Financial Results for Fiscal 2008
(for the year ended March 31, 2009)

Apr. 28, 2009
Kawasaki Heavy Industries, Ltd.

Contents
・ Summary of FY2008 Results (Consolidated)
・ Breakdown of Increases/Decreases
in Profit for FY2008 Compared to FY2007
・ Interest-Bearing Debt and Cash Flows・ Business Results and Outlook by Segment
Shipbuilding
Rolling Stock
Aerospace
Gas Turbines & Machinery
Energy & Environmental Engineering
Consumer Products & Machinery
Industrial Hydraulic Products
・ R&D/Capital Expenditures/Number of Employees
・ Outlook for FY2009 by Segment
・ Outlook of Orders Received for FY2009
・ Business Portfolio (FY2008)

1234567891011121314Summary of FY2008 Results (Consolidated)
Orders Received & Net Sales

Profits(Billion \)(Billion \)

80

76.9

2,000
1,500

1,610.7 1,501.0

1,540.5
1,338.560
1,180.0 1,240.0

1,000

40500

2035.1
28.7
11.7
5.00
FY2007

FY2008FY2009Projection

Orders Received0FY2007

Net Sales

FY2009Net Income

Projection（Billion￥）

ActualExchange Rates
FY2007115162

FY2008Operating Income

Exchange Rates

USD/￥EUR/￥

6.0

FY2008101142

FY2007（Actual）

FY2008（Actual）

FY2009（Projection）Operating Income

７６．９２８．７

５.０

Net Income

３５．１

１１．７

６.０

AssumedExchange Rates
FY2009951251Breakdown of Increases/Decreases in Profitfor FY2008 compared to FY2007
yOperating income(-４８.１billion yen)

Adverse impact of the fluctuation of foreign exchange rate
Adverse impact of decrease in sales
Increase in selling, general and administrative expenses
Adverse impact of a rise in material price
Adverse impact of changes in accounting method for valuation of inventories
Adverse impact of Tax Law Revision regarding Depreciation Methodology
Changes in product mix, Other improvements

yNon-operating income(＋２２.９billion yen）

Decrease in net interest expenses
Increase in equity in income of non-consolidated subsidiaries and affiliates(FY2007 ￥7.6 billion →FY2008 ￥8.7 billion)
Gain and loss on foreign exchange (FY2007 ￥-11.5 billion →FY2008 ￥10.3 billion)

OthersyOther income-３５．１-１９．０- ０．７-１９．４- ４．０- １．６+３１．７+ ０．６+ １．０+２１．９- ０．６(-９.１billion yen)

Gain and loss on contribution of securities to employee’s retirement benefit trust- ５．８(FY2007 ￥ 1.3 billion →FY2008 ￥-4.4 billion )Losses on impairment (FY2007 ￥2.7 billion →FY2008 ￥1.3 billion)
Others+ １．３- ４．６2

Interest-Bearing Debt and Cash Flows
Ｂ／Ｓ

Cash Flows(Billion \)(Billion \)1,500

1,378.7

1,357.9

1,284.0

1,399.7

200%

75.7

80
45.7

150%

1,000
500

319.8
37.6

304.2
39.3

389.2

276.4
39.8

100%

40

FY2006

FY2007

FY2008FY2005-40

Cash on hand and in banks

Interest-Bearing Debt

Total assets

Net D/E Ratio (right scale)Net debt
Shareholders' equity
Net D/E ratio

FY2005282.1
237.5119%

FY2006
264.8
290.4
91%

FY2007236.5
313.175%(Billion \)FY2008
357.3
290.4
123%

FY20082.5050%FY2005

26.6
9.2

31.9045.8-80

FY2006

FY2007

-43.3

-49.0

-36.5

-41.2
-72.2

-120

-113.5C/F from operating activities
C/F from investing activities
Free Cashflows3

Shipbuilding
Operating Income & Operating Income to Sales

Orders Received & Net Sales(Billion \)(Billion \)

250

251.3
4200
150

141.3

100

126.4

2150.0110.00%FY2007-2500

Projection-2%-4%

FY2009Projection

Orders ReceivedFY2009-1.0-4FY2008

4%2%FY2008

071.5

FY20073.53.2

Operating IncomeNet Sales

Operating Income to Sales(vessel)

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

Orders Received
FY2007
FY2 0 0 8231225
1286FY2007
6(6)
3(1)
152(2)17(9)Sales
FY 2 0 0 8
6 (6 )
23 (2 )
172 (2 )
2 1 (1 0 )Note: ( ) = Sales units based on percentage-of -completion method

Business results for FY2008＊Orders received of 1 LPG carrier and 5 Bulk carriers＊Decrease in sales due to sales decrease of large vessels＊Deterioration in profitability due to sales decrease and recorded provision forlosses on construction contracts
Outlook for FY2009＊Decrease in sales of LNG and LPG carriers, Increase in sales of Bulk carriers＊Return to profitability mainly due to restoration of provision for losses onconstruction contracts recorded during FY2008

4

Rolling Stock
Operating Income & Operating Income to Sales

Orders Received & Net Sales(Billion \)(Billion \)

8%

15300
200

11.3

264.6

10186.4

183.2 171.7150.0

170.0

9.0
7.14%

52%

1000%0FY2007

0FY2007

FY2008Orders Received

Net Sales

Business results for FY2008＊Large-scale orders received of Shinkansen cars for JR and additional order of
R160 for N.Y. subway (140 cars/US$275 mil)＊Increase in profit due to sales increase of rolling stock for overseas

FY2008FY2009Projection

FY2009Projection

6%

Operating Income

Operating Income to Sales

Outlook for FY2009＊Increase in sales of Shinkansen cars for JR and rolling stock for U.S. ,while
decrease in sales due to the reclassification of construction machinery
business unit into “Others” segment(*note)＊Decrease in profit due to adverse impact of an assumed exchange rate of95 yen against US dollar(*note)Orders Received/ Net Sales/ Operating Income of construction machinery
business unit for FY2009 projection are included in “Others” segment.
FY2008 Results of this segment excluding the results of construction machinery
business unit are as follows:[FY2008 Orders Received: ¥235.0 billion Net Sales: ¥150.3 billion
5Operating Income: ¥12.3 billion ]Aerospace
Orders Received & Net Sales

Operating Income & Operating Income to Sales(Billion \)(Billion \)

300
237.3

239.1

202.5

15200.4

200

170.0

190.0

9%

10.8

106%

5100

FY20082.500%
FY2007

0FY2007

FY2008-5FY2009

3%

FY2009-4.1

Projection-3%

Projection

Orders Received

Net Sales

Sales units of components parts for commercial aircraft(unit)Sales
FY2007
FY 2 0 0 8
B777
B767
Embraer170/175
Embraer190/195

82
1269
79

73
1346112

Operating Income

Operating Income to Sales

Business results for FY2008＊Orders received of commercial aircraft businesses for BOEING and P-1 maritime patrol aircraftsfor JDA＊Deterioration in profitability due to sales decrease and adverse impact of changes in accounting
method for valuation of inventories
Outlook for FY2009＊Decrease in sales mainly due to sales decrease regarding development of the XP-1(Patrolaircraft) and the C-X (Transport aircraft) for JDA＊Return to profitability mainly due to the effects of write-down in inventories of commercial
aircraft businesses recorded during FY2008

6Gas Turbines & MachineryOperating Income & Operating Income to Sales

Orders Received & Net Sales(Billion \)(Billion \)

400

355.5

1513.3
11.0

300
227.4
2008%

195.1

185.4

220.0

200.06%107.0
52%

1000%00
FY2007

FY2008FY2009FY2007

Net Sales

FY2008FY2009Projection

Projection

Orders Received

4%

Operating Income

Operating Income to Sales

Business results for FY2008
Outlook for FY2009＊Increase in orders received due to＊Sales at the same level as FY2008:・・・new orders received of commercial aircraft jet engines, the TRENT XWB(+) Sales increase of aero-dynamic machinery and marine propulsion systems
・・・demand increase of diesel power generators and marine propulsion systems(-) Sales decrease of marine diesel engines and commercial aircraft jet engines＊Increase in sales of commercial aircraft jet engines and marine diesel engines＊Decrease in profit due to adverse impact of an assumed exchange rate of 95 yen＊Decrease in profit due to adverse impact of the fluctuation of foreign exchange
against US dollar and R&D expenses increase in machinery business unit
rate and changes in accounting method for valuation of inventories

7

Energy & Environmental Engineering
Operating Income & Operating Income to Sales

Orders Received & Net Sales(Billion \)(Billion \)200

12142.5

150

10%

8.9

9106.0

105.1
83.6

100

10.880.095.064.05%

3500%00
FY2007

FY2008FY2009Projection

Orders Received

Net Sales

Business results for FY2008＊Decrease in orders received reflecting the influence of global retrenchment incapital spending＊Decrease in profit due to sales decrease of large-scale industrial plants
for overseas

FY2007

FY2008FY2009Projection

Operating Income

Operating Income to Sales

Outlook for FY2009＊Continuing of selective order-taking policy＊Decrease in sales and profit due to of completion of large-scale industrial plants
for overseas

For reference only
Large-scale projects as sales for FY2008
・Ferronickel plant/ Korea
・Urea production facility/ Pakistan
・Cement plant/ Vietnam8

Consumer Products & MachineryOperating Income & Operating Income to Sales

Net Sales(Billion \)(Billion \)

500

19.6

433.9

40010336.4

FY2008

300

260.0

5%0%0
FY2007-5%-10.1-10%-20

100-26.0-300
FY2007

FY2008FY2009Projection

Sales by Region for Consumer Products（Thousands of Unit / Billion \)Domestic
NorthAmerica
EuropeOthersTotal

FY2009Projection-10200

Region10%20

FY2007
FY2008
Unit
AmountUnit
Amount2015.21914.7230(124)177.1 197(118)134.3118110.7
97
73.2
151
39.6
210
44.9
519
342.6
523
267.1

Note
1. Sales units consist of Motorcycle, All-Terrain Vehicles (ATV), Utility Vehicles (MULE),
Personal Water Craft (Jet Ski) and parts for these products.
2. ( ) represents Motorcycle sales unit.

Operating Income-15%

Operating Income to Sales

Business results for FY2008＊Decrease in sales due to・・・sales decrease of Motorcycles for U.S. and European markets and industrial robots forautomobile and semiconductor manufacturing equipment・・・adverse impact of the fluctuation of foreign exchange rate
＊Deterioration in profitability due to sales decrease and adverse impact of the fluctuationof foreign exchange rate
Outlook for FY2009＊Significant decrease in sales reflecting our prospect that the Motorcycles market volume in developing
countries such as U.S. and Europe would shrink by 25% against FY2008 and the lower-level of capitalspending would last among automobile and semiconductor manufacturers＊Larger loss due to･･･sales decrease･･･adverse impact of an assumed exchange rate of 95 yen against US dollar･･･deterioration in product mix of motorcycles i.e. decrease in sales proportion of large-sized
motorcycles with higher margin
9Industrial Hydraulic Products
Operating Income & Operating Income to Sales

Orders Received & Net Sales(Billion \)100(Billion \)

92.3

84.0

1084.1 84.9
70.0

65.0

9.1

15%

8.3

810%

650

4

3.0

5%

20%

00
FY2007

FY2008FY2009FY2007

Net Sales

Business results for FY2008＊Increase in sales of industrial hydraulic products for construction machinery
mainly for Chinese market＊Decrease in profit due to slowdown in production from the third quarter ofFY2008 and adverse impact of a rise in material price

FY2009Projection

Projection

Orders Received

FY2008Operating Income

Operating Income to Sales

Outlook for FY2009＊Decrease in profit due to sales decrease of industrial hydraulic products forconstruction machinery

10R&D/Capital Expenditures/Number of Employees(Billion￥/ Persons)

FY２００７
Actual

FY２００８Actual

FY２００９Projection

R&D

36.2

38.2

40.0

Capital Expenditures

50.5

82.4

78.0

Depreciation andAmortization

37.4

44.3

54.0

Domestic

23,542

24,311

24,600Overseas

7,021

7,955

8,400

Number of Employees

30,56332,26633,00011

Outlook for FY2009 by Segment(Billion￥）

Net Sales
FY２００８ActualOperating Income

FY２００９Projection

FY２００８Actual

FY２００９Projection

Shipbuilding

126.4

150.0

-1.0

3.5

Rolling Stock

186.4

170.0

11.3

9.0

Aerospace

200.4

190.0

-4.1

2.5

Gas Turbines & Machinery

195.1

200.0

11.0

7.0

Energy & Environmental Engineering

105.1

95.0

8.9

4.0

Consumer Products & Machinery

336.4

260.0

-10.1

-26.0

Industrial Hydraulic Products

84.9

65.0

8.3

3.0

Others

103.5

110.0

4.2

2.0

Total

1,338.5

1,240.0

28.7

5.0

Assumed Exchange Rates
USD=￥９５/EUR=￥１２５12Outlook of Orders Received for FY2009（Billion￥）

Orders Received
FY２００７
Actual

FY２００８Actual

FY２００９Projection

Shipbuilding

251.3

71.5

110.0

Rolling Stock

183.2

264.6

150.0

Aerospace

202.5

239.1

170.0

Gas Turbines & Machinery

227.4

355.5

220.0

Energy & Environmental Engineering

106.0

83.6

80.0

Consumer Products & Machinery

433.9

336.4

260.0

Industrial Hydraulic Products

92.3

84.1

70.0

Others

113.9

105.5

120.0

Total

1,610.7

1,540.5

1,180.013

Business Portfolio (FY2008)

Orders Received

Industrial Others
Hydraulic
7%
Products5%

Consumer
Products &Machinery
22%

Net Sales

Shipbuilding
5%
RollingStock
17%￥1,540.5billion
Aerospace
16%

Energy &Environmental
Engineering
5%

Gas Turbines &Machinery
23%

Industrial
Hydraulic
Products6%

Consumer
Products &Machinery
25%

Others8%

Shipbuilding
9%
RollingStock
14%￥1,338.5billion
Aerospace
15%

Energy &Environmental
Engineering
8%

Gas Turbines &Machinery
15%

14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.