January 31, 2008
(Consolidated)

KAWASAKI HEAVY INDUSTRIES, LTD. AND CONSOLIDATED SUBSIDIARIESFLASH CONSOLIDATED FINANCIAL RESULTS OF THE THIRD QUARTER (Unaudited)
For nine months ended December 31, 2007 and 2006 and one year ended March 31, 2007

Thousands ofOperating results
Net sales

Millions of yen

U.S. dollars

Nine months ended

Nine months ended

Dec. 31, 2007
1,051,155

Dec. 31, 2006
1,001,128%
Change+5%\\Nine months ended$Dec. 31, 2007
9,208,541

Operating income

53,77144,650+20%

471,056

Net income

28,962

23,074+26%253,719

17.4

14.8

Earnings per share (Yen)

Financial condition

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

Net assets

Ratio of net assets
to total assets

As of December 31, 2007
As of March 31, 2007

\1,370,741
1,357,980\314,721
295,378

23%
21%

As of December 31, 2007$

12,008,244$

2,757,083−

Yen / U.S. dollars
Net assets
less minority interests
per share

Thousand shares
Number of sharesissued and outstanding

As of December 31, 2007
As of March 31, 2007

\185.1175.0

1,668,735
1,659,415

As of December 31, 2007

$1.62

−

Fiscal year forecast

Millions of yen
Net sales

One year ending March 31, 2008

\Net income

1,520,000\-1-33,000

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 ￥114.15=$1, the rate prevailing as of December 31, 2007, solely for theconvenience of the readers.

-2-(Consolidated)

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

Millions of yen
As ofAs ofMar. 31, 2007
Dec. 31, 2007

Assets :Current assets :Cash on hand and in banks
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\39,873405,128
457,943
69,556
972,500
91,212259,797
47,232
1,370,741\\$

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

349,304
3,549,085
4,011,765
609,338
8,519,492
799,055
2,275,926
413,771
12,008,244

Liabilities and net assets :Current liabilities :Short-term borrowingsand current portion of long-term debt
Trade payables
Advances 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\221,782
358,194
137,657
101,498
819,131\\$

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

1,942,900
3,137,924
1,205,931
889,163
7,175,918

142,607
94,282
236,889

165,754
90,342
256,096

1,249,295
825,948
2,075,243

104,265
54,251
146,544(63)
14,999(1,267)(9,904)
5,896
314,7211,370,741

103,18853,179
125,799(55)
19,342(1,608)(9,417)
4,950
295,378
1,357,980

913,403475,261
1,283,785(552)
131,397(11,099)(86,763)
51,651
2,757,083
12,008,244\$

Condensed Consolidated Statements of Income
For nine months ended December 31, 2007 and 2006
Millions of yen
Nine months ended Nine months ended
Dec. 31, 2006
Dec. 31, 2007
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 incomeof consolidated subsidiaries
Net income\\

1,051,155
878,853
172,302
118,531
53,771\1,001,128
858,905
142,223
97,57344,650％Change+5%

Thousands ofU.S. dollars
Nine months ended
Dec. 31, 2007$+20%

9,208,541
7,699,106
1,509,435
1,038,379
471,056

3,882

2,974

34,0084,384(6,032)(9,949)1,617(4,776)(8,725)38,406(52,843)(87,158)

46,056(16,244)

35,740(12,193)(850)
28,962-3-\(473)
23,074+29%+26%

403,469(142,304)$(7,446)
253,719

(Consolidated)

Net sales, orders and operating income (loss) by industry segment
For nine months ended December 31, 2007 and 2006

Millions of yen
Nine months ended
Nine months ended
Dec. 31, 2007
Dec. 31, 2006
Net sales :Shipbuilding
Rolling Stock& Construction Machinery
Aerospace
Gas Turbines & Machinery
Plant & Infrastructure Engineering
Consumer products & Machinery
OtherTotal\\112,383(11%)

117,239 (11%)
171,505 (16%)
130,384 (12%)
82,210(8%)
305,579 (29%)
131,855 (13%)
1,051,155 (100%)\79,964(8%)+41%\142,149
175,371
124,558
72,390286,825
119,871
1,001,128(14%)
(18%)
(12%)
(7%)
(29%)
(12%)
(100%)

-18%
-2%
+5%
+14%
+7%
10%
+5%

Millions of yen
Nine months ended
Nine months ended
Dec. 31, 2007
Dec. 31, 2006
Orders :Shipbuilding
Rolling Stock& Construction Machinery
Aerospace
Gas Turbines & Machinery
Plant & Infrastructure Engineering
Consumer products & Machinery
OtherTotal\\183,511(16%)

158,352 (14%)
125,605 (11%)
158,746 (14%)
66,084(6%)
305,578 (26%)
145,780 (13%)
1,143,656 (100%)

\\\

2,940

\

4,088
12,415
7,351
3,895
14,6628,420
53,771-4-%
Change(11%)+46%

187,467 (17%)
130,203 (12%)
149,440 (13%)
104,564 (9%)
286,825 (26%)
128,020 (12%)
1,111,964 (100%)-16%-4%+6%-37%+7%+14%+3%

125,445

Millions of yen
Nine months ended
Nine months ended
Dec. 31, 2007
Dec. 31, 2006
Operating income (loss) :Shipbuilding
Rolling Stock& Construction Machinery
Aerospace
Gas Turbines & Machinery
Plant & Infrastructure Engineering
Consumer products & Machinery
OtherTotal%
Change\-2,458\12,612
8,253
6,402-3,923
16,677
7,087
44,650Thousands of
U.S. dollars
Nine months ended
Dec. 31, 2007$

984,520$

1,027,061
1,502,453
1,142,216
720,193
2,676,995
1,155,103
9,208,541

Thousands of
U.S. dollars
Nine months ended
Dec. 31, 2007$

1,607,630$

1,387,227
1,100,350
1,390,679
578,9222,676,987
1,277,092
10,018,887

Thousands of
U.S. dollars
Nine months ended
Dec. 31, 2007$

25,756$35,813
108,760
64,39834,122
128,444
73,763471,056