KAWASAKI HEAVY INDUSTRIES, LTD.

2000
ANNUAL REPORT 2000

annual report

Kawasaki AR 2000/0824 00.8.31 5:05 PM ページ c2

川重AR2000̲C2&P1&21 00.8.31 4:32 PM ページ 1

ProfileFounded in 1878, Kawasaki Heavy Industries,
Ltd. (KHI) is a leading comprehensive
manufacturer of transportation equipment andindustrial goods in the world. With a broad
technological base that encompasses land, sea
and air, KHI manufactures ships, rolling stock,aircraft and jet engines, refuse incinerators,
industrial plants, steel structures and various
manufacturing equipment and systems. KHI
also produces such world-famous consumer
products as Kawasaki brand motorcycles and
Jet Ski® personal watercraft.

Contents
Financial Highlights
To Our Shareholders
Concern for the Environment
Review of Kawasaki Global Operations
Transportation Equipment
AerospaceIndustrial Equipment
Consumer Products
Financial Review
Six-Year Summary
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Report of Independent Public Accountants
Supplementary Information on Non-Consolidated Results
Board of Directors
Major Consolidated Subsidiaries and Affiliates
Network
Kawasaki Corporate Data

1
2
6
9
10
12
14
16
18
21
22
27
39
40
42
44
47
49

Cover: Max Series E4 Shinkansen(featured on page 11)

川重AR2000̲C2&P1&21 00.8.31 4:32 PM ページ 1

Financial Highlights
Kawasaki Heavy Industries, Ltd. and consolidated subsidiaries
Years ended March 31, 2000, 1999 and 1998
Thousands of
U.S. dollars

Millions of yen

For the year:
Net sales
Net income (loss)
Capital expenditure
Depreciation and amortization

2000

1999

1998

2000

¥ 1,149,698(18,632)
37,51335,081¥ 1,202,189(6,132)40,42834,607¥ 1,297,212
18,55642,92832,416$10,830,881(175,525)
353,396
330,485

1,206,806
174,955
486,350

1,204,857
199,637
447,028

1,222,906
209,040
437,387

11,368,874
1,648,187
4,581,724

At year-end:
Total assets
Total shareholders’ equity
Interest-bearing debt
Per share amounts (yen and U.S. dollars):
Net income (loss)
Cash dividends¥(13.4)
—

¥

(4.4)
6.0

¥

13.3
6.0

$

(0.13)—

Note: The U.S. dollar amounts represent arithmetical results of translating Japanese yen to dollars on the basis of ¥106.15=$1, the rate prevailing as of March 31, 2000.
These translations are solely for the convenience of the readers.

Net sales

Net income

Total shareholders’ equity(Billions of yen)(Billions of yen)(Billions of yen)

400

0

200

-5

96

97

98

99

00

-20

175.0

199.6

209.0

197.2

18.6

18.6

22.6

163.0

5

100

96

97

98

(18.6)

600

200

150

(6.1)

10

16.5

15

800

0

250

20
1,149.7

1,202.2

1,000

1,086.2

1,200

1,297.225

1,224.3

1,400

99

00

50

0

96

97

98

99

00

1
KAWASAKI 2000

Kawasaki AR 2000/0824 00.8.31 5:05 PM ページ 2

To Our Shareholders

Amid harsh business conditions caused by a prolonged recession in Japan and thedelayed recovery of other Asian economies, we focused on finding new opportunities
for our products in Western markets, where growth was robust. Alongside this, wemade further progress in radically lowering our cost base to improve earnings acrossour entire business.
For the fiscal year ended March 31, 2000 (fiscal 2000), sales of the Consumer Products
segment were up slightly from the previous year, increasing 2.6% to ¥277.2 billion.
However, sales fell in Transportation Equipment, Aerospace, Industrial Equipment andOther. As a result, total net sales declined 4.4% to ¥1,149.7 billion. Operating income
slumped ¥20.4 billion, or 94.2%, to ¥1.3 billion, and the net loss for the year widened to¥18.6 billion.
Sales fell in the face of a persistent economic downturn in Japan and slow growththroughout the rest of Asia. The strong yen compounded these problems. In terms of
profits, margins declined substantially in our industrial equipment business. Anotherprincipal reason for our weaker performance were extraordinary losses including a write
down of securities and prior period retirement allowances regarding designatedsubsidiaries.
In view of these losses, we elected not to pay a dividend for the fiscal year ended
March 2000. We hope that our shareholders will understand and appreciate our positionon this issue.
Owing to a sluggish pace of recovery, demand in the Japanese and other Asianmarkets remains depressed. The resulting intense competition is likely to cause ongoing
erosion of selling prices. Combined with uncertainties over currency movements inforeign exchange markets and growing concerns about an economic slowdown in the
United States, we expect general business conditions to remain harsh.
It is therefore imperative that we face and overcome these difficulties so that we cansurvive and continue to grow as a globally competitive company. Accordingly, wemust reassess and reorganize our business as quickly as possible. To do so, we need to
implement a raft of structural reforms so that we can shift to a mix of technologicallyadvanced, high-value-added businesses–and, in the process, win the approval of
capital markets.
Accordingly, we have designated the fiscal year ending March 2001 as a year of
structural business reform. In the near-term, in addition to undertaking a radical review
of our business structures, we plan to rapidly implement a series of measures designed
to reduce our fixed cost base and thereby lower our break-even point.
Fundamentally, on a mid- to long-term basis, our primary objective is to strengthen
our core businesses. In addition, we will undertake a comprehensive review of our
shipbuilding operations targeting international competitiveness. In our industrial
equipment business, which is afflicted by a combination of slumping demand and falling
selling prices, we will selectively focus on, and direct resources toward, specific areasthat are profitable as well as demonstrate future growth potential. Moreover, within thissegment, we will reevaluate the production process, including the integration of facilities
and other improvement measures.
We ask our shareholders for their continued support and understanding as we takeon these important challenges.
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July 2000

2
KAWASAKI 2000

Masamoto Tazaki
President

Kawasaki AR 2000/0824 00.8.31 5:05 PM ページ 3

KHI President
Masamoto Tazaki
speaks frankly about
the critical need forchange to ensure
the future.

Having taken up your new appointment aspresident, how do you intend to manage KHI
during these difficult times?
I have always regarded adversity as a positive
advantage point when managing–difficulties need tobe tackled with passion, energy and a spirit ofchallenge. My attitude is that, by tackling such
obstacles, we can grasp an ideal opportunity tocapture the lead over our competitors. In this way, I
intend to take over at the helm of KHI with this samestrong sense of determination.
Today’s business environment is characterized byhuge changes that are rapidly transforming thestructure of our economy and society–indeed, you
could say that we are at an historic turning point. We
are in an age where the axiom “survival of the fittest”
applies particularly strongly. Only those who force
their own evolution to change will survive. At such aturning point, using the basic policy of enhancing
customer satisfaction as embraced by our consumer
products business as an example, we must
revolutionize our thinking along these lines to growas a company over the coming decades.
Traditionally, our portfolio includes an enormous
number of products that are made to order, such asindustrial plants, wherein cost reduction is necessarily
a perennial issue. However, if we are to boost earnings
and thrive during this era of mega-competition, wemust move beyond conventional thinking of simply
taking orders for custom-made products, and thenseeking efficient ways to reduce costs.

As I mentioned above, in the consumer products
business, raising customer satisfaction is a core
concept. Even with those businesses thatcharacteristically involve made-to-order products, wemust work to assess customer needs, and then deliver“something different” that sets us apart from thecompetition at a price that creates value both for us asa company and for the customer. Through suchvalue-added, differentiated products, I believe that
we can increase customer satisfaction while
generating profits. We also need to realize that raisingcustomer satisfaction is as much about thedevelopment of technologies that will give our
products a competitive edge as it is about after-sales
service, or the total cost and performance over the life
cycle of respective products.
Around the world, the Kawasaki brand name hasa well-established image for high quality, highperformance, and good service–especially in sports
motorbikes. I want to transfer the benefits of thatbrand image to all our company’s products. If weraise customer satisfaction and build up the Kawasaki
brand image for all our operations, this will in turnenable us to realize the optimum means in truly
creating something different.
The consumer products business also has anotherimportant asset that sets KHI apart from otherfirms–namely a marketing, production, sales,
distribution and service network that spans the globe.
In promoting globalization and efficiency across all
business lines, from now, I want us to make increased
use of this network, particularly in relation to our
mass-produced industrial items.

3
KAWASAKI 2000

Kawasaki AR 2000/0824 00.8.31 5:05 PM ページ 4

What issues will be important during the coming yearof business reform?
Above all, we need to put an end to the losses that haveafflicted us for two years’ running. We must stage asignificant recovery in earnings. I have designated thecoming year as one of business reform primarily toemphasize a fundamental shift in our management
approach. Instead of pursuing volume, we need topursue quality, namely a higher rate of earnings. Further,
we need to build businesses that can produce strong
profit levels without being contingent on scale.
Last year, we formulated a medium-term business planthat would take us through to the end of March 2004.
Under the current business conditions, we must also
switch the focus of this plan from quantity to quality on aclearly defined basis. I plan to complete the review of thisprocess by the end of this year. However, as a first step inthe practical implementation of this transition, we will besignificantly reducing our fixed cost base through greater
selectivity and focus. This will involve the integration of
manufacturing plants and other measures to streamline
our operations, principally in our plant engineering andsteel structures businesses. My aim is to drastically lower
our break-even point through such actions.
As a separate course of action, I also want to institutea much more rigorous internal evaluation system withregard to effectively managing the profitability of longterm and large-scale contracts. In reviewing KHI’s
performance over the past two years, losses incurred on
major orders in the rolling stock and plant engineering
divisions had a significant impact on our profitability.
From now, we must be much more selective regarding
respective projects in ensuring comprehensive analyses
and avoidance of order-related contractual risks.
In your view, what conditions do KHI’s corebusinesses need to fulfill?
I believe there are three conditions. First, the products
must be highly competitive. This is fundamental for amanufacturer: unless the products enjoy a superior
position in world markets in terms of theircompetitiveness on technical, sales and service fronts,
they cannot be considered a core business. Second is the4
KAWASAKI 2000

scale of operations. To develop a business on a global
scale, I think it needs to have a turnover of at least $1
billion. Third, the market needs to be large and stable, or
have high potential.
Judged on these criteria, KHI currently has fivebusinesses that qualify as being core: rolling stock,aerospace, gas turbines, environmental plant and related
products, and consumer products. We will invest inthese five areas selectively and shift the focus ofmanagement resources accordingly.
First of all, we are well positioned to expand ourrolling stock business. Although revenues have notgrown to the scale I just mentioned, we can leverage ourposition as a leading and highly regarded rolling stock
manufacturer, in supplying markets in the United Statesand Asia, which demonstrate a substantial growthpotential.
Next, aerospace fully satisfies the criteria for being acore business. We rank among the top makers of aircraft
in Japan, and we have immense technical expertise inthis field. In addition, there are high barriers to entry by
new competitors, a stable demand in the defense
industry, and considerable growth potential in thecommercial aviation sector.
Gas turbines represents another field with thepotential to grow into a core business. Although KHI’s
business for gas turbines is currently small in scale,further expansion is anticipated supported by the overall
growth of the jet engine business. Increased demand isalso expected for gas turbine generators, which we havedeveloped capitalizing on original KHI technologies.
Additionally, environmental plant and related
products is an area with tremendous opportunities in the
future. At the moment, we are predominantly amanufacturer of municipal refuse incinerators, but in the
future I want us to apply our accumulated engineering
technical expertise in other businesses to this sector.
Finally, in consumer products, we rank among thefour main world manufacturers of motorcycles. We areespecially strong in the premium and sports motorbikeclasses. Having developed our business in Westernmarkets, we see a lot of room for growth by developing
our position in the expanding Asian market.

Kawasaki AR 2000/0824 00.8.31 5:05 PM ページ 5

What is KHI’s financial strategy?
In the short term, we need to return to the black andrepair our balance sheet as a matter of urgency.
However, I see my ultimate mission as senior
management as the creation of enterprise value.
Previously, I was talking about customer satisfaction. In
the same vein, the most important product for me as arepresentative of top management is KHI stock, and thecustomers for that stock are KHI shareholders. So it isvital that we work to raise the satisfaction of thesecustomers by maximizing enterprise value.
Specifically, if we are to survive and thrive over the
coming decades, we must revitalize our operations byselectively investing our finite resources to the maximum
effect. This involves becoming better versed in thethinking that we first introduced last year, when we
started using return on invested capital as a key
management indicator. It is vital that we begin to use ourcapital more efficiently than we have in the past.
It is also crucial that we gain the confidence ofshareholders and investors in how we will generateearnings growth. For this reason, we must increase
disclosure and accountability to shareholders in all
aspects of our business performance, policies andstrategy. This means building trust and boostingtransparency.
Lastly, making a profit for our owners must be aforemost priority. I firmly believe that it is important tosatisfy all our stakeholders. If we maximize enterprise value,then we can achieve objectives in this respect as well.

business, we also derive operational synergy from a
combination of the technological, manufacturing andsales expertise in each business. Finally, the high loyalty,transferability and quality of our employees afford us
great versatility in combining the efforts of our various
divisions.
I believe that these are our fundamental strengths as acompany. Through the policies I am proposing, we cantake full advantage of such assets, by rebuilding ourbusiness model and developing multiple core businesses
to provide stable revenue streams with growth potential.
Once each business is able to operate as a financiallyindependent entity, we will seek to further optimize the
KHI Group management structure throughconsideration of such options as the establishment of
separate companies, an internal company system, or aholding company structure. Regardless of suchmeasures, we will endeavor to retain the aforementioned
synergy-generating features.
My personal management philosophy is based on theconcept of sustainable growth. By reforming ourbusiness and management structures along the lines I
have discussed, and by applying our wholehearted
efforts to the task, I believe we can make this company
prosper again. I hope our shareholders will lend us theirsupport.

Where do you want the KHI Group to be in, say, five
years’ time?
As a comprehensive heavy industries manufacturer, we
benefit from the fact that cyclical variations in theearnings of our various businesses tend to complement
each other. Through our varied product and customer
mix, we can achieve a good balance between the private
and public sectors, and between domestic and overseas
markets. This makes it easier to manage the effects offluctuations in exchange rates, public investment levels,and the state of the domestic economy. As well as
financial synergy between the various parts of the5
KAWASAKI 2000

Kawasaki AR 2000/0824 00.8.31 5:05 PM ページ 6

Fiscal 2000 was the final year of the second three-year stageof KHI’s environmental protection activities plan (EPAP). The
primary focus during the year was to finalize theestablishment and implementation of internal environmental
management systems (EMS).

Concern for the
Aerospace
Environment

Electricity consumption(Thousands of kWhs)
400,000
50

300,000

200,000
40

100,000

Alongside these measures, KHI established the fundamental concepts and policies as a framework
for the company's environmental protection activities. To guide companywide progress on tacklingenvironmental problems, a new Environmental Management Department was created in April 1999,
while the KHI Environmental Charter was formulated in August. By establishing multiple goals inconnection with its environmental protection program and pursuing the achievement of theseobjectives, KHI aims to make its operations more eco-friendly, while also contributing to therealization of a recycling-oriented society that is able to coexist in harmony with the environment.

ENVIRONMENTAL MANAGEMENT SYSTEMS SET-UP
30

0

97

98

99

00

Years ended March 31

Management indicator*
Absolute consumption

Heat consumption(kLs)
50,000

6

40,00030,0005

20,00010,000

4

0

97

98

99

00

Years ended March 31

Management indicator*
Absolute consumption*Management indicator =absolute consumption (emission)
volume/(non-consolidated sales(¥ billion) x10)

6
KAWASAKI 2000

Within the scope of its global operations, KHI strives to be a positive contributor to the process ofprotecting the environment. The company aims not only to solve environmental problems, but also
to help develop a truly eco-friendly and recycling-oriented society. By harmonizing its operations
with the environment, and by developing technology and products that can help protect andpreserve the environment, KHI hopes to contribute to the sustainable development of society. To
realize these aims, KHI has been developing and implementing a range of practical environmental
protection activities since 1994, when the company initiated the first stage of EPAP.
As previously noted, fiscal 2000 marked the final year of the second, three-year stage of EPAP,
which began in April 1997. The principal objective of this stage was to construct EMS based on
ISO14001 standards that would underpin KHI's environmental protection activities, and to gain
ISO14001 certification for them.
The activities undertaken in fiscal 2000 tackled this challenge on a number of fronts.
First, KHI's basic EMS structure was completed during the year.
Under the current EMS, the Corporate Environment Committee promotes the environmental
protection activities for the entire company. The Committee, being chaired by the board director in
charge of KHI's overall environmental protection activities, plans and evaluates EPAP.
At the divisional level, the heads of each division are charged with the responsibility of
implementing the division's environmental protection activities. They chair Divisional Environment
Committees, which formulate divisional activities plans in line with EPAP, and oversee divisional
activities. Each division is taking active measures to reduce the environmental impact of KHI's
activities through reviewing its total business processes as a manufacturer–from R&D through todesign, purchasing, manufacturing, distribution, use and disposal of its products.
Second, three divisions of KHI gained ISO14001 certification during fiscal 2000–namely, the Steel
Structure & Industrial Equipment, the Gas Turbines, and the Consumer Products & Machinery. Thisbrought the total number of KHI divisions that have gained ISO14001 certification to five, out ofthirteen.
Third, in line with the establishment of the company's EMS, the KHI Environmental Charter wasformulated in August 1999. This states the fundamental concept underlying the company's stance on
the environment and outlines basic policies.

Kawasaki AR 2000/0824 00.8.31 5:05 PM ページ 7

ENVIRONMENTAL PROTECTION PERFORMANCE INDICATORS & COSTS
Energy-saving measures are a prime focus of KHI's environmental protection program. The
company has drawn up several numerical energy-saving targets, using energy consumption
per unit of non-consolidated sales as the corresponding management performanceindicator. The performance targets set for fiscal 2000 were 1% reductions in thecorresponding management indicators. However, primarily due to the 6.2% fall in nonconsolidated sales during fiscal 2000 compared with the previous year, actual performanceindicators of electricity, water and heat rose 4.0%, 5.2% and 11.2%, respectively. During
fiscal 2000, absolute consumption of electricity, water and heat recorded decreases of 2.4%
and 1.3%, and an increase of 4.3%, respectively, compared to the previous fiscal year. This
led to a reduction in total energy costs in absolute terms of ¥132 million.
KHI is also working to conserve resources by reducing waste product volume producedby all its operations, and through a variety of companywide recycling programs. During
fiscal 2000, the total amount of waste product volume was reduced by 3,204 tons, or 4.3%, to71,922 tons. At 48,095 tons, the total volume of materials recycled was on a par with theprevious year. The proportion of the waste product volume accounted for by recycling thusrose by 2.2 percentage points, to 66.9%.
KHI is managing its use of chemicals to exercise greater control over their effects on theenvironment. Since 1997, the company has been voluntarily recording the amounts being
handled of 178 separate chemical substances. This is in line with the Pollutant Release &Transfer Register (PRTR) system, which is scheduled to become mandatory following theenactment of Japanese legislation in April 2001. This system governs the release of specified
chemical substances into the environment and any improvements made to the handling ofsuch processes.
In compliance with the PRTR system, each KHI division keeps precise records of theamounts of these 178 chemicals that are purchased, used, discharged, or transferred. The
two chemicals that have the greatest usage in volume terms within the company are xylene
and toluene, which are used in paints and other coatings. In the future, KHI plans to switch
to more eco-friendly paints.
The total cost of KHI's environmental protection measures during fiscal 2000 amounted to¥7,772 million. This figure included environmental R&D costs of ¥6,100 million, calculated on an
accrual base. As a proportion of non-consolidated sales, environmental costs rose 0.05
percentage point to 0.82%.
In November 1999, to improve disclosure of such actions in response to the demands ofsociety, KHI issued its first environmental report. The company also created a special
environmental section within its corporate home page.

Water consumption(Thousands of m3)
8,000

1.0

7,000
6,000
5,000
4,000

0.8

3,000
2,000
1,000

0.6

0

97

98

99

00

Years ended March 31

Management indicator*
Absolute consumption

Carbon dioxide emissions(Tons per carbon)

80,000870,00060,00050,00040,000730,00020,00010,000
6

0

97

98

99

00

Years ended March 31

Management indicator*
Absolute emissions

MAKING BUSINESS MORE ECO-FRIENDLY
Modern society has changed immensely in economic terms, and now is much more highly
focused on environmental concerns. In other words, the era of a society centered on theeconomics of mass production, mass consumption and mass disposal is at an end. In its
place, the focus has shifted to making the most efficient use of resources over the life cycle

7
KAWASAKI 2000

Kawasaki AR 2000/0824 00.8.31 5:05 PM ページ 8

Against this backdrop, KHI has formulated the third
three-year stage of EPAP, which will cover the period
ending in March 2003.

Concern for the
Aerospace
Environment

Waste product volume andreduction rates(Tons)
100,000(%)

80,00010

60,0005

40,0000

20,000

-5

15

-10

0

97

98

99

00

Years ended March 31

Reduction rate
Waste product volume

Recycling volume andrecycling ratio(Tons)
60,000(%)
80

50,00040,00030,00070

20,00010,000

0

60

97

98

99

00

Years ended March 31

Recycling ratio
Recycling volume

8
KAWASAKI 2000

of a product, from production through distribution, consumption and disposal. Within thiscontext, the aim is to make society more oriented towards the recycling of all resources, thereby
reducing the impact of economic activity on the environment. In Japan, legislation was passed
in May 2000 based on this concept.
Against this backdrop, KHI has formulated the third three-year stage of EPAP, which will
cover the period ending in March 2003. Based on the concepts and policies stated in KHI's
Environmental Charter and on the company's EMS, this plan aims to establish an eco-friendlymeans of conducting business throughout the company. Specifically, the plan mandates KHI to
make continuous progress on the following matters.
• Development of environmental protection measures on a companywide basis• Compliance with environmental legislation and regulations• Programs addressing global warming countermeasures• Implementation of green purchasing• Development of eco-friendly products• Implementation of environmental performance evaluations• Fuller disclosure of environmental actions via issuance of reports• Implementation of environmental accounting
Green purchasing is one of the new initiatives in the third stage of KHI's EPAP. The company's
green purchasing program will place environmental concerns alongside such traditionalpurchasing criteria as quality, cost and delivery lead time, with the idea being to give priority tothe procurement of products and materials that reduce environmental impact as much as possible.
In assessing environmental impact, KHI will analyze and select purchased products over their
entire life cycle, from raw material sourcing to final disposal. When suppliers are equivalent in termsof quality, cost and delivery, priority will be given to those that are more eco-friendly. To make such
judgments, KHI will source environmental information on products from all of its suppliers.
In product development, KHI plans to introduce the use of Life Cycle Assessment (LCA)
methodology to help design products that are kinder to the environment. As well as ensuringthat products use and emit smaller quantities of environmental pollutants, conserve resources,
save energy, and make use of sustainable resources, this process will help design products thatcan be used over a long period, and that are made out of recycled, reusable or recyclable
materials. In addition, products will be designed for ease of disposal or ease of processing forrecycling. During fiscal 2001, ahead of the introduction of LCA methodology, KHI aims toestablish product environmental assessment methods.
As part of the third stage of the company's EPAP, KHI also plans to introduce environmental
performance evaluations and environmental accounting. The former will be conducted via
annual internal environmental audits by division. During fiscal 2001, KHI aims to introduce thispractice throughout its operations. The environmental accounting system will be used todetermine the precise costs and effects of environmental protection measures at divisional level.
During fiscal 2001, as a means of identifying existing or potential problems, KHI will conduct a
trial environmental accounting program in designated divisions using guidelines issued by
Japan's Environment Agency.
Along with the environmental report for the whole of KHI, which was first issued in 1999,
from 2000 onwards the company plans to begin issuing divisional reports on the environmental
status of its individual businesses.

Kawasaki AR 2000/0824 00.8.31 5:05 PM ページ 9

Review of Kawasaki Global Operations

Transportation Equipment

AerospaceIndustrial Equipment

Consumer Products

9
KAWASAKI 2000

Kawasaki AR 2000/0824 00.8.31 5:06 PM ページ 10

Transportation
Equipment

Main Products
LNG carriers
LPG carriersContainer ships
VLCCs and othertypes of tankers
Bulk carriers

Sales (Millions of yen)98

213,41899

184,04000

164,942Due to increased overseas revenues, which derived mainly from contracts for U.S.
customers, rolling stock sales rose. However, sales from ships declined, primarily due tothe effects of the strong yen. Total segment sales for fiscal 2000 fell 10.4% to ¥164.9 billion.
Segment operating income was swayed by a number of factors. With most of the losses
on large rolling stock contracts for U.S. customers having been recognized in the previous
fiscal year, rolling stock largely improved in terms of profit performance. However, a slump
in the prices of ships, combined with the strength of the yen, affected the profitability ofships. As a result, the segment registered an operating loss of ¥9.7 billion–though this was a
35.5% improvement on the previous year.
During fiscal 2000, KHI received orders for a total of nine vessels, including asubmarine and seven container ships. However, previous orders for three VLCCs (verylarge crude-oil carriers) were canceled. Combined with a decline in large-scale orders forrolling stock from overseas customers, this resulted in a substantial decrease in the level oforders secured by the segment as a whole compared with the previous year.

Highspeed vessels
Submarines
Maritime applicationequipment

Electric cars(including Shinkansen)
Electric and diesel
locomotives
Passenger coaches
Integrated transit
systems
Monorail cars
Platform screen doors

10
KAWASAKI 2000

KHI’s shipbuilding specialty is the construction of high-value-added and high-speed
vessels. In particular, the company is one of the world's technologically most accomplishedsuppliers of LNG, LPG and other types of gas carriers. During fiscal 2000, KHI delivered atotal of 12 vessels, including two VLCCs, one LNG carrier, one LPG carrier, and asubmarine. However, the global shipbuilding industry still suffers from oversupply. The
resulting intense competition continues to make business conditions harsh for KHI. The
company is responding by focusing on its specialty areas, and by seeking alliances withother firms. In this way, this area of operations will strive to improve international
competitiveness.
In terms of both operational scale and technical expertise–the latter deriving partly from thecompany's wealth of aerospace technology–KHI is Japan's leading rolling stock
manufacturer. As such, it is supplying high-speed Shinkansen bullet trains to Japan Railways(JR) companies, and is participating in a number of development and manufacturing projects
for various types of rolling stock. The company also actively supplies overseas orders.
During fiscal 2000, domestic revenues included the sale of new types of Shinkansen bullet
trains, such as the Hikari Railstar Series 700E to JR West and the Max Series E4 to JR East.
Overseas, the division delivered subway cars for Singapore.
Owing to its efficiency as a mass transportation method and its environmental
advantages, demand for railways continues to rise worldwide–particularly in big cities in
the United States and Asia. By tapping its vast wealth of expertise and experience, and byusing advanced technology, KHI plans to forge ahead as one of the leading global
suppliers of rolling stock.

Kawasaki AR 2000/0824 00.8.31 5:07 PM ページ 11

Reggane LPG Carrier
Ordered by Sonatrach Petroleum Corporation of Algeria, this LPG(liquefied petroleum gas) carrier has an 84,000 m3 capacity. The
vessel's four independent gas storage tanks constructed using
special steel keep the LPG at temperatures as low as -480C. The
ship also features advanced fire-prevention and fire-fighting
facilities.

Max Series E4 Shinkansen Bullet Train
Having produced Max series E4 Shinkansen bullet trains since
their debut in December 1997, KHI delivered a E4 Shinakansenfeaturing the application of new, world-class technology in July
1999. Jointly developed by JR East and KHI, the nose structuresof this new E4 are the first in the world to be constructed fromcarbon fiber-reinforced plastic (CFRP). By fully applying
aerospace technology for compound materials, CFRP enables the
production of a car body which is as strong or even stronger, as
well as lighter and more classically streamlined compared withconventional aluminum models.

Singapore Subway Cars
These cars have been designed to boost capacity on existinglines, and will also be used on the line to Changi Airport inSingapore scheduled to open in 2001. Fitted with wider seats,
they provide increased comfort and safety. The trains
incorporate improved external design features such as a renewed
front view and painted outer panels.

11
KAWASAKI 2000

Kawasaki AR 2000/0824 00.8.31 5:07 PM ページ 12

Sales (Millions of yen)

Aerospace

Main Products
T-4 intermediate jet
trainers
CH-47, OH-1 and BK117
helicopters
Component parts for
B777 and B767
passenger airplanes
MissilesElectronic equipment

98

255,32899

228,61800

219,447

During fiscal 2000, while sales to the Japan Defense Agency (JDA) rose, commercial
aviation sales declined. Total segment sales decreased by 4.0% to ¥219.4 billion. Primarily
due to the appreciation of the yen, segment operating income plunged 41.3% to ¥10.8
billion. With commercial aviation demand declining, orders received by the segment as awhole dipped below the level of the previous year.
KHI ranks among Japan's leading aircraft manufacturers, and is renowned internationallyfor its technological prowess. The company manufactures high-quality products, mainly
aircraft and jet engines, for both the defense and commercial sectors. With regard tocommercial business operations, KHI is a member of joint development and production
programs for the Boeing 767 and 777 passenger airplanes. In the jet engine field, it has
been involved in the V2500 international development and production project. KHI is also
jointly developing and manufacturing aircraft engines with leading world suppliers suchas Rolls-Royce of the U.K. for the RB211/Trent series and Pratt & Whitney of the UnitedStates for the PW4000 series.

Space equipment
Jet engines
Gas turbines

During fiscal 2000, KHI commenced delivery of OH-1 light observation helicopter to JDA.
In the commercial fields, one of the year's highlights was the establishment of a new
business relationship with Embraer of Brazil for a joint development and manufacturingcontract for the ERJ-170, a regional jet aircraft.
Defense programs remain a core revenue source, accompanied by a stable upward trend
related to worldwide demand for commercial aircraft over the medium and long term.
As one of Japan's leading aircraft manufacturers, KHI continues to be competitive
internationally in terms of technology and quality. By capitalizing on such expertise,
and through strengthening its network of alliances with overseas manufacturers, KHI
continues to expand its business base in this segment. With its commercial aviation
operations well positioned to grow, KHI's global aerospace business undoubtedly has abright future.

12
KAWASAKI 2000

Kawasaki AR 2000/0824 00.8.31 5:08 PM ページ 13

OH-1 Helicopter
As prime contractor, KHI started full-scale production of OH-1
light observation helicopter for the JDA back in 1998, with thefirst being delivered in January 2000. Developed andmanufactured entirely in Japan, they will be used for GroundSelf-Defense Force surveillance operations. As well as aerial
reconnaissance, they can also be used for mid-air troop control
and supervision.

BK117 Helicopter
Over 400 Kawasaki BK117 helicopters have been delivered aroundthe world. Of these, 128 have gone to Japanese customers–suchas the Yamaguchi Prefecture fire-prevention unit pictured here.
The BK117 is being widely used by public services in a range ofcivilian applications, from personnel transport to fire-fighting
and police operations. Advanced functionality and meticulous
after-sales support have drawn high praise from many customers.

Regional Jet Aircraft Development with Embraer
In October 1999, KHI concluded a joint development andmanufacturing contract with Brazilian commercial aircraft
manufacturer Embraer for the ERJ-170, a 70-seater regional jet
aircraft. Concerning this project, the company will be responsible
for the development, design and manufacture of major wing
components wherein a high level of technical expertise is required.

13
KAWASAKI 2000

Kawasaki AR 2000/0824 00.8.31 5:08 PM ページ 14

Industrial
Industrial
Equipment

Main Products
Steel making, cement,chemical and otherindustrial plants
Power plants
Municiple refuse
incineration plants
Aero-derived gas
turbine engines fornaval vessels
Bridges

Sales (Millions of yen)98

485,35399

436,03000

417,865

In fiscal 2000, while sales of environmental plants and related products rose, sales
pertaining to KHI's steel structures operations declined, owing to a fall in Japanese publicworks spending. This resulted in a decrease in total segment sales, which fell 4.2% to¥417.9 billion. Margins tumbled in both industrial plant and steel structures operations,producing a segment operating loss of ¥11.3 billion, compared with operating income of¥0.7 billion in the previous year. Overall, orders received fell as a large increase inenvironment-related orders failed to offset a decline in orders for industrial plants andpower plants.
KHI is regarded as a leading engineering expert involving a diverse range of industrial
plant construction projects in Japan and abroad. In particular, the company's proventechnical expertise in steel and cement plant engineering is noted as one of the highest in
the world. Relating to its steel structures business, KHI has participated in theconstruction of a number of bridges and other major infrastructure projects. During theyear, completed projects included a hot strip mill delivered to a Japanese steel maker andthe glass dome of the Osaka Maritime Museum.

LNG and LPG tanks
Shield machines
and tunnel boringmachines
Crushing machinery
Industrial hydraulicequipment
Wheel loaders
Medium-sized gas
turbine generators

Both the industrial plant and steel structures businesses have been adversely affected by aprolonged recession in Japan and a slow recovery in Southeast Asia. Accordingly, KHI iscurrently undertaking measures aimed at accelerating the streamlining of its operations inthese areas. In addition, by shifting resources and focusing on specialist areas and highvalue-added products, the company plans to reinforce earnings, thereby establishing astrong base for future development.
In contrast, environmental plants and related products offer positive, long-term, growthprospects. KHI ranks in the top echelon of Japanese makers of municipal refuse
incineration plants, both in terms of a solid customer base and technical expertise. Fiscal
2000 saw the delivery of a major municipal refuse incineration plant, the Kobe Clean
Center. The company also undertook renovation of a number of existing facilities toeliminate dioxin emissions. KHI continues to develop and improve technologicallyadvanced products that are expected to generate new business.
KHI is one of Japan's leading manufacturers of industrial hydraulic equipment and gas
turbine generators, and is also developing its construction machinery business.
Cooperating with the Consumer Products & Machinery Group, these businesses areenhancing their worldwide sales network to boost sales of such mass-produced
industrial equipment.

14
KAWASAKI 2000

Kawasaki AR 2000/0824 00.8.31 5:09 PM ページ 15

Kobe East Municipal Refuse Incineration Plant
Each of the three incinerators at this plant, known as the Kobe
Clean Center, is capable of processing 300 tons of refuse perday. Fully fitted with anti-dioxin installations, it also features ahighly efficient power generation system that converts any
excess heat produced.

Hot Strip MillKHI designed, developed, constructed and installed this hot
strip mill for Nakayama Steel Works on a full turnkey basis,including all pilot-scale testing and civil engineering work.
Fitted with a blast furnace and all the machines necessary toroll, cut and finish various thicknesses of steel, the mill boasts a
compact design that saves space and energy.

Osaka Maritime Museum DomeThe glass dome of the Osaka Maritime Museum, opened inJuly 2000, is a steel-framed hemisphere 35 meters high with adiameter of 70 meters. Constructed entirely at KHI's Harima
Works, it was assembled from approximately 4,800 individual
sheets of glass and then transported by sea to Osaka city.

15
KAWASAKI 2000

Kawasaki AR 2000/0824 00.8.31 5:09 PM ページ 16

Sales (Millions of yen)Consumer
Products

Main Products
Motorcycles
All-Terrain Vehicles(ATVs)
Jet Ski® personal
watercraft
General-purpose
gasoline engines
Brush cutters

98

259,10799

270,02100

277,176

Sales of motorcycles in the United States and Europe remained robust, and motorcycle
demand in Asia also recovered. Sales of ATVs (All-Terrain Vehicles) and MULE utility
vehicles also rose in the United States. As a result, despite the effects of the strong yen,segment sales rose slightly compared with the previous year, advancing 2.6% to ¥277.2
billion. However, the strength of the yen had a significant impact on profits. Despite higher
earnings at KHI's U.S. subsidiaries, segment operating income fell 39.0% to ¥9.5 billion.
The Kawasaki brand name is widely associated with medium and large super sports bikes,
and other top-of-the-range motorcycles. Other popular consumer products are ATVs and
Jet Ski® watercraft, which KHI was the first firm in the world to commercialize
successfully. These products are made at 16 manufacturing bases, and distributed globally
through a total of over 6,000 dealerships around the world. During fiscal 2000, to extract
greater synergy in manufacturing and sales from this network, industrial robots weretransferred to this segment from the Industrial Equipment segment.

Transmissions
Industrial robots

Demand in the major markets of Europe and North America is projected to demonstrate
healthy growth. Demand should also continue to recover in Asian markets as theireconomies regain previous levels of growth. KHI is developing new Kawasaki brandproducts designed to cater to market trends and user needs. At the same time, KHI isfocusing on building up its development, manufacturing and sales expertise to foster thegrowth of its global business.
Motor sports and marine sports remain the prime focus. Through the development ofprofessional racing factory bikes, KHI uses the resulting stream of technical advances tomake constant improvements to its commercial product range. While building the brandimage, racing also helps to develop an avid fan base.

16
KAWASAKI 2000

Kawasaki AR 2000/0824 00.8.31 5:10 PM ページ 17

Ninja ZX-12R Super Sports Bike
Incorporating KHI's state-of-the-art technology, the ZX-12R sits
at the pinnacle of the Kawasaki super sports bike range.
Featuring the world's first aluminum monocoque frame on amass-production bike, it is powered by a water-cooled, 4-stroke,
4-cylinder, DOHC, 1,199cm3 engine. With a sleek, streamlined
form, it displays a balance of power, handling and high-speed
stability that make it one of the finest motorcycles available.

Japan Superbike ChampionshipIn the 2000 Japan Superbike Championship race series,
Hitoyasu Izutsu competed for Kawasaki on a ZX-7RR. This bikehas a water-cooled, 4-stroke, 4-cylinder, DOHC, 748cm3 engine.

MULE 2510 Diesel
This model is the top of the range of the MULE utility vehicle
series. Fitted with a water-cooled, 4-stroke, 3-cylinder, 953cm3
diesel engine, it was developed and is being manufactured
under an alliance with a Japanese diesel engine maker.

Z-Series Industrial Robots
This series of robots is designed to transport objects weighing
between 130 and 300 kg. Featuring a compact design thatenables them to take up little room, they also boast long reachand wide maneuverability.

17
KAWASAKI 2000

Kawasaki AR 2000/0824 00.8.31 5:10 PM ページ 18

With the economy hit by sluggish consumer spending and a
downturn in capital investment, Japan’s GDP contracted during
the fiscal year ended March 31, 2000 (fiscal 2000).
Aerospace
Financial
Review
OVERVIEWNET INCOME

During the fiscal year ended March 31, 2000 (fiscal 2000), KHI’s
net sales declined for a second consecutive year in the face of apersistent economic downturn in Japan and sluggish growththroughout the rest of Asia. These problems were further
compounded by continued appreciation of the yen. With the
exception of Consumer Products, which was taken out of theTransportation Equipment segment and reclassified as asegment on its own, all of KHI’s business segments posted
decreases in sales revenues. Total consolidated net sales fell
4.4% to ¥1,149.7 billion ($10,831 million).

Total overseas sales fell ¥9.6 billion ($91 million), or 2.0%, to¥461.5 billion ($4,348 million). This accounted for 40.1% of total
sales, compared with a percentage of 39.2% in fiscal 1999. The
breakdown of this sales figure between the four overseas
regions was: North America ¥221.3 billion ($2,085 million),
down 4.3%; Europe ¥94.0 billion ($885 million), up 7.2%; Asia
¥75.1 billion ($707 million), up 5.9%; and Other Areas ¥71.2
billion ($671 million), down 12.6%.

The ratio of the cost of sales to net sales rose 0.9 percentage
point, from 86.9% to 87.8%. The ratio of selling, general andadministrative (SGA) expenses to net sales rose 0.8 percentage
point, from 11.3% to 12.1%. As a result, operating income
plunged 94.2% to ¥1.3 billion ($12 million). The ratio of
operating income to net sales fell 1.7 percentage points, from
1.8% to 0.1%.
Net other income (expenses) was an expense of ¥24.0 billion($226 million), compared with an expense of ¥22.2 billion for fiscal
1999. This amount includes a ¥3.9 billion ($37 million) write-downof marketable securities, investments in securities and others, anda ¥2.7 billion ($26 million) prior-period retirement allowance,
recorded as extraordinary losses. Loss before income taxes andminority interests totaled ¥22.7 billion ($214 million), comparedwith a loss of ¥0.5 billion for fiscal 1999. KHI adopted tax effectaccounting beginning fiscal 1999, by which an amount of ¥9.5
billion ($89 million) was recorded as deferred income taxes forfiscal 2000.The net loss for the year increased from ¥6.1 billion to¥18.6 billion ($176 million). The net loss per share amounted to¥13.4 ($0.13), compared with a loss of ¥4.4 per share in fiscal 1999.

Net sales(Billions of yen)Transportation Equipment

AerospaceIndustrial Equipment

Consumer Products

Sales by segment (Billions of yen)

15

277.2

18.6

22.6

20

164.9

1,149.7

1,297.2

Net income(Billions of yen)
25

70.3

1,202.2

10

219.4

600

5

400

0

200

-5

(18.6)

800

(6.1)

1,000

1,086.2

1,200

1,224.3

1,400

Other

16.5

OVERSEAS SALES

99

00

417.9
-20

0
96

97

18
KAWASAKI 2000

98

99

00

96

97

98

Kawasaki AR 2000/0824 00.8.31 5:10 PM ページ 19

RESULTS BY GEOGRAPHIC AREA
Sales in Japan declined 5.5% to ¥929.1 billion ($8,753 million),while operating income fell from a ¥27.3 billion profit in fiscal
1999 to a loss of ¥4.5 billion ($42 million), because the parent
company was affected by continued appreciation of the yen, apersistent economic downturn in Japan and sluggish growththroughout the rest of Asia.
In North America, boosted by the recovery of a rolling stock
subsidiary, sales rose 3.1% to ¥160.4 billion ($1,511 million).
Following substantial losses on rolling stock contracts posted infiscal 1999, operating income of ¥3.7 billion ($35 million) wasrecorded.
Due primarily to the substantial appreciation of the yen
against the euro, sales in Europe fell 14.5%, to ¥39.6 billion ($373
million). At ¥0.8 billion ($8 million), operating income was down
36.3% compared with the previous year.

Sales in Asia increased sharply to ¥16.3 billion ($154 million), a
26.7% rise due mainly to higher sales of motorcycles. However,
due to the continued affect of the currency crisis, the operating
loss increased from ¥0.9 billion to ¥1.6 billion ($15 million).
At ¥4.3 billion ($40 million), sales in Other Areas were 5.6%
below fiscal 1999. However, operating income was substantiallyhigher, increasing 85.1% to ¥87 million ($819 thousand).

R&D AND CAPITAL EXPENDITURES
Total consolidated R&D expenses during fiscal 2000 rose ¥1.3
billion to ¥19.9 billion ($188 million). This was equivalent to
1.7% of net sales. Capital expenditures on a cash flow basis
during fiscal 2000 totaled ¥37.5 billion ($353 million), a decreaseof 7.2% from fiscal 1999.

CASH FLOWS
A decrease in inventories, combined with an increase inadvances received, more than offset the cash outflow resulting
from the consolidated loss before income taxes and minority

250

5

197.2

188.4

200

150
800

163.0

120

1,200

1,000

127.6

140

161.7

150.8

160

162.1

16.4

180

13.3

10

12.2

15

199.6

1,400

209.0

200

1,206.820

1,204.9

Total shareholders’ equity(Billions of yen)

1,222.9

Total assets(Billions of yen)

1,303.2

Working capital(Billions of yen)

1,252.4

Net income per share
(Yen)

175.0

In view of the situation, management elected not to pay any cash
dividends for fiscal 2000.

100
600

80

-5

60

(13.4)

(4.4)

0

100

400
50

40
200
20

-15
96

97

98

99

00

0

0

0
96

97

98

99

00

96

97

98

99

00

96

97

98

99

00

19
KAWASAKI 2000

Kawasaki AR 2000/0824 00.8.31 5:10 PM ページ 20

Aerospace
Financial
Review

interests of ¥22.7 billion ($214 million). As a result of decreases
in cash paid for interest and cash paid for income taxes, net
cash provided by operating activities rose 39.8% to ¥31.2 billion($294 million). Due mainly to an increase in addition to longterm loans receivable, net cash used for investing activities
increased 7.4% to ¥46.6 billion ($439 million). Proceeds fromlong-term debt, mainly issue of corporate bond, increased
61.0%, or ¥33.5 billion ($315 million) to ¥88.4 billion ($832
million), while repayment of long-term debt was ¥39.7 million($374 million). Cash dividends paid decreased, and decrease in
short-term borrowings was also reduced. As a result of theforegoing, net cash provided by financing activities was ¥39.7
billion ($374 million), an increase of ¥37.4 billion ($352 million).
This resulted in a net increase in cash and cash equivalentsof ¥23.0 billion ($217 million). Combined with an increase in
cash and cash equivalents of ¥4.3 billion ($41 million) arisingfrom newly consolidated subsidiaries, cash and cash
equivalents at the fiscal 2000 year-end amounted to ¥82.2 billion($774 million).

Return on equity
(%)

160

14

100

6

80

4

9.1

8

10.4

125.8

10

12.5

12

143.6

120.7

120

141.9

140

150.3

Total shareholders’ equity per share
(Yen)

2

60

(3.0)

0

40
20

(9.9)

-2
-4
-10

0
96

97

98

20
KAWASAKI 2000

99

00

96

97

98

99

00

FINANCIAL CONDITION
A rise of 55.1%, or ¥30.5 billion ($287 million), in cash on handand in banks, including time deposits with maturities of overthree months in an amount of ¥3.6 billion ($34 million), waspartially offset by a 9.0% fall in inventories. Current assets
decreased to ¥879.4 billion ($8,285 million). Total investments
and long-term loans fell 7.3% to ¥47.3 billion ($445 million). Dueto an amount of ¥9.3 billion ($88 million) being recognized asdeferred tax assets, intangible and other assets rose 70.8% to¥17.0 billion ($160 million). Total assets were largely unchanged,
rising 0.2% to ¥1,206.8 billion ($11,369 million).
Current liabilities decreased 4.4% to ¥691.0 billion ($6,510
million). This was due largely to decreases in trade payables,
short-term borrowings and current portion of long-term debt,
and accrued expenses.
Total long-term liabilities increased 21.0% to ¥334.4 billion($3,150 million), due primarily to a 26.5% increase in long-term
debt, less current portion, which was mainly used for refinancing. As a result, total liabilities increased slightly, rising
2.7% to ¥1,025.4 billion ($9,660 million). However, working
capital increased substantially, rising 16.5% to ¥188.4 billion($1,775 million).
Due to the consolidated net loss of ¥18.6 billion ($176
million), which was the principal factor causing a 26.4% fall in
retained earnings to ¥68.8 billion ($649 million), and following
the payment of cash dividends worth ¥4.2 billion ($39 million),shareholders’ equity dropped 12.4% to ¥175.0 billion ($1,648
million). The shareholders’ equity ratio fell 2.1 percentage
points, from 16.6% to 14.5%.

川重AR2000̲C2&P1&21 00.8.31 4:32 PM ページ 21

Six-Year Summary
Kawasaki Heavy Industries, Ltd. and consolidated subsidiaries
Years ended March 31

Millions of yen

Operating results:
Net sales
Cost of sales
Gross profit
Selling, general and administrative
expenses
Operating income
Net income (loss)

2000

1999

1998

1997

1996

1995

¥ 1,149,698
1,008,860
140,838¥1,202,189
1,045,143
157,046¥1,297,212
1,114,693
182,519¥1,224,259
1,041,697
182,562¥1,086,244
928,126
158,118¥1,070,444
912,432
158,012

139,587
1,251(18,632)

135,380
21,666(6,132)

131,440
51,07918,556

120,351
62,211
22,572

111,362
46,756
16,462

110,41347,59910,21637,51335,081
19,90040,42834,607
18,60042,92832,416
17,80035,13031,245
17,40039,31930,823
17,30033,72930,89917,000¥ 188,403
245,278
1,206,806
264,048
174,955¥ 161,712
244,866
1,204,857
208,763
199,637¥ 162,084
242,435
1,222,906
198,135
209,040¥ 150,759
233,196
1,303,168
197,130
197,161¥ 127,644
231,615
1,252,371
204,801
162,984¥ 106,458
227,173
1,191,664
184,535
152,991

¥

¥

¥

¥

¥

¥

Capital expenditure
Depreciation and amortization
R & D expenses
Financial position at year-end:
Working capital
Net property, plant and equipment
Total assets
Long-term debt, less current portion
Total shareholders’ equity
Per share amounts (yen):
Net income (loss)
Cash dividends
Shareholders’ equity(13.4)
—
125.8

(4.4)
6.0
143.6

13.3
6.0
150.3

16.4
7.0
141.9

12.2
5.5
120.7

7.6
5.0
113.3

Other data:
Number of shares issued (millions)
Number of employees

1,391
29,772

1,391
26,486

1,391
26,102

1,389
24,211

1,350
24,401

1,350
24,266

Non-consolidated data:
Orders received

865,834

950,312

1,007,695

958,477

1,028,903

939,899

21
KAWASAKI 2000

川重AR2000̲P22-39 00.8.31 4:57 PM ページ 22

Consolidated Balance Sheets
Kawasaki Heavy Industries, Ltd. and consolidated subsidiaries
As of March 31, 2000 and 1999

Thousands of
U.S. dollars (Note 1)

Millions of yen

AssetsCurrent assets:
Cash on hand and in banks
Marketable securities (Notes 3 and 5)
Receivables
Trade
Other
Allowance for doubtful receivables

Inventories (Notes 4 and 5)
Deferred tax assets (Note 9)
Other current assets
Total current assets
Investments and long-term loans:
Investments in securities (Notes 3 and 10)
Long-term loans
Other (Note 5)
Allowance for doubtful receivables
Total investments and long-term loans

Property, plant and equipment (Note 5):Land
Buildings
Machinery and equipment
Construction in progress
Accumulated depreciation
Net property, plant and equipment
Intangible and other assets
Deferred tax assets (Note 9)
Intangible and other assets

Foreign currency translation adjustments
Total assets
The accompanying notes to the consolidated financial statements are an integral part of these statements.

22
KAWASAKI 2000

2000¥

85,782
46,021

1999¥

55,30647,785

2000$

808,121433,547

397,616
16,304(3,375)
410,545

403,423
13,173(3,041)
413,555

3,745,794
153,594(31,795)
3,867,593

316,529
4,216
16,345879,438

347,765
5,507
14,481
884,399

2,981,902
39,717
153,9818,284,861

32,136
8,716
13,734(7,327)47,25938,967
1,784
13,264(3,009)51,006

302,742
82,110129,383(69,025)445,21050,822
244,103443,876
5,829
744,630(499,352)
245,278

50,070238,406
429,758
5,115
723,349(478,483)
244,866

478,775
2,299,604
4,181,592
54,9137,014,884(4,704,211)
2,310,673

9,315
7,676
16,991

2,956
6,989
9,945

87,75372,313160,066

17,840¥ 1,206,806

14,641¥ 1,204,857

168,064$11,368,874

川重AR2000̲P22-39 00.8.31 4:57 PM ページ 23

Thousands of
U.S. dollars (Note 1)

Millions of yen

Liabilities and shareholders’ equity
Current liabilities:
Short-term borrowings and current portion of long-term debt (Note 5)
Trade payables
Advances from customers
Accrued income taxes (Note 9)
Accrued expenses
Provision for product warranty
Deferred tax liabilities (Note 9)
Other current liabilities
Total current liabilities

Long-term liabilities:
Long-term debt, less current portion (Note 5)
Retirement and severance benefits
Deferred tax liabilities (Note 9)
Other
Total long-term liabilities

2000

1999

2000

222,302
310,557
86,012
2,441
19,5491,648
515
48,011
691,035¥ 238,265
321,830
81,4093,424
21,375
1,386
5,162
49,836722,687$ 2,094,225
2,925,643
810,287
22,996
184,164
15,525
4,852
452,294
6,509,986

264,048
58,332
2,705
9,313
334,398

208,763
54,024
2,573
10,894276,2542,487,499
549,524
25,48387,7343,150,240

6,418

6,279

60,461

81,427
24,682
68,846
174,955¥ 1,206,806

81,427
24,682
93,528
199,637¥ 1,204,857

767,094
232,520
648,573
1,648,187$11,368,874¥

Contingent liabilities (Note 11)

Minority interests

Shareholders’ equity (Note 6):
Common stock of ¥50 par value :Authorized - 3,360,000,000 shares
Issued - 1,390,595,964 shares
Capital surplus
Retained earnings
Total shareholders’ equity
Total liabilities and shareholders’ equity

23
KAWASAKI 2000

川重AR2000̲P22-39 00.8.31 4:57 PM ページ 24

Consolidated Statements of Operations
Kawasaki Heavy Industries, Ltd. and consolidated subsidiaries
For the three years ended March 31, 2000, 1999 and 1998

Thousands of
U.S. dollars (Note 1)

Millions of yen

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Other income (expenses):
Interest and dividend income
Equity in income (loss) of unconsolidated
subsidiaries and affiliates
Interest expense
Other, net (Note 8)
Income (loss) before income taxes and minority
interests
Income taxes (Note 9)
Current
Deferred
Minority interests in net (income)loss of consolidated subsidiaries
Net income (loss)

2000¥ 1,149,698
1,008,860
140,838
139,587
1,251

1999¥ 1,202,189
1,045,143
157,046
135,380
21,6661998¥ 1,297,212
1,114,693
182,519
131,440
51,0792000$10,830,881
9,504,098
1,326,783
1,314,998
11,785

4,274

5,495

5,122

40,264(654)(11,782)(15,819)683(12,646)(15,723)1,236(11,907)(3,815)(6,161)(110,994)(149,025)(22,730)(525)

41,715(214,131)(5,899)9,466(9,358)
2,943(22,618)—(55,572)
89,176531(18,632)808(6,132)(541)
18,556

5,002$ (175,525)

¥

¥

¥

Yen

Per share amounts (Note 2 (v)):
Net income (loss)
Net income - diluted
Cash dividends¥(13.4)——

The accompanying notes to the consolidated financial statements are an integral part of these statements.

24
KAWASAKI 2000

¥ (4.4)—
6.0

U.S. dollars (Note 1)¥ 13.312.0
6.0$(0.13)——

川重AR2000̲P22-39 00.8.31 4:57 PM ページ 25

Consolidated Statements of Shareholders’ Equity
Kawasaki Heavy Industries, Ltd. and consolidated subsidiaries
For the three years ended March 31, 2000, 1999 and 1998

Balance at March 31, 1997
Net income for the year
Adjustment for changes of interests in consolidated subsidiaries
Increase in retained earnings arising fromnewly consolidated subsidiaries
Decrease in retained earnings arising from affiliates
newly accounted for by the equity method
Cash dividends
Bonuses to directors and statutory auditors
Conversion of convertible bonds
Balance at March 31, 1998
Net loss for the year
Cumulative effect of adopting tax effect accounting
Increase in retained earnings arising from affiliates
newly accounted for by the equity method
Merger of unconsolidated subsidiaries with consolidated subsidiary
Adjustment for changes of interests in affiliates accounted forby the equity method
Cash dividends
Bonuses to directors and statutory auditors
Balance at March 31, 1999
Net loss for the year
Increase in retained earnings arising fromnewly consolidated subsidiaries
Increase in retained earnings arising from affiliates
newly accounted for by the equity method
Decrease due to companies ceasing to be an affiliate accounted forby the equity method
Decrease due to merger of unconsolidated subsidiaries
with consolidated subsidiary
Adjustment for changes of interests in affiliates accounted forby the equity method
Cash dividends
Bonuses to directors and statutory auditors
Balance at March 31, 2000

Thousands
Number ofshares ofcommon stock

Millions of yen
Commonstock

CapitalsurplusRetainedearnings

1,389,123——¥ 81,088——¥ 24,345——¥ 91,728
18,556
23

—

—

—

2,727

—
—
—
1,473
1,390,596
—
—

—
—
—
339
81,427
—
—

—
—
—
337
24,682——(83)(9,728)(292)—
102,931(6,132)
5,652

—
—

—
—

—
—

65
24

—
—
—
1,390,596————
81,427————
24,682—(406)(8,344)(262)
93,528(18,632)

—

—

—

2,677

—

—

—

34

—

—

—

(3,996)

—

—

—

(357)

—
—
—
1,390,596———¥ 81,427———¥ 24,682(64)(4,172)(172)¥ 68,846

Thousands of U.S. dollars (Note 1)

Balance at March 31, 1999
Net loss for the year
Increase in retained earnings arising fromnewly consolidated subsidiaries
Increase in retained earnings arising from affiliates
newly accounted for by the equity method
Decrease due to companies ceasing to be an affiliate accounted forby the equity method
Decrease due to merger of unconsolidated subsidiaries
with consolidated subsidiary
Adjustment for changes of interests in affiliates accounted forby the equity method
Cash dividends
Bonuses to directors and statutory auditors
Balance at March 31, 2000
The accompanying notes to the consolidated financial statements are an integral part of these statements.

$ 767,094—$ 232,520—$ 881,093(175,525)——

25,219

—

—

320

—

—

(37,645)——(3,363)———$ 767,094———$ 232,520(603)(39,303)(1,620)$ 648,573

25
KAWASAKI 2000

川重AR2000̲P22-39 00.8.31 4:57 PM ページ 26

Consolidated Statements of Cash Flows
Kawasaki Heavy Industries, Ltd. and consolidated subsidiaries
For the years ended March 31, 2000 and 1999

Thousands of
U.S. dollars (Note 1)

Millions of yen

2000
Cash flows from operating activities:
Loss before income taxes and minority interests
Adjustments to reconcile loss before income taxes and minority interests
to net cash provided by operating activities:
Depreciation and amortization
Provision for retirement and severance benefits
Accrued bonuses
Loss on disposal of property, plant and equipment
Provision for (reversal of) estimated loss on uncompleted contract
Write-downs of securities and others
Provision for allowance for doubtful accounts
Interest and dividend income
Interest expense
Changes in assets and liabilities:
Decrease (increase) in
Trade receivables
Inventories
Other current assets
Increase (decrease) in
Trade payables
Advances received
Other current liabilities
Other, net
Sub total
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:
Acquisition of property, plant and equipment
Additions to long-term loans receivable
Other
Net cash used for investing activities
Cash flows from financing activities:
Proceeds from long-term debt
Repayment of long-term debt
Cash dividends paid
Cash dividends paid to minority interests
Decrease in short-term borrowings
Net cash provided by financing activities
Effect of exchange rate changes
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Increase in cash and cash equivalents arising fromnewly consolidated subsidiaries
Cash and cash equivalents at end of year
Supplemental information on cash flows:
Cash and cash equivalents
Cash on hand and in banks in the balance sheet
Time deposits with maturities over three months
Total
The accompanying notes to the consolidated financial statements are an integral part of these statements.

26
KAWASAKI 2000

¥

¥

¥
¥

(22,730)

1999
(525)

$ (214,131)

35,081
3,479(3,419)1,317(4,111)
3,031
4,765(4,274)
11,782

34,607
1,842
186
1,382
5,784
—
876
(5,495)
12,646

330,485
32,774(32,209)12,407(38,728)
28,55444,889(40,264)
110,994

3,583
21,447(5,615)

6,985
3,471
1,258

33,754
202,044(52,897)(2,911)
5,972
38
(432)
47,003
4,122(11,270)(8,623)
31,232(5,346)(16,294)
2,552
1,417
45,346
6,562(12,380)(17,181)
22,347(27,423)
56,260359(4,070)442,798
38,832(106,171)(81,234)
294,225(37,513)(5,866)(3,200)(46,579)(40,428)(406)(2,546)(43,380)(353,396)(55,261)(30,146)(438,803)

88,368(39,719)(4,203)(64)(4,643)39,739(1,408)22,98454,83754,894(37,681)(8,310)(62)(6,514)
2,327(946)(19,652)
74,489832,482(374,178)(39,595)(603)(43,740)
374,366(13,264)
216,524
516,599

4,339
82,16085,782(3,622)82,160

¥

2000

¥

¥
¥

—
54,83755,306(469)
54,837$$$40,876
773,999

808,121(34,122)773,999

川重AR2000̲P22-39 00.8.31 4:57 PM ページ 27

Notes to the Consolidated Financial Statements

1. Basis of presenting consolidated financial statements
Kawasaki Heavy Industries, Ltd. (the “Company”) and its consolidated domestic subsidiaries maintain their accounts and recordsin accordance with the provisions set forth in the JapaneseCommercial Code and the Securities and Exchange Law and in conformity with accounting principles and practices generally
accepted in Japan, which are different from the accounting anddisclosure requirements of International Accounting Standards.
The accounts of overseas consolidated subsidiaries are based on theiraccounting records maintained in conformity with generally
accepted accounting principles and practices prevailing in therespective countries of domicile.
The accompanying consolidated financial statements are atranslation of the audited consolidated financial statements of theCompany which were prepared in accordance with accounting
principles and practices generally accepted in Japan from theaccounts and records maintained by the Company and its consolidated subsidiaries and were filed with the Minister of Finance(“MOF”) as required by the Securities and Exchange Law.
In preparing the accompanying consolidated financial statements,
certain reclassifications have been made in the consolidated financial statements issued domestically in order to present them in a form
which is more familiar to readers outside Japan. The consolidated
cash flow statement for 1999 has been prepared for the purpose ofinclusion in the consolidated financial statements, although such statement was not customarily prepared in Japan and not required to be
filed with MOF prior to 2000.
The translation of the Japanese yen amounts into U.S. dollars areincluded solely for the convenience of the reader, using the prevailingexchange rate at March 31, 2000, which was ¥106.15 to U.S. $1.00.
The convenience translations should not be construed as representations that the Japanese yen amounts have been, could have been,or could in the future be, converted into U.S. dollars at this or any
other rate of exchange.

2. Significant accounting policies(a) Consolidation
The Company prepared the consolidated financial statements for theyear ended March 31, 2000 in accordance with the revised
Accounting Principles for Consolidated Financial Statements (the“Revised Accounting Principles”) effective from the year ended March
31, 2000.
The accompanying consolidated financial statements include theaccounts of the Company and significant companies, over which theCompany has power of control through majority voting right or existence of certain conditions evidencing control by the Company.
Investments in non-consolidated subsidiaries and affiliates, over which
the Company has the ability to exercise significant influence over operating and financial policies of the investees, are accounted for on theequity method. The effect of adopting the Revised Accounting
Principles is immaterial.
The consolidated financial statements include the accounts of theCompany and 112 (65 in 1999 and 62 in 1998) subsidiaries.
For the years ended March 31, 2000, 1999 and 1998, respectively,
4, 58 and 59 subsidiaries are excluded from the consolidation. The
amounts of total assets, net sales, net income and retained earningsof these excluded subsidiaries, in the aggregate, would not have had
a material effect on the consolidated financial statements.
(b) Application of the equity method of accounting
For the year ended March 31, 2000, 20 (12 in 1999 and 1998) affiliates are accounted for by the equity method.
For the years ended March 31, 2000, 1999 and 1998, investments
in 4, 58 and 59 unconsolidated subsidiaries and 14, 22 and 23 affili-ates, respectively, are stated at cost without applying the equity
method of accounting. If the equity method had been applied for theseinvestments, the amounts of net income and retained earnings of theseexcluded subsidiaries and affiliates would not have had a material
effect on the consolidated financial statements.
(c) Consolidated subsidiaries’ fiscal year-ends
Fiscal year-ends of 29 (20 in 1999 and 17 in 1998) consolidated
subsidiaries end on December 31. The Company consolidates such
subsidiaries’ financial statements as of each subsidiary’s latest yearend. Unusual significant transactions for the period between eachsubsidiary’s year-end and the Company’s year-end are adjusted
on consolidation.
(d) Elimination of inter-company transactions and accounts
All significant inter-company transactions and accounts and unrealized inter-company profits are eliminated on consolidation, and the
portion thereof attributable to minority interests is credited tominority interests.
In the elimination of investments in subsidiaries, the assets andliabilities of the subsidiaries, including the portion attributable tominority shareholders, are evaluated using the fair value at the time
the Company acquired control of the respective subsidiaries.
When the excess of equity in net assets over the cost of an investment is considered significant, it is amortized to income by the straightline method over five years. Otherwise, it is credited directly toretained earnings in the year of acquisition or the year newly
included in consolidation.

27
KAWASAKI 2000

川重AR2000̲P22-39 00.8.31 4:57 PM ページ 28(e) Translation of foreign currency statements
The financial statements of the overseas consolidated subsidiaries aretranslated into yen as stated below, in accordance with a regulation
issued by the Financial Accounting Deliberation Council.
(1) Assets and liabilities are translated at the fiscal year-end
exchange rates.
(2) Share capital accounts and retained earnings are translated athistorical rates.
(3) Revenue and expense accounts are translated at average rates
prevailing during the fiscal year.
Differences arising from the application of the process stated above
are shown as foreign currency translation adjustments in theaccompanying consolidated balance sheet.
(f) Appropriations of retained earnings
Appropriations of retained earnings are recorded in the fiscal year
when the proposed appropriations are approved.
(g) Revenue recognition
Sales are principally recognized at the time of completion of thecontracts. However, the percentage-of-completion method isapplied to long-term contracts exceeding ¥5,000 million.
(h) Consolidated statements of cash flows
In accordance with the “Standards for Preparation of Consolidated
Cash Flow Statement, etc.” (the “New Standards”), effective from theyear ended March 31, 2000, the Company is required to prepare
consolidated cash flow statements. The 1999 consolidated cash flow
statement, which was prepared for readers outside Japan althoughsuch statement was not required, has been restated to conform to the2000 presentation.
(i) Cash and cash equivalents
In preparing the consolidated statements of cash flows, cash on hand,readily-available deposits and short-term highly liquid investments with maturities of not exceeding three months at the time ofpurchase are considered to be cash and cash equivalents.
(j) Allowance for doubtful receivables
Possible losses from notes and accounts receivable, loans and otherreceivables are provided for based on relevant income tax laws andthe Companies’ estimates of losses on collection.
(k) Inventories
Inventories are stated at cost, as determined principally by the specific identification cost method, the first-in, first-out method or themoving-average method.
(l) Marketable securities
Marketable securities are stated principally at cost, as determined by
the moving-average method. When significant impairment of value
has been deemed permanent, cost has been appropriately reduced.

28
KAWASAKI 2000(m) Investments in securities
Investments in securities are stated at cost, as determined by the moving-average method, except for those accounted for by the equity
method as explained in Note 2 (b). When significant impairment ofvalue has been deemed permanent, cost has been appropriately
reduced.
(n) Property, plant and equipment
Property, plant and equipment are stated at cost. Depreciation is computed principally by the declining-balance method over estimateduseful lives.
(o) Intangible assets
Amortization of intangible assets is computed by the straight-line
method.
(p) Provision for product warranty
Expected future product warranty costs are provided for ships andconsumer products.
(q) Bond issue expenses
Bond issue expenses are charged to income as incurred.
(r) Foreign currency translation
Foreign currency accounts of the Company and its domestic
subsidiaries are translated into yen as stated below, in accordancewith a regulation issued by the Financial Accounting Deliberation
Council.
(1) Foreign currencies and short-term monetary accounts are translated at the rates of exchange prevailing at the balance sheet date.
The resulting translation gain or loss is included in the determination of net income for the year.
(2) Long-term monetary accounts and non-monetary accounts aretranslated at historical exchange rates prevailing at the time oftransactions.
(3) Monetary accounts which are hedged by forward exchange contracts are translated into yen at the contracted rates of exchange.
If long-term monetary items were translated at exchange rates
in effect at March 31, 2000, net translation losses of ¥131 million ($1,234
thousand) would have been recorded.
(s) Income taxes
Income taxes were principally provided for based on taxable
income for the period, determined in accordance with applicable tax
laws, for the year ended March 31, 1998. Effective April 1, 1998, theCompany adopted the new accounting standard, which recognizes
tax effects of temporary differences between the carrying amountsof assets and liabilities for tax and financial reporting.
Under the new accounting standard, the asset and liability
approach is used to recognize deferred tax assets and liabilities forthe expected future tax consequences of temporary differences
between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes.

川重AR2000̲P22-39 00.8.31 4:57 PM ページ 29

The amount of deferred income taxes attributable to the net tax
effects of the temporary differences at April 1, 1998 is reflected as an
adjustment to the retained earnings brought forward from the previous year. Prior year’s financial statements have not been restated.
The cumulative effect of adopting the new accounting standard is¥5,652 million and the effect for the year ended March 31, 1999 was
to decrease net loss by ¥2,741 million.
(t) Retirement and severance benefits
Employees who terminate their services with the Company and its
domestic consolidated subsidiaries are generally entitled to lumpsum payments, the amounts of which are determined by reference
to their current basic rates of pay and length of service. The
Company and its domestic consolidated subsidiaries provide for 40
percent of the amount which would be required to be paid if alleligible employees voluntarily terminated their services at thebalance sheet date. For the year ended March 31, 2000, certain
domestic consolidated subsidiaries changed the percentage from 40
percent to 100 percent. As a result of this change, the loss before
income taxes and minority interests was increased by ¥2,745 million($25,860 thousand).
Employees of the Company’s overseas consolidated subsidiaries are generally covered by various pension plans, accounted
for in accordance with generally accepted accounting principles in
the country of incorporation. In addition, the Company and someof its domestic consolidated subsidiaries provide for retirement andseverance benefits for directors and statutory auditors principallyat 50 percent of the amount required if they retired at the balance
sheet date.
(u) Finance leases
For the Company and its domestic consolidated subsidiaries,
finance leases which do not transfer ownership and do not have bargain purchase provisions are accounted for in the same manner as
operating leases in accordance with generally accepted accounting
principles in Japan.
(v) Per share amounts of net income (loss) and cash dividends
The computations of per share amounts of net income (loss) shownin the consolidated statements of operations are based upon theweighted average number of issued shares outstanding during eachperiod. Diluted income per share, is computed based on theassumption that all dilutive convertible bonds were converted at the
beginning of the year.
Per share amounts of cash dividends for each period represent
dividends declared as applicable to the respective year.
(w) Reclassifications
Certain prior year amounts have been reclassified to conform to 2000
presentation. These changes had no impact on previously reported
results of operations or shareholders’ equity.

3. Market value information for securities
Market values, book values and unrealized gains of quoted securities as of March 31, 2000 is as follows:

Market values:
Marketable securities
Investments in securities:
Subsidiaries and affiliates
Other
Book values:
Marketable securities
Investments in securities:
Subsidiaries and affiliates
Other
Unrealized gains

Millions of yen

Thousands of
U.S. dollars¥ 77,611$ 731,145

4,770
136
82,51744,936
1,281
777,362¥ 45,867$ 432,096

8,134
104
54,105¥ 28,412

76,627980
509,703$ 267,659

29
KAWASAKI 2000

川重AR2000̲P22-39 00.8.31 4:57 PM ページ 30

4. Inventories
Inventories as of March 31, 2000 and 1999 are comprised as follows:

Millions of yen

Finished products
Work in process
Raw materials and supplies
Total

2000
¥ 44,006
235,050
37,473¥ 316,529

1999¥ 37,950
268,027
41,788¥ 347,765

Thousands of
U.S. dollars

2000$ 414,564
2,214,319
353,019$ 2,981,902

5. Short-term borrowings and long-term debt
Short-term borrowings and long-term debt as of March 31, 2000 and 1999 are comprised as follows:

Millions of yen

Short-term borrowings:
Short-term debt, principally bank loans and commercial paper
Current portion of long-term debt
Total short-term debt
Long-term debt:
Loans from banks and other financial institutions, partly secured by mortgage
or other collateral, due from 2000 to 2034, bearing interest ranging
from 0.57 percent to 7.9 percent and from 0.694 percent to 7.5 percent
as of March 31, 2000 and 1999, respectively
2.10~6.15 percent notes due 1999
2.50 percent notes due 2000
2.55 percent notes due 2001
1.00 percent notes due 2002
1.05~2.00 percent notes due 2003
1.94 percent notes due 2004
1.67 percent notes due 2005
1.87 percent notes due 2006
2.51~2.775 percent notes due 2008
2.33 percent notes due 2009
0.80 percent convertible bonds due 2001
0.65~0.90 percent convertible bonds due 2003
0.75 percent convertible bonds due 2005
1.10 percent convertible bonds due 2006
0.90 percent convertible bonds due 2008
1.00 percent convertible bonds due 2011
Less portion due within one year
Total long-term debt

Thousands of
U.S. dollars

2000

1999

2000

¥ 187,211
35,091¥ 222,302¥ 198,093
40,172¥ 238,265$ 1,763,646
330,579$ 2,094,225¥ 108,242—
10,00010,00010,00020,00020,00010,00010,00020,00010,0008,573
19,0799,609
17,1188,926
7,592
299,139(35,091)¥ 264,048¥ 82,601
25,00010,00010,000—10,00020,000——20,000—8,573
19,0799,609
17,1188,977
7,978
248,935(40,172)¥ 208,763$ 1,019,708—
94,206
94,206
94,206
188,413
188,413
94,206
94,206
188,413
94,20680,763
179,736
90,523
161,262
84,08971,5222,818,078(330,579)$ 2,487,499

The convertible bonds due 2001 through 2011 as of March 31, 2000 were convertible into 136,908,609 shares of common stock at the optionof the holders at prices of ¥459 ($4.32) or ¥598 ($5.63) per share. The conversion prices are subject to adjustments under specified conditions.

30
KAWASAKI 2000

川重AR2000̲P22-39 00.8.31 4:57 PM ページ 31

As of March 31, 2000 and 1999, the following assets were pledged as collateral for short-term borrowing and long-term debt:
Thousands of
U.S. dollars

Millions of yen

2000
¥
177
6,144
—
6,247
6,635
491
233
¥ 19,927

Marketable securities
Inventories
Property, plant and equipment (at net book value)
Land
Buildings
Machinery and equipment
Other
Total

1999
¥
180
5,091
11,517———63¥ 16,851

2000
$
1,667
57,880—58,85162,506
4,626
2,195$ 187,725

As of March 31, 2000, debt secured by the above pledged assets was as follows:

Millions of yen

Trade payables
Short-term and long-term debt
Total

Thousands of
U.S. dollars¥

97
18,940¥ 19,037$

914
178,427$179,341

The aggregate annual maturities of long-term debt as of March 31, 2000, are as follows:Year ending March 31,

Millions of yen

2001
2002
2003
2004
2005 and thereafter
Total¥ 35,091
33,38632,471
44,688
153,503¥299,139

Thousands of
U.S. dollars$

330,579
314,517305,898
420,989
1,446,095$ 2,818,078

6. Shareholders' equity(a) Capital surplus
The Commercial Code of Japan provides that the entire issue priceof new shares must be credited to common stock, provided that,by resolution of the Board of Directors, up to one-half of such issue
price may be credited to capital surplus so long as the common stock
is equal to at least the aggregate par value of the shares issued.
(b) Dividends
The maximum amount that the Company can distribute as dividends
is calculated based on the unconsolidated financial statements of theCompany in accordance with the Commercial Code of Japan.

(c) Restrictions on dividends
Under the terms of indentures for certain notes and convertible bonds
due through 2006, cumulative cash dividend payments by theCompany are not to exceed an amount equivalent to accumulated
net income of the Company earned during the years suchsecurities are outstanding plus ¥10,000 million (for certain indentures¥10,100 million).

7.Research and development expenses
For the year ended of March 31, 2000, Research and development expenses was ¥19,905 million ($187,518 thousand).

31
KAWASAKI 2000

川重AR2000̲P22-39 00.8.31 4:57 PM ページ 32

8. Other income (expenses) : other, net
Other income (expenses) : other, net in the consolidated statements of operations is comprised as follows:
Thousands of
U.S. dollars

Millions of yen

Loss on disposal of property, plant and equipment
Gain (loss) on sales of marketable securities and investments in securities
Foreign exchange loss, net
Gain on cancellation of the shipbuilding contracts
Write down of marketable securities, investments in securities and others
Prior-period retirement allowance
Other, net
Total

2000
¥ (1,317)
266(7,774)
2,053(3,917)(2,744)(2,386)¥ (15,819)

1999¥ (1,382)(1,077)(11,411)———(1,853)¥(15,723)

1998
(993)
799
(1,654)———(1,967)¥ (3,815)¥2000$ (12,407)
2,506(73,236)
19,341(36,901)(25,850)(22,478)$ (149,025)

9. Income taxes
Income taxes in Japan applicable to the Company and its domestic consolidated subsidiaries consist of corporation tax (national tax) andenterprise tax and inhabitants taxes (local taxes) which, in the aggregate, result in normal statutory tax rates of approximately 41.9 percent
for the year ended March 31, 2000 and 47.5 percent for the prior year.
Significant components of deferred tax assets and liabilities as of March 31, 2000 and 1999 are as follows:
Thousands of
U.S. dollars

Millions of yen

2000
Deferred tax assets
Excess bonuses accrued
Retirement benefits
Estimated loss on uncompleted contracts
Allowance for doubtful receivables
Fixed assets - intercompany profits
Depreciation
Net operating loss carryforwards
Other
Gross deferred tax assets
Less - Valuation allowance
Total deferred tax assets
Deferred tax liabilities
Deferral of gain on sale of fixed assets
Unrealized gain on uncompleted contracts
Other
Total deferred tax liabilities
Net deferred tax assets

¥

2,085
5,872
1,653
2,868
1,046
999
4,844
6,499
25,866(7,702)
18,164

1999
¥

1,997
1,430
4,426
7,853
¥ 10,311

1,471
2,684
3,692
732
1,127
250
3,262
8,798
22,016(7,193)
14,823

2000
$

2,028
7,565
4,502
14,095¥728

19,64255,31815,57227,0189,854
9,411
45,634
61,225
243,674(72,558)
171,116

18,813
13,472
41,69673,981$

97,135

10. Investments in unconsolidated subsidiaries and affiliates
Investments in unconsolidated subsidiaries and affiliates as of March 31, 2000 and 1999 are as follows:

Millions of yen

Investments in securities

32
KAWASAKI 2000

2000
¥ 23,102

1999¥ 24,570

Thousands of
U.S. dollars

2000$ 217,635

川重AR2000̲P22-39 00.8.31 4:57 PM ページ 33

11. Contingent liabilities
Contingent liabilities as of March 31, 2000 and 1999 are as follows:
Thousands of
U.S. dollars

Millions of yen

As drawer of trade notes discounted
As endorser of trade notes
As guarantor of indebtedness of employees, unconsolidated subsidiaries
and affiliates, and others

¥

2000
355
36

¥

40,642

1999
721
60

2000
3,344
339

$

46,647

382,873

12. Finance leases
Finance lease information, as required to be disclosed in Japan, for the respective years is as follows:(a) As lessee
The original cost of leased assets under non-capitalized finance leases and accumulated depreciation, assuming it is calculated on the straightline method over lease terms, as of March 31, 2000 and 1999 are as follows:
Thousands of
U.S. dollars

Millions of yen

Property, plant and equipment
Accumulated depreciation

Intangible assets
Accumulated amortization

2000¥ 13,793(6,816)¥ 6,977

1999¥ 13,582(6,309)¥ 7,2732000$ 129,939(64,211)$ 65,728

¥

¥

$

¥

379
(261)
118

¥

438
(240)
198

3,571
(2,459)1,112$

The present values of future minimum lease payments under non-capitalized finance leases as of March 31, 2000 and 1999 are as follows:
Thousands of
U.S. dollars

Millions of yen

2000¥ 2,556
4,715¥ 7,271

Current portion
Non-current portion
Total

1999
¥ 2,654
5,006¥ 7,660

2000$ 24,079
44,418$ 68,497

Lease payments and “as if capitalized” depreciation and amortization and interest expense for non-capitalized finance leases are as follows:
Thousands of
U.S. dollars

Millions of yen

Lease payments
Depreciation and amortization
Interest

¥

2000
3,076
2,862
230

1999
¥ 3,094
3,058
277

1998
¥ 3,419
N/A
N/A

$

2000
28,97826,9622,167(b) As lessor
The original cost of leased assets under finance leases and accumulated depreciation, as of March 31, 2000 and 1999 are as follows:

Millions of yen

Property, plant and equipment
Accumulated depreciation

2000
1,295
(714)
¥
581

¥

1999
2,069
(1,025)¥ 1,044¥

Thousands of
U.S. dollars

2000
12,200(6,726)
$
5,474

$

33
KAWASAKI 2000

川重AR2000̲P22-39 00.8.31 4:57 PM ページ 34

The present values of future minimum lease payments to be received under finance leases as of March 31, 2000 and 1999 are as follows:
Thousands of
U.S. dollars

Millions of yen

2000
¥
173
489
¥
662

Current portion
Non-current portion
Total

1999
¥
288
811
¥ 1,099

2000
$
1,630
4,607
$
6,237

Lease payments received, depreciation and amortization and interest on finance leases are as follows:
Thousands of
U.S. dollars

Millions of yen

Lease payments received
Depreciation and amortization
Interest

¥

2000
218
147
38

¥

1999
325
276
50

¥

1998
334
N/A
N/A

$

2000
2,054
1,385
358

13. Operating leases
The present values of future minimum lease payments under operating leases as of March 31, 2000 and 1999 are as follows:

Millions of yen

Current portion
Non-current portion
Total

2000
¥
50
178
¥
228

1999
¥
302
517
¥
819

Thousands of
U.S. dollars

2000
$
471
1,677
$
2,148

14. Derivative transactions
Since the Company and its consolidated subsidiaries operateinternationally and have a substantial volume of export and importtransactions, it enters into foreign currency exchange and option transactions in order to manage risk of fluctuations in exchange rates inrelation to foreign currency denominated assets and liabilities.
The Company and its consolidated subsidiaries also enter into
interest swap and option transactions to hedge against futurefluctuations in interest rates on borrowings, primarily to fix, cap or
collar interest rates on variable rate debt.
The Company and its consolidated subsidiaries's purpose forpurchasing derivatives is to hedge against risks of fluctuations in

34
KAWASAKI 2000

currency exchange rates and interest rates rather to than be exposed
to such risks through dealing or speculation. In order to minimize
credit risk, the Company and its consolidated subsidiaries use only
highly-rated international financial institutions as counterparty toderivative transactions.
The Company and its consolidated subsidiaries have establishedpolicies that restrict the use of derivative instruments, including
limits as to the purpose, nature, type and amount, and that require
reporting and review in order to control the use of derivatives andmanage risk.

川重AR2000̲P22-39 00.8.31 4:57 PM ページ 35

Outstanding positions and unrealized gains and losses at March 31, 2000 are as follows:

Millions of yen

Thousands of
U.S. dollars

2000

2000

Contract
AmountCurrency related contracts:
Foreign exchange contracts
Sell
U.S. dollars
Other currencies
Purchase German Marks
U.S. dollars
PoundsEuro
Other currencies
Option contracts
Sell options
Call U.S. dollars
Purchase options
Put
U.S. dollars
TotalInterest rate related contracts:
Option contracts
Collarpurchase
Swap contracts
Receive fixed for variable rates
Receive variable for fixed rates
Total

¥

¥

291
240
640
570
515
423
1,003

Unrealized
Gain (loss)

Unrealized
Gain (loss)

¥

$

8
3
(66)
9
13
(10)
(101)

76
28
(622)
85
122
(94)
(951)

6,635

59

556

6,300
¥

(39)
(124)

$

(368)
(1,168)

¥

(8)

$

(75)

¥

—
(977)
(985)

$

—
(9,204)(9,279)3,000—
92,00015. Segment information
Industry segments of the Company and its consolidated subsidiaries in prior years were classified into Transportation
Equipment, Aerospace, Industrial Equipment and Other.
Consumer products such as motorcycles, which were included in theTransportation Equipment segment, are separated from theTransportation Equipment segment and classified as the Consumer
Products segment for the year ended March 31, 2000. Previously
reported data have been restated accordingly. The Transportation
Equipment segment manufactures and sells ships and rolling stock.

Operations within the Aerospace segment include the production andsale of airplanes, helicopters and airplane engines. Products manufactured and sold by the Industrial Equipment segment include
boilers, prime movers, gas turbines, hydraulic, crushing, and construction machines, chemical and steel making plants, steel bridges
and hospital respiration equipment. The Consumer Products segment
manufactures and sells motorcycles and Jet Ski® personal watercraft.
Operations in the Other segment involve trade, mediation ofoverseas sales and orders and other activities.

35
KAWASAKI 2000

川重AR2000̲P22-39 00.8.31 4:57 PM ページ 36(a) Information by industry segment
Millions of yen

2000
External
sales

Transportation equipment
AerospaceIndustrial equipment
Consumer products
Other
Total
Eliminations and corporate
Consolidated total¥

164,942
219,447
417,865
277,176
70,2681,149,698—¥ 1,149,698

Intersegment
sales

Total
sales

Operatingexpenses

OperatingincomeTotal
assets¥1,857 ¥ 166,799 ¥ 176,534 ¥ (9,735) ¥ 159,783
5,981
225,428
214,633
10,795
201,494
34,597452,462
463,738(11,276)
441,886
1,986
279,162
269,6219,541
208,780
43,499113,767
112,108
1,659
171,703
87,9201,237,618
1,236,634
984
1,183,646(87,920)(87,920)(88,187)
267
23,160¥— ¥ 1,149,698 ¥ 1,148,447 ¥ 1,251 ¥ 1,206,806

Depreciation
and amortization

Capitalexpenditures¥ 3,681
4,536
9,928
11,095
5,862
35,102(21)¥ 35,081¥ 2,793
6,437
8,677
16,485
5,308
39,700(16)¥ 39,684

Depreciation
and amortization

Capitalexpenditures¥ 3,696
4,602
11,312
9,888
5,134
34,632(25)¥ 34,607¥ 3,814
4,596
8,239
17,4498,046
42,144(1)¥ 42,143

Depreciation
and amortization

Capitalexpenditures¥ 3,652
4,695
10,592
8,695
4,810
32,444(28)¥ 32,416¥ 2,885
3,823
9,787
10,7297,829
35,053(23)¥ 35,030

Depreciation
and amortization

Capitalexpenditures$ 34,677
42,732
93,528104,52255,224
330,683(198)$330,485$ 26,312
60,64181,743
155,299
50,005374,000(151)$373,849

Millions of yen

1999
External
sales

Transportation equipment
AerospaceIndustrial equipment
Consumer products
Other
Total
Eliminations and corporate
Consolidated total¥

184,040
228,618
436,030
270,02183,4801,202,189—¥ 1,202,189

Intersegment
sales

Total
sales

Operatingexpenses

OperatingincomeTotal
assets¥2,326 ¥ 186,366 ¥ 201,462 ¥(15,096) ¥ 181,424
6,152
234,770
216,392
18,378227,397
53,178489,208
488,522686
434,453
4,747
274,768
259,132
15,636
188,316
44,138
127,618
125,461
2,157
192,349
110,541
1,312,730
1,290,969
21,761
1,223,939(110,541)(110,541)(110,446)(95)(19,082)¥— ¥ 1,202,189 ¥ 1,180,523 ¥ 21,666 ¥ 1,204,857
Millions of yen

1998
External
sales

Transportation equipment
AerospaceIndustrial equipment
Consumer products
Other
Total
Eliminations and corporate
Consolidated total¥

213,418
255,328
485,353
259,107
84,006
1,297,212—¥ 1,297,212

Intersegment
sales

Total
sales

Operatingexpenses

OperatingincomeTotal
assets¥

1,640 ¥ 215,058 ¥ 220,966 ¥ (5,908) ¥ 163,551
6,173
261,501
240,962
20,539218,618
53,608538,961
521,358
17,603444,0823,825
262,932
246,158
16,774
198,657
43,341
127,347
125,346
2,001
196,322
108,587
1,405,799
1,354,790
51,0091,221,230(108,587)(108,587)(108,657)
70
1,676
¥
— ¥ 1,297,212 ¥ 1,246,133 ¥ 51,079 ¥ 1,222,906
Thousands of U.S. dollars

2000
External
sales

Transportation equipment
AerospaceIndustrial equipment
Consumer products
Other
Total
Eliminations and corporate
Consolidated total

36
KAWASAKI 2000

$ 1,553,858
2,067,329
3,936,552
2,611,173
661,969
10,830,881—$10,830,881

Intersegment
sales

$

Total
sales

Operatingexpenses

OperatingincomeTotal
assets17,494 $ 1,571,352 $ 1,663,062 $(91,710) $ 1,505,257
56,345
2,123,674
2,021,978101,696
1,898,201
325,926
4,262,478
4,368,705 (106,227) 4,162,845
18,7092,629,882
2,540,000
89,882
1,966,839
409,788
1,071,757
1,056,128
15,6291,617,550
828,262
11,659,143 11,649,873
9,270 11,150,692(828,262)(828,262)(830,777)
2,515
218,182$— $10,830,881 $10,819,096 $ 11,785 $11,368,874

川重AR2000̲P22-39 00.8.31 4:57 PM ページ 37(b) Information by geographic area
Segment information by geographic area, as required to be disclosed in Japan, for the respective years is as follows:
Millions of yen

2000
External
sales

Japan
North America
EuropeAsia
Other areas
Total
Eliminations and corporate
Consolidated total¥

929,110
160,436
39,554
16,321
4,277
1,149,698—¥ 1,149,698

Intersegment
sales

Total
sales

Operatingexpenses

OperatingincomeTotal
assets¥ 148,766 ¥ 1,077,876 ¥ 1,082,344 ¥ (4,468) ¥ 1,084,113
11,288
171,724
167,977
3,747
105,322
4,515
44,06943,231
838
24,496
4,009
20,33021,927(1,597)
16,675
128
4,405
4,318
87
1,894
168,706
1,318,404
1,319,797(1,393)
1,232,500(168,706)(168,706)(171,350)
2,644(25,694)¥— ¥ 1,149,698 ¥ 1,148,447 ¥ 1,251 ¥ 1,206,806
Millions of yen

1999
External
sales

Japan
North America
EuropeAsia
Other areas
Total
Eliminations and corporate
Consolidated total¥

982,857
155,635
46,287
12,8814,529
1,202,189—¥ 1,202,189

Intersegment
sales

Total
sales

Operatingexpenses

OperatingincomeTotal
assets¥ 154,699 ¥ 1,137,556 ¥ 1,110,276 ¥ 27,280 ¥ 1,106,765
11,869167,504
172,780(5,276)112,105
6,252
52,53951,224
1,315
25,7362,855
15,736
16,611(875)
17,036
—
4,529
4,482
47
1,777
175,675
1,377,864
1,355,373
22,491
1,263,419(175,675)(175,675)(174,850)(825)(58,562)¥— ¥ 1,202,189 ¥ 1,180,523 ¥ 21,666 ¥ 1,204,857
Millions of yen

1998
External
sales

Japan
North America
EuropeAsia
Other areas
Total
Eliminations and corporate
Consolidated total¥ 1,105,123
127,61336,922
23,056
4,498
1,297,212—¥ 1,297,212

Intersegment
sales

Total
sales

Operatingexpenses

OperatingincomeTotal
assets¥ 125,662 ¥ 1,230,785 ¥ 1,183,543 ¥ 47,242 ¥ 1,096,854
9,830
137,443
136,519924
120,853
6,194
43,116
41,8101,306
20,830682
23,73821,398
2,340
5,987
—
4,498
4,353
145
1,669
142,368
1,439,580
1,387,623
51,957
1,246,193(142,368)(142,368)(141,490)(878)(23,287)¥— ¥ 1,297,212 ¥ 1,246,133 ¥ 51,079 ¥ 1,222,906
Thousands of U.S. dollars

2000
External
sales

Japan
North America
EuropeAsia
Other areas
Total
Eliminations and corporate
Consolidated total$ 8,752,803
1,511,408
372,624
153,754
40,292
10,830,881—$10,830,881

Intersegment
sales

Total
sales

Operatingexpenses

OperatingincomeTotal
assets$ 1,401,470 $10,154,273 $10,196,364 $(42,091) $10,213,029
106,340
1,617,748
1,582,449
35,299992,200
42,534415,158
407,263
7,895
230,768
37,767
191,521
206,566(15,045)
157,089
1,206
41,49840,679819
17,842
1,589,317
12,420,198 12,433,321(13,123) 11,610,928(1,589,317) (1,589,317) (1,614,225)
24,908(242,054)$— $10,830,881 $10,819,096 $ 11,785 $11,368,874

37
KAWASAKI 2000

川重AR2000̲P22-39 00.8.31 4:57 PM ページ 38(c) Corporate assets
Included in eliminations and corporate in (a) and (b) above under total assets are corporate assets of ¥33,062 million ($311,465 thousand),¥34,540 million and ¥59,245 million at March 31, 2000, 1999 and 1998, respectively, which are mainly comprised of cash and time depositsof the Company.
(d) Overseas sales
Overseas sales consist of the total sales of the Company and its consolidated subsidiaries made outside of Japan. Overseas sales information, as required to be disclosed in Japan, for the respective years is as follows:
Millionsof yen%Millionsof yen%Millionsof yenOverseassales% against
net sales

Overseassales% against
net sales¥ 221,272
93,98475,05871,191¥ 461,505

19.2%
8.2%
6.5%
6.2%
40.1%

¥ 231,159
87,68370,84581,453¥ 471,140

19.2%
7.3%
5.9%
6.8%
39.2%

2000

North America
EuropeAsia
Other areas
Total

38
KAWASAKI 2000%

Thousands of
U.S. dollars

Overseassales% against
net sales

Overseassales¥ 179,235
66,806
99,413
102,599¥ 448,053

13.8%
5.1%
7.7%
7.9%
34.5%

$ 2,084,522
885,389
707,094
670,664$ 4,347,669

1999

1998

2000

川重AR2000̲P22-39 00.8.31 4:57 PM ページ 39

Report of Independent Public Accountants
To the Shareholders and the Board of Directors of Kawasaki Heavy Industries, Ltd.:We have audited the accompanying consolidated balance sheets of Kawasaki Heavy Industries, Ltd. (a Japanese corporation) andsubsidiaries as of March 31, 2000 and 1999, and the related consolidated statements of operations and shareholders’ equity for eachof the three years in the period ended March 31, 2000 and cash flows for each of the two years in the period ended March 31, 2000,
expressed in Japanese yen. Our audits were made in accordance with generally accepted auditing standards in Japan and,accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in thecircumstances.
In our opinion, the consolidated financial statements referred to above present fairly the consolidated financial position of
Kawasaki Heavy Industries, Ltd. and subsidiaries as of March 31, 2000 and 1999, and the consolidated results of their operations
for each of the three years in the period ended March 31, 2000 and their cash flows for each of the two years in the period ended
March 31, 2000 in conformity with accounting principles generally accepted in Japan which, except for the change in the method ofsegmentation referred to in Note 15, were applied on a consistent basis.
Also, in our opinion, the U.S. dollar amounts in the accompanying consolidated financial statements have been translated fromJapanese yen on the basis set forth in Note 1.

Asahi & Co.
(Member Firm of Andersen Worldwide SC)

Kobe, Japan
June 29, 2000

Statement on Accounting Principles and Auditing Standards
This statement is to remind users that accounting principles and auditing standards and their application in practice may vary among nations
and therefore could affect, possibly materially, the reported financial position and results of operations. The accompanying financial statements
are prepared based on accounting principles generally accepted in Japan, and the auditing standards and their application in practice are thosegenerally accepted in Japan. Accordingly, the accompanying financial statements and the auditors’ report presented above are for users familiar
with Japanese accounting principles, auditing standards and their application in practice.

39
KAWASAKI 2000

川重AR2000̲P40-41&44-49 00.8.31 4:42 PM ページ 40

Supplementary Information on Non-Consolidated Results
Years ended March 31

Ships(Billions of yen)(Billions of yen)

96
Sales

97

98

99

00

69.5 100.6 154.5 124.9

88.0

160
140
120
100
80
60
40
20
0
96

97

98

Sales

Exports

60.0

Orders
Received 119.3
Order
Backlog

49.0

59.4

60.2

52.4

56.3 120.9

86.5

60.6

99

Major Orders

Major Components of Sales• 7 Container ships• 1 Bulk carrier• VLCC(Very Large Crude-oil Carrier)• 1 Submarine• LNG carrier• Canceled: 3 VLCCs• LPG carrier• Pure car carrier

00

Exports• RO/RO Ship
• Patrol Ship

(Billions of yen)300

• Submarine

250
269.1 243.5 213.6 168.0 130.1• Deep submergence rescue vehicle

200
150
100
50
0
96

97

98

Orders Received

Rolling Stock

9900

Order Backlog(Billions of yen)(Billions of yen)

96

97

98

99

00

Sales

57.3

68.0

57.1

57.2

54.2

Exports

0.3

1.3

6.7

15.9

7.0

Orders
Received

72.0

62.0

77.0

85.1

72.5

Order
Backlog

71.6

67.2

87.5 111.5 125.2

70
60
50
40
30
20
10
0
96

97

98

Sales

99

Aerospace• 246 cars for JR Group, including
87 Shinkansen cars

• 147 cars for other domestic
railways• 235 cars for other domestic
railways• 70 cars for Hong Kong

• 24 subway cars for Singapore00• 8 electric locomotives for Panama

140
120
100
80
60
40
20
0
97

98

99

00

Order Backlog(Billions of yen)

Major Orders

Major Components of Sales

250• T-4 intermediate jet trainers• T-4 intermediate jet trainers

200• CH-47J large transport
helicopters• CH-47J large transport
helicopters• OH-1 light observation
helicopters• OH-1 light observation
helicopters• Helicopter engines• UP-3D fleet EW training
support aircraft

300

150
100

(Billions of yen)

96

97

98

99

00

50
0
96

171.8 194.9 252.3 226.8 217.9

97

98

Sales

23.4

43.4

63.2

81.1

324.9 349.7 323.0 308.6 272.0• Gas turbine engines for naval
vessels

350
300
250
200
150
100
50
0
97

98

Orders Received

KAWASAKI 2000

00

(Billions of yen)

96

40

99
Exports

61.0

Orders
Received 198.5 212.8 223.9 217.4 192.6
Order
Backlog• 388 cars for JR Group,
including 131 Shinkansen cars

Exports

Orders Received

Exports

Major Components of Sales(Billions of yen)

96

Sales

Major Orders

99

00

Order Backlog• Helicopter engines• Component parts for the Boeing
767 and 777• Gas turbine engines for naval
vessels• Component parts for V2500,
RB211/Trent and PW4000
turbo-fan engines• Component parts for the Boeing
767 and 777• Component parts for V2500,
RB211/Trent and PW4000
turbo-fan engines

川重AR2000̲P40-41&44-49 00.8.31 4:43 PM ページ 41

Industrial Equipment(Billions of yen)

600
500
400
300
200

(Billions of yen)

100
96

97

98

99

00

Sales

475.2 505.1 451.6 385.0 368.7

Exports

75.2 114.7

97.6

68.3

96

97

98

Sales

99

00

Exports

86.3

Orders
Received 465.3 450.0 400.6 349.6 323.6
OrderBacklog

0663.3 612.7 562.4 520.6 471.9(Billions of yen)

700
600
500
400
300
200
100
0

Major Orders

Major Components of Sales• Municipal refuse incineration
plants and plant modifications
for dioxin reduction• Municipal refuse incineration
plants and plant modifications
for dioxin reduction• Flue gas desulfurization plantfrom Taiwan• Cogeneration power plant for adomestic steel manufacturer• Acrylic fiber manufacturing
plant from China• Hot strip mill for a domestic
steel manufacturer• Marine gas turbines and diesel
engines from domestic andoverseas customers• Cattle-feed / food additive
production plants to theUnited Sates• Natural gas compression
modules from Malaysia• Heat recovering boiler to India• Bridges
96

97

98

Orders Received

9900

Order Backlog• Container cranes• Baggage and cargo handlingsystems for China• Marine gas turbines and diesel
engines for domestic andoverseas customers• Shield machines and tunnel
boring machines

Consumer Products(Billions of yen)

250

Sales of motorcycles in the United States and Europe remained robust
and motorcycle demand in Asia also recovered. Sales of ATVs (AllTerrain Vehicles) and MULE utility vehicles also rose in the UnitedStates. As a result, despite the effects of the strong yen, sales roseslightly compared with the previous year.

200
150
100
(Billions of yen)

50
96

97

98

99

00

Sales

175.2 174.4 184.7 213.1 216.0

Exports

134.1 137.3 151.7 178.6 180.8

0
96

97

98

Sales

Orders
Received 173.8 177.4 185.3 211.7 216.5
Order
Backlog

99

00

Exports(Billions of yen)

250
200

14.7

17.7

17.9

21.4

21.6

150
100
50
0
96

97

98

Orders Received

Total

99

00

Order Backlog(Billions of yen)

1,200
1,000
800
600
400

(Billions of yen)

96
Sales

97

98

99

00

200
0
96

949.0 1,043.0 1,100.2 1,007.0 944.8

97

98

Sales

Exports00

293.0 345.7 378.6 404.1 387.5

Orders
Received 1,028.9 958.5 1,007.7 950.3 865.8
OrderBacklog

99
Exports(Billions of yen)

1,500
1,200

1,343.6 1,290.8 1,204.4 1,130.1 1,020.8

900
600
300
0
96

97

98

Orders Received

9900

Order Backlog

41
KAWASAKI 2000

Kawasaki AR 2000/0824 00.8.31 5:10 PM ページ 42

Board ofDirectors

42
KAWASAKI 2000

Yasuhiko Ono

Kenjiro Ogata

Yoshiro Inoue

Executive Vice President

Executive Vice President

Executive Vice President

Toshio Kamei

Masamoto Tazaki

ChairmanPresident

Kawasaki AR 2000/0824 00.8.31 5:10 PM ページ 43

ChairmanTakashi Sugoh

Yousuke Fujii

Toshio Kamei

Deputy Senior General Manager of

Deputy Senior General Manager of Consumer

Aerospace Group

Products & Machinery Group

Hironobu Hashiguchi

Kengo Yamashita

Senior General Manager of Technology Group

General Manager of Gas Turbine Division

President

Masamoto Tazaki *Executive Vice Presidents

Takehiko Saeki

Shiro Ikeda

Kenjiro Ogata *Senior General Manager of Rolling Stock &Senior Manager of Personnel Department

Overall Administration of Market

Construction Machinery Group

Development Department, Kansai Project

Deputy Senior General Manager of Consumer

Shinichi Morita

Research & Development Department,

Products & Machinery Group

Senior Manager of Corporate Planning Office

Domestic and Overseas Offices and Plant

Minoru Sakasai

Masakazu SatoEngineering Group

Deputy Senior General Manager of Plant

Senior Manager of Finance Department

International Operations Department,

Engineering Group

Yasuhiko Ono *Overall Administration of Technology Group

Corporate Auditors
Directors

and Ship Division

Kazuo Mizuno
Yoshiro Inoue *General Manager of Steel Structure &Overall Administration of Planning andIndustrial Equipment Division

ControlAkio Sera
Toshiaki Tatsuki
Mitsugi Maeda(As of July 1, 2000)

Toshio Atsuta
Executive Managing Directors

Deputy Senior General Manager ofTechnology Group

Hiromichi Takawa *Senior General Manager of Plant Engineering

Takuya Maeda

Group

General Manager of Industrial Plant
Engineering Division

Shigeji Yamada *Senior General Manager of Machinery & Steel

Tadao Katoh

Structure Group

Senior Manager of General Administration
Department

Toshiaki Ouchida *Senior General Manager of Aerospace Group

Shuichi Tadokoro
General Manager of Ship Division

Managing Directors

Kosuke Sakano
Tadashi Nishimura

Deputy Senior General Manager of Plant

Senior General Manager of Gas Turbine &Engineering Group

Machinery Group

Koumei Kawaji
Toru Ohmae

General Manager of Aerospace Division

Senior General Manager of Consumer
Products & Machinery Group* Representative Director

43
KAWASAKI 2000

川重AR2000̲P40-41&44-49 00.8.31 4:43 PM ページ 44

Major Consolidated Subsidiaries and Affiliates
Name

Location

Paid-in Capital

Equity(Millions of yen,unless otherwise noted)(% ownership by KHI,
unless otherwise noted)

Principal Businesses

Transportation Equipment
Kawasaki Rolling Stock Engineering Co., Ltd.

Japan

140

100.00

Manufacture and repair of parts andcomponents for rolling stock; design of rollingstock

Kawasaki Industrial Co., Ltd.

Japan

125

98.71

Construction of arcades; manufacture andinspection of high-pressure containers;
maintenance and repair of rolling stock

Kawasaki Rail Car, Inc.

U.S.A.

US$60,600*

100.00Engineering, manufacture, sales and after-sales
service of rolling stock in the United States

Nangtong Cosco KHI Ship Engineering Co., Ltd.†

China

US$80,000*

50.00

Manufacture and sale of ships

Kawasaki Helicopter System Ltd.

Japan

200

100.00Transportation of passengers or cargo byhelicopter; maintenance and repair ofhelicopters and flight training services; research,
design and construction of heliports

Advanced Technology Institute ofCommuter-Helicopter †

Japan

8,025

19.40

Research and development of basic technology
for commuter helicopters

Japan Aircraft Manufacturing Co., Ltd.†

Japan

6,048

25.70

Manufacture and sale of aircraft parts

Kawasaki Safety Service Industries, Ltd.

Japan

1,708

72.69

Manufacture, sale and installation of hospital
respiration, fire-extinguishing and medical
equipment

Kawasaki Thermal Engineering Co., Ltd.

Japan

1,460

83.01

Manufacture, sale and installation of general
purpose boilers and air-conditioning equipment

Kawasaki Hydromechanics Corporation

Japan

272

99.71

Manufacture, sale and installation of hydraulicpresses and various hydraulic equipment

Kawasaki Construction Co., Ltd.

Japan

300

100.00Installation of steel structures

Kawasaki Machine Systems, Nishi-Nihon Ltd.

Japan

104

100.00

Sale and repair of industrial machinery andequipment

Kawasaki Machine Systems, Naka-Nihon Ltd.

Japan

112

100.00

Sale and repair of industrial machinery andequipment

Nichijo Manufacturing Co., Ltd.

Japan

120

50.04

Manufacture and sale of snow removal
equipment

Kawasaki Construction Machinery Corp. of
America

U.S.A.

US$8,000*

100.00

Manufacture and sale of construction machineryin the United States

Kawasaki Precision Machinery (UK) Limited

U.K.

£5,000*100.00

Manufacture and sale of hydraulic products

Wuhan Kawasaki Marine Machinery Co., Ltd.

China

1,100

55.00

Manufacture, sale and after-sales service ofKawasaki-branded azimuth thrusters and sidethrusters, and other machinery

Kawasaki Setsubi Kogyo Co., Ltd.†

Japan

1,581

33.62

Design and installation of air conditioning,heating/cooling, plumbing and hygiene,
lighting and power equipment and facilities

Japan Gas Turbine K.K.†

Japan

1,500

40.00

Sale, assembly, site engineering support, repair,testing, pilot operation, installation andarrangement of power generation equipment,
plus related service-based businesses

Shanghai Cosco Kawasaki Heavy Industries
Steel Structure Co., Ltd.†

China

US$14,900*

40.00

Manufacture and sale of steel structures

AerospaceIndustrial Equipment

44
KAWASAKI 2000

(owned by Kawasaki Motors
Corp., U.S.A.)川重AR2000̲P40-41&44-49 00.8.31 4:43 PM ページ 45

Name

Location

Paid-in Capital

Equity(Millions of yen,unless otherwise noted)(% ownership by KHI,
unless otherwise noted)

Principal Businesses

Consumer Products
Kawasaki Motors Corporation Japan

Japan

560

100.00

Domestic wholesale of motorcycles and Jet Ski®
personal watercraft

Kawasaki Metal Industries, Ltd.

Japan

350

100.00

Manufacture, processing and assembly ofvarious steel products

Kawasaki Motors Manufacturing Corp., U.S.A.

U.S.A.

US$30,000*

100.00

Manufacture of motorcycles, all-terrain vehicles(ATVs), Jet Ski® personal watercraft, small
gasoline engines and industrial robots

Kawasaki Motors Corp., U.S.A.

U.S.A.

US$65,900*

100.00Distribution of motorcycles, all-terrain vehicles(ATVs), Jet Ski® personal watercraft and small
gasoline engines in the United States

Kawasaki Motors Finance Corporation

U.S.A.

US$10,000*

100.00Inventory financing for dealers of Kawasaki
Motors Corp., U.S.A.

(owned by Kawasaki Motors
Corp., U.S.A.)

KM Receivables Corporation

U.S.A.

US$100100.00(owned by KMFC)Management of accounts receivables ofKawasaki Motors Finance Corporation

Canadian Kawasaki Motors Inc.

Canada

C$2,000*

100.00Distribution of motorcycles, all-terrain vehicles(ATVs), and Jet Ski® personal watercraft in
CanadaKawasaki Motors (UK) Ltd.

U.K.

£2,000*100.00Distribution of motorcycles, all-terrain vehicles(ATVs), and Jet Ski® personal watercraft in the
United Kingdom

Kawasaki Motoren GmbHGermany

DM12,300*

100.00Distribution of motorcycles, all-terrain vehicles(ATVs), and Jet Ski® personal watercraft inGermany

Kawasaki Motors Pty. Ltd.

Australia

A$2,000*

100.00Distribution of motorcycles, all-terrain vehicles(ATVs), and Jet Ski® personal watercraft inAustralia

P.T. Kawasaki Motor Indonesia

Indonesia

US$10,000*

51.00

Manufacture and distribution of motorcycles inIndonesia

Kawasaki Motors (Phils.) Corporation

Philippines

P101,430*

50.001

Manufacture and distribution of motorcycles in
the Philippines

Kawasaki Motors Enterprise (Thailand)Co., Ltd.

Thailand

B1,400,000*

75.50

Manufacture and distribution of motorcycles inThailandKawasaki Robotics (U.S.A.), Inc.

U.S.A.

US$1,000*

100.00

Sales and after-sales service of industrial robots
in the United States(owned by Kawasaki Motors
Corp., U.S.A.)

Kawasaki Robotics (UK) Ltd.

U.K.

£917*

100.00

Sales and after-sales service of industrial robots
in the U.K. and Ireland

Kawasaki Machine Systems Korea Ltd.

Korea

W1,500**100.00

Sale and after-sales service of industrial robots,robot systems and other industrial machinery

Hainan Sundiro-Kawasaki Engine Co., Ltd.†

China

US$29,900*

33.00

Manufacture and sale of motorcycle engines

Kawaju Shoji Co., Ltd.

Japan

600

70.00

Trading

Kawaju Real Estate Co., Ltd.

Japan

320

100.00Administration of Company welfare facilities;
real estate sales, leasing and construction

Kawasaki Kosan Co., Ltd.

Japan

300

100.00Insurance representation; real estate leasing,administration and maintenance; leasing andprovision of loans

Kawasaki Foods Co., Ltd.

Japan

160

100.00Food supply to Company facilities; operation ofdining facilities

Other

45
KAWASAKI 2000

川重AR2000̲P40-41&44-49 00.8.31 4:43 PM ページ 46

NameLocation

Paid-in Capital

Equity(Millions of yen,unless otherwise noted)(% ownership by KHI,
unless otherwise noted)

Principal Businesses

Kawaju Tomakomai Kanko Kaihatsu Co., Ltd.

Japan

300

100.00Management of a golf course

Uji Kanko Co., Ltd.

Japan

240

100.00Management of a golf course

Kawasaki do Brasil Industria e Comércio Ltda.

Brazil

R1,136*100.00

Sale of KHI products in Brazil, and the rest ofCentral and South America; provision of orderintermediation and various engineering services

Kawasaki Heavy Industries (U.S.A.), Inc.

U.S.A.

US$600*100.00

Product sales, mediation of orders and provisionof various engineering support services in North
America

Kawasaki Heavy Industries (UK) Ltd.

U.K.

£500*

100.00

Sale of KHI products in various countries in
Europe (principally the U.K.), the Middle East,
and Africa; provision of order intermediation
services* Monetary unit in thousands** Monetary unit in millions† Affiliate accounted for using equity method

46
KAWASAKI 2000

(As of March 31, 2000)

川重AR2000̲P40-41&44-49 00.8.31 4:43 PM ページ 47

Network
Kobe Head Office
Kobe Crystal Tower
1-3, Higashikawasaki-cho 1-chome
Chuo-ku, Kobe 650-8680, Japan
Phone: 81-78-371-9530
Fax: 81-78-371-9568

Sydney Officec/o Kawasaki Motors Pty. Ltd.
Unit Q, 10-16 South Street
Rydalmere, N.S.W. 2116, Australia
Phone: 61-2-9684-2585
Fax: 61-2-9684-4580

Tokyo Head OfficeWorld Trade Center Bldg.
4-1, Hamamatsu-cho 2-chome
Minato-ku, Tokyo 105-6116, Japan
Phone: 81-3-3435-2111
Fax: 81-3-3436-3037

OVERSEAS SUBSIDIARIESOVERSEAS OFFICES
Seoul Office2302 Changgyo Bldg.
1 Changgyo-Dong, Chung-Gu
Seoul, Korea
Phone: 82-2-778-6637
Fax: 82-2-778-6638
Beijing Office
Room No. 2602, China World Tower
China World Trade Center
No.1, Jian Guo Men Wai Avenue
Beijing 100004
People’s Republic of China
Phone: 86-10-6505-1350
Fax: 86-10-6505-1351
Shanghai Office
13th Floor, Shanghai Senmao
International Building
101, Yin Cheng East Road
Pudong New Area
Shanghai, 200120
People’s Republic of China
Phone: 86-21-6841-3377
Fax: 86-21-6841-2266
Taipei Office
15th Floor, Fu-key Bldg.
99 Jen-Ai Road, Section 2
Taipei, Taiwan
Phone: 886-2-2322-1752
Fax: 886-2-2322-5009
Bangkok Office
17th Floor, Ramaland Building
952 Rama IV Road, Bangrak
Bangkok 10500, Thailand
Phone: 66-2-632-9511
Fax: 66-2-632-9515
Manila Office
20th Floor, Metrobank Plaza Bldg.
Gil J. Puyat Avenue, Makati
Metro Manila
The Philippines
Phone: 63-2-818-2786
Fax: 63-2-818-2787
Kuala Lumpur Office
Letter Box No. 162
6th Floor, UBN Tower
10 Jalan P. Ramlee
50250 Kuala Lumpur, Malaysia
Phone: 60-3-230-5141
Fax: 60-3-230-5148
Jakarta Office
9th Floor, Skyline Bldg.
Jl. M.H. Thamrin 9
Jakarta 10340, Indonesia
Phone: 62-21-314-0737
Fax: 62-21-314-1049

Kawasaki Heavy Industries (U.S.A.), Inc.
599 Lexington Avenue, Suite 3901
New York, NY 10022, U.S.A.
Phone: 1-212-759-4950
Fax: 1-212-759-6421
Houston Branch
333 Clay Street, Suite 4480
Houston, TX 77002-4103, U.S.A.
Phone: 1-713-654-8981
Fax: 1-713-654-8187
Kawasaki Rail Car, Inc.
29 Wells Avenue, Building #4,
Yonkers, NY 10701, U.S.A.
Phone: 1-914-376-4700
Fax: 1-914-376-4779
Kawasaki Robotics (U.S.A.), Inc.
28059 Center Oaks Court
Wixom, MI 48393, U.S.A.
Phone: 1-248-305-7610
Fax: 1-248-305-7618
Kawasaki Motors Corp., U.S.A.
9950 Jeronimo Road
Irvine, CA 92618-2084, U.S.A.
Phone: 1-949-770-0400
Fax: 1-949-460-5600
Grand Rapids Office5080 36th Street S.E.
Grand Rapids, MI 49512, U.S.A.
Phone: 1-616-949-6500
Fax: 1-616-954-3031

Canadian Kawasaki Motors Inc.
25 Lesmill Road, Don Mills, Toronto
Ontario M3B 2T3, Canada
Phone: 1-416-445-7775
Fax: 1-416-445-5389
Kawasaki do Brasil Industria e Comércio Ltda.
Avenida Paulista, 542-6 Andar
Bela Vista, 01310-000, São Paulo, S.P., Brazil
Phone: 55-11-289-2388
Fax: 55-11-289-2788
Kawasaki Heavy Industries (UK) Ltd.
4th Floor, 3 St. Helen’s Place
London EC3A 6AB, U.K.
Phone: 44-20-7588-5222
Fax: 44-20-7588-5333
Kawasaki Precision Machinery (UK) Ltd.
Ernesettle Lane, Ernesettle, Plymouth
Devon PL5 2SA, U.K.
Phone: 44-1752-364394
Fax: 44-1752-364816
Kawasaki Robotics (UK) Ltd.
Unit 6&7, Easter Court
Europa Boulevard, West brock
Warrington WA5 5ZB, U.K.
Phone: 44-1925-713000
Fax: 44-1925-713001
Kawasaki Motors (UK) Ltd.
1 Dukes Meadow
Millboard Road,
Bourne End
Buckinghamshire SL8 5XF, U.K.
Phone: 44-1628-851000
Fax: 44-1628-856799
Kawasaki Heavy Industries GmbH
5th Floor, Wehrhahn Center
Oststrasse 10, 40211 Düsseldorf, Germany
Phone: 49-211-1792340
Fax: 49-211-161844

Green River Insurance Company
7 Burlington Square, #600
Burlington, VT 05402, U.S.A.
Phone: 1-802-860-0444
Fax: 1-802-860-0440

Kawasaki Gas Turbine Europe GmbH
Max-Planck-Strasse 21A
61381 Friedrichsdorf, Germany
Phone: 49-6172-7363
Fax: 49-6172-736355

Kawasaki Motors Finance Corporation
9950 Jeronimo Road
Irvine, CA 92618-2084, U.S.A.
Phone: 1-949-770-0400
Fax: 1-949-460-5600

Kawasaki Robotics GmbH
29 Sperberweg 41468 Neuss, Germany
Phone: 49-2131-34260
Fax: 49-2131-930973

KM Receivables Corporation
9950 Jeronimo Road, Suite 203
Irvine, CA 92618-2084, U.S.A.
Phone: 1-949-770-0400
Fax: 1-949-460-5600
Kawasaki Motors Manufacturing Corp., U.S.A.
6600 Northwest 27th Street
Lincoln, NE 68524, U.S.A.
Phone: 1-402-476-6600
Fax: 1-402-476-6672
Maryville Plant
28147 Business Highway 71
Maryville, MO 64468, U.S.A.
Phone:1-660-582-5829
Fax: 1-660-582-5826
Kawasaki Construction Machinery Corp. of
America
2140 Barrett Park Drive, Suite 101
Kennesaw, GA 30144, U.S.A.
Phone: 1-770-499-7000
Fax: 1-770-421-6842

Kawasaki Motoren GmbH
Max-Planck-Strasse 26
61381 Friedrichsdorf, Germany
Phone: 49-6172-7340
Fax: 49-6172-734160
Kawasaki Heavy Industries (Europe) B.V.
7th Floor, Riverstaete
Amsteldijk 1661079 LH Amsterdam
The Netherlands
Phone: 31-20-6446869
Fax: 31-20-6425725
KHI Europe Finance B.V.
Hoekenrode 61102 BR Amsterdam
The Netherlands
Phone: 31-20-6293800
Fax: 31-20-6294661
Kawasaki Motors Netherlands N.V.
Diamantlaan 142132 WV Hoofddorp
The Netherlands
Phone: 31-23-5670500
Fax: 31-23-5670583

47
KAWASAKI 2000

川重AR2000̲P40-41&44-49 00.8.31 4:43 PM ページ 48

Kawasaki Machine Systems Korea, Ltd.
3rd Floor (307)Industrial Complex Support Bldg.
637, Kojan-Dong, Namdong-Go
Inchon, 405-310, Korea
Phone: 82-32-821-6941~5
Fax: 82-32-821-6947
KHI (Dalian) Computer Technology Co., Ltd.
Building Foreign Specialistof the Dalian Maritime University
Ling Shui Qiao, Dalian
People’s Republic of China
Phone: 86-411-467-2507
Fax: 86-411-467-2459
Wuhan Kawasaki Marine Machinery Co., Ltd.
No. 43 Wudong Street
Qingshan, Wuhan
People’s Republic of China
Phone: 86-27-6590626
Fax: 86-27-6590627
Kawasaki Heavy Industries (H.K.) Ltd.
Room 1619, Jardine House
Connaught Road, Central, Hong Kong
Phone: 852-2522-3560
Fax: 852-2845-2905
Kawasaki Motors Enterprise (Thailand) Co., Ltd
119/18 Moo 4, Pluak Daeng-Wangtapin
Sapansi Road, Tambon Pluak Daeng
Amphur Pluak Daeng, Rayong 21140, Thailand
Phone: 66-38-955050~58
Fax: 66-38-955067
KHI Design & Technical Service Inc.
Unit 7A&7B The Island Plaza, 105 Alfaro Street
Salcedo Village, Makati, Metro Manila
The Philippines
Phone: 63-2-810-9213
Fax: 63-2-816-1222
Kawasaki Motors (Phils.) Corporation
Km.24 East Service Road, Bo. Cupang, Alabang
Muntinlupa, Metro Manila, The Philippines
Phone: 63-2-842-3140
Fax: 63-2-842-2730
Kawasaki Heavy Industries (Singapore) Pte. Ltd.
6 Battery Road, #18-04
Singapore 049909
Phone: 65-2255133~4
Fax: 65-2249029
P.T. Kawasaki Motor Indonesia
Jl. Perintis Kemerdekaan, Kelapa Gading
Jakarta Utara 14250, Indonesia
Phone: 62-21-452-3322
Fax: 62-21-452-3566
Kawasaki Motors Pty. Ltd.
Unit Q, 10-16 South Street
Rydalmere, N.S.W. 2116, Australia
Phone: 61-2-9684-2585
Fax: 61-2-9684-4580

Robots International Limited
21, Archbishop Street
Valetta, Malta
Phone: 356-320897
Fax: 356-346041

Chiba Works
1, Niihama-cho, Chuo-ku
Chiba 260-0826, Japan
Phone: 81-43-263-2211
Fax: 81-43-263-5525

Nantong Ocean Ship Engineering Co., Ltd.
Ren Gang Nanshou, Nantong City, 226005
Jiangsu Province, People’s Republic of China
Phone: 86-513-351-4770
Fax: 86-513-351-4349

Sodegaura Works
50-1, Minamisode, Sodegaura
Chiba 299-0268, Japan
Phone: 81-438-62-7127
Fax: 81-438-62-7129

Nantong Cosco KHI Ship Engineering Co., Ltd.
117, Linjiang Road, Nantong City
Jiangsu Province, People’s Republic of China
Phone: 86-513-350-0666
Fax: 86-513-351-4349

Gifu Works
1, Kawasaki-cho, Kakamigahara
Gifu 504-8710, Japan
Phone: 81-583-82-5712
Fax: 81-583-82-2981

Shanghai Cosco Kawasaki Heavy Industries Steel
Structure Co., Ltd.
5198 Hutai Road, Baoshan District
Shanghai, People’s Republic of China
Phone: 86-21-5602-8888
Fax: 86-21-5602-5198

Nagoya Works 1
3-11, Oaza Kusunoki, Yatomi-cho
Ama-gun, Aichi 498-0066, Japan
Phone: 81-567-68-5117
Fax: 81-567-68-5090

Hainan Sundiro-Kawasaki Engine Co., Ltd.
Lingui Dadao No.3
Guilinyang Economic Development Area
Qiongshan City, Hainan Province
People’s Republic of China
Phone: 86-898-5711586
Fax: 86-898-6715518
Glory Kawasaki Motors Co., Ltd.
221/1 Rama IX Road, Huay Kwang
Bangkok 10320, Thailand
Phone: 66-2-643-0813
Fax: 66-2-247-7924
KHITKAN Co., Ltd.
G.K. Land Industrial Park, Moo 4
Tambon Pluak Daeng
Amphur Pluak Daeng, Rayong Province
ThailandPhone: 66-38-955062~66
Fax: 66-38-955067

Kawasaki Motors N.V.
Marconiweg 54131 PD Vianen ZH
The Netherlands
Phone: 31-347-324949
Fax: 31-347-324955
Tiesse Robot S.p.A.
Via Isorella 24
25010 Visano (Brescia), Italy
Phone: 39-30-9958621
Fax: 39-30-9958677

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KAWASAKI 2000

Kobe Works
1-1, Higashikawasaki-cho 3-chome
Chuo-ku, Kobe 650-8670, Japan
Phone: 81-78-682-5001
Fax: 81-78-682-5500
Hyogo Works
1-18, Wadayama-dori 2-chome
Hyogo-ku, Kobe 652-0884, Japan
Phone: 81-78-682-3111
Fax: 81-78-671-5784
Nishi-Kobe Works
234, Matsumoto, Hazetani-cho
Nishi-ku, Kobe 651-2239, Japan
Phone: 81-78-991-1133
Fax: 81-78-991-3186

Kawasaki Motors Holding (Malaysia) Sdn. Bhd.
Lot 6&8, Jalan Segambutpusat
Segambut, 51200
Kuala Lumpur, Malaysia
Phone: 60-3-6251-2591
Fax: 60-3-6251-2688

Seishin Works
8-1, Takatsukadai 2-chome
Nishi-ku, Kobe 651-2271, Japan
Phone: 81-78-992-1911
Fax: 81-78-992-1910

Kawasaki Motors Service Co., Ltd.
129 Rama IX Road, Kwaeng Huaykwang
Khet Huaykwang, Bangkok 10320, Thailand
Phone: 66-2-246-1510

Akashi Works
1-1, Kawasaki-cho, Akashi
Hyogo 673-8666, Japan
Phone: 81-78-921-1301
Fax: 81-78-913-1366

KMPC Realty Corporation
Km.24 East Service Road, Bo. Cupang, Alabang
Muntinlupa, Metro Manila, The Philippines
Phone: 63-2-842-3140
Fax: 63-2-842-2730

Banshu Works
2680, Oka, Inami-cho
Kako-gun, Hyogo 675-1113, Japan
Phone: 81-794-95-1211
Fax: 81-794-95-1226

DOMESTIC WORKSOVERSEAS JOINT VENTURES

Nagoya Works 2
7-4, Kanaoka, Tobishima-muraAma-gun, Aichi 490-1445, Japan
Phone: 81-5675-5-0800
Fax: 81-5675-5-0803

Noda Works
118, Futatsuzuka, Noda
Chiba 278-8585, Japan
Phone: 81-471-24-1121
Fax: 81-471-24-7645
Yachiyo Works
1780, Kamikoya, Yachiyo
Chiba 276-0022, Japan
Phone: 81-474-83-1111
Fax: 81-474-82-3227

Harima Works
8, Niijima, Harima-cho
Kako-gun, Hyogo 675-0155, Japan
Phone: 81-794-35-2131
Fax: 81-794-35-2132
Sakaide Works
1, Kawasaki-cho, Sakaide
Kagawa 762-8507, Japan
Phone: 81-877-46-1473
Fax: 81-877-45-0556

川重AR2000̲P40-41&44-49 00.8.31 4:43 PM ページ 49

Kawasaki Corporate Data
(As of March 31, 2000)

Kawasaki Heavy Industries, Ltd.
Head Office:
Kobe Crystal Tower
1-3, Higashikawasaki-cho 1-chome
Chuo-ku, Kobe 650-8680, JapanFounded: 1878
Incorporated: 1896
Paid-in Capital:¥81,426,590,792
Number of Shares Outstanding:
1,390,595,964 shares

ADR Facility:
KHI has a sponsored American Depository Receipt (ADR)
facility. ADRs are traded in the over-the-counter (OTC) market in
the United States under cusip number 486 359 20 1 with each
ADR representing four ordinary shares.
ADR Depository:
The Bank of New York
101 Barclay St., 22 West
New York, NY 10286, U.S.A.
Phone: 1-212-815-2042
U.S. Toll Free:888-269-2377(888-BNY-ADRS)
http://www.bankofny.com/adr
KHI Home Page at:
http://www.khi.co.jp

Number of Shareholders:
128,242
Number of Employees:
29,772
Stock Exchange Listings:
Tokyo, Osaka, Nagoya, Kyoto,
Fukuoka, Sapporo
Newspapers in which public notices are made:The Nihon Keizai Shimbun
The Kobe Shimbun
Transfer Agent:
The Chuo Mitsui Trust and Banking Company, Limited
7-1, Kyobashi 1-chome
Chuo-ku, Tokyo 104-0031, Japan
Handling Office
The Chuo Mitsui Trust and Banking Company, Limited
Osaka Branch Office
2-21, Kitahama 2-chome
Chuo-ku, Osaka 541-0041, Japan
Independent Auditors:
Asahi & Co.
Kobe Crystal Tower
1-3, Higashikawasaki-cho 1-chome
Chuo-ku, Kobe 650-8680, Japan

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KAWASAKI 2000

Kawasaki AR 2000/0824 00.8.31 5:04 PM ページ c1

PRINTED IN JAPAN ON RECYCLED PAPER

Printed in JapanKAWASAKI HEAVY INDUSTRIES, LTD.

ISSN 0287-1793

ANNUAL REPORT 2000