidiaries
Decrease in cash and cash equivalents resulting from exclusion ofsubsidiaries from consolidation
Cash and cash equivalents at end of period

14

Six months ended
September 30, 2016

40,292
24,087(554)(7,369)
727
1,259
(320)
(431)
(526)
1,857
(1,348)(1,376)(8,601)(47,993)(48,256)(5,927)(4,418)(3,042)(17,015)(2,388)(81,346)785(1,886)(18,445)(100,893)

476
25,121
3,077(6,794)(1,034)
8,685
(491)
1,970
(549)
1,433
(2,945)(2,984)(58,251)(16,045)(26,623)
3,945(21,022)
2,671(17,154)477(106,036)
576(1,432)(10,354)(117,247)(40,251)(33,752)

901

4,200

(38)
675
(1,601)
(144)
(60)
45
(248)
(40,722)

(610)
165
(625)
(338)
(40)
31
(650)
(31,618)

143,079
8,500(13,856)
20,000(10,000)(11,680)(625)
106
135,52377(6,013)47,721

151,460
4,503(9,338)20,000(10,000)(11,674)
(443)
(570)
143,936
3,223(1,705)37,832

(1)

-

-

(438)

41,70635,689(4) 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*)Gain on sale of fixed assets
Six months ended September 30, 2015 (April 1, 2015 – September 30, 2015)
Realized gains of deferred revenue in conjunction with the sale-and-leaseback related to fixed
assets of a North American subsidiary.
Six months ended September 30, 2016 (April 1, 2016 – September 30, 2016)
Realized gains of deferred revenue in conjunction with the sale-and-leaseback related to fixed
assets of a North American subsidiary.

(2*)Gain on sale of fixed assets
Six months ended September 30, 2016 (April 1, 2016 – September 30, 2016)
In conjunction with the sale of the land and building of the Company’s Tokyo office.

15

Segment information and others
Segment information
1. Six months ended September 30, 2015(April 1, 2015– September 30, 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)

51,861
62,769166,805
103,375
55,834143,055
63,94860,543
708,194
708,194

1,657
1,083
664
6,864
7,576
395
6,584
17,75042,576(42,576)-

53,51863,852
167,470
110,240
63,410143,450
70,53278,294
750,770(42,576)
708,194(3,115)
3,525
25,676
8,171
2,669
510
3,876
1,299
42,613(308)
42,305

Million yen
IncomeAmountIntersegment transactions(68)
Corporate expenses*
(239)
Total
(308)
*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.

162. Six months ended September 30, 2016 (April 1, 2016 – September 30, 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)

51,622
62,346
168,917106,62278,567
128,567
65,72834,926697,299697,299

1,579
12
921
6,199
3,627
417
6,869
17,98337,610(37,610)-

53,201
62,359169,839
112,821
82,195
128,984
72,59852,909734,909(37,610)697,299(16,428)(671)
20,1132,977
1,700(2,455)
3,943
1,397
10,576(2,084)
8,491

Million yen
AmountIncomeIntersegment transactions
30
Corporate expenses*(2,115)
Total(2,084)* 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4. Supplementary information(1) Orders and sales (consolidated)
Orders received
Six months ended
September 30, 2015

Six months ended
September 30, 2016

Year ended
March 31, 2016

Reportable segment

million yen% of total
million yen% of total
million yen% of total
Ship & Offshore Structure
67,496
9.1
8,645
1.6
98,394
5.8
Rolling Stock
65,775
8.9
57,716
10.7
132,133
7.8
Aerospace
134,663
18.2
98,90418.3
464,286
27.4
Gas Turbine & Machinery
115,84415.6
102,65819.0
288,903
17.0
Plant & Infrastructure
75,046
10.1
34,325
6.3
138,775
8.1
Motorcycle & Engine
143,055
19.3
128,56723.8
333,595
19.6
Precision Machinery
64,045
8.6
71,40313.2
133,191
7.8
Other
72,896
9.8
36,2096.7
104,407
6.1
Total
738,823100.0
538,430100.0
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

Six months ended
September 30, 2015
million yen% of total
51,861
7.3
62,7698.8
166,805
23.5
103,375
14.5
55,8347.8
143,055
20.2
63,9489.0
60,543
8.5
708,194
100.0

Six months ended
September 30, 2016
million yen% of total
51,622
7.4
62,3468.9
168,91724.2
106,62215.2
78,567
11.2
128,567
18.4
65,7289.4
34,926
5.0
697,299
100.0

Year 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
100.0Year 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

Six months ended
September 30, 2016
million yen% of total
206,523
11.9
349,14320.1
527,72630.5
360,80220.8
233,601
13.5
32,033
1.8
19,1461.1
1,728,978100.0

Six months ended
September 30, 2015
million yen% of total
279,632
15.2
406,06322.1
454,25524.7
350,632
19.1
274,724
14.9
26,422
1.4
40,8962.2
1,832,627
100.0

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

18

(2) Net sales by geographic area (consolidated)
Six months ended September 30, 2015 (April 1, 2015 – September 30, 2015)
Japan
United States
EuropeAsia
Other areas
Total

Million yen
39.0%
26.4%
9.8%
15.8%
8.7%
100.0%

276,602
187,229
69,679112,493
62,189708,194

Six months ended September 30, 2016 (April 1, 2016 – September 30, 2016)
Japan
United States
EuropeAsia
Other areas
Total

Million yen
41.9%
24.4%
12.9%
14.1%
6.4%
100.0%

292,700
170,784
90,46098,47744,876697,299

19

(3) 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

Orders received
Before-tax ROIC (%)
R&D expenses
Capital Expenditures
Depreciation/amortization
Number of employees at
end of fiscal year
*Number of employees
outside of Japan included
therein-Fiscal 2015 (ended
March 31, 2016)(actual)1,541.0
95.9
93.2
46.0

Outlook for the year ending March 31, 2017 (fiscal 2016)
Revised forecast
Forecast issued
Change(A)
July 29, 2016 (B)(A – B)
1,390.0
1,500.0(110.0)
3.8%
8.3%(4.5)%
47.0
47.0
87.0
98.0
(11.0)
52.0
56.0
(4.0)

Fiscal 2015 (ended
March 31, 2016)(actual)1,693.6
9.4%
43.6
76.3
49.0

Outlook for the year ending March 31, 2017 (fiscal 2016)
Revised forecast
Forecast issued
Change(A)
September 30, 2016 (B)(A – B)
1,510.0
1,510.0
34.0
34.0
25.0
25.0
16.5
16.5

35,500*8,90035,700*9,000(200)*(100)

34,605*8,708Notes: 1. Outlook’s assumed foreign exchange rates: ¥102 = US$1, ¥114= 1 euro
2. Before-tax ROIC = (income before income taxes + interest expense) / invested capital.
3. Capital expenditures represent the total of newly recorded property, plant and equipment andnewly recorded intangible assets. Depreciation/amortization represents depreciation and amortization
expenses on property, plant and equipment and intangible assets.

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)
September 30, 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
140.0
340.0
245.0
155.0
305.0
140.0
80.0
1,510.0

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

Net sales

Operatingincome(loss)Net sales

Fiscal 2015 (ended
March 31, 2016)(actual)Operatingincome(loss)

94.8
146.6
351.8
236.4
135.6
333.5
133.1
108.8

We didn’t disclose theeach segment data.

1,510.020

34.0

Net sales--

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)
July 29, 2016 (B)(A – B)
90.0
130.0(40.0)
170.0
180.0(10.0)
220.0
230.0(10.0)
255.0
255.0
120.0
140.0
(20.0)
305.0
325.0(20.0)
145.0
145.0
85.0
95.0
(10.0)
1,390.0
1,500.0(110.0)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

Outlook for the year ending March 31, 2017 (fiscal 2016)
Revised outlook
Forecast issued
Change(A)
July 29, 2016 (B)(A – B)Fiscal 2015 (ended
March 31, 2016)(actual)(c) Before-tax ROIC(%)

Reportable segment
Ship & Offshore Structure
Rolling Stock
Aerospace
Gas Turbine & Machinery
Plant & Infrastructure
Motorcycle & Engine
Precision Machinery
Total(28.8)
3.2
10.4
4.3
16.3
6.0
8.0
3.8

1.0
8.0
13.5
6.3
16.3
10.2
10.8
8.3

21

(29.8)
(4.8)
(3.1)
(2.0)
(4.2)
(2.8)
(4.5)

(38.4)
11.7
33.9
8.8
17.5
14.1
9.5
9.4