Financial Results for First Quarter FY 2012
(for the year ending March 31, 2013)

July 31, 2012
Kawasaki Heavy Industries, Ltd.

Table of Contents

I. Consolidated Results for First Quarter FY2012

 Summary of Financial Results Financial Results by Segment
 Details of Change in Profit I Details of Change in Profit II Financial Results by Segment
Ship & Offshore Structure
Rolling Stock
Aerospace
Gas Turbine & Machinery
Plant & Infrastructure
Motorcycle & Engine
Precision Machinery Financial Condition and Cash Flows

1
2
3
4
5
6
7
8
9
10
11
12

II．Forecast for FY2012

 Consolidated Operating Performance Forecast by Segment
 R&D/CAPEX/Number of Employees

13
14
15

I. Consolidated Results for First Quarter FY2012

Summary of Financial Results(Billion Yen)FY2011.1Q

FY2012.1Q

vs. FY2011.1Q

Change< Orders Received >Orders Received

251.1

271.5

+ 20.3

Net Sales

291.5

283.5

- 8.0

Operating Income

12.3

6.7

- 5.6

Recurring Profit

14.6

11.7

- 2.9

Increased as a whole due to increase in orders
received in Plant & Infrastructure and Ship &Offshore Structure segments, despite decreasein orders received in Precision Machinery
segment< Net Sales >Decreased as a whole due to sales decrease inMotorcycle & Engine and Precision
Machinery segments, despite increase in
Aerospace segment< Profits >Net Income

9.5

6.0

Yen / US$82

80

Yen / EUR

119

105

Exchange Rates ( weighted-average )

-1-

- 3.5

Decreased as a whole due to income decreaseor deterioration in Precision Machinery andShip & Offshore Structure segments, despite
increase in Aerospace segment

I. Consolidated Results for First Quarter FY2012

Financial Results by Segment(Billion Yen)

Orders Received

Net Sales

Operating Income/Loss

FY2011
1Q

FY2012
1Q

ChangeFY2011
1Q

FY2012
1Q

ChangeFY2011
1Q

FY2012
1Q

ChangeShip & Offshore Structure

17.0

30.3

+ 13.3

27.7

22.7

- 5.0

0.9

- 0.6

- 1.5

Rolling Stock

22.6

25.3

+ 2.7

25.8

28.8

+ 2.9

0

0.1

0

Aerospace

30.6

34.4

+ 3.8

40.0

49.6

+ 9.5

- 0.8

0.8

+ 1.7

Gas Turbine & Machinery

31.3

32.5

+ 1.1

45.5

45.3

- 0.1

3.3

2.6

- 0.7

Plant & Infrastructure

19.1

37.1

+ 18.0

23.8

19.8

- 3.9

0.9

0.1

- 0.8

Motorcycle & Engine

59.6

53.4

- 6.1

59.6

53.4

- 6.1

0.3

- 0.3

- 0.7

Precision Machinery

43.4

28.6

- 14.8

40.4

36.1

- 4.3

7.1

3.9

- 3.1

Others

27.2

29.6

+ 2.3

28.4

27.6

- 0.8

0.9

0.5

- 0.3

-

-

-

-

-

-

- 0.5

- 0.7

- 0.2

251.1

271.5

+ 20.3

291.5

283.5

- 8.0

12.3

6.7

- 5.6

Eliminations and corporate

Total

Note : “Eliminations and corporate” includes some expenses incurred at Head Office which were not allocated to each industry segment for internal reporting-2-

I. Consolidated Results for First Quarter FY2012

Details of Change in Profit I- FY2012.1Q vs. FY2011.1Q 【Operating Income】- 5.6( FY2011.1Q 12.3  FY2012.1Q 6.7 )(Billion Yen)

Impact of fluctuationof foreign exchange
rate

- 4.0

FY2011.1Q

Increase in selling, general &administrative expenses

- 1.8

12.3

Effects ofsales decrease- 1.0
Impact of changes
in product mix andother factors

- 2.3

-3-

Impact of change
in material price+ 3.6

FY2012.1Q
6.7

I. Consolidated Results for First Quarter FY2012

Details of Change in Profit II- FY2012.1Q vs. FY2011.1Q -(Billion Yen)

【Non-operating Income/Expenses】+ 2.6 ( FY2011.1Q 2.2  FY2012.1Q 4.9 )Net Interest expense ( incl. dividend income )Equity in income of unconsolidated subsidiaries and affiliates
Gain and loss on foreign exchange
Others【Extraordinary Income/Losses】

0
+ 0.1
+ 2.3
0

（ - 0.4  - 0.3 ）（ 2.0  2.2 ）（ 0.3  2.6 ）（ 0.3  0.3 ）+ 0.5 ( FY2011.1Q - 0.5  FY2012.1Q 0 )※+ 0.5 （ - 0.5  0 ）Loss on impairment of fixed assets※ Loss on impairment of idle assets whose book values were written down to the recoverable amounts-4-

I. Consolidated Results for First Quarter FY2012

Ship & Offshore Structure
Main Products： LNG carriers, LPG carriers, VLCCs, Bulk carriers, Submarines, Offshore structures

 FY2012.1Q （ vs. FY2011.1Q )（Billion Yen / In accumulated amount）（Forecast in April 110.0）

Orders Received

110.0

Orders Received: Increased significantly due to orders received of a LNG carrier
and other vessels
Net Sales: Decreased due to decrease in amount of shipbuilding of large-scale bulk
carriers
Operating Income/Loss: Deterioration in profitability due to sales decrease and sales
increase in lower margin projects<Units of Orders Received and Sales of New Building Ships>(unit)
Orders Received
FY2011.1Q

17.0

1Q

24.6

2Q

36.9

3Q

39.9

FY201130.3

1Q

Net Sales

FY2012
Forecast（Forecast in April 80.0）

113.5
87.1

80.0

53.1
27.7

LNG carriers
Small-sized LNG carriers
LPG carriers
VLCCs
Bulk carriers
Submarines
Total

22.7

 FY2012 Forecast （ vs. FY2011）

Sales

FY2012.1Q

FY2011.1Q

FY2012.1Q

1

2 (2)
1 (1)
2 (2)

1 (1)
1 (1)
1 (1)

14 (10)2 (2)21 (17)15 (13)1 (1)
19 (17)

1
1
4

1

5

3

Note: ( ) = Sales units by percentage-of-completion method

Orders Received: Expected to increase due to orders received of new building shipincluding gas carriers
Net Sales: Expected to decrease due to stagnation of ship price and decrease inamount of shipbuilding
Operating Income/Loss: Expected to deteriorate in profitability due to sales
decrease, the effect of prolonged stagnation of ship price and other factors<For Reference> Business Development in Overseas

1Q

2Q

3Q

FY2011

1Q

FY2012
Forecast

Operating Income/Loss
4.1
0.9

0.5

1Q

2Q

3.9
1Q

3Q

FY2011FY2012
Forecast-0.6-5.0（Forecast in April - 5.0）

NACKS was established in December 1995, as a fifty-fifty joint venture between KHI and China Ocean
Shipping (Group) Company (COSCO), one of the world’s largest shipping company, and its capacity
was expanded in 2008. At NACKS, various types of commercial vessels are built for domestic shipping
company such as COSCO as well as for Japanese and European customers.
As a parent company of NACKS, KHI has also supported DACKS, which was initially established by
NACKS and COSCO Group, since its establishment in July 2007. In order to make it more competitiveand further expand its operations, KHI decided to acquire a 34% stake in DACKS, and this investment
was approved by China authority in April 2012.
Meanwhile, KHI decided to participate in a joint venture project for building drill ships etc. in Brazil,
where the demand for the drill ships & FPSO for the drilling and production of offshore oil is rapidly
increasing, and executed a shareholders agreement with EEP in May 2012.
With a view to expanding operations and boosting profitability at two shipyards in China anddeveloping the new shipyard in Brazil as the third overseas shipyard, KHI will further deepen
cooperation between its bases at home and three overseas shipyards, and actively pursue shipbuilding
by taking advantage of the feature of each shipyard.

-5-

I. Consolidated Results for First Quarter FY2012

Rolling Stock
Main Products : Electric train cars (incl. Shinkansen), Electric and diesel locomotives, Passenger coaches, Platform screen doors,
Gigacell® (High-Capacity, Full Sealed Ni-MH Battery) FY2012.1Q （ vs. FY2011.1Q ）（Billion Yen / In accumulated amount）（Forecast in April 150.0）

Orders Received

150.0

22.6
1Q

42.1

2Q

49.9

66.0
25.3

3Q

Orders Received: Increase in orders received for overseas market including highspeed rail cars for Taiwan
Net Sales: Increased due to sales increase for North American market and Japan
Railways (JR) companies, despite decrease for Asian market
Operating Income: Remained at the same level as in the previous first quarter
despite sales increase

FY2011

1Q

 FY2012 Forecast （ vs. FY2011 ）FY2012
Forecast（Forecast in April 130.0）

Net Sales
132.6

130.0

Orders Received: Expected to increase due to increase in orders received for JR
companies and overseas market
Net Sales: Expected to remain at the same level as in the previous fiscal year with afocus on overseas market
Operating Income: Expected to increase due to cost reduction and other factors

94.6<For Reference> Present Status of Overseas Projects
North America

55.3
28.8

25.8

1Q

2Q

3Q

FY2011

1Q

Operating Income

FY2012
Forecast（Forecast in April 6.0）

4.9

6.0

5.1

1.1
0.1

0
1Q

2Q

3Q

FY2011

1Q

FY2012
Forecast- Working to win orders mainly for heavy rails and commuter rails.
- Extension of product lineup such as efSET® and K-Star Express® to meet demand for
Medium- to High-speed rail projects.
- California High-speed Rail: Working with other Japanese companies aiming to win thecontract for E&M system including rail cars.

Asia- There are construction and expansion plans of the urban transport systems in several Asian
cities, and High-speed railways projects in India- KHI received orders of an additional 48 high-speed rail cars from Taiwan High Speed Rail
Corporation in May 2012. KHI will expand its high-speed rail business globally based on
supply track record at Taiwan High Speed Rail.
- Dedicated Freight Corridor - Western Corridor (Delhi – Mumbai)
Japanese ODA project, working to receive orders for electric locomotives and maintenancebase facilities and others.

-6-

I. Consolidated Results for First Quarter FY2012

Aerospace
Main Products : Aircrafts for Japan Ministry of Defense, Component parts for commercial aircrafts (Boeing , Embraer), Missiles（Billion Yen / In accumulated amount）

Orders Received

327.2（Forecast in April 220.0）

220.0
114.1
30.6
1Q

(unit)

67.5

2Q

3Q

FY2011

1Q

FY2012
Forecast（Forecast in April 250.0）

250.0
206.5
138.5
87.4
49.6

40.0
2Q

3Q

FY2011

1Q

FY2012
Forecast（Forecast in April 9.0）

Operating Income/Loss

9.0

7.8
5.9
3.0
0.8

1Q

-0.8

2Q

FY2011.1Q FY2012.1Q
Boeing 777
21
21
Boeing 767
7
7
Boeing 787
7
10
Embraer170/175
36
Embraer190/195
25
21

34.4

Net Sales

1Q

 FY2012.1Q （ vs. FY2011.1Q ）Orders Received: Increase in orders received for Japan Ministry of Defense (MOD)and component parts for Boeing 777 and 787
Net Sales: Increased due to sales increase for MOD corresponding to the progress ofthe production of P-1 next-generation patrol aircraft and sales of component parts for
Boeing 787
Operating Income/Loss: Increased due to sales increase, cost reduction and other< Sales units of component parts for commercial aircrafts >factors

3Q

FY2011

1Q

FY2012
Forecast

 FY2012 Forecast （ vs. FY2011 )Orders received: Expected to decrease due to decrease in orders received for MOD,
despite increase in component parts for commercial aircrafts
Net Sales: Expected to increase due to increase in sales for MOD and sales ofcomponent parts for Boeing 777 and 787
Operating Income/Loss: Expected to increase due to sales increase for MOD andsales increase of component parts for commercial aircrafts<For Reference> Present Status of Main Projects
Aircrafts for MOD
In March 2012, KHI received orders of the first mass production of C-2 next-generation cargo
aircraft for MOD and the development of new utility helicopter (UH-X) for Japan Ground SelfDefense Force. KHI is working toward the commencement of the mass production of C-2 andthe development of UH-X, as well as the mass production of P-1 next-generation patrol aircraft.
Component parts for commercial aircrafts
Boeing 777‐ KHI’s production rate for 777 program is expected to increase 7 to 8.3 units permonth in FY2012 corresponding to the increase in production rate by the Boeing Company.
Boeing 787- In September 2011, the first 787 was delivered to the airline by the Boeing
Company and regular flight service with 787 was started from November 1, 2011. KHI has
completed the production system at Kawasaki’s Nagoya Works I for ramp-up production.

-7-

I. Consolidated Results for First Quarter FY2012

Gas Turbine & Machinery
Main Products : Jet engines, Gas turbine co-generation system, Gas turbines & steam turbines for marine & land, Diesel engines,
Marine propulsion system, Aero-dynamic machinery FY2012.1Q （ vs. FY2011.1Q )（Billion Yen / In accumulated amount）（Forecast in April 230.0）

Orders Received

230.0

227.2
123.3

 FY2012 Forecast （ vs. FY2011 ）

79.7
31.3
1Q

32.5
2Q

3Q

Orders Received: Increase in orders received for component parts of commercial aircraft
jet engines
Net Sales: Remained at the same level as in the previous first quarter due to sales increasein component parts for commercial aircraft jet engines and industrial gas turbines, despite
decrease in sales of turbines for land
Operating Income: Decreased due to the adverse impact of the appreciation of the yen,increase in the R&D expense and other factors

FY2011

1Q

Net Sales

FY2012
Forecast（Forecast in April 210.0）

210.0

194.6

Orders Received: Expected to remain at the same level as in the previous fiscal year due toorders received for energy and environmental products
Net Sales: Expected to increase due to sales increase in energy and environmental products
and component parts for commercial aircraft jet engines
Operating Income: Expected to remain at the same level as in the previous fiscal year due
to sales increase, despite increase in the amortization of development for component parts ofcommercial aircraft jet engines and other factors<For Reference>
Major Projects for Commercial Aircraft Jet Engines

137.0
84.7
45.5

1Q

45.3

2Q

3Q

FY2011

1Q

8.0
3.3

1Q

8.0

7.7

3.9
2.6

2Q

3Q

FY2011

1Q

FY2012
Forecast

PW1100G - JM
Airbus A320neo
International Collaboration Program

RRSP（※)RRSP（※)

Share

Approx. 8.5%

Approx. 7%

Approx. 6%

Responsible
Components

Intermediate pressurecompressor (IPC) module

Intermediate pressurecompressor (IPC) module

Primary parts of the engine’s fan andlow-pressure compressor

First IPC module shipped to Rolls-Royce inMarch 2011.

Made decision to collaborate in a program fordevelopment and production.
Design work in progress.

FY2012
Forecast（Forecast in April 8.0）

TrentXWB
Airbus A350

Participation Type

Present Status

Operating Income

Trent1000
Boeing 787

Aircraft（※）

Development was completed and mass
production started in FY2010. To bedelivered in accordance with production
schedule of airplanes.

Risk & Revenue Sharing Partner

Energy and Environmental Products
In December 2011, the development of the world’s first gas turbine generator which uses
ventilation air methane (VAM) was completed. In February 2012, the development of thehigh-efficiency 30MW-class L30A gas turbine (all manufactured domestically) wascompleted. With offices located in Japan, Europe, the Americas and Asia, KHI will continue
to actively develop gas turbine business in domestic and overseas markets.
In addition, with regard to the 110MW power plant which consists of 14 units of Kawasaki
Green Gas Engines (received an order in September 2011), 7 units were started operation in
July 2012, and the others are under construction for full-scale operation in August 2012.

-8-

I. Consolidated Results for First Quarter FY2012

Plant & Infrastructure
Main Products: Industrial plants (cement, chemical and others), Power plants, LNG & LPG tanks, Municipal refuse incineration plants,
Shield machines, Crushing machines

 FY2012.1Q （ vs. FY2011.1Q ）（Billion Yen / In accumulated amount）（Forecast in April 130.0）

Orders Received

130.0

119.2
84.0
46.8

 FY2012 Forecast （ vs. FY2011 )

37.1

19.1
1Q

2Q

3Q

FY2011

1Q

FY2012
Forecast（Forecast in April 130.0）

Net Sales

130.0

122.8

Orders Received: Increase in orders received for overseas projects including thecryogenic tanks for Ichthys LNG Project
Net Sales: Decreased due to sales decrease of large-scale overseas projects, despitesales increase of material handling systems and municipal refuse incineration plants
Operating Income: Decreased due to sales decrease and decline in profit margin

Orders Received: Expected to increase as a whole due to orders received of energy
and environmental projects, and projects related infrastructure for resourceproducing countries
Net Sales: Expected to increase due to increase in sales of municipal refuse
incineration plants for domestic customers and other projects
Operating Income: Expected to decrease due to decline in profit margin resulting
from severe competitiveness

78.7
56.2
23.8
1Q

2Q

3Q

FY2011

1Q

Operating Income

6.7

FY2012
Forecast（Forecast in April 10.0）

14.1

10.0

8.8

0.9
1Q

<For Reference> Orders Received of Energy and Environmental Projects

19.8

0.1
2Q

3Q

FY2011

1Q

FY2012
Forecast- In parallel with an expected increase of worldwide energy consumption, a lot of
floating LNG facilities are planned to be constructed. Under these circumstances,
KHI’s proven track record of boilers for land and marine use (more than 1,200
units) and technical capability, which has realized reliable and robust boilers thatcan operate under severe offshore condition, are highly evaluated, and in July 2011,
KHI won the contract with Technip to supply 7 units of boilers for the Shell’s
floating LNG facility of “Prelude”, the world’s first floating LNG facility.
- In April 2012, KHI won the contract of 4 massive cryogenic tanks for Ichthys LNG
Project in Australia. This project is very important for Japan in terms of the stablesupply of energy and the decentralization of natural gas supply as approximately
70% of the Ichthys LNG to be delivered to Japan. KHI will support this projectbased on its proven track record and the EPC technologies.
-9-I. Consolidated Results for First Quarter FY2012

Motorcycle & Engine
Main Products: Motorcycles, All-Terrain Vehicles(ATVs), Utility Vehicles, Personal Watercraft, General-purpose Gasoline Engines（Billion Yen / In accumulated amount）（Forecast in April 260.0）

Net Sales

260.0

235.2
154.2
106.2
59.6

 FY2012.1Q （ vs. FY2011.1Q )Net Sales: Decreased due to sales decrease of motorcycles in European
market, despite sales increase of motorcycles in Asian and otheremerging markets mainly Indonesia and Brazil
Operating Income/Loss: Deterioration in profitability due to sales
decrease and other factors

53.4

1Q

2Q

3Q

FY2011

1Q（Forecast in April 5.0）

Operating Income/Loss

0.3

2Q

3Q

5.0

FY2011

1Q

-0.3

1Q

-2.3

FY2012
Forecast

FY2012
Forecast

-2.9
-4.5

＜Wholesales by Geografic Area for Consumer Products＞(Thousands of unit / Billion Yen)

Domestic
North America (incl. Canada)

EuropeEmerging Countries & Others

Total

FY2011.1Q
FY2011
Unit
AmountUnit
Amount
4
3.5
14
12.1
22 (12)
16.2 121 (69)
78.0
18
14.4
57
42.2
72
15.9
309
71.0
116
50.0
501
203.3

FY2012.1Q
FY2012 Forecast
Unit
AmountUnit
Amount
5
3.6
13
11.8
20 (13)13.0 124 (77)
76.5
12
8.7
61
45.2
78
18.3
375
88.5
115
43.6
573
222.0

Note: 1) Sales units and amount include the following products.
Units: Motorcycles, All-Terrain Vehicles(ATVs), Utility Vehicles and Personal Watercraft(Jet Ski)
Amount: The products mentioned above and parts for those products.
2) Figures in the parenthesis ( ) represent motorcycle sales units.

 FY2012 Forecast （ vs. FY2011 )Net Sales: Expected to increase due to sales increase in Asian and otheremerging countries and other factors
Operating Income/Loss: Expected to improve due to sales increase, cost
reduction by expanding overseas production and local procurement<For Reference>
Business Development in Asian and Other Emerging Markets- In Asian and other emerging countries such as Indonesia, KHI’s sales isincreasing as leisure motorcycles market is expanding, and demand for leisuremotorcycles is expected to increase from now on following further economic
growth and increased purchasing power. In order to respond to market growthand further to reinforce the business operation in Asian and other emerging
countries, KHI focuses on upgrading production which includes constructionof the new plant in Indonesia and expansion of the plant in Thailand.
- In China, which has the largest motorcycle market in the world, demand for
leisure motorcycles that KHI mainly targets is expected to increase following
the recent economic growth. In this market environment, in June 2012, KHI
signed a letter of intent on a business partnership deal with Loncin Motor Co.,
Ltd. regarding the manufacture and sale of motorcycles in China.
- 10 -

I. Consolidated Results for First Quarter FY2012

Precision Machinery
Main Products： Hydraulic components (pumps, motors & valves), Hydraulic systems for industrial use, Hydraulic marine machinery, Industrial Robots

 FY2012.1Q （ vs. FY2011.1Q ）（Billion Yen / In accumulated amount）（Forecast in April 210.0）

Orders Received
210.0
174.5
131.1
91.1

 FY2012 Forecast （ vs. FY2011 ）

43.4

1Q

28.6
2Q

3Q

FY2011

1Q

FY2012
Forecast

200.0

175.0
129.0
85.2
40.4

36.1

2Q

3Q

FY2011

1Q

FY2012
Forecast（Forecast in April 27.0）

Operating Income

27.0

26.6
20.7
14.5
7.1

1Q

Orders Received & Net Sales: Expected to increase due to increase in hydrauliccomponents for construction machinery in emerging countries and industrial robots
Operating Income: Expected to remain at the same level as in the previous fiscal year
despite increase in fixed cost resulting from capital expenditures and employment（Forecast in April 200.0）

Net Sales

1Q

Orders Received: Decrease in orders received for hydraulic components for construction
machinery in emerging countries mainly in China
Net Sales: Decrease in sales of hydraulic components for construction machinery inemerging market mainly in China and industrial robots for manufacturers of semiconductor
production equipments
Operating Income: Decreased due to decrease in sales, increase in fixed cost resulting
from capital expenditures and employment and other factors

3.9
2Q

3Q

FY2011

1Q

FY2012
Forecast<For Reference> Businesses Development in Emerging Countries
In August 2006, production of hydraulic pumps started at Chinese subsidiary in Suzhou.
Also, in Zhejiang, the joint venture of hydraulic machinery manufacturing was establishedwith a Chinese company and production started in April 2010, while the sales subsidiary inShanghai provides the products manufactured at the above manufacturing companies tocustomers throughout China.
In addition, KHI constructed a new plant at the subsidiary in Suzhou in October 2011,
expanded of the plant in Zhejiang and established the subsidiary for after-sales service inShanghai.
On the other hand, as the expectation that the recession of Chinese construction machinery
market continues is increasing, we will watch the trend of this market closely. But the
Chinese construction machinery market is already the largest in the world, and the continued
growth of this market over the medium- to long-term is expected as construction of housing
for low-income families and energy-and transportation-related infrastructure projects still
likely to go forward.
Meanwhile, spurred by a rapidly growing economy, India's hydraulic excavator market isbooming. In order to cater to the growing demand for local production, in February 2012,
KHI set up the joint venture with Wipro Limited in Bangalore for manufacture, sales, andservicing of hydraulic components for construction machinery.

- 11 -

I. Consolidated Results for First Quarter FY2012

Financial Condition and Cash Flows【Financial Condition】(Billion Yen)FY2011
End ofJune 2011

Total Assets

FY2012End ofJune 2012

End ofMarch 2012

1,312.5

1,362.1

1,374.2

Shareholders’ Equity

293.8

306.0

305.4

（Ratio of shareholders’ equity to total assets）(22.3%)(22.4%)(22.2%)

Interest-bearing debt

445.8

407.1

435.0

（Net Interest-bearing debt）（416.9）（372.8）(401.6)

Net Debt Equity Ratio

141.9%

121.8%

131.4%

Note: Interest-bearing debt includes lease obligations【Cash Flows】（Billion Yen）

FY2011.1Q

FY2012.1Q

Cash flows from operating activities- 10.2

7.9

Cash flows from investing activities- 14.8- 30.6

Free Cash Flows- 25.1- 22.6

Cash flows from financing activities

11.1

22.6

- 12 -

II．Forecast for FY2012

Consolidated Operating Performance* No changes in the forecast for FY2012 from April 26, 2012.
(Billion Yen)FY2011
Actual

FY2012
Forecast

vs. FY2011

Change< Orders Received >Orders Received

1,311.8

1,430.0+ 118.2

Net Sales

1,303.7

1,380.0+ 76.3Operating Income

57.4

52.0

- 5.4

Expected to increase as a whole due to increase in orders
received in Ship & Offshore Structure and Rolling Stocksegments, despite decrease in Aerospace segment that
acquired high-level orders from MOD in the previous
fiscal year

< Net Sale >Recurring Profit

63.6

56.0

- 7.6

Net Income

23.3

34.0

+ 10.7

Yen / US$79

80

Yen / EUR

109

100

Expected to increase as a whole due to sales increase in
Aerospace, Motorcycle & Engine and Precision
Machinery segments, despite sales decrease in Ship &Offshore Structure segment

Exchange Rates (actual & assumed)< Profits >Note : Assumed rates are applied to the outstanding foreign exchange exposure as of July 31, 2012
(For Reference)

Impact on profit by FX fluctuation of 1 yen(Billion Yen)

US$
EUR

Operating Recurring
IncomeProfit
3.3
1.6
0.3
0.1

- 13 -

Although operating income and recurring profit are
expected to decrease mainly due to the effect ofdeterioration in profitability in Ship & Offshore
Structure segment, net income is expected toincrease significantly because partial write-down ofdeferred tax assets, which was recorded in the previous
fiscal year, is not expected in this fiscal year

II．Forecast for FY2012

Forecast by Segment* No changes in the forecast for FY2012 from April 26, 2012.
(Billion Yen)

Orders Received
FY2011
ActualForecast

Ship & Offshore Structure

39.9

Rolling StockNet Sales

ChangeFY2011
ActualForecast

110.0+ 70.1

113.5

66.0

150.0

+ 84.0Aerospace

327.2

220.0

Gas Turbine & Machinery

227.2

Plant & Infrastructure

Operating Income/Loss
ChangeFY2011
ActualForecast

80.0- 33.5

3.9

- 5.0

- 8.9

132.6

130.0

- 2.6

5.1

6.0

+ 0.9

- 107.2

206.5

250.0

+ 43.5

7.8

9.0

+ 1.2

230.0

+ 2.8

194.6

210.0

+ 15.4

7.7

8.0

+ 0.3

119.2

130.0

+ 10.8

122.8

130.0

+ 7.2

14.1

10.0

- 4.1

Motorcycle & Engine

235.2

260.0

+ 24.8

235.2

260.0

+ 24.8

- 2.9

5.0

+ 7.9

Precision Machinery

174.5

210.0

+ 35.5

175.0

200.0

+ 25.0

26.6

27.0

+ 0.4

Others

122.2

120.0

- 2.2

123.2

120.0

- 3.2

3.8

2.0

- 1.8

-

-

-

-

-

-

- 8.8

- 10.0- 1.2

1,311.8

1,430.0+ 118.2

1,303.7

1,380.0+ 76.3

57.4

52.0

- 5.4

Eliminations and corporate

Total

FY2012FY2012FY2012

Note : “Eliminations and corporate” includes some expenses incurred at Head Office which are not allocated to each industry segment for internal reporting- 14 -

ChangeII．Forecast for FY2012

R&D/CAPEX/Number of Employees* No changes in the forecast for FY2012 from April 26, 2012.
(Billion Yen / Persons)

FY2011
Actual

FY2012
Forecast

ChangeR&D Expenses

39.9

45.0

+ 5.1

CAPEX
(Construction Base)

63.9

79.0

+ 15.1

Depreciation & Amortization

48.9

54.0

+ 5.1

Domestic

24,77025,500+ 730

Overseas

8,497

9,200

+ 703

33,267

34,700+ 1,433

Number of Employees- 15 -

Kawasaki,
Working as One for the Good of the Planet

Cautionary Statement
The performance outlook and the forecasts stated in this material were prepared by Kawasaki Heavy Industries, Ltd.
(hereinafter, KHI) based on the circumstances at the release point, and include potential risks and uncertain factorsthat relate to economic conditions, foreign currency exchange rates, tax rules, regulations and other factors.
Accordingly, please note that the actual operating results, financial position, and business deployment of KHI
may sometimes differ considerably from the descriptions in the present projections.