Financial Results for Second Quarter FY2013(for the year ending March 31, 2014)

October 29, 2013

Table of Contents

I. Consolidated Results for Second Quarter FY2013

 Summary of Financial Results Financial Results by Segment
 Details of Change in Profit I Details of Change in Profit II Financial Results by Segment
Ship & Offshore Structure
Rolling Stock
Aerospace
Gas Turbine & Machinery
Plant & Infrastructure
Motorcycle & Engine
Precision Machinery Financial Condition and Cash Flows

3
4
5
6

II． Forecast for FY2013

Consolidated Operating Performance
Forecast by Segment
R&D/CAPEX/Number of Employees

15
16
17

7
8
9
10
11
12
13
14

©
2 2013 KAWASAKI HEAVY INDUSTRIES, LTD. All Rights Reserved2

I. Consolidated Results for Second Quarter FY2013

Summary of Financial Results(Billion Yen)FY2012.2Q

ActualOrders Received

530.4

vs. FY2012.2Q

ChangeFY2013.2Q

Forecast
in July

Actualvs. FY2012.2Q

vs. Forecast
in July-

592.8+ 62.3-

Net Sales

574.9

610.0

595.0

+ 20.0- 15.0Operating Income

10.3

24.0

26.8

+ 16.4+ 2.8

Recurring Profit

20.1

18.0

22.7

+ 2.6

+ 4.7

Net Income

12.4

11.5

13.0

+ 0.5

+ 1.5

< Orders Received >Increased as a whole due to increase inorders received in Gas Turbine & Machinery
and Rolling Stock segments, despite
decrease in orders received in Ship &Offshore Structure and Plant & Infrastructure
segments< Net Sales >Increased as a whole due to increase inMotorcycle & Engine and Aerospacesegments, despite decrease in Precision
Machinery and Plant & Infrastructure
segments< Profits >Increased due to increased profits in Rolling
Stock and Aerospace segments, andimprovement in Motorcycle & Engine
segment

Weighted-average exchange rates ( actual & assumed )Yen / US$

79.92

95

97.77

Yen / EUR

101.79120

127.73© 2013 KAWASAKI HEAVY INDUSTRIES, LTD. All Rights Reserved3

I. Consolidated Results for Second Quarter FY2013

Financial Results by Segment(Billion Yen)

Orders Received

FY20122Q

FY2013
Change2Q

Net Sales

Operating Income

FY2012 FY2013
Change2Q
2Q

FY2012 FY2013
Change2Q
2Q

Ship & Offshore Structure

37.8

30.7

- 7.1

45.8

39.5

- 6.2

1.0

1.5

+ 0.5

Rolling Stock

66.9

75.0

+ 8.1

51.4

59.9

+ 8.5

- 3.1

3.7

+ 6.8

Aerospace

91.0

96.1

+ 5.1

109.1

122.3

+ 13.1

4.3

10.2

+ 5.8

Gas Turbine & Machinery

65.4

84.1

+ 18.6

93.2

77.3- 15.8

3.2

3.5

+ 0.2

Plant & Infrastructure

51.3

46.1

- 5.1

46.4

39.2

- 7.1

3.1

1.7

- 1.4

Motorcycle & Engine

103.9

139.7

+ 35.7

103.9

139.7

+ 35.7

- 2.2

2.5

+ 4.8

Precision Machinery

55.6

61.7

+ 6.1

67.0

55.6

- 11.4

4.9

4.2

- 0.7

Others

58.1

59.0

+ 0.8

57.9

61.2

+ 3.2

0.6

1.3

+ 0.6

-

-

-

-

-

-

- 1.7

- 2.1

- 0.4

530.4

592.8

+ 62.3

574.9

595.0

+ 20.010.3

26.8+ 16.4

Eliminations and corporate
Total

Note : “Eliminations and corporate” includes some expenses incurred at Head Office which were not allocated to each industry segment for internal reporting© 2013 KAWASAKI HEAVY INDUSTRIES, LTD. All Rights Reserved4

I. Consolidated Results for Second Quarter FY2013

Details of Change in Profit I- FY2013.2Q vs. FY2012.2Q 【Operating Income】 + 16.4

( FY2012.2Q 10.3  FY2013.2Q 26.8 ) (Billion Yen)
Increase in selling,
general & administrative
expenses

Impact of fluctuationof foreign exchange
rate

Impact of change
in material price

+ 0.6

+ 6.2
Impact of change indepreciation methodand depreciable lives- 5.3

Other factors- 9.4+ 24.3
FY2013.2Q

26.8
FY2012.2Q

10.3© 2013 KAWASAKI HEAVY INDUSTRIES, LTD. All Rights Reserved5Details of Change in Profit II

I. Consolidated Results for Second Quarter FY2013- FY2013.2Q vs. FY2012.2Q -(Billion Yen)

【Non-operating Income/Expenses】 - 13.8 ( FY2012.2Q 9.7  FY2013.2Q - 4.0 )Net Interest expense ( incl. dividend income )-0.3（ - 0.9

Equity in income of unconsolidated subsidiaries and affiliates

-

0.9

（

5.9



Gain and loss on foreign exchange- 11.1（

3.5

 - 7.5 ）Others

-（1.2

 - 0.2 ）【Extraordinary Income/Losses】

1.4

 - 1.2 ）5.0 ）0 ( FY2012.2Q 0  FY2013.2Q 0 )© 2013 KAWASAKI HEAVY INDUSTRIES, LTD. All Rights Reserved

6

I. Consolidated Results for Second Quarter FY2013

Ship & Offshore Structure
Main Products： LNG carriers, LPG carriers, VLCCs, Bulk carriers, Submarines, Offshore structures（Billion Yen / In accumulated amount）
Orders Received

30.3

37.8

（Forecast in April 120.0）

120.0
105.7

42.9
27.1

30.7

 FY2013.2Q （ vs. FY2012.2Q )Orders Received: Decreased despite orders received for 1 LNG carrier and 1 bulk
carrier
Net Sales: Decreased due to decrease in amount of shipbuilding of bulk carriers,
despite increase in amount of shipbuilding of gas carriers
Operating Income: Increased due to the effect of the depreciation of the yen,reversal of provision for loss on construction contracts accompanying yen
depreciation and other factors, despite sales decrease(unit)<Units of O rde rs R e ce ive d a nd Sa le s of Ne w Building Ships>

Orders Received

1Q

2Q

3Q

FY2012

1Q

2Q

FY2012.2Q FY2013.2Q FY2012.2Q FY2013.2Q

FY2013
Forecast

LNG carriers（Forecast in April 70.0）

70.0

68.6
45.8

39.5

22.7

1

1

Sm a ll-size d LNG ca rrie rs

Net Sales
90.3

Sales

LPG carriers

1

Bulk carriers

2

1

Submarines
Total

4

2

1(1)

2(1)

1(1)

1(1)

1(1)

2(2)

18(10)

6(4)

1(1)

2(2)

22(14)

13(10)

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

 FY2013 Forecast （ vs. Forecast in April ）Orders Received, Net Sales & Operating Income: No change

21.0<For Reference> Overseas Business Development
1Q

2Q

3Q

FY2012

1Q

2Q

FY2013
Forecast

Operating Income
4.4

4.1

3.3
（Forecast in April 0）

1.5

1.0

0

1Q

- 0.6

2Q

3Q

FY2012

1Q

2Q

FY2013
Forecast

NACKS was established in December 1995, as a fifty-fifty joint venture between KHI and China Ocean
Shipping (Group) Company (COSCO), one of the world’s largest shipping companies, and its capacity was
expanded in 2008. At NACKS, various types of commercial vessels are built for domestic shipping
companies such as COSCO, as well as for Japanese and European customers.
As a parent company of NACKS, KHI has also supported DACKS since its establishment in July 2007,
which was initiated by NACKS and COSCO Group. In order to increase DACKS’ competitivity and further
expand its operations, KHI acquired a 34% stake in DACKS in April 2012. As a result, KHI’s actual ratio ofinvestment in DACKS (including indirect investment) is 49%.
Meanwhile, KHI decided to participate in a joint venture project for building drill ships etc. in Brazil,
where the demand for the drill ships & FPSO for the drilling and production of offshore oil is rapidly
increasing, and executed a shareholders agreement with Estaleiro Enseada do Paraguaçu S.A. (EEP) in
May 2012, acquiring a 30% stake in EEP.
To expand operations and boost profitability at the two shipyards in China and develop the new shipyardin Brazil as a third overseas shipyard, KHI will further strengthen ties between our bases at home andthese three overseas shipyards, and will actively take advantage of the features of each shipyard forshipbuilding.

© 2013 KAWASAKI HEAVY INDUSTRIES, LTD. All Rights Reserved

7

I. Consolidated Results for Second Quarter FY2013

Rolling Stock
Main Products : Electric train cars (incl. Shinkansen), Electric and diesel locomotives, Passenger coaches, Gigacell® (High-Capacity, Full Sealed Ni-MH Battery)（Billion Yen / In accumulated amount）（Forecast in April 160.0）

Orders Received

160.0
124.4
93.1

75.0

66.9
35.0

25.3
1Q

2Q

3Q

FY2012

1Q

Net Sales

2Q

FY2013
Forecast（Forecast in April 155.0）

155.0

129.9

1Q

59.9

51.4

2Q

30.5

3Q

FY2012

1Q

2Q

Operating Income

FY2013
Forecast（Forecast in April 6.0）

6.0
2.2
0.1

2Q

1Q

3.7
1.9

3Q

- 0.5 FY2012- 3.1

Orders Received: Increased due to orders received for commuter train cars for theLong Island Rail Road and Metro-North Railroad, subway cars for the Washington
Metropolitan Area Transit Authority and subway cars for the Sapporo City
Transportation Bureau
Net Sales: Increased due to sales increase in overseas markets including Singapore
and North America, despite a sales decrease in the domestic market
Operating Income: Improved due to increase in projects of high profitability andthe effect of the depreciation of the yen FY2013 Forecast （ vs. Forecast in April ）Orders Received, Net Sales & Operating Income: No change<For Reference> Present Status of Overseas Projects

94.1
28.8

 FY2013.2Q （ vs. FY2012.2Q ）1Q

2Q

FY2013
Forecast

North America- Working to win a wide range of orders, mainly heavy rails, commuter rails andhigh-speed rails.
- Expansion of product lineup with new rolling stock such as the efSET® and the
K-Star Express® to meet demand for semi high-speed and high-speed rail
projects.
- Working to win orders for high-speed rail for California, and semi high-speed railfor Amtrak (The National Railroad Passenger Corporation).
Asia
With construction and expansion plans for urban transport systems in several Asian
cities, and High-speed railways projects in India. We will:- Win new projects in markets such as Taiwan and Singapore, where we have asolid track record.
- Work to receive orders for electric locomotives and maintenance base facilities
for Western Dedicated Freight Corridor (Delhi – Mumbai) (Japanese ODA project).

© 2013 KAWASAKI HEAVY INDUSTRIES, LTD. All Rights Reserved

8

I. Consolidated Results for Second Quarter FY2013

Aerospace
Main Products : Aircrafts for Japan Ministry of Defense, Component parts for commercial aircrafts, Commercial helicopter, Missiles, Space equipment（Billion Yen / In accumulated amount）
Orders Received（Forecast in April 250.0）

283.4

91.0

138.3

96.1
41.5

34.4
1Q

2Q

260.0

3Q

FY2012

1Q

2Q

 FY2013.2Q （ vs. FY2012.2Q ）Orders Received: Increased due to orders received for component parts for Boeing
787
Net Sales: Increased due to sales for the Japan Ministry of Defense (MOD)remaining constant to the previous same period and an increase in component partsfor Boeing 777 and 787
Operating Income: Increased significantly due to increase in sales and the effectof the depreciation of the yen< Sales units of c omponent parts for c ommerc ial airc rafts >FY2013
Forecast(unit)FY2012.2Q FY2013.2Q
Boeing 777
Boeing 767（Forecast in April 290.0）

Boeing 787

Net Sales

300.0

Embraer190/195

239.1

Orders Received & Net Sales: Revised up due to increase in orders received andsales for component parts for Boeing
Operating Income: Revised up due to sales increase, cost reduction and otherfactors

1,223

109.1

1Q

55.6

2Q

3Q

FY2012

1Q

2Q

FY2013
Forecast（Forecast in April 19.0）

Operating Income

23.0
14.8

9.3

10.2

0.8
1Q

2Q

3Q

FY2012<For Reference> Present Status of Major Projects
Aircrafts for MOD
In March 2013, KHI delivered the first P-1 patrol aircraft to MOD. KHI is steadily working on
the mass production of P-1, as well as C-2 transport aircraft.

Commercial aircrafts
7.5

4.3

50
7
32
22
23

 FY2013 Forecast （ vs. Forecast in April )

165.8
49.6

Embraer170/175

42
13
26
9
35

1Q

2Q

FY2013
Forecast

Component parts for Boeing 777- KHI’s production rate for the 777 program has increased
from 7 to 8.3 units per month, in correspondence to the increased production rate of the
Boeing Company.
Component parts for Boeing 787- KHI has achieved delivery of the 100th component partto Boeing in August 2012 since the first delivery of it in January 2007. KHI is working tocomplete the production system at Kawasaki’s Nagoya Works I for ramp-up production.

© 2013 KAWASAKI HEAVY INDUSTRIES, LTD. All Rights Reserved

9I. Consolidated Results for Second Quarter FY2013

Gas Turbine & Machinery
Main Products : Jet engines, Gas turbine co-generation system, Gas engines, Diesel engines, Gas turbines & steam turbines for marine & land,
Marine propulsion system, Aero-dynamic machinery（Billion Yen / In accumulated amount）
Orders Received（Forecast in April 220.0）

255.5

220.0

131.6
32.5

84.1

65.4

1Q

2Q

35.6
3Q

Net Sales

FY2012

1Q

2Q

FY2013
Forecast（Forecast in April 185.0）

207.0

185.0

144.6
93.2

1Q

36.4

2Q

3Q

FY2012

1Q

2Q

Operating Income（Forecast in April 11.0）

7.0
2.6

1Q

2Q

3.5
0.8
FY2012

Orders Received, Net Sales & Operating Income: No change

Trent1000

TrentXWB

AircraftBoeing 787

Airbus A350

Airbus A320neo

Participation TypeRRSP（※)RRSP（※)

International Collaboration Program

Share

Approx. 8.5%

Approx. 7%

Approx. 6%

Responsible
Components

Intermediate pressurecompressor (IPC) module

Intermediate pressurecompressor (IPC) module

Primary parts of the engine’s fan
and low -pressure compressor

Present Status（※）

PW1100G - JM

Development was completed and mass
production started in FY2010. To bedelivered in accordance with production
schedule of airplanes.

Made decision to collaborate in a programFirst flight test was performed in June 2013,
for development and production.
and flight tests are currently ongoing.
Design work in progress.

Risk & Revenue Sharing Partner

In July 2007, KHI
has reached a formal agreement with Rolls-Royce plc. to participate in thedevelopment and production of the Trent 1000-TEN and Trent XWB-97 engines as a RRSP.

Energy and Environmental Products

4.6

3Q

 FY2013 Forecast （ vs. Forecast in April ）FY2013
Forecast

11.0

3.2

Orders Received: Increased due to increase in orders received for gas engines and hydraulicmachinery, despite decrease due to the effect of change in accounting methodology regarding
commercial aircraft jet engines
Net Sales: Excluding the decrease due to change in accounting methodology regarding
commercial aircraft jet engines, and despite sales decrease in marine diesel engines, sales
remained the same as in the previous same period due to sales increase in component partsof commercial aircraft jet engines and gas engines
Operating Income: Remained at the same level as in the previous same period due tosubstantial sales remaining unchanged from the previous same period<For Reference>
Major Projects for Commercial Aircraft Jet Engines

77.3

45.3

 FY2013.2Q （ vs. FY2012.2Q )1Q

2Q

FY2013
Forecast

The L30A, a 30MW class Gas Turbine, for which KHI completed development in February 2012, has been
operating very successfully at its first commercial plant. Also, KHI is enhancing its after-sales services
through start of operations of a gas turbine overhaul facility in Malaysia.
Furthermore, KHI is building a track record in overseas markets including the first delivery of a gas
engine to India in June 2013 and two gas engines to the United States. KHI is also reinforcing theoverseas promotion of our gas engines, such as by establishing a sales division in Malaysia.
In addition, KHI established a new department in April 2013 to enhance its energy solution business. KHI
will actively develop our Energy and Environmental business in domestic and overseas markets.

© 2013 KAWASAKI HEAVY INDUSTRIES, LTD. All Rights Reserved

10

I. Consolidated Results for Second Quarter FY2013

Plant & Infrastructure
Main Products: Industrial plants (cement, fertilizer and others), Power plants, LNG tanks, Municipal refuse incineration plants, Tunnel boring machines,
Crushing machines（Billion Yen / In accumulated amount）
Orders Received（Forecast in April 130.0）

130.0

113.6
37.1

51.3

69.4

46.1
16.6

1Q

2Q

3Q

FY2012

1Q

2Q

FY2013
Forecast

 FY2013.2Q （ vs. FY2012.2Q ）Orders Received: Decreased from the previous same period, which was marked bya large-scale overseas project
Net Sales: Decreased due to sales decrease of material handling systems and alarge-scale overseas project, despite sales increase of shield machines andenvironmental equipment projects
Operating Income: Decreased due to decrease in sales and a lower profit margin FY2013 Forecast （ vs. Forecast in April )Net Sales（Forecast in April 115.0）

115.8
46.4

115.0

71.1

19.8
1Q

16.7
2Q

3Q

FY2012

1Q

39.2

2Q

<For Reference>
Orders Received of Energy and Environmental Projects
FY2013
Forecast

Operating Income
9.7（Forecast in April 7.0）

7.0
3.1

3.7
1.7

0.1
1Q

1Q
2Q

Orders Received, Net Sales & Operating Income: No change

3Q

FY2012- 0.6

2Q

FY2013
Forecast- With the expected increase in energy consumption worldwide, there are a growing
number of projects to construct floating LNG facilities. Under these circumstances,
KHI has a proven track record of boilers for land and marine use (over 1,200
units), and has achieved appraise for reliable and robust boilers that are suitablefor even severe offshore conditions. And in July 2011, KHI won a contract withTechnip to supply 7 units of boilers for Shell’s floating LNG facility, “Prelude”, theworld’s first floating LNG facility.
- In April 2012, KHI won a contract for 4 massive cryogenic tanks for the Ichthys
LNG Project in Australia. This project is very important for Japan, in terms ofproviding a stable supply of energy and the decentralization of natural gas supply,
as approximately 70% of the Ichthys LNG to be delivered to Japan. KHI will
support this project with its proven track record and EPC technologies.

© 2013 KAWASAKI HEAVY INDUSTRIES, LTD. All Rights Reserved11

I. Consolidated Results for Second Quarter FY2013

Motorcycle & Engine
Main Products: Motorcycles, All-Terrain Vehicles(ATVs), Utility Vehicles, Personal Watercraft, General-purpose Gasoline Engines（Billion Yen / In accumulated amount）
Net Sales（Forecast in April 290.0）

290.0

251.8

53.4
1Q

103.9

158.8

1,397

3Q

FY2012

1Q

Net Sales: Increased due to sales increase of motorcycles in the UnitedStates and emerging markets, mainly Thailand and Indonesia
Operating Income: Improved due to sales increase, improvement in
profitability and other factors

67.4

2Q

 FY2013.2Q （ vs. FY2012.2Q )2Q

FY2013
Forecast

 FY2013 Forecast （ vs. Forecast in April )Net Sales & Operating Income: No change

Operating Income（Forecast in April 10.0）

10.0

1Q

- 0.3

2Q

3Q

- 2.2

- 2.0

2.3

2.4

2.5

FY2012

1Q

2Q

FY2013
Forecast(T hous ands of unit / Billion Y en)＜Wholesales by Geographic Area for Consumer Products＞

FY2012.2Q
Unit

Domestic
North America (incl. Canada)

EuropeEmerging Countries & Others

Total

Amount8
6.7
45 (28)
28.3
21
14.8
168
39.0
242

88.8

FY2012FY2013.2Q

FY2013 Forecast

Unit
Amount14
12.1
118 (74)
79.7
55
38.5
357
86.2

Unit
Amount10
7.8
52 (30)
41.6
19
17.1
186
54.5

Unit
Amount14
12.1
117 (68)
89.5
56
41.2
433
107.9

544

216.5

267

121.0

N ote: 1 ) Sales units and amount inc lude the following produc ts .
®

U nits : M otorc yc les , A ll-T errain V ehic les (A T V s ), U tility V ehic les and P ers onal Waterc raft(J et Ski )A mount: T he produc ts mentioned above and parts for thos e produc ts .
2 ) F igures in the parenthes is ( ) repres ent motorc yc le s ales units .

620

250.7

<For Reference>
Businesses Development in Emerging Countries
KHI will capture the steadily growing demand for leisure motorcycles in themarket of emerging countries.
- In order to respond to market growth and to further reinforce business
operations in emerging countries, KHI is constructing a new plant inIndonesia and expanding the plant in Thailand to boost production
capacity.
- Of the 2013 models, Ninja 250/300 is a success all over the world including
emerging markets.
- KHI has worked on the "Pulsar 200NS“ with India’s Bajaj to make anumber of improvements for the Indonesian market. The new Pulsar
200NS is being released under the “Kawasaki Bajaj” brand.
- Kawasaki Heavy Industries Management (Shanghai), Ltd. started importand sales of motorcycles for the Chinese market.

© 2013 KAWASAKI HEAVY INDUSTRIES, LTD. All Rights Reserved

12

I. Consolidated Results for Second Quarter FY2013

Precision Machinery
Main Products： Hydraulic components (pumps, motors & valves), Hydraulic systems for industrial use, Hydraulic marine machinery,Precision Machinery / Electric-powered devices, Industrial Robots（Billion Yen / In accumulated amount）

 FY2013.2Q （ vs. FY2012.2Q ）Orders Received（Forecast in April 150.0）

140.0
109.7
28.6

55.6

1Q

2Q

78.4

61.7
29.8

3Q

FY2012

1Q

2Q

FY2013
Forecast

Net Sales（Forecast in April 140.0）

130.4
67.0

1Q

3Q

FY2012

1Q

2Q

FY2013
Forecast

Operating Income（Forecast in April 14.0）

9.0

8.4
3.9

4.9

4.8

4.2
1.5

1Q

2Q

3Q

FY2012

Orders Received & Net Sales: Revised down due to expected recovery of
construction machinery market in emerging countries, mainly China, being
slower than initially envisioned
Operating Income: Revised down due to sales decrease<For Reference> Businesses Development in Emerging Countries

55.6
25.1

2Q

 FY2013 Forecast （ vs. Forecast in April ）

125.0

93.8
36.1

Orders Received: Increased due to increase in orders received forindustrial robots for automotive industries and clean robots forsemiconductor production equipment
Net Sales: Decreased due to sales decrease of hydraulic components forconstruction machinery in emerging countries, mainly China
Operating Income: Decreased due to sales decrease and other factors

1Q

2Q

FY2013
Forecast

Hydraulic sector
In August 2006, production of hydraulic pumps started at a Chinese subsidiary in Suzhou. Also, in
Zhejiang, a joint venture of hydraulic machinery manufacturing was established with a Chinesecompany and production started in April 2010, while a sales subsidiary in Shanghai provides the
products manufactured at the above mentioned manufacturing companies to customers throughout
China.
Demand remains at a low level in the Chinese construction machinery market though it hasbottomed out. However, the continued growth of this market over the medium- to long-term is
expected as construction of housing for low-income families and energy-and transportation-related
infrastructure projects are still likely to go forward.
Meanwhile, spurred by a rapidly growing economy, India's hydraulic excavator market is booming.
In order to cater to the growing demand for local production, KHI has set up a joint venture for
manufacturing, sales, and servicing of hydraulic components for construction machinery in February
2012.
Robot sector
In China, as the demand for automated manufacturing grows due to rising labor and other costs, a
new production plant for robots, on the site of our hydraulic components plant in Suzhou, China, isplanned to start operations in 2015.

© 2013 KAWASAKI HEAVY INDUSTRIES, LTD. All Rights Reserved

13

I. Consolidated Results for Second Quarter FY2013

Financial Condition and Cash Flows【Financial Condition】(Billion Yen)FY2013End of
September
2013

FY2012End ofMarch 2013

End of
September 2012

1,380.8

1,466.2

1,557.4

306.4

338.2

326.4

(22.1%)(23.0%)(20.9%)

Interest-bearing debt

472.3

484.6

583.1

（Net Interest-bearing debt）（443.5）（446.1）(551.0)Net Debt Equity Ratio

144.7%

131.9%

168.7%

Total Assets

Shareholders’ Equity（Ratio of shareholders’ equity to total assets）

Note: Interest-bearing debt includes lease obligations【Cash Flows】（Billion Yen）

FY2012.2Q

FY2013.2Q

Cash flows from operating activities- 19.4- 45.6

Cash flows from investing activities- 46.1- 41.9

Free Cash Flows- 65.6- 87.5

59.2

80.9

Cash flows from financing activities© 2013 KAWASAKI HEAVY INDUSTRIES, LTD. All Rights Reserved

14II． Forecast for FY2013

Consolidated Operating Performance(Billion Yen)FY2012
Actual

FY2013
Forecast

vs. Forecast in April

Change< Orders Received >Orders Received

1,369.5

1,450.0

1,450.0+ 80.50

Net Sales

1,288.8

1,380.0

1,380.0+ 91.20Remains unchanged due to increase in
Aerospace segment due to increase inorders received for component parts for
Boeing, despite decrease in Precision
Machinery segment, where recovery of theconstruction machinery market in emerging
countries, mainly China, are expected to be
slower than initially envisioned

42.0

60.0

60.0

+ 18.00< Net Sales & Profits >Operating Income

in Aprilin October

vs. FY2012

vs. Forecast
in April

Recurring Profit

39.3

53.0

53.0

+ 13.70

Net Income

30.8

34.0

34.0

+ 3.2

0

Exchange Rates (actual & assumed)

Yen / US$

82.86

95

95

Yen / EUR

107.76120

130

Remain unchanged due to increase in sales
and profits in Aerospace segment due tosales increase for component parts for
Boeing, cost reduction and other factors,
despite sales and profits decrease in
Precision Machinery segment due todecrease in sales of hydraulic components
for construction machinery in emerging
countries, mainly China

Note : Assumed rates are applied to the outstanding foreign exchange exposure as of October 29, 2013(For Referenc e)

Impact on profit by FX fluctuation of 1 Yen(Billion Yen)

US$
EUR

Operating
Inc ome1.3(1.7)
0.2(0.2)

Recurring
Profit1.1(0.8)0(0)* Figures in the parenthesis ( ) represent impact as of July 30, 2013

© 2013 KAWASAKI HEAVY INDUSTRIES, LTD. All Rights Reserved

15II． Forecast for FY2013

Forecast by Segment(Billion Yen)

Orders Received

Net Sales

FY2013
Forecast

FY2012
Actualin Aprilin OctoberOperating Income

FY2013
Forecast

FY2012
Actualin Aprilin October

FY2012
Actual

FY2013
Forecast
in Aprilin October

Ship & Offshore Structure

105.7

120.0

120.0

90.3

70.0

70.0

4.1

0

0

Rolling Stock

124.4

160.0

160.0

129.9

155.0

155.0

2.2

6.0

6.0

Aerospace

283.4

250.0

260.0

239.1

290.0

300.0

14.8

19.0

23.0

Gas Turbine & Machinery

255.5

220.0

220.0

207.0

185.0

185.0

7.0

11.0

11.0

Plant & Infrastructure

113.6

130.0

130.0

115.8

115.0

115.0

9.7

7.0

7.0

Motorcycle & Engine

251.8

290.0

290.0

251.8

290.0

290.0

2.3

10.0

10.0

Precision Machinery

109.7

150.0

140.0

130.4

140.0

125.0

8.4

14.0

9.0

Others

125.1

130.0

130.0

124.2

135.0

140.0

1.2

3.0

4.0

-

-

-

-

-

-

- 8.0

- 10.0- 10.01,369.5

1,450.0

1,450.0

1,288.8

1,380.0

1,380.0

42.0

60.0

60.0

Eliminations andcorporate
Total

Note : “Eliminations and corporate” includes some expenses incurred at Head Office which are not allocated to each industry segment for internal reporting© 2013 KAWASAKI HEAVY INDUSTRIES, LTD. All Rights Reserved

16II． Forecast for FY2013

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

FY2012
Actual

FY2013 Forecast
in Aprilin October

Change

- 1.0

-

43.0

(18.1)

78.6

84.0

101.0

+ 17.0

48.3

43.0

- 3.0

-

40.0

(17.9)

Domestic

25,22225,70025,7000Overseas

8,788

9,200

9,200

0

34,01034,90034,900

0

R&D Expenses

CAPEX

※2

Depreciation & Amortization

Number of Employees

41.7

44.0

(18.2)(35.4)(21.9)-(41.5)※1: Figures in parenthesis ( ) represent the results of the second quarter※2: Increase in property, plant and equipment and intangibles© 2013 KAWASAKI HEAVY INDUSTRIES, LTD. All Rights Reserved

17Figures recorded in the business forecasts are forecasts that reflect the judgment of the Company based on theinformation available at the time of release and include risks and uncertainties. Accordingly, the Company cautions
investors not to make investment decisions solely on the basis of these forecasts.
Actual business results may differ materially from these business forecasts due to various important factors resulting
from changes in the external environment and internal environment. Important factors that may affect actual
business results include, but are not limited to, economic conditions, the yen exchange rate against the U.S. dollar
and other currencies, the tax system, and laws and regulations.

© 2013 KAWASAKI HEAVY INDUSTRIES, LTD. All Rights Reserved

18