2002

Semiannual Report
For the six months ended September 30, 2002

Consolidated Financial Highlights
Kawasaki Heavy Industries, Ltd. and Consolidated Subsidiaries
For the six months ended September 30, 2002 and 2001

Thousands of
U.S. dollars

Millions of yen
2002

For the period:
Net sales.................................................................................................................................................. ¥ 539,691
Operating income (loss) .......................................................................................................................
(2,234)
Net loss ...................................................................................................................................................
3,488
Research and development expenses.................................................................................................
6,400
Depreciation and amortization ............................................................................................................
15,348Net cash provided by operating activities .........................................................................................
21,0682001

2002¥ 492,140
4,916
2,332
7,000
15,53822,832$4,402,047(18,222)
28,45052,202
125,188
171,843

Per share (in yen and U.S. dollars):
Net loss ...................................................................................................................................................
Cash dividends.......................................................................................................................................

2.50
—

1.70
—

0.02
—

At period-end:
Total assets ............................................................................................................................................
Total shareholders’ equity ...................................................................................................................

1,172,682
159,451

1,247,092
162,210

9,565,106
1,300,579

Orders received and outstanding:
Orders received during the period......................................................................................................
Order backlog at the period-end .........................................................................................................

523,025
1,190,754

443,940
1,271,005

4,266,109
9,712,512

Number of employees ...........................................................................................................................

29,00929,079Notes: 1. This Semiannual Report has been prepared in conformity with generally accepted accounting principles and practices in Japan.
2. All dollar figures herein refer to U.S. currency. Yen amounts have been translated, for convenience only, at ¥122.60 to $1.00, the approximate rate of exchange at
September 30, 2002.

Net Sales

Net Income (Loss)(Billions of yen)(Billions of yen)

Apr. 2002-Mar. 2003
539.7

Apr. 2002-Mar. 2003

(3.5)

Apr. 2001-Mar. 2002
492.1

652.4

Apr. 2001-Mar. 2002

(2.3)

8.6

Apr. 2000-Mar. 2001
454.3
0

200

606.2
400

600
First half

800

Apr. 2000-Mar. 2001
1,000

1,200

Second half

1,400

-15

-10

-5
First half

(12.4)

2.1
0

5
Second half10

To Our Shareholders
Reforming Our Earnings Structure and Aiming for asecond half of this fiscal year. In addition, decreased

Return to a Sustainable Growth Path

demand for aircraft and related businesses stemming

Expectations of an early recovery in the Japanese econo-from the terrorist incidents in the United States in 2001,

my appear dim because of the combination of deflation-

the appreciation of the yen during this interim period,

ary trends—caused by stagnation in private capitaland other factors adversely affected the Company’s per-investment, restraints on government public works

formance.

investment, and weakness in personal consumption—the

Nevertheless, we are expecting higher profits foradverse impact of the disposal of nonperforming loans in

the full fiscal year, ending March 31, 2003, than those inJapan, and the uncertainty about future conditions in thethe previous year, boosted by increased sales of higher-

U.S. economy.

margin projects in the second half of the fiscal year andAmid this operating environment during the interim

the positive benefits of various measures to improve

period, extending from April 1, 2002, through September

profitability.

30, 2002, Kawasaki Heavy Industries (KHI) Group succeed-

In consideration of enhancing our capabilities fored in boosting orders received ¥79.1 billion, or 17.8%,

future growth, we regret that we have decided to contin-

from the interim period of the previous fiscal year, to

ue to suspend the payment of cash dividends for the¥523.0 billion as a result of aggressive marketing efforts.

interim period under review. We request you, our share-

This was despite declines in new orders for the Aerospace

holders, to examine carefully our ongoing initiatives andand Gas Turbines & Machinery segments, as orders won

we look forward to your continuing understanding andby other segments expanded. Net sales for the interim

support.

period were up ¥47.6 billion, or 9.7% year on year, to

KHI’s corporate philosophy calls for applying its ad-¥539.7 billion mainly due to higher sales in the Rolling

vanced technologies to create new value-added products

Stock, Construction Machinery & Crushing Plant segment

for use on land, at sea, and in the air and to contribute toand the Consumer Products & Machinery segment.

the development of society.

Profitwise, however, we reported an operating loss of

Based on this philosophy, we are adhering strictly to¥2.2 billion and a net loss of ¥3.5 billion despite our con-attaining our objective of “Quality followed by Quantity”

tinuing efforts to improve profitability in all phases ofand working to improve our earnings structure throughour operations. This worse performance than the interim

reforms centering on sharpening the focus of our busi-

period of the previous fiscal year is partly due to the fact

ness portfolio, transforming our business model, andthat our higher-margin projects are concentrated in theenhancing the effectiveness of our management systems.

1Our specific objective is to achieve a return on invested

On the other hand, in our shipbuilding and hydrauliccapital before tax of 9% or more in the fiscal year ending

machinery businesses, we are working to substantially

March 31, 2005.

increase our flexibility in these operations and improve

To achieve this objective, we are working to create

the efficiency of management. To this end, in Octobera more stable earnings structure by strict emphasis on

2002, we established Kawasaki Shipbuilding Corporation,

monitoring our margins from the time orders are received,and Kawasaki Precision Machinery Ltd., as wholly

preventing any unexpected cost overruns, and preparing

owned subsidiaries. Through these measures, we arecountermeasures against sudden fluctuations in foreign

seeking to strengthen the competitiveness of our busi-

currency exchange rates. Moreover, by offering products

nesses and substantially enhance the enterprise value ofand services that are differentiated based on our techno-

the Group as a whole.

logical capabilities, we are endeavoring to increase profit

The KHI Group is responding to changes in the busi-

margins and evolving our business model toward one

ness environment and is steadily implementing various

based on identifying profit sources throughout the life

policies under its medium-term business plan to return tocycle of our products.

a stable growth path. We appreciate the continued advice

In addition, we are placing emphasis on investing ourand support of our shareholders as well as their under-

management resources in core and developing business-

standing of what we are working to accomplish in thees where we anticipate growth. These businesses are:years ahead.

Aerospace, Consumer Products, Rolling Stock, and Gas
Turbines & Machinery. We are nurturing and strengthen-December 2002

ing these businesses as our earnings pillars. As part ofthis strategy, we have decided to implement a shareexchange with NIPPI Corporation to make it a wholly
owned subsidiary and thereby further strengthen our

Masamoto Tazaki

position in the aerospace business.

President and CEO

2

Review of Operations

Shipbuilding
to adverse movements in foreign exchange rates, thesegment reported an operating loss of ¥1.5 billion compared with an operating profit of ¥3.0 billion for theinterim period of the previous fiscal year.
A total of six vessels were delivered in the interim
period: two container ships, three bulk carriers, andone LPG carrier.

For the interim period under review, orders received bythis segment increased ¥32.6 billion, or 76.5%, to ¥75.2
billion. The segment secured orders for six vessels:
three LNG carriers, one LPG carrier, and two bulk
carriers.
Net sales declined ¥3.0 billion, or 5.6%, to ¥49.8 billion
due mainly to decreased sales of new ships.
Because there were relatively few high-margin ships
recognized as sales during the interim period and owing

Rolling Stock, Construction Machinery & Crushing Plant
segment mainly consisted of 83 cars to the JR Group,
including cars for Shinkansen bullet trains, 74 cars toother domestic railways, and 200 subway cars to the
New York City Transport Authority.
Operating income rose ¥0.2 billion, or 23.4%, to ¥1.0
billion.

The segment reported a ¥27.2 billion or 55.9% increase
in total orders for the interim period, to ¥75.8 billion.
Major orders received in the period under review were
350 cars for domestic railway companies, including 24
cars for Shinkansen bullet trains for the Japan Railways(JR) Group, and orders for the Taiwan High Speed Rail
Corporation.
Net sales for the interim period climbed ¥26.6 billion,or 50.5%, to ¥79.4 billion. Rolling stock delivered by thisAerospace
Net sales decreased ¥9.5 billion, or 17.3%, to ¥45.7 billion. Although in the defense sector, orders for T-4 intermediate jet trainers and component parts for F-2 supportfighters remained brisk, segment sales declined becauseof the drop in deliveries to Boeing.
Operating income declined ¥4.6 billion, or 77.4%, to¥1.3 billion, reflecting the decrease in sales.

Orders from the Japan Defense Agency (JDA) decreasedslightly from the same period of the previous fiscal year,
and orders from Boeing, mainly component parts forthe 777 and 767 passenger aircraft, showed a substantial decline. As a consequence, total orders received by
the segment for the interim period fell ¥20.7 billion, or
45.0%, to ¥25.3 billion.

3

Gas Turbines & Machinery
Net sales decreased ¥0.9 billion, or 1.1%, to ¥80.8 billion. Products delivered to the JDA during the interim
term included gas turbine/diesel engines for naval vessels and helicopter engines. Other sales included deliveries of component parts for jet engines for commercial
aircraft, small and medium-sized gas turbine generators,
cogeneration systems, turbine/diesel engines for vessels, and hydraulic equipment.
Operating income amounted to ¥2.0 billion, a declineof ¥1.6 billion or 44.7%.

Total orders for the interim term for this segment
declined ¥3.8 billion, or 5.7%, to ¥63.6 billion. New
orders received included those for component parts for
the V2500, Trent, and other jet engines for commercial
aircraft, small and medium-sized gas turbine generators, turbine/diesel engines for vessels delivered tocustomers in Japan and overseas, and hydraulicequipment.

Plant & Infrastructure Engineering
incineration plants to reduce dioxin emissions, a fertilizer plant for a Chinese company, as well as ash handlingequipment to electric power companies, bridges, andshield machines.
Operating loss increased ¥0.6 billion, or 13.6%, to ¥4.6
billion, owing to certain low-margin projects that werestill on the order books.

Total orders of this segment increased ¥19.7 billion, or
31.5%, to ¥82.0 billion as a result of the receipt of orders
for municipal refuse incineration plants as well asorders for a continuous zinc galvanizing line from
China, bridges, water gates, and shield machines.
Net sales amounted to ¥80.1 billion and were ¥9.2 billion or 12.9% higher year on year. Facilities and products recorded in sales included municipal refuse
incineration plants and the retrofitting of existing

Consumer Products & Machinery
owing to increased sales and decreased sales promotion expenses in Europe and the United States as aresult of the successful reduction in excess pipeline
inventories in these markets.

Net sales of this segment rose ¥27.5 billion, or 20.4%, to¥162.3 billion as sales of ATVs (all-terrain vehicles) andindustrial robots expanded.
The segment posted an operating loss of ¥0.2 billion,
although this was a ¥3.7 billion, or 95.9% improvementfrom the interim period of the previous fiscal year,

Other
Orders in this segment were down ¥3.2 billion, or 7.6%,
to ¥38.8 billion. Net sales amounted to ¥41.5 billion, representing a decline of ¥2.4 billion, or 5.4% from the pre-vious fiscal year. The segment reported an operating
loss of ¥0.3 billion, a decrease of ¥0.4 billion from theinterim period in the previous fiscal year.
4Performance by Geographical Area
Sales in Japan rose ¥4.3 billion, or 1.2%, for the interim

Sales in Europe were up ¥7.6 billion, or 25.6%, to ¥37.4

period under review, to ¥363.8 billion, mainly because ofbillion, due mainly to higher revenues from our motor-

higher revenues of the parent company, but operating

cycle sales subsidiary. Operating income expanded ¥2.0

income declined ¥15.4 billion, to an operating loss ofbillion from a loss of ¥0.9 billion for the interim period¥6.1 billion, as a consequence of differences in the com-of the previous fiscal year to ¥1.1 billion.

position of sales during this interim period and the

In Asia, sales increased ¥0.5 billion, or 5.4%, to ¥10.2

interim period of the previous fiscal year, and unfavor-

billion and operating income fell ¥0.1 billion, or 22.4%

able movements in foreign exchange rates.

to ¥0.2 billion.

In North America, sales climbed ¥34.8 billion, orIn other areas, sales increased ¥0.4 billion, or 21.4%,

38.0%, to ¥126.2 billion, mainly owing to increased rev-

to ¥2.2 billion and operating income was ¥0.1 billion,

enues of subsidiaries for rolling stock production andapproximately the same amount as for the interim peri-

motorcycle sales. Operating income was ¥0.4 billion, an

od of the previous fiscal year.

increase of ¥2.5 billion compared to the interim period
in the previous fiscal year.

Cash FlowsNet cash provided by operating activities amounted to

As a consequence, cash and cash equivalents at end¥21.1 billion for the interim period under review. Netof the period declined ¥35.7 billion from the end of the

cash used for investing activities was ¥18.9 billion, andprevious fiscal year, to ¥54.1 billion.

net cash used for financing activities was ¥38.3 billion,
owing to the redemption of bonds and repayment oflong-term debt.

5

Condensed Consolidated Balance Sheets
Kawasaki Heavy Industries, Ltd. and Consolidated Subsidiaries
As of September 30 and March 31, 2002 and September 30, 2001
Thousands of
U.S. dollars

Millions of yen
September 30, 2002
(unaudited)

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............................................................

Liabilities and shareholders’ equity:
Current liabilities:
Short-term borrowingsand current portion of long-term debt.....................
Payables .........................................................................
Advances from customers...........................................
Other current liabilities ...............................................
Total current liabilities ............................................
Long-term liabilities:
Long-term debt, less current portion.........................
Others.............................................................................
Total long-term liabilities.........................................
Minority interests .............................................................
Shareholders’ equity:
Common stock ..............................................................
Capital surplus ..............................................................
Retained earnings .........................................................
Net unrealized gains on securities .............................
Foreign currency translation adjustments ................
Treasury stock ..............................................................
Total shareholders’ equity ......................................
Total liabilities and shareholders’ equity..........

March 31, 2002

September 30, 2001
(unaudited)

September 30, 2002
(unaudited)¥

55,463321,214415,451
50,510842,638
74,068240,552
15,424¥1,172,682¥

91,344
396,915372,269
42,143902,671
95,398
241,517
15,489¥1,255,075¥

79,577359,664
409,698
42,180891,119
98,319242,054
15,600¥1,247,092$ 452,390
2,620,017
3,388,670
411,990
6,873,067
604,144
1,962,088
125,807$9,565,106¥ 221,919
272,351
155,872
66,667
716,809¥ 243,113
325,664
111,423
72,357752,557¥ 239,671
281,109
161,922
68,443751,145$1,810,106
2,221,460
1,271,387
543,776
5,846,729

226,92264,177
291,099
5,323

248,170
81,434
329,604
5,183

253,342
75,610328,952
4,785

1,850,914
523,466
2,374,380
43,41881,427
24,68360,5594,836(12,029)(25)
159,451¥1,172,682

81,427
24,68264,1105,925(8,407)(6)
167,731¥1,255,075

81,427
24,68255,503
10,946(10,348)—
162,210¥1,247,092

664,168
201,330
493,956
39,445(98,116)(204)
1,300,579$9,565,106

6

Condensed Consolidated Statements of Operations and Retained Earnings
Kawasaki Heavy Industries, Ltd. and Consolidated Subsidiaries
For the six months ended September 30, 2002 and 2001 (unaudited)Thousands of
U.S. dollars

Millions of yen

Net sales ........................................................................................................................................................
Cost of sales..................................................................................................................................................
Gross profit...........................................................................................................................................
Selling, general and administrative expenses ..........................................................................................
Operating income (loss) .....................................................................................................................
Other income (expenses):
Interest and dividend income ................................................................................................................
Equity in income (loss) of unconsolidated
subsidiaries and affiliates .....................................................................................................................
Interest expense.......................................................................................................................................
Other, net ..................................................................................................................................................
Loss before income taxes and minority interests ...........................................................................
Income taxes.................................................................................................................................................
Minority interests in net income of consolidated subsidiaries .............................................................
Net loss..................................................................................................................................................
Retained earnings:
Balance at the beginning of the period .................................................................................................
Net loss for the period ............................................................................................................................
Bonuses to directors and statutory auditors.......................................................................................
Adjustment for changes of interests in affiliates accounted for by the equity method .................
Balance at the end of the period................................................................................................................

7

2002

2001

2002

¥539,691
474,106
65,58567,819(2,234)¥492,140
422,408
69,73264,816
4,916$4,402,047
3,867,096
534,951
553,173(18,222)

2,221

2,547

18,11661(5,157)(3,400)(8,509)(5,109)88¥ 3,488(10)(6,597)(1,724)
(868)
1,362
102
¥ 2,332$498(42,064)(27,733)(69,405)(41,672)717
28,450¥ 64,110
3,488
(63)
(—)
¥ 60,559¥ 58,452
2,332
(49)
(568)
¥ 55,503$ 522,917
28,450(511)(—)$ 493,956

Consolidated Statements of Cash Flows
Kawasaki Heavy Industries, Ltd. and Consolidated Subsidiaries
For the six months ended September 30, 2002 and 2001 (unaudited)

Millions of yen

2002

Cash flows from operating activities:
Loss before income taxes and minority interests .............................................................................. ¥ 8,509
Depreciation and amortization .............................................................................................................
15,348Provision for retirement and severance benefits ...............................................................................
4,484
Accrued bonuses ....................................................................................................................................
709
Provision for (reversal of) allowance for doubtful accounts ............................................................
(1,403)
Reversal of estimated losses on construction contracts ..................................................................
—
Write-downs of securities ......................................................................................................................
—
Gain (loss) on sale of securities............................................................................................................
38
Gain (loss) on sale of fixed assets ........................................................................................................
648
Gain on contribution of securities to employees’ retirement benefit trust ....................................
(1,312)
Interest and dividend income ...............................................................................................................
(2,221)
Interest expense......................................................................................................................................
5,157
Changes in assets and liabilities:
Decrease (increase) in:
Trade receivables ...................................................................................................................
74,404Inventories ............................................................................................................................... (49,120)
Other current assets...............................................................................................................
(5,661)
Increase (decrease) in:
Trade payables........................................................................................................................ (48,634)
Advances received..................................................................................................................
44,454
Other current liabilities .........................................................................................................
(3,289)Other, net .................................................................................................................................................
1,071
Subtotal ................................................................................................................................................
26,164
Cash received for interest and dividends............................................................................................
2,266
Cash paid for interest.............................................................................................................................
(4,761)
Cash paid for income taxes ...................................................................................................................
(2,601)
Net cash provided by operating activities.........................................................................................
21,068Continues to next page

8

2001

¥

Thousands of
U.S. dollars

2002

868
15,5386,078
92
890(5,966)
4,181(81)(5,761)—(2,547)
6,597$ 69,405
125,188
36,574
5,783(11,444)
—
—
310
5,285
(10,701)(18,116)
42,06472,422(60,117)(5,738)606,884(400,653)(46,175)(49,149)
57,312(3,953)130
29,0602,022(5,811)(2,439)22,832(396,688)
362,594(26,827)
8,736
213,40918,483(38,834)(21,215)
171,843

Thousands of
U.S. dollars

Millions of yen

2002

Continued from previous page

Cash flows from investing activities:
Decrease (increase) in time deposits due more than three months ............................................... ¥ (174)
Acquisition of property, plant and equipment ................................................................................... (17,276)
Proceeds from property, plant and equipment ..................................................................................
489
Acquisition of intangible assets ............................................................................................................
(741)
Proceeds from intangible assets...........................................................................................................
22
Acquisition of investments in securities..............................................................................................
(876)
Proceeds from investments in securities ............................................................................................
139
Decrease in short-term loans ................................................................................................................
(871)
Payment received on long-term loans receivable ..............................................................................
(459)
Proceeds from collection of long-term loans receivable ...................................................................
408
Proceeds from purchase of newly consolidated subsidiaries’ stock...............................................
162
Decrease in other investments .............................................................................................................
245
Net cash used for investing activities................................................................................................. (18,932)

¥

2001

2002

123
(15,835)
8,106(2,316)
94
(710)
321
(1,309)(1,307)2,260—
186(10,387)$ (1,419)(140,914)
3,989(6,044)
179(7,145)
1,134(7,104)(3,744)
3,328
1,321
1,998
(154,421)

Cash flows from financing activities:
Increase (decrease) in short-term borrowings ...................................................................................
Proceeds from long-term debt ..............................................................................................................
Repayment of long-term debt................................................................................................................
Acquisition of treasury stock ................................................................................................................
Cash dividends paid ...............................................................................................................................
Cash dividends paid to minority interests ..........................................................................................
Net cash used for financing activities ................................................................................................

(27,537)
14,434(25,105)
(15)
(1)
(100)
(38,324)

5,142
3,668
(18,965)—(2)(44)(10,201)(224,608)
117,732(204,772)
(122)
(8)
(816)
(312,594)

Effect of exchange rate changes..................................................................................................................

481

407

3,924

Net increase (decrease) in cash and cash equivalents............................................................................

(35,707)

2,651(291,248)

Cash and cash equivalents at beginning of the period...........................................................................

89,77775,212732,276

Cash and cash equivalents at end of the period ...................................................................................... ¥ 54,070¥ 77,863$ 441,0289

Segment Information
Kawasaki Heavy Industries, Ltd. and Consolidated Subsidiaries
For the six months ended September 30, 2002 and 2001 (unaudited)(a) Information by industry segment
Millions of yen
2002

Shipbuilding ...............................................................................................
Rolling Stock, Construction Machinery& Crushing Plant .....................................................................................
Aerospace ..................................................................................................
Gas Turbines & Machinery ......................................................................
Plant & Infrastructure Engineering .........................................................
Consumer Products & Machinery...........................................................
Other...........................................................................................................
Total....................................................................................................
Eliminations ...............................................................................................
Consolidated total.............................................................................

External
sales

Intersegment
sales

Total
sales

Operatingexpenses

Operatingincome (loss)¥ 49,823¥

711¥ 50,534¥ 52,066¥(1,532)

79,42345,65780,80280,128
162,316
41,542539,691—¥539,691

1,197
829
9,170
10,713
2,291
16,67041,581(41,581)¥—

80,62046,48689,972
90,841
164,607
58,212581,272(41,581)¥539,691

79,63345,14688,013
95,439164,768
58,561
583,626(41,701)¥541,925

987
1,340
1,959
(4,598)(161)(349)(2,354)120¥(2,234)

Total
sales

Operatingexpenses

Operatingincome (loss)

Millions of yen
2001

Shipbuilding ...............................................................................................
Rolling Stock, Construction Machinery& Crushing Plant .....................................................................................
Aerospace ..................................................................................................
Gas Turbines & Machinery ......................................................................
Plant & Infrastructure Engineering .........................................................
Consumer Products & Machinery...........................................................
Other...........................................................................................................
Total....................................................................................................
Eliminations ...............................................................................................
Consolidated total.............................................................................

External
sales

Intersegment
sales¥ 52,803¥

476¥ 53,279¥ 50,328¥2,95152,781
55,17581,67570,964
134,844
43,898492,140—¥492,140

1,450
1,457
13,652
6,539
3,091
16,614
43,279(43,279)¥—

54,231
56,632
95,32777,503
137,935
60,512535,419(43,279)¥492,140

53,43150,701
91,787
81,549141,833
60,490530,119(42,895)¥487,224

800
5,931
3,540
(4,046)(3,898)
22
5,300
(384)
¥4,916

Thousands of U.S. dollars
2002
External
sales

Shipbuilding ............................................................................................... $ 406,387
Rolling Stock, Construction Machinery& Crushing Plant .....................................................................................
647,822
Aerospace ..................................................................................................
372,406
Gas Turbines & Machinery ......................................................................
659,070
Plant & Infrastructure Engineering .........................................................
653,572
Consumer Products & Machinery........................................................... 1,323,948
Other...........................................................................................................
338,842
Total.................................................................................................... 4,402,047
Eliminations ...............................................................................................
—
Consolidated total............................................................................. $4,402,047

10Intersegment
sales

Total
sales

Operatingexpenses

Operatingincome (loss)

5,799$ 412,186$ 424,682$(12,496)

9,763
6,762
74,79687,382
18,687
135,971
339,160(339,160)$—

657,585
379,168
733,866
740,954
1,342,635
474,813
4,741,207(339,160)$4,402,047

649,535
368,238
717,887
778,458
1,343,948
477,660
4,760,408(340,139)$4,420,269

8,050
10,93015,979(37,504)(1,313)(2,847)(19,201)
979$(18,222)$

(b) Information by geographic area
Millions of yen
2002Japan...........................................................................................................
North America ...........................................................................................
Europe ........................................................................................................
Asia .............................................................................................................
Other areas ................................................................................................
Total....................................................................................................
Eliminations ...............................................................................................
Consolidated total.............................................................................

External
sales

Intersegment
sales

Total
sales

Operatingexpenses

Operatingincome (loss)¥363,783
126,182
37,360
10,1842,182
539,691—¥539,691¥ 78,793
7,984
1,891
3,540
62
92,270(92,270)¥—¥442,576
134,166
39,251
13,724
2,244
631,961(92,270)¥539,691¥448,631
133,803
38,162
13,4882,161
636,245(94,320)¥541,925¥(6,055)
363
1,089
236
83
(4,284)2,050¥(2,234)

Millions of yen
2001

Japan...........................................................................................................
North America ...........................................................................................
Europe ........................................................................................................
Asia .............................................................................................................
Other areas ................................................................................................
Total....................................................................................................
Eliminations ...............................................................................................
Consolidated total.............................................................................

External
sales

Intersegment
sales

Total
sales

Operatingexpenses

Operatingincome (loss)¥359,520
91,41029,7489,665
1,797
492,140—¥492,140¥ 81,054
7,416
2,085
3,689
62
94,306(94,306)¥—¥440,574
98,826
31,833
13,354
1,859
586,446(94,306)¥492,140¥431,232
100,969
32,722
13,0501,771
579,744(92,520)¥487,224¥9,342(2,143)
(889)
304
88
6,702
(1,786)¥4,916

Thousands of U.S. dollars
2002
External
sales

Intersegment
sales

Total
sales

Operatingexpenses

Operatingincome (loss)

Japan........................................................................................................... $2,967,234
North America ........................................................................................... 1,029,217
Europe ........................................................................................................
304,731
Asia .............................................................................................................
83,067$ 642,684
65,122
15,42428,874$3,609,918
1,094,339
320,155
111,941$3,659,307
1,091,378
311,272
110,016$(49,389)
2,961
8,883
1,925

Other areas ................................................................................................
17,798
Total.................................................................................................... 4,402,047
Eliminations ...............................................................................................
—
Consolidated total............................................................................. $4,402,047

506
752,610(752,610)$—

18,304
5,154,657(752,610)$4,402,047

17,627
5,189,600(769,331)$4,420,269

677(34,943)
16,721$(18,222)11

(c) Overseas sales
Millions of yen

Thousands of
U.S. dollars

Overseassales% against
net sales

Overseassales¥126,791
37,93649,88624,315¥238,928

25.8%
7.7%
10.1%
4.9%
48.5%

$1,246,354
422,113
330,865
296,166$2,295,498

Millions of yen

Overseassales% against
net sales¥152,803
51,751
40,56436,310¥281,428

28.3%
9.6%
7.5%
6.7%
52.1%

2002

North America...................................................................................
Europe................................................................................................
Asia .....................................................................................................
Other areas........................................................................................
Total ...................................................................................................

%

%

12

2002

2001

Net Sales, Orders and Order Backlog by Industry Segment
For the six months ended September 30, 2002 and 2001 (unaudited)Thousands of
U.S. dollars

Millions of yen
2002

2001

2002

Net sales:
Shipbuilding................................................................................................................................................ ¥ 49,823
Rolling Stock, Construction Machinery & Crushing Plant....................................................................
79,423Aerospace ...................................................................................................................................................
45,657
Gas Turbines & Machinery .......................................................................................................................
80,802
Plant & Infrastructure Engineering..........................................................................................................
80,128Consumer Products & Machinery ........................................................................................................... 162,316
Other............................................................................................................................................................
41,542
Total......................................................................................................................................................... ¥539,691¥ 52,803
52,781
55,17581,67570,964
134,844
43,898¥492,140$ 406,387
647,822
372,406
659,070
653,572
1,323,948
338,842$4,402,047

Orders received:
Shipbuilding................................................................................................................................................ ¥ 75,166
Rolling Stock, Construction Machinery & Crushing Plant....................................................................
75,764
Aerospace ...................................................................................................................................................
25,348Gas Turbines & Machinery .......................................................................................................................
63,649Plant & Infrastructure Engineering..........................................................................................................
81,967
Consumer Products & Machinery ........................................................................................................... 162,316
Other............................................................................................................................................................
38,815
Total......................................................................................................................................................... ¥523,025¥ 42,594
48,61046,09567,47662,313
134,844
42,008¥443,940$ 613,100
617,977
206,753
519,160
668,572
1,323,948
316,599$4,266,109

Thousands of
U.S. dollars

Millions of yen

Order backlog:
Shipbuilding.......................................................................
Rolling Stock, Construction Machinery& Crushing Plant .............................................................
Aerospace ..........................................................................
Gas Turbines & Machinery ..............................................
Plant & Infrastructure Engineering.................................
Consumer Products & Machinery ..................................
Other ..................................................................................
Total ...............................................................................

As of
September 30, 2002

As ofMarch 31, 2002

As of
September 30, 2001

As of
September 30, 2002

¥ 212,559¥ 194,275¥ 163,011$1,733,760

260,050
172,649
181,842
340,621—23,033¥1,190,754

272,642
195,447
204,819
347,496—
25,760¥1,240,439

299,790
194,096
195,981
392,880—
25,247¥1,271,005

2,121,126
1,408,230
1,483,214
2,778,311—
187,871$9,712,512

13

Kawasaki Corporate Data
(As of September 30, 2002)
Kawasaki Heavy Industries, Ltd.

Stock Exchange Listings:
Tokyo, Osaka, Nagoya, Fukuoka, Sapporo

Kobe Head Office:
Kobe Crystal Tower,
1-3, Higashikawasaki-cho 1-chome,
Chuo-ku, Kobe, Hyogo 650-8680, Japan

Newspapers in Which Public Notices Are Made:
Nihon Keizai Shimbun
Kobe Shimbun

Tokyo Head Office:World Trade Center Bldg.,
4-1, Hamamatsu-cho 2-chome,
Minato-ku, Tokyo 105-6116, Japan

Transfer Agent:
The Chuo Mitsui Trust and Banking Company, Limited
33-1, Shiba 3-chome,
Minato-ku, Tokyo 105-8574, JapanFounded: 1878

Handling Office:
The Chuo Mitsui Trust and Banking Company, Limited
Osaka Branch Office
2-21, Kitahama 2-chome,
Chuo-ku, Osaka 541-0041, Japan

Incorporated: 1896
Paid-in Capital: ¥81,427,090,720
Number of Shares Outstanding: 1,390,597,636 shares
Number of Shareholders: 128,859
Number of Employees: 29,009

Independent Auditors:
Asahi & Co.
Kobe Crystal Tower,
1-3, Higashikawasaki-cho 1-chome,
Chuo-ku, Kobe, Hyogo 650-8680, JapanADR Facility:
KHI has a sponsored American Depository Receipt (ADR) facility.
ADRs are traded on the over-the-counter market in the UnitedStates under CUSIP number 486 359 20 1 with each ADR representing four ordinary shares.
ADR Depository:
The Bank of New York
101 Barclay St., 22 West,
New York, NY 10286, U.S.A.
Phone: 1-212-815-8161
U.S. Toll-Free: 888-269-2377(888-BNY-ADRS)
http://www.bankofny.com/adr
KHI Web Site at: http://www.khi.co.jp

This semiannual report is printed in Japan on recycled paper.