Report of Earnings and Financial Statements for the
Six Months Ended September 30, 2017 (Consolidated)(Prepared pursuant to Japanese GAAP)
October 27, 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:
Supplementary materials to quarterly earnings:
Quarterly earnings presentation:

November 8, 2017
December 1, 2017
Available
Conducted (for institutional investors, analysts and thepress)

1. Consolidated Financial Results for the Six Months ended September 30, 2017
(April 1, 2017 – September 30, 2017)(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
709,721
1.7
16,11589.7
September 30, 2017
Six Months Ended
697,299(1.5)
8,491 (79.9)
September 30, 2016
Note: Comprehensive income: Six months ended September 30, 2017:
Six months ended September 30, 2016:
Earnings per share

Earnings per share– diluted
yen

15,116-

10,853-(1,725)

-

(242)

-

13,893 million yen(24,643) million yen

-%
-%

yen
Six Months Ended
64.97
September 30, 2017
Six Months Ended(1.45)
September 30, 2016
※As the Company carried out a share consolidation with a 10:1 ratio of common shares with an effective
date of October 1, 2017, earnings per share has been calculated assuming this share consolidation was
carried out at the beginning of the fiscal year ended March 31, 2017.

1

(2) Financial Condition
Total assets

Net assets

million yen

million yen%

September 30, 2017

1,795,393

456,251

24.6

March 31, 2017

1,687,363

451,327

25.9

Note: Shareholders’ equity:

Equity ratio

September 30, 2017: 441,746 million yen
March 31, 2017: 437,247 million yen

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

Full year
yenYear ended
4.00
2.00
6.00
March 31, 2017
Year ending
3.00
March 31, 2018Year ending March
30.00
31, 2018 (forecast)
Note: Revisions to the most recently announced dividend forecast: None
※The Company conducted a share consolidation with a 10:1 ratio of common shares, with an effective date ofOctober 1, 2017. The expected dividend per share as of March 31, 2018 factoring in the impact of the shareconsolidation is shown. The total annual dividend for the fiscal year ending March 31, 2018 is denoted withthe “-“.mark. If the share consolidation was excluded from consideration, the expected dividend per share asof March 31, 2018 would be ¥3 per share, and the total annual dividend for the fiscal year ending March 31,2018 would be ¥6 per share.

3. Forecast of Consolidated Earnings for the Year Ending March 31, 2018
(April 1, 2017 – March 31, 2018)

Net sales

Full year

million yen%

1,590,000

4.6(Percentage figures represent changes versus the year-ago period)
Net income
Earnings per
Operating income
Recurring profit
attributable to owners
shareof parent
million yen%
million yen%
million yen%
yen
62,00034.8

55,50051.3

38,00045.0

Note: Revisions to the most recently announced earnings forecast: Yes※As the Company carried out a share consolidation with a 10:1 ratio of common shares with an effective
date of October 1, 2017, the calculation of earnings per share factors the impact of this share consolidationin consideration.

2

227.47

Notes1) 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. Consolidated Financial Statements (4) Notes on financial statements” onpage 15 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, 2017:
167,080,532 shares
March 31, 2017:
167,080,532 shares(2) Number of shares held in treasury as of period-end
September 30, 2017:
26,942 shares
March 31, 2017:
25,910 shares(3) Average number of shares during respective periods
Six months ended September 30, 2017:
167,054,136 shares
Six months ended September 30, 2016:
167,057,007 shares※As the Company carried out a share consolidation with a 10:1 ratio of common shares with an effective
date of October 1, 2017, the number of shares issued as of period-end, the number of shares held intreasury as of period-end, and the average number of shares during respective periods have been
calculated assuming that this share consolidation was carried out at the beginning of the fiscal year ended
March 31, 2017.

3

The quarterly report of earnings and financial statements is exempted from quarterly review
procedures based on the Financial Instruments and Exchange act.
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 their preparation, anddo 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 10 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, analysts and the press on Friday
October 27, 2017, and to post the briefing material on quarterly financial results to be used for thebriefing on TDnet and the Company’s website simultaneously with the announcement of financial results.
Dividend and earnings forecasts after share consolidation
At the 194th Ordinary General Meeting of Shareholders held on June 28, 2017, the shareholders approved
the share consolidation, and effective October 1, 2017, every 10 common shares issued by the Company
was consolidated into 1 share. Both the fiscal year-end dividend forecast and earnings per share in the
full-year consolidated earnings forecasts for the fiscal year ending March 31, 2018, factor in this shareconsolidation.

4

Accompanying Materials – Contents
1. Qualitative Information and Financial Statements

6(1) Consolidated operating results

6(2) Consolidated financial position

9(3) Consolidated earnings outlook

10

2. Consolidated Financial Statements

11(1) Consolidated balance sheets

11(2) Consolidated statements of income and comprehensive income13(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(Accounting procedures specific to preparation of quarterly consolidated financial statements)

15(Related to consolidated statements of income)15(Segment information)

16

3. Supplementary Information

17

(1)

Orders and sales (consolidated)

17

(2)

Net sales by geographic area (consolidated)

18(3) Supplementary information on earnings forecasts for the fiscal year ending March 31, 2018

519

1. Qualitative Information and Financial Statements(1) Consolidated operating results
In the first six months of the fiscal year ending March 31, 2018, despite modest growth centered on
the U.S., where the real economy remains strong, the global economy was relatively lacking in vigor
overall due to languishing crude oil prices, the economic slowdown in emerging countries andresource-rich countries, as well as other factors. In addition, uncertainty about future prospects forthe real economy persists, including turmoil in international financial markets due to Brexit,
concerns about an expansion of protectionist policies, and other factors. Going forward, these risks
with the potential to drag down the global economy must continue to be watched.
The Japanese economy has been recovering modestly, due to the impacts of the moderate
turnaround in personal consumption, the pickup in capital investment, and other factors. Goingforward, the economy is expected to grow modestly overall due to steady improvements in theincome and employment environments, but there is a possibility that economic policies enacted bycountries around the world, especially the U.S., and geopolitical risks on the Korean Peninsula andin other regions, could result in both rapid and significant fluctuations in foreign 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 fiscal first half increased
versus the same period of the previous fiscal year, mainly in the Aerospace, Precision Machinery and
Plant & Infrastructure segments. Net sales in the fiscal first half rose slightly overall versus the same
period of the previous fiscal year, due to the increase in sales in the Precision Machinery and Gas
Turbine & Machinery segments, as well as the decline in sales in the Plant & Infrastructure segment,along with other factors. Operating income, recurring profit, and net income attributable to ownersof parent all increased compared to the same period of the previous fiscal year, due to the increase inprofit in the Precision Machinery segment, the improvement in the Ship & Offshore Structure
segment, and other factors.
As a result, consolidated orders received increased ¥128.4 billion versus the same period of theprevious fiscal year to ¥666.9 billion, consolidated sales increased ¥12.4 billion year on year to¥709.7 billion, operating income increased ¥7.6 billion to ¥16.1 billion, recurring profit rose ¥16.8
billion in comparison to the same period of the previous fiscal year to ¥15.1 billion, while net
income attributable to owners of parent improved ¥11.0 billion to ¥10.8 billion.

6

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

2016 (A)

Orders received

Change (B – A)

2017 (B)Six months ended
September 30

Net

OperatingNet

OperatingNet

Operating

2016

2017

Changesales

incomesales

incomesales

income(A)(B)(B – A)

Ship & Offshore
Structure

51.6(16.4)

45.0

(5.1)

(6.5)

11.2

8.6

16.3

7.7

Rolling Stock

62.3

(0.6)

63.6

(0.9)

1.3

(0.2)

57.7

68.4

10.6

Aerospace

168.9

20.1

168.5

11.7

(0.4)

(8.3)

98.9

151.3

52.4

106.6

2.9

116.2

4.3

9.5

13

102.6

109.4

6.8

78.5

1.7

53.7

(0.2)

(24.8)

(1.9)

34.3

53.6

19.2

128.5

(2.4)

136.9

(2.0)

8.4

0.3

128.5

136.9

8.4

Machinery

65.7

3.9

86.9

9.0

21.2

5.1

71.4

92.4

21.0

Other

34.9

1.3

38.5

1.4

3.6

0.0

36.2

38.2

2.0

-

(2.0)

-

(2.1)

-

(0.0)

-

-

-

697.2

8.4

709.7

16.1

12.4

7.6

538.4

666.9

128.4

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 increased ¥7.7 billion year on year to ¥16.3 billion, due to orders
received for LPG carriers and Kawasaki JETFOIL.
Consolidated net sales fell ¥6.5 billion year on year to ¥45.0 billion, due to a decline in thevolume of vessel repair work.
Consolidated operating loss was ¥5.1 billion, a ¥11.2 billion improvement from the same period of
the previous fiscal year, when additional allowance for doubtful receivables was posted and there
was an increase in provision for losses on construction contracts.

7

Rolling Stock
Consolidated orders received increased ¥10.6 billion versus the same period of the previous fiscal
year, when rolling stock for a domestic subway and other orders were received, to ¥68.4 billion, due
to an order received for rolling stock for a high-speed railway (MRT) in Bangladesh.
Consolidated net sales increased ¥1.3 billion year on year to ¥63.6 billion, due to the increase in
the domestic market, despite a decline in Asia, including Singapore and other factors.
Consolidated operating income fell ¥0.2 billion year on year to an operating loss of ¥0.9 billion,
due to the decline in profitable projects, and other factors.
Aerospace
Consolidated orders received increased ¥52.4 billion year on year to ¥151.3 billion, due to theincrease in orders received from the Ministry of Defense, and other factors.
Consolidated net sales fell ¥0.4 billion year on year to ¥168.5 billion, due to the decline in sales ofcomponent parts for commercial aircraft and other factors, despite the increase in sales to the
Ministry of Defense.
Consolidated operating income fell ¥8.3 billion year on year to ¥11.7 billion, due to the decline inprofitability of component parts for commercial aircraft, and other factors.
Gas Turbine & Machinery
Consolidated orders received increased ¥6.8 billion year on year to ¥109.4 billion, due to theincrease in natural gas compression modules, and other factors.
Consolidated net sales increased ¥9.5 billion year on year to ¥116.2 billion, due to the increase incomponent parts of aircraft engines, and other factors.
Consolidated operating income increased ¥1.3 billion year on year to ¥4.3 billion, due to theincrease in sales.
Plant & Infrastructure
Consolidated orders received increased ¥19.2 billion year on year to ¥53.6 billion, due to theincrease in waste treatment facility operations, and other factors.
Consolidated net sales fell ¥24.8 billion year on year to ¥53.7 billion, due to the decline inconstruction work volume on a chemical plant for an overseas market, and other factors.
Consolidated operating income fell ¥1.9 billion year on year to an operating loss of ¥0.2 billion,
due to the decrease in sales.

8Motorcycle & Engine
Consolidated net sales increased ¥8.4 billion year on year to ¥136.9 billion, due to the increase inmotorcycles and general-purpose engines for developed countries, despite the decline in motorcycles
for emerging markets.
Consolidated operating income increased ¥0.3 billion year on year to an operating loss of ¥2.0
billion, due to the profit growth by the increase in sales and other factors.
Precision Machinery
Consolidated orders received increased ¥21.0 billion year on year to ¥92.4 billion, due to theincrease in hydraulic components for construction machinery.
Consolidated net sales increased ¥21.2 billion year on year to ¥86.9 billion, due to an increase insales of hydraulic components for construction machinery and various industrial robots, as well asother factors.
Consolidated operating income increased ¥5.1 billion year on year to ¥9.0 billion, due to theincrease in sales.
Other Operations
Consolidated net sales increased ¥3.6 billion year on year to ¥38.5 billion.
Consolidated operating income was ¥1.4 billion, on par with the same period of the previous fiscal
year.

(2) Consolidated financial position
On September 30, 2017, consolidated assets totaled ¥1,795.3 billion, an increase of ¥108.0 billion
from March 31, 2017, due to an increase in trade receivables in conjunction with the posting of sales,
and an increase in inventories in association with progress on construction projects. Liabilities
totaled ¥1,339.1 billion, a ¥103.1 billion increase versus March 31, 2017, due to the increase inlong-term debt and other interest-bearing debts along with other factors, despite the decline inadvances from customers. Interest-bearing debts increased ¥158.7 billion to ¥559.4 billion. Net
assets increased ¥4.9 billion to ¥456.2 billion, due to the posting of net income attributable to ownersof parent, dividend payments, and other factors.

9(3) Consolidated earnings outlook
Concerning consolidated financial performance for the fiscal year ending March 31, 2018,
consolidated net sales are expected to be ¥1,590.0 billion, an increase of ¥35.0 billion from theprevious announcement (July 31, 2017). This upward revision is due to the increase in component
parts for commercial aircraft in the Aerospace segment, the increase in hydraulic equipment for theconstruction machinery market in the Precision Machinery segment, the revision in assumed foreignexchange rates, and other factors.
In terms of profits, consolidated operating income is expected to be ¥62.0 billion, consolidated
recurring profit is expected to be ¥55.5 billion, and net income attributable to owners of parent is
expected to be ¥38.0 billion, due to the increase in profits in conjunction with higher sales in thePrecision Machinery and Aerospace segments, progress in profitability improvements, and otherfactors, despite the expected deterioration in profit due to revisions to delivery deadlines and costs of
LNG carriers in the Ship & Offshore Structure segment, along with other factors.
The Company expects consolidated orders received increasing ¥60.0 billion from the value
previously announced to ¥1,620 billion, ROIC of 6.4% and ROE of 8.4% billion due to the increaseof orders in Aerospace segment and Precision Machinery segment.
The Company's earnings forecasts assume exchange rates of ¥110 to the US dollar and ¥130 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. Please note that actual earnings may differ materially from this outlook, due
to a variety of important factors stemming from changes the external environment and/or theCompany’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, foreignexchange rates, in particular the yen/dollar exchange rate, tax codes and other regulatory
system-related issues.

102. Consolidated Financial Statements(1) Consolidated balance sheets
Million yen
As of
As of
March 31, 2017
September 30, 2017
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
Total current assets
Fixed assets
Net property, plant and equipment
Buildings and structures
Other
Total 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
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
Long-term liabilities
Bonds payable
Long-term debt
Net defined benefit liability
Other
Total long-term liabilities
Total liabilities

11

55,388444,633
49,850323,433
111,577
95,544(2,593)
1,077,835

45,442
489,342
59,249342,778
116,521117,934(2,400)1,168,86800

180,070
281,810
461,881
15,284

186,413288,669
475,083
15,567147,090(14,727)
132,362
609,527
1,687,363

150,731(14,857)
135,873626,525
1,795,393

240,572
101,449
111,456
4,295
20,288
12,175
18,103205,871
129,228
843,441

218,476
112,900
107,983
4,555
16,816
11,262
17,376
165,648
224,595
879,615130,000
147,492
81,56333,538392,594
1,236,035

140,000
200,400
85,85033,277459,527
1,339,142

Net assets
Shareholders’ equity
Common stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income
Net unrealized gains (losses) on securities, net of tax
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 net assets and liabilities

12

104,484
54,393
287,448(96)
446,230

104,484
54,393289,949(100)
448,727

3,232(1,182)(341)(10,692)(8,983)14,080451,327
1,687,363
63

3,781(1,462)(610)(8,689)(6,981)
14,504456,251
1,795,393

(2) Consolidated statements of income and comprehensive income
Consolidated statements of income
Million yen
Six months ended
September 30, 2016
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
Equity in income of non-consolidated subsidiaries and affiliates
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expense
Foreign exchange losses
Other
Total non-operating expenses
Recurring profit
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 (loss) attributable to owners of parent

Six months ended
September 30, 2017697,299595,267
102,031

709,721599,529
110,191

25,047
20,67147,82093,5398,491

25,542
20,65947,874
94,076
16,115

378
171
2,945
1,985
5,480

358
185
2,553
1,442
1,376
5,916

1,433
10,666
3,598
15,698(1,725)

1,338
5,577
6,915
15,116(*1) 2,202
2,202
476
(16)
493
736
(242)

15,116
3,250
11,865
1,011
10,853

Consolidated statements of comprehensive income
Million yen
Six months ended
September 30, 2016
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 associates accounted
for using equity method
Total other comprehensive income
Comprehensive Income attributable to:
Owners of parent
Non-controlling interests

13

Six months ended
September 30, 2017

493

11,865(458)
729(15,623)
1,999

576
(272)
831
2,009

(11,784)(1,116)(25,137)(24,643)(23,959)
(683)

2,028
13,893
12,855
1,038

(3) Consolidated cash flow statements
Million yen
Six months ended
September 30, 2016
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 net defined benefit liability
Interest and dividend income
Interest expense
Share of (profit) loss of entities accounted for using equity method(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
Net increase (decrease) in short-term debt
Proceeds from long-term debt
Repayment of long-term debt
Proceeds from issuance of bonds
Redemption of bonds
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
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, 2017

476
25,121
3,077(6,794)(1,034)
8,685
1,970
(549)
1,433
(2,945)(58,251)(16,045)(26,623)
3,945(21,022)
2,671(17,154)(2,998)(106,036)
576(1,432)(10,354)(117,247)

15,11627,442(115)(3,491)
(933)
(727)
7,197
(543)
1,338
(2,553)(43,312)(31,518)(11,014)(4,386)(40,403)(19,133)(12,149)(1,203)(117,983)
524(1,338)(4,536)(123,333)(33,752)(38,595)

4,200

566

(610)
165
(625)
(338)
(40)
31
(650)
(31,618)(222)
54(1,791)
25
(57)
45
(309)
(40,285)

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

110,375
56,355(16,599)
20,000(10,000)(3,375)(662)(462)
155,631(2,457)(10,445)
50,722(438)-

35,68940,277

(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
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 tax effect 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.
Related to consolidated statements of income(*1) 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
1. 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
IncomeAmountIntersegment 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 applicable16

2. Six months ended September 30, 2017 (April 1, 2017 – September 30, 2017)(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)

45,07563,690168,517
116,215
53,737
136,980
86,96738,537
709,721709,721

1,301
52
669
5,172
5,021
305
6,758
19,673
38,955(38,955)-

46,377
63,742
169,186
121,388
58,759137,286
93,72558,210748,676(38,955)
709,721(5,199)(922)
11,7354,340(200)(2,058)9,070
1,458
18,223(2,108)
16,115

Million yen
IncomeAmountIntersegment transactions(77)
Corporate expenses*(2,031)
Total(2,108)* 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

3. Supplementary information(1) Orders and sales (consolidated)
Orders received
Reportable segment

Six months ended
September 30, 2016

Six months ended
September 30, 2017

Year ended
March 31, 2017

million yen% of total
million yen% of total
million yen% of total
Ship & Offshore Structure
8,645
1.6
16,3392.4
36,9792.7
Rolling Stock
57,716
10.7
68,416
10.2
158,597
11.7
Aerospace
98,90418.3
151,32722.6
237,016
17.5
Gas Turbine & Machinery
102,658
19.0
109,466
16.4
260,354
19.3
Plant & Infrastructure
34,325
6.3
53,6008.0
95,0127.0
Motorcycle & Engine
128,56723.8
136,98020.5
313,030
23.2
Precision Machinery
71,403
13.2
92,48413.8
166,832
12.3
Other
36,2096.7
38,254
5.7
80,9486.0
Total
538,430100.0
666,930100.0
1,348,773
100.0
Note: The Motorcycle & Engine segment’s orders received are equal to its net sales as production is based mainlyon estimated demand.

17

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, 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

Six months ended
September 30, 2017
million yen% of total
45,075
6.3
63,6908.9
168,51723.7
116,215
16.3
53,7377.5
136,980
19.3
86,96712.2
38,537
5.4
709,721100.0

Year ended
March 31, 2017
million yen% of total
103,204
6.7
137,159
9.0
329,91521.7
241,953
15.9
160,877
10.5
313,030
20.6
155,278
10.2
77,4105.0
1,518,830
100.0Year ended
March 31, 2017
million yen% of total
191,604
10.8
392,224
22.2
508,75928.8
394,97722.4
214,926
12.1
37,912
2.1
21,401
1.2
1,761,806
100.0

Six months ended
September 30, 2017
million yen% of total
162,7859.4
398,69723.2
490,08228.5
387,87122.5
215,266
12.5
43,4392.5
20,3241.1
1,718,468
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

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

(2) Net sales by geographic area (consolidated)
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

Six months ended September 30, 2017 (April 1, 2017 – September 30, 2017)
Japan
United States
EuropeAsia
Other areas
Total

Million yen
42.3%
24.9%
10.9%
14.3%
7.3%
100.0%

300,733
176,841
77,978102,039
52,127
709,72118

(3) Supplementary information on earnings forecasts for the fiscal year ending March 31, 2018
1) 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

Outlook for the year ending March 31, 2018 (fiscal 2017)
Forecast issued
Revised forecast
ChangeJuly 31, 2017
(A)
(A – B)(B)
1,590.0
1,555.0
35.0
62.0
58.0
4.0
55.5
51.5
4.0
38.0
36.0
2.0

Year ended
March 31, 2017
(Fiscal 2016)(actual)
1,518.8
45.9.
36.6
26.2

1,620.0
6.4%
48.0
94.0
52.0

1,560.0
6.0%
48.0
99.0
53.0

60.0
0.4%
(5.0)
(1.0)

1,348.7
5.0%
43.6
82.7
51.5

36,400*9,10036,400*9,100*-35,127*8,779Notes: 1. Outlook’s assumed foreign exchange rates: ¥110 = US$1, ¥130= 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

Reportable segment

Outlook for the year ending March 31, 2018 (fiscal 2017)
Revised forecast
Forecast issued
Change(A)
July 31, 2017 (B)(A – B)Net sales

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

100.0
150.0
335.0
265.0
125.0
335.0
195.0
85.0
1,590.0

Operatingincome(loss)
(5.0)
4.5
18.5
11.0
3.0
14.0
20.0
4.0
(8.0)
62.0

Net sales
100.0
150.0
325.0
265.0
125.0
330.0
175.0
85.0
1,555.019

Operatingincome(loss)
0
5.5
13.0
11.0
3.5
13.0
16.0
4.0
(8.0)
58.0

Net sales
-10.0
5.0
20.0
35.0

Operatingincome(loss)
(5.0)
(1.0)
5.5
(0.5)
1.0
4.0
4.0

Year ended
March 31, 2017
(Fiscal 2016)(actual)
Net sales
103.2
137.1
329.9
241.9
160.8
313.0
155.2
77.4
1,518.8

Operatingincome(loss)(21.4)
3.4
25.0
15.2
2.6
11.7
13.1
3.1
(7.0)
45.9

(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, 2018 (fiscal 2017)
Revised outlook
Forecast issued
Change(A)
July 31, 2017 (B)(A – B)
65.0
55.0
190.0
190.0
355.0
330.0
275.0
275.0
.0
110.0
110.0
335.0
330.0
205.0
185.0
85.0
85.0
1,620.0
1,560.0

10.0
25.0
5.0
20.0
60.0

Billion yen
Year ended
March 31, 2017
(Fiscal 2016) (actual)
36.9
158.5
237.0
260.3
95.0
313.0
166.8
80.9
1,348.7(c) Before-tax ROIC

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

(%)
Year ended
March 31, 2017
(Fiscal 2016) (actual)

Outlook for the year ending March 31, 2018 (fiscal 2017)
Revised outlook
Forecast issued
Change(A)
July 31, 2017 (B)(A – B)

(5.0)
5.2
9.1
4.6
5.4
10.9
19.6
6.4

0.5
6.9
5.5
4.9
9.0
9.5
15.8
6.0

20

(5.5)
(1.7)
3.6
(0.3)
(3.6)
1.4
3.8
0.4

(23.4)
3.0
15.1
7.1
8.9
7.3
13.4
5.0