Sumitomo Heavy Industries, Ltd.
2Q CONSOLIDATED FINANCIAL REPORTFor the Six-Month Period from April 1 to September 30, 2011

All financial information has been prepared in accordance with generally accepted accounting principles in Japan. This document
has been translated from the Japanese original as a guide to non-Japanese investors and contains forward-looking statementsthat are based on management’s estimates, assumptions, and projections at the time of publication. A number of factors could
cause actual results to differ materially from expectations. Amounts shown in this financial statement have been rounded to thenearest million yen.

Consolidated Results for the Second Quarter
Ended September 30, 2011

Summary of Consolidated Financial Results
For the Second Quarter Ended September 30, 2011
Presented November 1, 2011

Sumitomo Heavy Industries, Ltd.
Listed exchanges

Tokyo Stock Exchange, Osaka Securities Exchange

Stock code

6302

Head officeTokyo

President

Yoshinobu Nakamura

URL

www.shi.co.jp

Inquiries

Hideo Oshima
General Manager, Corporate Communications Dept.

Telephone+81 3 6737 2333

Scheduled reporting date for quarterly report

November 8, 2011

Scheduled date of payment of cash dividends

December 8, 2011

Availability of supplementary explanations forquarterly financial statement
Holding of meeting to explain quarterly
financial statement

Yes
Yes (for Institutional Investors and Analysts)

1. FY 2011 2Q Consolidated Results (April 1, 2011, to September 30, 2011)(1) Business Results(Units: millions of yen)
Second Quarter
April 1 to September 30, 2011

Previous Second Quarter
April 1 to September 30, 2010

% change% change

Net sales

294,06816.7

251,922

Operating income

21,57932.4

16,301

98.3

Ordinary income

20,16836.1

14,816104.3

Net income

9,236

16.6

7,920

500.2

Net income per share (yen)Fully diluted net income per share (yen)

15.04

13.13

--

--

Note: Comprehensive Income
Fiscal quarter ended September 30, 2011: 9,338 million yen (123.9%)
Fiscal quarter ended September 30, 2010: 4,171 million yen (--%)

2

0.1

Consolidated Results for the Second Quarter
Ended September 30, 2011

(2) Financial Position(Units: millions of yen)
End of Second Quarteras of September 30, 2011

End of Previous Full Year
as of March 31, 2011

Total assets

639,528

626,829

Shareholders’ equity

274,682

269,380

42.5

42.6

Equity ratio (%)
Reference: Equity
Fiscal quarter ended September 30, 2011: 271,588 million yen
Fiscal year ended March 31, 2011: 267,326 million yen

2. Dividends(Units: yen)
Year Ended March 31,
2011

Year Ended March 31,
2012

Year Ended March 31,
2012 (forecast)

Annual dividends per share
--

--

0.00

4.00

First quarter
Second quarter
Third quarter----End of term

8.00

6.00

Annual dividends

8.00

10.00

Note:

Changes from the most recent dividend forecast: None

3. FY 2011 Consolidated Forecasts (April 1, 2011, to March 31, 2012)(Units: millions of yen)
Full Year
April 1, 2010, to March 31, 2011

% change
Net sales

640,000

16.8

Operating income

54,00017.9

Ordinary income

50,50014.1

Net income

28,0000.3

Projected net income per share (yen)

45.62

Note:

Changes from the most recent consolidated forecast: Yes

3

Consolidated Results for the Second Quarter
Ended September 30, 2011

4. Additional Notes(1) Transfers of important subsidiaries during the fiscal period (moves of specific subsidiaries due to change in scope of
consolidation):
None
Newly consolidated:

None

Excluded from consolidation:None(2) Special accounting measures applied in the quarterly consolidated financial report:

None(3) Changes to accounting policies, changes to accounting estimates and restatements(i) Changes to accounting policies resulting from revisions to accounting standards, etc.:

None(ii) Changes other than (i):None(iii) Changes to accounting estimates:None(iv) Restatements:

None(4) Number of shares issued (common shares)(i) Number of shares issued at end of fiscal period (including treasury stock):
As of September 30, 2011
As of March 31, 2011

614,527,405 shares
614,527,405 shares(ii) Amount of treasury stock at end of fiscal period
As of September 30, 2011
As of March 31, 2011

785,701 shares
122,181 shares(iii) Average number of shares during fiscal period (cumulative quarterly period)
As of September 30, 2011
As of September 30, 2010

614,176,736 shares603,216,335 shares

Recording of Implementation Conditions Regarding Quarterly Review ProceduresThis quarterly financial summary does not fall within the scope of the Quarterly Review Procedures referenced
in the Financial Instruments and Exchange Act. At the time of disclosure of the quarterly financial summary, theGroup was in the process of implementing the quarterly review procedures for its quarterly financial statements.
Explanations and Other Special Items Regarding the Pertinent Reasons for the Earnings Forecast
Earnings forecasts and outlooks concerning future financial results are believed to be reasonable based on
information available at the time of publication. Actual financial results may vary from the above forecast andoutlook due to a variety of factors. For information on the assumptions that form the basis of the earnings
forecast and items to note concerning the use of earnings forecasts, please see (3) Qualitative Information
regarding Consolidated Earnings Forecast in the Supplementary Materials on page 8.

4Consolidated Results for the Second Quarter
Ended September 30, 2011

Supplementary Materials – Table of Contents

1. Qualitative Information Regarding Current Quarterly Consolidated Business Performance......6(1) Qualitative Information on Consolidated Business Performance ....................................................6(2) Qualitative Information on the Group’s Consolidated Financial Position.........................................7(3) Qualitative Information Regarding Consolidated Earnings Forecast...............................................8
2. Notes Regarding Summary Information (Others) ............................................................................8(1) Changes Involving Important Subsidiaries during the Current Consolidated Year-to-Date Quarterly
Period .............................................................................................................................................8(2) Special Accounting Procedures Adopted during the Development of the Quarterly Consolidated
Financial Report..............................................................................................................................8(3) Changes to Accounting Policies, Changes to Accounting Estimates and Restatements ................8
3. Quarterly Consolidated Financial Statements .................................................................................9(1) Quarterly Consolidated Balance Sheets .........................................................................................9(2) Consolidated Income Statements and Consolidated Statement of Comprehensive Income.........11
Consolidated Income Statements .................................................................................................11
Consolidated Statement of Comprehensive Income .....................................................................12(3) Notes on Premise of a Going Concern .........................................................................................12(4) Notes Regarding Significant Fluctuations to Shareholders’ Equity ...............................................12(5) Subsequent Events of Significant Importance ..............................................................................12
4. Supplementary Information .............................................................................................................13(1) Orders, Sales and Operational Profit, and Balance of Orders by Segment ..................................13(2) (Summary) Consolidated Cash Flows Statement .........................................................................15

5

Consolidated Results for the Second Quarter
Ended September 30, 2011

1. Qualitative Information Regarding Current Quarterly Consolidated Business
Performance(1) Qualitative Information on Consolidated Business Performance
The Japanese economy for the year to date up to the end of the second quarter of the current fiscal year under review
showed continued signs of weakness as the Tohoku Region Earthquake that struck in March of this year significantly
impacted manufacturing activity, while at the same time the Japanese Yen abruptly strengthened. At the same time, theoverall global economy remained unstable as the implementation of inflationary controls in China, which was the driving
force behind global economic growth, increased uncertainty. Moreover, the disruption to public sector finance and tofinancial markets of developed regions such as Europe and the US raised concerns about its effects to the real economy.
Set against this economic backdrop, the Group made earthquake recovery efforts a top priority and worked hard tonormalize production activities that were disrupted. As a result, orders increased across all segments of the Group to end
at JPY303.1 billion, a 24% increase as compared to the same period last year (hereinafter referred to as the “previousterm”). In terms of sales, all segments of the Group posted improved results with the exception of Environmental
Facilities and Plant. Consequently, the Group posted total sales of JPY294.1 billion, a 17% increase from the previous
term.
Turning to income, the compounding effects of an increase in sales and cost cutting resulted in the Group posting an
operating income figure of JPY21.6 billion, a 32% improvement from the previous term, ordinary income of JPY20.2
billion, a 36% improvement from the previous term, and quarterly net income of JPY9.2 billion, a 17% improvement fromthe previous term.
Conditions in each business segment of the Group were as follows:
1. Machinery Components
Expansion in emerging markets as well as the positive contribution made by the European operations resulted in
improvements across almost all product models in the segment as compared to the previous term. Consequently, thesegment as a whole posted better than previous term figures for both orders and sales. In actual figures, the segment
received orders worth JPY49.2 billion (an increase of 32% from the previous term), and posted sales of JPY46.0 billion(an increase of 33% from the previous term). Further, the segment posted operating income of JPY2.2 billion.
2. Precision Machinery
With respect to plastics machinery, the recovering trend in the European markets contributed towards an increase in bothorders and sales for this product line. In other product areas, demand for medical devices fell. Despite this, order figures
for the segment as a whole increased as compared to the previous term. Sales figures also improved from the previous
term mainly due to the abundance of orders that was carried forward to the current period. In actual figures, the segment
received orders worth JPY74.1 billion (an increase of 6% from the previous term), and posted sales of JPY68.6 billion(an increase of 17% from the previous term). Further, the segment posted operating income of JPY6.0 billion.
3. Construction Machinery
The hydraulic excavator business saw an increase in both orders and sales despite the fact that its supply chain was
disrupted due to the Tohoku Region Earthquake. The construction crane business also posted improved orders andsales figures as the North American market showed signs of recovery. As a result, the segment as a whole received
orders worth JPY86.4 billion (an increase of 28% from the previous term) and posted sales of JPY79.9 billion (anincrease of 25% from the previous term). Further, the segment posted operating income of JPY3.9 billion.
4. Industrial Machinery
Orders for turbines trended positively as the level of capital improvements made by overseas customers in the resourcesand energy sectors increased. At the same time, by prioritizing the response to earthquake recovery efforts, demand forthe segment’s materials handling products improved from the previous term. The segment also posted sales figures thatexceeded the previous term. In actual figures, the segment received orders worth JPY45.0 billion (an increase of 25%
from the previous term) and posted sales of JPY37.2 billion (an increase of 13% from the previous term). Further, thesegment posted operating income of JPY4.9 billion.

6

Consolidated Results for the Second Quarter
Ended September 30, 2011

5. Ships
The ship market has continued to remain stagnant and this is reflected in the lack of new orders received during thecurrent quarter under review. This result was the same as the previous term where again no new orders were received.
With regard to sales, four vessels were handed over during the current quarter under review, which is the same figure as
the previous term. Consequently, the segment received orders worth JPY3.9 billion (an increase of 337% from theprevious term), and posted sales of JPY31.1 billion (an increase of 9% from the previous term). Further, the segment
posted operating income of JPY5.7 billion.
6. Environmental Facilities & Plants
Although the energy plant business remained sluggish, orders increased as the water treatment plant business showed
positive signs of growth. Sales on the other hand decreased mainly due to the weak order figures posted in the previous
term. Consequently, the segment received orders worth JPY40.2 billion (an increase of 43% from the previous term) andposted sales of JPY27.0 billion (a decrease of 10% from the previous term). Unfortunately, the decline in sales also led
to the segment posting an operating loss of JPY2.0 billion.
7. Others
Both orders and sales figures showed improvement from the previous term. In actual figures, the segment received
orders worth JPY4.3 billion (an increase of 1% from the previous term) and posted sales of JPY4.3 billion (an increase of
9% from the previous term). Further, the segment posted operating income of JPY800 million.

(2) Qualitative Information on the Group’s Consolidated Financial Position
Total assets at the end of the current quarter under review (ended September 30, 2011) amounted to JPY639.5 billion,
an increase of JPY12.7 billion as compared to the end of the previous consolidated fiscal year. This was mainly due to
the JPY5.0 billion increase in cash and deposits, the JPY3.1 billion increase in trade notes and accounts receivable, andthe JPY7.3 billion increase in inventory assets exceeding the JPY3.3 billion decrease in investments and other assets
from the end of the previous consolidated fiscal year.
Total liabilities rose to a figure of JPY364.8 billion, an increase of JPY7.4 billion as compared to the end of the previous
consolidated fiscal year. This was mainly due to the JPY3.7 billion increase in trade notes and accounts payable as wellas the JPY5.8 billion increase in the balance of interest-bearing liabilities.
Net assets amounted to JPY274.7 billion, an increase of JPY5.3 billion as compared to the end of the previous
consolidated fiscal year as the JPY1.0 billion decrease in the foreign currency translation adjustment was offset by a
JPY5.6 billion increase in retained earnings.
As a result, the shareholders’ equity ratio fell by 0.1% from the end of the previous consolidated fiscal year to finish at
42.5%.
(Cash Flow Condition)
Although quarterly net income before taxes and other adjustments increased and the level of accounts receivables fell,
payment of corporate income and other taxes increased, the level of inventory assets rose, and the level of accounts
payable decreased. As a result, cash flow from operating activities totaled JPY13.5 billion, a decrease of JPY800 million
from the previous term.
Cash flow used for investing activities totaled JPY8.7 billion, a decrease of JPY900 million from the previous term. Morespecifically, while there was an increase in cash used to acquire fixed assets and a decline in cash generated from thesale of marketable securities, there was also a reduction in the cash used to acquire shares of subsidiaries that resulted
in a change to their consolidated status.
Cash flow used for financing activities totaled JPY600 million, a decrease of JPY21.5 billion from the previous term as
there was an increase in the amount of interest-bearing liabilities held.
As a result of the foregoing, the balance of cash and cash equivalents at the end of the second quarter of the current
consolidated fiscal year totaled JPY56.4 billion, an increase of JPY4.7 billion as compared to the end of the previous
consolidated fiscal year.

7Consolidated Results for the Second Quarter
Ended September 30, 2011(3) Qualitative Information Regarding Consolidated Earnings Forecast
Operating performance for the year-to-date period up to the end of the second quarter shows sales tracking closely toforecasted figures. In terms of income, both operating and ordinary income figures have exceeded forecast mainly due tothe impact of cost-cutting measures. Quarterly net income is also closely tracking forecasted figures as an extraordinary
loss due to the write-down of marketable securities was posted.
Although the operating environment that forms the backdrop of the Company’s business remains unclear and the future
outlook continues to be uncertain, the full-year forecast for sales has been revised upwards after taking into theconsideration the operating performance for the year-to-date period up to the end of the second quarter. However, thefull-year forecast for net income has been revised downwards.
Further, from the third quarter of the current consolidated fiscal year, the following currency exchange rate is being
assumed: USD1 = JPY77; EUR1 = JPY110.
The differences in the full-year consolidated earnings forecast from the figures published along with the Summary ofConsolidated Financial Results on July 29, 2011 are summarized below:(Fiscal Year Ending March 2012)(Units: millions of yen)

% Difference(Reference)Previous Year
Results

10,0001.6

548,01554,000----45,80350,500----44,25330,00028,000(2,000)(6.7)

27,926

48.83

45.62

--

--

45.87

Previous
Forecast (A)Current
Forecast (B)Net sales

630,000

640,000

Operating income

54,000Ordinary income

50,500Net income
Net income per share (yen)Difference(B-A)

2. Notes Regarding Summary Information (Others)(1) Changes Involving Important Subsidiaries during the Current Consolidated Year-to-Date
Quarterly Period
There are no applicable items.

(2) Special Accounting Procedures Adopted during the Development of the Quarterly Consolidated
Financial Report
There are no applicable items.

(3) Changes to Accounting Policies, Changes to Accounting Estimates and Restatements
There are no applicable items.

8Consolidated Results for the Second Quarter
Ended September 30, 2011

3. Quarterly Consolidated Financial Statements(1) Quarterly Consolidated Balance Sheets(Units: millions of yen)
End of Previous Fiscal Year
as of March 31, 2011

End of Second Quarteras of September 30, 2011

AmountAmountAssetsCash and deposits

52,48657,487

Notes and accounts receivable

155,267

158,363

Inventory assets

131,035

138,354

Other

27,54627,218(991)(1,093)365,342

380,329Land

117,157

116,674

Other (net)96,99999,068

Total tangible assets

214,156

215,742

6,936

6,382

6,936

6,382

Other

41,86738,482

Allowance for doubtful accounts(1,472)(1,406)40,39537,076

Fixed assets

261,487

259,199

Total assets

626,829

639,528

Allowance for doubtful accounts
Current assets

Other
Total intangible assets

Investments and other assets

9Consolidated Results for the Second Quarter
Ended September 30, 2011

(Units: millions of yen)
End of Previous Fiscal Year
as of March 31, 2011

End of Second Quarteras of September 30, 2011

AmountAmountLiabilities
Notes and accounts payable

131,951

135,630

Short-term bank loans

21,50425,068Long-term loans due within one year

4,411

12,111-

5,000

Allowance

7,000

6,880

Other

77,64175,021

242,507259,710Bonds

10,00010,000Long-term debt due after one year

31,91821,449

Employees’ severance and retirement benefits

31,38032,155

208

206

Deferred income taxes on revaluation

31,836

31,569

Other

9,600

9,757

Long-term liabilities

114,943

105,136

Total liabilities

357,450

364,846

Common stock

30,87230,872

Capital surplus

23,78923,789Retained earnings

188,047

193,633

(67)

(433)

242,641

247,860

Unrealized gains on securities

981

1,017

Profit (loss) on deferred hedge

960

1,220

Adjustment regarding pension obligations ofconsolidated overseas subsidiaries(1,978)(1,883)

Revaluation reserve for land

39,851

39,463Foreign currency translation adjustments(15,129)(16,089)

Total accumulated other comprehensive income

24,68623,728

Minority interests

2,053

3,094

Total net assets

269,380

274,682

Liabilities and net assets

626,829

639,528

Commercial paper

Current liabilities

Allowance

Net assets

Treasury stock
Stockholders’ equity

10Consolidated Results for the Second Quarter
Ended September 30, 2011

(2) Consolidated Income Statements and Consolidated Statement of Comprehensive Income
Consolidated Income Statements(Units: millions of yen)Previous Second Quarter
April 1, 2010, to September
30, 2010

Present Second Quarter
April 1, 2011, to September
30, 2011

AmountAmountNet sales

251,922

294,068

Cost of sales

198,158

230,660

Gross income

53,764

63,408Selling, general & administrative expenses

37,463

41,829Operating income

16,301

21,579Interest income

7689

Dividend income

709

314

Other

847

1,351

1,632

1,754

795

777

2,321

2,388

Total non-operating expenses

3,116

3,165

Ordinary income

14,816

20,168Loss on devaluation of marketable securities

－

2,155

Loss on contracts－

374

Loss on impaired assets－

229

Financial impact due to the application of theaccounting standard for asset retirement
obligations

480－

Total extraordinary losses

480

2,758

Income before income taxes

14,336

17,410

Corporate income taxes

5,815

7,555

Quarterly net income before income or loss
adjustments on minority interests

8,522

9,855

602

619

7,920

9,236

Non-operating income

Total non-operating income
Non-operating expenses
Interest expense
Other

Extraordinary losses

Minority interests
Net income

11Consolidated Results for the Second Quarter
Ended September 30, 2011

Consolidated Statement of Comprehensive Income(Units: millions of yen)Previous Second Quarter
April 1, 2010, to September 30,
2010
Amount

Net income before adjusting for profit (loss)
from minority interests

Present Second Quarter
April 1, 2011, to September 30,
2011
Amount

8,522

9,855

Unrealized gains on securities(1,976)

36

Profit (loss) on deferred hedge

220

265

Adjustment regarding pension
obligations of consolidated overseas
subsidiaries

(181)

95

(2,367)(908)

Amount applied for equity method
accounting of affiliates

(46)

(5)

Total other comprehensive income(4,351)

(517)

4,171

9,338

3,709

8,667

462

671

Other comprehensive income

Foreign currency translation adjustments

Comprehensive income(Breakdown)Comprehensive income relating to parent
company shareholdings
Comprehensive income relating tominority interests(3) Notes on Premise of a Going Concern
There are no applicable items.

(4) Notes Regarding Significant Fluctuations to Shareholders’ Equity
There are no applicable items.

(5) Subsequent Events of Significant Importance
There are no applicable items.

12Consolidated Results for the Second Quarter
Ended September 30, 2011

4. Supplementary Information(1) Orders, Sales and Operational Profit, and Balance of Orders by Segment
Orders Received(Units: millions of yen)Segment

April 1, 2010 to
September 30, 2010

April 1, 2011 to
September 30, 2011

AmountAmountY/Y Change
Amount%Machinery Components

37,21349,23912,025

32.3

Precision Machinery

69,94674,0564,111

5.9

Construction Machinery

67,40586,41919,01428.2

Industrial Machinery

36,03944,969

8,931

24.8

893

3,899

3,006

336.6

Environmental Facilities & Plants

28,02940,215

12,186

43.5

Others

4,267

4,322

55

1.3

Total

243,792

303,119

59,327

24.3

Ships

Sales and Operational Profit(Units: millions of yen)Segment

April 1, 2010 to
September 30, 2010
Operational
ProfitSales

April 1, 2011 to
September 30, 2011
Operational
ProfitSales

Y/Y Change
Operational
ProfitSales

Machinery Components

34,514

1,628

45,9992,221

11,485593

Precision Machinery

58,5001,672

68,567

6,009

10,067

4,337

Construction Machinery

63,7793,109

79,9103,936

16,131

827

Industrial Machinery

32,843

5,393

37,246

4,885

4,403

(508)

Ships

28,426

3,154

31,078

5,679

2,653

2,525

Environmental Facilities & Plants

29,913604

26,965(1,966)(2,948)(2,571)Others

3,947

722

4,302

841

355

119

―

18

―

(25)

―

(43)

251,922

16,301

294,068

21,57942,146

5,279

Adjustments
Total

13

Consolidated Results for the Second Quarter
Ended September 30, 2011

Balance of Orders Received(Units: millions of yen)Segment

End of Previous FiscalYear
as of March 31, 2011

End of Second Quarteras of September 30,
2011

AmountAmountChangeAmount%Machinery Components

25,431

28,670

3,240

12.7

Precision Machinery

65,626

71,1155,489

8.4

Construction Machinery

23,56330,072

6,509

27.6

Industrial Machinery

85,62893,351

7,723

9.0

Ships

96,022

68,842(27,180)(28.3)

Environmental Facilities & Plants

69,68582,934

13,250

19.0

Others

1,942

1,962

20

1.1

Total

367,896376,947

9,051

2.5

The Group’s operating segments are categorized as follows:Businesses

Main Products

Machinery Components

Power transmission and control

Precision Machinery

Plastic injection molding machines, film forming machines, semiconductor
production equipment, laser processing systems, cryocoolers, precision
positioning equipment, ion accelerators, medical machines and equipment ,plasma coating systems for FPDs, precision forgings, control components,
defense equipment, machining tools

Construction Machinery

Hydraulic excavators, mobile cranes, road machinery

Industrial Machinery

Forging machines, material handling systems, logistics systems,
automated parking systems, turbines, pumps

Ships

Ships

Environmental Facilities & Plants

Private power generation facilities, boilers, industrial waste treatment facilities,
air pollution control equipment, water and sewage treatment systems, processequipment, pressure vessels, agitation tanks, air conditioning equipment, foodprocessing machinery

14

Consolidated Results for the Second Quarter
Ended September 30, 2011(2) (Summary) Consolidated Cash Flows Statement(Units: millions of yen)Previous Second
Quarter
April 1, 2010, toSeptember 30, 2010

Present Second Quarter
April 1, 2011, toSeptember 30, 2011

Y/Y Change

Income before income taxes

14,336

17,4103,074

Depreciation

8,735

8,526

(209)

(Increase) decrease in notes andaccounts receivable(3,106)

4,524

7,630

(Increase) decrease in inventories(5,097)(6,819)(1,722)

Increase (decrease) in notes andaccounts payable

9,563

2,111

(7,451)

Payments for income taxes(7,905)(13,423)(5,518)Other(2,156)

1,205

3,360

14,37013,533(837)(7,037)(10,042)(3,006)

250

1,294

1,044

(2,608)―2,608

Proceeds from sale of securities

359

143

(216)

Other

(560)

(61)

499

(9,596)(8,667)929

Net increase (decrease) in short-term
loans(18,684)

5,353

24,037

Cash dividends paid

(2,411)(4,900)(2,490)Other(1,037)(1,096)(60)(22,131)(643)

21,487

(129)

500

629

Cash and cash equivalents at beginning of
period61,45251,700(9,752)

Cash and cash equivalents at end of period

43,96756,424

12,457

Net cash provided by operating activities
Payments for purchases of fixed assets
Proceeds from sale of fixed assets
Expenses related to the acquisition ofsubsidiaries that resulted in a change
to their consolidated status

Net cash used in investing activities

Net cash used in financing activities
Other

15