Sumitomo Heavy Industries, Ltd.
3Q CONSOLIDATED FINANCIAL REPORTFor the Nine-Month Period from April 1 to December 31, 2010

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 Third Quarter
Ended December 31, 2010

Summary of Consolidated Financial Results
For the Third Quarter Ended December 31, 2010
Presented January 31, 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 reportFebruary 8, 2011

Scheduled date of payment of cash dividends--

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

None
None

1. FY 2010 3Q Consolidated Results (April 1, 2010, to December 31, 2010)(1) Business Results(Units: millions of yen)
Third Quarter
April 1 to December 31, 2010

Previous Third Quarter
April 1 to December 31, 2009

% change% change

Net sales

369,1962.7

359,414(27.5)

Operating income

25,333

93.9

13,064(71.2)

Ordinary income

22,986

99.5

11,521(72.5)Net income

15,773

239.6

4,645

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

2

25.99

7.70

--

--

Consolidated Results for the Third Quarter
Ended December 31, 2010

(2) Financial Position(Units: millions of yen)
End of Third Quarter
As of December 31, 2010

End of Previous Full YearAs of March 31, 2010

Total assets

615,445

610,087

Shareholders’ equity

259,460

254,153

41.8

40.0

418.70404.73Equity ratio (%)
Net assets per share (yen)Note:

Equity:Fiscal quarter ended December 31, 2010: 257,259 million yen
Fiscal year ended March 31, 2010: 244,221 million yen

2. Dividends(Units: yen)
Year Ended March 31,
2010

Year Ending March 31,
2011

Year Ending March 31,
2011 (forecast)First quarter----

Second quarter

0.00

0.00

Third quarter----End of term

4.00

6.00

Annual dividends

4.00

6.00

Annual dividends per share

Note:

Changes to dividend forecast for current quarter: No

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

% change
Net sales

555,000

7.5

Operating income

43,00052.2

Ordinary income

39,00048.1

Net income

22,00065.7

Projected net income per share (yen)

35.81

Note:

Changes to consolidated forecasts for current quarter: Yes

3

Consolidated Results for the Third Quarter
Ended December 31, 2010

4. Additional Notes(For further details, please see “2. Other Notes” in the “Supplementary Materials” on page 9.)(1) Transfers of important subsidiaries during the fiscal period:

None

Newly consolidated:

None

Excluded from consolidation:

None

Note: Refers to movements of specified subsidiaries that have resulted from any changes to the range ofconsolidated entities during the current quarterly accounting period.
(2) Application of concise method on accounting procedure and special accounting procedures:

Yes

Note: Refers to whether any special accounting treatment or any simplified accounting treatment was used during
the development of the quarterly consolidated financial statements.
(3) Changes in principles, procedures, and presentation of accounting treatment(i) Changes resulting from revisions to accounting standards, etc.:

Yes(ii) Changes other than (i):None

Note: Refers to changes to general rules and procedures, as well as to denotation methods for accounting treatment
in relation to the development of current quarter consolidated financial statements as referenced in the section
entitled “Changes to Important Items that Form the Basis of the Development of the Quarterly Consolidated
Financial Statements”.
(4) Number of shares issued (common shares)(i) Number of shares issued at end of fiscal period (including treasury stock):
As of December 31, 2010
As of March 31, 2010

614,527,405 shares
605,726,394 shares(ii) Amount of treasury stock at end of fiscal period
As of December 31, 2010
As of March 31, 2010

105,185 shares
2,315,778 shares(iii) Average number of shares during fiscal period (cumulative quarterly period)
As of December 31, 2010
As of December 30, 2009

606,957,574 shares
603,446,118 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(1) The earnings and dividend forecast that was announced on November 4, 2010 has been revised.
(2) Statements regarding the future contained in this document, including the earning forecast, are believed to bereasonable based on information available at the time of publication. Actual financial results may varysignificantly from the forecast due to a variety of factors. For information on the assumptions that form thebasis of the earnings forecast and items to note concerning the use of the earnings forecast, please see “(3)Qualitative Information regarding the Consolidated Earnings Forecast” on page 8 of the “Supplementary
Materials”.

4Consolidated Results for the Third Quarter
Ended December 31, 2010

Supplementary Materials – Table of Contents

1. Qualitative Information Regarding Current Quarterly Consolidated Business Performance......6(1) Qualitative Information Regarding Consolidated Operating Results ...............................................6(2) Qualitative Information on the Group’s Consolidated Financial Position.........................................7(3) Qualitative Information Regarding Consolidated Earnings Forecast...............................................8
2. Other Notes.........................................................................................................................................9(1) Changes Involving Important Subsidiaries......................................................................................9(2) Application of Simplified Accounting Methods and Special Accounting Procedure .........................9(3) Summary of Changes to Accounting Treatment Principles, Procedures, Presentation Methods,
and Other Items ..............................................................................................................................9(4) Summary of Key Events Related to the Premises of a Going Concern ........................................10
3. Quarterly Consolidated Financial Statements ...............................................................................11(1) Quarterly Consolidated Balance Sheets .......................................................................................11(2) Quarterly Consolidated Income Statements..................................................................................13(3) Consolidated Cash Flows Statement ............................................................................................14(4) Notes on Premise of a Going Concern .........................................................................................15(5) Segment Information ....................................................................................................................15(6) Notes Regarding Significant Fluctuations to Shareholders’ Equity ...............................................17(7) Important Matters to Note that Occurred After the End of the Current Period...............................17
4. Supplementary Information .............................................................................................................18(1) Orders, Sales, and Balance of Orders by Segment ......................................................................18

5

Consolidated Results for the Third Quarter
Ended December 31, 2010

1. Qualitative Information Regarding Current Quarterly Consolidated Business
Performance(1) Qualitative Information Regarding Consolidated Operating Results
The Japanese economy for the year-to-date period up to the end of the third quarter of the current consolidated fiscal
year (April 1, 2010 to December 31, 2010) continued to show gentle recovery as exports to emerging markets, inparticular China, improved, and measures to boost the domestic economy took hold. This was despite the fact that theJapanese Yen significantly strengthened during the period. At the same time, emerging economies such as China
continued their strong performance as measures to boost their economies took hold; further enhancing their presence on
the global stage. On the other hand, the developed economies of Europe and North America remained unstable due tofinancial uncertainty in Europe and the delayed recovery of markets in the United States.
Set against this economic backdrop, the Group worked to adapt to changes in the operating environment by carrying out
such efforts as accelerating its global growth plan, with a specific focus on the ever-expanding emerging markets.
As a result of these efforts, orders increased across all segments of the Group with the exception of Environmental
Facilities and Plants, and Others, to finish at JPY376.0 billion, a 33% increase as compared to the same period in theprevious fiscal year (hereinafter referred to as the “previous period”). In addition, the Group posted total sales of
JPY369.2 billion, a 3% increase as compared to the previous period.
Turning to income, the positive effects of cost-cutting measures implemented during the period resulted in the Groupposting operating income of JPY25.3 billion, an increase of 94% from the previous period, and ordinary income of
JPY23.0 billion, an increase of 100% from the previous period. In addition, the Group posted an extraordinary gain fromnegative goodwill generated from executing a stock-swap agreement with Nihon Spindle Manufacturing Co., Ltd.
Consequently, quarterly net income for the period was JPY15.8 billion, an increase of 240% from the previous period.
Conditions in each business segment are provided below:
1. Machinery Components
Both orders and sales across the entire segment improved as compared to the previous period as emerging markets,with a particular focus on China, recovered, and demand for gear reducers designed for precision controls as well asother devices trended well in the domestic market. Consequently, the segment received orders worth JPY56.9 billion (anincrease of 29% from the previous period), and posted net sales of JPY54.1 billion (an increase of 5% from the previous
period). Operating income for the segment totaled JPY3.2 billion.
2. Precision Machinery
Both orders and sales of plastics machinery increased as markets in East Asia, most notably China, recovered. In otherareas of the segment, demand for medical devices forged ahead while machinery designed for the semiconductor andelectronics sectors remained on the path to recovery, resulting in increases in both orders and sales. Consequently, thesegment received orders worth JPY111.5 billion (an increase of 51% from the previous period), and posted net sales of
JPY91.9 billion (an increase of 33% from the previous period). Operating income for the segment totaled JPY4.6 billion.
3. Construction Machinery
The hydraulic excavator business saw an increase in both orders and sales primarily as a result of the rapid expansion of
the Chinese market. On the other hand, the delayed recovery of North American markets continued to weigh heavily on
the construction crane business as both orders and sales waned. Consequently, the segment received orders worth
JPY99.3 billion (an increase of 45% from the previous period), and posted net sales of JPY93.2 billion (an increase of
31% from the previous period). Operating income for the segment totaled JPY4.5 billion.

6

Consolidated Results for the Third Quarter
Ended December 31, 2010

4. Industrial Machinery
Orders for turbines and pumps trended positively as the level of capital improvements made by overseas customers in
the resources and energy sectors recovered. However, sales figures in this segment area declined mainly due to weakorder figures posted in the previous period. Also, the demand for materials handling products, particularly fromcompanies in the electricity generating sector increased, and this development had a positive impact on orders. Again,
however, sales figures in this segment area declined mainly due to weak order figures posted in the previous period. As
a whole, the segment received orders worth JPY48.3 billion (an increase of 12% from the previous period), and posted
net sales of JPY45.8 billion (a decrease of 30% from the previous period). Operating income for the segment totaled
JPY7.3 billion.
5. Ships
Although recovery in the ship market has been slow, two orders for new vessels were received in the third quarter of theconsolidated fiscal year as compared to none during the same period last year. In regard to sales, four vessels werehanded over, a decline of two vessels as compared to the previous period. Consequently, the segment received orders
worth JPY13.1 billion (an increase of 26.9% from the previous period), and posted net sales of JPY30.1 billion (adecrease of 29% from the previous period). Operating income for the segment totaled JPY3.2 billion.
6. Environmental Facilities & Plants
The energy plant business saw a decline in both orders and sales as the slowdown of the domestic market for industrial
power generation boilers had a negative impact on the segment. Orders in the water treatment plant business also fell
due to weak market conditions. However, sales in this segment area increased due to the significant number of orders
outstanding from the end of the previous consolidated fiscal year. Consequently, the segment received orders worth
JPY40.4 billion (a decrease of 7% from the previous period), and posted net sales of JPY48.1 billion (a decrease of 9%from the previous period). Operating income for the segment totaled JPY1.6 billion.
7. Others
This segment received orders worth JPY6.4 billion (a decrease of 1% from the previous period), and posted net sales of
JPY6.0 billion (a decrease of 6% from the previous period). Operating income for the segment totaled JPY1.0 billion.

(2) Qualitative Information on the Group’s Consolidated Financial Position
Total assets at the end of current quarter (ended December 31, 2010) equaled JPY615.4 billion, an increase of JPY5.4
billion as compared to the end of the previous consolidated fiscal year. More specifically, cash and cash deposits,
tangible fixed assets, and investments and other assets decreased by JPY20.6 billion, JPY3.6 billion and JPY4.6 billion,
respectively. This was offset by a JPY28.5 billion increase in inventories and a JPY5.3 billion increase in notes andaccounts receivables.
Total liabilities increased by JPY100 million as compared to the end of the previous consolidated fiscal year to equal
JPY356.0 billion. This was mainly due to the JPY20.7 billion increase in notes and accounts payables exceeding thedecrease of JPY8.2 billion and JPY1.3 billion in the balance of interest-bearing liabilities and accrued retirement benefits,
respectively.
Net assets totaled JPY259.5 billion, an increase of JPY5.3 billion as compared to the end of the previous consolidated
fiscal year. As a result of making Nihon Spindle Manufacturing Co., Ltd. a wholly-owned group subsidiary company
through a stock-swap agreement, minority interests fell by JPY7.7 billion while additional paid-in capital increased by
JPY3.3 billion. Moreover, the JPY4.4 billion decrease in the foreign currency translation adjustment account and the
JPY1.2 billion decrease in the value of other marketable securities were offset by the JPY13.4 billion increase in retained
earnings.
As a result, the shareholders’ equity ratio improved by 1.8% from the end of the previous consolidated fiscal year to finish
at 41.8%.

7

Consolidated Results for the Third Quarter
Ended December 31, 2010

Cash Flow Condition
Although the level of quarterly net income before taxes and other adjustments as well as the level of accounts payablerose, the level of accounts receivable along with the level of inventories fell. In addition, payments of corporate and othertaxes rose. As a result, cash flow from operating activities totaled JPY3.6 billion, a decrease of JPY22.8 billion ascompared to the previous period.
Cash flow used for investing activities totaled JPY12.8 billion, an increase of JPY1.1 billion from the previous period.
More specifically, while there was a decrease in cash used to acquire fixed assets, there was an increase in the cashused to acquire shares of subsidiaries that resulted in a change to their consolidated status.
Cash flow used for financing activities totaled JPY10.5 billion, a decrease of JPY1.0 billion from the previous period, as
the Group reduced its repayment of interest-bearing liabilities.
As a result of the foregoing, the balance of cash and cash equivalents at the end of third quarter of the consolidated
fiscal year totaled JPY41.3 billion, a decrease of JPY20.2 billion as compared to the end of the previous consolidated
fiscal year.

(3) Qualitative Information Regarding Consolidated Earnings Forecast
The Consolidated Earnings Forecast for the period ending March 2011 that was previously announced on November 4,2010 has been revised as follows:(Fiscal Year Ending March 2011)(Units: millions of yen)

% Difference(Reference)Previous Year
Results

5,000

0.9

516,165

3,000

7.5

28,254

4,000

11.4

26,33322,000

2,000

10.0

13,280

35.81

--

--

22.01

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

550,000

555,000

Operating income

40,00043,000Ordinary income

35,00039,000Net income

20,000Net income per share (yen)32.85

Difference(B-A)

Although the operating environment that sets the backdrop for the Group’s business continues to be unclear, and leaves
doubts regarding the future outlook, a decision was made to revise the full-year forecast for net sales, operating income,ordinary income and net income in an upwardly direction. This decision was made based on the positive trends seen fororder figures in the construction machinery segment, and the fact that the cost-cutting measures in the precision
machinery segment continued to make significant headway.
Please note that from the fourth-quarter onwards, a currency exchange rate of USD1 = JPY82.5 and EUR1 = JPY110
will be utilized.

8

Consolidated Results for the Third Quarter
Ended December 31, 2010

2. Other Notes(1) Changes Involving Important Subsidiaries
There are no applicable items.

(2) Application of Simplified Accounting Methods and Special Accounting ProcedureI.

Simplified Accounting Methods• Method of calculating estimated bad debt write-offs in respect to general receivables
The ratio of bad debt write-offs used at the end of the previous fiscal year has been used.
• Valuation method for inventories
With regard to the calculation of inventories at the end of the third quarter, physical inventory has been
omitted, and calculations have been performed in a reasonable manner on the basis of the results ofphysical inventory for the previous consolidated fiscal year.
• Method of calculating unrealized profit/loss in respect of inventories
The profit/loss ratio used at the end of the previous consolidated fiscal year has been used.
• Method of calculating depreciation on fixed assets
For assets that are depreciated using the declining-balance method, calculations have been made byprorating the amount of depreciation for the consolidated fiscal year.
• Method of calculating deferred and accrued accounts
Estimates obtained by using a reasonable calculation method have been recorded.
• Method of calculating corporate income tax, etc., as well as deferred tax assets and deferred tax liability
Tax payments on corporate income tax are calculated in such a way that addition/subtraction items and tax
deduction items to be included are limited to important items only.
In determining the collectability of deferred tax assets, where no substantial changes have been identified in
the management environment or in temporary differences arising after the end of the previous consolidated
fiscal year, forecasts used for the previous consolidated fiscal year and tax planning have been used for
calculation.

II. Special Accounting Methods Used to Prepare the Consolidated Quarterly Financial Statements:
Not applicable(3) Summary of Changes to Accounting Treatment Principles, Procedures, Presentation Methods,
and Other Items
I.

Adoption of the “Accounting Standard for Equity Method Accounting of Investments” and the “Practical
Solution for the Unification of Accounting Policies Applied to Associated Companies Accounted for Using theEquity Method”
As of the first quarter of the current consolidated fiscal year, the Group has adopted the Accounting Standard
for Equity Method Accounting of Investments (Statement No. 16 of the Accounting Standards Board of Japan,
dated March 10, 2008) and the Practical Solution for the Unification of Accounting Policies Applied to
Associated Companies Accounted for Using the Equity Method (Practical Issues Task Force No. 24 of the
Accounting Standards Board of Japan, dated March 10, 2008). There is no impact to operating income,ordinary income, or quarterly net income before taxes and other adjustments as a result of this change.

9Consolidated Results for the Third Quarter
Ended December 31, 2010

II. Adoption of the “Accounting Standard for Asset Retirement Obligations”
As of the first quarter of the current consolidated fiscal year, the Group has adopted the Accounting Standard
for Asset Retirement Obligations (Statement No. 18 of the Accounting Standards Board of Japan, dated March
31, 2008) and the Implementation Guidance on the Accounting Standard for Asset Retirement Obligations(Implementation Guidance No. 21 of the Accounting Standards Board of Japan, dated March 31, 2008).
Although the impact on operating income, ordinary income, and segment information is minimal, the Group
posted an extraordinary loss in the amount of JPY480 million for the first quarter as a result of applying the
Accounting Standard for Asset Retirement Obligations.
III. Adoption of the “Accounting Standard for Business Combinations”
As of the first quarter of the current consolidated fiscal year, the Group has adopted the Accounting Standard
for Business Combinations (Statement No. 21 of the Accounting Standards Board of Japan, dated December
26, 2008), the Accounting Standard for Consolidated Financial Statements (Statement No. 22 of the
Accounting Standards Board of Japan, dated December 26, 2008), the Partial Amendments to the AccountingStandard for Research and Development Costs (Statement No. 23 of the Accounting Standards Board ofJapan, dated December 26, 2008), the Revised Accounting Standard for Business Divestitures (Statement No.
7 of the Accounting Standards Board of Japan, with a revision date of December 26, 2008), the Revised
Accounting Standard for Equity Method of Accounting for Investments (Statement No. 16 of the AccountingStandards Board of Japan, with a revision date of December 26, 2008), and the Revised Guidance on
Accounting Standard for Business Combinations and Accounting Standard for Business Divestitures(Guidance No. 10 of the Accounting Standards Board of Japan, with a revision date of December 26, 2008).

(4) Summary of Key Events Related to the Premises of a Going Concern
There are no applicable items.

10Consolidated Results for the Third Quarter
Ended December 31, 2010

3. Quarterly Consolidated Financial Statements(1) Quarterly Consolidated Balance Sheets(Units: millions of yen)
End of Third Quarter
As of December 31, 2010

End of Previous Fiscal YearAs of March 31, 2010

AmountAmountAssetsCash and deposits

41,87262,511

Notes and accounts receivable

137,165

131,893

Inventory assets

151,928

123,416

Other

24,42023,032

Allowance for doubtful accounts(1,033)(1,073)354,351

339,780Land

117,834

115,971

Other (net)95,054

100,506

Total tangible assets

212,888

216,477

6,302

7,308

6,302

7,308

Other

43,25848,096

Allowance for doubtful accounts(1,354)(1,574)

41,904

46,523Fixed assets

261,094

270,308

Total assets

615,445

610,087

Current assets

Other
Total intangible assets

Investments and other assets

11Consolidated Results for the Third Quarter
Ended December 31, 2010

(Units: millions of yen)
End of Third Quarter
As of December 31, 2010

End of Previous Fiscal YearAs of March 31, 2010

AmountAmountLiabilities
Notes and accounts payable

128,756

108,018

Short-term bank loans

18,53630,524

Commercial paper

14,000－Long-term loans due within one year

3,133

10,438

Allowance

6,905

7,807

Other

68,61878,168239,948234,954

Bonds

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

33,77936,698

Employees’ severance and retirement benefits

31,13232,426

384

235

Deferred income taxes on revaluation

32,18532,211

Other

8,557

9,411

Long-term liabilities

116,037

120,981

Total liabilities

355,985355,935

Capital30,87230,872

Capital surplus

23,78920,503Retained earnings

175,396

161,951(58)(1,494)229,999

211,831

Unrealized gains on securities

753

2,003

Profit (loss) on deferred hedge

1,608

1,125

Adjustment regarding pension obligations ofconsolidated overseas subsidiaries(1,650)(1,753)

Revaluation reserve for land

40,34840,386

Foreign currency translation adjustments(13,798)(9,370)Appraisal and translation differences

27,26032,390Minority interests

2,201

9,931

Total net assets

259,460

254,153

Liabilities and net assets

615,445

610,087

Current liabilities

Allowance

Net assets

Treasury stock
Stockholders’ equity

12Consolidated Results for the Third Quarter
Ended December 31, 2010(2) Quarterly Consolidated Income Statements(Units: millions of yen)Previous Third Quarter
April 1, 2009, to December
31, 2009

Present Third Quarter
April 1, 2010, to December
31, 2010

AmountAmountNet sales

359,414369,196

Cost of sales

289,745

288,288

Gross income

69,66980,907

Selling, general & administrative expenses

56,60655,574

Operating income

13,06425,333

Interest income

124

113

Dividend income

618

819

2,055

1,159

2,797

2,091

Interest expense

1,431

1,140

Other

2,909

3,297

Total non-operating expenses

4,340

4,438

Ordinary income

11,521

22,986

Gain from negative goodwill

－

3,437

Gain on sales of securities

1,272

－

844

－

2,115

3,437

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

480

Loss on contracts－

336

Loss on impaired assets－

223

Loss on devaluation of marketable securities

840－

Total extraordinary losses

840

1,038

Income before income taxes

12,79625,384

Corporate income tax, current

5,044

6,633

Corporate income tax, deferred

2,483

2,203

Total corporate income taxes

7,527

8,836

Quarterly net income before income or loss adjustments on
minority interests－

16,549Minority interests

624

776

4,645

15,773Non-operating income

Other
Total non-operating income
Non-operating expenses

Extraordinary gains

Revenues from grants and subsidies
Total extraordinary gains
Extraordinary losses

Net income

13Consolidated Results for the Third Quarter
Ended December 31, 2010

(3) Consolidated Cash Flows Statement(Units: millions of yen)Previous Third Quarter
April 1, 2009, to December 31,
2009

Present Third Quarter
April 1, 2010, to December 31,
2010

12,79625,384

14,651

13,234Gain from negative goodwill－(3,437)

Interest and dividend income

(742)

(932)

Interest expenses

1,431

1,140

(Increase) decrease in notes and accounts
receivable

37,738(9,956)(Increase) decrease in inventories

7,046(29,236)(39,767)

22,138

Other

1,047

(4,287)

Subtotal

34,201

14,049Interest and dividends received

1,316

942

Interest expenses(1,231)(1,104)

Payments for income taxes(7,817)(10,265)

26,4683,622(Increase) decrease in time deposits

1,999

(173)

(Increase) decrease in securities

1,500

－

(16,046)(11,035)－(2,608)

1,357

452

(Increase) decrease in short-term loans
receivable

494

－

Other

(988)

537

(11,684)(12,829)

Net increase (decrease) in short-term loans(565)(10,635)

Net increase (decrease) in commercial paper(24,000)

14,000

Proceeds from long-term debt

5,500

－

Repayments for long-term debt

(827)

(10,125)

10,000－(13)(2,413)

Cash flows from operating activities
Income before income taxes
Depreciation

Increase (decrease) in notes and accounts
payableNet cash provided by operating activities
Cash flows from investing activities

Payments for purchases of property, plant, andequipment
Payments for acquisition of subsidiaries’ stock
accompanying changes in scope of consolidation
Proceeds from sale of securities

Net cash used in investing activities
Cash flows from financing activities

Income from the issuance of bonds
Cash dividends paid

14

Consolidated Results for the Third Quarter
Ended December 31, 2010

Previous Third Quarter
April 1, 2009, to December 31,
2009

Present Third Quarter
April 1, 2010, to December 31,
2010(1,003)

(344)

(621)

(977)

(11,529)(10,495)

Effect of exchange rate changes on cash and cash
equivalents

361

(696)

Net increase (decrease) in cash and cash equivalents

3,616(20,397)

Cash and cash equivalents at beginning of year

42,41461,452

Increase due to new consolidated companies

1,942

236

17

－

47,98941,292

Payment of dividends for minority stockholders
Other
Net cash used in financing activities

Increase due to merger and acquisition
Cash and cash equivalents at end of period(4) Notes on Premise of a Going Concern
There are no applicable items.

(5) Segment Information
1. Summary of Reporting Segments
The Group’s reporting segments are based on those units within the Group where separate financial information isavailable and where the Board of Directors of the Group periodically deliberates over matters such as the distribution ofmanagement resources and the financial performance of such segments.
The Group formulates a comprehensive international and domestic strategy for individual products and services for thehead office and for each consolidated subsidiary, and executes such strategies at the operating level. Consequently, theGroup comprises segments that are split by categories of products and services offered by the head office andconsolidated subsidiaries. More specifically, the six reporting segments of the Group are “Machinery Components”,“Precision Machinery”, “Construction Machinery”, “Industrial Machinery”, “Ships”, and “Environmental Facilities & Plants”.

Businesses

Main Products

Machinery Components

Power transmission and control

Precision Machinery

Plastic injection molding machines, film forming machines, semiconductor
production equipment, laser processing systems, cryogenic equipment, precision
XY stages, ion accelerators, 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

Boilers, industrial waste treatment facilities, water and sewage treatment
systems, paper machines, pressure vessels, bridges

15Consolidated Results for the Third Quarter
Ended December 31, 2010

2. Information Regarding Net Sales and Profit Conditions by Reporting Segment
Current Third Quarter (April 1, 2010, to December 31, 2010)(Units: millions of yen)Segment

A

B

C

D

E

(1) Sales to externalcustomers

54,11891,854

93,20045,78630,119(2) Internal sales
betweensegments or
exchanges

1,175

848

7

108

57

Total

55,29392,702

93,20845,89430,176

48,799 366,072

Segment profit (loss)

3,202

4,623

4,476

7,273

3,216

1,575

Item

F

Subtotal

Other

1

2

Total

H

G

Net sales
48,109 363,186

690

2,886

24,3656,010 369,196

1,573

4,460

7,583 373,655
953― 369,196(4,460)―(4,460) 369,196

25,31815

25,333

Segments:
A: Machinery Components
B: Precision Machinery
C: Construction Machinery
D: Industrial Machinery
E: Ships
F: Environmental Facilities & Plants
G: Adjustments
H: Value included on the quarterly consolidated income statement
Notes:
1. The “Other” segment represents those business segments that are not included as part of any otherreporting segment. This includes the Group’s real-estate businesses, software-related business and otherbusinesses.
2. Mainly due to the deletion of intersegment transactions

3. Information on Impairment Losses Relating to Fixed Assets and Goodwill by Reporting Segment
In the Environmental Facilities & Plants segment, the Group executed a stock-swap agreement with Nihon Spindle
Manufacturing Co., Ltd. with an effective date of October 1, 2010. As a result of the event, negative goodwill in theamount of JPY3,437 million was generated and this amount was posted in the third quarter of the current consolidated
fiscal year.

Additional Information
As of the current first quarter consolidated fiscal period, the Group has adopted the Revised Accounting Standard forDisclosures about Segments of an Enterprise and Related Information (Statement No. 17 of the AccountingStandards Board of Japan, dated March 27, 2009) and the Implementation Guidance on the Accounting Standard forDisclosures about Segments of an Enterprise and Related Information (Implementation Guidance No. 20 of the
Accounting Standards Board of Japan, dated March 21, 2008).

16

Consolidated Results for the Third Quarter
Ended December 31, 2010

Reference Information
The table below provides a summary of the values from the third quarter of the previous consolidated fiscal year for
all business segments as if they were displayed using the reporting segments used during the third quarter of thecurrent consolidated fiscal year.
Previous Third Quarter (April 1, 2009, to December 31, 2009)(Units: millions of yen)Segment

A

B

C

D

E

(1) Sales to externalcustomers

51,644

69,20871,40865,36042,563(2) Internal sales
betweensegments or
exchanges

1,357

928

5

124

113

Total

53,001

70,136

71,41365,48442,67553,508 356,217

13(4,567)(811)

10,684

3,278

3,474

Item

F

Subtotal

Other

1

Total

2

H

G

Net sales

Segment profit (loss)

52,814 352,996

694

3,221

12,071

6,418 359,414

1,685

4,906

8,103 364,320
942

13,013― 359,414(4,906)―(4,906) 359,414
50

13,064

Segments:
A: Machinery Components
B: Precision Machinery
C: Construction Machinery
D: Industrial Machinery
E: Ships
F: Environmental Facilities & Plants
G: Adjustments*
H: Value included on the quarterly consolidated income statement
Notes:
1. The “Other” segment represents those business segments that are not included as part of any otherreporting segment. This includes the Group’s real-estate businesses, software-related business and otherbusinesses.
2. Mainly due to the deletion of intersegment transactions(6) Notes Regarding Significant Fluctuations to Shareholders’ Equity
On October 1, 2010, the Group executed a stock-swap agreement with Nihon Spindle Manufacturing Co., Ltd. Treasury
stock, which was held by the Group, was appropriated for use as part of this agreement. As a result of this move, anincrease of JPY3,286 million for additional paid-in capital and a decrease of JPY1,436 million for treasury stock wasrecorded in the third quarter year-to-date consolidated financial statements. Moreover, at the end of the third quarter ofthe current consolidated fiscal year, additional paid-in capital stood at JPY23,789 million while treasury stock stood at
JPY58 million.

(7) Important Matters to Note that Occurred After the End of the Current Period
There are no applicable items.

17Consolidated Results for the Third Quarter
Ended December 31, 2010

4. Supplementary Information(1) Orders, Sales, and Balance of Orders by Segment
Orders Received(Units: millions of yen)Previous Third
Quarter
April 1, 2009, toDecember 31, 2009

Third Quarter
April 1, 2010, toDecember 31, 2010

Amount%Amount%Amount%Amount%Machinery Components

43,97815.6

56,89715.1

12,91929.4

61,421

15.2

Precision Machinery

73,60626.1

111,503

29.6

37,89751.5

106,085

26.3

Construction Machinery

68,37024.2

99,30726.4

30,93645.2

100,531

24.9

Industrial Machinery

43,05515.2

48,349

12.9

5,294

12.3

59,834

14.8

Ships

3,559

1.3

13,141

3.5

9,583

269.3

4,290

1.1

Environmental Facilities &Plants43,28815.3

40,43810.8(2,850)(6.6)

62,550

15.5

Other

6,491

2.3

6,410

1.7

(80)

(1.2)

8,726

2.2

Total

282,346100.0

376,045

100.0

93,69933.2

403,437

100.0

Segments

Previous Fiscal Year
April 1, 2009, to
March 31, 2010

Y / Y Change

Sales(Units: millions of yen)Previous Third
Quarter
April 1, 2009, toDecember 31, 2009

Third Quarter
April 1, 2010 to
December 31, 2010

Amount%Amount%Machinery Components

51,64414.4

54,118

14.7

2,474

Precision Machinery

69,20819.2

91,85424.9

Construction Machinery

71,40819.9

93,200Industrial Machinery

65,360

18.2

Ships

42,563

Environmental Facilities &PlantsSegments

Previous Fiscal Year
April 1, 2009, to
March 31, 2010

Y / Y Change

Amount%4.8

69,04013.4

22,64632.7

105,191

20.4

25.2

21,792

30.5

102,650

19.9

45,786

12.4(19,574)(29.9)

85,637

16.6

11.8

30,1198.2(12,444)(29.2)

62,92712.2

52,814

14.7

48,10913.0(4,705)(8.9)

81,884

15.8

Other

6,418

1.8

6,010

1.6

(408)

(6.4)

8,835

1.7

Total

359,414100.0

369,196

100.0

9,781

2.7

516,165

100.0

18Amount%Consolidated Results for the Third Quarter
Ended December 31, 2010

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

End of Previous
Fiscal YearAs of March 31,
2010
Amount%End of Third Quarter
As of December 31,
2010
Amount%End of Previous
Third Quarter
As of December 31,
2009

ChangeAmount%Amount%Machinery Components

18,0804.8

20,860

5.4

2,779

15.4

18,361

4.4

Precision Machinery

47,044

12.5

66,693

17.4

19,64941.8

51,171

12.3

Construction Machinery

13,468

3.6

19,574

5.1

6,106

45.3

12,3893.0

Industrial Machinery

78,81320.9

81,375

21.2

2,562

3.3

83,742

20.2

Ships

142,72037.9

125,74332.8(16,977)(11.9)

162,353

39.2

Environmental Facilities &Plants75,13019.9

67,45917.6(7,671)(10.2)

84,938

20.5

Other

1,619

0.4

2,019

0.5

401

24.8

1,801

0.4

Total

376,874

100.0

383,723

100.0

6,849

1.8

414,755

100.0

19