Financial Results for FY 2009
(for the year ended March 31, 2010)

April 27, 2010
Kawasaki Heavy Industries, LtdTable of Contents
I. Consolidated Results for FY2009
 Summary of Financial Results
 Details of Change in Profit ①
 Details of Change in Profit ②
 Financial Results by Segment
Shipbuilding
Rolling Stock
Aerospace
Gas Turbines & Machinery
Energy & Environmental Engineering
Motorcycle & Engine
Precision Machinery
Others Financial Condition and Cash Flows

1
2
3
4
5
6
7
8
9
10
11
12
13

Ⅱ．Forecast for FY2010
 Consolidated Operating Performance Forecast by Segment
 R&D/CAPEX/Number of Employees(Note) Change in Segment Information
Disclosure

14
15
16
17

I. Consolidated Results for FY2009

Summary of Financial Results(¥ Billion / In accumulated amount)

FY2008FY2009ChangeActualForecastin Jan.

Actualvs. FY2008

vs. Forecast
in Jan.

Orders Received

1,540.5

1,060.0

1,001.2- 539.2- 58.7

Net Sales

1,338.5

1,180.0

1,173.4- 165.1- 6.5

Operating Income/Loss

28.7

5.0

- 1.3

- 30.0- 6.3

Recurring Profit

38.7

10.0

14.2

- 24.4+ 4.2

Net Income/Loss

11.7

3.0

- 10.8- 22.5- 13.8Exchange Rates ( weighted-average )

￥/US$

101

90

93

￥/EUR

142

130

130

-1-

【Orders Received】
Decrease in all segments except Energy& Environmental Engineering segment【Net Sales】
Significant decrease in Consumer
Products & Machinery segment due tosales decrease of motorcycles in U.S. &European markets【Profits】
Profit declined due to the adverse impactof sales decrease in U.S. & European
Markets, and also of the appreciation of
the yen, despite implementation of the
fixed cost reduction especially in mass
production businesses

Details of Change in Profit ①- FY2009 vs. FY2008 (¥ Billion / In accumulated amount)【Operating Income/loss】 - 30.0 （ FY2008 28.7 => FY2009 - 1.3 ）F Y2 0 0 8

A dv erse im p act
o f sales decrease

28.7- 25.0

Actual vs. Forecast in Jan. - 6.3 billion yen（Forecast in January 5.0 → Actual - 1.3)
Impact of sales decrease- 2.4
Impact of decline in material price+ 0.7
Increase in sales promotion expenses - 3.0
Other factors- 1.6

F Y2 0 0 9
A dv erse im p act o ffluct uat io n o f
fo reign ex ch an ge rat e

+ 7.0

- 1.3

Im p act o f ch an ges inacco un t in g m et h o ds
Im p act o f declin e
in m at erial p rice

- 19.0+ 9.5
Ch an ges in p ro duct m ix
an d o t h er fact o rs

D ecrease in sellin g, gen eral &adm in ist rat iv e ex p en ses- 14.2+ 11.7-2-(Val u at i o n o f in v en to ries +4 .0 /Co n s t ru ct io n co n t ract s +3 .0 )

Details of Change in Profit ②- FY2009 vs. FY2008(¥ Billion / In accumulated amount)【Non-operating Income/Expenses】+ 5.6 （ FY2008 10.0 => FY2009 15.6 ）Net Interest expense ( incl. dividend income )Equity in income of unconsolidated subsidiaries and affiliates

Gain and loss on foreign exchange
Others【Extraordinary Income/Losses】

+ 0.5
- 2.1
+ 0.5
+ 6.6

（- 2.3 ⇒ - 1.7 ）（ 8.7 ⇒ 6.5 ）（ 10.3 ⇒ 10.9 ）（- 6.7 ⇒ 0 ）- 3.0 （ FY2008 - 15.0 => FY2009 - 18.1 )※1

Provision for losses on damages suit
Business restructuring expenses on Consumer Products business
Loss on impairment of fixed assets
Loss on contribution of securities to the pension trust
Others

- 1.8
- 7.6
- 1.7
+ 4.4
+ 3.6

※2

（ - 5.1 ⇒ - 6.9 ）※3（ 0 ⇒ - 7.6 ）※4( - 1.3 ⇒ - 3.1 )( - 4.4 ⇒ 0 )( - 4.0 ⇒ - 0.3 )※1 Amount equivalent to fine claimed by Japan Fair Trade Commission in relation to refuse incineration plants※2

Estimated loss for the company in case of losing a suit for damages by owner of refuse incineration plants
Expenses estimated to need to liquidate the excess inventory (¥6.3bil.), Expenses on early retirement of employees (¥1.3bil.)※4 Loss on impairment of fixed assets in subsidiaries whose book values were written down to the recoverable amounts※3-3-

Financial Results by Segment(¥ Billion / In accumulated amount)

Orders Received

Net Sales

Operating Income/Loss

FY2008FY2009ChangeFY2008FY2009ChangeFY2008FY2009ChangeShipbuilding

71.5

16.1

- 55.3

126.4

151.8

25.4

- 1.0

1.4

2.5

Rolling Stock※1

235.0

77.1

- 157.8

154.8

167.1

12.3

12.3

7.7

- 4.6

Aerospace

239.1

171.3

- 67.7

200.4

188.8

- 11.5

- 4.1

1.7

5.9

Gas Turbines & Machinery

355.5

226.2

- 129.2

195.1

191.3

- 3.7

11.0

6.6

- 4.3

Energy & Environmental
Engineering

83.6

124.7

41.1

105.1

90.4

- 14.6

8.9

6.2

- 2.6

Consumer Products& Machinery

336.4

216.9

- 119.4

336.4

216.9

- 119.4- 10.1- 31.6- 21.5

Hydraulic Machinery

84.1

71.0

- 13.084.9

68.8- 16.1

8.3

6.9

- 1.4

Others ※2

135.0

97.5

- 37.4

135.1

97.8

- 37.3

3.2

- 0.4

- 3.6

-

-

-

-

-

-

0

- 0.1

- 0.1

1,540.5

1,001.2- 539.2

1,338.5

1,173.4- 165.1

28.7

- 1.3

- 30.0Eliminations and Corporate

Total※1 FY2008 figures exclude Construction Machinery business unit

(Figures incl. Construction Machinery: Orders Received ¥264.6bil., Net Sales ¥186.4bil., Operating Income ¥11.3bil.)※2 FY2008 figures include Construction Machinery business unit

(Figures excl. Construction Machinery: Orders Received ¥105.5bil., Net Sales ¥103.5bil., Operating Income ¥ 4.2bil.)-4-

Shipbuilding
Main Products： LNG Carriers、LPG Carriers、VLCCs、Bulk Carries、Submarines and others（¥ Billion / In accumulated amount）※ Boxed figures (“Recalculation”) show the recalculated figures based on the new accounting standard which has been adopted since FY2010 => Refer to Page 17
Orders Received
0
90.0

0
58.4

0

64.1

71.5

(Forecast in Jan. 20.0)

20.6
1.8

2.7

1Q

2Q

10.4

16.1

3Q

FY2009

0
1Q

2Q

3Q

FY2008

 FY2009 （ vs. FY2008）
Orders Received:
Significant decline in orders received of new building ships due todownturn of shipping market
Net Sales: Increase in sales units and sales of large-scale vessels
Operating Income:
Profitability returned due to sales increase and improvement of
profitability by decline of material price, and other factors

FY2010
Forecast<Unit of Orders Received and Sales of New Building Ships>

Orders Received
FY2008LNG carriers
Small-sized LNG carriers
LPG carriers
VLCC
Bulk carriers
Submarines

Net Sales(Forecast in Jan. 150.0)

151.8
126.4

120.0

111.7

95.8
65.2
39.4

19.0
2Q

3Q

FY20081Q

2Q

3Q

FY2009FY2010
Forecast

Operating Income(Forecast in Jan. 2.0)

Recalculation
2.0

1.4

1.5

1.4
0.7

0
1Q

0.2

3Q

FY2008

2Q

1Q

- 0.6
- 1.0

- 2.5

1
1
5
6

1

Sales
FY2008FY2009

6(6)
2(0)
3(2)
1(0)
7(0)
2(2)

6(6)
2(2)
1(0)
15(10)
2(2)

21(10)

26(20)

Note: ( ) = Sales units by percentage-of-completion method

53.7

1Q

Total

FY2009FY20082Q

3Q FY2009

FY2009- 0.9

FY2010
Forecast

 FY2010 Forecast （ vs. Recalculated FY2009 figures in the box）
Orders Received: Increase in orders received of new building ships
Net Sales:
Net sales are expected to decrease due to sales decrease of large-scale
vessels
Operating Income:
Income is expected to increase due to sales increase in highly profitable
vessels (For Reference) Joint Venture in China
NACKS was established in Nantong in December 1995, as a joint venture between
KHI and China Ocean Shipping(Group) Company, the biggest shipping company inChina and its capacity was expanded in 2008. At NACKS, various types ofcommercial vessels such as very large-size container ships, VLCCs, bulk carriers andcar carriers are built by utilizing two large-scale docks for both domestic and overseas
customers under the technical support from Kawasaki Shipbuilding Corporation.
(NACKS is an equity method affiliate.)-5-

Rolling Stock
Main Products : Electric train cars (incl. Shinkansen), Electric and diesel locomotives, Passenger coaches,（¥ Billion / In accumulated amount）
Platform screen doors, Gigacell (High-Capacity, Full Sealed Ni-MH Battery)※ FY2008 Figures exclude Construction Machinery business unit
※ Boxed figures (“Recalculation”) show the recalculated figures based on the new business segmentation (excl. crushing machine) and the new accounting standard which have been adopted
since FY2010 => Refer to Page 17
 FY2009 （ vs. FY2008）
Orders Received
Recalculation
Orders Received:
0
0
0
0
0
0

235.0
(Forecast in Jan. 140.0)

163.2

130.0

119.9
91.4
28.0
1Q

2Q

・ 132 cars for Singapore Land Transport Authority
・ Decrease in large-scale orders received for Japan Railways
Net Sales:
Increase in sales for Japan Railways and overseas market
Operating Income:
Income decreased due to deterioration in profitability for overseas
projects by the appreciation of the yen, and other factors

219.7

3Q

FY2008

1Q

44.5

2Q

63.0

3Q

77.1

FY200966.2

FY2008FY2009FY2010
Forecast

 FY2010 Forecast （ vs. Recalculated FY2009 figures in the box）
Orders Received: Increase in orders received for Japan Railways andoverseas market
Net sales: Net sales is expected to be the same level as the previous
year despite decrease in small projects such as spare parts
Operating Income: Income is expected to be the same level as theprevious year despite the adverse impact of the appreciation of the yen,and other factors

Net Sales(Forecast in Jan. 165.0)

167.1

154.8
105.7

150.0

145.0

80.1

64.5
40.8

27.3

1Q

135.6

122.3

2Q

3Q

FY20081Q

2Q

3Q

FY2009FY2008 FY2009

FY2010
Forecast

 (For Reference) The Present Status of New Overseas Projects
・North America- Working to receive orders mainly for heavy rails and commuter rails- Light Rail Vehicles (LRVs) for U.S. market is currently under development
・High-speed railways- There are plans in U.S., Vietnam and other countries
・Dedicated Freight Corridor - Western Corridor Phase I (Delhi – Mumbai)- Japanese ODA project, working to receive orders for electric locomotives
・E&M system projects in Asian region- Working with other companies

Operating Income(Forecast in Jan. 9.0)

12.3

6.5

7.7

7.4

11.6
8.7

8.0

4.6
3.2

2.2

1Q

1.6
2Q

3Q

FY20081Q

2Q

3Q

FY2009FY2008 FY2009

FY2010
Forecast-6-

Aerospace
Main Products : Aircrafts for Japan Ministry of Defense, Component parts for commercial aircrafts (BOEING , Embraer), Missiles（¥ Billion / In accumulated amount）※ Boxed figures (“Recalculation”) show the recalculated figures based on the new accounting standard which has been adopted since FY2010 => Refer to Page 17
Orders Received
.0
.0
.0
.0
.0
.0

(Forecast in Jan. 160.0)

239.1

200.0
171.3
87.7

79.9

58.3

46.5

27.5
1Q

11.4
2Q

3Q

FY20081Q

2Q

3Q

FY2009FY2010
Forecast

Net Sales(Forecast in Jan. 180.0)

215.0

200.4

188.8

126.4

119.3

95.2

73.3

39.5

1Q

26.6
2Q

3Q

FY20081Q

2Q

3Q

FY2009FY2010
Forecast

O perating Income

 FY2009 （ vs. FY2008）
Orders Received: Decrease in orders received for component parts for
BOEING including B777
Net Sales: Decrease in sales for Japan Ministry of Defense (MOD)because the aircrafts XP-1 & XC-2 for MOD are on the phase between
development and mass production
Operating Income: Income improved due to expenses deferrals
regarding B787 project with the revision of development schedule ofthe said aircraft, and other factors
 FY2010 Forecast （ vs. Recalculated FY2009 figures in the box）
Orders Received: Increase in orders received of component parts for
BOEING including B787 & B777
Net Sales: Net sales are expected to increase due to the production
increase of XP-1 on the mass production phase and of component partsfor BOEING B787
Operating Income: Income is expected to increase slightly despite theconsiderable amortized cost of investment incurred by initiating mass
production of component parts for commercial aircraft

Recalculat io n0

(Fo recast in Jan . 2 .5 )0

4.0

FY 2 0 0 9

FY 2 0 1 0
Fo recast

1.7

0

0.2

0.5

0

1Q

2Q

3Q

FY 2 0 0 8

FY 2 0 0 8

3Q

1Q
2Q

0
0

3.7

2.6

- 0.6

FY 2 0 0 9

- 2.1
- 4.3

- 4.1

- 4.1

<Sales units of components partsfor commercial aircrafts> (unit)
Sales
FY2008FY2009
B777
73
77
B767
13
10
Embraer170/175
46
16
Embraer190/195
112
50

 (For Reference) XC-2 Test Aircraft Delivered to Japan Ministry of Defense
The #1 test XC-2 transport aircraft manufactured at Kawasaki’s Gifu Works
completed a successful first flight in Jan. 2010 after a series of in-house testing, andwas delivered to Japan Ministry of Defense (MOD) on Mar. 30, 2010 at the Works.
The Ministry of Defense began development of the XC-2 in 2001 as a replacement of
the current C-1, and in Nov. 2001, Kawasaki was nominated as a prime-contractor for
developing the airplane with aircraft manufacturers and other participating companies.
The XC-2 employs a newly developed flight control system and an enhanced laborsaving loading/unloading system. Powered by GE engines, the XC-2 has a greater
flight range capability and superior maximum cruise speed than its predecessor.
The #2 test XC-2 transport aircraft is currently in production and scheduled fordelivery to the MOD by the end of Mar. 2011.

-7-

Gas Turbines & Machinery
Main Products : Jet engines, Gas turbine co-generation system, Gas turbines & Steam turbines for marines & land,
Diesel engines, Marine Propulsion System, Aero-Dynamic Machinery（¥ Billion / In accumulated amount）※ Boxed figures (“Recalculation”) show the recalculated figures based on the new accounting standard which has been adopted since FY2010 => Refer to Page 17

Orders Received
355.5

0
0
0
0
0
0
0
0

(Forecast in Jan. 220.0)

279.3
220.0

FY2009FY2010
Forecast

138.5

119.3

99.8

59.1

1Q

226.2

52.3

2Q

3Q

FY2008

1Q

2Q

3Q

Net Sales(Forecast in Jan. 200.0)

0
0
0
0
0
0
0

195.1
138.8

128.8

91.7

83.4

44.9

1Q

44.7

2Q

3Q

FY20081Q

2Q

3Q

FY2009Operating Income
0
5
0
5
0
5
0
5
0

210.0

191.3

FY2010
Forecast

 FY2009 （ vs. FY2008）
Orders Received: Decrease in orders received for component parts forcommercial aircraft jet engines that had a large order received in theprevious fiscal year, and for marine propulsion systems
Net Sales: Net sales decreased slightly due to sales decline of marine
diesel engines
Operating Income: Income decreased due to the adverse impact of theappreciation of the yen, and other factors
 FY2010 Forecast （ vs. Recalculated FY2009 figures in the box）
Orders Received: Decrease in orders received for component parts forcommercial aircraft jet engines
Net Sales: Net sales are expected to increase due to sales increase incomponent parts for commercial aircraft jet engines, marine machinery,
and aero-dynamic machineryOperating Income: Income is expected to increase due to the sales
increase, despite the initial cost for newly developed commercial
aircraft jet engines

Recalculation

11.0(Forecast in Jan. 7.0)

11.0
8.9

6.7

<Summary of Major Projects for Commercial Aircraft Jet Engines>
10.0

Aircraft

6.6

1Q

2Q

3Q

FY2008

0.6

1Q

2Q

Full Partner

RRSP（※)RRSP（※)

Approx. 6%

Approx. 8.5%

Approx. 7%

Responsible
Components
3Q

FY2009FY2008FY2009FY2010
Forecast（※）-8-

TrentXWB
A350

Share
2.7
0.9

Trent1000
B787

Participation Type

4.7
2.2

V2500
A320 and others

Intermediate
Intermediate
Fan case, vane, disc,pressurepressure
low-pressure compressor blade compressor (IPC) compressor (IPC)
modulemoduleRisk & Revenue Sharing Partner

Energy & Environmental Engineering
Main Products: Industrial plants (cement, chemical and others), Power plants, LNG & LPG tanks, Municipal refuse incineration plants, Shield machines, Crushing Machine（¥ Billion / In accumulated amount）※ Boxed figures (“Recalculation”) show the recalculated figures based on the new business segmentation (incl. crushing machine) and the new accounting standard which have been adopted
since FY2010 => Refer to Page 17
Recalculation

Orders Received(Forecast in Jan. 130.0)

0

124.7

0
0

135.6

91.2

83.6
49.0

120.0
98.9

61.6

 FY2009 （ vs. FY2008）
Orders Received: Orders received increased due to a large-scale order
received of fertilizer production facility for Turkmenistan
Net Sales: Decrease in large-scale projects for overseas customers
Overseas large-scale projects in FY2008
Ferronickel plant / Korea
Urea production facility / Pakistan
Cement plant / Vietnam

32.5

28.7
13.2

0
1Q

2Q

3Q

FY20081Q

2Q

3Q

FY2009FY2008FY2009FY2010
Forecast

Net Sales(Forecast in Jan. 100.0)

124.4
107.5

105.1

110.0

90.4
66.1
46.6

35.7

20.2

1Q

47.1

13.1
2Q

3Q

FY20081Q

2Q

3Q

FY2009FY2008 FY2009

FY2010
Forecast

Operating Income

4.60(Forecast in Jan. 7.5)

6.2

5.3

1.6

1Q

2Q

3Q FY2008

9.9
7.9

1Q
0

 FY2010 Forecast （ vs. Recalculated FY2009 figures in the box）
Orders Received: Decrease in large-scale orders received for overseas
customers
Net Sales: Net sales are expected to increase slightly despite decreasein large-scale projects
Operating Income: Income is expected to decrease due to decrease inhighly profitable projects
 (For Reference) Joint Ventures in China

8.90Operating Income:
Income decreased due to the adverse impact of sales decline

- 0.6

1.0
2Q

6.0

3Q

- 0.1 FY2009

FY2008FY2009FY2010
Forecast

In 2006, KHI started a joint venture with Anhui Conch Cement Company Ltd., China’s
largest cement manufacturer. KHI has established three joint ventures for the time
being and set up an integrated system in China encompassing the design, production,
sales and after-sale services of waste heat recovery power generation systems for
cement plants and cement producing facilities (Pre-heaters, Rotary Kilns and Roller
Mills) with sophisticated technologies it has accumulated. KHI will contribute further
to bring technologies for environment and energy conservation in China.

-9-Motorcycle & Engine
Main Products: Motorcycles, All-Terrain Vehicles(ATVs), Utility Vehicles, Personal Watercraft、General-Purpose Gasoline Engines（¥ Billion / In accumulated amount）※ Boxed figures (“Recalculation”) show the recalculated figures based on the new business segmentation (excl. industrial robots) and the new accounting standard which have been adopted
since FY2010 => Refer to Page 17

Net Sales

Recalculation

336.4

0

303.7
260.0

216.9

177.6

0
0

(Forecast in Jan. 220.0)

247.8

203.0

152.3
106.2

94.0

60.2

0
1Q

2Q

3Q FY2008

1Q

2Q

3Q FY2009

FY2008 FY2009

FY2010
Forecast

Operating Income
1Q

0
0
0
0

- 1.8

0.3

3Q

FY2008

2Q

- 7.7

1Q

2Q

3Q

FY2009FY2008 FY2009

FY2010
Forecast- 5.6- 10.1- 10.4- 16.6- 25.6- 31.6- 27.0(Forecast in Jan. - 28.0)＜Sales by Geografic Segment for Consumer Products＞ (Thousands of unit/ \ Billion)

FY2008
Unit
AmountDomestic
19
14.7
North America 197(118)134.3
Europe
97
73.2
Other
210
44.9
Total
523
267.1

0

FY2009FY2010 Forecast
Unit
AmountUnit
Amount
17
12.9
16
12.2
80(49)
56.3 126(66)
87.0
72
56.2
72
58.8
228
45.1
296
62.3
397
170.5
510
220.3

Note: 1) Sales units and amount include the following products.
Units: Motorcycles, All-Terrain Vehicles(ATV), Utility Vehicles and Personal Water Craft(Jet Ski)
Amount: The products mentioned above and parts for those products.
2) Figures in the Parenthesis( ) represent motorcycle sales units.

 FY2009 （ vs. FY2008）
Net Sales:
・Decrease in sales of motorcycles due to significant reduction of U.S.
and European markets
・Decrease in sales of industrial robots
Operating Income:Loss expanded significantly due to the adverse impact of sales decrease
and the appreciation of the yen and other factors, while improvement ofmarginal profitability and fixed cost reduction and other measures were
implemented
 FY2010 Forecast （ vs. Recalculated FY2009 figures in the box）
Net Sales:
Net sales are expected to increase due to the effects of liquidation of
the excess inventory implemented in the previous fiscal year and theeffects of sales increase in Asian and other emerging markets
Operating Income:
Income is expected to improve dramatically due to sales increase andthe effects of business restructuring measures implemented through theprevious fiscal year For Reference
・A joint venture, CK&K, was established in China with Kwang Yang Motor Co.,
Ltd.(KYMCO) of Taiwan for production and sales of general purpose gasoline
engines. Production started in Jan. 2010.
・New motorcycle production plant started up at Kawasaki’s Brazilian subsidiary,
KMB, in Oct. 2009.
・New subsidiary, IKM, is planned to be established in India in May 2010 to importand sell motorcycles.

- 10 -

Precision Machinery
Main Products： Hydraulic components (pumps, motors & valves), Hydraulic systems for industrial use, Hydraulic marine machinery, Industrial Robots（¥ Billion / In accumulated amount）※ Boxed figures (“Recalculation”) show the recalculated figures based on the new business segmentation (incl. industrial robots) and the new accounting standard which have been adopted
since FY2010 => Refer to Page 17
Recalculation

Orders Received
0(Forecast in Jan. 70.0)

0
0
0

110.0
84.9

84.1

71.5

71.0

55.0

0

116.8

46.5

28.9

27.5
10.9

0
1Q

2Q

3Q

FY20081Q

2Q

3Q

FY2009FY2008FY2009FY2010
Forecast

Net Sales
0
117.6

0
84.9

0

82.7
68.8

68.2

0
0

110.0

(Forecast in Jan. 65.0)

47.1

47.2
29.0

23.0

14.3

0
1Q

2Q

3Q

FY20081Q

2Q

3Q

FY2009FY2008FY2009FY2010
Forecast

Operating Income(Forecast in Jan. 5.0)

0
0
0
0
0
0
0
0
0
0

8.3
7.0
4.3

2.6
1.1
1Q

2Q

3Q

FY2008

1Q

8.0

3.4

1.9

2Q

3Q

FY2009 FY2010 Forecast （ vs. Recalculated FY2009 figures in the box）
Orders Received & Net Sales:
Both orders received and net sales are expected to increase due to therecovering demand for hydraulic machinery for construction
machinery in Asian and other emerging markets, and industrial robots
for manufacturers of semiconductor production equipments
Operating Income:
Income is expected to increase due to sales increase （For Reference） Businesses Development in China

8.8

6.9

5.0

 FY2009 （ vs. FY2008）
Orders Received & Net Sales:
Both orders received and net sales decreased significantly due todemand decline for hydraulic components for construction machinery
in Japanese, U.S. & European markets, despite strong demand in Asianand other emerging markets
Operating Income:
Income decreased due to the adverse impact of sales decline

FY2008 FY2009

FY2010
Forecast

In Aug. 2006, production of hydraulic pumps started at Chinese subsidiary in Suzhou
to meet the increasing demand in China.
In Sep. 2008, the production facility was expanded, and in Jan. 2009, production of
hydraulic marine machinery started at the same facility and a joint venture of
hydraulic machinery manufacturing was established in Zhejiang with a Chinesecompany. In order to provide the products manufactured at the above two
manufacturing companies to customers throughout China, a sales subsidiary wasestablished in Shanghai.

- 11 -

Others
Main Products： Trading, Construction Machinery and others（¥ Billion / In accumulated amount）※ FY2008 Figures include Construction Machinery business unit

※ Boxed figures (“Recalculation”) show the recalculated figures based on the new accounting standard which has been adopted since FY2010 => Refer to Page 17

Orders Received
135.0(Forecast in Jan. 100.0)

111.8

110.0

97.5

79.3

67.6
42.9

38.9
13.5
1Q

2Q

3Q

FY20081Q

2Q

3Q

FY2009FY2010
Forecast

Net Sales
135.1(Forecast in Jan. 100.0)

105.9

110.0

97.8

75.9

69.0
42.8

34.2
17.2
1Q

2Q

3Q

FY20081Q

2Q

3Q

FY2009Operating Income
2.3

2.9

FY2010
Forecast(Forecast in Jan. 0)

2.4

1.1

1Q

2Q

Adoption of the new accounting standard is the main cause ofoperating loss for FY2010 forecast

Recalculation

3.2

3Q FY2008

0

2Q

3Q

FY2009

1Q

- 0.3

- 0.2

- 0.4

 For Reference

FY2009FY2010
Forecast

FY2008

- 6.0
- 8.6

- 12 -

Financial Condition and Cash Flows【Financial Condition】(¥ Billion)

FY2008End of Mar.2009

FY2009End of Mar.2010

1,399.7

1,352.4

Shareholders’ Equity

290.4

277.0

（Ratio of shareholders’ equity to total assets）(20.7%)（20.4%）

Interest-bearing debt

389.2

428.9

（Net Interest-bearing debt）（357.3）（394.1)Net Debt Equity Ratio

123%

142%

Total Assets

Note) Interest-bearing debt includes lease obligations【Cash Flows】（¥ Billion / In accumulated amount）

FY2008FY2009Cash flows from operating activities- 41.2

30.1

Cash flows from investing activities- 72.2- 63.2

Free Cash Flows- 113.5- 33.0Cash flows from financing activities

107.6

35.9

- 13 -

II. Forecast for FY2010

Consolidated Operating Performance(¥ Billion)

FY2009FY2010

ActualForecast【Orders Received】

ChangeSignificant recovery of orders received is expectedin Shipbuilding, Rolling Stock and other segments,
despite orders received in Energy & Environmental
Engineering segment are expected to decrease

Orders Received

1,001.2

1,240.0+ 238.7

Net Sales

1,173.4

1,280.0+ 106.5

Operating Income/Loss

- 1.3

32.0

+ 33.3

Recurring Profit

14.2

32.0

+ 17.7

Net sales are expected to increase in mass
production businesses such as Motorcycle &Engine and Precision Machinery segments due togradual recovery of the demand, despite sales
decrease is expected in Shipbuilding segment

Net Income/Loss- 10.820.0+ 30.8【Profits】

￥/US$

93

90

￥/EUR

130

125

Exchange Rates (actual & assumed)

Note) Assumed rate is applied to the foreign exchange exposure as of April 27, 2010
（For Reference）
Impact on profit by FX fluctuation of 1 yen(\ Billion)

US$
EUR

Operating
Income1.9
0.3

Recurring
Profit1.2
0.3- 14 -【Net Sales】

Significant improvement is expected in Motorcycle& Engine segment due to sales increase inmotorcycles and the effects of businessrestructuring measures implemented through theprevious fiscal year

Forecast by Segment(¥ Billion)

Orders Received
FY2009ActualCrushing
MachineIndustrial
RobotsNet Sales

FY2010
Forecast

Operating Income/Loss

FY2009FY2010FY2009FY2010

ActualForecast

ActualForecast

Shipbuilding

16.1

90.0

151.8

120.0

1.5

2.0

Rolling Stock

66.2

130.0

150.0

145.0

8.7

8.0

Aerospace

171.3

200.0

188.8

215.0

3.7

4.0

Gas Turbines & Machinery

226.2

220.0

191.3

210.0

8.9

10.0

Energy & Environmental
Engineering

135.6

120.0

107.5

110.0

7.9

6.0

Motorcycle & Engine

203.0

260.0

203.0

260.0

- 27.00Precision Machinery

84.9

110.0

82.7

110.0

3.4

8.0

Others

97.5

110.0

97.8

110.0

- 8.6

- 6.0

Total

1,001.2

1,240.0

1,173.4

1,280.0

- 1.3

32.0

※ FY2009 figures are recalculated based on the new business segmentation and the new accounting standard which have been adopted since FY2010- 15 -

R&D/CAPEX/Number of Employees(￥Billion / Persons)

FY2008Actual

FY2009Actual

FY2010
Forecast

R&D Expenses

38.2

38.0

40.5

CAPEX
(Construction Base)

82.4

59.2

66.0

Depreciation & Amortization

44.3

51.4

54.0

Domestic

24,311

24,396

24,600Overseas

7,955

7,901

7,800

Number of Employees

32,26632,29732,400- 16 -

(Note) Change in Segment Information Disclosure＜Change in Industry Segment and Segment Denomination＞
Industry segment and segment denomination have been changed as stated below, in accordance with
the new industry segmentation for internal reporting which has been adopted since April 2010.
Change in Industry Segment
Crushing Machine business unit :(Previous) “Rolling Stock segment” => (Current) “Energy & Environmental Engineering segment”
Industrial Robots business unit :(Previous) “Consumer Products & Machinery segment” => (Current) “Precision Machinery segment”
Change in Segment Denomination（Previous) “Consumer Products & Machinery segment” => (Current) “Motorcycle & Engine segment”(Previous) “Hydraulic Machinery segment” => (Current) “Precision Machinery segment”＜Application of New Financial Accounting Standard for Segment Information Disclosure＞
With the previous accounting standard, operating income by industry segment was presented with reflecting
re-allocation of some expenses incurred at Head Office which was not allocated to each segment for internalreporting.
However, as a new accounting standard adopting "Management Approach" applies since FY 2010 in Japan,such expenses will not be re-allocated to each segment.
Accordingly, for the readers' convenience, recalculated FY2008 and FY2009 operating income based on the
new accounting standard is presented on certain pages of this material to easily compare with the financial
results for the previous fiscal year.
- 17 -

Kawasaki,
Working as One for the Good of the Planet

Cautionary Statement
The performance outlook and the forecasts stated in this material were prepared by Kawasaki Heavy Industries, Ltd.
(hereinafter, KHI) based on the circumstances at the release point, and include potential risks and uncertain factorsthat relate to economic conditions, foreign currency exchange rates, tax rules, regulations and other factors.
Accordingly, please note that the actual operating results, financial position, and business deployment of KHI
may sometimes differ considerably from the descriptions in the present projections.