October 31, 2008
(Consolidated)

KAWASAKI HEAVY INDUSTRIES, LTD. AND CONSOLIDATED SUBSIDIARIESFLASH CONSOLIDATED FINANCIAL RESULTS
For six months ended September 30, 2008 and 2007 and one year ended March 31, 2008

Operating results

Net sales
Operating income
Net income
Earnings per share (Yen)Millions of yen
Six months ended
Six months ended
Sep. 30, 2007
Sep. 30, 2008

Thousands ofU.S. dollars
Six months ended
Sep. 30, 2008\$Financial condition

As of September 30, 2008
As of March 31, 2008
As of September 30, 2008

652,924
24,353
12,3367.4699,540
39,05019,87811.9\$

1,360,771
1,378,770
13,131,053

\$

\$

－

Thousand shares
Number of sharesissued and outstanding

184.5
187.7
1.78

1,668,264
1,668,305－Millions of yen
Six months ended
Six months ended
Sep. 30, 2007
Sep. 30, 2008

Thousands ofU.S. dollars
Six months ended
Sep. 30, 2008\$

Fiscal year forecast
One year ending March 31, 2009

23%
23%

313,593
319,038
3,026,083

Cash flows

Operating activities
Investing activities
Financing activities
Cash and cash equivalents at end of term6,300,531
235,000
119,039

Millions of yen / Thousands of U.S. dollars
Total assets
Net assets
Ratio of net assets
to total assets

Yen / U.S. dollars
Net assets
per share
As of September 30, 2008
As of March 31, 2008
As of September 30, 2008

\8,547(29,584)
11,843
28,616\24,010(20,190)(20,801)
22,819Millions of yen
Net sales
Net income\1,450,000-1-\

26,00082,476(285,477)
114,282
276,136

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 yen
to U.S. dollars on the basis of ￥103.63=$1, the rate prevailing as of September 30, 2008, solely for theconvenience of the readers.

-2-(Consolidated)

Condensed Consolidated Balance Sheets
As of September 30 and March 31, 2008
Millions of yen
As ofAs ofMar. 31, 2008
Sep. 30, 2008

Thousands ofU.S. dollars
As ofSep. 30, 2008

Assets :Current assets :Cash on hand and in banksReceivables, 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\\29,898
354,549
495,400
69,793
949,640
72,164
275,726
63,241
1,360,771\

156,103
380,030
145,416
119,752
801,301\\39,875
433,155
439,31069,942982,282
79,675259,927
56,886
1,378,770$

137,681431,000
124,679
131,181824,541$$

288,5073,421,297
4,780,469
673,483
9,163,756
696,3622,660,677610,258
13,131,053

Liabilities and net assets :Current liabilities :Short-term borrowingsand current portion of long-term debt
PayablesAdvances from customers
Other current liabilities
Total current liabilities
Long-term liabilities :Long-term debt, less current portion
OthersTotal long-term liabilities
Net assets :Common stock
Capital surplus
Retained earnings
Treasury stock
Net unrealized gains on securities
Gains/losses on hedging items
Foreign currency translation adjustments
Minority interests
Total net assets
Total liabilities and net assets\\-3-

1,506,350
3,667,181
1,403,223
1,155,573
7,732,327

145,298
100,579
245,877

138,766
96,425
235,191

1,402,084
970,559
2,372,643

104,329
54,289154,901
(469)
4,787
4,107
(14,137)
5,786
313,593
1,360,771

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

1,006,745
523,873
1,494,752(4,526)46,19339,631(136,418)
55,833
3,026,083
13,131,053\$

Condensed Consolidated Statements of Income
For six months ended September 30, 2008 and 2007
Millions of yen
Six months ended
Six months ended
Sep. 30, 2007
Sep. 30, 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 unconsolidated
subsidiaries and affiliates
Interest expense
Other, net
Income before income taxes andminority interests
Income taxes
Minority interests in net income ofconsolidated subsidiaries
Net income\\652,924
547,663
105,261
80,90824,353\699,540
582,117
117,423
78,37339,050％Change-7%Thousands of
U.S. dollars
Six months ended
Sep. 30, 2008$-38%

6,300,531
5,284,792
1,015,739
780,739
235,000

2,501

2,468

24,134

3,311(3,429)(1,183)2,331(3,859)(8,153)

31,950(33,089)(11,416)

25,553(12,589)

31,837(11,470)(628)
12,336\(489)
19,878-20%-38%

246,579(121,480)$(6,060)119,039

For three months ended September 30, 2008
Millions of yen

Thousands of
U.S. dollars

Three months ended

Three months ended

Sep. 30, 2008

Sep. 30, 2008

\Net sales350,392$

Gross profit
Selling, general and administrative expenses
Operating income

3,381,183
2,829,489

293,220

Cost of sales

57,172551,694

41,319398,717

15,853

152,977

855

8,251

Other income (expenses) :Interest and dividend income
Equity in income of unconsolidated
1,956

18,875Interest expense(1,579)(15,237)

Other, net(6,357)(61,344)

10,728103,522(6,134)(59,191)

subsidiaries and affiliates

Income before income taxes andminority interests
Income taxes
Minority interests in net income of(3,474)(360)

consolidated subsidiaries
Net income\4,234-4-$40,857

Condensed Consolidated Statements of Cash Flows(Consolidated)

For six months ended September 30, 2008 and 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
Decrease in assets
Decrease in liabilities
Other
Net cash provided by operating activities
Cash flows from investing activities:
Acquisition of tangible and intangible assets
Acquisition of investments in securities
OtherNet 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
OtherNet cash provided by (used for) financing activities
Effect of exchange rate changes
Net 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

Millions of yen
Six months ended
Six months ended
Sep. 30, 2007
Sep. 30, 2008

Thousands ofU.S. dollars
Six months ended
Sep. 30, 2008

\25,553$

246,579\20,025
22,602(41,356)(18,277)
8,547$

193,236
218,103(399,074)(176,368)
82,476\(30,787)(24)
1,227(29,584)$(297,086)(232)
11,841(285,477)\20,381
21,008(20,910)(8,636)
11,843$

196,671
202,721(201,776)(83,334)
114,282\31,837\17,642
33,312(30,659)(28,122)
24,010\(23,964)(1,111)
4,885(20,190)\(5,369)3,220(10,108)(8,544)(20,801)(359)(9,553)38,169\-5-

28,616(3,465)(92,184)
368,320413(16,568)
39,229\158
22,819$276,136

(Consolidated)

Segment information(a) Information by industry segment

External
sales
Shipbuilding
Rolling Stock& Construction Machinery
Aerospace
Gas Turbines & Machinery
Plant & Infrastructure Engineering
Consumer products & Machinery
Hydraulic Machinery
OtherTotal
Eliminations
Consolidated total\53,735\83,679
95,291
91,79046,692
177,622
47,29756,818652,924
652,924

Externalsales
Shipbuilding
Rolling Stock& Construction Machinery
Aerospace
Gas Turbines & Machinery
Plant & Infrastructure Engineering
Consumer products & Machinery
Hydraulic Machinery
OtherTotal
Eliminations
Consolidated total\77,480\70,244
118,247
84,28949,647
212,51239,977
47,144
699,540
699,540

External
sales
Shipbuilding
Rolling Stock& Construction Machinery
Aerospace
Gas Turbines & Machinery
Plant & Infrastructure Engineering
Consumer products & Machinery
Hydraulic Machinery
OtherTotal
Eliminations
Consolidated total$518,527

807,479
919,531885,747
450,565
1,714,002
456,403548,277
6,300,531$ 6,300,531

Millions of yen
Six months ended September 30, 2008
Intersegment
Total
Operating
sales
sales
expenses

Operatingincome (loss)

\906

\258

\730
810
8,485
5,170
3,661
4,356
19,48843,606(43,606)
-\

7,064
560
4,785
4,693
302
5,045
1,818
24,525(172)
24,353\54,641\84,409
96,101
100,275
51,862
181,283
51,65376,306
696,530(43,606)
652,924\

54,383\77,345
95,541
95,49047,169180,981
46,60874,488672,005(43,434)
628,571

Millions of yen
Six months ended September 30, 2007
Intersegment
Total
Operating
sales
sales
expenses
\932

\591
868
6,322
6,802
2,577
4,254
18,02440,370(40,370)-\78,412\70,835
119,115
90,611
56,449215,089
44,231
65,168739,910(40,370)699,540\76,111\69,674
108,422
84,91755,043
202,769
40,324
63,868701,128(40,638)
660,490

Operatingincome (loss)\2,301\

1,161
10,693
5,694
1,407
12,3203,908
1,297
38,781
269
39,050Thousands of U.S. dollars
Six months ended September 30, 2008
Intersegment
Total
Operating
sales
sales
expenses

Operatingincome (loss)

$

$

2,490

$

68,166
5,404
46,17445,287
2,915
48,682
17,541
236,659(1,659)235,000

8,743

7,044
7,816
81,87849,88935,32842,034
188,053
420,785(420,785)
$
--6-

$

527,270814,523
927,347
967,625
500,454
1,749,330
498,437
736,330
6,721,316(420,785)$ 6,300,531$

524,780

746,357
921,943
921,451
455,167
1,746,415
449,755
718,7896,484,657(419,126)$ 6,065,531

(Consolidated)(b) Information by geographic area

Externalsales
Japan
North America
EuropeAsia
Other Areas
Total
Eliminations\\465,767
106,348
56,11919,857
4,833
652,924
652,924

Millions of yen
Six months ended September 30, 2008
Intersegment
Total
Operating
sales
sales
expenses

Operatingincome (loss)\\

119,156
12,944
2,539
19,299123
154,061(154,061)-\\\491,024
118,166
72,01013,863
4,477
699,540
699,540

External
sales
Japan
North America
EuropeAsia
Other Areas
Total
Eliminations
Consolidated total$$

4,494,519
1,026,228
541,532191,614
46,6386,300,531
6,300,531

584,923
119,292
58,65839,156
4,956
806,985(154,061)
652,924\\\

567,873
120,52957,55837,2394,651
787,850(159,279)
628,571\Millions of yen
Six months ended September 30, 2007
Intersegment
Total
Operating
sales
sales
expenses

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

143,302
12,691
2,334
11,683
118
170,128(170,128)-\\

634,326
130,857
74,34425,546
4,595
869,668(170,128)
699,540\\\595,440
134,40471,413
24,7244,493
830,474(169,984)
660,490

Operatingincome (loss)\\

Thousands of U.S. dollars
Six months ended September 30, 2008
Intersegment
Total
Operating
sales
sales
expenses$$

1,149,821
124,906
24,501
186,230
1,187
1,486,645(1,486,645)-$$

5,644,340
1,151,134
566,033
377,844
47,825
7,787,176(1,486,645)
6,300,531$$

5,479,813
1,163,071
555,418
359,346
44,8807,602,528(1,536,997)
6,065,531

17,050(1,237)
1,100
1,917
305
19,135
5,218
24,35338,886(3,547)
2,931
822
102
39,194(144)
39,050Operatingincome (loss)$$

164,527(11,937)
10,615
18,498
2,945
184,648
50,352
235,000(c) Overseas sales
Millions of yen
Six months ended
Sep. 30, 2008
Overseas% againstsales
net sales
North America
EuropeAsia
Other Areas
Total\\148,385
68,37874,082
71,595362,440

22.8%
10.4%
11.3%
11.0%
55.5%

-7-

Six months ended
Sep. 30, 2007
Overseas% againstsales
net sales\\162,065
81,69464,742
77,624
386,125

23.1%
11.6%
9.3%
11.1%55.1%

Thousands of
U.S. dollars
Six months ended
Sep. 30, 2008
Overseassales$$

1,431,873
659,828
714,870
690,872
3,497,443

(Consolidated)

Net sales, orders and order backlog by industry segment
For six months ended September 30, 2008 and 2007

Millions of yen
Six months ended
Six months ended
Sep. 30, 2008
Sep. 30, 2007
Net sales :Shipbuilding
Rolling Stock& Construction Machinery
Aerospace
Gas Turbines & Machinery
Plant & Infrastructure Engineering
Consumer products & Machinery
Hydraulic Machinery
OtherTotal
Orders :ShipbuildingRolling Stock& Construction Machinery
Aerospace
Gas Turbines & Machinery
Plant & Infrastructure Engineering
Consumer products & Machinery
Hydraulic Machinery
OtherTotal\53,735(8%)\83,679
95,291
91,79046,692
177,622
47,29756,818652,924\\

Thousands ofU.S. dollars%
Six months ended
ChangeSep. 30, 2008

\77,480

(11%)

-31%

(13%)
(15%)
(14%)
(7%)
(27%)
(7%)
(9%)
(100%)\70,244
118,247
84,28949,647
212,51239,977
47,144
699,540

(10%)
(17%)
(12%)
(7%)
(30%)
(6%)
(7%)
(100%)

58,444(8%)\85,631

136,098
58,366
119,369
49,032
177,62255,09863,237717,266

(19%)
(8%)
(17%)
(7%)
(25%)
(8%)
(8%)
(100%)\

121,60573,726
93,52741,557
212,51244,04052,238724,836$

518,527

+19%
-19%
+9%
-6%
-16%
+18%
+21%
-7%

$

807,479
919,531885,747
450,565
1,714,002
456,403548,277
6,300,531

(12%)

-32%

$

563,968

(17%)
(10%)
(13%)
(6%)
(29%)
(6%)
(7%)
(100%)

+12%
-21%
+28%
+18%
-16%
+25%
+21%
-1%

$

1,313,307
563,215
1,151,877
473,145
1,714,002
531,680
610,219
6,921,413

Millions of yen
As ofSep. 30, 2008
Order backlog :Shipbuilding
Rolling Stock& Construction Machinery
Aerospace
Gas Turbines & Machinery
Plant & Infrastructure Engineering
Consumer products & Machinery
Hydraulic Machinery
OtherTotal\421,518(26%)\484,027
215,310
278,576
137,506
37,11735,6301,609,684

(30%)
(13%)
(17%)
(9%)
( - %)(2%)(3%)(100%)-8-

As ofMar. 31, 2008%
Change\414,176

(27%)

+2%

\431,377
248,332
245,962
135,288
29,317
29,211
1,533,663

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

+12%
-13%
+13%
+2%-%
+27%
+22%
+5%

Thousands of
U.S. dollars
As ofSep. 30, 2008$

4,067,529$

4,670,723
2,077,680
2,688,179
1,326,894
358,168
343,819
15,532,992