Report of Earnings and Financial Statements
for the Fiscal Year Ended March 31, 2015 (Consolidated)(Prepared pursuant to Japanese GAAP)
April 28, 2015
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/
Shigeru Murayama, President
Ryoji Mori, Senior Manager, Accounting Department+81 3-3435-2130

Scheduled dates:
Ordinary general meeting of shareholders
Commencement date of dividend payments
Submission of financial statements:

June 25, 2015
June 26, 2015
June 25, 2015

Supplementary materials to financial results
Earnings presentation:

Available
Conducted (for institutional investors and analysts)

1. Consolidated Financial Results for the Fiscal Year Ended March 31, 2015
(April 1, 2014 – March 31, 2015)(Amounts in millions of yen rounded down to the nearest million yen)

(1) Operating Results
Years ended March 31(Millions of yen ) (Percentage figures indicate change compared with the previous fiscal year )Net sales

Operating income

Recurring profit

Net income

%
%
%
2015
1,486,123
7.2
87,25920.6
84,28839.0
51,6392014
1,385,482
7.4
72,35172.0
60,60554.1
38,601
Note: Comprehensive income Fiscal year ended March 31, 2015: ¥ 87,760 million 27.7%
Fiscal year ended March 31, 2014: ¥ 68,705 million 56.0%

%
33.7
25.0

Years ended March 31
Earnings per share
Return on equity Return on assets– diluted
Yen
Yen
%
%
2015
30.89
12.9
5.2
2014
23.09
11.0
4.0
For reference: Equity in income of non consolidated subsidiaries and affiliates
Fiscal year ended March 31, 2015: ¥ 6,208 million
Fiscal year ended March 31, 2014: ¥ 7,016 million
Earnings per share

Operating income
to net sales
%
5.8
5.2

(2) Financial Condition
March 31

(Millions of yen )Total assets

Net assets

Equity ratio

Net assets per share

%

Yen

2015

1,662,283

447,95725.9

258.582014

1,554,430

376,68623.3

217.16

For reference: Shareholders’ equity

March 31, 2015:
March 31, 2014:1¥ 431,996 million¥ 363,041 million

(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 year2015

127,651(67,397)(57,133)

47,721

2014

151,721(77,559)(62,505)

45,431

2. Dividends
Years ended/ending March 31
Dividend per share

Recorddate orterm

Total
dividends
paid
Full year(annual)Yen
million yen

Payout ratio(consolidated)

Dividends /Net assets(consolidated)

%

%

1Q

2Q

3Q

Year-end

Yen

Yen

Yen

Yen

2014

-

0.00

-

6.00

6.00

10,030

25.9

2.7

2015

-

3.00

-

7.00

10.00

16,709

32.3

4.2

2016
(forecast)

-

5.00

-

7.00

12.00

29.0

3. Forecast of Consolidated Earnings for the Fiscal Year Ending March 31, 2016
(April 1, 2015 – March 31, 2016)(Millions of yen)(Percentage figures indicate change compared with the previous fiscal year)
Earnings
Net sales
Operating income
Recurring profit
Net income
per share
%
%
%
%
Yen
For six months
endingSeptember 30,
2015
Full year

785,000

23.9

39,00068.1

37,00042.5

26,000

42.9

15.56

1,650,000

11.0

102,000

16.8

100,000

18.6

69,000

33.6

41.30

*Notes(1) Changes affecting the status of material subsidiaries (scope of consolidation): None
(2) Changes in accounting policies, changes in accounting estimates, and correction of errors(ⅰ) Changes in accounting policies in accord with revisions to accounting standards: None(ⅱ) Changes in accounting policies other than (ⅰ): None(ⅲ) Changes in accounting estimates: None(ⅳ) Correction of errors: None
(3) Number of shares issued and outstanding (common stock)(ⅰ) Number of shares issued as of period-end (including treasury stock)
March 31, 2015:
1,670,805,320 shares
March 31, 2014:
1,671,892,659 shares(ⅱ) Number of shares held in treasury as of period-end
March 31, 2015:
191,653 shares
March 31, 2014:
141,710 shares(ⅲ) Average number of shares during respective periods
March 31, 2015:
1,671,637,196 shares
March 31, 2014:
1,671,770,272 shares

2For reference: Overview of Non-Consolidated Financial Results(1) Operating Results
Years ended March 31(Millions of yen ) (Percentage figures indicate change compared with the previous fiscal year)

Net sales
2015
2014

1,098,013
1,011,603

Operating income
%
8.5
2.8

Earnings per share
2015
2014

Yen
21.81
19.20

46,40936,108

%
28.5
187.1

Recurring profit
%
54.6
84.7

55,51335,905

Net income
36,46532,099

%
13.6
87.0

Earnings per share– diluted
Yen-(2) Financial Condition
March 31

(Millions of yen)
Total assets

Net assets

Equity ratio

Net assets per share

%

Yen

2015

1,301,125

294,05222.5

176.012014

1,243,533

273,19321.9

163.41

Note: Shareholders’ equity

March 31, 2015: ¥294,052 million
March 31, 2014: ¥ 273,193 million* Review Status
This report is exempt from the review of accounts conducted pursuant to Japan’s Financial Instruments
and Exchange Act. As of this report’s publication, the review of the financial results had not been
completed.
*Appropriate Use of Financial Forecasts and Other Important Matters
Forward-Looking Statements
These materials contain earnings forecast and other forward-looking statements based on information
available to the company at the time of disclosure and the company makes no assurances as to the actual
results and/or other outcomes, which may differ from those expressed or implied herein due to various
factors. For assumptions underlying earnings forecasts and other information regarding the use of suchforecasts, refer to “(iii) Consolidated Earnings Outlook” on page 8 in section “(1) Consolidated Operating
Results” of “1. Qualitative Information and Financial Statements” in the Accompanying Materials.
How to Obtain Supplementary Briefing Material on Financial Results and Details of the Financial
Results Briefing
The Company plans to conduct a briefing for institutional investors and analysts on Tuesday April 28,
2015, and to post the briefing material on financial results to be used for the briefing on TDnet and theCompany’s website simultaneously with the announcement of financial results.

3

Accompanying Materials – Contents
1. Qualitative Information and Financial Statements

5(1) Consolidated operating results

5(2) Consolidated financial position

9(3) Dividend policy and dividends for the fiscal years 2014 and 201510(4) Business and other risks

11

2. Status of Group11

3. Management Strategy

11(1) Basic management strategy

11(2) Target management metrics

11(3) Medium- to long-term management strategy

12(4) Management priorities

12

4. Basic rationale for selecting accounting standards

15

5. Consolidated Financial Statements

16(1) Consolidated balance sheets

16(2) Consolidated statements of income and comprehensive income

18

Consolidated statements of income

18

Consolidated statements of comprehensive income19(3) Consolidated statement of changes in net assets

20(4) Consolidated statements of cash flows

23(5) Notes on financial statements

24

Notes on the going-concern assumption

24

Basis of preparation of financial statements

24

Changes in basis of preparation of financial statements

24

Additional information

24

Consolidated balance sheets

24

Consolidated Statements of Income

24

Segment information and others

25

Per share data

29

Material subsequent events30

6. Others

31(1) Corporate officer changes

31(2) Consolidated orders and sales(3) Supplementary information on earnings forecasts for the fiscal year ending March 31, 2016

31

4

32

1. Qualitative Information and Financial Statements(1) Consolidated operating results(i) Overview of consolidated operating results
In fiscal 2014 (the year ended March 31, 2015), the global economy continued to growmodestly on the whole in conjunction with the full-fledged recovery of the US economy.
However, the situation will continue to bear watching, particularly with respect to theimpacts of US monetary policy actions, concerns about economic stagnation in emerging
countries, uncertainty with respect to the debt problem in Europe and other factors, aswell as the impact of the decline in crude oil prices on resource-rich countries.
While there are concerns about the risk of a downturn in overseas economies
negatively impacting the Japanese economy, the ongoing improvement in theemployment and income environments as well as the decline in crude oil prices have led
to an upturn in consumer sentiment. This, along with other factors, such as the
improvement in exporters’ earnings due to the weakening of the yen against othercurrencies, especially the US dollar, are helping the economy rise out of the malaisecaused by the recoil decline following last April’s consumption tax rate hike, and theeconomy is expected to continue to grow modestly going forward.
Amid such an operating environment, the Group achieved an increase in orders
received during fiscal 2014, centered on order growth in segments such as Plant &Infrastructure, Aerospace, and Ship & Offshore Structure. Overall sales increased on
growth in sales in segments such as Aerospace and Gas Turbine & Machinery.
Operating income, recurring profit and net income also rose as a result of the increasein profit in Aerospace and most other segments.
The Group’s consolidated orders received increased by ¥257.5 billion year on year to ¥1,712.9
billion. Consolidated net sales totaled ¥1,486.1 billion, a ¥100.6 billion year-on-year increase, andconsolidated operating income increased by ¥14.9 billion year on year to ¥87.2 billion. As a result of
operating income growth and decreasing foreign exchange losses, consolidated recurring profit
increased by ¥23.6 billion year on year to ¥84.2 billion. Consolidated net income increased by¥13.0billion year on year to ¥51.6 billion.

5

Consolidated operating performance in the fiscal year ended March 31, 2015, is summarized bysegment below.
(ii) Segment information
Segment net sales, operating income, and orders received(billions of yen)

Fiscal year ended March 31

2014 (A)

2015(B)

Orders received

Change (B – A)

Fiscal year ended March 31

Net

OperatingNet

OperatingNet

Operating

2014

2015

Changesales

incomesales

incomesales

income(A)(B)(B – A)

Ship & Offshore
Structure

80.8

(2.0)

90.3

2.6

9.4

4.6

117.8

179.2

61.3

Rolling Stock

147.9

7.5

121.5

6.0

(26.4)

(1.5)

133.0

131.4

(1.6)

Aerospace

280.7

26.2

325.0

36.3

44.3

10.0

286.3

357.0

70.6

189.2

10.4

218.7

11.2

29.5

0.7

222.0

235.7

13.7

103.8

6.3

121.1

6.5

17.2

0.2

103.9

203.4

99.5

322.2

16.1

329.2

14.9

6.9

(1.1)

322.2

329.2

6.9

Machinery

123.2

10.4

135.7

10.9

12.5

0.4

127.2

136.2

8.9

Other

137.2

4.4

144.2

3.9

6.9

(0.4)

142.6

140.5

(2.1)

-

(7.2)

-

(5.4)

-

1.8

-

-

-

1,385.4

72.3

1,486.1

87.2

100.6

14.9

1,455.4

1,712.9

257.5

Gas Turbine &Machinery
Plant &
Infrastructure
Motorcycle &EnginePrecision

Adjustments
Total

Note: 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.

Ship & Offshore Structure
Consolidated orders received increased ¥61.3 billion year on year to ¥179.2 billion, as a result ofbooking orders for a submarine and five liquefied gas carriers (LNG carriers and LPG carrier).
Consolidated net sales increased ¥9.4 billion year on year to ¥90.3 billion, as growth in theamount of construction of LNG carriers and other factors offset the decline in the amount ofconstruction of LPG carriers, bulk carriers, and other vessels.
The segment incurred a consolidated operating income of ¥2.6 billion, a ¥4.6 billion upturn fromthe previous fiscal year's consolidated operating income. The amelioration in profitability waschiefly by virtue of sales growth and the reversal of provision for losses on construction contracts.
Rolling Stock
Consolidated orders received were ¥131.4 billion that were equivalent level of the previous fiscal
year, as despite receiving an order from the Singapore Land Transport Authority for subway train
6

cars for new lines, there was an absence of large orders from North America and from within Japansuch as were received in the same period of the previous fiscal year.
Consolidated net sales decreased ¥26.4 billion year on year to ¥121.5 billion, as a result of adecline in overseas sales to customers in North America.
Consolidated operating income decreased ¥1.5 billion year on year to ¥6.0 billion, attributable to a
decline in sales and profit margin.
Aerospace
Consolidated orders received grew ¥70.6 billion year on year to ¥357.0 billion, due to an increasein orders from Japan’s Ministry of Defense and for component parts for the Boeing 787.
Consolidated net sales increased ¥44.3 billion year on year to ¥325.0 billion, largely due to thegrowth in sales to Japan’s Ministry of Defense and of component parts for Boeing777 and 787.
Consolidated operating income showed a sharp increase of ¥10.0 billion increase year on year to¥36.3billion, largely by virtue of sales growth and yen depreciation.
Gas Turbine & Machinery
Consolidated orders received increased ¥13.7 billion year on year to ¥235.7 billion, attributable tothe increase in orders for aircraft engine components,industrial gas turbines, natural gas compression
modules, and other products.
Consolidated net sales grew ¥29.5 billion year on year to ¥218.7 billion, due to an increase insales of aircraft engine components, hydraulic machinery, and other products.
Despite the increase in amortization of development costs for the aircraft engine new program,
R&D costs, and other factors, the increase in sales resulted in consolidated operating income of¥11.2billion, a ¥0.7 billion year-on-year increase.
Plant & Infrastructure
Consolidated orders received increased by ¥99.5 billion year on year to ¥203.4 billion
as a result of booking orders for gas-to-gasoline plants, boiler power plants and otherprojects.
Consolidated net sales increased ¥17.2 billion year on year to ¥121.1 billion, due toprogress in areas such as LNG storage tank plants and boiler power plants.
The segment posted consolidated operating income of ¥6.5 billion, which was roughly
on par with the previous year, as the increase in sales was partly offset by adeterioration in profitability and other factors.
Motorcycle & Engine
Consolidated net sales totaled ¥329.2 billion, a ¥6.9 billion year-on-year increase, as
the decline in motorcycle sales to Latin America and Thailand was offset by the increasein vehicle sales and motorcycle sales to Europe.
Consolidated operating income fell ¥1.1 billion year-on-year to ¥14.9 billion,
primarily due to factors such as intensifying competition in emerging countries and an
7

increase in fixed costs.
Precision Machinery
Consolidated orders received increased by ¥8.9 billion year on year to ¥136.2 billion
as a result of an increase in orders for industrial robots for the automotive industry andother applications.
Consolidated net sales increased ¥12.5 billion year on year to ¥135.7 billion, as
although sales of hydraulic components were roughly flat year on year, there was anincrease in sales of industrial robots, centered on robots for the automotive industry,along with other factors.
The segment posted consolidated operating income of ¥10.9 billion, which was
roughly on par with the previous year, as the increase in sales was offset by adeterioration in profitability and other factors.
Other Operations
Consolidated net sales increased by ¥6.9 billion year on year to ¥144.2 billion.
Consolidated operating income was ¥3.9 billion that were equivalent level of the previous fiscal
year.
(iii) Consolidated earnings outlook
The Group's operating environment is generally solid, underpinned by the recovery in
the economies of Japan, the US, and other developed countries, despite concerns
including the impacts of economic stagnation in emerging countries, uncertainty about
the European debt problem, and the decline in crude oil prices. In fiscal 2015 (the final
year of Medium-Term Business Plan 2013), the Group will put its full efforts into
achieving the targets of the medium-term business plan, and with everyone in theGroup involved in implementing Kawasaki-ROIC management, strive to make thegrowth scenario envisioned in the Group Management Model 2018 a reality andenduringly enhance corporate value.
For fiscal 2015, we are forecasting consolidated net sales of ¥1,650 billion, a
year-on-year increase of ¥163.9 billion expected to be concentrated mainly in the
Rolling Stock, Aerospace and Gas Turbine & Machinery segments. In terms of earnings,
we are forecasting consolidated operating income of ¥102 billion, recurring profit of¥100 billion, and net income of ¥69 billion. We plan to achieve these forecasts bycontinuing our various measures to improve earnings, such as steadily carrying out
investment and development aimed at future growth and boosting productivity.
For fiscal 2015, we are expecting an increase in Ministry of Defense projects in the
Aerospace segment, and an increase in train car orders for overseas customers in the
Rolling Stock segment. However, due to the fact that we are anticipating a decline inorders in both the Plant & Infrastructure and Ship & Offshore Structure segments
which received orders for large projects in the previous fiscal year, we are expecting
8

consolidated orders received of ¥1,680 billion, a ¥32.9 billion year-on-year decline.
Furthermore, we are expecting ROIC of 11.8% and ROE of 15% due to a further
improvement in capital productivity achieved by putting Kawasaki-ROIC management
into practice.
The Company’s earnings forecasts assume exchange rates of ¥118 to the US dollar
and ¥128 to the euro.

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. 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) Consolidated financial position(i) Financial condition(A) Assets
At March 31, 2015, consolidated assets totaled ¥1,662.2 billion, a 6.9% increase fromMarch 31, 2014. Of this total, current assets accounted for ¥1,073.0 billion, a 6.6%
year-on-year increase, chiefly attributable to an increase in inventories. Fixed assets
totaled ¥589.2 billion at March 31, 2015, a 7.3% increase from March 31, 2014, mainly
as a result of capital investments that added to holdings of property, plant andequipment.
(B) Liabilities
Consolidated liabilities increased 3.1% year on year to ¥1,214.3 billion at March 31,
2015, mainly attributable to an increase in advances from customers, despite a decline
in short-term debt and other factors.
(C) Net assets
Consolidated net assets at March 31, 2015, totaled ¥447.9 billion, an 18.9% increase
from March 31, 2014. While dividend payments detracted from consolidated net assets,
this was more than offset by net income, improvement in foreign currency translation
adjustments due to yen depreciation, and other factors.
(ii) Cash flows(A) Cash flows from operating activities
Operating activities provided net cash of ¥127.6 billion, a ¥24.0 billion decrease fromthe previous fiscal year. Major sources of operating cash flow included depreciation
expense of ¥44.5 billion, a ¥29.4 billion increase in advances from customers, and a9¥28.9 billion increase in trade payables. Major uses of operating cash flow included
expenditure of ¥22.5 billion due to the increase in inventories.
(B) Cash flows from investing activities
Investing activities used net cash of ¥67.3 billion, ¥10.1 billion less than in theprevious fiscal year, mainly to acquire property, plant and equipment.
(C) Cash flows from financing activities
Financing activities used net cash of ¥57.1 billion, ¥5.3 billion less than the previous
fiscal year. The cash outflow was mainly due to debt repayments.
(iii) Cash flow ratios
Fiscal year ended March 31:
2011
2012
2013
2014
2015
Equity ratio (%)
21.3
22.4
23.0
23.3
25.9
Market-value equity ratio (%)
45.1
31.0
33.6
40.8
61.0
Debt-to-cash-flow ratio (%)
523.7
480.5
1,724.6293.0
324.6Interest-coverage ratio (times)
17.2
19.0
6.7
36.0
31.8
Notes:
1. Ratios are calculated as follows.
Ratio of shareholders’ equity to total assets: Shareholders’ equity / Total assets
Market-value equity ratio: Market capitalization / Total assets
Debt-to-cash-flow ratio: Interest-bearing debt / Cash flow from operating activities
Interest-coverage ratio: Cash flow from operating activities / Interest paid
2. All ratios are calculated using consolidated-basis financial data.
3. Market capitalization is calculated by multiplying the closing price of the company’s stock by
the number of shares issued and outstanding (excluding treasury stock) at the end of the fiscal
year.
4. The figure for cash flow from operating activities is taken from cash flow from operating
activities on the consolidated statement of cash flows.
5. Interest-bearing debt is all interest-bearing debt listed under liabilities on the consolidatedbalance sheet. Interest paid is the figure for “Cash paid for interest” on the consolidated
statement of cash flows.

(3) Dividend policy and dividends for the fiscal years 2014 and 2015
As a basic management policy, the Company aims to increase corporate value, inother words to consistently generate profit exceeding the cost of invested capitalthroughout the future. In line with this policy, the Company believes that one priority
for management is to engage in cutting-edge research and development as well as
innovative capital investment required to achieve future growth, and thereby return
profits to shareholders by enhancing shareholder value over the long term.
In order to maintain a good balance between enhancing shareholder value andreturning profits to shareholders through dividends, the Company has set a medium-to
long-term consolidated payout ratio standard of 30%, in light of both the outlook for
future earnings and a comprehensive examination of its financial condition, including
ROE, free cash flow, the D/E ratio (debt-to-equity ratio) and other factors.
The Company has a basic policy of distributing surplus retained earnings as
dividends twice a year, once after the fiscal second quarter and once after the fiscal
10year-end. Interim dividends are authorized by the Board of Directors; year-end
dividends are authorized at general meetings of shareholders.
In fiscal 2015, the Company intends to pay a dividend of ¥12 per share (¥5 interim
dividend, ¥7 year-end dividend).

(4) Business and other risks
No risks other than those disclosed under the heading “Business and Other Risks” in the Company’s
most recent full-year statutory financial report (filed June 26, 2014) have surfaced since said filing.
Updated risk disclosures are therefore omitted here.

2. Status of Group
There have been no material changes in the “Chart of Operations (Nature of Operations)” and the“Status of Affiliated Companies” in the Company’s most recent full-year statutory financial report(filed June 26, 2014). Updated disclosure of them is therefore omitted here.

3. Management Strategy(1) Basic management strategy
The Kawasaki Group Mission Statement states the Group’s mission as “Kawasaki,
working as one for the good of the planet.” The Group has established the Kawasaki

Business Vision 2020 based on this Group mission, as we aim to be a corporate groupthat creates new value through integrated technological capabilities and opens the way
to new possibilities for our customers and society.
The Group has a basic management policy of increasing corporate value, in otherwords consistently generating profits exceeding the cost of invested capital throughout
the future, and we will continue to carry out cutting-edge research and development aswell as innovative capital investment in order to achieve the aims of this management
policy.
(2) Target management metrics
The Group has adopted profit targets (operating income, recurring profit, and net
income) and ROIC (return on invested capital: earnings before interest and taxes(EBIT) ÷ invested capital), a measure of capital efficiency, as its target metrics ofoperating performance.
The Group applies ROIC for each of the Group’s business units (BU), the smallest
unit into which its operations are classified, and evaluates BU based on whether or not
ROIC exceeds the weighted-average cost of capital (WACC).
Improving these management metrics ultimately results in higher ROE (net income ÷shareholders’ equity)11

(3) Medium- to long-term management strategy
The Group has a medium-term business plan, Medium-Term Business Plan 2013,
effective from fiscal 2013 through fiscal 2015. In addition, the Group has placedenhancement of corporate value at the heart of its management strategy, and witheveryone in the Group committed to “Kawasaki-ROIC Management,” we will strive tocarry out the following: 1) Plan and implement growth strategies through thestrengthening of core competencies in each BU; 2)Set optimal financial indicators with afocus on ROIC, and formulate specific action plans to achieve these indicators; 3)Create
new value through internal synergies which leverage integrated management; 4)Define
scale-down or withdrawal strategies broken down to the sub-BU and individual productlevel; and 5)Create a business portfolio focused on profitability, stability, and growth.
Furthermore, we have established the Group Management Model 2018 which lays out
what the Group aims to be in fiscal 2018. This Group Management Model 2018 includes
concrete financial indicator targets (operating income margin of 6% or higher, ROIC of
12% or higher, ROE of 14% or higher) and clarifies the philosophy aimed at generating
investment capacity targeting future growth. In addition, we have classified the BUs
into 4 areas (Aerospace and Transport Systems, Land and Sea Transport Systems,
Energy and Environment, and Industrial Equipment) according to their businesscharacteristics, and have established clear growth strategies and optimal businessportfolios for each area.
(4) Management priorities
In fiscal 2015, the final fiscal year of Medium-Term Business Plan 2013, the Groupwill work on the following priorities in order to ensure that the targets of Medium-TermBusiness Plan 2013 are achieved and to make the Group Management Model 2018 a
reality.
1. Enhance corporate value
The Group is striving to increase ROIC at the BU level. BUs with an ROIC lower thanthe hurdle rate (WACC) will carry out action plans which set a detailed timetable forclearing the hurdle rate and define the issues to be resolved, while BUs that havealready cleared the hurdle rate will endeavor to boost their ROIC to the highest level inthe industry and to increase their economic value-added, thereby enhancing the Group’s
overall corporate value.
2. Focus on cash flows
The Group will ensure appropriate levels of free cash flow while steadily investingand developing with an eye to future growth, and use free cash flow as a source fordividends and to reduce interest-bearing debt, thereby generating spare investment
capacity. To this end, the Group has made securing operating cash flow a particularpriority in fiscal 2015, and in addition to bolstering profitability, the Group plans to12

develop specific measures aimed at increasing operating capital efficiency.
3. Strengthen risk management through integrated management
The Group’s businesses are exposed to various risks, including foreign exchange rates
and economic changes. In addition to monitoring anticipated risks with frequent risk
tolerance checks and carrying out efficient risk management, among other initiatives
the Group is working to review prices and production bases, and on the development ofhigh value-added products capable of withstanding changes in the external
environment. The Group is also striving to enhance risk management by leveraging thestrengths of integrated management. This includes well-balanced management of thesize of the 7 segments with different business characteristics, and inspecting thebusiness portfolio from the standpoint of diversifying risk among, for example, private
sector and public sector demand, between advanced countries and emerging markets,and between order-made products and mass-produced products.
4. Enhance the corporate governance framework and focus on engagement
In Japan, companies are being asked to make a wide range of changes concerning theway they interact with the capital markets. Examples of this include the Japanese
Version of the Stewardship Code, the final report (“Ito Review”) of the “Competitivenessand Incentives for Sustainable Growth: Building Favorable Relationships between
Companies and Investors” project, and the Corporate Governance Code. In addition togetting started on building a framework in compliance with the Corporate Governance
Code, the Group will continue to work with shareholders and investors to increase
corporate value by engaging in quality dialogue with the capital markets.
5. Bolster core competencies and pursue synergies
The Group is working to strengthen core competencies, which enable BUs to produce
profits, and is pursuing synergies leveraging the strengths of integrated management.
Examples of synergistic effects mobilizing the Group’s technologies include thenext-generation efWING® rolling stock bogie which has a CFRP frame, and the Ninja
H2/H2R which uses a supercharged engine developed by the Company. Going forward,
we will launch full-scale development towards the creation of a complete hydrogen (theultimate clean energy source) supply chain, including production, transport, storage
and use, as well as work on technologies to differentiate our products and businesses,
and develop base technologies.
6. Develop human capital and value diversity
The Group’s core competencies are underpinned by the Group’s personnel. Therefore,
the Group works to retain, develop, and enhance talented personnel, and also focuses on
creating a global workforce in conjunction with the global expansion of the Group,
fostering exchange between personnel extending beyond organizational lines, and13

passing along skills and capabilities to our younger personnel. In addition, the Group is
endeavoring to create working environments that value diversity, such as enhancing
work-life balance, which includes promoting active roles for women and offeringchildcare support, as well as establishing accommodating workplaces for persons withdisabilities and ensuring opportunities for persons with disabilities to work by
establishing special subsidiaries.
Individual business segments’ priorities are as follows.
① Ship & Offshore StructureContinue to receive orders for liquefied gas carriers (LNG carriers, LPG carriers);
complete offshore work vessels and LNG-fueled propulsion ships; further boost thecompetitiveness of the China business; launch the Brazil business; and bolster thefoundations of the naval shipping business② Rolling Stock
Enhance competitiveness by developing leading-edge technologies, new rolling stock,and other technologies and products that meet customers’ needs; further boost system
integration capabilities by strengthening personnel development; build a global,
optimal business execution platform, including overseas production, overseas
procurement, and utilization of partnerships③ Aerospace
Establish a mass production system for C-2 transport and P-1 fixed-wing patrolaircraft, including repair services and parts supply, and apply to derivative aircraft;increase production of Boeing 787 component parts and apply to derivative aircraft, anddevelop and launch mass production for 777X
④ Gas Turbine & Machinery
Develop an energy solutions business based on high-efficiency industrial gas turbinesand gas engines; promote overseas business development; develop new models of jet
engines for civilian aircraft and handle increased production⑤ Plant & Infrastructure
Enhance competitiveness by making existing products more advanced and rapidlycommercialize new products and technologies; expand overseas businesses centered on
emerging markets and resource-producing countries by strengthening overseas
partnerships; further bolster engineering capabilities by cultivating human resources;
steadily complete large projects⑥ Motorcycle & Engine
14

Continue to introduce attractive, strong models that possess the Kawasaki appeal;establish position as a premium brand; further boost presence in advanced countries
where economies are on a recovery track; enhance the strength of the brand andcultivate new markets in emerging markets; thoroughly promote management
efficiency for the global supply chain⑦ Precision Machinery
Maintain high market share and expand market share for hydraulic components for
excavators; grow sales in market for construction machinery besides excavators;
enhance system proposal capabilities and upgrade and expand overseas production
framework in the industrial robot field; engage in ongoing initiatives targeting new
fields for the future, such as medical robots
Notes:
These materials contain earnings forecast and other forward-looking statements based on information
available to the company at the time of disclosure and the company makes no assurances as to the actual
results and/or other outcomes.

4. Basic rationale for selecting accounting standards
In light of the fact that the difference in accounting standards continues to narrow,
the Group plans to continue to use Japanese accounting standards in the near term.
The Group has been studying the possible adoption of IFRS, and will continue toconsider the situation surrounding the Group both in Japan and overseas, and willaddress this issue as appropriate from the perspective of increasing corporate value.

155. Consolidated Financial Statements(1) Consolidated balance sheets
March 31

Millions of yen

AssetsCurrent assets
Cash on hand and in banks
Trade receivables
Merchandise and finished products
Work in process
Raw materials and supplies
Deferred tax assets
Other
Allowance for doubtful receivables
Total current assets
Fixed assets
Net property, plant and equipment
Buildings and structures,
Machinery and equipment,
Land
Leased assets,
Construction in progress
Other,
Total property, plant and equipment
Intangible assets
Investments and other assets
Investments in securities
Long-term loans
Deferred tax assets
Net defined benefit assets
Other
Allowance for doubtful receivables
Total investments and other assets
Total fixed assets
Total assets

16

2014

2015

47,949415,664
56,673
302,511
98,84833,04654,165(3,104)
1,005,754

51,645421,890
59,487321,326
117,837
33,292
70,576(2,995)
1,073,062

144,147
99,76862,866
1,987
29,33045,810383,912
17,262

161,840
121,21064,7082,108
18,35652,330420,554
16,40914,167424
52,711
1,444
79,461(710)
147,500
548,675
1,554,430

15,488363
41,611
317
95,299(823)
152,257
589,220
1,662,283

Liabilities
Current liabilities
Trade payables
Electronically recorded obligations-operating
Short-term debt
Lease obligations, current
Income taxes payable
Deferred tax liabilities
Accrued bonuses
Provision for product warranties
Provision for losses on construction contracts
Advances from customers
Current portion of bonds
Asset retirement obligations
Other
Total current liabilities

252,10753,923
190,757404
10,100442
22,118
10,535
13,560137,59849
103,818
795,415

253,90785,453
122,338276
17,094442
26,440
11,4805,873
171,607
20,00015
109,691
824,623

Long-term liabilities
Bonds payable
Long-term debt
Lease obligations
Deferred tax liabilities
Provision for loss on damages suit
Provision for environmental measures
Net defined benefit liability
Asset retirement obligations
Other
Total long-term liabilities
Total liabilities

110,000
141,343
2,139
6,630
395
3,669
97,048487
20,614382,328
1,177,744

110,000
159,749
2,011
8,199
2,535
79,272464
27,468389,7021,214,326

Total shareholders’ equity

104,484
54,393
217,449(43)
376,284

104,484
54,393
253,605(67)412,416

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

2,652(3,803)
6,416(18,509)(13,243)
13,645
376,686
1,554,430

3,704(1,985)25,179(7,318)19,57915,961
447,957
1,662,283

Net assets
Shareholders’ equity
Common stock
Capital surplus
Retained earnings
Treasury stock17

(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 benefits
Advertising expenses
R&D expenses
Provision for doubtful accounts
Other
Total selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Gain on sales of securities
Equity in income of non-consolidated subsidiaries and affiliates
Other
Total non-operating income
Non-operating expenses
Interest expense
Foreign exchange losses
Other
Total non-operating expenses
Recurring profit
Extraordinary income
Gain on contribution of securities to retirement benefit trust
Total extraordinary income
Extraordinary losses
Loss on disaster
Loss on impairment of fixed assets
Total extraordinary losses
Income before income taxes and minority interests
Income taxes
Current
Deferred
Total income taxes
Income before minority interests
Minority interests in net income of consolidated subsidiaries
Net income

18

2014

2015

1,385,482
1,140,293
245,189

1,486,123
1,216,680
269,443

46,662
10,63340,39810
75,132
172,837
72,351

50,587
10,481
41,606
104
79,403
182,184
87,259

919
397
1,187
7,016
2,669
12,190

796
395
1,138
6,208
4,714
13,253

3,991
14,785
5,159
23,93660,605

3,761
5,097
7,365
16,22384,288

3,323
3,323

-

2,142
476
2,618
61,31084,28815,902
4,409
20,311
40,9982,396
38,601

23,563
6,779
30,34353,9452,306
51,639

Consolidated statements of comprehensive income
Millions of yen

Years ended March 31
2014
Income before minority interests

2015

40,99853,945Net unrealized gains (losses) on securities(1,852)

783

Deferred gains (losses) on hedges

2,314

1,860

Foreign currency translation adjustments

11,996

12,384Remeasurements of defined benefit plans

1,870

10,952

Share of other comprehensive income of associates accounted forusing equity method

13,377

7,834

Total other comprehensive income

27,70633,815Comprehensive Income attributable to:68,70587,760Owners of the parent company

64,90884,462

Minority interests

3,797

3,298

Other comprehensive income19(3) Consolidated statements of changes in net assets
Millions of yen

Years ended March 31
2014
Shareholders’ equity
Common stock
Balance at end of previous year
Changes during the period

2015

104,484

Total changes during the period

104,484--

104,484

104,484

54,39354,393

0
-

0
(0)

0

0

54,39354,393

198,528(11,523)

217,449-

Restated Balance

187,005

217,449

Changes during the period
Cash dividend
Net income
Treasury stock retired
Increase (decrease) by change of consolidation period of subsidiaries(8,358)38,601
201(15,045)
51,639(659)
221

30,44436,156

217,449

253,605

(27)

(43)

(16)
0
-

(684)
0
660

(16)

(23)

(43)

(67)

357,379(11,523)

376,284-

Restated Balance

345,856

376,284

Changes during the period
Cash dividend
Net income
Treasury stock purchased
Treasury stock disposed
Treasury stock retired
Increase (decrease) by change of consolidation period of subsidiaries(8,358)38,601(16)0
201(15,045)
51,639(684)
0221

Balance at end of year
Capital surplus
Balance at end of previous year
Changes during the period
Treasury stock disposed
Treasury stock retired
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

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
Treasury stock disposed
Treasury stock retired
Total changes during the period
Balance at end of year
Total shareholders’ equity
Balance at end of previous year
Cumulative effect of changes in accounting policies

Total changes during the period
Balance at end of year20

30,42836,132376,284

412,416

Comprehensive income
Net unrealized gain (loss) on securities
Balance at end of previous year
Changes during the period
Net changes in items other than shareholders’ equity
Total changes during the period
Balance at end of year

4,524

2,652

(1,871)

1,051(1,871)

1,051

2,652

3,704

(5,998)(3,803)

2,195

1,818

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
Balance at end of year
Foreign currency translation adjustments
Balance at end of previous year
Changes during the period
Net changes in items other than shareholders’ equity
Total changes during the period
Balance at end of year

2,195

1,818

(3,803)(1,985)(17,665)

6,416

24,081

18,762

24,081

18,762

6,416

25,179Remeasurements of defined benefit plans
Balance at end of previous year-

(18,509)

Cumulative effect of changes in accounting policies(20,410)-

Restated Balance(20,410)(18,509)

1,900
1,900

11,19011,190

Balance at end of year

(18,509)(7,318)

Total comprehensive income
Balance at end of previous year

(19,139)(13,243)

Changes during the period
Net changes in items other than shareholders’ equity
Total changes during the period

Cumulative effect of changes in accounting policies(20,410)-

Restated Balance(39,549)(13,243)

Changes during the period
Net changes in items other than shareholders’ equity

26,30632,822

26,30632,822(13,243)

19,57911,641

13,645

Net changes in items other than shareholders’ equity

2,004

2,316

Total changes during the period

2,004

2,316

13,645

15,961

Cumulative effect of changes in accounting policies

349,881(31,933)

376,686-

Restated Balance

317,947

376,686(8,358)38,601(15,045)
51,639

(16)
0

(684)
0

Total changes during the period
Balance at end of year
Minority interests
Balance at end of previous year
Changes during the period

Balance at end of year
Total net assets
Balance at end of previous year

Changes during the period
Cash dividend
Net income for the year (loss)
Treasury stock purchased
Treasury stock disposed21

Treasury stock retired
Increase (decrease) by change of consolidation period of subsidiaries
Net changes in items other than shareholders’ equity
Total changes during the period
Balance at end of year

22

201

221

28,31035,13958,73871,271

376,686

447,957

(4) Consolidated statements of cash flows
Millions of yen

Years ended March 31
Cash flows from operating activities
Income before income taxes and minority interests
Depreciation and amortization
Loss on impairment of fixed assets
Increase (decrease) in net defined benefit liability
Increase (decrease) in accrued bonuses
Increase (decrease) in allowance for doubtful receivables
Increase (decrease) in provision for product warranties
Increase (decrease) in provision for losses on construction contracts
Increase (decrease) in provision for losses on damages suit
Increase (decrease) in provision for environmental measures
Loss on disposal of inventories(Gain) loss on sale of marketable and investment securities(Gain) loss on valuation of securities(Gain) loss on sale of property, plant, and equipment
Equity in income non-consolidated subsidiaries and affiliates
Interest and dividend income
Interest expense(Increase) decrease in trade receivables(Increase) decrease in inventories(Increase) decrease in advance payments(Increase) decrease in other current assets
Increase (decrease) in trade payables
Increase (decrease) in advances from customers
Increase (decrease) in other current liabilities
Other
Subtotal
Cash received for interest and dividends
Cash paid for interest
Cash paid for income taxes
Net cash provided by operating activities
Cash flows from investing activities
Decrease (increase) in time deposits with maturities over three months
Acquisition of property, plant and equipment
Proceeds from sale of property, plant and equipment
Acquisition of intangible assets
Proceeds from sale of intangible assets
Acquisition of investments in securities
Proceeds from sale of investments in securities
Acquisition of investments in subsidiaries of affiliate
Decrease (increase) in short-term loans receivable
Additions to long-term loans receivable
Proceeds from collection of long-term loans receivable
Other
Net cash used for investing activities
Cash flows from financing activities
Increase (decrease) in short-term debt, net
Proceeds from long-term debt
Repayment of long-term debt
Proceeds from issuance of bonds
Redemption of bonds payable
Acquisition of treasury stock
Proceeds from stock issuance to minority shareholders
Cash dividends paid
Cash dividends paid to minority shareholders
Other
Net cash used for financing activities
Effect of exchange rate changes
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Increase (decrease) in cash and cash equivalents by change of consolidation
period of subsidiaries
Cash and cash equivalents at end of period

23

2014

2015

61,31037,838476(2,830)
1,839
(129)
4,117
(5,345)
(102)
(915)
1,339
(1,187)619
1,043(7,016)(1,317)
3,991
17,750(1,295)(6,927)
8,277
20,05925,978
7,713
2,969
168,258
6,018(4,210)(18,345)
151,72184,28844,572(2,521)
4,255
(160)
666
(7,957)(467)(1,134)
1,966(1,138)52
1,428(6,208)(1,191)
3,761
630(22,583)(11,086)(623)
28,93329,460(62)
1,390
146,272
6,099(4,012)(20,707)
127,651(584)(77,396)
2,212(2,778)
595
(610)
2,695
(2,063)
196
(64)
84
152
(77,559)(1,276)(73,917)
11,890(3,443)
23
(486)
1,470
(1,261)(1,164)
(63)
141
690
(67,397)(64,139)
40,430(58,749)
40,000(10,000)(17)(8,363)(1,532)(132)(62,505)(4,001)
7,655
36,971(16,587)
42,456(86,233)
20,000(25)
1(15,675)(986)(83)(57,133)
(953)
2,167
45,431804

122

45,43147,721

(5) Notes on financial statements
Notes on the going-concern assumption
Not applicable
Basis of preparation of financial statements
Other than information disclosed under the heading “Changes in basis of preparation of financial
statements” below, no material changes have been made from the information disclosed in the
Company’s most recent full-year statutory financial report (filed June 26, 2014). An updated
disclosure is therefore omitted here.
Changes in basis of preparation of financial statements
1. Change in the scope of consolidation(1) Change in the scope of consolidation
Two companies were added as consolidated subsidiaries because they were newly establishedby the Company.
One company ceased to be consolidated subsidiaries as they were completed of liquidation .
(2) Number of consolidated subsidiaries after change
97 companies
2. Change in application of the equity method(1) Non-consolidated subsidiaries which are accounted for under the equity method
None(2) Associated companies which are accounted for under the equity method(i) Change in associated companies which are accounted for under the equity method
One company was removed from the use of the equity method due to the sale of shares in said
company.
(ii) Number of associated companies accounted for under the equity method after change
17 companies

Additional Information
Not applicable
Consolidated balance sheets
Fiscal year ended March 31, 2015 (As of March 31, 2015)
Information is omitted here as its disclosure in this report is not of material importance.
Consolidated Statements of Income
Fiscal year ended March 31, 2015 (April 1, 2014 – March 31, 2015)
Information is omitted here as its disclosure in this report is not of material importance.

Information Omitted
Notes on the unapplied accounting policies, consolidated statements of comprehensive income,consolidated statements of changes in shareholders’ equity, the consolidated cash flow statements,
lease transactions, related-party transactions, tax-effect accounting, financial instruments, securities,
24

derivative transactions, retirement benefits, stock-based compensation, business combination, asset
retirement obligations, investment and rental property are omitted here, as their disclosure in thisreport is not of material importance.
Segment information and others
1. 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 theCompany’s board 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 is delegated to each of the internal companies, based on which they conduct businesses
in Japan and overseas. The Company’s operations are therefore segmented based on each internal
company’s product categories. The Company’s eight reportable segments are the Ship & Offshore
Structure segment, the Rolling Stock segment, the Aerospace segment, the Gas Turbine &Machinery segment, the Plant & Infrastructure segment, the Motorcycle & Engine segment, thePrecision Machinery segment, and the Other segment.
Main segment businesses are listed below.
Industry segment
Ship & Offshore
Structure
Rolling Stock
Aerospace
Gas Turbines &Machinery
Plant & Infrastructure
Motorcycle & Engine
Precision Machinery
Other

Major products
Construction and sale of ships and other vessels, etc.
Production and sale of rolling stock, snow plows, etc.
Production and sale of aircraft, etc.
Production and sale of jet engines, general-purpose gas turbine
generators, prime movers, etc.
Production and sale of industrial equipment, boilers, environmental
equipment, steel structures, crushers, etc.
Production and sale of motorcycles, all-terrain vehicles (ATV), utility
vehicles, personal watercraft (“JET SKI”), general-purpose gasoline
engines, etc.
Production and sale of industrial hydraulic products, industrial robots, etc.
Production and sale of construction machinery, commercial activities,
sales/order agency and intermediary activities, administration of welfare
facilities, etc.

(2) Calculation methods for sales, income (loss), assets, liabilities and other items by reportable segment
Accounting methods applied for calculation of sales, income (loss), assets, liabilities, and otheritems by industry segment largely correspond to information presented under “Basis ofpreparation of financial statements” on page 24. Segment income is based on operating income.
Intersegment sales or transfers are based on market prices.

25

(3) Sales, income (loss), assets, liabilities, and other items by reportable segment
Fiscal year ended March 31, 2014 (April 1, 2013 – March 31, 2014)(Millions of yen)
Sales
Intersegment
External sales
sales ortransfer
Ship & Offshore
Structure

Rolling Stock
Aerospace
Gas Turbines& Machinery
Plant &
Infrastructure
Motorcycle &EnginePrecision
Machinery
Other
Operations
Total
Adjustments
Consolidated
total

Other items
Total

Segment
income(loss)

Segment
assetsDepreciation/amortization

Loss onimpairmentof fixed
assetsInvestment inIncrease inequityproperty, plant
methodand equipment
affiliates
and intangibles

80,863

1,776

82,640(2,006)

129,542755-

49,0891,532

147,951
280,737

5,821
2,537

153,772
283,274

7,572
26,254

159,363
348,608

2,630
9,937

-

125
-

5,490
25,699189,241

16,922

206,164

10,486279,356

3,155

-

1,424

8,300

103,898

15,639119,537

6,312

109,878

1,297

476

15,2342,424

322,248794

323,042

16,100252,933

10,241-

1,099

17,250123,276

13,567

136,844

10,415

124,989

4,435

-

6

7,734

137,264

33,016170,280

4,481

120,529

2,078

-

2,717

4,236

1,385,482-

90,075(90,075)

1,475,557(90,075)

79,616(7,264)

1,525,202
29,22734,531
3,306

476
-

69,697-

72,67015,055

1,385,482-

1,385,482

72,351

1,554,430

37,838476

69,69787,726

Fiscal year ended March 31, 2015 (April 1, 2014 – March 31, 2015)(Millions of yen)
Sales
Intersegment
External sales
sales ortransfer
Ship & Offshore
Structure

Rolling Stock
Aerospace
Gas Turbines& Machinery
Plant &
Infrastructure
Motorcycle &EnginePrecision
Machinery
Other
Operations
Total
Adjustments
Consolidated
total

Other items
Total

Segment
income(loss)

Segment
assetsDepreciation/amortization

Investment inequitymethod affiliates

Increase inproperty, plantand equipment
and intangibles

90,327

3,289

93,616

2,675

171,736805

56,7493,317

121,519
325,083

3,736
2,160

125,256
327,244

6,044
36,318

169,469
363,417

2,837
10,823

144
-

3,256
34,780218,794

17,637

236,432

11,269296,359

3,913

1,436

7,053

121,11318,859139,973

6,574

124,938

1,345

17,3062,293

329,240808

330,048

14,923271,746

13,245

1,212

15,788135,782

14,423150,205

10,908134,868

5,162

7

6,175

144,261

40,952

185,213

3,986

101,982

2,222

2,861

2,169

1,486,123-

101,866(101,866)

1,587,990(101,866)

92,701(5,442)

1,634,518
27,76540,356
4,216

79,719-74,8355,260

1,486,123-

1,486,123

87,2591,662,283

44,572

79,71980,09626

(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

2014

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

2015

1,475,557(90,075)

1,587,990(101,866)

1,385,482

1,486,123

Fiscal year ended March 31(Millions of yen)

Income2014

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

2015
79,616(79)(7,185)92,701(1,042)(4,399)72,351

87,259*Note: Corporate expenses mainly comprise general and administrative expenses not attributed toreportable segments.
Fiscal year ended March 31(Millions of yen)

Assets2014

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

2015

1,525,202
129,822(100,595)

1,634,518
117,990(90,225)

1,554,430

1,662,283*Note: Corporate assets shared by all segments mainly comprise fixed assets not attributed to reportablesegments.
Fiscal year ended March 31
Other items

Total for reportablesegments

Adjustments*

2014

2015

2014

Depreciation/amortization

34,53140,356

3,306

Increase in property, plantand equipment andintangibles

72,67074,835

15,0552015(Millions of yen)Amounts reported on
the consolidated
financial statements
2014

2015

4,216

37,83844,572

5,260

87,72680,096*Note: Adjustments are mainly due to fixed assets not attributed to reportable segments.

27

Related information
Fiscal year ended March 31, 2014 (April 1, 2013 – March 31, 2014)
1. Information by product and service
Information by product and service is omitted here as segmentation is equivalent to that used forreportable segments.
2. Information by geographic area(a) Net salesJapan
605,328USA
326,337

Europe101,381Asia
240,221

Other areas
112,212(Millions of yen)Total
1,385,482

Note: Net sales are classified by country or region based on the location of customers.

(b) Property, plant and equipment(Millions of yen)Japan
324,502

North
America
26,059Europe

Asia

3,704

Other areas

28,363

1,281

Total
383,912

3. Information by major clients(Millions of yen)
Clients
Ministry of Defense

Net sales
197,640

Related segments
Ship & Offshore Structure, Aerospace, Gas Turbines & Machinery

Fiscal year ended March 31, 2015 (April 1, 2014 – March 31, 2015)
1. Information by product and service
Information by product and service is omitted here as segmentation is equivalent to that used forreportable segments.
2. Information by geographic area(a) Net salesJapan
631,018

USA
356,806

Europe115,145

Asia
252,371

Other areas
130,782

Note: Net sales are classified by country or region based on the location of customers.

28(Millions of yen)Total
1,486,123(b) Property, plant and equipment(Millions of yen)Japan
358,868

North
America
24,048Europe

Asia

3,794

Other areas

32,792

1,051

Total
420,554

3. Information by major clients(Millions of yen)
Clients
Ministry of Defense

Net sales
220,745

Related segments
Ship & Offshore Structure, Aerospace, Gas Turbines & Machinery

Impairment loss on fixed assets by reportable segment
Fiscal year ended March 31, 2014 (April 1, 2013 – March 31, 2014)
Information is omitted here as it is equivalent to that stated in “1. Segment information”.
Fiscal year ended March 31, 2015 (April 1, 2014 – March 31, 2015)
Not applicable.
Amortization amount for and unamortized balance of goodwill
Fiscal year ended March 31, 2014 (April 1, 2013 – March 31, 2014)
Not applicable.
Fiscal year ended March 31, 2015 (April 1, 2014 – March 31, 2015)
Not applicable.
Gain on negative goodwill by reportable segment
Fiscal year ended March 31, 2014 (April 1, 2013 – March 31, 2014)
Not applicable.
Fiscal year ended March 31, 2015 (April 1, 2014 – March 31, 2015)
Not applicable.
Per share data
Years ended March 31

(Yen)
2014

2015

Net assets per share217.16

Net assets per share

258.58

Earnings per share - basic

23.09

Earnings per share - basic

30.89

Notes:
1. Diluted net earnings per share is not stated because there are no potential shares.
2. Net assets per share were calculated based on the following:
March312014
376,686

Total net assets
Amounts excluded from total net assets
Of which: minority interest
Net assets attributable to the common shares
Number of common shares used to compute net assets per
share(Thousands of shares)

29(Millions of yen)2015
447,957

13,645(13,645)

15,961(15,961)

363,041

431,996

1,671,750

1,670,613

3. Net income/loss per share and net income per share (diluted) were calculated based on the following:
Years ended March 31(Millions of yen)
2015

2014
Earnings per share - basic
Net income
Earnings not attributable to common shareholders
Net income allocated to the common shares
Average number of common shares outstanding (thousands of shares)

Material subsequent events
Not applicable30

38,601

51,63938,601

51,639

1,671,770

1,671,637

6. Others(1) Corporate officer changes
Refer to the Company’s press release on March 31, 2015, titled “New Directors and Corporate
Auditor to be Nominated.”(2) Consolidated orders and sales
Orders received
Years ended March 31(Millions of yen)2014（A）

2015（B）% of total

Change（B-A）% of total%

Ship & Offshore Structure
117,872
8.0
179,221
10.4
61,34852.0
Rolling Stock
133,049
9.1
131,428
7.6(1,620)(1.2)
Aerospace
286,38319.6
357,03120.8
70,648
24.6
Gas Turbine & Machinery
222,01315.2
235,72213.7
13,708
6.1
Plant & Infrastructure
103,9127.1
203,473
11.8
99,56095.8
Motorcycle & Engine
322,24822.1
329,240
19.2
6,991
2.1
Precision Machinery
127,297
8.7
136,286
7.9
8,989
7.0
Other
142,6849.8
140,558
8.2(2,125)(1.4)
Total
1,455,462
100.0
1,712,963
100.0
257,500
17.6
Note: The Motorcycle & Engine segment’s orders received are equal to its net sales as production is based mainlyon estimated demand.

Net sales
Years ended March 31(Millions of yen)2014（A）

2015（B）% of total

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

80,863
147,951
280,737
189,241
103,898
322,248
123,276
137,264
1,385,482

5.8
10.6
20.2
13.6
7.4
23.2
8.8
9.9
100.0

Change（B-A）% of total

90,327
121,519
325,083
218,794
121,113329,240
135,782
144,261
1,486,123

6.0
8.1
21.8
14.7
8.1
22.1
9.1
9.7
100.0

%

9,463
(26,431)
44,34629,553
17,215
6,991
12,505
6,996
100,641

11.7(17.8)
15.7
15.6
16.5
2.1
10.1
5.0
7.2

Order backlog
Years ended March 31
2014（A）

2015（B）% of total

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

161,134
364,654450,581295,100
170,737
25,821
32,2341,500,264

10.7
24.3
30.0
19.6
11.3
1.7
2.1
100.0

31

(Millions of yen)
Change（B-A）% of total

264,281405,999
488,431
336,441
255,522
26,32528,531
1,805,533

14.6
22.4
27.0
18.6
14.1
1.4
1.5
100.0

%

103,146
41,34437,85041,341
84,785504(3,702)305,269

64.0
11.3
8.4
14.0
49.6
1.9
(11.4)
20.3

(3) Supplementary information on earnings forecasts for the fiscal year ending March 31, 2016
1. Consolidated earnings outlook(Billions of yen)

Outlook for the fiscal year
ending March 31, 2016
(A)

Fiscal year ended
March 31, 2015(actual)(B)

Change (A – B)

Net sales
Operating income
Recurring profit
Net income

1,650.0
102.0
100.0
69.0

1,486.1
87.2
84.2
51.6

163.9
14.8
15.8
17.4

Orders received
Before-tax ROIC (%)
R&D expenses
Capital expenditures
Depreciation/amortization
Number of employees
at end of period*Number of employees outside

1,680.0
11.8%
46.0
92.0

1,712.9
10.4%
41.6
80.0

(32.9)
1.4%
4.4
12.0

54.0

44.5

9.5

35,40035,471(71)*9,200*9,452*(252)of Japan included therein

Notes: 1. Outlook’s assumed foreign exchange rates: ¥118 = US$1, ¥128 = 1 euro

2. Before-tax ROIC = (income before income taxes + interest expense) / invested capital.
3. Capital expenditures represent the total of newly recorded property, plant and equipment andnewly recorded intangible assets. Depreciation/amortization represents depreciation/amortization
expenses for property, plant and equipment and intangible assets.

2. Outlook by reportable segment(a) Net sales and operating income (loss)(Billions of yen)

Fiscal year ended
March 31, 2015 (actual)(B)

Outlook for the fiscal year
ending March 31, 2016
(A)

Change (A – B)

Net sales

Operating
Income (loss)

Net sales

Operating
Income (loss)

Net sales

Operating
Income (loss)

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

105.0
180.0
360.0
260.0
125.0
350.0
150.0
120.0

90.3
121.5
325.0
218.7
121.1
329.2
135.7
144.2

1,650.0

2.6
6.0
36.3
11.2
6.5
14.9
10.9
3.9
(5.4)
87.2

14.7
58.5
35.0
41.3
3.9
20.8
14.3
(24.2)

Total

3.0
11.0
41.0
16.0
6.0
15.5
11.5
3.0
(5.0)
102.0

0.4
5.0
4.7
4.8
(0.5)
0.6
0.6
(0.9)
0.4
14.8

1,486.1

32

163.9

(b) Orders received(Billions of yen)

Outlook for the fiscal year
Fiscal year ended
ending March 31, 2016
March 31, 2015 (actual)(A)(B)
Ship & Offshore Structure
Rolling Stock
Aerospace
Gas Turbine & Machinery
Plant & Infrastructure
Motorcycle & Engine
Precision Machinery
Other
Total

120.0
160.0
440.0
250.0
100.0
350.0
155.0
105.0
1,680.0

179.2
131.4
357.0
235.7
203.4
329.2
136.2
140.5
1,712.9

Change (A – B)
(59.2)
28.6
83.0
14.3
(103.4)20.8
18.8(35.5)(32.9)(c) Before-tax ROIC(%)

Outlook for the fiscal year
Fiscal year ended
ending March 31, 2016
March 31, 2015 (actual)(A)(B)
Ship & Offshore Structure
Rolling Stock
Aerospace
Gas Turbine & Machinery
Plant & Infrastructure
Motorcycle & Engine
Precision Machinery
Total

5.4
12.5
29.0
8.6
12.6
12.0
12.9
11.8

33

6.0
8.7
35.1
5.7
14.3
7.3
16.7
10.4

Change (A – B)
(0.6)
3.8
(6.1)
2.9
(1.7)
4.7
(3.8)
1.4