Report of Earnings and Financial Statements for the Year Ended March 31, 2009
April 28, 2009
Listed company’s name:

Kawasaki Heavy Industries, Ltd.

Listed on:
1st sections of TSE, OSE, NSE
Stock code:
7012
URL:
http://www.khi.co.jp/
Representative:
Tadaharu Ohashi, President
Contact:
Minoru Akioka, Senior Manager, Accounting DepartmentTel:+81 3-3435-2130
Scheduled dates:
Ordinary General Meeting of shareholders
June 25, 2009
Commencement date of dividend payments
June 26, 2009
Submission of financial statements:
June 25, 2009

1. Consolidated Financial Results for the Year Ended March 31, 2009
(April 1, 2008 to March 31, 2009)(Amounts rounded down to the nearest million yen)

(1) Operating Results(Percentage figures represent changes versus the year-ago period)
Net salesYear ended
March 31, 2009
Year ended
March 31, 2008

Operating income

million yen%

1,338,597
1,501,097

Recurring profit

million yen%

million yen(10.8)

28,713(62.6)

38,718

4.3

76,91011.2

63,972

Earnings per share

Earnings per share
Return on equity– diluted
yen%

Net income%

million yen%(39.4)

11,727(66.6)

30.4

35,141

18.0%

Operating income
to net sales
%

2.7

2.1

4.6

5.1

Return on assets

yenYear ended
7.02
6.92
3.8
March 31, 2009
Year ended
21.08
20.58
11.6
March 31, 2008
For reference: Equity in income of non-consolidated subsidiaries and affiliates:
Year ended March 31, 2009: 8,709 million yen
Year ended March 31, 2008: 7,642 million yen(2) Financial Condition
Total assets

Net assets

million yen

million yen

Ratio ofshareholders’ equity
to total assets%

March 31, 2009

1,399,770

295,24520.7

174.10March 31, 2008

1,378,769

319,03722.7

187.73

Note:

Shareholders’ equity: March 31, 2009:
March 31, 2008:

290,440 million yen
313,192 million yen

1

Net assets per shareyen(3) Cash Flow Position
Cash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash
equivalents at end ofyear

million yen

million yen

million yen

million yen(41,256)(72,283)

107,692

31,41375,765(49,090)(27,391)

38,169Dividend per share
End of
End of
End ofsecondthird
financialquarterquarter
year
yen
yen
yen

Total
dividends
paid(annual)Payout ratio(consolidated)

Dividends /Net assets(consolidated)yenmillion yen%%

Year ended
March 31, 2009
Year ended
March 31, 2008

2. Dividends

End offirstquarteryen

Record dateYear ended
March 31, 2008
Year ended
March 31, 2009
Year ending March
31, 2010 (forecast)

Full year

-

0.00

-

5.00

5.00

8,341

23.7

2.7

-

0.00

-

3.00

3.00

5,004

42.6

1.6

-

0.00

-

3.00

3.00

83.4

3. Forecast of Consolidated Earnings for the Year Ending March 31, 2010
(April 1, 2009 to March 31, 2010)
Net sales
For six months
endingSeptember 30,
2009
Full year(Percentage figures represent changes versus the year-ago period)
Earnings per
Operating income
Recurring profit
Net income
sharemillion yen%
million yen%
million yen%
yenmillion yen%

570,000(12.7)(12,000)-(8,000)-(6,000)-(3.60)

1,240,000

(7.3)

5,000

(82.5)

10,000(74.1)

6,000(48.8)

3.60

4. Other Information
1) Changes affecting the status of material subsidiaries (scope of consolidation): None
2) Changes in accounting principles, procedures, and methods of presentation applicable to the
preparation of consolidated financial statements:(1) Changes in accordance with revisions to accounting standards: Yes(2) Changes other than (1) above: None
3) Number of shares issued (common stock)(1) Number of shares issued at end of period (treasury stock included):
March 31, 2009:
1,669,629,122 shares
March 31, 2008:
1,669,629,122 shares(2) Number of shares held in treasury at end of period:
March 31, 2009:
1,394,288 shares
March 31, 2008:
1,324,199 shares
For reference:2

Overview of Non-Consolidated Financial Results(1) Operating Results
Net salesYear ended March 31,
2009
Year ended March 31,
2008

Operating income

million yen%

million yen%

million yen

771,428(13.3)(12,061)-2,614

889,963(3.2)

43,053(8.5)

31,705

Earnings per share
yenYear ended March 31,
2009
Year ended March 31,
2008

Recurring profit%

Net income
million yen%(91.7)(6,109)-(6.4)

20,822(2.3)

Earnings per share– dilutedyen(3.66)

-

12.49

12.21

(2) Financial Condition
Total assets

Net assets

million yen

million yen

Ratio ofshareholders’ equity
to total assets%

March 31, 2009

977,988

230,79923.5

138.34

March 31, 2008

922,962

255,366

27.6

153.06

Note:

Shareholders’ equity: March 31, 2009:
March 31, 2008:

Net assets per shareyen

230,799 million yen
255,366 million yen* Appropriate Use of Financial Forecasts and Other Important Matters
Forward-Looking Statements
These materials contain various forward-looking statements and other forecasts regarding performanceand other matters. Such statements are based on information available at the time of preparation. Actual
results may differ from those expressed or implied by forward-looking statements due to a range offactors. For the assumptions underlying the earnings forecasts presented and other information
regarding the use of such forecasts, refer to “Consolidated operating results” in “Qualitative
Information and Financial Statements,” beginning on page4.

3

Qualitative Information and Financial Statements
Consolidated operating results
During fiscal 2008 (the year ended March 31, 2009), the Japanese economy entered a steep
downturn marked by a consumer spending slump, retrenchment in capital spending, an export
slowdown, and deterioration in employment conditions amid precipitous yen appreciation in thefiscal third quarter (October 1, 2008 – December 31, 2008) most notably against the euro and
US dollar. Although there were signs that economy had bottomed out towards fiscal year end, it
remained stagnant.
Much of the global economy, including emerging economies, likewise slowed markedly orsank into recession.
Amid this economic environment, for fiscal 2008 the Kawasaki Heavy Industries (KHI)Group reported a decrease in orders on a consolidated basis of ¥70.1 billion versus fiscal 2007
to ¥1,540.5 billion, despite increases in orders in the Gas Turbines & Machinery and Rolling
Stock & Construction Machinery segments.
Turning to revenues, consolidated net sales fell ¥162.5 billion to ¥1,338.5 billion, reflecting
lower sales in the Consumer Products & Machinery segment as well as other segments.
Profit-wise, consolidated operating income decreased ¥48.1 billion to ¥28.7 billion andrecurring profit decreased ¥25.2 billion to ¥38.7 billion. This was due mainly to the appreciationof the yen in the fiscal second half and sustained high material costs. Net income decreased¥23.4 billion to ¥11.7 billion.
On a non-consolidated basis, the Group reported orders amounting to ¥1,054.5 billion, net
sales of ¥771.4 billion, an operating loss of ¥12.0, and recurring profit of ¥2.6 billion, to finish
on a net loss of ¥6.1 billion.
Segment information
Segment information (millions of yen)
Year ended
March 31, 2009
OperatingSegment
Net sales
incomeShipbuilding
1,264
(10)
Rolling Stock& Construction
1,864
113
Machinery
Aerospace
2,004
(41)
Gas Turbines &
1,951
110
Machinery
Plant &
Infrastructure
1,051
89
Engineering
Consumer
3,364
(101)
Products &MachineryHydraulic849
83
Machinery
Other
1,035
42
Operations
Eliminations―
0and corporate
Consolidated
13,385287
total
Note: Net sales are external sales.

Year ended
March 31, 2008
Operating
Net sales
income
1,413
32

For reference: Orders
Year ended Year ended
March 31,
March 31,
2009
2008
715
2,513

1,717

71

2,646

1,832

2,373
1,854

108
133

2,391
3,555

2,025
2,274

1,425

108

836

1,060

4,339

196

3,364

4,339

840

91

841

923

1,045

23

1,055

1,139

―

2

―

―

15,010769

15,405

16,107

4

Shipbuilding
The Shipbuilding segment booked new orders for one LPG tanker and five bulk carriers, but
its consolidated order bookings nonetheless shrank to ¥71.5 billion in fiscal 2008, a ¥179.8
billion decrease from fiscal 2007, when it benefited from a heavy influx orders for bulk carriers.
Consolidated net sales fell ¥14.9 billion versus fiscal 2007 to ¥126.4 billion, largely reflecting
a decline in sales of large vessels.
The decline in sales weighed on profitability, as did the sharp increases in material costs andthe yen’s appreciation against the dollar. The segment incurred an operating loss of ¥1.0 billion,¥4.2 billion below its operating income in fiscal 2007.
Rolling Stock & Construction Machinery
Consolidated order bookings increased ¥81.3 billion in fiscal 2008 versus fiscal 2007 to¥264.6 billion primarily by virtue of a sharp increase in domestic orders for shinkansen (bullet
trains), electric commuter trains, and locomotives from JR Group and other railway companies.
Overseas, the segment received orders for subway cars for the New York City subway system.
Consolidated net sales grew ¥14.7 billion versus fiscal 2007 to ¥186.4 billion as growth inoverseas sales of rolling stock offset a decline in sales of construction machinery.
Sales growth boosted operating income to ¥11.3 billion, a ¥4.1 billion increase versus fiscal
2007.
Aerospace
The Aerospace segment won new consolidated orders for parts for the Boeing 777 jetliners
and for the P-1 maritime patrol aircraft for Japan’s Ministry of Defense, and its consolidated
order bookings increased ¥36.6 billion in fiscal 2008 versus fiscal 2007 to ¥239.1 billion.
Consolidated net sales were down ¥36.9 billion versus fiscal 2007 to ¥200.4 billion as a resultof declines in sales to Japan’s Ministry of Defense and sales of Boeing 777 parts coupled withthe yen’s appreciation against the dollar.
Profitability-wise, the decrease in sales was compounded by cost increases, including
inventory valuation losses. The segment incurred an operating loss of ¥4.1 billion, ¥15.0 billion
below its operating income in fiscal 2007.
Gas Turbines & Machinery
In fiscal 2008, consolidated order bookings rose sharply by ¥128.0 billion versus fiscal 2007
to ¥355.5 billion, lifted by growth in orders for aircraft engine parts for Trent XWB aircraft
engines, diesel generator systems, and ship propulsion systems.
Consolidated net sales grew ¥9.6 billion versus fiscal 2007 to ¥195.1 billion, driven largely by
growth in sales of marine diesel engines.
Despite this sales growth, operating income declined ¥2.3 billion versus fiscal 2007 to ¥11.0
billion, largely as a result of the strong yen and inventory valuation losses.
Plant & Infrastructure Engineering
Despite an influx of orders for LNG storage tanks and various plants, consolidated orderbookings decreased ¥22.3 billion in fiscal 2008 versus fiscal 2007 to ¥83.6 billion.
Consolidated net sales fell ¥37.3 billion versus fiscal 2007 to ¥105.1 billion as growth inoverseas revenues from nonferrous metals smelting plants was outweighed by declines inrevenues from municipal refuse incineration plants.
Operating income fell ¥1.8 billion to ¥8.9 billion due to the decline in sales.
Consumer Products & Machinery5Consolidated net sales fell ¥97.5 billion in fiscal 2008 versus fiscal 2007 to ¥336.4 billion as
growth in Asian motorcycle sales was more than offset by a drop in North American andEuropean motorcycle sales, a decline in industrial robot sales to the auto and semiconductor
industries, and the yen’s progressive appreciation against the dollar and euro.
Due to the decline in sales, due particularly to stagnant sales of large-sized motorcycles, thesegment incurred a ¥10.1 billion operating loss, ¥29.8 billion below its operating income infiscal 2007.
Hydraulic Machinery
Consolidated order bookings fell ¥8.1 billion in fiscal 2008 versus fiscal 2007 to ¥84.1 billion,
due primarily to decrease in demand from construction machinery manufacturers.
Consolidated net sales were up ¥800 million versus fiscal 2007 to ¥84.9 billion by virtue ofstrong sales to the construction machinery industry through mid-year.
Operating income was down ¥700 million versus fiscal 2007 to ¥8.3 billion.
Other Operations
Consolidated net sales fell ¥1.0 billion in fiscal 2008 versus fiscal 2007 to ¥103.5 billion.
Operating profit grew ¥1.9 billion versus fiscal 2007 to ¥4.2 billion.
Consolidated Earnings Outlook
We see no signs of a recovery from the economic recession that was triggered by the global
financial crises, and we expect difficult business conditions to persist, particularly inmass-production businesses. The Company will nevertheless forge ahead to rebuild its earnings
base and bring about sustained growth.
The Company expects consolidated net sales for the fiscal year ending March 31, 2010, of¥1,240.0 billion. The Company expects sales from the Shipbuilding and Rolling Stock &Construction Machinery segments to increase but sales from the Consumer Products &Machinery segment to decline sharply due to the worsening market environment.
Profit-wise, despite the Company’s determined efforts to thoroughly improve profitability
throughout its operations by cutting fixed costs and expenses and increasing productivity, theCompany expects operating income of ¥5.0 billion, recurring profit of ¥10.0 billion, and net
income of ¥6.0 billion due to the impact of the strong yen and decline in sales inmass-production businesses.
Assumed exchange rates are ¥95 to the US dollar and ¥125 to the euro.
Consolidated Financial Condition
Financial Condition
At March 31, 2009, total assets were ¥1,399.7 billion, up 1.5% versus March 31, 2008.
Current assets were up 1.3% to ¥995.7 billion. The main reason for the increase in current assets
was a rise in inventories, reflecting progress made on projects for which orders have been
received. The growth in tangible and intangible fixed assets more than offset the drop in thevalue of investment securities due to the stock price declines, and total fixed assets grew 1.8%
versus March 31, 2008, to ¥403.9 billion.
Current liabilities increased 0.6% versus March 31, 2008, to ¥830.0 billion, and long-term
liabilities grew 16.7% to ¥274.5 billion. As a result, total liabilities increased 4.2% to 1,104.5
billion. This was primarily due to a ¥72.5 billion decrease in payables being more than offset byan ¥112.3 billion increase in interest-bearing debt.
Net assets decreased 7.4% versus March 31, 2008, to ¥295.2 billion reflecting a decrease inforeign currency translation adjustments due to the strong yen.
6Cash FlowsNet cash used in operating activities in fiscal 2008 was ¥41.2 billion, ¥ 117.0 billion morethan in fiscal 2007. Principal cash inflows were depreciation and amortization of ¥44.3 billion
and income before income taxes and minority interests of ¥23.6 billion. Principal cash outflows
were a decrease in accounts payable of ¥55.0 billion, an increase in inventories of ¥54.7 billion,
and income taxes of ¥25.0 billion.
Net cash used in investing activities amounted to ¥72.2 billion, ¥23.1 billion higher than in
fiscal 2007. This cash was principally used to acquire property, plant and equipment.
Net cash provided by financing activities was to ¥107.6 billion, ¥ 135.0 billion more than in
fiscal 2007. The increase was mainly due to an increase in borrowings.
Cash Flow Ratios
March 31,
Ratio of shareholders’ equity
to total assets (%)
Market-value equity ratio (%)
Cash flow to debt ratio (%)
Interest-coverage ratio (times)

2005
16.8

2006
18.5

2007
21.3

2008
22.7

2009
20.7

22.3
495.4
11.3

50.0
698.8
8.5

60.9
663.3
7.1

26.8
364.8
9.4

23.3
–
–

Notes:
1. Ratios are calculated as follows:
Ratio of shareholders’ equity to total assets: Shareholders’ equity / Total assets
Market-value equity ratio: Market capitalization / Total assets
Cashflow to debt ratio: Interest-bearing debt / Cash flow from operating activities
Interest-coverage ratio: Cash flow from operating activities / Interest paid
2. All indices are calculated using consolidated figures.
3. Market capitalization is calculated by multiplying the closing price of the company’s stock by the number ofshares issued and outstanding (excluding treasury stock) at the end of the fiscal year.
4. The figure for cash flow from operating activities is taken from cash flow from operating activities on the
consolidated statement of cash flows.
5. Interest-bearing debt consists of all interest-bearing debt listed under liabilities on the consolidated balance
sheet. Interest paid is the figure for “Cash paid for interest” on the consolidated statement of cash flows.
6. Cash flow from operating activities was negative for the fiscal year ended March 31, 2009, so the cash flow
to debt ratio and the interest-coverage ratio are not given for that year.

Dividend Policy and Dividends for the Fiscal Years Through March 31, 2009 and 2010
The Company’s basic policy is to continuously pay shareholders a stable dividend
commensurate with the Company’s earnings while accruing sufficient internal reserves to boost
earnings power and strengthen and enhance the Company’s operating foundation to enable
future growth. In consideration of recent earnings performance, internal reserves, and otherrelevant factors, the Company intends to pay a dividend of ¥3 per share for the fiscal year ended
March 31, 2009.
The Company also intends to pay a dividend of ¥3 per share for the fiscal year ending March
31, 2010.
Business and Other Risks
No additional risks have surfaced since the Company reported on business and other risks in
its most recent full-year statutory financial report (filed on June 25, 2008). Information on
business and other risks is therefore omitted here.

7

Status of Group
There have been no material changes in the “Status of Affiliated Companies” or “Chart ofOperations (Nature of Operations)” in the Company’s most recent full-year statutory financial
report (filed on June 25, 2008). The Company has therefore omitted an updated disclosure.
Management Strategy(1) Basic Management Strategy
In accord with its mission statement, the Group is pursuing a mission of “Kawasaki, working
as one for the good of the planet.” The Group has amassed a diverse wealth of technologies
across a broad range of domains, most notably including land, marine, and air transport systems,
and energy and environmental engineering. By maximally utilizing and combining thesetechnological assets, the Group aims to harmonize diverse values and reconcile contradictory
challenges such as material affluence and preservation of the global environment. As an
integrated technology group, the Group is explicitly committed to contributing to thedevelopment of society by creating new value. Amid today’s rapidly changing societal andoperating environment, the Group’s basic management policy is to enhance corporate value andincrease customer satisfaction by maximally capitalizing on its integrated technologicalcapabilities to offer customers exceptional products and services differentiated on the basis ofbrand or technology, while meeting the expectations of shareholders, customers, employees, andlocal communities.
(2) Target Management Metrics
In the aim of generating profits that meet investors’ expectations, the Group has adopted
ROIC (return on invested capital: earnings before interest and taxes ÷ invested capital), a
measure of capital efficiency, as its target metric of operating performance. While seeking tomaximize ROIC, the Group will also endeavor to strengthen its financial condition throughearnings growth and improvement in invested-capital efficiency. In the aim of strengthening its
earnings power, the Group has adopted the ratio of recurring profit to net sales as a second target
performance metric pursuant to its Global K medium-term business plan.
(3) Medium-to-long-term Management Strategy
Under its Global K medium-term business plan for the five years through fiscal 2011, theCompany aims to develop into a highly profitable global company and realize its
aforementioned corporate vision based on the core management principles of “quality followedby quantity,” “selectivity and concentration,” and “creation of new value.”In the first half of the Global K plan’s term, the Company made steady progress in building
up its overall earnings foundation by implementing various initiatives based on the above coremanagement principles to improve individual businesses’ profitability and reform or discontinue
unprofitable businesses. Since fiscal 2009, however, the Company has been beset by an adverse
operating environment amid the global recession triggered by US subprime mortgage defaults.
In response to such a challenging environment, the Company is pursuing various initiatives inaccord with the above basic policies.
(4) Management Priorities
Through fiscal 2008, the Group was generally on schedule in achieving its earnings targets
toward realization of the Global K plan’s vision through business expansion and growth.
However, the Group’s operating environment has since turned increasingly adverse as severe
repercussions from the financial market turmoil and credit crunch triggered by US subprime
mortgage problems have fed through to the real economy. Japan in particular is projected toexperience the most severe economic contraction of any developed country. Despite suchadversity, the Group will maintain sound operations as a manufacturer.
To do so in an environment of temporarily heightened business risk, the Group recognizes theimportance of conducting operations with an even stronger commitment to risk management
and the concept of “quality followed by quantity,” while also upholding the Global K plan’s
policies. The Group will closely monitor the market environment and place priority on lowering8its breakeven sales level, improving cash flow, and streamlining its balance sheet. In businesses
where contraction in demand is a concern, the Group will assess risk more rigorously and screenorder bookings and investment proposals more selectively. Meanwhile, the Group will proceed
as planned in funneling resources into growth businesses (e.g., energy, environmental
engineering) and R&D programs essential to lay the technological foundation for the Group’s
future. The Group will also continue to strategically invest in priority markets, giving due
consideration to selection of investment opportunities and the speed and magnitude of resource
deployment.
The Group aims to strengthen individual businesses’ earnings power by implementing thefollowing measures specific to each business.
(1) Rolling Stock: With a large backlog of orders from North America and elsewhere, the rollingstock business will strengthen its operations in its three major markets: Japan, North America,and Asia.
(2) Aerospace: The aerospace business will advance several major projects, including preparing
for mass production of the Boeing 787 and the P-1 maritime patrol aircraft, and completingdevelopment of the next transport aircraft.
(3) Gas Turbines & Machinery: The gas turbine & machinery business will strengthen its
competitiveness by boosting its overall productivity, proceeding with development of a newmodel of jet engine for commercial aircraft, and strengthening its energy and environmental
engineering operations by developing new products, including new models of industrial gas
turbines and highly efficient gas engines.
(4) Consumer Products & Machinery: Faced with headwinds in the form of a global recession,
the consumer products & machinery business will strengthen its development and production
operations on a global basis in the aim of boosting its products’ competitiveness and improving
the profitability of motorcycles targeted at developed-country markets, its highest-priority
business.
(5) Plant & Infrastructure Engineering: The plant & infrastructure engineering business, led bysubsidiary Kawasaki Plant Systems, Ltd., will accelerate development of the energy-related andenvironmental businesses designated in the Global K medium-term plan.
(6) Shipbuilding: With its sights set on winning new orders, the shipbuilding business willsolidify improvement in earnings through such means as optimizing the Kawasaki Shipbuilding
Corporation’s production systems, including Chinese operations.
(7) Hydraulic Machinery: The hydraulic machinery business will strengthen its pentapolar
global operations (based in Japan, the US, Europe, China, and Korea) and nimbly invest
enterprise resources while lowering its breakeven sales level.
(8) Industrial Robots: The industrial robot business will strengthen its development capabilities
and cultivate new customers.
(9) Construction Machinery: The construction machinery business will strengthen its
development and sales capabilities through its alliance with Hitachi Construction MachineryCo., Ltd., and TCM Corporation.
Needless to add, the Group’s business activities such as those described above are predicatedon compliance with applicable laws. The Group has prescribed internal corporate ethics
regulations and is endeavoring to ensure that all personnel are knowledgeable about applicablelaws with which they must comply. Toward this end, the Group conducts sequential education
programs, distributes a variety of guidebooks, and has established compliance committees
within various organizational units. The Group is also carrying out organizational initiatives toensure legal compliance, mainly in the organizational units in charge of operating divisions andthe head office. Meanwhile, the Group is endeavoring to establish a corporate culture thatalways places utmost priority on information disclosure and transparency.
The Group thus aims to enhance corporate value and establish reliable Kawasaki brands bystrengthening its earnings power across all its businesses and ensuring rigorous compliance withapplicable laws.

9

Consolidated Financial Statements(1) Consolidated Balance Sheets
Millions of yen
As of
As of
March 31, 2008
March 31, 2009
AssetsCurrent assets
Cash on hand and in banks
Trade receivables
Inventories
Merchandise and finished products
Work in process
Raw materials and supplies
Deferred tax assets
Other current assets
Allowance for doubtful receivables

39,875417,934
439,30925,25064,053(4,140)982,282

31,955402,341
69,609325,578
81,25333,23254,937(3,111)
995,796

100,982
68,37164,457
9,938
16,178259,927

105,81776,94464,287690
19,572
16,805284,117

Total current assets
Fixed assets
Net property, plant and equipment
Buildings and structures
Machinery and equipment
Land
Leased assets
Construction in progress
Other
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investments in securities
Long-term loans
Deferred tax assets
Other
Allowance for doubtful receivables
Total investments and other assets
Total fixed assets
Total assets

16,053
16,053

1,106
18,466
19,57347,1892,005
38,33634,319(1,344)
120,506
396,487
1,378,769

24,865559
42,77333,272(1,187)100,283
403,974
1,399,770

Liabilities
Current liabilities
Trade payables
Short-term borrowings
Current position of lease obligations
Income taxes payable
Deferred tax liabilities
Accrued bonuses
Provision for product warranties
Provision for losses on construction contracts
Provision for losses on damages suit
Advances from customers
Current portion of bonds
Commercial paper
Other
Total current liabilities

430,999
120,162
16,836269
19,263
6,733
8,836
2,245
124,679
17,51876,998824,541

358,478
157,082
272
8,710
931
14,241
7,638
20,9307,410
125,762
20,00030,00078,547830,006

10

Long-term liabilities
Bonds payable
Long-term debt
Lease obligations
Deferred tax liabilities
Provision for environmental measures
Employees’ retirement and severance benefits
Other
Total long-term liabilities
Total liabilities
Net assets
Shareholders’ equity
Common stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Valuation and translation adjustments
Net unrealized gains (losses) on securities
Gains (losses) on hedging items
Foreign currency translation adjustment
Total valuation and translation adjustments
Minority interests
Total net assets
Total net assets and liabilities

11

60,99077,776
5,433
2,167
81,927
6,895
235,190
1,059,732

40,990140,715
227
2,938
3,980
79,9695,697
274,518
1,104,525

104,328
54,290151,401(459)
309,560

104,328
54,281
154,272(467)
312,415

10,292
5,217(11,878)
3,631
5,845
319,037
1,378,769

3,139
(263)
(24,850)(21,974)
4,804
295,245
1,399,770

(2) Consolidated Statements of Income
Millions of yen
Year ended March
31, 2008
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Salaries and benefits
Advertising expenses
R&D expenses
Provision for doubtful receivables
Other
Total selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Gain on sale of marketable and investment securities
Equity income of non-consolidated subsidiaries and affiliates
Foreign exchange gain, net
Other
Total non-operating income
Non-operating expenses
Interest expense
Foreign exchange loss
Loss on valuation of securities
Other
Total non-operating expenses
Recurring profit
Extraordinary income
Gain on sale of business
Gain on contribution of securities to the pension trust
Gain on sale of affiliates’ shares
Total extraordinary income
Extraordinary losses
Provision for losses on damages suit
Loss on contribution of securities to the pension trust
Provision for environmental measures
Loss on impairment of fixed assets
Loss on sale of investments in affiliates
Other
Total extraordinary losses
Income before income taxes and minority interests
Income taxes
Current
Deferred
Total income taxes
Minority interests in net income of consolidated subsidiaries
Net income

12Year ended March
31, 2009

1,501,097
1,262,032
239,064

1,338,597
1,146,944
191,652

43,112
14,65036,22868,163
162,154
76,91041,87912,96638,256359
69,477
162,939
28,713

3,654
1,350
465
7,642
4,733
17,845

3,141
1,210
620
8,709
10,373
3,784
27,838

7,980
11,548
11,25430,783
63,972

6,658
1,875
9,298
17,832
38,718

1,375
292
1,668

594
594

2,245
2,167
2,763
408
7,585
58,055

5,165
4,492
1,812
1,399
2,818
15,68823,62523,270(1,260)22,010903
35,141

16,783(6,021)
10,761
1,135
11,727

Consolidated Statement of Changes in Shareholders’ Equity
Millions of yen
Year ended March
Year ended March
31, 2008
31, 2009
Shareholders’ equity
Common stock
Balance at end of previous year
Changes during the period
Issuance of new shares
Total changes during the period
Balance at end of year
Capital surplus
Balance at end of previous year
Changes during the period
Issuance of new shares
Treasury stock disposed
Other
Total changes during the period
Balance at end of year
Retained earnings
Balance at end of previous year
Changes during the period
Cash dividend
Net income for the year
Other
Total changes during the period
Balance at end of year
Treasury stock
Balance at end of previous year
Changes during the period
Treasury stock purchased
Treasury stock disposed
Other
Total changes during the period
Balance at end of year
Total shareholders’ equity
Balance at end of previous year
Changes during the period
Issuance of new shares
Cash dividend
Net income for the year
Treasury stock purchased
Treasury stock disposed
Other
Total changes during the period
Balance at end of year
Valuation and translation adjustments
Net unrealized gain (loss) on securities
Balance at end of previous year
Changes during the period
Net changes in items other than shareholders’ equity
Total changes during the period
Balance at end of year
Gains (losses) on hedging items
Balance at end of previous year
Changes during the period
Net changes in items other than shareholders’ equity

13

103,187

104,328

1,141
1,141
104,328

104,328

53,17954,290

1,112
18
(19)
1,111
54,290(9)(9)
54,281

125,798

151,401(8,297)35,141(1,241)25,602
151,401(8,341)
11,727(514)
2,871
154,272

(55)

(459)

(488)
79
4
(404)
(459)

(31)
23
(7)
(467)

282,110309,560

2,254(8,297)35,141(488)
97(1,256)27,450309,560(8,341)
11,727
(31)
14
(514)
2,854
312,415

19,342

10,292(9,049)(9,049)10,292(7,152)(7,152)
3,139(1,607)

5,217

6,824

(5,480)Total changes during the period
Balance at end of year
Foreign currency translation adjustments
Balance at end of previous year
Changes during the period
Net changes in items other than shareholders’ equity
Total changes during the period
Balance at end of year
Total Valuation and translation adjustments
Balance at end of previous year
Changes during the period
Net changes in items other than shareholders’ equity
Total changes during the period
Balance at end of year
Minority interests
Balance at end of previous year
Changes during the period
Net changes in items other than shareholders’ equity
Total changes during the period
Balance at end of year
Total net assets
Balance at end of previous year
Changes during the period
Issuance of new shares
Cash dividend
Net income for the year
Treasury stock purchased
Treasury stock disposed
Other
Net changes in items other than shareholders’ equity
Total changes during the period
Balance at end of year

14

6,824
5,217

(5,480)(263)(9,417)(11,878)(2,461)(2,461)(11,878)(12,987)(12,987)(24,850)

8,317

3,631

(4,686)(4,686)
3,631(25,621)(25,621)(21,974)

4,949

5,845

895
895
5,845

(1,040)(1,040)4,804

295,377

319,037

2,254(8,297)35,141(488)
97(1,256)(3,790)23,659319,037(8,341)
11,727
(31)
14
(514)
(26,661)(23,807)295,245

(3) Consolidated Cash Flow Statement
Millions of yen
Year ended March Year ended March
31, 2008
31, 2009
Cash flow from operating activities
Income before income taxes and minority interests
Depreciation and amortization
Loss on impairment of fixed assets
Increase (decrease) in employees’ retirement and severance benefits
Increase (decrease) in accrued bonuses
Increase (decrease) in allowance for doubtful receivables
Increase (decrease) in provision for product warranties
Increase (decrease) in provision for losses on construction contracts
Increase (decrease) in provision for losses on damages suit
Increase (decrease) in provision for environmental measures
Loss on disposal of inventories(Gain) loss on sale of marketable and investment securities
Loss on valuation of securities(Gain) loss on sale of property, plant, and equipment(Gain) loss on contribution of securities to the pension trust
Investment gain on equity method
Interest and dividend income
Interest expense(Increase) decrease in trade receivables(Increase) decrease in inventories(Increase) decrease in other current assets
Increase (decrease) in trade payables
Increase (decrease) in advances received
Increase (decrease) in other current liabilities
Other
Subtotal
Cash received for interest and dividends
Cash paid for interest
Cash paid for income taxes
Cash paid for suspension of activities for participation in Moto GP
Net cash provided by operating activities
Cash flow from investing activities(Increase) decrease in time deposits with maturities over three months
Acquisition of property, plant and equipment
Proceeds from sale of property, plant and equipment
Acquisition of intangible assets
Proceeds from sale of intangible assets
Acquisition of investments in securities
Proceeds from sale of investments in securities
Acquisition of equity interest in subsidiaries resulting in change inscope of consolidation(Increase) decrease in short-term loans receivable
Additions to long-term loans receivable
Proceeds from collection of long-term loans receivable
Other
Net cash used for investing activities
Cash flow from financing activities
Increase (decrease) in short-term borrowings, net
Proceeds from long-term debt
Repayment of long-term debt
Redemption of bonds payable
Acquisition of treasury stock
Cash dividends paid
Cash dividends paid to minority interests
Other
Net cash used for financing activities
Effect of exchange rate changes
Increase (decrease) in cash and cash equivalents due to changes
Cash and cash equivalents at beginning of year15

58,05537,455
2,763
7,124
1,451
(406)
(3,497)
(153)
2,167
1,350
(348)
1,397
(1,375)(7,642)(5,004)
7,980(11,102)(19,045)(10,724)
26,8701,849
7,757(3,315)93,606
9,607(8,035)(19,413)75,76523,62544,334
1,399
2,314(5,335)(849)
1,161
12,201
5,165
1,812
2,382
(620)
1,875
164
4,492
(8,709)(4,351)
6,658
5,398(54,708)(2,709)(55,077)
8,274(8,867)2,916(17,050)
8,926(6,480)(25,064)(1,587)(41,256)(1,634)(45,598)468(5,237)55(1,183)5,730

705(68,059)
2,902(6,400)14(3,043)
1,795-(1,241)

(277)
(989)
94
(516)
(49,090)

(33)
(165)
1,474
(233)
(72,283)

13,0983,327(14,817)(20,000)(479)(8,262)(259)(27,391)(501)(1,217)39,22867,88073,551(7,499)(17,518)(16)(8,320)(361)(22)
107,692(908)(6,755)38,169

Increase in cash and cash equivalents due to changes in fiscal periods ofconsolidated subsidiaries
Cash and cash equivalents at end of year

16

158

-

38,16931,413

(5) Events or circumstances that raise material doubt regarding the going-concern
assumption
Not applicable(6) Basis of Preparation of Financial Statements
Other than the information in (7) “Changes in Basis of Preparation of Financial Statements,”
no material changes have been made in the information in the Company’s most recent full-year
statutory financial report (filed on June 25, 2008). The Company has therefore omitted an
updated disclosure.
(7) Changes in Basis of Preparation of Financial Statements
1. Change in the scope of consolidation(1) Change in the scope of consolidation
Seven companies became consolidated subsidiaries. Earth Technica Co., Ltd. (previously
accounted for under the equity method), Earth Technica’s subsidiary Fukae Powtec Co., Ltd.,and another company were added as consolidated subsidiaries because the Company acquired
additional shares in Earth Technica. Khitkan Co., Ltd., (previously accounted for under theequity method) was also added as a consolidated subsidiary because the Company acquired
additional shares in that company. Additionally, the Company established three newconsolidated subsidiaries.
Five companies ceased to be consolidated subsidiaries. Four former consolidated subsidiaries
were excluded from the scope of consolidation because they merged with other consolidated
subsidiaries. The remaining company was excluded because it was liquidated.
(2) Number of consolidated subsidiaries after change
97 companies
2. Change in application of the equity method(1) Non-consolidated subsidiaries which are accounted for under the equity method:None(2) Associated companies which are accounted for under the equity method:
1) Change in associated companies which are accounted for under the equity method:
Six companies ceased to be equity-method subsidiaries/affiliates. Earth Technica Co.,
Ltd., Earth Technica’s subsidiary Fukae Powtec Co., Ltd., and another company ceased tobe equity-method subsidiaries/affiliates because the Company acquired additional sharesin Earth Technica. Khitkan Co., Ltd., also ceased to be accounted for under the equity
method because the Company acquired additional shares in that company. The remaining
two companies ceased to be equity-method subsidiaries/affiliates because the Company
sold them.
2) Number of associated companies accounted for under the equity method after change
12 companies
3. Changes in accounting standards
Valuation standards / methods for principal assets
Inventories
The Company previously valued ordinary held-for-sale inventories mainly at cost by the
specific identification, moving average, and FIFO methods. Effective the fiscal year ended
March 31, 2009, the Company switched to valuing inventories mainly at cost (writing down
inventories’ carrying value to reflect impairment of the goods’ utility) by the specificidentification, moving average, and FIFO methods when it adopted the Accounting Standard
for Measurement of Inventories (ASBJ Statement No. 9, as revised July 5, 2006).
Due to this change, gross profit, operating income, recurring profit, and income before
income taxes and minority interests for the fiscal year ended March 31, 2009, were each 4,074
million yen lower.
The effects on segment information are stated in the relevant sections.
17

4. Changes in Accounting Policies(1) Adoption of the Practical Solution on Unification of Accounting Policies Applied to Foreign
Subsidiaries for Consolidated Financial Statements
Effective the fiscal year ended March 31, 2009, the Company adopted the Practical Solution
on Unification of Accounting Policies Applied to Foreign Subsidiaries for Consolidated
Financial Statements (ASBJ Practical Issues Task Force Report No. 18, May 17, 2006).
This change did not affect income/loss for the fiscal year ended March 31, 2009.
(2) Adoption of the accounting standard for lease transactions (lessee)
Previously, finance leases for which ownership of the leased assets does not transfer to thelessees were not capitalized but accounted for in the same manner as operating leases. Effective
the fiscal year ended March 31, 2009, the Company adopted the Accounting Standard for Lease
Transactions (ASBJ Statement No.13, 1st Committee of the Business Accounting Council, June
17, 1993; revised March 30, 2007) and the Guidance on Accounting Standard for Lease
Transactions (ASBJ Statement Guidance No.16, Accounting System Committee, JapaneseInstitute of Certified Public Accountants, January 18, 1994; revised March 30, 2007).
Accordingly, such finance leases are now accounted for in the same manner as purchase/saletransactions.
Leased assets of which ownership does not transfer to the lessees were depreciated with thestraight-line method assuming the lease period equals the estimated useful life and the residual
value at the end of the lease term is nil.
Finance leases for which ownership of the leased assets does not transfer to the lessees enteredinto on or before March 31, 2008, continue to be accounted for in the same manner as operatingleases.
This change did not materially affect income/loss for the fiscal year ended March 31, 2009.
(3) Adoption of the accounting standard for lease transactions (lessor)
Previously, finance leases for which ownership of the leased assets does not transfer to thelessees were not capitalized but accounted for in the same manner as operating leases. Effective
the fiscal year ended March 31, 2009, the Company adopted the Accounting Standard for Lease
Transactions (ASBJ Statement No.13, 1st Committee of the Business Accounting Council, June
17, 1993; revised March 30, 2007) and the Guidance on Accounting Standard for Lease
Transactions (ASBJ Statement Guidance No.16, Accounting System Committee, JapaneseInstitute of Certified Public Accountants, January 18, 1994; revised March 30, 2007).
Accordingly, such finance leases are now accounted for in the same manner as purchase/saletransactions.
Finance leases for which ownership of the leased assets does not transfer to the lessees enteredinto on or before March 31, 2008, continue to be accounted for in the same manner as operatingleases.
This change did not materially affect income/loss for the fiscal year ended March 31, 2009.

18

Changes in the Presentation of Accounts
Year ended March 31, 2009 (April 1, 2008 – March 31, 2009)
Consolidated Balance Sheets
In accord with the Cabinet Office Ordinance on Partial Revision of the Regulations
Concerning the Terminology, Forms and Preparation Methods of Financial Statements etc.
(Cabinet Office Ordinance No. 50, August 7, 2008), effective the fiscal year ended March 31,
2009, assets that were presented as “inventories” in the fiscal year ended March 31, 2008, aredivided and presented as “merchandise and finished products,” “work in process,” and “rawmaterials and supplies.” “Merchandise and finished products,” “work in process,” and “rawmaterials and supplies” included in “inventories” in the fiscal year ended March 31, 2008, were
62,386 million yen, 296,265 million yen, and 80,656 million yen, respectively.
Consolidated Statements of Income“Loss on valuation of securities” in non-operating expenses was presented separately because
the amount exceeded 10% of total non-operating expenses.
Valuation loss on marketable and investment securities for the fiscal year ended March 31,
2008, was 59 million yen in total and included in “other” in non-operating expenses.
Consolidated Cash Flow Statements“Increase (decrease) in provision for product warranties” and “loss on valuation of securities”
in cash flow from operating activities were presented separately. The former to ensure clear
disclosure of the Group’s cash flows; the latter due to its increased importance. “Increase(decrease) in provision for product warranties” and “loss on valuation of securities” for the
fiscal year ended March 31, 2008, were 1,755 million yen and 59 million yen, respectively, andincluded in “other” in cash flow from operating activities.
Additional Information
The Company and its consolidated subsidiaries in Japan have revised machinery’s useful life
pursuant to 2008 amendments to the tax code. Due to this change, operating income, recurring
profit, and income before income taxes and minority interests were each 1,690 million yen
lower.
The effects on segment information are stated in the relevant sections.
(8) Notes on Financial Statements
Consolidated Balance Sheets
Year ended March 31, 2009 (March 31, 2009)
Information is omitted here as its disclosure in this report is not of material importance.
Consolidated Statements of Income
Year ended March 31, 2009 (April 1, 2008 to March 31, 2009)*1. “Gain on sale of business” represents the gain on sale of consolidated subsidiary Kawasaki
Life Corporation’s golf course management business.
2. “Loss on contribution of securities to the pension trust” was a loss incurred by additional
contribution of investment securities held by the Company to the pension trust.
3. Loss on impairment of fixed assets(1) Outline asset groups in which loss on impairment of fixed assets was recognizedPurposeLocation
Type
Assets held for business
Sodegaura city, Chiba
Machinery, equipment, etc.
(2) Method for asset grouping
Asset grouping is based on line of business, and principle assets held for lease and idle assets
are treated as independent asset groups.
(3) Reason for recognition of loss on impairment of fixed assets
The book values of some assets were written down to recoverable amounts due to19deteriorating business income, market price declines, and/or diminishing prospective utility.
(4) Calculation of recoverable amount
Recoverable amounts are measured by net sales price or utility value. Net sales price iscalculated based on assessment by a real estate appraiser or on fixed assets’ tax-assessment
values . Utility value is calculated based on expected future cash flows.
(5) Loss on impairment of fixed assets
A write-down of 1,399 million yen, mainly for machinery and equipment, was recorded asloss on impairment of fixed assets in extraordinary losses.
4. Other items (extraordinary losses) comprised a loss associated with suspension of Moto GP
racing activities.
Notes on consolidated statements of income other than those presented above are omitted
here, as their disclosure in this report is not of material importance.
Information Omitted
Notes on the consolidated statements of changes in shareholders’ equity, the consolidated cash
flow statements, lease transactions, related-party transactions, tax-effect accounting, securities,
derivative transactions, retirement benefits, stock-based compensation, business combinations,and other matters are omitted here, as their disclosure in this report is not of material importance20

Segment Information
1) Information by industry segment
Year ended March 31, 2008 (April 1, 2007 – March 31, 2008)
Millions of yen
Assets, depreciation/amortization, andcapital expenditures

Sales and operating income (loss)

141,397

1,567

142,965

139,712

Operatingincome(loss)
3,252

171,738726

172,465

165,292

237,348

1,644

238,993

185,486

16,940142,547

Total sales
External sales Intersegment
sales
Shipbuilding
Rolling Stock &Construction
Machinery
Aerospace
Gas Turbines &Machinery
Plant &
Infrastructure
Engineering
Consumer
Products &MachineryHydraulic
Machinery
Other
Total
Eliminations/
corporation
Consolidated total

Operatingexpenses

AssetsDepreciation
Capital/amortization expenditures

134,576

2,458

4,160

7,172

161,585

3,578

6,454

228,117

10,875281,516

6,232

6,154

202,426

189,034

13,392

188,133

3,765

5,391

13,746

156,293

145,454

10,839132,174

1,926

1,318

433,9628,243

442,206

422,536

19,669315,308

13,517

19,36684,027

8,724

92,752

83,635

9,117

53,347

2,658

4,801

104,588
1,501,097

40,23391,827

144,822
1,592,925

142,468
1,516,252

2,353
76,672

164,445
1,431,087

1,699
35,836

1,674
49,320-(91,827)(91,827)(92,065)237(52,318)

1,618

1,217

1,501,097-

1,501,097

1,424,186

76,9101,378,769

37,45550,538Notes: 1. Method of segmentation
Business segmentation is based on the categorization used by management.
2. Major products by industry segment
Industry segment
Shipbuilding
Rolling Stock &Construction Machinery
Aerospace
Gas Turbines &Machinery
Plant & Infrastructure
Engineering
Consumer Products &MachineryHydraulic Machinery
Other

Major products
Ships and vessels
Rolling stock, construction machinery, snowplows
Aircrafts
Jet engines, general-purpose gas turbine generators, movers
Industrial equipment, boilers, environmental equipment, steel structures
Motorcycles, personal watercraft, all-terrain vehicles (ATV), utility
vehicles, general-purpose gasoline engines, industrial robots
Industrial hydraulic products
Commercial activities, sales/order agency and intermediary activities,
management of welfare facilities

3. “Eliminations/corporation” includes working funds (cash on hand and in banks) of theCompany, fixed assets shared by all the segments, deferred tax assets and long-term investment
funds (investment in securities), together totaling 115,075 million yen.
4. Figures for “Eliminations/corporation” under “Depreciation/amortization” include
depreciation expenses on fixed assets shared by all the segments, and figures for“Eliminations/corporation” under “Capital expenditure” include expenses related to fixed
assets shared by all the segments.

21

5. Change in inventory valuation method
In accord with the amendment of the Corporate Tax Act in 2008, effective the fiscal year ended
March 31, 2008, the Company and its consolidated subsidiaries in Japan switched theirdepreciation method for property, plant and equipment acquired on or after April 1, 2007, to thedepreciation method described in the Corporate Tax Act as amended.
Further, property, plant and equipment acquired on or before March 31, 2007, is depreciated inaccord with the Corporate Tax Act before amendment to 5% of their acquisition cost; and thedifference between 5% of the acquisition cost and the memorandum price is then depreciatedusing the straight-line method over five years from the following accounting year and recorded
in depreciation expense.
Due to this change, compared with what they would have been under the previous accounting
method, operating expenses for the fiscal year ended March 31, 2008, in the Shipbuilding
business were 362 million yen higher; in the Rolling Stock & Construction Machinery business,
314 million yen higher; in the Aerospace business, 708 million yen higher; in the Gas Turbines& Machinery business, 526 million yen higher; in the Plant & Infrastructure Engineeringbusiness, 172 million yen higher; in the Consumer Products & Machinery business, 1,371
million yen higher; in the Hydraulic Machinery business, 259 million yen higher; in Other
businesses, 208 million yen higher. Operating income in each segment was lower by the sameamounts.
6. Change of segment name
Effective the fiscal year ended March 31, 2009, the Japanese name of the Plant, Infrastructure,& Steel Structures Engineering segment was changed to Plant & Infrastructure Engineering
due to the decreased importance of the steel-structures engineering to that business (the English
name remains Plant & Infrastructure Engineering). There was no effect on sales or operating
income/loss by segment.

22

Year ended March 31, 2009 (April 1, 2008 – March 31, 2009)
Millions of yen
Assets, depreciation/amortization, andcapital expenditures

Sales and operating income (loss)

126,426

1,761

128,188

129,207

Operatingincome(loss)(1,018)

186,454

1,367

187,822

176,452

200,424

1,873

202,298

195,156

18,315

213,471

105,178

13,852

336,459

Total sales
External sales Intersegment
sales
Shipbuilding
Rolling Stock &Construction
Machinery
Aerospace
Gas Turbines &Machinery
Plant &
Infrastructure
Engineering
Consumer
Products &MachineryHydraulic
Machinery
Other
Total
Eliminations/
corporation
Consolidated total

Operatingexpenses

AssetsDepreciation
Capital/amortization expenditures

139,016

3,986

7,115

11,369200,481

5,139

6,147

206,475(4,177)

331,670

6,659

20,380202,446

11,025203,902

4,606

10,176

119,030

110,059

8,971

113,157

1,716

1,270

4,037

340,497

350,640(10,142)

268,013

14,957

24,297

84,919103,579
1,338,597

8,523
42,14391,87693,443
145,7221,430,473

85,053
141,466
1,401,802

8,389
4,256
28,67160,429149,478
1,466,151

3,729
1,846
42,642

10,5391,173
81,0991,338,597(91,876)-(91,876)
1,338,597(91,918)
1,309,883

41
28,713(66,380)
1,399,770

1,691
44,334

1,350
82,450Notes: 1. Method of segmentation
Business segmentation is based on the categorization used by management.
2. Major products by industry segment
Industry segment
Shipbuilding
Rolling Stock &Construction Machinery
Aerospace
Gas Turbines &Machinery
Plant & Infrastructure
Engineering
Consumer Products &MachineryHydraulic Machinery
Other

Major products
Ships and vessels
Rolling stock, construction machinery, snowplows
Aircrafts
Jet engines, general-purpose gas turbine generators, movers
Industrial equipment, boilers, environmental equipment, steel structures
Motorcycles, personal watercraft, all-terrain vehicles (ATV), utility
vehicles, general-purpose gasoline engines, industrial robots
Industrial hydraulic products
Commercial activities, sales/order agency and intermediary activities,
management of welfare facilities

3. “Eliminations/corporation” includes working funds (cash on hand and in banks) of theCompany, fixed assets shared by all the segments, deferred tax assets, and long-term
investment funds (investment in securities), together totaling 96,934 million yen.
4. Figures for “Eliminations/corporation” under “Depreciation/amortization” include
depreciation expenses for fixed assets shared by all the segments, and figures for“Eliminations/corporation” under “Capital expenditure” include expenses related to fixed
assets shared by all the segments.

23

5. Change in inventory valuation standard and method
The Company previously valued ordinary held-for-sale inventories mainly at cost by the
specific identification, moving average, and FIFO methods. Effective the first quarter of the
fiscal year ended March 31, 2009, the Company switched to valuing inventories mainly at cost
(writing down of inventories’ carrying value to reflect impairment of the goods’ utility) by the
specific identification, moving average, and FIFO methods when it adopted the AccountingStandard for Measurement of Inventories (ASBJ Statement No. 9, as revised July 5, 2006). Dueto this change, operating income for the fiscal year ended March 31, 2009, in the Rolling Stock& Construction Machinery business was 516 million yen lower; in the Aerospace business,
1,226 million yen lower; in the Gas Turbines & Machinery business, 1,677 million yen lower;
in the Plant & Infrastructure Engineering business, 29 million yen lower; in the Consumer
Products & Machinery business, 486 million yen lower; in the Hydraulic Machinery business,
103 million yen lower; and in the Other businesses, 34 million yen lower.
6. Change in useful life for property, plant and equipment
The Company and some of its consolidated subsidiaries in Japan have revised machinery’s
useful life and asset groupings pursuant to 2008 amendments to the tax code. Due to thischange, operating income for the fiscal year ended March 31, 2009, in the Shipbuilding
business was 543 million yen lower; in the Rolling Stock & Construction Machinery business,
473 million yen lower; in the Aerospace business, 271 million yen lower; in the Gas Turbines& Machinery business, 260 million yen lower; in the Plant & Infrastructure Engineeringbusiness, 53 million yen lower; in the Consumer Products & Machinery business, 205 million
yen lower; in the Other businesses, 48 million yen lower; while in the Hydraulic Machinery
business, it was 166 million yen higher.

242) Information by geographic area
Year ended March 31, 2008 (April 1, 2007 – March 31, 2008)
Millions of yen
External sales

Intersegment
sales

Total sales

Operatingexpenses

Operatingincome (loss)

1,058,487
267,559
131,608
33,296
10,145
1,501,097
1,501,097

307,546
25,201
5,320
24,751
246
363,067(363,067)-

1,366,033
292,761
136,928
58,048
10,392
1,864,164(363,067)
1,501,097

1,291,102
293,276
132,449
56,597
10,117
1,783,542(359,355)
1,424,186

74,931
(515)
4,479
1,451
274
80,622(3,711)
76,910

Japan
North America
EuropeAsia
Other areas
Total
Eliminations/corporate
Consolidated total

Assets
1,103,513
191,075
83,92837,9173,333
1,419,768(40,999)
1,378,769

Notes: 1. Classification method of geographic segment: by geographic proximity
2. Major countries or regions in each segment other than Japan:
North America
EuropeAsia
Other areas

The U.S.A. and Canada
The Netherlands, the United Kingdom,
and Germany
Thailand, Indonesia, the Philippines, and Korea
Australia and Brazil

3. “Eliminations/corporation” includes working funds (cash on hand and in banks) of theCompany, fixed assets shared by all the segments, deferred tax assets, and long-term
investment funds (investment in securities), together totaling 115,075 million yen.
4. Change in inventory valuation method
In accord with the amendment of the Corporate Tax Act in 2008, effective the fiscal year ended
March 31, 2008, the Company and its consolidated subsidiaries in Japan switched theirdepreciation method for property, plant and equipment acquired on or after April 1, 2007, to thedepreciation method described in the Corporate Tax Act as amended.
Further, property, plant and equipment acquired on or before March 31, 2007, is depreciated inaccord with the Corporate Tax Act before amendment to 5% of their acquisition cost; and thedifference between 5% of the acquisition cost and the memorandum price is then depreciatedusing the straight-line method over five years from the following accounting year and recorded
in depreciation expense.
Due to this change, compared with what it would have been under the previous accounting
method, operating expenses for the fiscal year ended March 31, 2008 in Japan was 3,924 million
yen higher, and operating income in Japan was lower by the same amount.

25

Year ended March 31, 2009 (April 1, 2008– March 31, 2009)
Millions of yen
External sales

Intersegment
sales

Total sales

Operatingexpenses

Operatingincome (loss)

974,453
220,855
90,89743,328
9,062
1,338,597
1,338,597

247,019
24,4994,563
41,818250
318,151(318,151)-

1,221,473
245,355
95,46085,1469,312
1,656,748(318,151)
1,338,597

1,208,066
246,742
94,75380,593
8,945
1,639,101(329,217)
1,309,883

13,406(1,386)
707
4,552
367
17,647
11,06528,713

Japan
North America
EuropeAsia
Other areas
Total
Eliminations/corporate
Consolidated total

Assets1,169,702
182,268
59,21638,4212,970
1,452,578(52,808)
1,399,770

Notes: 1. Classification method of geographic segment: by geographic proximity
2. Major countries or regions in each segment other than Japan:
North America
EuropeAsia
Other areas

The U.S.A. and Canada
The Netherlands, the United Kingdom,
and Germany
Thailand, Indonesia, the Philippines, and Korea
Australia and Brazil

3. “Eliminations/corporation” includes working funds (cash on hand and in banks) of theCompany, fixed assets shared by all the segments, deferred tax assets, and long-term
investment funds (investment in securities), together totaling 96,934 million yen.
4. Change in inventory valuation standard and method
The Company previously valued ordinary held-for-sale inventories mainly at cost by the
specific identification, moving average, and FIFO methods. Effective the first quarter of the
fiscal year ended March 31, 2009, the Company switched to valuing inventories mainly at cost
(writing down inventories’ carrying value to reflect impairment of the goods’ utility) by the
specific identification, moving average, and FIFO methods when it adopted the AccountingStandard for Measurement of Inventories (ASBJ Statement No. 9, as revised July 5, 2006). Dueto this change, operating income for the fiscal year ended March 31, 2009, in Japan was 4,074
million yen lower.
5. Change in useful life for property, plant and equipment
The Company and some of its consolidated subsidiaries on Japan have revised machinery’s
useful life and asset groupings pursuant to 2008 amendments to the tax code. Due to thischange, operating income for the fiscal year ended March 31, 2009, in Japan was 1,690 million
yen lower.

26

2. Overseas sales
Year ended March 31, 2008 (April 1, 2007 – March 31, 2008)
Millions of yen
Overseas sales
North America
EuropeAsia
Other areas
Total

Consolidated net sales

358,716
153,612
161,905
148,315
822,550

Ratio of overseas sales toconsolidated sales (%)

1,501,097

23.8
10.2
10.7
9.8
54.7

Notes: 1. “Overseas sales” includes sales by the Company and its consolidated subsidiaries to the countries andregions other than Japan.
2. Classification method of geographic segment: by geographic proximity
3. Major countries or regions in each segment:
North America
EuropeAsia
Other areas

The U.S.A. and Canada
The United Kingdom, France, the Netherlands, Germany,and Italy
China, Korea, Taiwan, Vietnam, and the Philippines
Panama, Brazil, Bahamas, and Australia

Year ended March 31, 2009 (April 1, 2008 – March 31, 2009)
Millions of yen
Overseas sales
North America
EuropeAsia
Other areas
Total

Consolidated net sales

309,979
116,298
174,310130,050
730,637

Ratio of overseas sales toconsolidated sales (%)

1,338,597

23.1
8.6
13.0
9.7
54.5

Notes: 1. “Overseas sales” includes sales by the Company and its consolidated subsidiaries to the countries andregions other than Japan.
2. Classification method of geographic segment: by geographic proximity
3. Major countries or regions in each segment:
North America
EuropeAsia
Other areas

The U.S.A. and Canada
The United Kingdom, France, the Netherlands, Germany,and Italy
China, Korea, the Philippines, Taiwan, and Indonesia
Panama, Bahamas, Brazil, and Australia

27

Per-share Data
As of March
31, 2008

As of March
31, 2009

187.7321.08
20.58

174.10
7.02
6.92

Net assets per share (yen)Earnings per share – basic (yen)Earnings per share – diluted (yen)Notes:

1. Net assets per share is computed based on the following data.
Millions of yen, except number of shares
Total net assets on consolidated balance sheets
Amounts excluded from total net assets
Of which: Minority interests
Net assets attributable to the common shares
Number of common shares used to compute net
assets per share (thousand shares)

As of March
31, 2008
319,037
5,845
5,845
313,192

As of March
31, 2009
295,2454,804
4,804
290,440

1,668,304

1,668,234

2. Both basic and diluted earnings per share are computed based on the following data.
Millions of yen, except number of shares and earnings per share
As of March
31, 2008
Earnings per share – basic
Net income
35,141
Earnings not attributable to common shareholders
Net income allocated to the common stocks
35,141
Weighted-average number of common shares
1,666,850(thousand shares)
Earnings per share – diluted
Net income adjustment
Of which: Interest expense etc.
Increase in common shares (thousand shares)
Of which:
Convertible bonds (thousand shares)
Bonds with stock acquisition rights (thousand shares)

Summary of non-diluting residual securities notincluded in the computation of diluted earnings per
share

11,727
11,727
1,668,271

96
96
45,28977
77
35,747

24,341
20,94818,037
17,709--Material subsequent events
Year ended March 31, 2009 (April 1, 2008 – March 31, 2009)
Not applicable28

As of March
31, 2009

Non-consolidated Financial Statements(1) Non-consolidated Balance Sheets
Millions of yen
As of
As of
March 31, 2008
March 31, 2009
AssetsCurrent assets
Cash on hand and in banks
Notes receivable-trade
Accounts receivable-trade
Work in process
Raw materials and supplies
Advance payments
Prepaid expenses
Deferred tax assets
Other current assets
Short-term loans
Accounts receivable, otherAccrued income
Derivative assets
Other
Total other current assets
Allowance for doubtful receivables
Total current assets
Fixed assets
Net property, plant and equipment
Buildings
Structures
Machinery and equipment
Vessels
Aircraft
VehiclesTools, furniture and fixtures
Land
Leased assets
Construction in progress
Total property, plant and equipment
Intangible assets
SoftwareLicense production and licensee’s execution right
Other
Total intangible assets
Investments and other assets
Investments in securities
Shares of affiliates
Investments in capital of affiliates
Long-term loans
Long-term loans to affiliates
Long-term loans to employees
Claims in bankruptcy and rehabilitation
Deferred tax assets
Other
Allowance for doubtful receivables
Total investments and other assets
Total fixed assets
Total assets

29

18,823
1,494
242,641
228,894
45,90916,289
302
6,351

9,607
1,595
266,188
238,757
50,006
20,318442
16,536

20,041
12,74924
17,3922,900
53,108(935)
612,879

26,417
11,096
33
9,900
3,003
50,451(947)
652,956

46,0459,155
30,416
2
200
649
9,547
34,441
3,410
133,869

48,646
9,389
35,4971
137
666
10,721
34,509547
15,271
155,389

3,793
398
7,064
11,256

3,474
114
10,16913,75843,41788,494
1,826
10
4,446
288
197
21,0005,903(629)
164,956
310,082
922,962

22,482
95,491
2,873
13
3,371
258
180
26,712
6,214(1,713)
155,883
325,031977,988

Liabilities
Current liabilities
Notes payable-trade
Accounts payable-trade
Short-term borrowings
Current portion of long-term debt
Current position of lease obligations
Accounts payable, otherAccrued expenses
Income taxes payable
Advances from customers
Deposits received
Unearned revenue
Accrued bonuses
Provision for product warranties
Provision for losses on construction contracts
Provision for losses on damages suit
Other current liabilities
Current portion of bonds payable
Current portion of convertible bonds payable
Commercial paper
Notes payable-facilities
Other
Total current liabilities
Long-term liabilities
Bonds payable
Convertible bondBonds with stock acquisition rights
Long-term debt
Lease obligations
Long-term accounts payable, other
Provision for environmental measures
Employees’ retirement and severance benefits
Other
Total long-term liabilities
Total liabilities
Net assets
Shareholders’ equity
Common stock
Capital surplus
Legal capital surplus
Other capital surplus
Total capital surplus
Retained earnings
Other retained earnings
Provision foe special depreciation
Provision for advanced depreciation of fixed assets
Provision for special account for advanced depreciationof fixed assets
Retained earnings brought forward
Total retained earnings
Treasury stock
Total shareholders’ equity
Valuation and translation adjustments
Net unrealized gains (losses) on securities
Gains (losses) on hedging items
Total valuation and translation adjustments
Total net assets

30

34,066
267,340
87,934
3,527
10,63925,411
5,817
35,6391,007
30
10,797
724
2,882
2,245

25,797214,072
118,968
8,974
119
18,851
26,954983
48,373
1,792
18
6,756
1,007
10,985
7,410

10,000
7,518
1,223
1,424
508,229

20,00030,0002,080
3,308
546,455

50,0007,038
3,952
70,155485
1,386
25,823524
159,366
667,596

30,0007,038
3,952
134,7112
374
2,945
21,238471
200,732
747,188

104,328

104,328

52,058
48
52,10752,05839
52,098

174
6,734

146
6,798

-

384

77,85984,769(459)
240,745

62,98870,318(467)
226,277

9,237
5,383
14,620255,366

2,872
1,649
4,522
230,799

922,962

Total net assets and liabilities

31

977,988(2) Non-consolidated Statements of Income
Millions of yen
Year ended March
31, 2008
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Salaries and benefits
Depreciation and amortization
Allowance for doubtful receivables
R&D expenses
Unallocated expenses
Contract expense
Other
Total selling, general and administrative expenses
Operating income (loss)
Non-operating income
Interest income
Dividend income
Gain on sale of marketable and investment securities
Foreign exchange gains, net
Reversal of allowance for doubtful receivables
Other
Total non-operating income
Non-operating expenses
Interest expense
Interest on bonds
Foreign exchange losses
Loss on valuation of securities
Other
Total non-operating expenses
Recurring profit
Extraordinary income
Gain on sale of investments in affiliates
Gain on contribution of securities to the pension trust
Gain on cancellation of shares due to absorption
Total extraordinary income
Extraordinary losses
Provision for losses on damages suit
Loss on impairment of fixed assets
Provision for environmental measures
Loss on contribution of securities to the pension trust
Provision for doubtful accounts of affiliates
Loss on valuation of stock of affiliates
Other
Total extraordinary losses
Income (loss) before income taxes
Income taxes
Current
Deferred
Total income taxes
Net income (loss)

32

Year ended March
31, 2009

889,963784,062
105,900

771,428
718,187
53,241

12,435769
32,230
5,649
3,778
7,983
62,84743,053

12,110778
732,8495,430
3,148
10,97865,302(12,061)

1,059
6,640
394
151
804
9,051

1,002
12,077
11
11,213
128
1,101
25,534

2,944
1,617
8,525
7,312
20,39931,705

3,465
1,008
1,777
4,608
10,859
2,614

1,522
1,375
189
3,088

-

2,245
2,662
1,386
6,294
28,499

5,165
1,558
4,492
1,230
452
2,818
15,716(13,102)

8,743(1,066)
7,677
20,822

2,030(9,023)(6,992)(6,109)(3) Non-consolidated Statement of Changes in Shareholders’ Equity
Millions of yen
Year ended March
Year ended March
31, 2008
31, 2009
Shareholders’ equity
Common stock
Balance at end of previous year
Changes during the period
Issuance of new shares
Total changes during the period
Balance at end of year
Capital surplus
Capital reserve
Balance at end of previous year
Changes during the period
Issuance of new shares
Total changes during the period
Balance at end of year
Other capital surplus
Balance at end of previous year
Changes during the period
Treasury stock disposed
Total changes during the period
Balance at end of year
Retained earnings
Other retained earnings
Provision for special depreciation
Balance at end of previous year
Changes during the period
Reversal of provision for special depreciation
Provision for special depreciation
Total changes during the period
Balance at end of year
Provision for advanced depreciation of fixed assets
Balance at end of previous year
Changes during the period
Reversal of provision for advanced depreciation of fixed assets
Provision for advanced depreciation of fixed assets
Total changes during the period
Balance at end of year
Provision for special account for advanced depreciation of fixed
assetsBalance at end of previous year
Changes during the period
Reversal of provision for special account for advanced
depreciation of fixed assets
Provision for special account for advanced depreciation of
fixed assets
Total changes during the period
Balance at end of year
Retained earnings brought forward
Balance at end of previous year
Changes during the period
Cash dividend
Net income
Reversal of provision for special depreciation
Provision for special depreciation
Reversal of provision for advanced depreciation of
fixed assets

33

103,187

104,328

1,141
1,141
104,328

104,328

50,94552,0581,112
1,112
52,05852,058

49

48

(1)
(1)
48

(9)
(9)
39

423

174

(251)
2
(249)
174

(33)
5
(28)
146

6,963

6,734

(228)
(228)
6,734

(64)
128
63
6,798

-

-

-

-

-

384

-

384
384

64,857

77,859(8,297)
20,822251(2)(8,341)(6,109)
33
(5)

228

64

Provision for advanced depreciation of fixed assets
Provision for special account for advanced depreciation of
fixed assets
Total changes during the period
Balance at end of year
Treasury stock
Balance at end of previous year
Changes during the period
Treasury stock purchased
Treasury stock disposed
Total changes during the period
Balance at end of year
Total shareholders’ equity
Balance at end of previous year
Changes during the period
Issuance of new shares
Cash dividend
Net income for the year
Treasury stock purchased
Treasury stock disposed
Total changes during the period
Balance at end of year
Valuation and translation adjustments
Net unrealized gain (loss) on securities
Balance at end of previous year
Changes during the period
Net changes in items other than shareholders’ equity
Total changes during the period
Balance at end of year
Gains (losses) on hedging items
Balance at end of previous year
Changes during the period
Net changes in items other than shareholders’ equity
Total changes during the period
Balance at end of year
Total valuation and translation adjustments
Balance at end of previous year
Changes during the period
Net changes in items other than shareholders’ equity
Total changes during the period
Balance at end of year
Total net assets
Balance at end of previous year
Changes during the period
Issuance of new shares
Cash dividend
Net income for the year
Treasury stock purchased
Treasury stock disposed
Net changes in items other than shareholders’ equity
Total changes during the period
Balance at end of year

34

-

(128)

-

(384)

13,00277,859(14,871)
62,988

(45)

(459)

(488)
74
(414)
(459)

(31)
23
(7)
(467)

226,382

240,745

2,254(8,297)
20,822(488)
73
14,363
240,745(8,341)(6,109)(31)
14(14,468)
226,277

17,8109,237(8,573)(8,573)
9,237(6,364)(6,364)
2,872(1,062)

5,383

6,446
6,446
5,383

(3,733)(3,733)
1,649

16,747

14,620(2,127)(2,127)
14,620(10,098)(10,098)
4,522

243,129

255,366

2,254(8,297)
20,822(488)
73(2,127)
12,236
255,366(8,341)(6,109)(31)
14(10,098)(24,566)
230,799

(4) Events or circumstances that raise material doubt regarding the going-concern assumption
Not applicable35

6. Other(1) Corporate officer changes
Refer to the Company’s press release of February 23, 2009, titled “Directors and Executive Officers toChange.”(2) Orders and sales (consolidated)
1) Orders received
Year ended March 31,
2008 (A)
Shipbuilding
Rolling Stock& Construction Machinery
Aerospace
Gas Turbines & Machinery
Plant & Infrastructure Engineering
Consumer Products & Machinery
Hydraulic Machinery
Other
Total

Year ended March 31,
2009 (B)

Change (B-A)

million yen
251,331% of total

million yen
71,512% of total

15.6

4.6

million yen(179,818)(71.5)

183,25411.3

264,603

17.1

81,34944.3

202,505
227,422106,045433,962
92,334113,900
1,610,756

12.5
14.1
6.5
26.9
5.7
7.0
100.0

239,176355,517
83,648336,459
84,142
105,528
1,540,589

15.5
23.0
5.4
21.8
5.4
6.8
100.0

36,671
128,095(22,397)(97,503)(8,192)(8,371)(70,167)

18.1
56.3(21.1)(22.4)
(8.8)
(7.3)
(4.3)

%

Note: The Consumer Products & Machinery segment’s orders received are equal to its net sales as

production is based mainly on estimated demand.

2) Net sales

Shipbuilding
Rolling Stock& Construction Machinery
Aerospace
Gas Turbines & Machinery
Plant & Infrastructure Engineering
Consumer Products & Machinery
Hydraulic Machinery
Other
Total

Year ended March 31,
2008 (A)% of total
million yen
141,397
9.4

Year ended March 31,
2009 (B)million yen% of total
126,426
9.4

Change (B-A)
million yen(14,971)%(10.5)

171,73811.4

186,45413.9

14,715

8.5

237,348
185,486
142,547
433,962
84,027
104,588
1,501,097

15.8
12.3
9.4
28.9
5.5
6.9
100.0

200,424
195,156
105,178
336,459
84,919103,579
1,338,597

14.9
14.5
7.8
25.1
6.3
7.7
100.0

(36,924)
9,670(37,368)(97,503)891(1,009)(162,500)(15.5)
5.2(26.2)(22.4)
1.0(0.9)(10.8)

3) Order backlog

Shipbuilding
Rolling Stock& Construction Machinery
Aerospace
Gas Turbines & Machinery
Plant & Infrastructure Engineering
Consumer Products & Machinery
Hydraulic Machinery
Other
Total

Year ended March 31,
2008 (A)million yen% of total
414,17527.0Year ended March 31,
2009 (B)million yen % of total
356,937
21.0

Change (B-A)
million yen(57,238)(13.8)%

431,37628.1

478,56528.1

47,18810.9

248,332
245,961
135,288
29,316
29,211
1,533,663

16.1
16.0
8.8
1.9
1.9
100.0

286,600
405,196
112,162
28,53931,1601,699,162

16.8
23.8
6.6
1.6
1.8
100.0

38,268159,234(23,125)
(777)
1,948
165,49915.4
64.7(17.0)
(2.6)
6.6
10.7

36

(3) Orders and sales (non-consolidated)
Orders, net sales and order backlog by industry segment
1) Orders received
Year ended March 31,
2008 (A)
Rolling Stock& Construction Machinery
Aerospace
Gas Turbines & Machinery
Plant & Infrastructure Engineering
Consumer Products & Machinery
Total
Export orders received

Year ended March 31,
2009 (B)

Change (B-A)

million yen% of total

million yen% of total

million yen

132,390

14.8

209,304

19.8

76,91358.0

182,698
225,41132,087
318,770
891,357
564,718

20.4
25.2
3.5
35.7
100.0
63.3

222,684
345,796
28,977
247,740
1,054,503
553,607

21.1
32.7
2.7
23.4
100.0
52.4

39,985
120,385(3,110)(71,029)
163,145(11,111)

21.8
53.4
(9.6)
(22.2)
18.3
(1.9)

%

Note: The Consumer Products & Machinery segment’s orders received are equal to its net sales as

production is based mainly on estimated demand.

2) Net sales
Year ended March 31,
2008 (A)% of total
million yen
Rolling Stock& Construction Machinery
Aerospace
Gas Turbines & Machinery
Plant & Infrastructure Engineering
Consumer Products & Machinery
Total
Net export sales

Year ended March 31,
2009 (B)million yen% of total

Change (B-A)
million yen%

138,68115.5

129,779

16.8(8,902)(6.4)

220,263
175,886
36,361
318,770889,963521,756

24.7
19.7
4.0
35.8
100.0
58.6

182,995
184,540
26,373
247,740
771,428455,912

23.7
23.9
3.4
32.1
100.0
59.0

(37,267)
8,653(9,988)(71,029)(118,534)(65,844)(16.9)
4.9(27.4)(22.2)(13.3)(12.6)

3) Order backlog
Year ended March 31,
2008 (A)% of total
million yen
Rolling Stock& Construction Machinery
Aerospace
Gas Turbines & Machinery
Plant & Infrastructure Engineering
Consumer Products & Machinery
Total
Export order backlog

Year ended March 31,
2009 (B)million yen % of total

Change (B-A)
million yen%

282,62033.4

355,432

31.7

72,811

25.7

232,666
274,496
55,924
845,707459,867

27.5
32.4
6.6
100.0
54.3

271,872434,666
58,485
1,120,456
549,261

24.2
38.7
5.2
100.0
49.0

39,205160,170
2,560
274,748
89,394

16.8
58.3
4.5
32.4
19.4

37

Supplementary information on earnings forecasts for the fiscal year ending March 31, 2010
(1) Consolidated earnings outlook
Billions of yen
Outlook for the year ending
March 31, 2010 (A)Year ended March 31,
2009 (B)Net sales
Operating income
Recurring profit
Net income

1,240.0
5.0
10.0
6.0

1,338.5
28.7
38.7
11.7

(98.5)(23.7)(28.7)(5.7)

Orders received
Before-tax ROIC (%)
R&D expenses
Capital expenditures

1,180.0
2.6%
40.0

1,540.5
4.5%
38.2(360.5)(1.9)%
1.8

78.0

82.4

(4.4)

54.0

44.3

9.7

33,0008,400*

32,266
7,955*

734
445*

Change (A-B)

Depreciation/amortization
Number of employees at
end of period*Number of employees
outside of Japan included
thereinNotes: 1. The expected foreign exchange rate used for the outlook: ¥95=US$1, ¥125=1 Euro
2. Before-tax ROIC = (income before income taxes + interest expense) / invested capital
3. Capital expenditure represents the total of newly recorded property, plant and equipment and newly
recorded intangible assets. Depreciation/amortization represents depreciation/amortization expenses forproperty, plant and equipment and intangible assets.

(2) Outlook by industry segment
1) Net sales and operating income (loss)
Billions of yen
Outlook for the year ending
March 31, 2010
(A)
Net sales

Shipbuilding
Rolling Stock& Construction Machinery
Aerospace
Gas Turbines & Machinery
Plant & Infrastructure
Engineering
Consumer Products &MachineryHydraulic Machinery
Other
Total

Operatingincome (loss)

Year ended
March 31, 2009
(B)
Net sales

Operatingincome (loss)

Change(A – B)Net sales

Operatingincome (loss)

150.0

3.5

126.4

(1.0)

23.6

4.5

170.0

9.0

150.3

12.3

19.7

(3.3)

190.0
200.0

2.5
7.0

200.4
195.1

(4.1)
11.0

(10.4)
4.9

6.6
(4.0)

95.0

4.0

105.1

8.9

(10.1)

(4.9)

260.0
65.0
110.0
1,240.0(26.0)
3.0
2.0
5.0

336.4
84.9
139.6
1,338.5(10.1)
8.3
3.3
28.7

(76.4)(19.9)(29.6)(98.5)(15.9)(5.3)(1.3)(23.7)

38

2) Orders received
Billions of yen
Outlook for the year ending
March 31, 2010
(A)
110.0

Year ended
March 31, 2009
(B)
71.5

Change(A – B)

Shipbuilding
38.5
Rolling Stock
150.0
235.0
(85.0)& Construction Machinery
Aerospace
170.0
239.1
(69.1)
Gas Turbines & Machinery
220.0
355.5
(135.5)
Plant & Infrastructure
Engineering
80.0
83.6
(3.6)
Consumer Products &Machinery
260.0
336.4
(76.4)
Hydraulic Machinery
70.0
84.1
(14.1)
Other
120.0
135.0
(15.0)
Total
1,180.0
1,540.5(360.5)
Notes: The construction machinery business, which was previously included in the Rolling Stock & Construction
Machinery segment, was spun-off in April 2009 to become KCM Corporation. Hitachi Construction
Machinery Co., Ltd., subsequently invested capital in, entered into business alliance with, KCM
Corporation. As a result, said business’s relationship with the Rolling Stock & Construction Machinery
segment was weakened, and it was therefore included in the “Other” segment in the above segment
outlook.
For reference, the construction machinery business’s sales, income (loss), and orders received for theyear ended March 31, 2009, were included in “Other” above. Therefore, the above figures differ from thosefor sales and operating income (loss) presented in “Segment information” in the notes on financial
statements, and for net sales and orders presented in the “Orders and sales (consolidated)” section.

39