July 31, 2008
(Consolidated)

KAWASAKI HEAVY INDUSTRIES, LTD. AND CONSOLIDATED SUBSIDIARIESFLASH CONSOLIDATED FINANCIAL RESULTS OF THE FIRST QUARTER (Unaudited)
For three months ended June 30, 2008 and 2007 and one year ended March 31,2008

Operating results
Millions of yen
Three months ended
Three months ended
Jun. 30, 2007
Jun. 30, 2008
Net sales
Operating income
Net income
Earnings per share (Yen)\Financial condition

As of June 30, 2008
As of March 31, 2008
As of June 30, 2008

302,531
8,246
8,102
4.9

\Millions of yen / Thousands of U.S. dollarsTotal assets
Net assets\$

1,345,446
1,378,770
12,642,793\$

Yen / U.S. dollars
Net assets
less minority interests
per share
As of June 30, 2008
As of March 31, 2008
As of June 30, 2008\$

1,668,290
1,668,305－

Millions of yen
Three months ended
Jun. 30, 2008

Thousands ofU.S. dollars
Three months ended
Jun. 30, 2007\$

Fiscal year forecast
One year ending March 31, 2009

311,059
319,038
2,922,938

Thousand shares
Number of sharesissued andoutstanding

183.2
187.7
1.72

Cash flows

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

330,445
19,19812,0107.2(3,585)(14,818)
12,101
31,217(33,687)(139,241)113,710
293,338

Millions of yen
Net sales
Net income\1,460,000-1-\30,000

Thousands ofU.S. dollars
Three months ended
Jun.30, 2008$

2,842,802
77,485
76,132

Ratio of net assets
to total assets
23%
23%－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 106.42 yen =$1, the rate prevailing as of June 30, 2008, solely for theconvenience of the readers.

-2-(Consolidated)

Condensed Consolidated Balance Sheets
As of June 30 and March 31, 2008
Thousands ofU.S. dollars
As ofJun. 30, 2008

Millions of yen
As ofJun. 30, 2008

As ofMar.31, 2008

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\\32,655
361,013474,647
72,996
941,31182,838
264,523
56,774
1,345,446\

174,363355,629
147,392
128,989
806,373\\

39,875433,155
439,31069,942982,282
79,675259,927
56,886
1,378,770$

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

306,850
3,392,342
4,460,130
685,923
8,845,245
778,4072,485,651
533,490
12,642,793$

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
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\\1,638,442
3,341,750
1,385,003
1,212,074
7,577,269

128,246
99,768228,014138,766
96,425
235,191

1,205,093
937,493
2,142,586

104,329
54,324
150,660
13,025(376)(15,852)
(464)
5,413
311,059
1,345,446

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

980,351
510,468
1,415,712
122,393(3,533)(148,957)(4,360)50,8642,922,938
12,642,793\$

Condensed Consolidated Statements of Income
For three months ended June 30, 2008 and 2007
Thousands of
U.S. dollars
Three months ended

Millions of yen
Three months ended
Three months ended
Jun.30, 2007

Jun. 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\302,531
254,443
48,08839,842
8,246-3-330,445
272,948
57,49738,29919,198$-57.0%2,842,802
2,390,932
451,870
374,385
77,485

1,646

1,567

15,467

1,355(1,850)5,427

670(2,186)(111)

12,733(17,384)
50,996

14,824(6,455)

19,138(6,964)

(267)
8,102

\\Jun.30, 2008%

Change-8.4%\(164)
12,010-22.5%-32.5%

139,297(60,656)$(2,509)76,132

Condensed Consolidated Statements of Cash Flows(Consolidated)

For three months ended June 30, 2008

Thousands ofU.S. dollars
Millions of yen
Three months ended Three months ended
Jun.30, 2008
Jun.30, 2008
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 used for 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 in short-term borrowings
Proceeds from long-term debt
Repayment of long-term debt
Other
Net cash provided by financing activities
Effect of exchange rate changes
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of term
Cash and cash equivalents at end of term

-4-\

14,824\9,542
39,962(54,103)(13,810)(3,585)\(14,923)(13)
118(14,818)\

18,8878(507)(6,287)
12,101\(650)(6,952)
38,16931,217$139,297$

89,664
375,512(508,391)(129,769)(33,687)$(140,227)
(122)
1,108
(139,241)$

177,476
75(4,764)(59,077)
113,710$(6,108)(65,326)
358,664
293,338(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 and corporate
Consolidated total\19,090
36,10439,56344,984
20,28494,00723,00925,490302,531302,531

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

179,384$

339,260
371,763422,702
190,603883,358
216,209239,523
2,842,802
2,842,802

Millions of yen
Three months ended
Jun.30, 2008
Total
Intersegment
sales
sales

Operatingincome (loss)

\186

\23

\259
394
4,260
2,891
1,862
2,040
9,956
21,848(21,848)
-\

2,382
219
2,258
1,695
(1,834)
2,633
939
8,315
(69)
8,246

\19,276\36,363
39,95749,244
23,175
95,86925,04935,446324,379(21,848)
302,531

Thousands of U.S. dollars
Three months ended
Jun.30, 2008
Intersegment
Total
sales
sales

Operatingincome (loss)

$

$

217

$

22,384
2,058
21,217
15,927(17,234)
24,741
8,824
78,134(649)
77,485

1,748

2,434
3,702
40,03027,166
17,497
19,16993,554205,300(205,300)
$
-- 5-

$

181,132$

341,694
375,465
462,732
217,769
900,855
235,378
333,077
3,048,102(205,300)
2,842,802

(Consolidated)(b) Information by geographic area

External
sales
Japan\North AmericaEurope
Asia
Other Areas
TotalEliminations and corporate
Consolidated total\206,345
51,06734,858
7,810
2,451
302,531302,531

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

1,938,968
479,863
327,551
73,38823,0322,842,802
2,842,802

Millions of yen
Three months ended
Jun.30, 2008
Intersegment
Totalsales
sales\\56,974 \
6,647
1,333
9,345
54
74,353(74,353)- \$$535,369
62,46012,52687,812
508
698,675(698,675)-Millions of yen
Three months ended
Jun.30, 2008
Overseas% againstsales
net sales\\263,319 \
57,71436,191
17,155
2,505
376,884(74,353)
302,531 \Thousands of U.S. dollars
Three months ended
Jun.30, 2008
Intersegment
Totalsalessales(c) Overseas sales

North America
EuropeAsia
Other Areas
Total

Operatingincome (loss)

69,69139,45535,58829,238173,972

23.0%
13.0%
11.7%
9.6%
57.5%

-6-$

$

2,474,337
542,323
340,077
161,200
23,5403,541,477(698,675)
2,842,802

Thousands ofU.S dollars
Three months ended
Jun.30, 2008
Overseas
sales$$

654,868
370,748
334,411274,742
1,634,769

4,741
72
1,023
529
158
6,523
1,723
8,246

Operatingincome (loss)$$44,549
677
9,613
4,970
1,486
61,295
16,19077,485

(Consolidated)

Net sales, orders and order backlog by industry segment
For three months ended June 30, 2008 and 2007 and as of Jun. 30, 2007 and Mar. 31,2008

Millions of yen
Three months ended
Three months ended
Jun. 30, 2008
Jun. 30, 2007

Thousands of
U.S. dollars
Three months ended
Jun. 30,2008％
ChangeNet sales :Shipbuilding\Rolling Stock,& Construction Machinery
Aerospace
Gas Turbines & Machinery
Plant & Infrastructure Engineering
Consumer Products & Machinery
Hydraulic Machinery
Other
Total

19,090(6%)

36,10439,56344,984
20,28494,00723,00925,490302,531\42,885

(13%)

-55%

$

179,384

(12%)
(13%)
(15%)
(7%)
(31%)
(8%)
(8%)
(100%)

30,331
43,20639,53815,264
119,329
19,251
20,641
330,445

(9%)
(13%)
(12%)
(5%)
(36%)
(6%)
(6%)
(100%)

+19%
-8%
+14%
+33%
-21%
+20%
+23%
-8%

339,260
371,763422,702
190,603883,358
216,209239,523
2,842,802

20,628(5%)

58,395

(17%)

-65%

193,836

98,201
27,51759,14928,751
94,00728,92132,197389,371

(26%)
(7%)
(15%)
(7%)
(24%)
(7%)
(9%)
(100%)

28,63824,33049,11620,023
119,329
21,76924,185
345,785

(8%)
(7%)
(14%)
(6%)
(35%)
(6%)
(7%)
(100%)

+243%
+13%
+20%
+44%
-21%
+33%
+33%
+13%

922,768
258,570
555,807
270,165
883,358
271,763
302,547
3,658,814

Orders :Shipbuilding
Rolling Stock,& Construction Machinery
Aerospace
Gas Turbines & Machinery
Plant & Infrastructure Engineering
Consumer Products & Machinery
Hydraulic Machinery
OtherTotal\\$

Thousands of
U.S. dollars
As ofJun. 30, 2008

Millions of yen
As ofMar. 31, 2008

As ofJun. 30, 2008%
ChangeOrder backlog :Shipbuilding\ 420,168
Rolling Stock,& Construction Machinery
485,123
Aerospace
241,840
Gas Turbines & Machinery
267,120
Plant & Infrastructure Engineering
143,904
Consumer Products & Machinery
Hydraulic Machinery
35,229Other35,919
Total\ 1,629,303

(26%)
(30%)
(15%)
(16%)
(9%)
(-%)
(2%)
(2%)
(100%)\414,176

(27%)

+26%

\431,377248,332
245,962
135,288
29,317
29,211
1,533,663

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

+7%
-11%
+16%
-19%
-%
+50%
+53%
+8%

-7-

$

3,948,205$

4,558,570
2,272,505
2,510,055
1,352,227
331,037
337,521
15,310,120