Report of Earnings and Financial Statements for the
Fiscal Year Ended March 31, 2021 (Consolidated)(Prepared pursuant to Japanese GAAP)May 11, 2021
Listed company’s name:

Kawasaki Heavy Industries, Ltd.

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

1st sections of the TSE, and NSE
7012
https://global.kawasaki.com/
Yasuhiko Hashimoto, President and Chief Executive Officer
Tatsuo Hoshino, Senior Manager, Accounting Department+81 3-3435-2130

Scheduled dates:
Ordinary general meeting of shareholders
Commencement date of dividend payments
Submission of financial statements
Supplementary materials to financial results
Financial Results Presentation

June 25, 2021
June 25, 2021
Available
Conducted (for institutional investors, analysts and thepress)(Amounts in millions of yen rounded down to the nearest millions of yen)

1. Consolidated Financial Results for the Fiscal Year Ended March 31, 2021
(April 1, 2020 – March 31, 2021)(1) Operating Results
Years ended March 31(Percentage figures indicate change compared with the previous fiscal year)
Profit attributable to
Net sales
Operating income
Recurring profit
owners of parent
Millions of%Millions of%Millions of%Millions of
%
yen
yen
yen
yen
2021
1,488,486(9.3)(5,305)(2,855)(19,332)2020
1,641,335
2.9
62,063(3.1)
40,4296.8
18,662(32.0)
Note: Comprehensive income Fiscal year ended March 31, 2021: ¥12,848 million -%Fiscal year ended March 31, 2020: ¥(3,049) million -%Years ended March 31
Net income
Net income per
Return on equity Return on assets
per shareshare – diluted
Yen
Yen
%
%
2021
(115.73)
(4.2)
(0.1)
2020
111.724.0
2.1
For reference: Share of profit of entities accounted for using equity method
Fiscal year ended March 31, 2021: ¥ 411million
Fiscal year ended March 31, 2020: ¥ 1,255 million

1

Operating income
margin%(0.4)
3.8

(2) Financial Condition
March 31
Total assets

Net assets

Millions of yen
1,963,276
2021
1,957,845
2020
For reference: Shareholders’ equity

Equity ratio

Millions of yen
482,775
471,562
March 31, 2021:
March 31, 2020:

Net assets per share

%
23.7
23.3
¥ 465,332 million¥ 455,627 million

Yen2,785.71
2,727.59(3) Cash Flow Position
Years ended March 31
Cash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities(Millions of yen)
Cash and cash equivalents
at end of period

2021

34,601(37,392)

23,093

122,166

2020(15,461)(69,401)

115,803

102,546

2. Dividends
Years ended/ending March 31
Recorddate orterm

2020

Dividend per share
1Q

2Q

3Q

Year-end

Full year

Yen

Yen

Yen

Yen

Yen

-

35.00

-

0.00

35.00

Total
dividends
paid(annual)Millions of
yen
5,846

Payout ratio(consolidated)

Dividends /Net assets(consolidated)

%

%

31.3

1.3

2021
0.00
0.00
0.00
2022
30.00
29.5
(forecast)
Note: The Company’s Articles of Incorporation stipulate that the last day of the second quarter and the last dayof the fiscal year are the dates of record for dividends. Dividends forecast for the fiscal year ending
March 31, 2022 has been prepared for the full fiscal year only. As it is not possible to forecast the interim
and year-end dividends separately, only the total annual dividends are presented.

3. Forecast of Consolidated Earnings for the Fiscal Year Ending March 31, 2022
(April 1, 2021 – March 31, 2022)
Net sales

Full year

Millions ofyen
1,500,000%
0.8(Percentage figures indicate change compared with the previous fiscal year)
Profit attributable toEarnings
Operating income
Recurring profit
owners of parent
per share
Millions of%Millions of%Millions of
%
Yen
yen
yen
yen
30,00020,00017,000101.772

Notes1) Changes affecting the status of material subsidiaries (scope of consolidation): None
2) 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
3) Number of shares issued and outstanding (common stock)(1) Number of shares issued as of period-end (including treasury stock)
March 31, 2021:
167,080,532 shares
March 31, 2020:
167,080,532 shares(2) Number of shares of treasury stock as of period-end
March 31, 2021:
38,282 shares
March 31, 2020:
36,587 shares(3) Average number of shares during respective periods
March 31, 2021:
167,043,192 shares
March 31, 2020:
167,044,577 shares(Reference) Financial Results of the Company for the Fiscal Year Ended March 31, 2021
(April 1, 2020 – March 31, 2021)(1) Operating Results
Years ended March 31(Percentage figures indicate change compared with the previous fiscal year)

Net sales

2021
2020

Millions ofyen
1,098,661
1,250,354

2021
2020

Net income
per shareYen(214.24)
64.78

Operating income%(12.1)
4.6

Millions ofyen(50,722)
20,463%
34.6

Recurring profit
Millions ofyen(35,544)
17,141%80.0

Net Income
Millions ofyen(35,788)
10,822%(28.3)Net income pershare – diluted
Yen-(2) Financial Condition
March 31
Total assets
Millions of yen
1,630,571
1,609,205
2020
For reference: Shareholders’ equity
2021

Net assets

Equity ratio

Millions of yen
287,749
323,836
March 31, 2021:
March 31, 2020:

3

%
17.6
20.1
¥ 287,749 million¥ 323,836 million

Net assets per share
Yen
1,722.61
1,938.63

*Report of Earnings and Financial Statements are not subject to audit.
*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. Overview ofoperating results (4) Consolidated earnings outlook” on page 12 in the Accompanying Materials.
How to Obtain Supplementary Material on Financial Results and Details of the Financial Results
The Company plans to conduct a presentation for institutional investors, analysts and the press on
Tuesday May 11, 2021, and to post the presentation material on financial results to be used for thepresentation on TDnet and the Company’s website simultaneously with the announcement of financial
results.

4

Accompanying Materials – Contents
1. Overview of operating results

6(1) Consolidated operating results

6(2) Consolidated financial condition

11(3) Cash flows

11(4) Consolidated earnings outlook

12

2. Basic rationale for selecting accounting standards

12

3. Consolidated Financial Statements

13(1) Consolidated balance sheets

13(2) Consolidated statements of income and comprehensive income15(3) Consolidated statement of changes in net assets

17(4) Consolidated statements of cash flows

20(5) Notes on financial statements

21

Notes on the going-concern assumption

21

Related to consolidated statements of balance sheets

21

Related to consolidated statements of income

21

Segment information

22

Per share data

25

Material subsequent events

25

4. Supplementary information on earnings forecasts for the fiscal year ending March 31, 2022

526

1. Overview of operating results(1) Consolidated operating results
With the spread of variants of the virus that causes COVID-19 around the world, the outlook for an
end to the pandemic remains uncertain. However, due to the progress of vaccination mainly indeveloped countries, there has been a decrease in the number of new infections in some areas, andthere are also signs of a recovery in demand for short-distance flights and an increase in demand for
air freight in the United States and Japan. In addition, there are promising signs that the global
economy will recover in the future, such as supporting the economy through fiscal and monetary
policies of each country and efforts to realize a decarbonized society. As U.S.-China relations remain
unimproved, it is necessary to continue to pay close attention to the downside risks of the global
economy.
Amid such an operating environment, the Group’s orders received in the fiscal year ended March
31, 2021, decreased versus the previous fiscal year, in the Aerospace Systems segment and the Rolling
Stock segment despite the increase in the Ship & Offshore Structure and the Precision Machinery &Robot segment. Net sales decreased versus the previous fiscal year overall, due to decrease in the
Aerospace Systems segment and other segments despite increase in the Precision Machinery & Robot
segment and other segment. Operating income declined, due to deterioration in profitability in the
Aerospace Systems segment and other factors, despite the improvement in the Motorcycle & Engine
segment. Recurring profit declined due to a decline in operating income despite foreign exchange
gains and reversal of the provision for the in-service issues of commercial aircraft. Net income
attributable to owners of parent decreased due to impairment loss being recorded under
extraordinary loss as well as the decline in recurring profit despite decrease in tax expense due torecognition of deferred tax assets.
As a result, the Group’s consolidated orders received decreased ¥111.0 billion versus the same
period of the previous fiscal year to ¥1,402.4 billion, consolidated net sales decreased ¥152.8 billion
year on year to ¥1,488.4 billion, operating loss came to ¥5.3 billion, deteriorating ¥67.3 billion year
on year, recurring loss totaled ¥2.8 billion, deteriorating ¥43.2 billion year on year, and net loss
attributable to owners of parent came to ¥19.3 billion, deteriorating ¥37.9 billion year on year. ROIC*
was 1.0% negative, while ROE was 4.2% negative.
* Before-tax ROIC = EBIT (earnings before income taxes + interest expenses) ÷ invested capital(interest-bearing debt + shareholders’ equity)
The Company has changed the fiscal year-end of its six consolidated subsidiaries from December 31
to March 31 or to a provisional fiscal year-end method. As a result, in the fiscal year ended March 31,
2021, the accounting period of 6 consolidated subsidiaries is 15 months (January 1, 2020 to March 31,2021).

6

Consolidated operating performance in the fiscal year ended March 31, 2021, is summarized
by segment below.
Segment Information
Segment net sales, operating income, and orders received (billions of yen)
Fiscal year ended March 31

2020(A)

2021(B)

Orders received

Change (B – A)

Fiscal year ended
March 31

Net

OperatingNet

OperatingNet

Operating

2020

2021

ChangeSales

incomeSales

incomeSales

income(A)(B)(B – A)

Aerospace
Systems

532.5

42.7

377.7

(31.6)(154.8)(74.4)

414.9

329.5

(85.4)

242.9

17.5

240.1

13.4

(2.8)

(4.1)

252.3

219.0

(33.3)

217.3

12.2

240.8

14.0

23.4

1.8

218.8

259.4

40.5

Structure

71.6

(0.6)

79.4

(3.0)

7.7

(2.4)

56.2

98.1

41.8

Rolling Stock

136.5

(3.8)

133.2

(4.5)

(3.3)

(0.7)

125.7

77.0

(48.7)Engine

337.7

(1.9)

336.6

11.7

(1.0)

13.7

337.7

336.6

(1.0)

Other

102.4

1.2

80.4

0.4

(22.0)

(0.7)

107.5

82.5

(24.9)

-

(5.3)

-

(5.7)

-

(0.3)

-

-

-

1,641.3

62.0

1,488.4(5.3)(152.8)(67.3)

1,513.5

1,402.4(111.0)

Energy System& Plant
Engineering
Precision
Machinery &RobotShip & Offshore

Motorcycle &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.

7

Aerospace Systems
Regarding the business environment surrounding the Aerospace Systems segment, there is a certain
level of demand from the Ministry of Defense in Japan amid the tight defense budget. With respect tocommercial aircraft, global passenger demand has been sluggish due to the COVID-19 pandemic anddemand for commercial aircraft airframes and jet engines has declined.
Amid such an operating environment, consolidated orders received decreased ¥85.4 billion year on
year to ¥329.5 billion due to decreases in orders for component parts of airframes and jet engines forcommercial aircraft, despite an increase in orders received from the Ministry of Defense in Japan.
Consolidated net sales decreased ¥154.8 billion year on year to ¥377.7 billion due to decreases incomponent parts of airframes for Ministry of Defense in Japan and commercial aircraft, andcomponent parts of commercial aircraft jet engines.
Operating loss came to ¥31.6 billion, deteriorating ¥74.4 billion year on year, mainly due to adecrease in sales.
Energy System & Plant Engineering
Regarding the business environment surrounding the Energy System & Plant Engineering segment,
in Japan, there is ongoing demand for replacing aging facilities for refuse incineration plants, while
over the medium to long term, demand for distributed power sources in Japan and overseas, and forenergy infrastructure development in emerging markets, remains firmly rooted. On the other hand,
although there are signs of economic recovery in the Chinese market, where the virus has beensuccessfully contained at a relatively early stage, and in some developed countries where the infection
is showing signs of abating, there are concerns about the impact on some sales and after-sales service
activities because restrictions on the movement of people remain significant.
Amid such an operating environment, consolidated orders received amounted to ¥219.0 billion, adecrease of ¥33.3 billion compared to the same period of the previous year, when the Company
received orders for major construction of domestic waste disposal facilities.
Consolidated net sales decreased by ¥2.8 billion to ¥240.1 billion compared to the same period of
the previous year, when the Company recorded sales to overseas chemical plants, despite an increasein the volume of work on domestic waste disposal facilities and higher sales of Gas Turbine Combined
Cycle (GTCC) power plants in Japan.
Operating income decreased ¥4.1 billion year on year to ¥13.4 billion due to the decrease in revenue,
as well as losses on operations resulting from the effect of COVID-19 pandemic.

8Precision Machinery & Robot
Regarding the business environment surrounding the Precision Machinery & Robot segment, in the
precision machinery field, the Chinese construction machinery market recovered quickly from theimpact of the spread of the COVID-19 pandemic and recorded record-high sales of hydraulicexcavators. While construction machinery markets outside China had stagnated, with demand
declining significantly due to the impact of the pandemic, lately there have been very clear signs of arecovery in demand. In the robot field, while postponements of some general-purpose robots projects
due to the impact of the COVID-19 pandemic, sales of general industrial robots have been solid in the
Chinese market where the recovery in sales of such robots was rapid. With respect to robots for thesemiconductor market, performance is strong due to increased capital investment by manufacturers ofsemiconductor manufacturing equipment, and demand is expected to steadily expand over the medium
to long term as well.
Amid such an operating environment, consolidated orders received increased ¥40.5 billion year on
year to ¥259.4 billion, due to increases in hydraulic components for the construction machinery market
and robots for the semiconductor and vehicle body assembly markets.
Consolidated net sales increased by ¥23.4 billion year on year to ¥240.8 billion due to increases inhydraulic components for the construction machinery market and robots for the semiconductor andvehicle body assembly markets.
Operating income increased ¥1.8 billion year on year to ¥14.0 billion due to the increase in revenue.
Ship & Offshore Structure
Regarding the business environment surrounding the Ship & Offshore Structure segment, despite
the emergence of demand for gas-fueled vessels in conjunction with tighter environmental
regulations taking shape, the situation remains challenging due to the limited number of businesstalks on new projects due to the continued uncertainty of the global economy.
Amid such an operating environment, consolidated orders received increased by ¥41.8 billion to¥98.1 billion from the previous fiscal year due to orders for a submarine for Ministry of Defense inJapan.
Consolidated net sales increased ¥7.7 billion year on year to ¥79.4 billion, mainly due to anincrease in the volume of work of submarines for Ministry of Defense in Japan.
Operating loss worsened by ¥2.4 billion year on year to ¥3.0 billion mainly due to the posting oflosses from operations, despite the increase in revenue.
Rolling StockRegarding the business environment surrounding the Rolling Stock segment, the effect of the
COVID-19 pandemic has led to a review of railway-related investment plans in Japan, and delays inwork processes as well as postponement and cancellation of biddings overseas. In the medium andlong term, however, relatively stable growth is expected around the world due to development of
9

urban transportation as an environmental protection measure and to ease congestion in large cities
caused by increasing population concentration, as well as demand for railway infrastructure
following economic development in Asian countries.
Amid such an operating environment, consolidated orders received amounted to ¥77.0 billion, adecline of ¥48.7 billion compared with the previous fiscal year, when the Company received orders
for large-scale projects in Japan.
Consolidated net sales decreased ¥3.3 billion year on year to ¥133.2 billion, due to a decrease insales of railcars for the United States.
Operating loss worsened by ¥0.7 billion year on year to ¥4.5 billion, mainly due to a deteriorationin the profitability of overseas projects caused by the impact of the COVID-19 pandemic in addition
to the decrease in revenue.
Motorcycle & Engine
Regarding the business environment surrounding the Motorcycle & Engine segment, the COVID19 spread in the main markets. In the United States, a major market, demand for off-road models suchas four-wheeled vehicles increased compared with the previous year, and in the European market,
although there was a temporary negative impact from the lockdown in various countries in the early
spring, the level has recovered to the level of the previous year. Meanwhile, Southeast Asian markets
continued to stagnate.
Amid such an operating environment, consolidated net sales decreased ¥1.0 billion year on year to¥336.6 billion, due to decreased sales of motorcycles in Southeast Asian markets and the appreciationof the yen against the U.S. dollar, despite increased sales of off-road models such as four-wheeledvehicles in the North American market.
Operating income came to ¥11.7 billion, improving ¥13.7 billion year on year, due to reductions in
fixed costs and promotion expenses.
Other Operations
Consolidated net sales decreased ¥22.0 billion year on year to ¥80.4 billion.
Operating income decreased ¥0.7 billion year on year to ¥0.4 billion.
In the Group Vision 2030, the Group will focus on three fields; “A Safe and Secure RemotelyConnected Society”, “Near-Future Mobility” and “Energy and Environmental Solutions” and willtransform our business structure into a form which promises faster growth in line with environmental
changes. The Group is making steady progress in new businesses, such as the development of surgicalsupport robots and automated PCR testing, the development of delivery robots and unmannedtransport helicopters, and the promotion of hydrogen-related projects.

(2) Consolidated financial condition
10(i) Assets
Current assets were ¥1,285.4 billion, ¥26.6 billion increase from the previous fiscal year due to anincrease in inventories.
Fixed assets were ¥677.8 billion, ¥21.1 billion decrease from the previous fiscal year due to adecrease in depreciation of property, plant and equipment.
As a result, total assets were ¥1,963.2 billion, ¥5.4 billion increase from the previous fiscal year.
(ii) Liabilities
Interest-bearing debt was ¥593.3 billion, ¥25.8 billion increase from the previous fiscal year.
Liabilities were ¥1,480.5 billion, ¥5.7 billion decrease from the previous fiscal year due to adecrease in notes and accounts payable-trade.
(iii) Net assets
Consolidated net assets were ¥482.7 billion, ¥11.2 billion increase from the previous fiscal year
due to an increase in remeasurements of defined benefit plans.
(3) Cash flows(i) Cash flows from operating activities
Operating activities provided net cash of ¥34.6 billion, ¥50.0 billion increase from the previous
fiscal year, when operating activities used net cash of ¥15.4 billion. Major sources of operating cash
flows included a decrease in notes and accounts receivable-trade of ¥23.2 billion and Depreciation
and amortization of ¥61.2 billion. Major uses of operating cash flows included expenditure of ¥26.3
billion due to an increase in inventory assets, ¥16.7 billion due to a decrease in notes and accounts
payable-trade.
(ii) Cash flows from investing activities
Investing activities used net cash of ¥37.3 billion which is ¥32.0 billion less than in the previous
fiscal year, mainly due to purchase of property, plant and equipment, as well as intangible assets.
(iii) Cash flows from financing activities
Financing activities provided net cash of ¥23.0 billion, which is ¥92.7 billion less than in theprevious fiscal year. This was mainly due to proceeds from issuance of bonds.

(4) Consolidated earnings outlook
With respect to the earnings forecasts for the fiscal year ending March 31, 2022, the Company is
expecting consolidated net sales of ¥1,500.0 billion, a ¥11.6 billion year on year increase, due to11expected increases in the Rolling Stock segment, the Motorcycle & Engine segment and othersegments, despite expected decrease in the Aerospace systems segment by applying “AccountingStandard for Revenue Recognition” (ASBJ Statement No. 29 of March 31, 2020).
In terms of profit, the Company is forecasting consolidated operating income of ¥30.0 billion,
recurring profit of ¥20.0 billion, and net income attributable to owners of parent of ¥17.0 billion.
Furthermore, the Company is expecting ROIC of 2.5% and ROE of 3.9%. These forecasts are basedon the expectation for an improvement of profitability of component parts of commercial aircraft jetengines with the recovery of commercial aircraft operating hours in the Aerospace Systems segment
and for an increase in profits in conjunction with a rise in sales of the Motorcycle and Engine segment
and other factors.
Consolidated orders received are expected to increase ¥77.6 billion year on year to ¥1,480.0 billion.
Assumed exchange rates of ¥106/US$ and ¥128/Euro are used for the above consolidated earnings
outlook.

Note regarding consolidated earnings outlook
The above earnings outlook is based on information available at the time of preparation, and includes
risks and uncertainties. We therefore discourage making investment decisions depending solely on thisoutlook. Please note that actual earnings may differ materially from this outlook, due to a variety ofimportant factors stemming from changes the external environment and/or the Company’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, foreign exchange rates, inparticular the yen/dollar exchange rate, tax codes and other regulatory system-related issues.
2. Basic rationale for selecting accounting standards
In the near term, KHI Group plans to continue to use Japanese accounting standards to disclose
consolidated financial statements. The Group will continue to study the possible adoption of IFRS
from the standpoint of increasing corporate value over the medium- to long-term horizon as well as
promoting constructive dialogue with investors, all while taking the situation surrounding the Groupboth in Japan and overseas into consideration.

123. Consolidated Financial Statements(1) Consolidated balance sheets
Millions of yen

Years ended March 31

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable—trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
Machinery, equipment and vehicles, net
Land
Leased assets, net
Construction in progress
Other, net
Total property, plant and equipment
Intangible assets
Investments and other assets
Investment securities
Retirement benefit asset
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

13

2020

2021

106,108
473,204
75,042426,256
130,359
51,176(3,367)
1,258,781

126,702460,436
69,223452,848
136,471
43,314(3,589)1,285,407

193,931
151,196
62,183
2,694
15,95956,604
482,570
21,358172,951
142,951
57,743
10,564
16,63550,413451,259
22,427

12,035
135
70,598114,203(1,838)
195,134
699,063
1,957,845

12,721
155
70,452
122,254(1,403)204,180
677,868
1,963,276

Liabilities
Current liabilities
Notes and accounts payable-trade
Electronically recorded obligations - operating
Short-term loans payable
Current portion of bonds
Lease obligations
Income taxes payable
Provision for sales promotion expenses
Provision for bonuses
Provision for construction warranties
Provision for loss on construction contracts
Advances received
Other
Total current liabilities

261,159
110,526
166,188
20,0001,542
6,116
12,17422,032
14,454
11,464
148,610
173,456

247,294
107,849
141,579
30,000
1,061
4,753
7,380
18,23912,55014,263
153,298
179,283

947,726

917,555

160,000
188,859873
796
129,846

190,000
199,177
9,532
1,125
115,456(*1)15,689(*1)5,984

42,491
538,556
1,486,283

41,668562,944
1,480,500

Total shareholders’ equity

104,484
54,542
326,626(133)
485,520

104,484
54,542306,576(136)
465,467

Accumulated other comprehensive income
Net unrealized gains (losses) on securities
Deferred gains (losses) on hedges
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

1,636
(272)
(11,311)(19,946)(29,892)
15,934
471,562
1,957,845

1,955
(179)
(931)
(979)
(134)
17,442482,775
1,963,276

Non-current liabilities
Bonds payable
Long-term loans payable
Lease obligations
Deferred tax liabilities
Retirement benefit liability
Provision for the in-service issues of commercial aircraft
jet engines
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Common stock
Capital surplus
Retained earnings
Treasury stock14

(2) Consolidated statements of income and comprehensive income
Consolidated statements of income
Millions of yen

Years ended March 31

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Salaries and allowances
Research and development expenses
Other

Total selling, general and administrative expenses
Operating income (loss)
Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using equity method
Foreign exchange gains
Reversal of the provision for the in-service issues of commercial aircraft
Other

Total non-operating income
Non-operating expenses
Interest expense
Foreign exchange losses
Loss on disposal of property, plant and equipment
Payments for the in-service issues of commercial aircraft jet engines
Other

Total non-operating expenses
Recurring profit (loss)
Extraordinary income
Gain on sales of property, plant and equipment
Gain on sales of shares of subsidiaries and affiliates
Total extraordinary income
Extraordinary losses
Loss on withdrawal from businessImpairment loss
Loss on devaluation of stocks of subsidiaries and affiliates
Total extraordinary losses
Income before income taxes
Income taxes – current
Income taxes – deferred
Total income taxes
Net income (loss)
Net income (loss) attributable to non-controlling interests
Net income (loss) attributable to owners of parent

15

2020

2021

1,641,335
1,370,809
270,526

1,488,486
1,297,324
191,162

56,65152,60899,203
208,463
62,06356,97044,94994,548
196,468(5,305)

695
288
1,255
7,446
9,686

677
2,161
411
4,074
(*1)3,306
4,587
15,218

3,615
8,479
1,699
(*1)11,500
6,025
31,31940,429

3,790
2,886
6,091
12,768(2,855)(*2)1,277
1,277(*2)3,236(*3)1,581
4,817(*4)2,383
2,383
39,323
10,5468,500
19,046
20,276
1,614
18,662(*5)15,205
1,444
16,649(14,688)
10,506(7,707)
2,798(17,486)
1,846(19,332)

Consolidated statements of comprehensive income
Millions of yen

Years ended March 31
2020
Net income (loss)
Other comprehensive income
Net unrealized gains (losses) on securities
Deferred gains (losses) on hedges
Foreign currency translation adjustment
Remeasurement of defined benefit plans
Share of other comprehensive income of entities accounted forusing equity method
Total other comprehensive income(loss)
Comprehensive Income(loss) attributable to:
Owners of parent
Non-controlling interests

16

2021

20,276(17,486)(1,065)(21)(5,284)(15,017)

426
(284)
6,727
18,969(1,936)

4,496(23,326)(3,049)(4,116)
1,066

30,335
12,848
10,423
2,425

(3) Consolidated statements of changes in net assets
Millions of yen

Years ended March 31
2020
Shareholders’ equity
Common stock
Balance at end of previous year2021

104,484

Total changes during the period
Balance at end of year

104,484--

104,484

104,484

54,54254,542

(0)

(0)

0

0

Capital surplus
Balance at end of previous year
Changes during the period
Loss on sales of treasury stock
Transfer of loss on sales of treasury stock
Changes in equity of parent company in transactions with noncontrolling shareholders
Total changes during the period
Balance at end of year
Retained earnings
Balance at end of previous year
Cumulative effect of changes in accounting policies
Restated balance
Changes during the period

(0)
-

(0)

54,54254,542

324,606(4,948)326,626

319,657

Cash dividend
Net income (loss) attributable to owners of parent(11,693)
18,662

Transfer of loss on sales of treasury stock
Other
Total changes during the period
Balance at end of year
Treasury stock
Balance at end of previous year
Changes during the period
Treasury stock purchased, net
Loss on sales of treasury stock
Total changes during the period
Balance at end of year
Total shareholders’ equity
Balance at end of previous year

(0)

(0)
(716)

6,968

(20,049)

326,626

306,576

(130)

(133)

(3)
0

(3)
0

(3)

(3)

(133)

(136)

483,502

485,520

Cumulative effect of changes in accounting policies
Restated balance(4,948)478,554

Changes during the period
Cash dividend(11,693)

Net income (loss) attributable to owners of parent
Treasury stock purchased, net(19,332)

18,662(3)(19,332)(3)

Loss on sales of treasury stock
Transfer of loss on disposal of treasury stock

0
-

0
-

Changes in equity of parent company in transactions with noncontrolling shareholders

-

(0)

Other
Total changes during the period

17

-

(716)

6,965

(20,052)

Millions of yen

Years ended March 31
2020

2021

485,520

465,467

2,682

1,636

Net changes in items other than shareholder’s equity(1,046)319

Total changes during the period(1,046)

319

1,636

1,955

(227)

(272)

(44)

92

Balance at end of year
Comprehensive income
Net unrealized gains (losses) on securities
Balance at end of previous year
Changes during the period

Balance at end of year
Deferred gains (losses) on hedges
Balance at end of previous year
Changes during the period
Net changes in items other than shareholders’ equity
Total changes during the period

(44)

92

(272)

(179)

(4,556)(11,311)

Net changes in items other than shareholders’ equity(6,754)

10,379Total changes during the period(6,754)

10,379(11,311)(931)

Balance at end of previous year

(5,014)(19,946)

Changes during the period
Net changes in items other than shareholders’ equity(14,931)

18,966(14,931)

18,966(19,946)(979)(7,115)(29,892)

Net changes in items other than shareholders’ equity(22,776)

29,758

Total changes during the period

Balance at end of year
Foreign currency translation adjustments
Balance at end of previous year
Changes during the period

Balance at end of year
Remeasurements of defined benefit plans

Total changes during the period
Balance at end of year
Total comprehensive income
Balance at end of previous year
Changes during the period(22,776)

29,758

Balance at end of year

(29,892)(134)

Non-controlling interests
Balance at end of previous year

15,874

15,934

60

1,507

60

1,507

15,934

17,442

Changes during the period
Net changes in items other than shareholders’ equity
Total changes during the period
Balance at end of year

18Millions of yen

Years ended March 31
2020

2021

Total net assets
Balance at end of previous year
Changes in accounting policies

492,261(4,948)

Restated balance
Changes during the period

487,312

Cash dividend
Net income attributable to owners of parent (loss)
Treasury stock purchased, net
Loss on sales of treasury stock
Transfer of loss on disposal of treasury stock
Changes in equity of parent company in transactions with noncontrolling shareholders
Other471,562(11,693)
18,662(19,332)

(3)
0

(3)
0

-

-

-

(0)

-

(716)

Net changes in items other than shareholders’ equity(22,716)

31,265

Total changes during the period(15,750)

11,213

471,562

482,775

Balance at end of year19(4) Consolidated statements of cash flows
Millions of yen

Years ended March 31
Cash flows from operating activities
Income before income taxes
Depreciation and amortization
Impairment loss
Loss on devaluation of stocks of subsidiaries and affiliates
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for sales promotion expenses
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for construction warranties
Increase (decrease) in provision for loss on construction contracts
Increase (decrease) in retirement benefit liability
Increase (decrease) in provision for the in-service issues of commercial
aircraft jet engines
Interest and dividend income
Interest expense
Share of loss (profit) of entities accounted for using equity method
Loss (gain) on sales of property, plant and equipment
Loss on withdrawal from business
Gain on sales of shares of subsidiaries and affiliates
Decrease (increase) in notes and accounts receivable-trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable-trade
Decrease (increase) in advance payments
Increase (decrease) in advances received
Decrease (increase) in other current assets
Increase (decrease) in other current liabilities
Other
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment and intangible assets
Proceeds from sales of property, plant and equipment and intangible
assetsPurchase of investment securities
Proceeds from sales of investment securities
Purchase of shares of subsidiaries and associates
Proceeds from sales of shares of subsidiaries and affiliates
Other
Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayment of long-term loans payable
Proceeds from issuance of bonds
Redemption of bonds
Cash dividends paid
Dividends paid to non-controlling interests
Proceeds from sales and lease back
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

20

2020

2021

39,323
61,283
238
707
889
1,412
(16,133)
10,574(14,688)
61,25815,205
1,444(343)(5,085)(3,819)(1,938)2,788
11,611

4,221(9,705)

(983)
3,615
(1,255)(1,277)
2,383(46,753)(48,068)
2,401
3,326
(31,827)(8,986)18,303
6,004
(600)
2,500
(3,630)(13,731)(15,461)(2,839)3,790(411)(3,236)(1,581)
23,267(26,374)(16,784)
(132)
4,209
8,900
2,988
(5,570)42,9536,370(3,646)(11,076)
34,601(71,947)(51,692)

6,087

13,656(935)
1,232(5,400)
1,562(69,401)(1,042)
1,407
(97)
1,927
(1,551)(37,392)

103,758
24,348(28,938)
40,000(10,000)(11,710)
(989)
(664)
115,803
3,293
34,23468,311
102,546(28,409)27,310(22,297)
60,000(20,000)(59)(960)
10,014(2,505)23,093(682)
19,619102,546
122,166(5) Notes on financial statements

Notes on the going-concern assumption
Not applicable
Related to consolidated balance sheets(*1) Provision for the in-service issues of commercial aircraft jet engines
The Company participates as a risk and revenue sharing partner on the Rolls-Royce Trent 1000
engine program, which has been impacted by the challenge of managing significant in-service issues.
Rolls-Royce continues to work hard to remedy this situation. The Company has made a provision of
the cost related to in-service issues which the Company would cover as a member of this program.

Related to consolidated statements of income(*1) Payments/Reversal of the provision for the in-service issues of commercial aircraft jet engines
The Company participates as a risk and revenue sharing partner on the Rolls-Royce Trent 1000
engine program, which has been impacted by the challenge of managing significant in-service issues.
Rolls-Royce continues to work hard to remedy this situation. The Company has made a provision of
the cost related to in-service issues which the Company would cover as a member of this program.
The provision was included within the non-operating expenses. The reversal of the provision was
included within the non-operating income(*2) Gain on sales of property, plant and equipment
Fiscal year ended March 31, 2020
Proceeds from the sale of former dormitory/company housing sites.
Fiscal year ended March 31, 2021
Proceeds from the sale of housing sites of the Company and its subsidiary.

(*3) Gain on sales of shares of subsidiaries and affiliates
Proceeds from the sale of shares of affiliates of subsidiaries(*4) Loss on withdrawal from business
Losses associated with withdrawal from certain businesses by the Energy System & Plant
Engineering segment.

(*5)Impairment loss
Due to a decline in profitability from the assets of the Sakaide Works of the Ship & Offshore Structure
segment and of the Rolling Stock segment based on the current market environment.

21

Segment information
1. Overview of reportable segments
The Company’s reportable segments are components of the Company about which separate
financial information is available. These segments are subject to periodic reviews by the Company’sboard of directors to decide how to allocate resources and assess performance. The Company’s
operations are divided into internal companies based on product categories. Certain authority isdelegated to each of the internal companies, based on which they conduct businesses in Japan andoverseas. The Company’s operations are therefore segmented based on each internal company’s
product categories. The Company’s seven reportable segments are the Aerospace Systems segment,
the Energy System & Plant Engineering segment, the Precision Machinery & Robot segment, theShip & Offshore Structure segment, the Rolling Stock segment, the Motorcycle & Engine segment,
and the Other segment.
Main segment businesses are listed below.
Industry segment
Aerospace Systems
Energy System & Plant
Engineering
Precision Machinery &RobotShip & Offshore
Structure
Rolling Stock
Motorcycle & Engine
Other

Major products
Production and sale of aircraft, jet engines, etc.
Production and sale of energy-related machinery and system, marine
machinery and system, industrial equipment, environmental equipment,ultralow temperature tank, hydrogen-related structures, crushers, etc.
Production and sale of industrial hydraulic products, industrial robots, etc.
Construction and sale of ships and other vessels, etc.
Production and sale of rolling stock, snow plows, etc.
Production and sale of motorcycles, all-terrain vehicles (ATV), utility
vehicles, personal watercraft (“JET SKI”), general-purpose gasoline
engines, etc.
commercial activities, sales/order agency and intermediary activities,
administration of welfare facilities, etc.

2. Method for calculating sales, profit/loss, assets, liabilities, and other items for reportable segments
The accounting methods applied to the reported business segments generally follow theaccounting policies used to prepare the consolidated financial statements. The income of reporting
segments is based on operating income. Inter-segment earnings and transfers are based on market
prices.

22

3. Sales, income (loss), assets, liabilities, and other items by reportable segment
Fiscal year ended March 31, 2020 (April 1, 2019 – March 31, 2020)(Millions of yen)
Sales
Intersegment
External sales
sales ortransfer

Aerospace
Systems
EnergySystem &Plant
Engineering
Precision
Machinery &RobotShip &
Offshore
Structure
Rolling Stock
Motorcycle &EngineOther
Total
Adjustments
Consolidated
total

Other items
Total

Segment
income(loss)

Segment
assetsDepreciation Impairment/
loss
amortization

Increase in
Investment in property,
plant
equityand equipment
methodandaffiliates
intangibles

532,549

6,477

539,027

42,777745,048

22,539--25,121

242,972

30,871

273,843

17,566

314,753

3,362-

18,621

3,048

217,387

15,529232,917

12,211

203,525

9,279

-

1,737

12,84571,6809,049

80,730(637)

125,642

1,625-

44,9301,355

136,553

18

136,571(3,819)211,759

2,533

-

135

2,740

337,757772

338,529(1,948)282,185

15,963-

1,601

21,353

102,435
1,641,335-

38,927
101,647(101,647)

141,362
1,742,983(101,647)

1,235
67,386(5,322)

94,174
1,977,089(19,243)

1,562
56,866
4,417

-

3,682
70,708-745
67,2103,284

1,641,335-

1,641,335

62,063

1,957,845

61,283-70,70870,495

Fiscal year ended March 31, 2021 (April 1, 2020 – March 31, 2021)(Millions of yen)
Sales
Intersegment
External sales
sales ortransfer

Aerospace
Systems
EnergySystem &Plant
Engineering
Precision
Machinery &RobotShip &
Offshore
Structure
Rolling Stock
Motorcycle &EngineOther
Total
Adjustments
Consolidated
total

Other items
Total

Segment
income(loss)

Segment
assetsDepreciation Impairment/
loss
amortization

Increase in
Investment in property,
plant
equityand equipment
methodandaffiliates
intangibles

377,720

7,681

385,402(31,668)

757,342

23,043--

22,113

240,117

20,252

260,370

13,408342,500

3,340-

18,0804,162

240,864

14,853

255,717

14,086

213,792

10,071

-

(24)

9,836

79,425

3,764

83,189(3,059)133,932

1,407

4,076

49,841

1,030

133,2487

133,256(4,593)

215,688

2,551

11,129148

2,424

336,694730

337,424

11,758

256,997

14,904-

1,538

12,79080,415
1,488,486-

36,97984,270(84,270)

117,395
1,572,757(84,270)

469
403(5,709)73,211
1,993,465(30,189)

947
56,267
4,991

15,205-3,880
73,464-548
52,907
12,772

1,488,486-

1,488,486(5,305)

1,963,276

61,25815,20573,464

65,67923

4. Reconciliation and main components of difference between total for reportable segments andamounts on the consolidated financial statements
Fiscal year ended March 31(Millions of yen)

Sales

2020

Total for reportable segments
Intersegment transactions
Net sales reported on the consolidated
financial statements

2021

1,742,983(101,647)

1,572,757(84,270)

1,641,335

1,488,486

Fiscal year ended March 31(Millions of yen)

Income2020

Total for reportable segments
Intersegment transactions
Corporate expenses*
Operating income (loss) on consolidated
financial statements

2021
67,386
209(5,532)403
36(5,745)62,063(5,305)

Note: Corporate expenses mainly comprise general and administrative expenses not attributed toreportable segments.
Fiscal year ended March 31(Millions of yen)

Assets2020

Total for reportable segments
Intersegment transactions etc.
Corporate assets shared by all segments*
Total assets on consolidated financial
statements

2021

1,977,089(107,921)
88,6781,993,465(138,978)108,788

1,957,845

1,963,276

Note: Corporate assets shared by all segments mainly comprise fixed assets not attributed to reportablesegments.
Fiscal year ended March 31
Other items

Depreciation/amortization

Total for reportablesegments
2020

2021

56,86656,267

Adjustments*
2020
4,417

2021
4,991

(Millions of yen)Amounts reported on
the consolidated
financial statements
2020

2021

61,283

61,258

Increase in property, plantand equipment and67,21052,907
3,284
12,77270,495intangibles
Note: Adjustments are mainly due to fixed assets not attributed to reportable segments.

24

65,679Per share data
Fiscal year ended March 31
Net assets per share
Earnings per share - basic

2020
2,727.59

(Yen)
2021
2,785.71

111.72(115.73)

Notes:
1. Diluted net earnings per share are not stated because there are no potential shares.
2. Net income/loss per share and net income per share (diluted) were calculated based on the following:
Fiscal year ended March 31
2020
Earnings per share – basic
Net income (loss) attributable to owners of parent
Earnings not attributable to common shareholders
Net income (loss) allocated to the common stock
Average number of common stock outstanding (Thousands of shares)

Material subsequent events
Not applicable.

25

18,662－
18,662167,044(Millions of yen)2021
(19,332)－(19,332)
167,043

4. Supplementary information on earnings forecasts for the fiscal year ending March 31, 2022
(1) Net sales and operating income (loss)(Billions of yen)

Outlook for the fiscal year
ending March 31, 2022 (A)Aerospace System
Rolling StockEnergy Solution &MarinePrecision Machinery &Robot
Motorcycle & Engine
Other
Adjustments

Total

Fiscal year ended
March 31, 2021 (actual)(B)

Change (A – B)

Net sales

Operating
Income (loss)

Net sales

Operating
Income (loss)

Net sales

Operating
Income (loss)

340.0
150.0

(8.0)
3.0

377.7
133.2

(31.6)(4.5)(37.7)
16.8

23.6
7.5

320.0

3.5

319.5

10.3

0.5

(6.8)

250.0
380.0
60.0

16.0
17.0
2.0
(3.5)
30.0

240.8
336.6
80.4

14.0
11.7
0.4
(5.7)
(5.3)

9.2
43.4
(20.4)

2.0
5.3
1.6
2.2
35.3

1,500.0

1,488.4

11.6(2) Orders received(Billions of yen)

310.0
70.0

Fiscal year ended
March 31, 2021 (actual)
(B)
329.5
77.0

400.0

317.1

82.9

260.0
380.0
60.0
1,480.0

259.4
336.6
82.5
1,402.4

0.6
43.4(22.5)
77.6

Outlook for the fiscal year
ending March 31, 2022
(A)
Aerospace System
Rolling StockEnergy Solution &MarinePrecision Machinery &Robot
Motorcycle & Engine
Other

Total

Change (A – B)
(19.5)(7.0)

Notes: 1. Assumed exchange rates in the fiscal year ending March 31, 2022 would be ¥106/US$ and ¥128/Euro.
2. The Motorcycle & Engine segment’s orders received are equal to its net sales as production is based mainlyon estimated demand.
3. The company will change its reportable segments to “Aerospace System”, “Rolling Stock”, “Energy
Solution & Marine”, “Precision Machinery & Robot”, “Motorcycle & Engine” and “Other” from the fiscal
year ending March 31, 2022. Operating results for the fiscal year ended March 31, 2021, have been
recombined to match reportable segments following the changes.

26