Financial Results for FY 2011
(for the year ended March 31, 2012)

April 26, 2012
Kawasaki Heavy Industries, Ltd.

Table of Contents

I. Consolidated Results for FY2011
 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

II．Forecast for FY2012
1
2
3
4
5
6
7
8
9
10
11
12

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

13
14
15

I. Consolidated Results for FY2011

Summary of Financial Results(Billion Yen)FY2010
Actual

FY2011

vs. FY2010

Change（※）

Forecast in
January

Actualvs. FY2010

vs. Forecast
in January

Orders Received

1,270.6

1,380.0

1,311.8+ 41.2- 68.2Net Sales

1,226.9

1,330.0

1,303.7+ 76.8- 26.3Operating Income

42.6

50.0

57.4

+ 14.8+ 7.4

Recurring Profit

49.1

52.0

63.6

+ 14.4+ 11.6Net Income

25.9

26.0

23.3

- 2.6

- 2.7

Exchange Rates ( weighted-average )Yen / US$

86

79

Yen / EUR

113

109

（※）Assumed exchange rates for forecast in January : 1US$=80Yen

1EUR=100Yen-1-< Orders Received >Increased as a whole due to increase in orders
received in Aerospace, Gas Turbine &Machinery and Precision Machinery segments,
despite decrease in orders received in Rolling
Stock and Ship & Offshore Structure segments< Net Sales >Increased as a whole because sales increase in
Precision Machinery, Plant & Infrastructure
and Aerospace segments exceeded sales
decrease in Gas Turbine & Machinery andShip & Offshore Structure segments< Profits >- Operating income and recurring profit
increased because the effect of sales increasein Precision Machinery, Plant &Infrastructure and Aerospace segments andother factors exceeded the adverse impact of
the appreciation of the yen- However, net income decreased due to partial
write-down of deferred tax assets following
the promulgation of a law concerning
reduction of the corporate tax rate andimpairment loss in Ship & Offshore Structure
segment

I. Consolidated Results for FY2011

Financial Results by Segment(Billion Yen)

Orders Received

Net Sales

Operating Income/Loss

FY2010FY2011

ChangeFY2010FY2011

ChangeFY2010FY2011

ChangeShip & Offshore Structure

78.9

39.9

- 39.0

118.4

113.5

- 4.8

- 1.0

3.9

+ 4.9

Rolling Stock

187.1

66.0

- 121.0

131.1

132.6

+ 1.5

8.1

5.1

- 3.0

Aerospace

206.7

327.2

+ 120.5

196.8

206.5

+ 9.7

3.0

7.8

+ 4.7

Gas Turbine & Machinery

187.5

227.2

+ 39.6

202.6

194.6

- 8.0

9.5

7.7

- 1.7

Plant & Infrastructure

119.9

119.2

- 0.7

89.0

122.8

+ 33.7

8.2

14.1

+ 5.8

Motorcycle & Engine

234.4

235.2

+ 0.7

234.4

235.2

+ 0.7

- 4.9

- 2.9

+ 2.0

Precision Machinery

148.9

174.5

+ 25.6

140.3

175.0

+ 34.7

22.3

26.6

+ 4.3

Others

106.8

122.2

+ 15.3

114.0

123.2

+ 9.1

2.5

3.8

+ 1.2

-

-

-

-

-

-

- 5.3

- 8.8

- 3.5

1,270.6

1,311.8+ 41.2

1,226.9

1,303.7+ 76.8

42.6

57.4+ 14.8Eliminations 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 FY2011

Details of Change in Profit I- FY2011 vs. FY2010 【Operating Income】 + 14.8 ( FY2010 42.6  FY2011 57.4 )vs. Forecast in January(Billion Yen)

+ 7.4 billion yen（Forecast in January 50.0  Actual 57.4 )Impact of fluctuation of foreign exchange rate + 3.1- 4.2
Effects of sales decrease+ 8.5
Improvements and other factors

Improvements andother factors+ 27.7
Impact of fluctuationof foreign exchange
rate

FY2010- 26.2
Effects ofsales increase

42.6+ 18.4
Increase in selling, general &Impact of change
administrative expenses
in material price- 10.1+ 5.0-3-FY2011
57.4

I. Consolidated Results for FY2011

Details of Change in Profit II- FY2011 vs. FY2010 -(Billion Yen)

【Non-operating Income/Expenses】- 0.3 ( FY2010 6.5  FY2011 6.1 )Net Interest expense ( incl. dividend income )Equity in income of unconsolidated subsidiaries and affiliates
Gain and loss on foreign exchange
Others【Extraordinary Income/Losses】+ 0.4 （ - 2.3  - 1.9 ）- 0.6 （ 9.2  8.5 ）- 1.2 （ 1.4  0.2 ）+ 1.1 （ - 1.8  - 0.6 ）- 4.3 ( FY2010 - 10.5  FY2011 - 14.9 )Loss on impairment of fixed assets
Bad debt expense for doubtful accounts of affiliates
Effect of application of accounting for asset retirement obligations

※1
※2

※1

※2

- 4.9 （ - 9.9  - 14.9 ）+ 0.3 （ - 0.3 0）+ 0.2 （ - 0.2 
0）Loss on impairment of fixed assets mainly in Motorcycle & Engine segment whose book values were written down to the recoverable amounts
Loss on impairment of fixed assets mainly in Ship & Offshore Structure segment whose book values were written down to the recoverable
amounts-4-

I. Consolidated Results for FY2011

Ship & Offshore Structure
Main Products： LNG carriers, LPG carriers, VLCCs, Bulk carriers, Submarines, Offshore structures（Billion Yen / In accumulated amount）

Orders Received

110.0
78.9

67.2

（Forecast in January 60.0）

 FY2011 （ vs. FY2010 )Orders Received: Orders received of a small-sized LNG carrier, a LPG
carrier and 6 bulk carriers
Net Sales: Slightly decreased as a whole due to decrease in sales of largescale vessels such as LNG carriers
Operating Income/Loss: Improved due to decrease in provision for losses on<Units of Orders Received and Sales of New Building Ships>(un it)construction contracts
Orders Received
Sales
FY2010

36.4
17.0

24.6

36.9

39.9

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

1.6
1Q

2Q

3Q

FY2010

1Q

2Q

118.4
87.1

61.2

80.0

53.1

28.6

27.7

2Q

3Q

FY2010

1Q

Operating Income/Loss

2Q

4.1

2.0
FY2010
2Q

3Q

3Q

FY2011FY2012
Forecast（Forecast in January - 4.0）

4.9

1Q

FY2012
Forecast

113.5

93.2

3.3

FY2011（Forecast in January 110.0）

Net Sales

1Q

3Q

-1.0

0.9

0.5

1Q

2Q

3.9
FY2012
Forecast

3Q

FY2011

-5.0

11
1
12

FY2011F Y201 0

F Y2011

1
1

3 (2)
1 (1)
4 (2)

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

23 (13)2(2)33 (20)25 (14)2 (1)33 (18)6
8Note: ( ) = Sales units b y percentage-of-completion method
 FY2012 Forecast （ vs. FY2011）
Orders Received: Expected to increase due to orders received of newbuilding ship including gas carriers
Net Sales: Expected to decrease due to stagnation of ship price and decreasein amount 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> Joint Venture in China
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. (NACKS is an equity method affiliate) At
NACKS, various types of commercial vessels are built for domestic shipping company suchas COSCO as well as for Japanese and European customers.
As a parent company of NACKS, KHI has also supported DACOS, which was initiallyestablished by NACKS and COSCO Group, since its establishment in July 2007. In order tomake it more competitive and further expand its operations, KHI decided to acquire a 34%
stake in DACOS, and this investment was approved by China authority in April 2012.
With a view to expanding operations in China and boosting profitability, KHI will further
deepen cooperation between its bases at home and in China and actively pursue shipbuilding.

-5-

I. Consolidated Results for FY2011

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) FY2011 （ vs. FY2010 ）（Billion Yen / In accumulated amount）

Orders Received
187.1（Forecast in January 110.0）

124.1
101.5 117.7
22.6
1Q

2Q

3Q

FY2010

1Q

Net Sales

42.1

2Q

49.9

3Q

 FY2012 Forecast （ vs. FY2011 ）66.0

FY2011FY2012
Forecast

132.6

131.1

130.0

94.6

63.0

55.3
25.8

26.6
2Q

3Q

FY2010

1Q

2Q

3Q

FY2011FY2012
Forecast

8.1（Forecast in January 7.0）

5.9
3.4
1.7
0
2Q

3Q

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

Operating Income

1Q

Orders Received: Expected to increase due to increase in orders received for Japan
Railways 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（Forecast in January 130.0）

95.5

1Q

150.0

Orders Received: Decreased due to the deferrals of orders expected in this fiscal
year in addition to the decrease in large-scale orders received for overseas market
Net Sales: Remained at the same level as in the previous fiscal year because ofsales increase for overseas market, despite sales decrease for domestic market
Operating Income: Decreased due to the adverse impact of the appreciation of theyen, provision for losses on construction contracts and other factors

FY2010

1Q

4.9

5.1

3Q

FY2011

6.0

1.1
2Q

FY2012
Forecast- There are construction and expansion plans of the urban transport systems in several Asian
cities, and High-speed railways projects in India- Taichung City Railway System: Won the package contract of 36 cars and E&M system
under cooperation with other companies in March 2011. KHI as a leader of consortium willplay its role to oversee the whole project and system integration as well as supply the carsand rail yard facilities.
- 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 FY2011

Aerospace
Main Products : Aircrafts for Japan Ministry of Defense, Component parts for commercial aircrafts (Boeing , Embraer), Missiles

 FY2011 （ vs. FY2010 ）Orders Received: Increase in orders received for Japan Ministry of Defense (MOD) including
the first mass production contracts of C-2 next-generation cargo aircraft and others
Net Sales: Increase in sales of component parts for Boeing 777 and 787
Operating Income/Loss: Increased due to sales increase, cost reduction and other factors,
despite the adverse impact of the appreciation of the yen（Billion Yen / In accumulated amount）（Forecast in January 300.0）

Orders Received

327.2

87.9

< Sales un its of co mpon ent parts for commercial aircrafts >(unit)

220.0

206.7
123.7

114.1

36.5

30.6

Boeing 777

67.5

Boeing 767
Boeing 787
Embraer170/175

1Q

2Q

3Q

FY2010

1Q

Net Sales

2Q

3Q（Forecast in January 220.0）

FY2012
Forecast

250.0

206.5

196.8
138.5

135.0
87.4

83.0

2Q

3Q

FY2010

1Q

Operating Income/Loss

2Q

3Q

FY2011FY2012
Forecast（Forecast in January 6.0）

7.8

9.0

5.9
2.0
1Q

-1.8

3.0

2Q

-1.1

3.0
1Q

3Q

FY2010-0.8

2Q

 FY2012 Forecast （ vs. FY2011 )Embraer190/195

FY2011
83
25
29
19
98

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 of component partsfor Boeing 777 and 787
Operating Income/Loss: Expected to increase due to sales increase for MOD and sales
increase of component parts for commercial aircrafts<For Reference> Present Status of Main Projects

40.0

34.2
1Q

FY2011FY2010
64
16
22
14
91

3Q

FY2011FY2012
Forecast

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 maritime
patrol aircraft.
Component parts for commercial aircrafts
Boeing 777‐KHI’s production rate for 777 program increased to 7 units per month from thesecond half of FY2010 corresponding to the increase in production rate by the Boeing
Company, and KHI’s production rate is expected to increase up to 8.3 units per month in
FY2012.
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 FY2011

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（Billion Yen / In accumulated amount）（Forecast in January 230.0）

Orders Received
227.2

230.0

187.5
123.3

113.6
79.7

65.3
33.0
1Q

31.3
2Q

3Q

FY2010

1Q

Net Sales

2Q

3Q

FY2012
Forecast（Forecast in January 210.0）

202.6

194.6

149.6

210.0

137.0

99.2
45.5

2Q

 FY2012 Forecast （ vs. FY2011 ）Orders Received: Expected to remain at the same level as in the previous fiscal
year due to orders 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 forcomponent parts of commercial aircraft jet engines and other factors<For Reference>
Major Projects for Commercial Aircraft Jet Engines

84.7

49.9

1Q

FY2011

 FY2011 （ vs. FY2010 )Orders Received: Increase in orders received for component parts of commercial
aircraft jet engines, and for gas engine power plant
Net Sales: Decrease in sales of marine diesel engines and gas turbine-driven natural
gas compressors
Operating Income: Decreased due to sales decrease, the adverse impact of theappreciation of the yen and other factors

3Q

FY2010

1Q

Aircraft
Participation Type

2Q

3Q

FY2011FY2012
Forecast

9.6（Forecast in January 7.0）

9.5

8.0

7.7

8.0

3Q

FY2011FY2012
Forecast

6.1
4.0

1Q

2Q

3Q

FY2010

3.3

3.9

1Q

2Q

（※ ）

TrentXWBPW1100G - JM

Airbus A350
RRSP（※)

Airbus A320neo
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.

Present Status

Operating Income

Trent1000
Boeing 787
RRSP（※)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, the 110MW power plant which consists of 14 Kawasaki Green Gas Engines(received an order in September 2011) is under construction and scheduled to be operativein the summer of 2012.

-8-

I. Consolidated Results for FY2011

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

Orders Received
105.4（Forecast in January 140.0）

119.9

119.2
84.0

77.3
46.8

32.0

1Q

19.1
2Q

3Q

FY2010

1Q

Net Sales

2Q

1Q

38.8

2Q

3Q

FY2011FY2012
Forecast（Forecast in January 130.0）

89.0
20.4

130.0

122.8

130.0

FY2011FY2012
Forecast

78.7

56.4

56.2

3Q

FY2010

1Q

2Q

3Q（Forecast in January 15.0）

14.1
10.0

8.8

8.2
3.5

6.7

4.6
0.9

0.2
2Q

 FY2012 Forecast （ vs. FY2011 )Orders Received: Expected to increase as a whole due to orders received ofenergy and environmental projects, and projects related infrastructure forresource-producing 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 marginresulting from severe competitiveness

23.8

Operating Income

1Q

 FY2011 （ vs. FY2010 ）Orders Received: Remained at the same level as in the previous fiscal year
due to orders received of municipal refuse incineration plants for domestic
customers and other projects
Net Sales: Increase in sales of overseas projects
Operating Income: Increased due to sales increase and improvement in
profitability by steady progress in some projects

3Q

FY2010

1Q

2Q

3Q

FY2011FY2012
Forecast<For Reference>
Orders Received for Boilers of the Floating LNG Facility
In parallel with an expected increase of worldwide energy consumption, a
lot of floating LNG facilities are planned to be constructed. Under thesecircumstances, 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 that can operate under severe offshore condition, arehighly 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.
-9-I. Consolidated Results for FY2011

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

Net Sales（Forecast in January 240.0）

234.4

235.2

159.2

154.2

113.2

106.2

65.1

1Q

59.6

2Q

3Q

FY2010

1Q

2Q

3Q

FY2011

Operating Income/Loss

0.7
1Q

260.0

2Q

3Q

FY2012
Forecast

5.0

FY2010

0.3

2Q

3Q

FY20111Q-1.1

FY2012
Forecast

-2.3

-2.6
-4.9

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

Domestic
EuropeEmerging Countries & Others

Total

 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

-2.9
-4.5

（Forecast in January - 3.0）

North America (incl. Canada) FY2011 （ vs. FY2010 )Net Sales: Remained at the same level as in the previous fiscal year due
to sales increase in Asian and other emerging countries, despite sales
decrease in U.S. and European markets resulting from the adverse impactof the appreciation of the yen and other factors
Operating Income/Loss: Improved due to sales increase in Asian andother emerging countries, the effects of fixed cost reduction and otherfactors, despite adverse impact from the floods in Thailand and theappreciation of the yen

FY2010FY2011FY2012 Forecast
Unit
AmountUnit
AmountUnit
Amount
14
11.3
14
12.1
13
11.8
118(67)78.5 121(69)78.0 124(77)
76.5
67
47.7
57
42.2
61
45.2
272
61.0
309
71.0
375
88.5
471
198.5
501
203.3
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.

<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 growth andfurther to reinforce the business operation in Asian and other emerging countries,
KHI focuses on upgrading production which includes construction of the newplant in Indonesia and expansion of the plant in Thailand. (In Indonesia, leisuremotorcycle market in 2011 increased by 120,000 units from the previous year to640,000 units, and KHI sales was also increased by 17,000 units to 83,000 units.)- 10 -

I. Consolidated Results for FY2011

Precision Machinery
Main Products： Hydraulic components (pumps, motors & valves), Hydraulic systems for industrial use, Hydraulic marine machinery, Industrial Robots（Billion Yen / In accumulated amount）

Orders Received（Forecast in January 180.0）

210.0
174.5

148.9

131.1

106.7

91.1

68.0

43.4

35.0
1Q

2Q

3Q

FY2010

1Q

2Q

3Q

FY2011（Forecast in January 180.0）

Net Sales

175.0
140.3
85.2

60.9

3Q

FY2010

1Q

2Q

22.3

FY2012
Forecast

26.6

27.0

FY2011FY2012
Forecast

14.5

8.6

2Q

FY2011

20.7

14.6

1Q

3Q

（Forecast in January 27.0）

Operating Income

3.9<For Reference>
Businesses Development in Emerging Countries

40.4

27.8
2Q

200.0

7.1

3Q

FY2010 FY2012 Forecast （ vs. FY2011 ）Orders Received & Net Sales: Expected to increase due to demand
recovery of hydraulic components for construction machinery in emerging
countries and increase in sales of industrial robots
Operating Income: Expected to remain at the same level as in the previous
fiscal year due to sales increase, despite increase in fixed cost resulting from
capital expenditures

129.0

99.0

1Q

FY2012
Forecast

 FY2011 （ vs. FY2010 ）Orders Received : Increase in orders received for hydraulic components forconstruction machinery in emerging countries
Net Sales: Increase in sales of hydraulic components for construction
machinery and painting robots
Operating Income: Increased due to sales increase of hydrauliccomponents for construction machinery and other factors

1Q

2Q

3Q

In August 2006, production of hydraulic pumps started at Chinese subsidiary in Suzhou tomeet the increasing demand of hydraulic components for construction machinery in China.
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.
As the demand of hydraulic components in China continued to increase afterward, KHI
focused on upgrading production which includes construction of a new plant at thesubsidiary in Suzhou in October 2011, expansion of the plant in Zhejiang and establishmentof the subsidiary for after-sales service in Shanghai. Consequently, KHI Group’s presence inChinese market has been further enhanced.
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 FY2011

Financial Condition and Cash Flows【Financial Condition】(Billion Yen)FY2010End of March 2011

FY2011
End of March 2012

1,354.2

1,362.1

Shareholders’ Equity

289.0

306.0

（Ratio of shareholders’ equity to total assets）(21.3%)(22.4%)

Interest-bearing debt

429.1

407.1

（Net Interest-bearing debt）（381.9）(372.8)Net Debt Equity Ratio

132%

121%

Total Assets

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

FY2010FY2011

Cash flows from operating activities

81.9

84.7

Cash flows from investing activities- 52.9- 65.9

Free Cash Flows

28.9

18.7

Cash flows from financing activities- 18.8- 26.8- 12 -

II．Forecast for FY2012

Consolidated Operating Performance(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

105

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 April 26, 2012
(For Reference)

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

US$
EUR

Operating Recurring
IncomeProfit
3.5
1.7
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(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(Billion Yen / Persons)

FY2010
Actual

FY2011
Actual

FY2012
Forecast

R&D Expenses

37.0

39.9

45.0

CAPEX
(Construction Base)

55.3

63.9

79.0

Depreciation & Amortization

50.3

48.8

54.0

Domestic

24,511

24,77025,500Overseas

8,195

8,497

9,200

32,70633,267

34,700

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.