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

October 31, 2012
Kawasaki Heavy Industries, Ltd.

Table of Contents

I. Consolidated Results for Second Quarter FY2012

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

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

II．Forecast for FY2012

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

13
14
15

I. Consolidated Results for Second Quarter FY2012

Summary of Financial Results(Billion Yen)FY2011.2Q

FY2012.2Q※

Actualvs. FY2011.2Q

ChangeForecast
in AprilActualvs. FY2011.2Q

vs. Forecast
in April< Orders Received >Increased as a whole due to increase in orders
received in Rolling Stock and Aerospacesegments, despite decrease in orders receivedin Precision Machinery segment

Orders Received

513.4

-

530.4

+ 16.9-Net Sales

584.9

620.0

574.9

- 9.9

- 45.0Operating Income

26.6

20.0

10.3

- 16.2- 9.6

Decreased as a whole due to large sales
decrease in Precision Machinery and Plant &Infrastructure segments, despite increase in
Aerospace segment

Recurring Profit

27.2

24.0

20.1

- 7.0

- 3.8

< Profits >Net Income

17.8

14.0

12.4

- 5.3

- 1.5

Exchange Rates ( weighted-average )Yen / US$

80.20

79.92

Yen / EUR

116.00101.79※ Assumed exchange rates for forecast : 1US$=80Yen< Net Sales >- Decreased as a whole due to income
decrease or deterioration in Precision
Machinery and Rolling Stock segments,
despite increase in Aerospace segment- However, the amount of decrease inrecurring profit was less than that ofoperating income due to significant
improvements in gain and loss on foreignexchange and other factors

1EUR=100Yen (Changed from 105 Yen on July 31, 2012)-1-

I. Consolidated Results for Second Quarter FY2012

Financial Results by Segment(Billion Yen)

Orders Received

Net Sales

Operating Income/Loss

FY2011
2Q

FY2012
2Q

ChangeFY2011
2Q

FY2012
2Q

ChangeFY2011
2Q

FY2012
2Q

ChangeShip & Offshore Structure

24.6

37.8

+ 13.2

53.1

45.8

- 7.3

0.5

1.0

+ 0.4

Rolling Stock

42.1

66.9

+ 24.8

55.3

51.4

- 3.8

1.1

- 3.1

- 4.2

Aerospace

67.5

91.0

+ 23.4

87.4

109.1

+ 21.6

3.0

4.3

+ 1.3

Gas Turbine & Machinery

79.7

65.4

- 14.2

84.7

93.2

+ 8.4

3.9

3.2

- 0.6

Plant & Infrastructure

46.8

51.3

+ 4.5

56.2

46.4

- 9.8

6.7

3.1

- 3.5

Motorcycle & Engine

106.2

103.9

- 2.2

106.2

103.9

- 2.2

- 2.3

- 2.2

+0

Precision Machinery

91.1

55.6

- 35.585.2

67.0- 18.1

14.5

4.9

- 9.5

Others

55.1

58.1

+ 3.0

56.4

57.9

+ 1.4

1.8

0.6

- 1.1

-

-

-

-

-

-

- 2.7

- 1.7

+ 1.0

513.4

530.4

+ 16.9

584.9

574.9

- 9.9

26.6

10.3

- 16.2Eliminations 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 Second Quarter FY2012

Details of Change in Profit I- FY2012.2Q vs. FY2011.2Q 【Operating Income】 - 16.2

( FY2011.2Q 26.6  FY2012.2Q 10.3 )(Billion Yen)

vs. Forecast in April - 9.6 billion yen（Forecast in April 20.0  Actual 10.3）
Effects of fluctuation of foreign exchange rate
Effects of sales decrease
Impact of changes in material price
Other factors

Impact of fluctuationof foreign exchange
rate

- 1.7

FY2011.2Q

+ 0
- 5.6
+ 1.7
- 5.7

Increase in selling, general &administrative expenses- 3.4

Effects ofsales decrease- 1.5
Impact of changes
in product mix andother factors

26.6- 13.2

Impact of change
in material price+ 3.6

FY2012.2Q
10.3

-3-

Details of Change in Profit II

I. Consolidated Results for Second Quarter FY2012- FY2012.2Q vs. FY2011.2Q (Billion Yen)

【Non-operating Income/Expenses】+ 9.1 ( FY2011.2Q 0.6  FY2012.2Q 9.7 )Net Interest expense ( incl. dividend income )Equity in income of unconsolidated subsidiaries and affiliates
Gain and loss on foreign exchange
Others【Extraordinary Income/Losses】

+ 0.2
+ 1.0
+ 6.5
+ 1.2

（ - 1.1  - 0.9 ）（ 4.8  5.9 ）（ - 2.9  3.5 ）（0  1.2 ）+ 0.9 ( FY2011.2Q - 0.9  FY2012.2Q 0 )※+ 0.9 （ - 0.9  0 ）Loss on impairment of fixed assets※ Loss on impairment of idle assets whose book values were written down to the recoverable amounts-4-

I. Consolidated Results for Second Quarter FY2012

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

 FY2012.2Q （ vs. FY2011.2Q )（Billion Yen / In accumulated amount）（Forecast in April 110.0）

Orders Received

110.0

Orders Received: Increased significantly due to orders received of a LNG carrier and othervessels
Net Sales: Decreased due to decrease in amount of shipbuilding of large-scale bulk carriers
Operating Income/Loss: Increased due to decrease in provision for losses on construction
contracts and other factors, despite sales decrease<Units of Orders Received and Sales of New Building Ships>

Orders Received(unit)Sales

FY2011.2Q FY2012.2Q FY2011.2Q FY2012.2Q

17.0

1Q

24.6

2Q

36.9

3Q

39.9

FY2011

30.3

1Q

37.8

2Q

Net Sales

FY2012
Forecast（Forecast in April 80.0）

113.5
87.1

80.0

53.1

45.8

27.7

1Q

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

22.7

2Q

3Q

FY2011

1Q

2Q

FY2012
Forecast

1.0

FY2012
Forecast

Operating Income/Loss
4.1
0.9

0.5

1Q

2Q

3.9

1Q

3Q

FY2011

-0.6

2Q

-2.0
（Forecast in April - 5.0）

FY2012 Forecast （ vs. Forecast in April ）

1
1
1
6

2

7

4

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

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

17(12)
2(2)
25(19)

18(10)1(1)22(14)

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

Orders Received & Net Sales: Remain unchanged because of no significant change
Operating Income/Loss: Revised up due to the effect of decline of material price and otherfactors<For Reference> Business Development in Overseas
NACKS was established in December 1995, as a fifty-fifty joint venture between KHI and
China Ocean Shipping (Group) Company (COSCO), one of the world’s largest shipping
company, and its capacity was expanded in 2008. At NACKS, various types of commercial
vessels are built for domestic shipping company such as COSCO as well as for Japanese andEuropean customers.
As a parent company of NACKS, KHI has also supported DACKS, 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 acquired a 34% stake in
DACKS in April 2012. As a result, KHI’s actual ratio of investment in DACKS (including
indirect investment) is 49%.
Meanwhile, KHI decided to participate in a joint venture project for building drill ships etc.
in Brazil, where the demand for the drill ships & FPSO for the drilling and production of
offshore oil is rapidly increasing, executed a shareholders agreement with Estaleiro Enseada
do Paraguaçu S.A. (EEP) in May 2012 and acquired a 30% stake in EEP.
With a view to expanding operations and boosting profitability at two shipyards in China
and developing the new shipyard in Brazil as the third overseas shipyard, KHI will further
deepen cooperation between its bases at home and three overseas shipyards, and actively
pursue shipbuilding by taking advantage of the feature of each shipyard.

-5-

I. Consolidated Results for Second Quarter FY2012

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

Orders Received

140.0

42.1

49.9

2Q

3Q

66.0
25.3

22.6
1Q

66.9

 FY2012.2Q （ vs. FY2011.2Q ）Orders Received: Increase in orders received for overseas market including
high-speed rail cars for Taiwan and subway cars for Singapore
Net Sales: Decreased due to sales decrease for overseas market, despite
increase for Japan Railways (JR) companies
Operating Income/Loss: Deterioration in profitability due to provision forloss on construction contracts for a certain overseas project

FY2011

1Q

2Q

FY2012
Forecast（Forecast in April 130.0）

Net Sales
132.6

130.0

 FY2012 Forecast （ vs. Forecast in April ）Orders Received: Revised down due to the effect of order deferrals
Net Sales: Remains unchanged because of no significant change
Operating Income/Loss: Revised down due to provision for loss on
construction contracts for a certain overseas project

94.6
55.3

1Q

<For Reference> Present Status of Overseas Projects
North America

51.4
28.8

25.8

2Q

3Q

FY2011

4.9

5.1

1Q

2Q

FY2012
Forecast

Operating Income/Loss- 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
2.0

1.1

0.1

0
1Q

2Q

（Forecast in April 6.0）

3Q

FY2011

2Q

1Q

▲ 3.1

FY2012
Forecast- There are construction and expansion plans of the urban transport systems in several Asian
cities, and High-speed railways projects in India- KHI will work to win new projects in the markets such as Taiwan and Shingapore, where
we have the solid track record.
- 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 Second Quarter FY2012

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

 FY2012.2Q （ vs. FY2011.2Q ）（Billion Yen / In accumulated amount）

Orders Received

327.2（Forecast in April 220.0）

220.0
114.1
30.6
1Q

(unit)

91.0

67.5

2Q

Orders Received: Increase in orders received for Japan Ministry of Defense(MOD) and component parts for Boeing 777 and 787
Net Sales: Increased significantly due to sales increase for MOD including C-2
transport aircraft and component parts for Boeing 787
Operating Income/Loss: Increased due to sales increase, cost reduction andother factors< Sales units of component parts for commercial aircrafts >

34.4
3Q

FY2011

1Q

2Q

FY2011.2Q FY2012.2Q
Boeing 777
42
42
Boeing 767
13
13
Boeing 787
1226
Embraer170/175
69
Embraer190/195
52
35

FY2012
Forecast（Forecast in April 250.0）

Net Sales

250.0
206.5

 FY2012 Forecast （ vs. Forecast in April )

138.5
87.4
49.6

40.0
1Q

Orders received, Net Sales & Operating Income/Loss: Remain unchanged
because of no significant change

109.1

2Q

3Q

FY2011

1Q

2Q

FY2012
Forecast（Forecast in April 9.0）

Operating Income/Loss

9.0

7.8

<For Reference> Present Status of Main Projects
Aircrafts for MOD
In March 2012, KHI received orders of the first mass production of C-2 transport aircraft forMOD. KHI is working toward the commencement of the mass production of C-2, as well as the
P-1 patrol aircraft.

5.9
4.3

3.0
0.8

1Q

-0.8

2Q

3Q

FY2011

1Q

2Q

FY2012
Forecast

Component parts for commercial aircrafts
Boeing 777‐ KHI’s production rate for 777 program is expected to increase 7 to 8.3 units permonth in FY2012 corresponding to the increase in production rate by the Boeing Company.
Boeing 787- In September 2011, the first 787 was delivered to the airline by the Boeing
Company and regular flight service with 787 was started from November 1, 2011. KHI has
completed the production system at Kawasaki’s Nagoya Works I for ramp-up production.

-7-

I. Consolidated Results for Second Quarter FY2012

Gas Turbine & Machinery
Main Products : Jet engines, Gas turbine co-generation system, Gas turbines & steam turbines for marine & land, Diesel engines,
Marine propulsion system, Aero-dynamic machinery FY2012.2Q （ vs. FY2011.2Q )（Billion Yen / In accumulated amount）（Forecast in April 230.0）

Orders Received

240.0

227.2
123.3
79.7

65.4

31.3
1Q

 FY2012 Forecast （ vs. Forecast in April ）

32.5
2Q

3Q

FY2011

1Q

2Q

Net Sales

Orders Received: Decreased from the previous same period, which was marked by an
influx of large-scale orders received of the gas engine power plant, despite increase inorders received for component parts of commercial aircraft jet engines
Net Sales: Increased due to sales increase in component parts for commercial aircraft jetengines, industrial gas turbines and gas engines, despite decrease in sales of turbines forland
Operating Income: Decreased due to increase in the R&D expense and other factors,
despite sales increase

FY2012
Forecast（Forecast in April 210.0）

Orders Received: Revised up due to increase in orders received for component parts ofcommercial aircraft jet engines
Net Sales & Operating Income: Remain unchanged because of no significant change<For Reference>
Major Projects for Commercial Aircraft Jet Engines

210.0

194.6
137.0
45.5

3Q

FY2011

1Q

2Q

Operating Income

FY2012
Forecast（Forecast in April 8.0）

8.0International Collaboration Program

RRSP（※)RRSP（※)

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.

45.3

2Q

PW1100G - JM
Airbus A320neo

Share

Present Status

1Q

TrentXWB
Airbus A350

Participation Type

93.2

84.7

Trent1000
Boeing 787

Aircraft（※）

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

Risk & Revenue Sharing Partner

In September 2012, Seishin Works’ 4th plant was completed, and preparation for the
production for component parts of aircraft jet engines is proceeding.

8.0

7.7

Energy and Environmental Products
3.3

3.9

1Q

2Q

3Q

FY2011

2.6

3.2

1Q

2Q

FY2012
Forecast

In February 2012, the development of the high-efficiency 30MW-class L30A gas turbine(all manufactured domestically) was completed and started full-scale operation.
In addition, the 110MW power plant which consists of 14 units of Kawasaki Green Gas
Engines (received an order in September 2011) was started full-scale operation in August
2012.
KHI will actively develop Energy and Environmental business in domestic and overseas
markets.

-8-

I. Consolidated Results for Second Quarter FY2012

Plant & Infrastructure
Main Products: Industrial plants (cement, chemical and others), Power plants, LNG & LPG tanks, Municipal refuse incineration plants,
Shield machines, Crushing machines（Billion Yen / In accumulated amount）（Forecast in April 130.0）

Orders Received

130.0

119.2
84.0
46.8

37.1

51.3

19.1
1Q

2Q

3Q

FY2011

1Q

2Q

FY2012
Forecast（Forecast in April 130.0）

Net Sales

130.0

122.8

 FY2012.2Q （ vs. FY2011.2Q ）Orders Received: Increase in orders received for overseas projects
including the cryogenic tanks for Ichthys LNG Project
Net Sales: Decreased due to sales decrease of large-scale overseas projects,
despite sales increase of material handling systems and municipal refuse
incineration plants
Operating Income: Decreased due to sales decrease and decline in profit
margin FY2012 Forecast （ vs. Forecast in April )Orders Received & Net Sales: Remain unchanged because of no significant
changeOperating Income: Revised up due to improvement in profitability by steadyprogress in some projects

78.7
56.2

46.4

23.8
1Q

<For Reference> Orders Received of Energy and Environmental Projects

19.8
2Q

3Q

FY2011

1Q

2Q

Operating Income

FY2012
Forecast（Forecast in April 10.0）

14.1

11.0
8.8
6.7
3.1
0.9
1Q

0.1
2Q

3Q

FY2011

1Q

2Q

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

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 April 260.0）

250.0

235.2
154.2
106.2

103.9

59.6

1Q

53.4

2Q

3Q

FY2011

1Q

2Q

Operating Income/Loss

FY2012
Forecast

 FY2012.2Q （ vs. FY2011.2Q )Net Sales: Decreased due to sales decrease of motorcycles in European
market and appreciation of the Yen to EUR, despite sales increase of
motorcycles in Asian and other emerging markets mainly Indonesia
Operating Income/Loss: Remained at the same level as in the previous
same period despite sales decrease FY2012 Forecast （ vs. Forecast in April )Net Sales & Operating Income/Loss: Revised down due to sales
decrease in developed markets mainly Europe（Forecast in April 5.0）

2.0
0.3

2Q

3Q

FY2011

1Q

1Q

2Q

-0.3
-2.3

-2.9

-2.2

FY2012
Forecast-4.5＜Wholesales by Geografic Area for Consumer Products＞
FY2011.2Q
FY2011
Unit
AmountUnit
AmountDomestic
8
6.5
14
12.1
North America (incl. Canada) 44 (24)28.8 121 (69)78.0Europe
26
20.7
57
42.2
Emerging Countries & Others
153
34.9
309
71.0
Total
231
90.8
501
203.3

(Thousands of unit / Billion Yen)FY2012.2Q
FY2012 Forecast
Unit
AmountUnit
Amount
8
6.7
14
12.1
45 (28)28.3 119 (74)
74.5
21
14.8
58
39.9
168
39.0
387
87.8
242
88.8
578
214.3

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> New Plant, Joint Venture and 2013 New Models- In order to respond to market growth and further to reinforce the business
operation in Asian and other emerging countries, KHI started construction of the
new plant in Indonesia on September 7, 2012. The expansion of the plant inThailand is proceeding as planned.
- In June 2012, KHI signed a letter of intent on a business partnership deal with
Loncin Motor Co., Ltd. in Chongqing, China, regarding the manufacture andsale of motorcycles in China. The details of the joint venture project is underdiscussion.
- KHI announced the 2013 new models including “Ninja 250/300”, “Ninja ZX6R” and “Z800”. On August 1, 2012, “Ninja 250/300”, our global models, werelaunched in Indonesia, our core market, ahead of other countries.

- 10 -

I. Consolidated Results for Second Quarter FY2012

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

 FY2012.2Q （ vs. FY2011.2Q ）（Billion Yen / In accumulated amount）

Orders Received（Forecast in April 210.0）

174.5
131.1

130.0

91.1

Orders Received: Decrease in orders received for hydraulic components forconstruction machinery in emerging countries mainly in China
Net Sales: Decrease in sales of hydraulic components for construction machinery inemerging market mainly in China
Operating Income: Decreased due to decrease in sales, increase in fixed cost
resulting from capital expenditures which were executed past fiscal years and otherfactors

55.6

43.4

28.6

 FY2012 Forecast （ vs. Forecast in April ）
1Q

2Q

3Q

FY2011

1Q

2Q

Net Sales

130.0

129.0
85.2

67.0

40.4

36.1

2Q

3Q

FY2011

1Q

2Q

FY2012
Forecast

Operating Income
26.6
20.7

（Forecast in April 27.0）

14.5

12.0

7.1

1Q

2Q

3Q

FY2011

Orders Received, Net Sales & Operating Income: Revised down due to decreasein hydraulic components for construction machinery in emerging countries mainly
in China and other factors（Forecast in April 200.0）

175.0

1Q

FY2012
Forecast

3.9

4.9

1Q

2Q

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

- 11 -

I. Consolidated Results for Second Quarter FY2012

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

Total Assets

FY2012End of
September 2012

End ofMarch 2012

1,309.5

1,362.1

1,308.8

Shareholders’ Equity

297.3

306.0

306.4

（Ratio of shareholders’ equity to total assets）(22.7%)(22.4%)(22.1%)

Interest-bearing debt

427.1

407.1

472.3

（Net Interest-bearing debt）（390.0）（372.8）(443.5)

Net Debt Equity Ratio

131.1%

121.8%

144.7%

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

FY2011.2Q

FY2012.2Q

Cash flows from operating activities

32.5- 19.4

Cash flows from investing activities- 32.6- 46.1

Free Cash Flows- 0.1- 65.6

Cash flows from financing activities

- 5.3

59.2

- 12 -

II．Forecast for FY2012

Consolidated Operating Performance(Billion Yen)FY2011
Actual

FY2012 Forecast
in AprilChangein October

vs. FY2011

vs. Forecast in April

vs. Forecast
in April< Orders Received >Orders Received

1,311.8

1,430.0

1,350.0+ 38.2- 80.0Net Sales

1,303.7

1,380.0

1,300.0- 3.7- 80.0Operating Income

57.4

52.0

36.0

- 21.4- 16.0

Revised down due to large decrease in
Precision Machinery segment resulting
from demand decrease of hydrauliccomponents for construction machinery inemerging countries mainly in China< Net Sales >Recurring Profit

63.6

56.0

50.0

- 13.6- 6.0

Net Income

23.3

34.0

30.0

+ 6.7

- 4.0

Revised down due to large sales decreasein Precision Machinery segment resulting
from sales decrease of hydrauliccomponents for construction machinery inemerging countries mainly in China

Exchange Rates (actual & assumed)

Yen / US$

79.40

80

80

Yen / EUR

109.71

100

100< Profits >Note : Assumed rates are applied to the outstanding foreign exchange exposure as of the respective disclosure date
Assumed rate for Yen/EUR was changed from 105 Yen to 100 Yen on July 31, 2012
(For Reference)

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

Operating Recurring
IncomeProfitUS$
3.0 (3.3)
1.6 (1.6)EUR
0.2 (0.3)
0 (0.1)* Figures in the parenthesis ( ) represent impact as of July 31, 2012- 13 -

Revised down due to large income
decrease in Precision Machinery segment,
despite improvement in Ship & Offshore
Structure segment

II．Forecast for FY2012

Forecast by Segment(Billion Yen)

Orders Received
FY2011
ActualNet Sales

FY2012 Forecast
in Aprilin October

FY2011
ActualOperating Income/Loss

FY2012 Forecast
in Aprilin October

FY2011
Actual

FY2012 Forecast
in Aprilin October

Ship & Offshore Structure

39.9

110.0

110.0

113.5

80.0

80.0

3.9

- 5.0

- 2.0

Rolling Stock

66.0

150.0

140.0

132.6

130.0

130.0

5.1

6.0

2.0

Aerospace

327.2

220.0

220.0

206.5

250.0

250.0

7.8

9.0

9.0

Gas Turbine & Machinery

227.2

230.0

240.0

194.6

210.0

210.0

7.7

8.0

8.0

Plant & Infrastructure

119.2

130.0

130.0

122.8

130.0

130.0

14.1

10.0

11.0

Motorcycle & Engine

235.2

260.0

250.0

235.2

260.0

250.0

- 2.9

5.0

2.0

Precision Machinery

174.5

210.0

130.0

175.0

200.0

130.0

26.6

27.0

12.0

Others

122.2

120.0

130.0

123.2

120.0

120.0

3.8

2.0

3.0

-

-

-

-

-

-

- 8.8

- 10.0- 9.0

1,311.8

1,430.0

1,350.0

1,303.7

1,380.0

1,300.0

57.4

52.0

36.0

Eliminations and corporate
Total

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

R&D/CAPEX/Number of Employees(Billion Yen / Persons)

FY2011
Actual

FY2012 Forecast
in Aprilin October

vs. Forecast
in April

39.9

45.0

45.0

(16.2)-（18.2）

63.9

79.0

75.0

(32.0)-(35.4)

48.9

54.0

52.0

(22.3)-(21.9)

Domestic

24,77025,50025,400-100

Overseas

8,497

9,200

9,100

-100

33,267

34,70034,500- 200

R&D Expenses
CAPEX(Construction Base)
Depreciation & Amortization

Number of Employees

Note: Figures in parenthesis ( ) represent the results of the second quarter- 15 -

0
- 4.0
- 2.0

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.