Report of Earnings and Financial Statements for the Year Ended March 31, 2010
April 27, 2010
Listed company’s name:

Kawasaki Heavy Industries, Ltd.

Listed on:
1st sections of TSE, OSE, NSE
Stock code:
7012
URL:
http://www.khi.co.jp/
Representative:
Satoshi Hasegawa, President
Contact:
Hideyuki Matsubara, Senior Manager, Accounting DepartmentTel:+81 3-3435-2130
Scheduled dates:
Ordinary General Meeting of shareholders
June 25, 2010
Commencement date of dividend payments
June 28, 2010
Submission of financial statements:
June 25, 2010

1. Consolidated Financial Results for the Year Ended March 31, 2010
(April 1, 2009 to March 31, 2010)(Amounts rounded down to the nearest million yen)

(1) Operating Results(Percentage figures represent changes versus the year-ago period)
Net salesYear ended
March 31, 2010
Year ended
March 31, 2009

Operating income

million yen%

1,173,473
1,338,597

Recurring profit

million yen%

million yen(12.3)(1,316)-(10.8)

28,713(62.6)

Earnings per share

Net income%

million yen%

14,293(63.0)(10,860)-

38,718(39.4)

11,727(66.6)

Earnings per share
Return on equity– diluted
yen%%Operating income
to net sales
%

1.0

(0.1)

2.7

2.1

Return on assets

yenYear ended(6.51)(3.8)
March 31, 2010
Year ended
7.02
6.92
3.8
March 31, 2009
For reference: Equity in income of non-consolidated subsidiaries and affiliates:
Year ended March 31, 2010: 6,522 million yen
Year ended March 31, 2009: 8,709 million yen(2) Financial Condition
Total assets

Net assets

million yen

million yen

Ratio ofshareholders’ equity
to total assets%

March 31, 2010

1,352,439

283,053

20.4

166.13

March 31, 2009

1,399,770

295,24520.7

174.10Note:

Shareholders’ equity: March 31, 2010:
March 31, 2009:

277,081 million yen
290,440 million yen

1

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

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash
equivalents at end ofyear

million yen

million yen

million yen

million yen

30,178(63,277)

35,911

34,137(41,256)(72,283)

107,692

31,413

Dividend per share
End of
End of
End ofsecondthird
financialquarterquarter
year
yen
yen
yen

Total
dividends
paid(annual)Payout ratio(consolidated)

Dividends /Net assets(consolidated)yenmillion yen%%

Year ended
March 31, 2010
Year ended
March 31, 2009

2. Dividends

End offirstquarteryen

Record dateYear ended
March 31, 2009
Year ended
March 31, 2010
Year ending March
31, 2011 (forecast)

Full year

-

0.00

-

3.00

3.00

5,004

42.6

1.6

-

0.00

-

3.00

3.00

5,003

-

1.7

-

0.00

-

3.00

3.00

25.0

3. Forecast of Consolidated Earnings for the Year Ending March 31, 2011
(April 1, 2010 to March 31, 2011)
Net sales
For six months
endingSeptember 30,
2010
Full year(Percentage figures represent changes versus the year-ago period)
Earnings per
Operating income
Recurring profit
Net income
sharemillion yen%
million yen%
million yen%
yenmillion yen%

580,000

12.3

7,000

-

6,000

-

5,000

-

2.99

1,280,000

9.0

32,000-32,000123.8

20,000-

11.99

4. Other Information
1) Changes affecting the status of material subsidiaries (scope of consolidation): None
2) Changes in accounting principles, procedures, and methods of presentation applicable to the
preparation of consolidated financial statements:(1) Changes in accordance with revisions to accounting standards: Yes(2) Changes other than (1) above: None
Note: For details, see “Changes in Basis of Preparation of Financial Statements” on page 19 in the“Consolidated Financial Statements” section.
3) Number of shares issued (common stock)(1) Number of shares issued at end of period (treasury stock included):
March 31, 2010:
1,669,629,122 shares
March 31, 2009:
1,669,629,122 shares(2) Number of shares held in treasury at end of period:
March 31, 2010:
1,780,388 shares
March 31, 2009:
1,394,288 shares
Note: Concerning the number of shares based on calculation of Earnings per share (Consolidated), see“Per-share Data ” on page 30.

2For reference:
Overview of Non-Consolidated Financial Results(1) Operating Results
Net salesYear ended March 31,
2010
Year ended March 31,
2009

Operating income

million yen%

million yen%

million yen

644,133(16.5)(18,995)

57.4

8,627

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

Earnings per share
yenYear ended March 31,
2010
Year ended March 31,
2009

Recurring profit%

Net income
million yen

%

230.0

(5,417)-(91.7)(6,109)-Earnings per share– dilutedyen(3.24)-(3.66)-

Total assets

Net assets

million yen

million yen

Ratio ofshareholders’ equity
to total assets%

March 31, 2010

976,460

220,72022.6

132.33

March 31, 2009

977,988

230,79923.5

138.34(2) Financial Condition

Note:

Shareholders’ equity: March 31, 2010:
March 31, 2009:

Net assets per shareyen

220,720 million yen
230,799 million yen* Appropriate Use of Financial Forecasts and Other Important Matters
Forward-Looking Statements
These materials contain various forward-looking statements and other forecasts regarding performanceand other matters. Such statements are based on information available at the time of preparation. Actual
results may differ from those expressed or implied by forward-looking statements due to a range offactors. For the assumptions underlying the earnings forecasts presented and other information
regarding the use of such forecasts, refer to “Consolidated Earnings Outlook” in “Qualitative
Information and Financial Statements,” beginning on page 6.

3

Qualitative Information and Financial Statements
Consolidated operating results
During fiscal 2010 (the year ended March 31, 2010), the Japanese economy remained weak as
the yen strengthened against the dollar, capital spending continued to drop, and the downturn inboth employment conditions and personal consumption persisted. However, demand fromemerging countries grew and domestic demand generally improved, pointing to signs of an
economic recovery.
Globally, some emerging countries showed growth signs, but Europe and America only
managed a modest recovery.
This adverse operating environment continued to weight heavily on all areas of KHI Groupbusiness. Orders received declined in all but the Plant & Infrastructure Engineering segment.
Revenues declined in most business segments, particularly Consumer Products & Machinery.
Profits fell in all segments but the Aerospace and Shipbuilding segments, under the weight ofyen appreciation and downturns in European and American markets.
As a result, consolidated Orders received declined ¥539.2 billion to ¥1,001.2 billion,
consolidated net sales fell 165.1 billion versus fiscal 2009(the year ended March 31, 2009) to¥1,173.4 billion, consolidated operating income declined ¥30.0 billion to an operating loss of¥1.3 billion, and recurring profit fell ¥24.4 billion to ¥14.2 billion. Net income decreased ¥22.5
billion to a net loss of ¥10.8 billion.
On a non-consolidated basis, the KHI Group reported orders amounting to ¥578.6 billion, net
sales of ¥644.1 billion, an operating loss of ¥18.9 billion, and recurring profit of ¥8.6 billion, tofinish on a net loss of ¥5.4 billion.
The details of segment information of fiscal 2010 are as follows.
Segment information
Segment information (billions of yen)
Year ended
March 31, 2010
Operating
Net sales
income
151.8
1.4
167.1
7.7
188.8
1.7

Segment
Shipbuilding
Rolling Stock
Aerospace
Gas Turbines
191.3
6.6
& Machinery
Plant &
Infrastructure
90.4
6.2
Engineering
Consumer
Products &216.9(31.6)
MachineryHydraulic
68.8
6.9
Machinery
Other
97.8
(0.4)
Eliminations―(0.1)
and corporate
Consolidated
1,173.4(1.3)
total
Note: Net sales are external sales.

Year ended
March 31, 2009
Operating
Net sales
income
126.4
(1.0)
186.4
11.3
200.4
(4.1)

For reference: Orders
Year ended
March 31,
2010
16.1
77.1
171.3

Year ended
March 31,
2009
71.5
264.6
239.1

195.1

11.0

226.2

355.5

105.1

8.9

124.7

83.6

336.4

(10.1)

216.9

336.4

84.9

8.3

71.0

84.1

103.5

4.2

97.5

105.5

―

0

―

―

1,338.5

28.7

1,001.2

1,540.5

4

Shipbuilding
With a significant decline in orders for new vessels, consolidated orders received decreased¥55.3 billion year on year to ¥16.1 billion.
Consolidated net sales increased ¥25.4 billion year on year to ¥151.8 billion, boosted by aspate of sales of large vessels.
Operating income increased ¥2.5 billion year on year to ¥1.4 billion due to increased sales,
improved margins reflecting a decline in materials costs, and other factors.
Rolling Stock
Consolidated orders received included orders from Singapore for subway cars but declined to¥77.1 billion, down ¥187.4 billion versus the previous year, which was marked by an influx oflarge orders.
Consolidated net sales fell ¥19.2 billion year on year to ¥167.1 billion due mainly to there-segmentation of the Construction Machinery business, despite growth in sales of rolling stock
to the JR Group and overseas customers.
Consolidated operating income decreased ¥3.6 billion year on year to ¥7.7 billion due toreduced profitability of export deals as a result of yen appreciation.
The above year-on-year changes reflect the impact of the re-segmentation involving theConstruction Machinery business. Retroactively adjusted to reflect the re-segmentation, theRolling Stock segment had consolidated orders received of ¥235.0 billion, consolidated net salesof ¥154.8 billion, and operating income of ¥12.3 billion in the previous fiscal year (ended
March 31, 2009).
Aerospace
Consolidated orders received decreased ¥67.7 billion year on year to ¥171.3 billion as a result of
decreased orders for aircraft for Japan’s Ministry of Defense and component parts for the
Boeing 777 etc.
Consolidated net sales were down ¥11.5 billion year on year to ¥188.8 billion, largely due todecreased sales to Japan’s Ministry of Defense.
Despite the decline in sales, consolidated operating income was up ¥5.9 billion year on year
to an operating profit of ¥1.7 billion, due in part to adjustments to expense recognition timing
resulting from changes to the Boeing 787’s development schedule.
Gas Turbines & Machinery
Consolidated orders received decreased ¥129.2 billion year on year to ¥226.2 billion as a resultof decreased orders for aircraft engine components, marine propulsion systems, and other items.
Consolidated net sales declined ¥3.7 billion year on year to ¥191.3 billion, due to reduced
sales of marine diesel engines, despite an increase in sales of steam turbines for land and otherproducts. Consolidated operating income decreased ¥4.3 billion year on year to ¥6.6 billion,
largely as a result of yen appreciation.
Plant & Infrastructure Engineering
Consolidated orders received increased to ¥124.7 billion, up ¥41.1 billion year on year, due toorders for overseas fertilizer plants and other items.
Consolidated net sales decreased ¥14.6 billion year on year to ¥90.4 billion, largely reflecting
a falloff in overseas sales of large plant installations.
Consolidated operating income decreased ¥2.6 billion year on year to ¥6.2 billion, largely due
to a decline in sales.

5Consumer Products & Machinery
Consolidated net sales fell ¥119.4 billion year on year to ¥216.9 billion amid a decline inEuropean and North American motorcycle sales coupled with a falloff in industrial robots sales.
The sales decline, compounded yen appreciation, led to a consolidated operating loss of ¥31.6
billion, ¥21.5 billion worse than the previous fiscal year, despite improvement of the marginal
profit ratio and measures to cut fixed expenses.
Hydraulic Machinery
Consolidated orders received fell ¥13.0 billion year on year to ¥71.0 billion, mainly as a resultof diminished demand from the construction machinery industry.
Consolidated net sales were down ¥16.1 billion year on year to ¥68.8 billion, largely due to a
decline in sales to the construction machinery industry.
Operating income decreased in tandem with the drop in sales, declining ¥1.4 billion year on
year to ¥6.9 billion.
Other Operations
Consolidated net sales declined ¥5.7 billion year on year to ¥97.8 billion.
The Other segment booked a consolidated operating loss of ¥400 million, ¥4.6 billion below
the operating income recorded in the previous fiscal year, largely due to the Construction
Machinery business’s re-segmentation.
The above year-on-year changes reflect the impact of the re-segmentation involving theConstruction Machinery business. Retroactively adjusted to reflect the re-segmentation, theOther segment had consolidated net sales of ¥135.1 billion, and operating income of ¥3.2 billion
in the previous fiscal year (ended March 31, 2009).
Consolidated Earnings Outlook
Despite ongoing uncertainty posed by expanding fiscal deficits in European countries andconcern about the diminishing effects of countries’ economic stimulus packages, we expect themild global economic recovery to continue, led by emerging countries in Asia and elsewhere.
To achieve the vision for the KHI Group that we recently set forth in the Kawasaki Business
Vision 2020, we will forge resolutely ahead with concrete measures to rebuild our earnings baseand return to a sustained-growth trajectory. In particular, quickly returning the Motorcycle &Engine business segment to profitability is a top priority (effective the fiscal year ending March
31, 2011, the Consumer Products & Machinery segment has been renamed the Motorcycle &Engine segment).
We project consolidated net sales for the fiscal year ending March 31, 2011, of ¥1,280.0 billion,a year-on-year increase of approximately ¥100 billion. We expect sales from the Shipbuilding
segment to decrease but sales in the Motorcycle & Engine, Precision Machinery, and othermass-production businesses to improve in response to mild improvements in the market
environment.
Profit-wise, we expect operating income and recurring profit of ¥32.0 billion, and net incomeof ¥20.0 billion. Although uncertainty posed by currency fluctuations and concern aboutmaterials price appreciation remains unabated, we will continue endeavoring to improve
profitability throughout our operations through determined efforts to cut fixed expenses andboost productivity, which we have been carrying out since the year before last.
Assumed exchange rates are ¥90 to the US dollar and ¥125 to the euro.
Consolidated Financial Condition
Financial Condition
Current assets were down 6.4% to ¥931.6 billion. The main reason for the decrease in current

6assets was a decline in inventories due to an increase in sales of large vessels and a reduction ofcurrent inventories in the Consumer Products & Machinery business. Total fixed assets grew
4.1% versus March 31, 2009, to ¥420.7 billion, due to the increase in deferred tax assets andother factors.
As a result, total assets as of March 31, 2010 were ¥1,352.4 billion, down 3.3% versus March
31, 2009.
Current liabilities decreased 16.5% versus March 31, 2009, to ¥692.9 billion, and long-term
liabilities grew 37.2% to ¥376.4 billion.
As a result, total liabilities decreased 3.2% to ¥1,069.3 billion. This was primarily due to a¥55.7 billion decrease in trade payables and a ¥26.2 billion decrease in advances from
customers, while interest bearing debts increasing ¥39.6 billion.
Net assets decreased 4.1% versus March 31, 2009, to ¥283.0 billion, reflecting dividend
payments and posting of a net loss.
Cash FlowsNet cash provided by operating activities in fiscal 2010 (the year ended March 31, 2010) was¥30.1 billion, ¥71.4 billion more than in fiscal 2009. Principal cash inflows were a decrease ininventories of ¥56.2 billion and depreciation and amortization of ¥51.4 billion. Principal cash
outflows were a decrease in trade payables of ¥56.3 billion, a decrease in advances from
customers of ¥27.1billion, and income taxes of ¥12.8 billion.
Net cash used in investing activities amounted to ¥63.2 billion, ¥9.0 billion lower than in
fiscal 2009. This cash was principally used to acquire property, plant and equipment.
Net cash provided by financing activities was to ¥35.9 billion, ¥71.7 billion lower than in
fiscal 2009. The increase was mainly due to an increase in borrowings.
Cash Flow Ratios
March 31,
Ratio of shareholders’ equity tototal assets (%)
Market-value equity ratio (%)
Cash flow to debt ratio (%)
Interest-coverage ratio (times)

2006

2007

2008

2009

2010

18.5

21.3

22.7

20.7

20.4

50.0
698.8
8.5

60.9
663.3
7.1

26.8
364.8
9.4

23.3
–
–

31.8
1,421.2
5.5

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

Dividend Policy and Dividends for the Fiscal Years through March 31, 2010 and 2011
The Company’s basic policy is to continuously pay shareholders a stable dividend
commensurate with the Company’s earnings while accruing sufficient internal reserves to boost
earnings power and strengthen and enhance the Company’s operating foundation to enable
future growth. In consideration of recent earnings performance, internal reserves, and otherrelevant factors, the Company intends to pay a dividend of ¥3 per share for the fiscal year ended
March 31, 2010.
The Company also intends to pay a dividend of ¥3 per share for the fiscal year ending March
31, 2011.

7

Business and Other Risks
No additional risks have surfaced since the Company reported on business and other risks in its
most recent full-year statutory financial report (filed on June 25, 2009). Information on businessand other risks is therefore omitted here.
Status of GroupThe “Chart of Operations (Nature of Operations)” appears on the following page. There havebeen no material changes in the “Status of Affiliated Companies.” The Company has therefore
omitted an updated disclosure.

8Chart of Operations (Nature of Operations)
Sales &
Manufacturing

Manufacturing

Sales

Kawasaki Shipbuilding Corporation

Shipbuilding

incidental business
Kawajyu Kobe Support Co., Ltd.

Nantong COSCO KHI ShipEngineering Co.,Ltd.

Kawasaki Rail Car, Inc.

Rollingstock

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

Kawasaki Rolling Stock
Component Co., Ltd.
Kawasaki Rolling Stock
Technology Co., Ltd.

NIPPI Corporation

Aerospace

Kawaju Gifu Manufacturing Co.,Ltd.
Kawaju Gifu Engineering Co.,Ltd.

Kawasaki Thermal Engineering Co., Ltd.

Gas Turbines& Machinery
Plant &
Infrastructure
Engineering

Kawasaki Machine Systems, Ltd.

Kawasaki
Heavy
Industries,
Ltd.

Kawasaki Plant Systems, Ltd.

Kawasaki Engineering Co., Ltd.
KEE Environmental
Construction Co,.Ltd.

Kawasaki Motors Corporation Japan

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

Kawasaki Machine Systems, Ltd.
Kawasaki Motors Corp., U.S.A.

Consumer
Products& Machinery

Kawasaki Motors Europe N.V.
Kawasaki Motors Enterprise(Thailand) Co., Ltd.
Kawasaki Robotics (USA) Inc.

Hydraulic
Machinery

Kawasaki Precision Machinery Ltd.
Kawasaki Precision Machinery (UK) Ltd.

KCM Corporation
KCMA Corporation

Other
Operations

KCMJ Corporation
Kawasaki Heavy Industries(U.S.A.) Inc.

Kawasaki Trading Co.,Ltd.

Kawasaki Life Corporation

Kawasaki Heavy Industries(U.K.) Ltd.

Notes: 1.The table above lists only major companies. Consolidated subsidiaries are enclosed by a solid line; associated companies
accounted for under the equity method are enclosed by a dotted line.
2. Kawasaki Thermal Engineering Co., Ltd. is listed on the JASDAQ securities exchange.
3. The construction machinery business spun-off from the Company in April 2009 was succeeded by KCM Corporation;
the construction machinery business spun-off from Kawasaki Machine Systems Ltd. in April 2009 was succeeded by
KCMJ Corporation. These business interests were shifted from the Rolling Stock segment to the Other segment.
4. KCMA Corporation was shifted from the Rolling Stock segment to the Other segment.

9

Management Strategy(1) Basic Management Strategy
In accord with the mission statement, the Group is pursuing a mission of “Kawasaki, working as
one for the good of the planet.” The Group has amassed a diverse wealth of technologies acrossa broad range of domains, most notably including land, marine, and air transport systems, andenergy and environmental engineering. By maximally utilizing and combining thesetechnological assets, the Group aims to harmonize diverse values and reconcile contradictory
challenges such as material affluence and preservation of the global environment. As an
integrated technology group, the Group is explicitly committed to contributing to thedevelopment of society by creating new value. Amid today’s rapidly changing societal andoperating environment, the Group’s basic management policy is to enhance corporate value andincrease customer satisfaction by maximally capitalizing on its integrated technologicalcapabilities to offer customers exceptional products and services differentiated on the basis ofbrand or technology, while meeting the expectations of shareholders, customers, employees, andlocal communities.
The Company’s basic policy is to continuously pay shareholders a dividend commensurate with
the Company’s earnings while accruing sufficient internal reserves in order to strengthen andenhance the Company’s operating foundation to enable future growth.
(2) Target Management Metrics
In the aim of generating profits that meet investors’ expectations, the Group has adopted ROIC
(return on invested capital: earnings before interest and taxes ÷ invested capital), a measure 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 and improvement in invested-capital efficiency.
(3) Medium-to-long-term Management Strategy
The Company has formulated a new medium-term business plan, Medium-term Business Plan
2010, for the three years from fiscal 2011 through fiscal 2013. This plan heeds successes fromand problems encountered in the previous medium-term business plan, Global K, and addresses
dramatic and severe changes in the business environment. The plan includes a detailed roadmap
for returning the Group to the growth trajectory it was on in first half of fiscal 2009 by the endof the new plan’s term. Meanwhile, bolstering new business and new product development
efforts is crucial to ensure sustained group growth into the future. To this end the Group
formulated the Kawasaki Business Vision 2020, which lays out an overall direction for businessand long-term business strategies. The Company aims to return to growth through its Medium
Term Business Plan 2010 while laying the foundations for the future.
(4) Management Priorities
KHI Group unavoidably suffered a downturn in business performance, in particular forbusinesses engaged in mass production, due among other factors to constraints on fixed
expenses beyond appropriate levels, occasioned by the global economic recession which began
in 2008. The operating environment surrounding KHI Group continues to be harsh, due among
other factors to a sharp decline in new orders received in businesses engaged in custom-ordered
production, which usually maintain stable revenues. Meanwhile, the world economic ordersurrounding KHI Group is undergoing a significant transformation due to factors such asheightened global interest in the areas of energy and the environment, and increasing
multipolarity at the global level, centered on growth of emerging countries.
Amid these conditions, KHI Group is tasked with rapidly achieving optimization of inventory
levels, fixed expense levels which correspond to the size of the market, and improvement of themarginal profit ratio for businesses engaged in mass production, while at the same time
improving profitability of large mass-production projects and promptly dealing with foreseen

10

loss risk for businesses engaged in custom-ordered production. KHI’s recently established“Medium-Term Business Plan (“MTBP2010”)”, which covers the three year period from
FY2011 to FY2013, aims to undertake measures to restructure KHI Group’s revenue base andimprove cashflows, and return to the growth path followed until the first half of FY2009.
In order for KHI Group to achieve sustained growth into the future, measures are required forthe development and strengthening of new products and businesses from a medium to long-term
perspective; to that end, KHI established “Kawasaki Business Vision 2020”, which targets its
vision for the Group in FY2020, and set forth a roadmap and strategy to attain the vision, while
undertaking to concurrently implement the policies and measures defined in the Medium-TermBusiness Plan to strategically position the Group for future growth. Moreover, through there-unification of four Group companies, which is planned for this October, KHI will promotegroup-wide sharing and utilization of intellectual assets such as those related to technology andhuman resources which have been built up in each of the business units, and acceleratemeasures to attain the aims of the recently established Business Vision 2020.
The initiatives to be undertaken by each business segment are as follows. From April 2010 thename of the Consumer Products & Machinery segment was changed to the Motorcycle &Engine segment, and the name of the Hydraulic Machinery segment was changed to thePrecision Machinery segment.
(i) Shipbuilding: Maintain competitiveness for the business in China, bolster the role of thedomestic plants as the engineering and leading technology development center(ii) Rolling Stock: Ensure profitability of overseas projects, particularly for the North America
market, improve project management capabilities for handling overseas system projects,
low cost rolling stock and high-speed rolling stock, etc.
(iii) Aerospace: Move ahead with major projects, including moving into the mass production of
the next maritime patrol aircraft, next transport aircraft, and component parts for the
Boeing 787(iv) Gas Turbines & Machinery: Promote development of new models of jet engines forcommercial aircraft, strengthen the energy and environment business areas throughpromoting development of new products and models, including industrial gas turbines andhigh-efficiency gas engines, and increase competitiveness by improving overall
productivity(v) Plant & Infrastructure Engineering: Bolster research and development in order to expand in
the fields of energy and the environment, and accelerate efforts to commercialize new
products and new business concepts(vi) Motorcycle & Engine: Optimize inventory levels for motorcycles marketed toindustrialized countries, lower the breakeven point, increase sales in Asia and Brazil, enter
the Indian market, develop leading technology to respond to environmental requirements(vii) Precision Machinery: Ensure stable profitability of construction machinery products,
expand into other business areas, and strengthen system-handling capabilities for industrial
robots(viii)Other: Improve development and sales capabilities with respect to the construction
machinery division through an alliance with Hitachi Construction Machinery Co., Ltd.
Needless to say, compliance is a fundamental premise in carrying out business activities such as
those above. KHI Group strives to ensure that employees are made thoroughly aware of theprovisions of the various laws and regulations which apply to them, by implementing suchmeasures as establishing internal regulations concerning corporate ethics, carrying out staff
training for each position level, distribution of compliance guidebooks, and setting up CSR
committees in each organization. Furthermore, we are continuing to take thoroughgoingorganizational compliance initiatives, principally through the CSR Department which is theumbrella organization cooperating with the Corporate Planning Division which presides overinternal controls, with respect to the promotion of compliance and CSR including the creation ofunits in charge of compliance within each business unit, while also striving to create a corporate
culture that places the highest priority at all times on information disclosure and its
transparency.
11

KHI Group aims to increase profitability across all businesses in this way, and along withenhancing corporate value through thorough compliance, it aims to establish the Kawasaki
brand as one that can be trusted.

12

Consolidated Financial Statements(1) Consolidated Balance Sheets
Millions of yen
As of
As of
March 31, 2009
March 31, 2010
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

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

34,745400,264
56,807
281,023
80,392
25,20455,663(2,424)
931,678

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

116,123
79,86864,282282
9,744
14,106284,407

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

1,106
18,466
19,573866
19,852
20,71824,865559
42,77333,272(1,187)100,283
403,974
1,399,770

28,448515
51,50336,438(1,270)115,635
420,761
1,352,439

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

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

302,739
125,614
708
4,833
859
14,202
6,640
17,991
6,326
5,165
778
99,532477
32,00075,053692,923

13

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
Other
Total long-term liabilities
Total liabilities
Net assets
Shareholders’ equity
Common stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Valuation and translation adjustments
Net unrealized gains (losses) on securities
Gains (losses) on hedging items
Foreign currency translation adjustment
Total valuation and translation adjustments
Minority interests
Total net assets
Total net assets and liabilities

14

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

60,513
209,360
236
2,526
6,706
3,713
89,2404,166
376,463
1,069,386

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

104,328
54,275
137,689(552)
295,741

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

5,305
(162)
(23,803)(18,659)
5,972
283,053
1,352,439

(2) Consolidated Statements of Income
Millions of yen
Year ended March
31, 2009
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Salaries and benefits
Advertising expenses
R&D expenses
Provision for doubtful receivables
Other
Total selling, general and administrative expenses
Operating income (loss)
Non-operating income
Interest income
Dividend income
Gain on sale of marketable and investment securities
Equity in income of non-consolidated subsidiaries and affiliates
Foreign exchange gain, net
Other
Total non-operating income
Non-operating expenses
Interest expense
Loss on valuation of securities
Other
Total non-operating expenses
Recurring profit
Extraordinary income
Reversal of provision for environmental measures
Reversal of allowance for doubtful accounts for subsidiaries
and affiliates
Gain on sale of businessTotal extraordinary income
Extraordinary losses
Restructuring charges
Provision for losses on damages suit
Loss on impairment of fixed assets
Provision for environmental measures
Loss on liquidation of affiliate
Loss on contribution of securities to the pension trust
Other
Total extraordinary losses
Income (loss) before income taxes and minority interests
Income taxes
Current
Deferred
Total income taxes
Minority interests in net income of consolidated subsidiaries
Net income (loss)

15

Year ended March
31, 2010

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

1,173,473
1,023,609
149,863

41,87912,96638,256359
69,477
162,939
28,71339,5707,741
38,05765,811
151,180(1,316)

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

3,065
549
1,739
6,522
10,955
6,743
29,575

6,658
1,875
9,298
17,832
38,7185,399
8,566
13,965
14,293

-

1,077

-

460

594
594

1,537

5,165
1,399
1,812
4,492
2,818
15,68823,625

7,648
6,983
3,132
1,489
399
19,651(3,821)

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

8,805(2,822)
5,983
1,055(10,860)

(3) Consolidated Statement of Changes in Shareholders’ Equity
Millions of yen
Year ended March
Year ended March
31, 2009
31, 2010
Shareholders’ equity
Common stock
Balance at end of previous year
Changes during the period
Issuance of new shares
Total changes during the period
Balance at end of year
Capital surplus
Balance at end of previous year
Changes during the period
Treasury stock disposed
Total changes during the period
Balance at end of year
Retained earnings
Balance at end of previous year
Changes during the period
Cash dividend
Net income for the year (loss)
Other
Total changes during the period
Balance at end of year
Treasury stock
Balance at end of previous year
Changes during the period
Treasury stock purchased
Treasury stock disposed
Total changes during the period
Balance at end of year
Total shareholders’ equity
Balance at end of previous year
Changes during the period
Issuance of new shares
Cash dividend
Net income for the year (loss)
Treasury stock purchased
Treasury stock disposed
Other
Total changes during the period
Balance at end of year
Valuation and translation adjustments
Net unrealized gain (loss) on securities
Balance at end of previous year
Changes during the period
Net changes in items other than shareholders’ equity
Total changes during the period
Balance at end of year
Gains (losses) on hedging items
Balance at end of previous year
Changes during the period
Net changes in items other than shareholders’ equity
Total changes during the period
Balance at end of year16

104,328

104,328

104,328

104,328

54,29054,281(9)(9)
54,281(6)(6)
54,275

151,401

154,272(8,341)
11,727(514)
2,871
154,272(5,004)(10,860)(718)(16,583)
137,689

(459)

(467)

(31)
23
(7)
(467)

(107)
23
(84)
(552)

309,560

312,415(8,341)
11,727
(31)
14
(514)
2,854
312,415(5,004)(10,860)
(107)
17
(718)
(16,674)
295,741

10,292

3,139(7,152)(7,152)
3,139

2,166
2,166
5,305

5,217

(263)

(5,480)(5,480)
(263)

101
101
(162)

Foreign currency translation adjustments
Balance at end of previous year
Changes during the period
Net changes in items other than shareholders’ equity
Total changes during the period
Balance at end of year
Total Valuation and translation adjustments
Balance at end of previous year
Changes during the period
Net changes in items other than shareholders’ equity
Total changes during the period
Balance at end of year
Minority interests
Balance at end of previous year
Changes during the period
Net changes in items other than shareholders’ equity
Total changes during the period
Balance at end of year
Total net assets
Balance at end of previous year
Changes during the period
Issuance of new shares
Cash dividend
Net income for the year (loss)
Treasury stock purchased
Treasury stock disposed
Other
Net changes in items other than shareholders’ equity
Total changes during the period
Balance at end of year17

(11,878)(24,850)(12,972)(12,972)(24,850)

1,047
1,047
(23,803)

3,631(21,974)(25,606)(25,606)(21,974)

3,314
3,314
(18,659)

5,845

4,804

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

1,167
1,167
5,972

319,037

295,245(8,341)
11,727
(31)
14
(514)
(26,646)(23,792)
295,245(5,004)(10,860)
(107)
17
(718)
4,482
(12,192)
283,053

(4) Consolidated Cash Flow Statement
Millions of yen
Year ended March Year ended March
31, 2009
31, 2010
Cash flow from operating activities
Income (loss) 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(Gain) loss on contribution of securities to the pension trust
Investment gain on equity method
Interest and dividend income
Interest expense(Increase) decrease in trade receivables(Increase) decrease in inventories(Increase) decrease in other current assets
Increase (decrease) in trade payables
Increase (decrease) in advances received
Increase (decrease) in other current liabilities
Other
Subtotal
Cash received for interest and dividends
Cash paid for interest
Cash paid for income taxes
Cash paid for suspension of activities for participation in Moto GP
Net cash provided by operating activities
Cash flow from investing activities
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 equity interest in subsidiaries resulting in change inscope of consolidation
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
Other
Net cash used for investing activities
Cash flow 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

18

23,62544,334
1,399
2,314(5,335)(849)
1,161
12,201
5,165
1,812
2,382
(620)
1,875
164
4,492
(8,709)(4,351)
6,658
5,398(54,708)(2,709)(55,077)
8,274(8,867)2,916(17,050)
8,926(6,480)(25,064)(1,587)(41,256)(3,821)
51,423
3,132
9,317
(38)
(615)
(1,013)(2,916)
6,326
4,461
510
1,992
(1,739)32
784(6,522)(3,615)
5,399(3,792)
56,241(2,966)(56,396)(27,179)
12,165(404)
40,764
7,698(5,408)(12,876)
30,178705(68,059)
2,902(6,400)14(3,043)1,795

21(61,198)
993(4,764)
48
(123)
1,913

(1,241)

-

(33)
(165)
1,474
(233)
(72,283)(1,331)
518
(65)
115
594
(63,277)

67,88073,551(7,499)(17,518)(16)(8,320)(361)(22)(21,463)
74,793(11,518)
20,000(20,000)(90)
230(5,004)
(741)
(293)

Net cash used for financing activities
Effect of exchange rate changes
Increase (decrease) in cash and cash equivalents due to changes
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

19

107,692(908)(6,755)38,16931,41335,911(88)
2,723
31,41334,137

(5) Notes on the going-concern assumption
Not applicable(6) Basis of Preparation of Financial Statements
Other than the information stated under the following (7) “Changes in Basis of Preparation of
Financial Statements,” no material changes have been made from the information in the most recent
full-year statutory financial report (filed on June 25, 2009). The Company has therefore omitted an
updated disclosure.
(7) Changes in Basis of Preparation of Financial Statements
1. Change in the scope of consolidation(1) Change in the scope of consolidation
Three companies became consolidated subsidiaries. Kawasaki Chunhui Precision Machinery(Zhejiang) Ltd., Kawasaki Precision Machinery Trading (Shanghai) Co., Ltd., and another company
were added as consolidated subsidiaries because they were newly established by the Company.
Three companies ceased to be consolidated subsidiaries because they merged with other consolidated
subsidiaries and were dissolved.
Change in accounting policy
Effective the first quarter of fiscal year ended March 31, 2010, the Company adopted the Guidance on
determining a subsidiary and an affiliate (ASBJ Guidance No.22, May 13, 2008). This change had no
impact on the income and loss.
(2) Number of consolidated subsidiaries after change
97 companies
2. Change in application of the equity method(1) Non-consolidated subsidiaries which are accounted for under the equity method :None(2) Associated companies which are accounted for under the equity method
1) Change in associated companies which are accounted for under the equity method
Two companies were newly accounted for under the equity method. Anhui Conch Kawasaki
Equipment Manufacturing Co., Ltd. became an equity-method affiliate because the Company
acquired shares in that company, and Changzhou Kawasaki and Kwang Yang Engine Co., Ltd. also
became an equity-method affiliate because the Company newly established it.
2) Number of associated companies accounted for under the equity method
14 companies
3. Changes in accounting standards(1) Accounting standards for principal reserves and allowances
Provision for restructuring charge
Provision for restructuring charge is provided for in the estimated amounts required for the
re-structure of the Consumer Products & Machinery business.
(2) Accounting standards for revenue/expense recognition
Accounting standard for construction revenue and costa. Construction contracts for which certain elements were determinable with certainty at March 31,
2010: the percentage-of-completion method (The percentage of completion is estimated mainly withthe proportion-of-cost method)b. Other construction contracts: the completed-contract method20Change in accounting policy
The Company previously used the percentage-of-completion method for accounting revenues
associated mainly with construction contracts with a contract amount of three billion yen or more anda construction period of over one year, and other construction works were accounted for with thecompleted-contract method. Effective the first quarter of the fiscal year ended March 31, 2010,
however, in conjunction with adoption of the Accounting Standard for Construction Contracts (ASBJ
Statement No.15, December 27, 2007) and its accompanying Guidance on Accounting Standard forConstruction Contracts (ASBJ Guidance No.18, December 27, 2007), the percentage-of-completion
method was applied to construction contracts that were started during the first quarter ended June 30,
2009, for which certain elements were determinable with certainty at the fiscal year end. The
percentage of completion is estimated mainly with the proportion-of-cost method, under which thepercentage of construction completed during the period is calculated as the ratio of the construction
cost incurred during that period relative to the total construction cost. The completed-contract method
was applied to other works.
Due to this change, net sales were 32,214 million yen higher. While operating loss was 1,976 million
yen lower, recurring profit was higher in the same amount, and loss before income taxes and minority
interests was lower in the same amount.
The change's impact by segment is detailed in the relevant section.

Change in the Presentation of Accounts
Year ended March 31, 2010 (April 1, 2009 – March 31, 2010)
Consolidated Statements of Income“Valuation loss on marketable securities” was included in “other” under non-operating expenses in theamount of 32million yen because it declined to less than ten-hundredth of non-operating expenses.
(8) Notes on Financial Statements
Consolidated balance sheets
Year ended March 31, 2010 (As of March 31, 2010)
Information is omitted here as its disclosure in this report is not of material importance.
Consolidated Statements of Income
Year ended March 31, 2010 (April 1, 2009 – March 31, 2010)
1. Reversal of provision for environmental measures was recognized as a result of revaluation of
estimated costs for environmental measures such as soil improvement and recorded in the amount notrequired.
2. Reversal of allowance for doubtful accounts for subsidiaries and affiliates was recorded associatedwith collection of loans from Shanghai Cosco Kawasaki Heavy Industries Steel Structure Co., Ltd.
3. Restructuring charge was the total of estimated costs for liquidation of overstock of the Consumer
Products & Machinery business in North America (6,326 million yen, all of which was provided for theprovision for restructuring charge) and costs for the employees' early retirement scheme implemented inconsolidated subsidiaries in said business (1,321 million yen).
4. Loss on impairment of fixed assets(1) Outline asset groups in which loss on impairment of fixed assets was recognizedPurposeLocation

Assets held for businessInami-cho, Kako-gun, Hyogo

Assets held for businessYokkaichi-city, Mie

21

Type
Buildings and structures,
Machinery and equipment, etc.
Buildings and structures,
Machinery and equipment, 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 deteriorating
business income, and market price declines.
(4) Calculation of recoverable amounts
Recoverable amounts are measured by net sales price or utility value. Net sales price is principally
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 with a 5% discount rate.
(5) Loss on impairment of fixed assets
A write-down of 3,132 million yen was recorded as loss on impairment of fixed assets inextraordinary losses. Amounts by asset type are listed below.
Buildings and structures
1,199 million yen
Machinery and equipment, etc.

1,556 million yen

Other

376 million yen
3,132 million yen

5. Provision for environmental measures
An additional provision for environmental measures was recorded in the amount required as a result ofrevaluation of estimated costs for the PCB waste treatment that is obligated by the “Law concerning
Special Measures for Promotion of Proper Treatment of PCB Wastes.”
6. Loss on liquidation of affiliate was recognized associated with the liquidation of Kawasaki Oita
Manufacturing Co., Ltd.
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 consolidated statements of changes in shareholders’ equity, the consolidated cash flow
statement, lease transactions, related-party transactions, tax-effect accounting, financial instruments,
securities, derivative transactions, retirement benefits, stock-based compensation, business combinations,and investment and rental property are omitted here, as their disclosure in this report is not of material
importance.

22

Segment information
1) Information by industry segment
Year ended March 31, 2009 (April 1, 2008 – March 31, 2009)
Millions of yen
Assets, depreciation/amortization, andcapital expenditures

Sales and operating income (loss)
External sales Intersegment
sales
Shipbuilding
Rolling Stock &Construction
Machinery
Aerospace
Gas Turbines &Machinery
Plant &
Infrastructure
Engineering
Consumer
Products &MachineryHydraulic
Machinery
Other
Total
Eliminations/
corporation
Consolidated
total

Total sales

Operatingexpenses

Operatingincome (loss)

AssetsDepreciation/
Capitalamortization expenditures

126,426

1,761

128,188

129,207(1,018)139,016

3,986

7,115

186,454

1,367

187,822

176,452

11,369200,481

5,139

6,147

200,424

1,873

202,298

206,475(4,177)

331,670

6,659

20,380

195,156

18,315

213,471

202,446

11,025203,902

4,606

10,176105,178

13,852

119,030

110,059

8,971

113,157

1,716

1,270

336,459

4,037

340,497

350,640(10,142)

268,013

14,957

24,297

84,919103,579
1,338,597

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

85,053
141,466
1,401,802

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

3,729
1,846
42,642

10,5391,173
81,099-(91,876)(91,876)(91,918)

41(66,380)

1,691

1,350

1,338,597-

1,338,597

1,309,883

28,713

1,399,770

44,33482,450Notes: 1. Method of segmentation
Business segmentation is based on the categorization used by management.
2. Major products by industry segment
Industry segment
Shipbuilding

Major products
Ships and vessels

Rolling stock, construction machinery, snow plows, crushers
Rolling Stock &Construction
Machinery
Aerospace
Aircrafts
Gas Turbines &Jet engines, general-purpose gas turbines, prime movers
Machinery
Plant & Infrastructure Industrial equipment, boilers, environmental equipment, steel
Engineering
structures
Consumer Products & Motorcycles, personal watercraft, all-terrain vehicles (ATV), utility
Machinery
vehicles, general-purpose gasoline engines, industrial robots
Hydraulic Machinery Industrial hydraulic products
Other
Commercial activities, sales/order agency and intermediary
activities, administration of welfare facilities
3. The figure for “Eliminations/corporation” under “Assets” includes working funds (cash on
hand and in banks) of the Company, fixed assets shared by all the segments, deferred tax
assets, and long-term investment funds (investment in securities), together totaling 96,934
million yen.
4. The figure for “Eliminations/corporation” under “Depreciation/amortization” includes
depreciation expenses for fixed assets shared by all the segments, and the figure for“Eliminations/corporation” under “Capital expenditure” includes expenses related to fixed
assets shared by all the segments.

23

5. Change in inventory valuation standard and method
The Company previously valued ordinary held-for-sale inventories mainly at cost by the
specific identification, moving average, and FIFO methods. Effective the fiscal year ended
March 31, 2009, the Company switched to valuing inventories mainly at cost (writing downof inventories’ carrying value to reflect impairment of the goods’ utility) by the specificidentification, moving average, and FIFO methods when it adopted the Accounting Standard
for Measurement of Inventories (ASBJ Statement No. 9, as revised July 5, 2006). Due to thischange, operating income for the fiscal year ended March 31, 2009, in the Rolling Stock &Construction Machinery segment was 516 million yen lower; in the Gas Turbines &Machinery segment, 1,677 million yen lower; in the Plant & Infrastructure Engineering
segment, 29 million yen lower; in the Hydraulic Machinery segment, 103 million yen lower;
and in the Other segment, 34 million yen lower. At the same time, operating loss in the
Aerospace segment was 1,226 million yen higher; and in the Consumer Products &Machinery segment, 486 million yen higher.
6. Change in useful life for property, plant and equipment
The Company and its consolidated subsidiaries in Japan have revised machinery’s useful life
pursuant to 2008 amendments to the tax code. Due to this change, operating income for the
fiscal year ended March 31, 2009, in the Rolling Stock & Construction Machinery segment,
473 million yen lower; in the Gas Turbines & Machinery segment, 260 million yen lower; inthe Plant & Infrastructure Engineering segment, 53 million yen lower; in the Other segment,
48 million yen lower, while in the Hydraulic Machinery segment, it was 166 million yen
higher. At the same time, operating loss in the Shipbuilding segment was 543 million yen
higher; in the Aerospace segment, 271 million yen higher; and in the Consumer Products &Machinery segment, 205 million yen higher.
Year ended March 31, 2010 (April 1, 2009 – March 31, 2010)
Millions of yen
Assets, depreciation/amortization, andcapital expenditures

Sales and operating income (loss)
External sales Intersegment
sales
Shipbuilding
Rolling Stock
Aerospace
Gas Turbines &Machinery
Plant &
Infrastructure
Engineering
Consumer
Products &MachineryHydraulic
Machinery
Other
Total
Eliminations/
corporation
Consolidated
total

Total sales

Operatingexpenses

Operatingincome (loss)

AssetsDepreciation/
Capitalamortization expenditures

151,893
167,156
188,892

1,564
2,413
2,005

153,458
169,570
190,897

151,967
161,810
189,147

1,490
7,759
1,749

128,948
172,420304,371

4,350
3,668
8,192

6,693
5,264
9,142

191,379

22,765

214,144

207,450

6,694

215,874

6,222

10,27890,495

11,076

101,571

95,294

6,277

104,851

975

1,111

216,990

3,973

220,964

252,614(31,649)

236,306

19,283

17,10568,80997,855
1,173,473

7,319
32,55083,66976,129130,406
1,257,142

69,167130,825
1,258,277

6,961
(419)
(1,134)57,901
154,652
1,375,326

3,883
3,064
49,6392,282
5,551
57,429-(83,669)(83,669)(83,487)(181)(22,886)

1,783

1,843

1,173,473-

1,173,473

1,174,789(1,316)

1,352,439

51,42359,272

Notes: 1. Method of segmentation
Business segmentation is based on the categorization used by management.

24

2. Major products by industry segment
Industry segment
Major products
Ships
and
vessels
Shipbuilding
Rolling stock, snow plows, crushers
Rolling Stock
Aerospace
Gas Turbines &Machinery
Plant & Infrastructure
Engineering
Consumer Products &MachineryHydraulic Machinery
Other

Aircrafts
Jet engines, general-purpose gas turbines, prime movers
Industrial equipment, boilers, environmental equipment, steel
structures
Motorcycles, personal watercraft, all-terrain vehicles (ATV),
utility vehicles, general-purpose gasoline engines, industrial
robotsIndustrial hydraulic products
Commercial activities, sales/order agency and intermediary
activities, administration of welfare facilities

3. The figure for “Eliminations/corporation” under “Assets” includes working funds (cash on
hand and in banks) of the Company, fixed assets shared by all the segments, deferred tax
assets, and long-term investment funds (investment in securities), together totaling 114,487
million yen.
4. The figure for “Eliminations/corporation” under “Depreciation/amortization” includes
depreciation expenses for fixed assets shared by all the segments, and the figure for“Eliminations/corporation” under “Capital expenditure” includes expenses related to fixed
assets shared by all the segments.
5. Change in method of segmentation
In October 2008, the Company, Hitachi Construction Machinery Co., Ltd., and TCM
Corporation reached an agreement on forming an alliance with respect to their wheel loader
businesses. The alliance is to involve (i) joint research and development and (ii) a spin-off ofthe Company's wheel loader operation into a newly created subsidiary of the Company, andHitachi’s investment in that subsidiary.
In accord with the agreement, the construction machinery business was spun-off in April
2009 and succeeded by the Company's subsidiary, KCM Corporation. As a result, saidbusiness’s relationship with the Rolling Stock & Construction Machinery segment was
weakened and effective the first quarter of the fiscal year ended March 31, 2010, it wastherefore shifted from the Rolling Stock & Construction Machinery segment to the Other
segment.
Due to this change, compared with what they would have been under the previous method,
net sales for the fiscal year ended March 31, 2010, in the Rolling Stock segment was 20,625
million yen lower (including 22,207 million yen of external sales) and in the Other segment,
21,622 million yen higher (including 22,207 million yen of external sales). By the same
comparison, operating income in the Rolling Stock segment was 3,321 million yen higher,
while operating loss in the Other segment was 3,322 million yen higher.
6. Change in accounting standard for construction revenue and cost
As stated under the heading “Changes in Basis of Preparation of Financial Statements” onpage 20 of the “Qualitative Information and Financial Statements” section, the Company
previously used the percentage-of-completion method for accounting of revenues associatedmainly with construction contracts with a contract amount of three billion yen or more and aconstruction period of over one year, and other construction works were accounted for withthe completed-contract method. Effective the first quarter of the fiscal year ended March 31,
2010, however, in conjunction with adoption of the Accounting Standard for Construction
Contracts (ASBJ Statement No.15, December 27, 2007) and its accompanying Guidance on
Accounting Standard for Construction Contracts (ASBJ Guidance No.18, December 27,

25

2007), the percentage-of-completion method was applied to construction contracts that werestarted during the first quarter ended June 30, 2009, for which certain elements were
determinable with certainty as of March 31, 2010. The percentage of completion is estimatedmainly with the proportion-of-cost method, under which the percentage of construction
completed during the period is calculated as the ratio of the construction cost incurred duringthat period relative to the total construction cost. The completed-contract method was applied
to other works.
Due to this change, net sales for the fiscal year ended March 31, 2010, in the Shipbuilding
segment was 15,609 million yen higher; in the Rolling Stock segment, 702 million yen
higher; in the Aerospace segment, 5,663 million yen higher; in the Gas Turbines &Machinery segment, 7,247 million yen higher; and in the Plant & Infrastructure Engineering
segment, 2,991 million yen higher. Also due to the change, operating income in the
Shipbuilding segment was 262 million yen higher; in the Rolling Stock segment, 65 million
yen higher; in the Aerospace segment, 494 million yen higher; in the Gas Turbines &Machinery segment, 649 million yen higher; and in the Plant & Infrastructure Engineering
segment, 504 million yen higher.

262) Information by geographic area
Year ended March 31, 2009 (April 1, 2008 – March 31, 2009)
Millions of yen

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

External sales

Intersegment
sales

Total sales

Operatingexpenses

Operatingincome (loss)

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

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

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

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

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

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

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

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

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

27

Year ended March 31, 2010 (April 1, 2009 – March 31, 2010)
Millions of yen

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

External sales

Intersegment
sales

Total sales

Operatingexpenses

Operatingincome (loss)

917,366
135,306
66,86542,90911,025
1,173,473
1,173,473

154,199
16,764
1,792
37,842
190
210,788(210,788)-

1,071,566
152,070
68,65780,751
11,215
1,384,261(210,788)
1,173,473

1,072,557
160,241
67,80974,676
10,287
1,385,571(210,781)
1,174,789(990)(8,170)
848
6,075
927
(1,310)(6)(1,316)

Assets1,130,537
159,335
47,042
39,3286,870
1,383,113(30,674)
1,352,439

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

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

3. The figure for “Eliminations/corporation” under “Assets” includes working funds (cash on
hand and in banks) of the Company, fixed assets shared by all the segments, deferred tax
assets, and long-term investment funds (investment in securities), together totaling 114,487
million yen.
4. Change in accounting standard for construction revenue and cost
As stated under the heading “Changes in Basis of Preparation of Financial Statements” onpage 19 of the “Qualitative Information and Financial Statements” section, the Company
previously used the percentage-of-completion method for accounting of revenues associatedmainly with construction contracts with a contract amount of three billion yen or more and aconstruction period of over one year, and other construction works were accounted for withthe completed-contract method. Effective the first quarter of the fiscal year ended March 31,
2010, however, in conjunction with adoption of the Accounting Standard for Construction
Contracts (ASBJ Statement No.15, December 27, 2007) and its accompanying Guidance on
Accounting Standard for Construction Contracts (ASBJ Guidance No.18, December 27,2007), the percentage-of-completion method was applied to construction contracts that werestarted during the first quarter ended June 30, 2009, for which certain elements were
determinable with certainty as of March 31, 2010. The percentage of completion is estimatedmainly with the proportion-of-cost method, under which the percentage of construction
completed during the period is calculated as the ratio of the construction cost incurred duringthat period relative to the total construction cost. The completed-contract method was applied
to other works.
Due to this change, net sales for the fiscal year ended March 31, 2010, in Japan was 32,214
million yen higher, while operating loss in Japan was 1,976 million yen lower.

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

Consolidated net sales

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

Millions of yen
Ratio of overseas sales
to consolidated sales(%)

1,338,597

23.1
8.6
13.0
9.7
54.5

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

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

Year ended March 31, 2010 (April 1, 2009 – March 31, 2010)
Overseas sales
North America
EuropeAsia
Other areas
Total

Consolidated net sales

226,859
93,035
141,577
100,124
561,595

1,173,473

Millions of yen
Ratio of overseas sales
to consolidated sales
(%)
19.3
7.9
12.0
8.5
47.8

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

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

29

Per-share Data(yen)
Year ended March 31, 2009
Net assets per share

Year ended March 31, 2010
Net assets per share

174.10166.13

Earnings per share - basic

7.02

Loss per share - basic

6.51

Earnings per share - diluted

6.92

Diluted net income per share is not stated, because weposted net loss for the period.

Notes:
1. Net assets per share were calculated based on the following:
Total net assets(millions of yen)Amounts excluded from total net assets(millions of yen)
Of which: minority interest(millions of yen)
Net assets attributable to the common shares(millions of yen)
Number of common shares used to compute net assets per share(thousands of shares)

As of March 31,
2009295,2454,804
4,804
290,440

As of March 31,
2010
283,053
5,972
5,972
277,081

1,668,234

1,667,848

2. Net income/loss per share and net income per share (diluted) were calculated based on the following:
Earnings per share - basic
Net income (loss)(millions of yen)
Earnings not attributable to common shareholders (millions of yen)
Net income (loss) allocated to the common shares (millions of yen)
Average number of common shares outstanding (thousands of shares)
Net income per share (diluted)
Net income adjustment(millions of yen)
Of which: interest expense etc. (after-tax equivalent)(millions of yen)
Increase in common shares(thousands of shares)
Of which: exercise of convertible bonds(thousands of shares)
Of which: Zero-coupon convertible bond (thousands of shares)
Summary of non-diluting residual securities not included in thecomputation of diluted earnings per share

Material subsequent events
Year ended March 31, 2010 (April 1, 2009 – March 31, 2010)
Not applicable

30

Year ended
March 31, 2009

Year ended
March 31, 2010

11,727
11,727
1,668,271(10,860)(10,860)
1,668,119

77

-

77

-

35,747
18,037
17,709----Non-consolidated Financial Statements(1) Non-consolidated Balance Sheets
Millions of yen
As of
As of
March 31, 2009
March 31, 2010
AssetsCurrent assets
Cash on hand and in banks
Notes receivable-trade
Accounts receivable-trade
Work in process
Raw materials and supplies
Advance payments
Prepaid expenses
Deferred tax assets
Short-term loans
Accounts receivable, otherAccrued income
Derivative assets
Other
Allowance for doubtful receivables
Total current assets
Fixed assets
Net property, plant and equipment
Buildings
Structures
Machinery and equipment
Vessels
Aircraft
VehiclesTools, furniture and fixtures
Land
Leased assets
Construction in progress
Total property, plant and equipment
Intangible assets
SoftwareLicense production and licensee’s execution right
Other
Total intangible assets
Investments and other assets
Investments in securities
Shares of affiliates
Investments in capital of affiliates
Long-term loans
Long-term loans to affiliates
Long-term loans to employees
Claims in bankruptcy and rehabilitation
Deferred tax assets
Other
Allowance for doubtful receivables
Total investments and other assets
Total fixed assets
Total assets
Liabilities
Current liabilities
Notes payable-trade

31

9,607
1,595
266,188
238,757
50,006
20,318442
16,536
26,417
11,096
33
9,900
3,003
(947)
652,956

17,495
1,372
229,499
221,869
50,57015,829371
13,76544,621
12,280
50
5,850
3,997
(399)
617,175

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

53,671
10,446
39,580
0
94
498
7,886
33,698144
5,594
151,615

3,474
114
10,16913,758

8,716
726
5,649
15,091

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

25,394
111,8533,537
11
11,127224
318
35,7796,487(2,157)
192,577359,285
976,460

25,797

20,480Accounts payable-trade
Short-term debt
Current portion of long-term debt
Current position of lease obligations
Accounts payable, otherAccrued expenses
Income taxes payable
Advances from customers
Deposits received
Unearned revenue
Accrued bonuses
Provision for product warranties
Provision for losses on construction contracts
Provision for restructuring charges
Provision for losses on damages suit
Provision for environmental measures
Current portion of bonds payable
Current portion of bonds with stock acquisition rights
Commercial paper
Notes payable-facilities
Other
Total current liabilities
Long-term liabilities
Bonds payable
Convertible bondBonds with stock acquisition rights
Long-term debt
Lease obligations
Long-term accounts payable, other
Provision for losses on damages suit
Provision for environmental measures
Employees’ retirement and severance benefits
Other
Total long-term liabilities
Total liabilities
Net assets
Shareholders’ equity
Common stock
Capital surplus
Legal capital surplus
Other capital surplus
Total capital surplus
Retained earnings
Other retained earnings
Provision for special depreciation
Provision for advanced depreciation of fixed assets
Provision for special account for advanced depreciationof fixed assets
Retained earnings brought forward
Total retained earnings
Treasury stock
Total shareholders’ equity
Valuation and translation adjustments
Net unrealized gains (losses) on securities
Gains (losses) on hedging items
Total valuation and translation adjustments
Total net assets
Total net assets and liabilities

32

214,072
118,968
8,974
119
18,851
26,954983
48,373
1,792
18
6,756
1,007
10,985
7,410
20,00030,0002,080
3,308
546,455

190,559
93,5293,613
412,56924,981
462
41,297
1,620
17
6,615
744
8,717
6,326
5,165
778
477
32,0001,488
2,092
453,541

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

50,0007,038
3,475
205,587
1
91
6,706
2,461
26,131
706
302,198
755,740

104,328

104,328

52,05839
52,09852,05833
52,091

146
6,798

715
7,044

384

-

62,98870,318(467)
226,277

52,13659,895(552)
215,764

2,872
1,649
4,522
230,799
977,988

4,775
180
4,955
220,720
976,460

(2) Non-consolidated Statements of Income
Millions of yen
Year ended March
31, 2009
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Salaries and benefits
Depreciation and amortization
Allowance for doubtful receivables
R&D expenses
Unallocated expenses
Contract expenses
Other
Total selling, general and administrative expenses
Operating income (loss)
Non-operating income
Interest income
Dividend income
Gain on sale of marketable and investment securities
Foreign exchange gains, net
Other
Total non-operating income
Non-operating expenses
Interest expense
Interest on bonds
Loss on valuation of securities
Loss on reduction of noncurrent assets
Loss on assignment of accounts receivable
Other
Total non-operating expenses
Recurring profit
Extraordinary income
Reversal of provision for environmental measures
Reversal of allowance for doubtful accounts for subsidiaries
and affiliates
Total extraordinary income
Extraordinary losses
Loss on investment in subsidiaries and affiliates
Provision for losses on damages suit
Restructuring charges
Provision for environmental measures
Loss on contribution of securities to the pension trust
Provision for doubtful accounts of affiliates
Loss on valuation of stock of affiliates
Other
Total extraordinary losses
Income (loss) before income taxes
Income taxes
Current
Deferred
Total income taxes
Net income (loss)

33

Year ended March
31, 2010

771,428
718,187
53,241

644,133
597,898
46,234

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

12,027861
32,316
5,330
3,014
11,67865,229(18,995)

1,002
12,077
11
11,213
1,230
25,534

1,054
20,888
1,741
9,745
3,317
36,747

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

3,761
805
999
934
2,623
9,125
8,627

-

1,077

-

460

-

1,537

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

7,234
6,983
6,326
1,368
21,912(11,748)

2,030(9,023)(6,992)(6,109)260(6,591)(6,330)(5,417)

(3) Non-consolidated Statement of Changes in Shareholders’ Equity
Millions of yen
Year ended March
Year ended March
31, 2009
31, 2010
Shareholders’ equity
Common stock
Balance at end of previous year
Changes during the period
Issuance of new shares
Total changes during the period
Balance at end of year
Capital surplus
Capital reserve
Balance at end of previous year
Changes during the period
Issuance of new shares
Total changes during the period
Balance at end of year
Other capital surplus
Balance at end of previous year
Changes during the period
Treasury stock disposed
Total changes during the period
Balance at end of year
Retained earnings
Other retained earnings
Provision for special depreciation
Balance at end of previous year
Changes during the period
Provision for special depreciation
Reversal of provision for special depreciation
Total changes during the period
Balance at end of year
Provision for advanced depreciation of fixed assets
Balance at end of previous year
Changes during the period
Provision for advanced depreciation of fixed assets
Reversal of provision for advanced depreciation of fixed assets
Total changes during the period
Balance at end of year
Provision for special account for advanced depreciation of fixed
assetsBalance at end of previous year
Changes during the period
Provision for special account for advanced depreciation of
fixed assets
Reversal of provision for special account for advanced
depreciation of fixed assets
Total changes during the period
Balance at end of year
Retained earnings brought forward
Balance at end of previous year
Changes during the period
Cash dividend
Net income (loss)
Provision for special depreciation
Reversal of provision for special depreciation
Provision for advanced depreciation of fixed assets

34

104,328

104,328

104,328

104,328

52,05852,05852,05852,058

48

39

(9)
(9)
39

(6)
(6)
33

174

146

5
(33)
(28)
146

672
(103)
569
715

6,734

6,798

128
(64)
63
6,798

411
(165)
245
7,044

-

384

384

-

-

(384)

384
384

(384)
-

77,85962,988(8,341)(6,109)
(5)
33
(128)

(5,004)(5,417)
(672)
103
(411)

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

35

64

165

(384)

-

-

384

(14,871)
62,988(10,852)
52,136

(459)

(467)

(31)
23
(7)
(467)

(107)
23
(84)
(552)

240,745

226,277(8,341)(6,109)(31)
14(14,468)
226,277(5,004)(5,417)(107)
17(10,512)215,764

9,237

2,872

(6,364)(6,364)
2,872

1,902
1,902
4,775

5,383

1,649

(3,733)(3,733)
1,649(1,469)(1,469)180

14,620

4,522(10,098)(10,098)
4,522

433
433
4,955

255,366

230,799(8,341)(6,109)(31)
14(10,098)(24,566)
230,799(5,004)(5,417)
(107)
17
433
(10,079)
220,720

(4) Events or circumstances that raise material doubt regarding the going-concern assumption
Not applicable36

6. Other(1) Corporate officer changes
Refer to the Company’s press release on February 22, 2010, titled “Directors and Executive Officers toChange.”(2) Orders and sales (consolidated)
1) Orders received
Year ended March 31,
2009 (A)
Shipbuilding
Rolling Stock
Aerospace
Gas Turbines & Machinery
Plant & Infrastructure Engineering
Consumer Products & Machinery
Hydraulic Machinery
Other
Total

million yen
71,512
264,603
239,176355,517
83,648336,459
84,142
105,528
1,540,589% of total

4.6
17.1
15.5
23.0
5.4
21.8
5.4
6.8
100.0

Year ended March 31,
2010 (B)million yen
16,12877,166
171,380
226,228
124,767
216,990
71,042
97,5841,001,290% of total

1.6
7.7
17.1
22.5
12.4
21.6
7.0
9.7
100.0

Change (B-A)
million yen(55,384)(187,437)(67,796)(129,288)
41,119(119,468)(13,099)(7,943)(539,299)%(77.4)(70.8)(28.3)(36.3)
49.1(35.5)(15.5)(7.5)(35.0)

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

production is based mainly on estimated demand.
2) Net sales

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

Year ended March 31,
2009 (A)% of total
million yen
126,4269.4
186,45413.9
200,424
14.9
195,156
14.5
105,178
7.8
336,459
25.1
84,9196.3
103,579
7.7
1,338,597
100.0Year ended March 31,
2010 (B)million yen% of total
151,89312.9
167,156
14.2
188,892
16.1
191,379
16.3
90,495
7.7
216,990
18.4
68,8095.8
97,8558.3
1,173,473
100.0Year ended March 31,
2009 (A)million yen% of total
356,93721.0
478,56528.1
286,600
16.8
405,19623.8
112,162
6.6
28,5391.6
31,1601.8
1,699,162
100.0Year ended March 31,
2010 (B)million yen % of total
218,134
14.4
385,655
25.5
264,78817.5
426,506
28.3
146,565
9.7
30,7722.0
34,6352.2
1,507,057
100.0

Change (B-A)
million yen
25,467(19,297)(11,531)(3,776)(14,682)(119,468)(16,109)(5,723)(165,124)%

20.1(10.3)(5.7)(1.9)(13.9)(35.5)(18.9)(5.5)(12.3)

3) Order backlog

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

37

Change (B-A)
million yen(138,802)(92,909)(21,812)21,30934,402
2,232
3,474(192,105)%(38.8)(19.4)
(7.6)
5.2
30.6
7.8
11.1
(11.3)

(3) Orders and sales (non-consolidated)
Due to re-segmentation of Construction Machinery business, the year-on-year rate of Rolling
Stock Segment is not mentioned below.
Orders, net sales and order backlog by industry segment
1) Orders received
Year ended March 31,
2009 (A)
Rolling Stock
Aerospace
Gas Turbines & Machinery
Plant & Infrastructure Engineering
Consumer Products & Machinery
Total
Export orders received

million yen
209,304
222,684
345,796
28,977
247,740
1,054,503
553,607% of total

19.8
21.1
32.7
2.7
23.4
100.0
52.4

Year ended March 31,
2010 (B)million yen
53,617
153,077
216,216
12,778142,986
578,676
318,553% of total

9.2
26.4
37.3
2.2
24.7
100.0
55.0

Change (B-A)
million yen(155,686)(69,606)(129,580)(16,198)(104,754)(475,826)(235,054)%(31.2)(37.4)(55.9)(42.2)(45.1)(42.4)

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

production is based mainly on estimated demand.

2) Net sales

Rolling Stock
Aerospace
Gas Turbines & Machinery
Plant & Infrastructure Engineering
Consumer Products & Machinery
Total
Net export sales

Year ended March 31,
2009 (A)% of total
million yen
129,77916.8
182,995
23.7
184,540
23.9
26,373
3.4
247,740
32.1
771,428100.0
455,91259.0

Year ended March 31,
2010 (B)million yen% of total
118,67918.4
169,21126.2
184,886
28.7
28,3684.4
142,98622.2
644,133100.0
337,390
52.3

Year ended March 31,
2009 (A)% of total
million yen
355,43231.7
271,87224.2
434,666
38.7
58,4855.2
1,120,456
100.0
549,26149.0

Year ended March 31,
2010 (B)million yen % of total
285,19727.6
251,43824.3
452,42943.8
42,8894.1
1,031,954
100.0
507,820
49.2

Change (B-A)
million yen(11,099)(13,784)
346
1,995(104,754)(127,295)(118,521)

%

(7.5)
0.1
7.5
(42.2)(16.5)(25.9)

3) Order backlog

Rolling Stock
Aerospace
Gas Turbines & Machinery
Plant & Infrastructure Engineering
Consumer Products & Machinery
Total
Export order backlog

38

Change (B-A)
million yen(70,235)(20,434)
17,762(15,595)(88,502)(41,440)

%

(7.5)
4.0
(26.6)(7.8)(7.5)

(4) Supplementary information on earnings forecasts for the fiscal year ending March 31, 2011
1) Consolidated earnings outlook
Billions of yen
Outlook for the year
ending March 31, 2011
(A)

Year ended March 31,
2010 (B)(actual)Change (A – B)

Net sales
Operating income
Recurring profit
Net income

1,280.0
32.0
32.0
20.0

1,173.4(1.3)
14.2(10.8)

106.5
33.3
17.7
30.8

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

1,240.0
5.6%
40.5
66.0

1,001.2
0.2%
38.0
59.2

238.8
5.4%
2.4
6.8

54.0

51.4

2.6

32,40032,297103*7,800*7,901*(101)of Japan included therein

Notes: 1. The expected foreign exchange rate used for the outlook: ¥90=US$1, ¥125=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 industry segment
Net sales and operating income (loss)
Billions of yen

Shipbuilding
Rolling Stock
Aerospace
Gas Turbines &Machinery
Plant & Infrastructure
Engineering
Motorcycle & Engine
Precision Machinery
Other
Total

Outlook for the year
ending March 31,
2011 (A)Operating
Net sales
income(loss)
120.0
2.0
145.0
8.0
215.0
4.0

Year ended March 31,
2010 (B)(actual)Operating
Net sales
income(loss)
151.8
1.5
150.0
8.7
188.8
3.7

Change (A – B)

(31.8)(5.0)
26.1

Operatingincome(loss)
0.4
(0.7)
0.2

Net sales

210.0

10.0

191.3

8.9

18.6

1.0

110.0

6.0

107.5

7.9

2.4

(1.9)

260.0
110.0
110.0
1,280.0

0.0
8.0
(6.0)
32.0

203.0
82.7
97.8
1,173.4(27.0)
3.4
(8.6)
(1.3)

56.9
27.2
12.1
106.5

27.0
4.5
2.6
33.3

39

2) Orders received
Outlook for the year
ending March 31,
2011 (A)
90.0
130.0
200.0

Year ended March 31,
2010 (B)(actual)
16.1
66.2
171.3

Billions of yen
Change (A – B)

Shipbuilding
73.8
Rolling Stock
63.7
Aerospace
28.6
Gas Turbines &
220.0
226.2
(6.2)
Machinery
Plant & Infrastructure
Engineering
120.0
135.6
(15.6)
Motorcycle & Engine
260.0
203.0
56.9
Precision Machinery
110.0
84.9
25.0
Other
110.0
97.5
12.4
Total
1,240.0
1,001.2
238.7
Note: Outlook figures for the year ending March 31, 2011, appearing in the tables above wereprepared based on the Accounting Standard for Disclosures about Segments of an Enterpriseand Related information. In accord with the change in the Company's internal businesscategorizations effected in April 2010, the “Outlook by industry segment” above was also
prepared based on the new segmentation: the crushers business, which was previously part of
the Rolling Stock segment, was shifted to the Plant & Infrastructure Engineering segment, therobot business, which was previously part of the Consumer Products & Machinery segment,
was shifted to the Precision Machinery segment. Simultaneously, the denomination of theConsumer Products & Machinery segment was changed to the Motorcycle & Engine segment,
and the denomination of the Hydraulic Machinery segment was changed to the Precision
Machinery segment.
The figures in the “Net sales and operating income (loss)” and “Orders received” columns for
the Plant & Infrastructure Engineering segment for the year ended March 31, 2010, include theresults of the crushers business, and the corresponding figures for the Precision Machinery
segment include the results of the robot business. In addition, figures in the “Operating income(loss)” columns for the year ended March 31, 2010, were calculated with the cost allocation
method adopted for the calculation of outlook figures for the year ending March 31, 2011.
Accordingly, these figures differ from those for net sales and operating income (loss) reported
in the “Segment information” section and in the “Orders and sales (consolidated)” section.

40