April 30, 2008
(Consolidated)

KAWASAKI HEAVY INDUSTRIES, LTD. AND CONSOLIDATED SUBSIDIARIESFLASH CONSOLIDATED FINANCIAL RESULTS
For the years ended March 31, 2008 and 2007

Operating results

Thousands ofU.S. dollars

Millions of yen
2008
Net sales
Operating income
Net income
Earnings per share (Yen)\Financial condition

As of March 31, 2008
As of March 31, 2007
As of March 31, 2008

2007

1,501,097
76,91035,14121.1

1,438,619
69,142
29,77218.9\$

1,378,770
1,357,980
13,760,180\$\$$ 14,981,008
767,565
350,709187.7
175.01.87

Fiscal year forecast

－－

2007

75,766-49,090-27,392
38,169\45,859-43,312-1,30739,228Millions of yenNet sales
Net income
\23%
21%

1,668,305
1,659,415

2008\Ratio of net assets
to total assets

Thousand shares
Number of sharesissued andoutstanding

Millions of yen

One year ending March 31, 2009+4%+11%+18%

319,038
295,378
3,184,012

Cash flows

Operating activities
Investing activities
Financing activities
Cash and cash equivalents at end of year

2008

Millions of yen / Thousands of U.S. dollars
Total assets
Net assets

Yen / U.S. dollars
Net assets
less minority interests
per share
As of March 31, 2008
As of March 31, 2007
As of March 31, 2008\％
Change1,460,000-1-\30,000

Thousands ofU.S. dollars
2008$756,148-489,920-273,373
380,928

Notes : 1.

This "FLASH CONSOLIDATED FINANCIAL RESULTS" and following financial statements have been
prepared in conformity with generally accepted accounting principles and practices in Japan.

2.

All US$ amounts in these statements represent the arithmetical results of translating Japanese yento U.S. dollars on the basis of 100.2 yen =$1, the rate prevailing as of March 31, 2008, solely for theconvenience of the readers.

-2-(Consolidated)

Condensed Consolidated Balance Sheets
As of March 31, 2008 and 2007
Thousands ofU.S. dollars
2008

Millions of yen2008

2007

Assets :Current assets :Cash on hand and in banks
Trade receivables, less allowance
Inventories
Other current assets
Total current assets
Investments and long-term loans less allowance
Net property, plant and equipment
Intangible and other assets
Total assets\\39,875
433,155
439,31069,942982,28279,675
259,927
56,886
1,378,770\

137,681431,000
124,679
131,911825,271\\

39,351
442,577
427,934
52,056
961,918
96,994
253,819
45,2491,357,980$

138,463
412,501
124,445
131,097
806,506$$

397,954
4,322,904
4,384,331
698,025
9,803,214
795,1592,594,082
567,725
13,760,180

Liabilities and shareholders' equity :Current liabilities :Short-term borrowingsand current portion of long-term debt
Trade payables
Advances from customers
Other current liabilities
Total current liabilitiesLong-term liabilities :Long-term debt, less current portion
OthersTotal long-term liabilities
Net assets :Common stock
Capital surplus
Retained earnings
Net unrealized gains on securities
Gains/losses on hedging items
Foreign currency translation adjustments
Treasury stock
Minority interests
Total net assets
Total liabilities and net assets\\

1,374,062
4,301,397
1,244,301
1,316,478
8,236,238

138,766
95,695
234,461

165,754
90,342
256,096

1,384,890
955,040
2,339,930

104,32954,291
151,401
10,292
5,217(11,878)
(460)
5,846
319,038
1,378,770

103,188
53,179125,799
19,342(1,608)(9,417)(55)
4,950
295,378
1,357,980

1,041,208
541,826
1,510,988
102,715
52,066(118,543)(4,591)
58,343
3,184,012
13,760,180\$

Condensed Consolidated Statements of Income
For the years ended March 31, 2008 and 2007
Thousands ofU.S. dollars

Millions of yen2007

2008

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Other income (expenses) :Interest and dividend income
Equity in income of unconsolidatedsubsidiaries and affiliates
Interest expense
Other, net
Income before income taxes andminority interests
Income taxes
Minority interests in net income ofconsolidated subsidiaries
Net income\\

1,501,097
1,262,032
239,065
162,155
76,910\%1,438,619
1,213,524
225,095
155,953
69,142

Change+4.3%

2008$+11.2%

14,981,008
12,595,130
2,385,878
1,618,313
767,565

5,005

3,807

49,9507,642(7,980)(23,522)

2,694(6,650)(23,725)

76,267(79,641)(234,750)

58,055(22,011)45,268(15,286)(903)
35,141-3-\(210)
29,772+28.2%+18.0%

579,391(219,671)$(9,011)350,709

Condensed Consolidated Statements of Cash Flows(Consolidated)

For the years ended March 31, 2008 and 2007

Thousands ofU.S. dollars
2008

Millions of yen2008
2007
Cash flows from operating activities:
Income before income taxes and minority interests
Adjustments to reconcile net income before income taxes and minority
interests to net cash provided by operating activities:
Depreciation and amortization
Increase in assets
Increase in liabilities
OtherNet cash provided by operating activities
Cash flows from investing activities:
Acquisition of tangible and intangible assets
Acquisition of investments in securities
Other
Net cash used for investing activities
Cash flows from financing activities:
Increase (decrease) in short-term borrowings
Proceeds from long-term debt
Repayment of long-term debt
Other
Net cash used for financing activities
Effect of exchange rate changes
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Increase in cash and cash equivalents
due to changes in fiscal period of consolidated subsidiaries
Cash and cash equivalents at end of year

\58,055\37,455(29,042)
37,190(27,892)
75,766\(50,836)(1,183)2,929(49,090)\13,099
3,328(34,817)(9,002)(27,392)\

45,268\30,279(38,318)
24,261(15,631)45,859\(35,276)(10,089)
2,053(43,312)\(9,958)
62,061(48,586)(4,824)(1,307)-4-$373,802(289,840)
371,158(278,363)
756,148$(507,345)(11,806)
29,231(489,920)$

130,729
33,214(347,475)(89,841)(273,373)(5,000)(12,145)
391,496-

158
38,169579,391

482
1,722
37,506(501)(1,217)39,228\$\39,228

1,577$

380,928

(Consolidated)

Segment information(a) Information by industry segment

Externalsales
Shipbuilding\Rolling Stock& Construction Machinery
Aerospace
Gas Turbines & Machinery
Plant & Infrastructure Engineering
Consumer Products & Machinery
Hydraulic Machinery
Other
Total
Eliminations and corporate
Consolidated total\141,397
171,739
237,349
185,486
142,547
433,963
84,028104,588
1,501,097
1,501,097

Intersegment
sales\1,568

\727
1,644
16,94013,7478,244
8,724
40,234
91,828(91,828)-

Millions of yen
2008
OperatingOperatingexpenses
income (loss)

Total
sales
\142,965\172,466
238,993
202,426
156,294442,207
92,752
144,822
1,592,925(91,828)
1,501,097\139,712\

165,293
228,117
189,034
145,455
422,537
83,635
142,469
1,516,252(92,065)
1,424,187\3,253\

7,173
10,876
13,392
10,83919,6709,117
2,353
76,673237
76,910Total
assets\134,577\161,585
281,517
188,133
132,174
315,30953,348164,445
1,431,088(52,318)
1,378,770

Depreciation
Capitaland amortization expenditures
\

2,459

\

3,579
6,232
3,765
1,926
13,5172,659
1,699
35,836
1,619
37,455

\

4,161

\

6,454
6,154
5,392
1,318
19,3674,801
1,674
49,321
1,217
50,538

Hydraulic Machinery segment which had been included in ''Other'' until the year 2007 is presented separately for the year 2008
as its materiality increased in the company.
The information for the year 2007 below ｓ
i retroactively restated based on the new categories of the segment.

Externalsales\Shipbuilding
Rolling Stock& Construction Machinery
Aerospace
Gas Turbines & Machinery
Plant & Infrastructure Engineering
Consumer Products & Machinery
Hydraulic Machinery
Other
Total
Eliminations and corporate\Consolidated total

108,849
184,283
269,108
183,309
122,062
403,702
66,649100,657
1,438,619
1,438,619

External
sales
Shipbuilding
Rolling Stock& Construction Machinery
Aerospace
Gas Turbines & Machinery
Plant & Infrastructure Engineering
Consumer Products & Machinery
Hydraulic Machinery
OtherTotal
Eliminations and corporate
Consolidated total

Intersegmentsales\1,861

\500
1,687
14,41019,6709,184
8,598
40,434
96,344(96,344)
-

Total
sales
\110,710\184,783
270,795
197,719
141,732
412,886
75,247141,091
1,534,963(96,344)1,438,619

Intersegment
sales

$

1,411,148$

15,649$1,713,962
2,368,752
1,851,158
1,422,625
4,330,968
838,603
1,043,792
14,981,008
14,981,008

7,255
16,407
169,062
137,196
82,27587,066
401,537
916,447(916,447)$-

Millions of yen
2007
OperatingOperatingexpenses
income (loss)\112,958\171,613
257,395
187,882
144,163
385,323
69,185
137,546
1,466,065(96,588)1,369,477\(2,248)\13,170
13,4009,837(2,431)
27,5636,062
3,545
68,898244
69,142

Total
assets\117,832\

172,615
279,574
165,412
141,472
303,730
46,788
159,432
1,386,855(28,875)
1,357,980

Thousands of U.S. dollars
2008
OperatingOperatingexpenses
income (loss)

Total
sales
$

1,426,797$

1,721,217
2,385,159
2,020,220
1,559,821
4,413,243
925,669
1,445,329
15,897,455(916,447)
14,981,008-5-$

1,394,331$

1,649,631
2,276,617
1,886,567
1,451,647
4,216,936
834,681
1,421,845
15,132,255(918,812)
14,213,443$

32,466$

71,586
108,542
133,653
108,174
196,307
90,98823,484765,200
2,365
767,565

Depreciation
and amortization\2,169\2,660
5,291
3,076
1,816
10,5391,631
1,519
28,701
1,578
30,279

Capitalexpenditures\1,194

\

8,253
3,029
5,354
996
12,828
4,955
1,177
37,786
1,483
39,269Total
assetsDepreciation
and amortization

Capitalexpenditures$

1,343,084$

24,541$

41,527$

1,612,625
2,809,551
1,877,575
1,319,102
3,146,796
532,415
1,641,167
14,282,315(522,135)
13,760,180$

35,71962,19637,575
19,222
134,900
26,537
16,955
357,645
16,157
373,802$64,411
61,41753,812
13,154
193,283
47,914
16,708492,226
12,145504,371

(Consolidated)(b) Information by geographic area

External
sales
Japan
\North America
EuropeAsia
Other Areas
Total
Eliminations and corporate
Consolidated total\Intersegment
sales

1,058,487
267,560
131,608
33,297
10,145
1,501,097
1,501,097

Externalsales
Japan\North America
EuropeAsia
Other Areas
Total
Eliminations and corporate
Consolidated total\JapanNorth America
EuropeAsia
Other Areas
Total
Eliminations and corporate
Consolidated total$$

Millions of yen2008
Total
Operatingsales
expenses\\

307,546 \25,202
5,321
24,752247
363,068(363,068)- \\\278,960 \18,017
4,320
18,737
187
320,221(320,221)- \External
sales

Intersegment
sales

10,563,743
2,670,259
1,313,453
332,305
101,248
14,981,008
14,981,008$$

1,291,102 \
293,276
132,449
56,597
10,1191,783,543(359,356)
1,424,187 \1,321,953 \
279,271
103,162
41,427
13,027
1,758,840(320,221)
1,438,619 \

1,256,538 \
277,533
100,783
40,72812,808
1,688,390(318,913)
1,369,477 \$$

13,633,064
2,921,776
1,366,557
579,331103,713
18,604,441(3,623,433)
14,981,008$$

12,885,250
2,926,906
1,321,846
564,840
100,988
17,799,830(3,586,387)
14,213,443(c) Overseas sales
Millions of yen2007

2008
Overseassales
North America
EuropeAsia
Other Areas
Total\\358,717
153,613
161,906
148,315
822,551

Operatingincome (loss)

Overseassales% against
net sales
23.9%
10.2%
10.7%
9.9%
54.7%

\\-6-

336,765
119,408
186,066
135,506
777,745% against
net sales
23.4%
8.3%
12.9%
9.4%
54.0%

Operatingincome (loss)$$

747,814(5,130)44,711
14,491
2,725
804,611(37,046)
767,565

Thousands of
U.S. dollars
2008
Overseas
sales
$

$

3,580,010
1,533,064
1,615,828
1,480,190
8,209,092

1,103,514
191,075
83,92837,917
3,335
1,419,769(40,999)
1,378,770

Total
assets65,415 \
1,738
2,379
699
219
70,450(1,308)69,142 \Thousands of U.S. dollars
2008
Total
Operatingsales
expenses

3,069,321
251,517
53,104
247,026
2,465
3,623,433(3,623,433)-

Total
assets74,931 \
(514)
4,480
1,452
273
80,622(3,712)
76,910 \Millions of yen
2007
Total
Operatingsales
expenses

Intersegment
sales

1,042,993
261,254
98,842
22,69012,8401,438,619
1,438,619

1,366,033 \
292,762
136,92958,04910,392
1,864,165(363,068)
1,501,097 \Operating
income (loss)

1,093,598
202,539
70,36026,081
2,869
1,395,447(37,467)
1,357,980

Total
assets$$11,013,114
1,906,936
837,605
378,41333,283
14,169,351(409,171)
13,760,180

(Consolidated)

Net sales, orders and order backlog by industry segment
For the years ended March 31, 2008 and 2007

Thousands ofU.S. dollars

Millions of yen%
Change

2007

2008

2008

Net sales :Shipbuilding\ 141,397
Rolling Stock,& Construction Machinery
171,739
Aerospace
237,349
Gas Turbines & Machinery
185,486
Plant & Infrastructure Engineering
142,547
Consumer Products & Machinery
433,963
Hydraulic Machinery
84,028
Other
104,588
Total
1,501,097(10%)\108,849

(8%)

+30%

$

1,411,148

(11%)
(16%)
(12%)
(9%)
(29%)
(6%)
(7%)
(100%)

184,283
269,108
183,309
122,062
403,702
66,649100,657
1,438,619

(13%)
(19%)
(13%)
(8%)
(28%)
(5%)
(6%)
(100%)

-7%
-12%
+1%
+17%
+7%
+26%
+4%
+4%

1,713,962
2,368,752
1,851,158
1,422,625
4,330,968
838,603
1,043,792
14,981,008(16%)

135,600

(9%)

+85%

2,508,293

(11%)
(13%)
(14%)
(7%)
(27%)
(6%)
(6%)
(100%)

269,120
255,613204,847
150,221403,70272,918100,667\ 1,592,688

(17%)
(16%)
(13%)
(9%)
(25%)
(5%)
(6%)
(100%)

-32%
-21%
+11%
-29%
+7%
+27%
+13%
+1%

1,828,882
2,021,018
2,269,681
1,058,343
4,330,968
921,507
1,136,727$ 16,075,419%
ChangeThousands of
U.S. dollars
As ofMar. 31, 2008

Orders :Shipbuilding
251,331
Rolling Stock,& Construction Machinery
183,254
Aerospace
202,506
Gas Turbines & Machinery
227,422
Plant & Infrastructure Engineering
106,046
Consumer Products & Machinery
433,963
Hydraulic Machinery
92,335
Other
113,900
Total\ 1,610,757

Millions of yen
As ofMar. 31, 2007

As ofMar. 31, 2008

Order backlog :Shipbuilding\ 414,176
Rolling Stock,& Construction Machinery
431,377
Aerospace
248,332
Gas Turbines & Machinery
245,962
Plant & Infrastructure Engineering
135,288
Consumer Products & Machinery
Hydraulic Machinery
29,317
Other
29,211
Total\ 1,533,663(27%)\313,987

(21%)

+32%

$(28%)
(16%)
(16%)
(9%)
(-%)
(2%)
(2%)
(100%)

434,419
286,699
216,886
172,255
21,01019,899\ 1,465,155

(29%)
(20%)
(15%)
(12%)
(-%)
(2%)
(1%)
(100%)

-1%
-13%
+13%
-21%
-%
+40%
+47%
+5%

4,305,160
2,478,363
2,454,711
1,350,180
292,585
291,526$ 15,306,018-7-

4,133,493