Report of Earnings and Financial Statements for theNine Months Ended December 31, 2017 (Consolidated)(Prepared pursuant to Japanese GAAP)
January 31, 2018
Listed company’s name:

Kawasaki Heavy Industries, Ltd.

Listed on:
Stock code:
URL:
Representative:
Contact:
Tel:

1st sections of the TSE, and NSE
7012
http://www.khi.co.jp/
Yoshinori Kanehana, President
Hajime Asano, Senior Manager, Accounting Department+81 3-3435-2130

Scheduled dates:
Submission of quarterly securities filing:
Commencement of dividend payments:
Supplementary materials to quarterly earnings:
Quarterly earnings presentation:

February 8, 2018
Available
Conducted (for institutional investors, analysts and thepress)

1. Consolidated Financial Results for the Nine Months Ended December 31, 2017
(April 1, 2017 – December 31, 2017)(Amounts in millions of yen rounded down to the nearest million yen)

(1) Operating Results
Net sales(Percentage figures represent changes versus the year-ago period)
Net income attributable
Operating income
Recurring profit
to owners of parent
million yen%
million yen%
million yen%

million yen%
Nine Months Ended
1,092,369
4.7
44,644
95.1
December 31, 2017
Nine Months Ended
1,043,052(2.1)
22,875 (65.7)
December 31, 2016
Note: Comprehensive income: Nine months ended December 31, 2017:
Nine months ended December 31, 2016:
Earnings per share

Earnings per share– diluted
yen

39,99973.8

14,520(19.2)

23,008(65.1)

17,974(39.2)

24,057 million yen(227) million yen

-%
-%

yen
Nine Months Ended
86.92
December 31, 2017
Nine Months Ended
107.59December 31, 2016
Note: As the company carried out a share consolidation with a 10:1 ratio of common shares with an effective
date of October 1, 2017, earnings per share has been calculated assuming this share consolidation was
carried out at the beginning of the fiscal year ended March 31, 2017.

1

(2) Financial Condition
Total assets

Net assets

million yen

million yen%

December 31, 2017

1,903,409

466,524

23.6

March 31, 2017

1,687,363

451,327

25.9

Note: Shareholders’ equity:

Equity ratio

December 31, 2017: 451,100 million yen
March 31, 2017: 437,247 million yen

2. Dividends

Record date or term

End of firstquarteryen

End of second
quarteryen

Dividend per share
End of third
End of fiscal
quarter
year
yen
yen

Full year

yenYear ended
4.00
2.00
6.00
March 31, 2017
Year ending
3.00
March 31, 2018Year ending March
30.00
31, 2018 (forecast)
Note: 1. Revisions to the most recently announced dividend forecast: None
2. The company conducted a share consolidation with a 10:1 ratio of common shares, with an effective dateof October 1, 2017. The expected dividend per share for the fiscal year ending March 31, 2018 factoringin the impact of the share consolidation is shown. The total annual dividend for the fiscal year ending
March 31, 2018 is denoted with the “-“ mark. Without the impact of the share consolidation factored in,
the expected dividend per share for the fiscal year ending March 31, 2018 would be ¥3 per share, and thetotal annual dividend would be ¥6 per share.

3. Forecast of Consolidated Earnings for the Year Ending March 31, 2018
(April 1, 2017 – March 31, 2018)

Net sales

Full year

million yen%

1,590,000

4.6(Percentage figures represent changes versus the year-ago period)
Net income
Earnings per
Operating income
Recurring profit
attributable to owners
shareof parent
million yen%
million yen%
million yen%
yen
62,00034.8

Note: Revisions to the most recently announced earnings forecast: Yes

2

55,50051.3

33,50027.8

200.54

Notes1) Changes affecting the status of material subsidiaries (scope of consolidation): None2) Accounting procedures specific to preparation of quarterly consolidated financial statements: Yes*For further details, see “2. Consolidated Financial Statements (3) Notes on financial statements” onpage 13 in the Accompanying Materials.
3) Changes in accounting policies, changes in accounting estimates, and correction of errors(1) Changes in accounting policies in accord with revisions to accounting standards: None
(2) Changes in accounting policies other than (1): None
(3) Changes in accounting estimates: None
(4) Correction of errors: None
4) Number of shares issued and outstanding (common stock)(1) Number of shares issued as of period-end (including treasury stock)
December 31, 2017:
167,080,532 shares
March 31, 2017:
167,080,532 shares(2) Number of shares held in treasury as of period-end
December 31, 2017:
32,068 shares
March 31, 2017:
25,910 shares(3) Average number of shares during respective periods
Nine months ended December 31, 2017:
167,052,397 shares
Nine months ended December 31, 2016:
167,056,532 shares*As the company carried out a share consolidation with a 10:1 ratio of common shares with an effective date ofOctober 1, 2017, the number of shares issued as of period-end, the number of shares held in treasury as ofperiod-end, and the average number of shares during respective periods have been calculated assuming that
this share consolidation was carried out at the beginning of the fiscal year ended March 31, 2017.

The quarterly report of earnings and financial statements is exempted from quarterly review
procedures based on the Financial Instruments and Exchange act.
Appropriate Use of Financial Forecasts and Other Important Matters
Forward-Looking Statements
These materials contain various forward-looking statements and other forecasts regarding performanceand other matters. Such statements are based on information available at the time of their preparation, anddo not mean that the company promises to achieve these figures. Actual results may differ from thoseexpressed or implied by forward-looking statements due to a range of factors. For assumptions underlying
earnings forecasts and other information regarding the use of such forecasts, refer to “1. Qualitative
Information and Financial Statements (3) Consolidated earnings outlook” on page 9 in the Accompanying
Materials.
How to Obtain Supplementary Briefing Material on Quarterly Financial Results and Details of theQuarterly Financial Results Briefing
The company plans to conduct a briefing on conference call for institutional investors, analysts and thepress on Wednesday January 31, 2018, and to post the briefing material on quarterly financial results to be
used for the briefing on TDnet and the company’s website simultaneously with the announcement offinancial results.

3

Accompanying Materials – Contents
1. Qualitative Information and Financial Statements

5(1) Consolidated operating results

5(2) Consolidated financial position

8(3) Consolidated earnings outlook

9

2. Consolidated Financial Statements

10(1) Consolidated balance sheets

10(2) Consolidated statements of income and comprehensive income

12(3) Notes on financial statements

13(Notes on the going-concern assumption)

13(Notes on significant changes in the amount of shareholders’ equity)

13(Accounting procedures specific to preparation of quarterly consolidated financial statements)

13(Related to consolidated statements of income)13(Segment information)

15

3. Supplementary Information

17

(1)

Consolidated cash flow statements (condensed)

17

(2)

Orders and sales (consolidated)

17

(3)

Net sales by geographic area (consolidated)

18(4) Supplementary information on earnings forecasts for the fiscal year ending March 31, 2018419

1. Qualitative Information and Financial Statements(1) Consolidated operating results
In the first nine months of the fiscal year ending March 31, 2018, the global economy is relatively
lacking in vigor overall due to the economic slowdown in emerging countries and resource-richcountries, along with other factors, despite the ongoing modest growth centered on the U.S., where
the real economy remains strong, as well as China, where personal consumption and public
investment are supporting the economy.
In addition, uncertainty about future prospects for the real economy persists, including influence
to corporate activities due to Brexit, concerns about an expansion of protectionist policies, andother factors. Going forward, these risks with the potential to drag down the global economy must
continue to be watched.
The Japanese economy has been recovering modestly, due to the impacts of the pickup in inbounddemand, the improvement in corporate earnings, and other factors.
Going forward, the economy is expected to grow modestly overall, but there is a possibility that
economic policies enacted by countries around the world, especially the U.S., and geopolitical risks
on the Korean Peninsula and in other regions, could result in both rapid and significant fluctuations
in foreign exchange rates. As a result, foreign exchange rates must continue to be watched carefully.
Amid such an operating environment, the Group’s orders received in the first nine months of the
fiscal year ending March 31, 2018, increased versus the same period of the previous fiscal year,
mainly in the Aerospace, Precision Machinery and Plant & Infrastructure segments.
Net sales during the period increased, centered on the Precision Machinery as well as the Gas
Turbine & Machinery segments. Both operating income and recurring profit increased, due to higher
profit in the Precision Machinery segment, improvement in the Ship & Offshore Structure segment,
and other factors. On the other hand, net income attributable to owners of parent fell as a result oflosses in conjunction with extraordinary losses from the termination of a shipbuilding contract for an
offshore service vessel, along with other factors.
As a result, consolidated orders received increased ¥116.7 billion versus the same period of theprevious fiscal year to ¥1,002.0 billion, consolidated sales increased ¥49.3 billion year on year to¥1,092.3 billion, operating income increased ¥21.7 billion to ¥44.6 billion, recurring profit rose
¥16.9 billion in comparison to the same period of the previous fiscal year to ¥39.9 billion, while net
income attributable to owners of parent decreased ¥3.4 billion to ¥14.5 billion.

5

Consolidated operating performance in the first nine months of fiscal year is summarized bysegment below.
Segment Information
Segment net sales, operating income, and orders received (billion yen)
Nine months ended December 31

2016 (A)2017 (B)

Orders received

Change (B – A)

Nine months ended
December 31

Net

OperatingNet

OperatingNet

Operating

2016

2017

Changesales

incomesales

incomesales

income(A)(B)(B – A)

Ship & Offshore
Structure

74.9(13.8)

69.9

(4.3)

(5.0)

9.4

28.7

(2.4)

(31.2)

Rolling Stock

94.9

1.6

99.8

2.3

4.8

0.7

84.7

79.7

(4.9)

Aerospace

238.1

22.7

246.6

17.3

8.5

(5.3)

148.8

251.2

102.4

165.2

5.9

185.7

11.9

20.5

5.9

192.3

168.0

(24.2)

114.2

2.3

80.0

(0.0)

(34.2)

(2.4)

60.4

86.4

26.0

198.7

(2.0)

214.9

3.2

16.2

5.2

198.7

214.9

16.2

Machinery

103.5

6.8

136.3

14.7

32.7

7.9

115.7

144.7

29.0

Other

53.2

2.3

58.7

2.3

5.5

(0.0)

55.7

59.2

3.4

-

(3.1)

-

(2.9)

-

0.2

-

-

-

1,043.0

22.8

1,092.3

44.6

49.3

21.7

885.3

1,002.0

116.7

Gas Turbine &Machinery
Plant &
Infrastructure
Motorcycle &EnginePrecision

Adjustments
Total

Notes: 1. Net sales include only sales to external customers.
2. The Motorcycle & Engine segment’s orders received are equal to its net sales as production is based mainlyon estimated demand.

6

Ship & Offshore Structure
Consolidated orders received were minus ¥2.4 billion, a ¥31.2 billion year on year decline versus
the same period of the previous fiscal year when orders for submarines were received, due to thetermination of a shipbuilding contract for an offshore service vessel, despite receiving orders for
LPG carriers and Kawasaki JETFOIL during the period.
Consolidated net sales fell ¥5.0 billion year on year to ¥69.9 billion, due to a decline in thevolume of vessel repair.
Consolidated operating loss was ¥4.3 billion, a ¥9.4 billion improvement from the same period of
the previous fiscal year, when additional allowance for doubtful receivables was posted and there
was an increase in provision for losses on construction contracts.

Rolling Stock
Consolidated orders received fell ¥4.9 billion versus the same period of the previous fiscal year,
when rolling stock for a domestic subway and other orders were received, to ¥79.7 billion, despite anorder received for rolling stock for a high-speed railway (MRT) in Bangladesh.
Consolidated net sales increased ¥4.8 billion year on year to ¥99.8 billion, due to the increase in
the domestic market, despite a decline in Asia, including Singapore and other countries.
Consolidated operating income increased ¥0.7 billion year on year to an operating income of ¥2.3
billion, due to the increase in sales.
Aerospace
Consolidated orders received increased ¥102.4 billion year on year to ¥251.2 billion, due to theincrease in orders received from the Ministry of Defense, and other factors.
Consolidated net sales increased ¥8.5 billion year on year to ¥246.6 billion, due to the increase insales to the Ministry of Defense and other factors, despite the decline in sales of component parts forcommercial aircraft.
Consolidated operating income fell ¥5.3 billion year on year to ¥17.3 billion, due to the decline inprofitability of component parts for commercial aircraft, and other factors.
Gas Turbine & Machinery
Consolidated orders received declined ¥24.2 billion year on year to ¥168.0 billion, due to thedecline in gas engine power plants for the domestic market, and other factors.
Consolidated net sales increased ¥20.5 billion year on year to ¥185.7 billion, due to the increase incomponent parts of aircraft engines, and other factors.
Consolidated operating income increased ¥5.9 billion year on year to ¥11.9 billion, due to theincrease in sales.

7Plant & Infrastructure
Consolidated orders received increased ¥26.0 billion year on year to ¥86.4 billion, due to theincrease in waste treatment facility constructions and operations, and other factors.
Consolidated net sales fell ¥34.2 billion year on year to ¥80.0 billion, due to the decline inconstruction work volume on a chemical plant for an overseas market, and other factors.
Consolidated operating income fell ¥2.4 billion year on year to an operating loss of ¥0.0 billion,
due to the decrease in sales.
Motorcycle & Engine
Consolidated net sales increased ¥16.2 billion year on year to ¥214.9 billion, due to the increase inmotorcycles for developed countries and general-purpose engines, despite the decline in motorcycles
for emerging markets.
Consolidated operating income increased ¥5.2 billion year on year to ¥3.2 billion, due to theincrease in sales.
Precision Machinery
Consolidated orders received increased ¥29.0 billion year on year to ¥144.7 billion, due to theincrease in hydraulic components for construction machinery.
Consolidated net sales increased ¥32.7 billion year on year to ¥136.3 billion, due to an increase insales of hydraulic components for construction machinery and various industrial robots, as well asother factors.
Consolidated operating income increased ¥7.9 billion year on year to ¥14.7 billion, due to theincrease in sales.
Other Operations
Consolidated net sales increased ¥5.5 billion year on year to ¥58.7 billion.
Consolidated operating income was ¥2.3 billion, on par with the same period of the previous fiscal
year.

(2) Consolidated financial position
On December 31, 2017, consolidated assets totaled ¥1,903.4billion, an increase of ¥216.0 billion
from March 31, 2017, due to an increase in trade receivables in conjunction with the posting of sales,
and an increase in inventories in association with progress on construction projects. Liabilities
totaled ¥1,436.8 billion, a ¥200.8 billion increase versus March 31, 2017, due to the increase in
short-term debt and other interest-bearing debts along with other factors, despite the decline inadvances from customers. Interest-bearing debts increased ¥277.5 billion to ¥678.2 billion. Net
assets increased ¥15.1 billion to ¥466.5 billion, due to the posting of net income attributable toowners of parent, dividend payments, and other factors.
8(3) Consolidated earnings outlook
The company leaves its consolidated net sales and operating income for the fiscal year ending
March 31, 2018, unchanged from the values previously announced (on December 26, 2017).
The company expects net income attributable to owners of parent decreasing 1.5 billion from thevalue previously announced to 33.5 billion, due to the effect from the U.S. tax-reform.
The company expects consolidated orders received increasing ¥20.0 billion from the value
previously announced (on October 27, 2017) to ¥1,640.0 billion, ROIC of 4.9% and ROE of 7.3%
due to the increase of orders in Rolling Stock segment and Aerospace segment, despite the decreaseof orders in Ship & Offshore Structure.
The company's earnings forecasts assume exchange rates of ¥110 to the U.S. dollar and ¥130 to theeuro.

Note regarding consolidated earnings outlook
The above earnings outlook is based on information available at the time of preparation, andincludes risks and uncertainties. We therefore discourage making investment decisions depending
solely on this outlook. Please note that actual earnings may differ materially from this outlook, due
to a variety of important factors stemming from changes in the external environment and/or thecompany’s internal environment. Important factors that impact actual operating performance include,
but are not limited to, the economic situation surrounding the company’s scope of business, foreignexchange rates, in particular the yen/dollar exchange rate, tax codes and other regulatory
system-related issues.

92. Consolidated Financial Statements(1) Consolidated balance sheets
Million yen
As of
As of
March 31, 2017
December 31, 2017
AssetsCurrent assets
Cash on hand and in banks
Trade receivables
Merchandise and finished products
Work in process
Raw materials and supplies
Other
Allowance for doubtful receivables
Total current assets
Fixed assets
Net property, plant and equipment
Intangible assets
Investments and other assets
Other
Allowance for doubtful receivables
Total investments and other assets
Total fixed assets
Total assets
Liabilities
Current liabilities
Trade payables
Electronically recorded obligations - operating
Short-term debt
Income taxes payable
Accrued bonuses
Provision for product warranties
Provision for losses on construction contracts
Advances from customers
Other
Total current liabilities
Long-term liabilities
Bonds payable
Long-term debt
Net defined benefit liability
Other
Total long-term liabilities
Total liabilities

10

55,388444,633
49,850323,433
111,577
95,544(2,593)
1,077,835
461,881
15,28450,406558,550
73,066
365,492
120,204
111,331(8,656)
1,270,395
00
478,950
15,473147,090(14,727)
132,362
609,527
1,687,363

141,225(2,635)
138,589
633,013
1,903,409

240,572
101,449
111,456
4,295
20,288
12,175
18,103205,871
129,228
843,441

224,827
120,318
181,309
6,771
10,216
11,836
4,680
164,165
267,605
991,732

130,000
147,492
81,56333,538392,594
1,236,035

130,000
194,895
85,93634,322445,153
1,436,885

Net assets
Shareholders’ equity
Common stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income
Net unrealized gains (losses) on securities, net of tax
Deferred gains (losses) on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total net assets and liabilities

11

104,484
54,393
287,448(96)
446,230

104,484
54,573
293,616(120)
452,553

3,232(1,182)(341)(10,692)(8,983)14,080451,327
1,687,363
63

4,280(1,044)
2,785(7,474)(1,453)
15,423
466,524
1,903,409

(2) Consolidated statements of income and comprehensive income
Consolidated statements of income
Million yen
Nine months ended
December 31, 2016
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Salaries and benefits
R&D expenses
Other
Total selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Equity in income of non-consolidated subsidiaries and affiliates
Other
Total non-operating income
Non-operating expenses
Interest expense
Foreign exchange losses
Payments for contract adjustment for commercial aircraft jetengines
Other
Total non-operating expenses
Recurring profit
Extraordinary income
Gain on sale of fixed assets
Total extraordinary income
Extraordinary loss
Losses from the termination of a shipbuilding contract for an
offshore service vessel
Total extraordinary loss
Income before income taxes
Income taxes
Net income
Net income attributable to non-controlling interests
Net income attributable to owners of parent

Nine months ended
December 31, 2017

1,043,052
877,767
165,285

1,092,369
904,289
188,079

37,65930,86073,889142,40922,87538,661
31,06973,704143,435
44,644

632
231
4,820
3,958
9,643

523
259
3,097
2,400
6,280

2,187
1,803

2,014
17

-

(*1) 2,505

5,519
9,510
23,008

6,388
10,92539,999(*2) 2,202
2,202

-

-

(*3) 12,833

25,2106,078
19,132
1,158
17,974

12,83327,166
10,85016,315
1,794
14,520Consolidated statements of comprehensive income
Million yen
Nine months ended
December 31, 2016
Net income
Other comprehensive income
Net unrealized gains on securities
Deferred gains (losses) on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Share of other comprehensive income of associates accounted
for using equity method
Total other comprehensive income
Comprehensive Income attributable to:
Owners of parent
Non-controlling interests

12

Nine months ended
December 31, 201719,132

16,315449(5,601)(4,093)
3,008

1,117
135
2,422
3,225

(13,123)841(19,360)
(227)
(422)
195

7,742
24,05722,0502,007

(3) Notes on financial statements

Notes on the going-concern assumption
Not applicable
Notes on significant changes in the amount of shareholders’ equity
Not applicable
Accounting procedures specific to preparation of quarterly consolidated financial statements(Calculation of tax expense)
The company calculates tax expense by rationally estimating its effective tax rate after applicationof tax effect accounting to pretax net income for the fiscal year which includes the third quarter
under review, and multiplying quarterly pretax net income by said estimated effective tax rate. If
unable to use the estimated effective tax rate, the company calculates tax expense by multiplying thestatutory effective tax rate by quarterly pretax net income adjusted to reflect material differences
other than temporary differences.
Income taxes are reported inclusive of income tax adjustments.
Related to consolidated statements of income(*1) Payments for contract adjustment for commercial aircraft jet engines
Nine months ended December 31, 2017 (April 1, 2017 – December 31, 2017)
The company faces one- time expenses in connection with contracts with customers relating
to engine programs in which the company is participating. These expenses arose from the newrequirement to allocate a portion of the engines planned to be delivered to customers for use as
spare engines for operational supports. Accordingly, the company recorded these program
expenses as non-operating expenses.

(*2) Gain on sale of fixed assets
Nine months ended December 31, 2016 (April 1, 2016 – December 31, 2016)
Gain on sale of fixed assets occurred in relation to the sale of the land and building of thecompany’s Tokyo office.

13

(*3) Losses from the termination of a shipbuilding contract for an offshore service vessel
Nine months ended December 31, 2017 (April 1, 2017 – December 31, 2017)
These are losses in conjunction with the termination of a shipbuilding contract for an
offshore service vessel (losses recognized on valuation of inventories and trade receivables,
etc.)(Additional information)
Concerning the posting of losses in conjunction with the termination of a shipbuilding contract
for an offshore service vessel.
With the intention of entering the offshore development industry, which is a promisingmarket over the medium to long term, in November 2013 the company entered into a
shipbuilding agreement for an offshore service vessel (hereinafter, “vessel”) with a subsidiary*of Island Offshore Shipholding LP (hereinafter, “Island Offshore”). This was the first vessel of
its type to be constructed by the company, and certain problems during the engineering stage
arose along with an increase in materials costs and other issues.
Meanwhile, the stagnation in crude oil prices has led to a very difficult business environment
for offshore service providers in general ever since the order for this vessel was received, andIsland Offshore has been negotiating financial restructuring with its banking partners sinceNovember 2016.
Given the above circumstances, the company has proceeded cautiously, including
temporarily suspending the construction of the vessel, while paying close attention to theprogress of the financial restructuring of Island Offshore. During this time, the company has
been holding discussions with Island Offshore regarding the handling of the vessel. Based on
the shared understanding that the environment surrounding the offshore service businessremains challenging, and that uncertainty about the future will not be eliminated, the company
and Island Offshore agreed to terminate the shipbuilding agreement, and the company has
therefore decided to carry out the necessary accounting treatment.
*Island Navigator I KS (100% subsidiary company of Island Offshore Shipholding LP)

14

Segment information
1 . Nine Months Ended December 31, 2016 (April 1, 2016 – December 31, 2016)(1) Sales and income (loss) by reportable segment
Million yen

Ship & Offshore Structure
Rolling Stock
Aerospace
Gas Turbine & Machinery
Plant & Infrastructure
Motorcycle & Engine
Precision Machinery
Other
Reportable segment total
Adjustments*1
Consolidated total
Notes: 1. Breakdown of adjustments:

External sales

Intersegment
sales

Total sales

Operatingincome (loss)

74,97894,964
238,100
165,251
114,273
198,702103,566
53,215
1,043,052
1,043,052

1,916
16
1,294
9,381
5,072
480
10,48627,49756,146(56,146)-

76,894
94,980239,394
174,633
119,346
199,183
114,052
80,712
1,099,199(56,146)
1,043,052(13,817)
1,655
22,701
5,959
2,335(2,038)6,864
2,371
26,032(3,157)22,875

Million yen
IncomeAmountIntersegment transactions
22
Corporate expenses*(3,179)Total(3,157)*Corporate expenses mainly comprise general and administrative expenses not attributed to reportablesegments.
2. Segment income adjustments are based on operating income reported on the consolidated statements
of income for the corresponding period.

(2) Impairment loss on fixed assets and goodwill by reportable segment
Not applicable152. Nine months ended December 31, 2017 (April 1, 2017 – December 31, 2017)(1) Sales and income (loss) by reportable segment
Million yen

Ship & Offshore Structure
Rolling Stock
Aerospace
Gas Turbine & Machinery
Plant & Infrastructure
Motorcycle & Engine
Precision Machinery
Other
Reportable segment total
Adjustments*1
Consolidated total
Notes: 1. Breakdown of adjustments:

External sales

Intersegment
sales

Total sales

Operatingincome (loss)

69,977
99,829
246,689
185,753
80,058214,960
136,349
58,7501,092,369
1,092,369

2,173
99
1,081
7,886
7,466
463
10,802
29,06259,035(59,035)-

72,151
99,929247,770
193,639
87,524215,423
147,152
87,812
1,151,404(59,035)
1,092,369(4,374)
2,383
17,33911,944(98)
3,210
14,7932,364
47,561(2,916)44,644

Million yen
IncomeAmountIntersegment transactions(43)
Corporate expenses*(2,872)
Total(2,916)* Corporate expenses mainly comprise general and administrative expenses not attributed to reportablesegments.
2. Segment income adjustments are based on operating income reported on the consolidated statements
of income for the corresponding period.

(2) Impairment loss on fixed assets and goodwill by reportable segment
Not applicable16

3. Supplementary information(1) Consolidated cash flow statements (condensed)
Million yen
Nine months ended
December 31, 2016
Cash flow from operating activities
Cash flow from investing activities
Cash flow from financing activities
Cash and cash equivalents at end of period

Nine months ended
December 31, 2017

(147,276)(46,851)
206,284
48,719(206,775)(66,461)
269,564
44,148Nine months ended
December 31, 2017

Year ended
March 31, 2017(2) Orders and sales (consolidated)
Orders received
Reportable segment

Nine months ended
December 31, 2016

million yen% of total
million yen% of total
million yen% of total
Ship & Offshore Structure
28,793
3.2(2,447)(0.2)
36,9792.7
Rolling Stock84,7299.5
79,796
7.9
158,597
11.7
Aerospace
148,82816.8
251,272
25.0
237,016
17.5
Gas Turbine & Machinery
192,33721.7
168,040
16.7
260,354
19.3
Plant & Infrastructure
60,401
6.8
86,436
8.6
95,0127.0
Motorcycle & Engine
198,70222.4
214,960
21.4
313,030
23.2
Precision Machinery
115,74213.0
144,747
14.4
166,832
12.3
Other55,768
6.2
59,2005.9
80,9486.0
Total
885,302
100.0
1,002,007
100.0
1,348,773
100.0
Note: The Motorcycle & Engine segment’s orders received are equal to its net sales as production is based mainlyon estimated demand.

Net sales
Reportable segment
Ship & Offshore Structure
Rolling Stock
Aerospace
Gas Turbine & Machinery
Plant & Infrastructure
Motorcycle & Engine
Precision Machinery
Other
Total

Nine months ended
December 31, 2016
million yen% of total
74,978
7.1
94,9649.1
238,100
22.8
165,251
15.8
114,273
10.9
198,702
19.0
103,566
9.9
53,2155.1
1,043,052
100.0

Nine months ended
December 31, 2017
million yen% of total
69,977
6.4
99,8299.1
246,68922.5
185,753
17.0
80,0587.3
214,960
19.6
136,349
12.4
58,7505.3
1,092,369
100.0Year ended
March 31, 2017
million yen% of total
103,204
6.7
137,159
9.0
329,91521.7
241,953
15.9
160,877
10.5
313,030
20.6
155,278
10.2
77,4105.0
1,518,830
100.0Year ended
March 31, 2017
million yen% of total
191,604
10.8
392,224
22.2
508,75928.8
394,97722.4
214,926
12.1
37,912
2.1
21,401
1.2
1,761,806
100.0

Nine months ended
December 31, 2017
million yen% of total
118,500
7.1
375,07422.6
493,81129.8
378,91422.8
221,839
13.4
46,313
2.7
21,0571.2
1,655,511
100.0

Nine months ended
December 31, 2016
million yen% of total
211,68911.7
370,666
20.6
513,26128.5
417,47123.2
227,005
12.6
38,534
2.1
20,416
1.1
1,799,045
100.0

Order backlog
Reportable segment
Ship & Offshore Structure
Rolling Stock
Aerospace
Gas Turbine & Machinery
Plant & Infrastructure
Motorcycle & Engine
Precision Machinery
Other
Total

17

(3) Net sales by geographic area (consolidated)
Nine months ended December 31, 2016 (April 1, 2016 – December 31, 2016)
Japan
United States
EuropeAsia
Other areas
Total

Million yen
41.9%
24.4%
12.2%
14.5%
6.8%
100.0%

437,252
255,144
127,796
151,377
71,4801,043,052

Nine months ended December 31, 2017 (April 1, 2017 – December 31, 2017)
Japan
United States
EuropeAsia
Other areas
Total

Million yen
42.0%
24.9%
10.5%
14.7%
7.6%
100.0%

459,298
273,061
115,370
161,347
83,2901,092,369

18

(4) Supplementary information on earnings forecasts for the fiscal year ending March 31, 2018
1) Consolidated earnings outlook
Billion yen

Net sales
Operating income
Recurring profit
Net income attributable toowners of parent

Orders received
Before-tax ROIC (%)

Outlook for the year ending March 31, 2018 (fiscal 2017)
Forecast issued
Revised forecast
ChangeDecember 26, 2017
(A)
(A – B)(B)
1,590.0
1,590.0
62.0
62.0
55.5
55.5
38.0
33.5
35.0
(1.5)

Outlook for the year ending March 31, 2018 (fiscal 2017)
Forecast issued
Revised forecast
ChangeOctober 27, 2017
(A)
(A – B)(B)
1,640.0
1,620.0
20.0(1.5%)
4.9%
6.4%

Year ended
March 31, 2017
(Fiscal 2016) (actual)
1,518.8
45.9.
36.6
26.2

Year ended
March 31, 2017
(Fiscal 2016) (actual)
1,348.7
5.0%

Notes: 1. Outlook’s assumed foreign exchange rates: ¥110 = 1 U.S. dollar, ¥130= 1 euro
2. Before-tax ROIC = (income before income taxes + interest expense) / invested capital.

2) Outlook by reportable segment(a) Net sales and operating income (loss)
Billion yen

Reportable segment

Outlook for the year ending March 31, 2018 (fiscal 2017)
Revised forecast
Forecast issued
Change(A)
October 27, 2017 (B)(A – B)Net sales

Ship & Offshore Structure
Rolling Stock
Aerospace
Gas Turbine & Machinery
Plant & Infrastructure
Engineering& Engine
Motorcycle
Precision Machinery
Other
Adjustments
Total

100.0
145.0
335.0
275.0
120.0
335.0
195.0
85.0
1,590.0

Operatingincome(loss)
(5.0)
3.0
18.5
13.0
2.5
14.0
20.0
4.0
(8.0)
62.0

Net sales
100.0
150.0
335.0
265.0
125.0
335.0
195.0
85.0
1,590.019

Operatingincome(loss)
(5.0)
4.5
18.5
11.0
3.0
14.0
20.0
4.0
(8.0)
62.0

Net sales(5.0)10.0(5.0)-

Operatingincome(loss)
(1.5)
2.0
(0.5)
-

Year ended
March 31, 2017
(Fiscal 2016) (actual)
Net sales
103.2
137.1
329.9
241.9
160.8
313.0
155.2
77.4
1,518.8

Operatingincome(loss)(21.4)
3.4
25.0
15.2
2.6
11.7
13.1
3.1
(7.0)
45.9

(b) Orders received

Reportable segment
Ship & Offshore Structure
Rolling Stock
Aerospace
Gas Turbine & Machinery
Plant & Infrastructure
Motorcycle & Engine
Precision Machinery
Other
Total

Outlook for the year ending March 31, 2018 (fiscal 2017)
Revised outlook
Forecast issued
Change(A)
October 27, 2017 (B)(A – B)
30.0
65.0(35.0)
230.0
190.0
40.0
370.0
355.0
15.0
275.0
275.0
.0
110.0
110.0
335.0
335.0
205.0
205.0
85.0
85.0
1,640.0
1,620.0
20.0

Billion yen
Year ended
March 31, 2017
(Fiscal 2016) (actual)
36.9
158.5
237.0
260.3
95.0
313.0
166.8
80.9
1,348.7

Outlook for the year ending March 31, 2018 (fiscal 2017)
Revised outlook
Forecast issued
Change(A)
October 27, 2017 (B)(A – B)(%)
Year ended
March 31, 2017
(Fiscal 2016) (actual)(c) Before-tax ROIC

Reportable segment
Ship & Offshore Structure
Rolling Stock
Aerospace
Gas Turbine & Machinery
Plant & Infrastructure
Motorcycle & Engine
Precision Machinery
Total(20.8)
3.3
9.1
3.9
5.3
10.9
19.6
4.9

(5.0)
5.2
9.1
4.6
5.4
10.9
19.6
6.4

20

(15.8)
(1.9)
(0.7)
(0.1)
(1.5)

(23.4)
3.0
15.1
7.1
8.9
7.3
13.4
5.0