Report of Earnings and Financial Statements
for the Fiscal Year Ended March 31, 2013 (Consolidated)(Prepared pursuant to Japanese GAAP)
April 25, 2013
Listed company’s name:

Kawasaki Heavy Industries, Ltd.

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

1st sections of the TSE, OSE, and NSE
7012
http://www.khi.co.jp/
Satoshi Hasegawa, President
Ryoji Mori, Senior Manager, Accounting Department+81 3-3435-2130

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

June 26, 2013
June 27, 2013
June 26, 2013

Supplementary materials to financial results
Earnings presentation:

Available
Conducted (for institutional investors and analysts)

1. Consolidated Financial Results for the Fiscal Year Ended March 31, 2013
(April 1, 2012 – March 31, 2013)(Amounts in millions of yen rounded down to the nearest million yen)

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

Operating income

Recurring profit

Net income

%
%
%
2013
1,288,881 (1.1)
42,062 (26.8)
39,328 (38.1)
2012
1,303,778
6.2
57,484
34.8
63,627
29.4
Note: Comprehensive income Fiscal year ended March 31, 2013: ¥ 44,039 million
Fiscal year ended March 31, 2012: ¥ 24,569 million

30,86423,323
79.2%
34.6%

%
32.3
(10.1)

Years ended March 31
Earnings per share
Return on equity Return on assets– diluted
Yen
Yen
%
%
2013
18.46
9.5
2.7
2012
13.95
13.85
7.8
4.6
For reference: Equity in income of non consolidated subsidiaries and affiliates
Fiscal year ended March 31, 2013: ¥ 8,530 million
Fiscal year ended March 31, 2012: ¥ 8,567 million
Earnings per share

Operating income
to net sales
%
3.2
4.4

(2) Financial Condition
March 31

(Millions of yen )Total assets

Net assets

Equity ratio

Net assets per share

%

Yen

2013

1,466,290

349,88123.0

202.32

2012

1,362,139

315,92222.4

183.06

For reference: Shareholders’ equity

March 31, 2013:
March 31, 2012:1¥ 338,240 million¥ 306,054 million

(3) Cash Flow Position
Years ended March 31
Cash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities(Millions of yen)
Cash and cash equivalents
at end of year2013

28,101(81,160)

57,671

36,971

2012

84,737(65,959)(26,831)

33,245

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

Recorddate orterm

Total
dividends
paid
Full year(annual)Yen
million yen

Payout ratio(consolidated)

Dividends /Net assets(consolidated)

%

%

1Q

2Q

3Q

Year-end

Yen

Yen

Yen

Yen

2012

-

0.00

-

5.00

5.00

8,359

35.8

2.7

2013

-

0.00

-

5.00

5.00

8,358

27.0

2.5

2014
(forecast)

-

0.00

-

5.00

5.00

24.5

3. Forecast of Consolidated Earnings for the Fiscal Year Ending March 31, 2014
(April 1, 2013 – March 31, 2014)(Millions of yen)(Percentage figures indicate change compared with the previous fiscal year)
Earnings
Net sales
Operating income
Recurring profit
Net income
per share
%
%
%
%
Yen
For six months
endingSeptember 30,
2013
Full year

610,000

6.0

20,00092.4

17,000(15.6)

11,000(11.4)

6.57

1,380,000

7.0

60,00042.6

53,00034.7

34,000

10.1

20.33

*Other Information(1) Changes affecting the status of material subsidiaries (scope of consolidation): None
*This refers to additions and removals of material subsidiaries to and from the consolidated groupduring the period. For further details, see “Changes in basis of preparation of financial statements”
on page 22 in the Accompanying Materials.
(2) Changes in accounting policies, changes in accounting estimates, and correction of errors(ⅰ) Changes in accounting policies in accord with revisions to accounting standards: Yes(ⅱ) Changes in accounting policies other than (ⅰ): None(ⅲ) Changes in accounting estimates: Yes(ⅳ) Correction of errors: None
* The above changes correspond to Article 14-7 in the “Ordinance on Terminology, Forms andPreparation Methods of Consolidated Financial Statements”. For further details, see “Changes inaccounting policies, changes in accounting estimates, and correction of errors” on page 22 in the
Accompanying Materials.
(3) Number of shares issued and outstanding (common stock)(ⅰ) Number of shares issued as of period-end (including treasury stock)
March 31, 2013:
1,671,892,659 shares
March 31, 2012:
1,671,892,659 shares(ⅱ) Number of shares held in treasury as of period-end
March 31, 2013:
100,116 shares
March 31, 2012:
77,126 shares

2

(ⅲ) Average number of shares during respective periods
March 31, 2013:
1,671,803,541 shares
March 31, 2012:
1,671,465,052 shares
For reference: Overview of Non-Consolidated Financial Results(1) Operating Results
Years ended March 31(Percentage figures indicate change compared with the previous fiscal year)

Net sales
2013
2012

million yen
983,9211,003,390

Operating income
%
(1.9)
22.7

Earnings per share
2013
2012

Yen
10.26
6.87

million yen
12,57325,072%(49.8)-

Recurring profit
million yen
19,43338,029%(48.8)
15.8

Net income
million yen
17,158
11,491%
49.3(65.5)

Earnings per share– diluted
Yen
6.83(2) Financial Condition
March 31

(Millions of yen)
Total assets

Net assets

Equity ratio

Net assets per share

%

Yen

2013

1,195,116

258,47921.6

154.612012

1,144,618

255,03922.2

152.55

Note: Shareholders’ equity

March 31, 2013: ¥ 258,479 million
March 31, 2012: ¥ 255,039 million* Review Status
This report is exempt from the review of accounts conducted pursuant to Japan’s Financial Instruments
and Exchange Act. As of this report’s publication, the review of the financial results had not been
completed.
*Appropriate Use of Financial Forecasts and Other Important Matters
Forward-Looking Statements
These materials contain earnings forecast and other forward-looking statements based on information
available to the company at the time of disclosure and the company makes no assurances as to the actual
results and/or other outcomes, which may differ from those expressed or implied herein due to various
factors. For assumptions underlying earnings forecasts and other information regarding the use of suchforecasts, refer to “(iii) Consolidated Earnings Outlook” on page 5 in section “(1) Consolidated Operating
Results” of “1. Qualitative Information and Financial Statements” in the Accompanying Materials.
How to Obtain Supplementary Briefing Material on Financial Results and Details of the Financial
Results Briefing
The Company plans to conduct a briefing for institutional investors and analysts on Thursday April 25,
2013, and to post the briefing material on financial results to be used for the briefing on TDnet and theCompany’s website simultaneously with the announcement of financial results.

3

Accompanying Materials – Contents
1. Qualitative Information and Financial Statements

5(1) Consolidated operating results

5(2) Consolidated financial position

9(3) Dividend policy and dividends for the fiscal years through March 31, 2014 and 201510(4) Business and other risks

10

2. Status of Group11

3. Management Strategy

11(1) Basic management strategy

11(2) Target management metrics

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

11(4) Management priorities

12

4. Consolidated Financial Statements

15(1) Consolidated balance sheets

15(2) Consolidated statements of income and comprehensive income

17

Consolidated statements of income

17

Consolidated statements of comprehensive income18(3) Consolidated statement of changes in net assets

19(4) Consolidated statements of cash flows

21(5) Notes on financial statements

22

Notes on the going-concern assumption

22

Basis of preparation of financial statements

22

Changes in basis of preparation of financial statements

22

Changes in accounting policies, changes in accounting estimates, and correction of errors

22

Additional information

23

Consolidated balance sheets

23

Consolidated Statements of Income

23

Segment information and others

24

Per share data

28

Material subsequent events29

5. Others

30(1) Corporate officer changes

30(2) Consolidated orders and sales(3) Supplementary information on earnings forecasts for the fiscal year ending March 31, 2014

30

4

31

1. Qualitative Information and Financial Statements(1) Consolidated operating results(i) Overview of consolidated operating results
In the fiscal year ended March 31, 2013, global economic growth was generally subdued in thewake of an economic slowdown in China and emerging market economies that had hitherto been the
global economy's chief growth drivers. Looking ahead, the KHI Group expects moderate economic
growth to continue by virtue of an anticipated pickup in US manufacturing and solid infrastructure
demand in emerging market economies, although the European economy remains at risk of
instability amid concerns about sovereign debt problems in some European countries.

In Japan, post-earthquake reconstruction progressed but economic conditions generally remained
unstable, partly due to concerns of a global economic downturn. Going forward, there are highexpectations for growth in response to the recent reversal of the yen's appreciation trend and fiscal
and monetary policy measures to overcome deflation and realize sustained economic growth, butsuch expectations could take a while to feed through to the real economy.

Amid such an economic environment, the Group achieved growth in overall orders received in thefiscal year ended March 31, 2013, as order growth in the Rolling Stock and Ship & Offshore
Structure segments offset a decline in orders in the Precision Machinery and other segments. The
Precision Machinery segment's sales also declined in the wake of China's economic slowdown.
Although sales declined in the Ship & Offshore Structure segment also, overall sales were relatively
unchanged year on year, largely by virtue of sales growth in the Aerospace segment. Segments inwhich sales grew, including the Motorcycle & Engine and Aerospace segments, generally achieved
growth in operating income or otherwise improved their operating performance. Overall operating
income, however, decreased due to profit declines in several segments, including Precision
Machinery and Plant & Infrastructure.

The Group’s consolidated orders received totaled ¥1,369.5 billion, a ¥57.7 billion increase fromthe previous fiscal year. Consolidated net sales decreased ¥14.8 billion year on year to ¥1,288.8
billion. Consolidated operating income totaled ¥42.0 billion, down ¥15.4 billion from the previous
fiscal year. Consolidated recurring profit declined ¥24.2 billion year on year to ¥39.3 billion.
Consolidated net income increased ¥7.5 billion year on year to ¥30.8 billion as a result of a decrease
in income tax expense and reduction in extraordinary losses.

5Consolidated operating performance in the fiscal year ended March 31, 2013, is summarized bysegment below.
(ii) Segment information
Segment net sales, operating income, and orders received(billions of yen)

Fiscal year ended March 31
2013

Orders received

2012

Fiscal year ended March 31

Net

OperatingNet

Operatingsales

incomesales

income2013
Segment

2012

Ship & Offshore Structure

90.3

4.1

113.5

3.9

105.7

39.9

Rolling Stock

129.9

2.2

132.6

5.1

124.4

66.0

Aerospace

239.1

14.8

206.5

7.8

283.4

327.2

Gas Turbine & Machinery

207.0

7.0

194.6

7.7

255.5

227.2

Plant & Infrastructure

115.8

9.7

122.8

14.1

113.6

119.2

Motorcycle & Engine

251.8

2.3

235.2

(2.9)

251.8

235.2

Precision Machinery

130.4

8.4

175.0

26.6

109.7

174.5

Other

124.2

1.2

123.2

3.8

125.1

122.2

-

(8.0)

-

(8.8)

-

-

1,288.8

42.0

1,303.7

57.4

1,369.5

1,311.8

Adjustments
Total

Note: Net sales include only sales to external customers.

Ship & Offshore Structure
Consolidated orders received totaled ¥105.7 billion, a large increase of ¥65.8 billion from theprevious fiscal year. They included orders for one submarine and five carriers, including LNG
carriers.
Consolidated net sales decreased ¥23.1 billion year on year to ¥90.3 billion as growthin construction of liquefied gas carriers, including LNG and LPG carriers, was offset bya decline in construction of other classes of vessels, most notably Capesize bulk carriers.
Despite the sales decline, consolidated operating income was roughly unchanged year on year at¥4.1 billion, bolstered by cost reductions and yen depreciation.
Rolling Stock
Consolidated orders received increased ¥58.3 billion to ¥124.4 billion, largely as a result ofhigh-speed rail car orders from Taiwan and subway car orders from Singapore.
Consolidated net sales were roughly unchanged year on year at ¥129.9 billion as domestic sales
growth driven by increased demand from JR companies was offset by a decline in overseas sales.
Consolidated operating income decreased ¥2.9 billion year on year to ¥2.2 billion due to a decline
in profitability of overseas projects.
Aerospace
Despite growth in orders for component parts for the Boeing777 and 787, consolidated orders
6

received decreased to ¥283.4 billion, down ¥43.7 billion from the previous fiscal year, when thesegment booked large orders from Japan's Ministry of Defense.
Consolidated net sales increased ¥32.5 billion year on year to ¥239.1 billion, largely as a result ofgrowth in sales of component parts for the Boeing777 and 787 coupled with growth in sales of the
C-2 transport aircraft and other aircraft to Japan’s Ministry of Defense.
Consolidated operating income increased sharply, up ¥7.0 billion year on year to ¥14.8 billion,
largely due to sales growth and cost reductions.
Gas Turbine & Machinery
Consolidated orders received increased ¥28.2 billion to ¥255.5 billion, largely as result of growthin orders for component parts for commercial aircraft jet engines.
Consolidated net sales grew ¥12.3 billion year on year to ¥207.0 billion, as increased sales ofcomponent parts for commercial aircraft jet engines and gas engines offset a decline in sales ofdiesel engines for ships.
Consolidated operating income decreased ¥0.7 billion year on year to ¥7.0 billion, largely due toincreased amortization of R&D expenditures for new projects.
Plant & Infrastructure
Consolidated orders received decreased ¥5.6 billion yen year on year to ¥113.6 billion. Although
the segment won an order for cryogenic tanks for the Ichthys LNG project, domestic orders for LNG
storage tanks and conveyance equipment declined.
Consolidated net sales were down ¥6.9 billion year on year to ¥115.8 billion as continued robust
sales of LNG storage tank and growth in sales of conveyance equipment and refuse incineration
plants failed to offset a decrease in revenues from large overseas projects.
Consolidated operating income totaled ¥9.7 billion, a steep decline of ¥4.3 billion year on year, asa result of the sales decline and shrinkage in profit margins.
Motorcycle & Engine
Consolidated net sales grew ¥16.6 billion year on year to ¥251.8 billion. By region, motorcycle
sales declined in Europe but increased in the US and emerging market economies, most notablyIndonesia.
Consolidated operating income totaled ¥2.3 billion, a ¥5.3 billion year-on-year improvement
largely attributable to sales growth and improved profitability.
Precision Machinery
Consolidated orders received totaled ¥109.7 billion, a steep ¥64.8 billion year-on-year decline
mainly due to reduced demand for hydraulic equipment for construction machinery in emerging
market economies, most notably China.
This downshift in emerging market, particularly Chinese, demand for hydraulic equipment for
construction machinery resulted in a large decline in sales also. Consolidated net sales were down7¥44.6 billion year on year to ¥130.4 billion.
Consolidated operating income totaled ¥8.4 billion, a steep decline of ¥18.1 billion year on year,
largely due to the sales decline and growth in fixed expenses stemming from capital investments inthe previous fiscal year.
Other Operations
Consolidated net sales increased ¥1.0 billion yen year on year to ¥124.2 billion. Consolidated
operating income decreased ¥2.5 billion year on year to ¥1.2 billion.

(iii) Consolidated earnings outlook
The global economy is generally on track toward a moderate growth trajectory against a backdropof solid growth in emerging-market and resource-producing economies coupled with signs of
economic recovery in the US and China. The Japanese economy is also expected to embark on arecovery driven by a pickup in post-earthquake reconstruction and expectations that the
government's growth strategy will prove effective. In Europe, however, economies beset by debt
problems are expected to remain sluggish for a while longer.
While the operating environment is thus generally improving, the Company will diligently
conduct operations in the fiscal year ending March 2014, the first year of its Medium-Term Business
Plan 2013, in the aim of rectifying the downturn in its operating performance in the fiscal year justended. The Company will also pursue specific initiatives toward realization of Kawasaki Business
Vision 2020.
For the fiscal year ending March 31, 2014, the Company forecasts consolidated net sales of ¥1,380
billion, a year-on-year increase of ¥90 billion. Although the Company anticipates a sales decline in
the Ship & Offshore Structure segment, it projects sales growth in the Aerospace, Rolling Stock, andMotorcycle & Engine segments.
In terms of earnings, the Company forecasts consolidated operating income of ¥60 billion,
recurring profit of ¥53 billion, and net income of ¥34 billion. The Company plans to achieve these
forecasts by continuing to vigorously implement initiatives to improve earnings across all operations
through such means as reducing fixed and overhead expenses and boosting productivity.
The Company’s earnings forecasts assume exchange rates of ¥95 to the US dollar and ¥120 to the
euro.

The Company plans to implement the following accounting changes effective from the fiscal year
ending March 31, 2014.
Change in depreciation method
The Group has hitherto mainly depreciated its domestic property, plant and equipment by the
declining balance method based on useful lives prescribed in the Corporation Tax Act. Effectivefrom the fiscal year ending March 31, 2014, the Company plans to switch to the straight line method
and revise property, plant and equipment's useful lives to more appropriately reflect these assets'8

future usage. The effects of this change in depreciation method will extend indefinitely into the
future. In the fiscal year ending March 2014, the Company estimates that the change will reduce its
depreciation expense by approximately ¥16 billion.
Change in financial statement presentation of FIA
In the Gas Turbine & Machinery segment, when the Company's main partners sell jet engines toairlines, the airlines demand a concession called fleet introductory assistance (FIA), a type of
discount and sales promotion expense. The Company is charged a share of this FIA in proportion toits involvement in projects. The Company has hitherto included these FIA charges in cost of sales.
Effective from the fiscal year ending March 31, 2014, the Company plans to switch to reporting FIA
charges as a deduction from sales to more appropriately report its operating performance in light ofrecent research reports and debate on revenue recognition. In the fiscal year ending March 31, 2014,
the Company estimates that this change will reduce net sales by roughly ¥30 billion and orders
received by ¥40 billion.

(2) Consolidated financial position(i) Financial condition(A) Assets
At March 31, 2013, consolidated assets totaled ¥1,466.2 billion, a 7.6% increase from March 31,
2012. Of this total, current asset accounted for ¥1,016.8 billion, a 5.1% increase from March 31,
2012. The increase in current assets was chiefly attributable to growth in trade receivables stemmingfrom the booking of net sales and inventory growth in tandem with progress toward completion of
construction work. Fixed assets totaled ¥449.4 billion at March 31, 2013, a 13.8% increase from theprevious fiscal year. Their growth was largely attributable to capital investments that increased
property, plant and equipment and acquisition of an equity stake in Dalian Cosco KHI ShipEngineering Company, Ltd.
(B) Liabilities
Consolidated liabilities increased 6.7% year on year to ¥1,116.4 billion at March 31, 2013. The
increase was largely the net result of a 19.0% increase in interest-bearing debt, which ended thefiscal year at ¥484.6 billion, and reductions in notes and accounts payable, provision for employee
retirement and severance benefits, and provision for losses on construction contracts.
(C) Net assets
Consolidated net assets at March 31, 2013, totaled ¥349.8 billion, a 10.7% increase from March 31,
2012. The increase was largely attributable to the dividend payments and the booking of net income.
(ii) Cash flows(A) Cash flows from operating activities
Operating activities provided net cash of ¥28.1 billion, a ¥56.6 billion decrease from the previous
fiscal year. Major sources of operating cash flow included depreciation and amortization of ¥48.3
9

billion and a ¥10.6 billion decrease in trade receivables. Major uses of operating cash flow includeda ¥41.1 billion reduction in trade payables and tax payments of ¥15.7 billion.
(B) Cash flows from investing activities
Investing activities used net cash of ¥81.1 billion, a ¥15.2 billion increase from the previous fiscal
year, mainly to acquire property, plant and equipment.
(C) Cash flows from financing activities
Financing activities provided net cash of ¥57.6 billion, an ¥84.5 billion increase from the previous
fiscal year. This cash inflow stemmed mainly from increased borrowings.
(iii) Cash flow ratios
Fiscal year ended March 31:
2009
2010
2011
2012
2013
Equity ratio (%)
20.7
20.4
21.3
22.4
23.0
Market-value equity ratio (%)
23.3
31.8
45.1
31.0
33.6
Debt-to-cash-flow ratio (%)
1,421.2
523.7
480.5
1,724.6
Interest-coverage ratio (times)
5.5
17.2
19.0
6.7
Notes:
1. Ratios are calculated as follows.
Ratio of shareholders’ equity to total assets: Shareholders’ equity / Total assets
Market-value equity ratio: Market capitalization / Total assets
Debt-to-cash-flow ratio: Interest-bearing debt / Cash flow from operating activities
Interest-coverage ratio: Cash flow from operating activities / Interest paid
2. All ratios are calculated using consolidated-basis financial data.
3. Market capitalization is calculated by multiplying the closing price of the company’s stock by
the number of shares issued and outstanding (excluding treasury stock) at the end of the fiscal
year.
4. The figure for cash flow from operating activities is taken from cash flow from operating
activities on the consolidated statement of cash flows.
5. Interest-bearing debt is all interest-bearing debt listed under liabilities on the consolidatedbalance sheet. Interest paid is the figure for “Cash paid for interest” on the consolidated
statement of cash flows.
6. The debt-to-cash-flow ratio and interest coverage ratio are omitted for the fiscal year ended
March 31, 2009, because that fiscal year’s operating cash flow was negative.

(3) Dividend policy and dividends for the fiscal years 2013 and 2014
The Company’s basic policy is to pay shareholders stable dividends commensurate with earnings
on an ongoing basis while internally retaining sufficient funds to strengthen and expand its earnings
power and operating foundation in pursuit of future growth. After comprehensively considering its
earnings performance, the sufficiency of its retained earnings, and other relevant factors in light ofsaid policy, the Company intends to pay a dividend of ¥5 per share for the fiscal year ended March
31, 2013.
For the fiscal year ending March 31, 2014, the Company plans to pay a dividend of ¥5 per share.

(4) Business and other risks
No risks other than those disclosed under the heading “Business and Other Risks” in the Company’s
most recent full-year statutory financial report (filed June 27, 2012) have surfaced since said filing.
Updated risk disclosures are therefore omitted here.
102. Status of Group
There have been no material changes in the “Chart of Operations (Nature of Operations)” and the“Status of Affiliated Companies” in the Company’s most recent full-year statutory financial report(filed June 27, 2012). Updated disclosure of them is therefore omitted here.

3. Management Strategy(1) Basic management strategy
The Group has embraced a mission of creating new value conducive to formation of an affluent,
beautiful society in harmony with the global environment through utilization of its broad array ofsophisticated technological capabilities in accord with its Group Mission Statement, "Kawasaki,
working as one for the good of the planet." To concretely fulfill this Group Mission, the Group
formulated Kawasaki Business Vision 2020 (2020 Vision) and designated "Land, Sea and Air
Transport Systems," "Energy & Environmental Engineering," and "Industrial Equipment" as its
principal business sectors. With its innovative, leading-edge technological capabilities, the Groupaims to help customers and society realize their potential by nimbly providing products and services
that meet the diverse needs of people throughout the world.
The Group invests in plant and equipment to meet future demand and conducts R&D on an
ongoing basis as a provider of core societal infrastructure. At the same time, the Group has adopted abasic policy of meeting its shareholders' expectations by paying dividends commensurate withearnings on an ongoing basis while internally retaining sufficient funds to maintain and strengthen acycle of rewarding its stakeholders with the fruits of its operations and expand its earnings power
and operating foundation in pursuit of future growth.

(2) Target management metrics
In the aim of generating profits sufficient to meet investors’ expectations, the Group has adopted
ROIC (return on invested capital: earnings before interest and taxes ÷ invested capital), a measure ofcapital efficiency, as its target metric of operating performance. While seeking to maximize ROIC,
the Group will also endeavor to strengthen its financial condition through earnings growth andimprovement in invested-capital efficiency.

(3) Medium- to long-term management strategy[Review of Medium-Term Business Plan (FY2010–2012)]
In April 2010, the Company adopted a business plan (Medium-Term Business Plan 2010) for thethree years through fiscal 2012 as an action plan to realize its 2020 Vision. Earnings subsequently
came under pressure from various factors, including yen appreciation in excess of the Company's
exchange rate assumptions and prolonged economic stagnation in developed economies.
Nonetheless, the Group surpassed its initial earnings forecasts in both fiscal 2010 and 2011 andachieved Medium-Term Business Plan 2010's targets one year ahead of schedule by virtue of efforts
to reliably capitalize on demand growth driven by China's rapid economic growth. However, in
11

fiscal 2012, Medium-Term Business Plan 2010's final year, the Group fell short of the plan's initial
operational targets in the wake of a Chinese economic slowdown, continued yen appreciation andintensification of competition in global markets. Even amid such an environment, the Group
achieved profitability across all of its business segments, including the previously unprofitable
Motorcycle & Engine segment. The Group believes that it further enhanced the soundness of its
business operations in fiscal 2012.

[Formulation of Medium-Term Business Plan

(FY2013–2015)]

The Group has formulated a new medium-term business plan (Medium-Term Business Plan 2013)
for fiscal 2013 through 2015 after partially revising 2020 Vision in response to reflection upon theMedium-Term Business Plan 2010's outcome and subsequent changes in the environment. In
revising 2020 Vision, the Group placed priority on swiftly adapting to changes in the environment
and meeting increasingly diverse societal needs through system solutions businesses. The Group also
identified markets and business domains with promising growth prospects and clarified the directionin which it aims to evolve. Additionally, the Group newly formulated a "Kawasaki Corporate Brand
Strategy" to further upgrade its global presence.
In the newly formulated Medium-Term Business Plan 2013, the Group has developed an action
plan to maintain sustained growth and craft a more detailed roadmap for realization of its 2020
Vision. In particular, security of energy and resource supplies, including rare earth metals, has
become a critical issue for Japan in the wake of the Great East Japan Earthquake and resource
demand growth stemming from emerging market economies' growth. The Group formulated its
Medium-Term Business Plan 2013 based on a strong commitment to playing a key role in thegovernment's current growth strategy, including such resource security issues, as a company thatevolves together with society. The Group's priorities under its Medium-Term Business Plan 2013 are
discussed below.

(4) Management priorities
Although the global economy is on track toward a moderate growth trajectory, conditions now
differ from the previous medium-term plan's term, when the Chinese economy was the global
economy's major growth engine. The Group expects other emerging-market and resource-producing
economies to achieve robust growth. Even in developed countries, certain business domains such asenergy efficiency, environmental engineering, and leading-edge technologies have promising growthprospects. To unfailingly capture growing demand in these diverse growth markets and businesses,
the Group has decided to expedite its global strategy across all of its business segments and in its
parent company's Marketing Division.
One particularly important priority is expanding the Group's operations in the energy andenvironmental engineering sector amid growing awareness of global energy challenges. The Group
expects dispersed power sources to benefit from demand growth as energy systems adaptable tolocal conditions in not only the domestic market but also emerging market economies in whichenergy scarcity is a concern. In the dispersed power source market, the Group must swiftly respond12

to diverse customer needs. Specifically, the Group intends to reorient its business model frominternally-driven product development to a customer-centric approach. The Group is also promoting
cross-organizational sharing of diverse knowledge cultivated in different business segments andstrengthening its businesses that offer customers solutions in the form of complete energy systems.
With resource development picking up in countries such as Australia, Brazil, and the US, where a
shale gas boom is underway, the Group aims to expand its operations in a wide range of domains,
including not only energy utilization but also resource development, storage and transport. In theland, sea and air transport equipment and industrial equipment sectors, the Group is pursuing
expansion of its operations through technologies that improve operational and energy efficiency. In
the transport equipment sector, the Group is placing priority on early commercialization of new
propulsion systems. In the industrial equipment sector, the Group's priorities include branching into
the advanced production system and hydraulic mobile equipment markets.
Among the sectors identified in Japan's growth strategy, the Group considers "health and medicalcare," "next-generation infrastructure," "energy," and "marine resource development" to beparticularly important. In addition to building a system to commercialize automated cell culture
equipment, the Group plans to commence feasibility testing of tidal power generation systems anddesign a CO2-free hydrogen chain integration for a pilot chain scheduled to be commissioned into
operation in 2017. The Group plans to accelerate its development of these new products andbusinesses.
To build an operational foundation to support the above initiatives, the Group will endeavor tostrengthen its manufacturing capabilities by building an optimal global production platform
revolving around "mother factories" in Japan. The Group will also systematically invest in future
growth through human resource development, capital investment, and R&D. To do so, the Groupwill strengthen its financial foundations through such means as significantly improving free cash
flow across all business segments.
Individual business segments’ priorities are as follows.
(i) Ship & Offshore Structure: Increase orders received for LNG carriers; develop technologies for a
new propulsion plant for LNG carriers and technologies for LNG-fueled ships, etc.; expand
Chinese operations and launch operations in Brazil; branch into the marine development sector;
and strengthen the foundations of the naval shipping business(ii) Rolling Stock: Improve competitiveness by developing leading-edge technologies and products,
including new rolling stock, that meet customers' needs; strengthen project management
capabilities to accommodate growth in overseas projects; and build an optimal global businessmodel that includes overseas production, overseas supply chains, and utilization of partnerships(iii) Aerospace: Establish a mass production system for C-2 transport and P-1 fixed-wing patrolaircraft, including repair services and parts resupply, and apply it to derivative aircraft;accommodate growth in Boeing 787 component production and apply to derivative aircraft(iv) Gas Turbine & Machinery: Develop an energy solutions business based on high-efficiency
industrial gas turbines and gas engines; meet domestic demand for dispersed power sources and13cultivate overseas markets; and develop new models of jet engines for civilian aircraft andimprove jet engine production efficiency(v) Plant & Infrastructure: Improve competitiveness in the energy and environmental engineering
sector by upgrading existing products; and expand overseas operations, mainly inemerging-market and resource-producing economies, by rapidly commercializing new products
and technologies, cultivating human resources, and strengthening overseas partnerships(vi) Motorcycle & Engine: Improve cost-competitiveness by optimizing production operations andexpanding supply chains globally; expand sales in emerging markets in which the segment isalready active (e.g., Southeast Asia, Brazil); cultivate new markets, and develop advanced
technologies for environmental compliance(vii) Precision Machinery: Maintain high share of market for hydraulic components for excavatorsand expand presence in global market for construction machinery other than excavators; improvecost-competitiveness in the robot sector, and expand robot sales in emerging markets(viii) Other: Strengthen development capabilities, expand global market share and increase earnings
through an alliance with Hitachi Construction Machinery Co., Ltd. in the construction machinery
business
Needless to add, compliance with applicable laws is fundamental to the Group’s businessactivities such as those described above. The Group has decided to adopt a system of outside
directors, and is strengthening management oversight by selecting outside auditors who do not havea vested interest in the Group in addition to auditors who possess considerable experience infinancial and accounting matters. The Group has prescribed internal corporate ethics regulations andis endeavoring to ensure that all personnel are knowledgeable about the laws with which they mustcomply. Toward this end, the Group conducts multi-level training programs, distributes a variety ofguidebooks, and so on. The Group is also carrying out organizational initiatives to promote thoroughlegal compliance, such as establishing organizational units in charge of compliance within each
operating division, in addition to establishing a head-office department that oversees internal
controls, compliance, and CSR activities. Meanwhile, the Group is endeavoring to establish a
corporate culture that always places the utmost priority on information disclosure and transparency.

144. Consolidated Financial Statements(1) Consolidated balance sheets
March 31

Millions of yen
2012

AssetsCurrent assets
Cash on hand and in banks
Trade receivables
Merchandise and finished products
Work in process
Raw materials and supplies
Deferred tax assets
Other current assets
Allowance for doubtful receivables
Total current assets
Fixed assets
Net property, plant and equipment
Buildings and structures
Machinery and equipment
Land
Leased assets
Construction in progress
Other
Total property, plant and equipment
Intangible assets
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

15

2013

34,316
404,054
53,558300,224
88,11333,00757,166(3,255)967,186

38,525432,649
61,446
311,107
87,55137,64850,671(2,785)
1,016,813

113,632
74,52961,942323
11,782
12,540274,750

124,206
86,14162,318111
19,19813,815
305,792300
18,48518,786

19,446
19,44623,249432
37,61441,060(940)
101,416
394,953
1,362,139

22,729409
36,42865,605(936)
124,236
449,476
1,466,290

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

150
73,321
696,002

281,062
213,510
347
3,756
1,793
20,0606,148
18,719108,213
10,0006,000
133
112,793
782,540

60,000198,737
506
4,060
910
3,282
75,052
611
7,053
350,214
1,046,216

70,000184,362
433
5,511
569
4,512
62,300551
5,626
333,868
1,116,409

Total shareholders’ equity

104,484
54,393
176,414(22)
335,270

104,484
54,393
198,528(27)
357,379

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

3,989
246
(33,451)(29,215)9,868
315,922
1,362,139

4,524(5,998)(17,665)(19,139)
11,641
349,881
1,466,290

Long-term liabilities
Bonds payable
Long-term debt
Lease obligations
Deferred tax liabilities
Provision for loss on damages suit
Provision for environmental measures
Employees’ retirement and severance benefits
Asset retirement obligations
Other
Total long-term liabilities
Total liabilities
Net assets
Shareholders’ equity
Common stock
Capital surplus
Retained earnings
Treasury stock16

310,775
137,568
355
4,627
1,465
20,582
7,128
30,977
99,05010,000-(2) Consolidated statements of income and comprehensive income
Consolidated statements of income
Millions of yen

Years ended March 31
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Salaries and benefits
Advertising expenses
R&D expenses
Provision for doubtful accounts
Other
Total selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Gain on sales of securities
Equity in income of non-consolidated subsidiaries and affiliates
Foreign exchange gain, net
Other
Total non-operating income
Non-operating expenses
Interest expense
Foreign exchange losses
Other
Total non-operating expenses
Recurring profit
Extraordinary income
Gain on transfer of benefit obligation relating to employees’
pension fundTotal extraordinary income
Extraordinary losses
Loss on environmental measures
Loss on impairment of fixed assets
Total extraordinary losses
Income before income taxes and minority interests
Income taxes
Current
Deferred
Total income taxes
Income before minority interests
Minority interests in net income of consolidated subsidiaries
Net income

17

2012

2013

1,303,778
1,088,918
214,860

1,288,881
1,085,469
203,41241,565
8,166
39,940796
66,907
157,375
57,48443,0888,130
41,709114
68,305
161,349
42,062

1,672
658
591
8,567
206
7,449
19,146

876
765
1,424
8,530
5,980
17,576

4,282
8,721
13,00363,627

4,151
9,919
6,239
20,31039,328

-

8,624

-

8,624

14,921
14,921
48,706

1,437
363
1,800
46,152

9,932
12,89922,83125,8752,551
23,323

10,5902,550
13,14033,011
2,147
30,864

Consolidated statements of comprehensive income
Millions of yen

Years ended March 31
2012
Income before minority interests

2013

25,87533,011

106

541

Deferred gains (losses) on hedges

1,281(6,381)

Foreign currency translation adjustments(2,925)

11,712231

5,155

Total other comprehensive income(1,305)

11,027

Comprehensive Income attributable to:24,56944,039Owners of the parent company

22,22740,940Minority interests

2,341

3,099

Other comprehensive income
Net unrealized gains (losses) on securities, net of tax

Share of other comprehensive income of associates accounted forusing equity method18

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

Years ended March 31
2012
Shareholders’ equity
Common stock
Balance at end of previous year
Changes during the period
Conversion of convertible bonds
Total changes during the period
Balance at end of year
Capital surplus
Balance at end of previous year
Changes during the period
Conversion of convertible bonds
Treasury stock disposed

2013

104,340

104,484

144

-

144

-

104,484

104,484

54,251

54,393

142
(0)

-

142

-

54,39354,393

158,615

176,414(5,011)
23,323(3)(509)-(8,359)30,864
(0)
(204)
(185)

Total changes during the period

17,79822,114

Balance at end of year
Treasury stock
Balance at end of previous year
Changes during the period
Conversion of convertible bonds
Treasury stock purchased
Treasury stock disposed

176,414

198,528

(30)

(22)

13
(6)
1

(5)
0

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
Treasury stock disposed
Increase (decrease) by change of consolidation period of subsidiaries
Other

Total changes during the period
Balance at end of year
Total shareholders’ equity
Balance at end of previous year
Changes during the period
Conversion of convertible bonds
Cash dividend
Net income
Treasury stock purchased
Treasury stock disposed
Increase (decrease) by change of consolidation period of subsidiaries
Other
Total changes during the period
Balance at end of year

19

7

(4)

(22)

(27)

317,176

335,270300(5,011)
23,323
(6)
(2)
(509)
-

(8,359)30,864
(5)
0
(204)
(185)

18,093

22,109335,270

357,379

Comprehensive income
Net unrealized gain (loss) on securities
Balance at end of previous year
Changes during the period
Net changes in items other than shareholders’ equity
Total changes during the period
Balance at end of year
Deferred gains (losses) on hedges
Balance at end of previous year
Changes during the period
Net changes in items other than shareholders’ equity
Total changes during the period
Balance at end of year
Foreign currency translation adjustments
Balance at end of previous year
Changes during the period
Net changes in items other than shareholders’ equity
Total changes during the period
Balance at end of year
Total comprehensive income
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

3,876

3,989

112

535

112

535

3,989

4,524

(990)

246

1,236

(6,244)

1,236(6,244)

246(5,998)(31,006)(33,451)(2,444)

15,785(2,444)

15,785(33,451)(17,665)(28,119)(29,215)(1,095)

10,076(1,095)

10,076(29,215)(19,139)

8,376

9,868

1,491

1,772

1,491

1,772

9,868

11,641

297,433

315,922300(5,011)
23,323
(6)
(2)
(509)
395

(8,359)30,864
(5)
0
(204)
(185)
11,848

Total net assets
Balance at end of previous year
Changes during the period
Conversion of convertible bonds
Cash dividend
Net income for the year (loss)
Treasury stock purchased
Treasury stock disposed
Increase (decrease) by change of consolidation period of subsidiaries
Other
Net changes in items other than shareholders’ equity
Total changes during the period
Balance at end of year20

18,48933,958315,922

349,881(4) Consolidated statements of cash flows
Millions of yen

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

21

2012

2013

48,706
48,901
14,921(5,257)
4,885
449
(750)
(2,016)(1,077)(4,957)
(545)
(70)
(591)
918
1,177
(8,567)(2,331)
4,282(942)(18,705)(2,139)(7,332)
18,9738,708
4,138
100,775
6,656(4,455)(18,238)
84,737

46,152
48,385363(10,970)
(521)
(653)
(1,195)(12,617)
(340)
1,261
1,711
(1,424)55
1,032(8,530)(1,641)
4,151
10,601(10,711)
8,073(41,150)
5,670
4,015
(2,332)39,384
8,668(4,194)(15,756)
28,101

1,446(61,126)535(4,921)16(47)
663(1,761)
(11)
(70)
89
(771)
(65,959)(310)(65,517)348(4,898)
33
(571)
2,899
(12,339)
(11)
(44)
101
(1,152)
305(81,160)(568)
19,963(29,701)
20,000(30,186)(8)(5,014)(1,070)(243)(26,831)(1,822)(9,875)44,62942,12944,327(28,837)
20,000(10,000)(4)217(8,351)(1,326)(482)
57,671(886)
3,726
33,245(1,508)-33,24536,971

(5) Notes on financial statements
Notes on the going-concern assumption
Not applicable
Basis of preparation of financial statements
Other than information disclosed under the heading “(7) Changes in basis of preparation offinancial statements” below, no material changes have been made from the information disclosed
in the Company’s most recent full-year statutory financial report (filed June 27, 2012). An
updated disclosure is therefore omitted here.
Changes in basis of preparation of financial statements
1. Change in the scope of consolidation(1) Change in the scope of consolidation
Two companies were added as consolidated subsidiaries because they were newly establishedby the Company.
Four companies ceased to be consolidated subsidiaries as they were dissolved throughabsorption or liquidated.
(2) Number of consolidated subsidiaries after change
95 companies
2. Change in application of the equity method(1) Non-consolidated subsidiaries which are accounted for under the equity method:None(2) Associated companies which are accounted for under the equity method(i) Change in associated companies which are accounted for under the equity method
Three companies were newly accounted for using the equity method: the Group acquired anequity stake in Dalian Cosco KHI Ship Engineering Co, Ltd. and Estaleiro Enseada do
Paraguacu S.A., and newly established one other company.
(ii) Number of associated companies accounted for under the equity method after change
17 companies
Changes in accounting policies, changes in accounting estimates, and correction of errors
Change in depreciation method
In accordance with the revision to the Corporate Tax Law, effective the fiscal year ended March
2013, the Company and its domestic consolidated subsidiaries have changed the depreciation
method for property, plant and equipment acquired on or after April 1, 2012 to reflect therevised Corporate Tax Code.
As a result, operating income, recurring profit and income before income taxes and minority
interests for the fiscal year ended March 31, 2013 each increased by ¥1,379 million.
Change in the method of presentation
Consolidated statements of income
1. Effective the fiscal year ended March 31, 2013, “Gain on sales of securities” under
non-operating expenses ceased to be included in “other” and was presented separately
because of its increased importance in monetary terms. The consolidated financial
statements for the fiscal year ended March 31, 2012 have been restated to reflect the change.
22

As a result, the ¥591 million that had been included in “other” under non-operating
expenses in the consolidated statements of income for the fiscal year ended March 2012
was separately presented as “gain on sales of securities” of ¥591 million.
2. “Loss on valuation of securities” under non-operating expenses ceased to be presented
separately and was included in “other” because of its decreased importance in monetary
terms. The consolidated financial statements for the fiscal year ended March 31, 2012 havebeen restated to reflect the change.
As a result, the ¥918 million that had been separately presented as “loss on valuation of
securities” under non-operating expenses in the consolidated statements of income for the
fiscal year ended March 2012 was included in “other.”
Additional Information
Transfer of benefit obligation relating to employees’ pension fundTwo consolidated subsidiaries received approval from the Minister of Health, Labor and Welfare
with respect to its application for exemption from the benefit obligation related to future
employee services under the substitutional portion of the employees’ pension fund on May 1,2012 and for exemption from the past benefit obligation with respect to the substitutional
portion of the employees’ pension fund on March 31, 2013.
As a result, "gain on transfer of benefit obligation relating to employees’ pension fund" of¥8,624 million was recorded in extraordinary income for the fiscal year ended March 31, 2013.
Consolidated balance sheets
Fiscal year ended March 31, 2013 (As of March 31, 2013)
Information is omitted here as its disclosure in this report is not of material importance.
Consolidated Statements of Income
Fiscal year ended March 31, 2013 (April 1, 2012 – March 31, 2013)
1. Loss on impairment of fixed assets(1) Outline asset groups in which loss on impairment of fixed assets was recognizedPurposeLocationType
Buildings and structures, etc.
Idle assets
Funabashi-city, Chiba
Idle assets

Higashinada-ku, Kobe-city, Hyogo

Buildings, structures and land, etc.

(2) Method for asset grouping
Asset grouping is based on line of business, and principle assets held for lease and idle assets aretreated 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 to diminishedexpectation of future use.

(4) Calculation of recoverable amount
Recoverable amounts are measured by net sales price or utility value. Net sales price isprincipally calculated 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.
23

(5) Loss on impairment of fixed assets
A write-down of 363 million yen was recorded as loss on impairment of fixed assets inextraordinary losses. Amounts by asset type are listed below.
Buildings and structures

246 million yen

Land, etc.

116 million yen
363 million yen

Other than the notes on consolidated statements of income stated above, information is omitted
here as its disclosure in this report is not of material importance.
Information Omitted
Notes on the unapplied accounting policies, consolidated statements of comprehensive income,consolidated statements of changes in shareholders’ equity, the consolidated cash flow statements,
lease transactions, related-party transactions, tax-effect accounting, financial instruments, securities,
derivative transactions, retirement benefits, stock-based compensation, business combination, asset
retirement obligations, investment and rental property, and special purpose companies are omitted
here, as their disclosure in this report is not of material importance.
Segment information and others
1. Segment information(1) Overview of reportable segments
The Company’s reportable segments are components of the company about which separate
financial information is available. These segments are subject to periodic reviews by theCompany’s board of directors to decide how to allocate resources and assess performance. The
Company’s operations are divided into internal companies based on product categories. Certain
authority is delegated to each of the internal companies, based on which they conduct businesses
in Japan and overseas. The Company’s operations are therefore segmented based on each internal
company’s product categories. The Company’s eight reportable segments are the Ship & Offshore
Structure segment, the Rolling Stock segment, the Aerospace segment, the Gas Turbine &Machinery segment, the Plant & Infrastructure segment, the Motorcycle & Engine segment, thePrecision Machinery segment, and the Other segment.

24

Main segment businesses are listed below.
Industry segment
Ship & Offshore
Structure
Rolling Stock
Aerospace
Gas Turbines &Machinery

Major products
Construction and sale of ships and other vessels, etc.

Plant & Infrastructure
Motorcycle & Engine
Precision Machinery
Other

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

(2) Calculation methods for sales, income (loss), assets, liabilities and other items by reportable segment
Accounting methods applied for calculation of sales, income (loss), assets, liabilities, and otheritems by industry segment largely correspond to information presented under “(6) Basis ofpreparation of financial statements”. Segment income is based on operating income. Intersegment
sales or transfers are based on market prices.
(3) Sales, income (loss), assets, liabilities, and other items by reportable segment
Fiscal year ended March 31, 2012 (April 1, 2011 – March 31, 2012)(Millions of yen)
Sales

Ship & Offshore
Structure

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

Other items

External sales

Intersegment
sales ortransfer

Total

Segment
income(loss)

Segment
assets113,532

1,636

115,168

3,964

102,102

3,819

13,554

15,2782,297

132,684
206,580

2,104
1,845

134,789
208,426

5,154
7,815

157,487295,668

3,693
9,633

33

92
-

2,266
10,208

194,655

20,438215,093

7,775

223,649

6,680

-

576

7,310

122,800

13,150135,950

14,118109,395

1,703

64

10,171

3,277

235,243

1,033

236,276(2,959)222,515

11,151-967

11,770175,077

14,245

189,322

26,622

110,578

6,647

-

-

16,221

123,205

35,280158,485

3,836

183,392

2,536

1,268

2,409

3,381

1,303,778-

89,734(89,734)

1,393,513(89,734)

66,327(8,843)

1,404,790(42,650)

45,865
3,035

14,921-

29,496-56,7337,185

1,303,778-

1,303,778

57,484

1,362,139

48,901

14,921

29,496

63,91925

Depreciation/amortization

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

Fiscal year ended March 31, 2013 (April 1, 2012 – March 31, 2013)(Millions of yen)
Sales

Other items

Intersegment
External sales
sales ortransfer
Ship & Offshore
Structure

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

Total

Segment
income(loss)

Segment
assetsDepreciation/amortization

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

90,343

1,999

92,342

4,162

112,612

1,363-

35,4341,780

129,973
239,172

2,887
2,289

132,861
241,461

2,215
14,827

163,527
311,659

3,536
10,769

-

98
-

2,807
17,170207,008

19,404

226,412

7,033

251,808

6,100

-

1,085

9,324

115,813

15,114130,928

9,772

115,470

1,861-

11,767

4,376

251,858757

252,615

2,397

271,548

10,480-994

14,865130,455

14,027

144,482

8,452

114,699

7,712

-

-

12,319124,256

32,872

157,128

1,270

144,209

2,426

363

2,521

2,149

1,288,881-

89,352(89,352)

1,378,234(89,352)

50,131(8,069)1,485,535(19,244)

44,250
4,135

363
-

51,902-64,795
13,8291,288,881-

1,288,881

42,062

1,466,290

48,385363

51,902

78,624(4) Reconciliation and main components of difference between total for reportable segments andamounts on the consolidated financial statements
Fiscal year ended March 31(Millions of yen)

Sales

2012

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

2013

1,393,513(89,734)

1,378,234(89,352)

1,303,778

1,288,881

Fiscal year ended March 31(Millions of yen)

Income2012

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

2013
66,327(131)(8,711)50,131564(8,633)57,48442,062*Note: Corporate expenses mainly comprise general and administrative expenses not attributed toreportable segments.
Fiscal year ended March 31(Millions of yen)

Assets2012

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

2013

1,404,790
112,985(155,636)

1,485,535
122,759(142,004)

1,362,139

1,466,290*Note: Corporate assets shared by all segments mainly comprise fixed assets not attributed to reportablesegments.

26

Fiscal year ended March 31
Total for reportablesegments

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

Adjustments*

2012

2013

2012

Depreciation/amortization

45,86544,250

3,035

Increase in property, plantand equipment andintangibles

56,73364,795

7,185

2013

2012

2013

4,135

48,901

48,385

13,82963,91978,624*Note: Adjustments are mainly due to fixed assets not attributed to reportable segments.

2. Related information
Fiscal year ended March 31, 2012 (April 1, 2011 – March 31, 2012)(1) Information by product and service
Information by product and service is omitted here as segmentation is equivalent to that used forreportable segments.
(2) Information by geographic area(a) Net salesJapan
567,044USA
237,941

Europe123,317

Asia
239,627

Other areas
135,847(Millions of yen)Total
1,303,778

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

(b) Property, plant and equipment
Japan
238,733

North America
19,450Europe2,104

Asia
13,610

Other areas
852(Millions of yen)Total
274,750(3) Information by major clients
Clients
Ministry of Defense

Net sales
179,786(Millions of yen)
Related segments
Ship & Offshore Structure, Aerospace, Gas Turbines &Machinery

Fiscal year ended March 31, 2013 (April 1, 2012 – March 31, 2013)(1) Information by product and service
Information by product and service is omitted here as segmentation is equivalent to that used forreportable segments.
(2) Information by geographic area(a) Net salesJapan
616,220

USA
272,531

Europe97,540Asia
202,704

Other areas
99,884

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

27(Millions of yen)Total
1,288,881

(b) Property, plant and equipment
Japan259,212

North America
21,298Europe2,618

Asia
21,638Other areas
1,023(Millions of yen)Total
305,792(3) Information by major clients
Clients

Net sales

Ministry of Defense

193,685(Millions of yen)
Related segments
Ship & Offshore Structure, Aerospace, Gas Turbines &Machinery

3. Impairment loss on fixed assets by reportable segment
Fiscal year ended March 31, 2012 (April 1, 2011 – March 31, 2012)
Information is omitted here as it is equivalent to that stated in “1. Segment information”.
Fiscal year ended March 31, 2013 (April 1, 2012 – March 31, 2013)
Information is omitted here as it is equivalent to that stated in “1. Segment information”.
4. Amortization amount for and unamortized balance of goodwill
Fiscal year ended March 31, 2012 (April 1, 2011 – March 31, 2012)
Information is omitted here as it is not of material importance.
Fiscal year ended March 31, 2013 (April 1, 2012 – March 31, 2013)
Information is omitted here as it is not of material importance.
5. Gain on negative goodwill by reportable segment
Fiscal year ended March 31, 2012 (April 1, 2011 – March 31, 2012)
Information is omitted here as it is not of material importance.
Fiscal year ended March 31, 2013 (April 1, 2012 – March 31, 2013)
Information is omitted here as it is not of material importance.
Per share data
Years ended March 31

(Yen)
2012

2013

Net assets per share

183.06

Net assets per share202.32

Earnings per share - basic

13.95

Earnings per share - basic

18.46

Notes:
1. Diluted net earnings per share is not stated because there are no potential shares.
2. Net assets per share were calculated based on the following:
March312012
315,922

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

28(Millions of yen)2013
349,881

9,868

11,641(9,868)(11,641)

306,054338,240

1,671,815

1,671,792

3. Net income/loss per share and net income per share (diluted) were calculated based on the following:
Years ended March 31
2012
Earnings per share - basic
Net income
Earnings not attributable to common shareholders
Net income allocated to the common shares
Average number of common shares outstanding (thousands of shares)

Material subsequent events
Not applicable29

23,32323,323
1,671,465(Millions of yen)2013
30,86430,864
1,671,803

5. Others(1) Corporate officer changes
Refer to the Company’s press release on January 31, 2013, titled “Directors and Executive
Officers to Change.”(2) Consolidated orders and sales
Orders received
Years ended March 31(Millions of yen)2012（A）

2013（B）% of total

Change（B-A）% of total%

Ship & Offshore Structure
39,9093.0
105,733
7.7
65,823
164.9
Rolling Stock
66,0995.0
124,441
9.0
58,342
88.2
Aerospace
327,23324.9
283,485
20.6(43,747)(13.3)
Gas Turbine & Machinery
227,28117.3
255,553
18.6
28,271
12.4
Plant & Infrastructure
119,284
9.0
113,600
8.2(5,683)(4.7)
Motorcycle & Engine
235,24317.9
251,858
18.3
16,6157.0
Precision Machinery
174,587
13.3
109,7258.0(64,861)(37.1)
Other
122,2399.3
125,188
9.1
2,949
2.4
Total
1,311,878
100.0
1,369,588
100.0
57,7094.3
Note: The Motorcycle & Engine segment’s orders received are equal to its net sales as production is based mainlyon estimated demand.

Net sales
Years ended March 31(Millions of yen)2012（A）

2013（B）% of total

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

113,532
132,684
206,580
194,655
122,800
235,243
175,077
123,205
1,303,778

8.7
10.1
15.8
14.9
9.4
18.0
13.4
9.4
100.0

Change（B-A）% of total

90,343
129,973
239,172
207,008
115,813251,858
130,455
124,256
1,288,881

7.0
10.0
18.5
16.0
8.9
19.5
10.1
9.6
100.0

%

(23,189)(2,711)
32,591
12,353(6,986)
16,615(44,622)
1,051(14,896)(20.4)
(2.0)
15.7
6.3
(5.6)
7.0
(25.4)
0.8(1.1)

Order backlog
Years ended March 31
2012（A）

2013（B）% of total

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

102,870
345,170
386,376
409,819
181,698
42,30025,8791,494,116

6.8
23.1
25.8
27.4
12.1
2.8
1.7
100.0

30

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

120,112359,980
432,729495,717
171,486
21,571
26,796
1,628,393

7.3
22.1
26.5
30.4
10.5
1.3
1.6
100.0

%

17,242
14,81046,35285,897(10,212)(20,729)916
134,277

16.7
4.2
11.9
20.9
(5.6)
(49.0)
3.5
8.9

(3) Supplementary information on earnings forecasts for the fiscal year ending March 31, 2014
1. Consolidated earnings outlook(Billions of yen)

Outlook for the fiscal year
ending March 31, 2014
(A)

Fiscal year ended
March 31, 2013(actual)(B)

Change (A – B)

Net sales
Operating income
Recurring profit
Net income

1,380.0
60.0
53.0
34.0

1,288.8
42.0
39.3
30.8

91.2
18.0
13.7
3.2

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

1,450.0
7.4%
44.0
84.0

1,369.5
6.1%
41.7
78.6

80.5
1.3%
2.3
5.4

43.0

48.3

(5.3)

34,90034,010890*9,200*8,788*412

of Japan included therein

Notes: 1. Outlook’s assumed foreign exchange rates: ¥95 = US$1, ¥120 = 1 euro

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

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

Fiscal year ended
March 31, 2013 (actual)(B)

Outlook for the fiscal year
ending March 31, 2014
(A)

Change (A – B)

Net sales

Operating
Income (loss)

Net sales

Operating
Income (loss)

Net sales

Operating
Income (loss)

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

70.0
155.0
290.0
185.0
115.0
290.0
140.0
135.0

90.3
129.9
239.1
207.0
115.8
251.8
130.4
124.2

1,380.0

4.1
2.2
14.8
7.0
9.7
2.3
8.4
1.2
(8.0)
42.0

(20.3)
25.1
50.9(22.0)
(0.8)
38.2
9.6
10.8

Total

0
6.0
19.0
11.0
7.0
10.0
14.0
3.0
(10.0)
60.0

(4.1)
3.8
4.2
4.0
(2.7)
7.7
5.6
1.8
(2.0)
18.0

1,288.8

31

91.2

(b) Orders received(Billions of yen)

Outlook for the fiscal year
Fiscal year ended
March 31, 2013 (actual)ending March 31, 2014
(B)
(A)
Ship & Offshore Structure
Rolling Stock
Aerospace
Gas Turbine & Machinery
Plant & Infrastructure
Motorcycle & Engine
Precision Machinery
Other
Total

120.0
160.0
250.0
220.0
130.0
290.0
150.0
130.0
1,450.0

32

105.7
124.4
283.4
255.5
113.6
251.8
109.7
125.1
1,369.5

Change (A – B)
14.3
35.6
(33.4)(35.5)
16.4
38.2
40.3
4.9
80.5