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

July 30, 2013

Table of Contents

I. Consolidated Results for First 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






Revision of Forecast for the Second
Quarter (Accumulated) of FY2013
Consolidated Operating Performance
Forecast by Segment
R&D/CAPEX/Number of Employees

15
16
17
18

7
8
9
10
11
12
13
14

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

I. Consolidated Results for First Quarter FY2013

Summary of Financial Results(Billion Yen)FY2012.1Q

FY2013.1Q

ChangeOrders Received

271.5

283.1

+ 11.5Net Sales

283.5

282.5

- 1.0

Operating Income

6.7

16.7

+ 10.0Recurring Profit

11.7

9.4

- 2.3

Net Income

6.0

4.4

- 1.5

Yen / US$

80.65

97.46

Yen / EUR

105.78125.95

Exchange Rates ( weighted-average )© 2013 KAWASAKI HEAVY INDUSTRIES, LTD. All Rights Reserved

vs. FY2012.1Q< Orders Received >Increased as a whole due to increase inorders received in Rolling Stock andAerospace segments, despite decrease inorders received in Plant & Infrastructure
segment< Net Sales >Remained at the same level as in theprevious same period overall due toincrease in Motorcycle & Engine andAerospace segments, despite decrease in
Precision Machinery and Gas Turbine &Machinery segments< Profits >- Operating income increased significantly
because of increase in Aerospace, Ship &Offshore Structure and Motorcycle &Engine segments due to the effect of thedepreciation of the yen and other factors,
despite decrease in Precision Machineryand Plant & Infrastructure segments- Recurring profit decreased due todeterioration of gain and loss on foreignexchange and other factors

3

I. Consolidated Results for First Quarter FY2013

Financial Results by Segment(Billion Yen)

Orders Received

FY2012
1Q

FY2013
Change1Q

Net Sales

Operating Income

FY2012 FY2013
Change1Q
1Q

FY2012 FY2013
Change1Q
1Q

Ship & Offshore Structure

30.3

27.1

- 3.1

22.7

21.0

- 1.6

- 0.6

3.3

+ 4.0

Rolling Stock

25.3

35.0

+ 9.6

28.8

30.5

+ 1.7

0.1

1.9

+ 1.7

Aerospace

34.4

41.5

+ 7.1

49.6

55.6

+ 6.0

0.8

7.5

+ 6.6

Gas Turbine & Machinery

32.5

35.6

+ 3.1

45.3

36.4

- 8.9

2.6

0.8

- 1.8

Plant & Infrastructure

37.1

16.6

- 20.5

19.8

16.7

- 3.1

0.1

- 0.6

- 0.8

Motorcycle & Engine

53.4

67.4

+ 14.053.4

67.4+ 14.0

- 0.3

2.4

+ 2.8

Precision Machinery

28.6

29.8

+ 1.2

36.1

25.1

- 10.9

3.9

1.5

- 2.4

Others

29.6

29.6

+0

27.6

29.4

+ 1.8

0.5

0.3

- 0.2

-

-

-

-

-

-

- 0.7

- 0.7

+0

271.5

283.1

+ 11.5

283.5

282.5

- 1.0

6.7

16.7

+ 10.0Eliminations 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 First Quarter FY2013

Details of Change in Profit I- FY2013.1Q vs. FY2012.1Q 【Operating Income】 + 10.0

( FY2012.1Q 6.7  FY2013.1Q 16.7 )Impact of change
in material priceImpact of fluctuationof foreign exchange
rate

+ 0.1

(Billion Yen)

Effects ofsales decrease- 2.3

Other factors- 2.2+ 10.1+ 4.3

Increase in selling,
general & administrative
expenses

FY2013.1Q

16.7

FY2012.1Q

6.7© 2013 KAWASAKI HEAVY INDUSTRIES, LTD. All Rights Reserved5Details of Change in Profit II

I. Consolidated Results for First Quarter FY2013- FY2013.1Q vs. FY2012.1Q -(Billion Yen)

【Non-operating Income/Expenses】- 12.3 ( FY2012.1Q 4.9  FY2013.1Q - 7.3 )Net Interest expense ( incl. dividend income )-0.2（ - 0.3

Equity in income of unconsolidated subsidiaries and affiliates

-

0.7

（

2.2



Gain and loss on foreign exchange- 10.6（

2.6

 - 7.9 ）Others-（0.3

 - 0.3 ）【Extraordinary Income/Losses】

0.6

 - 0.5 ）1.5 ）0 ( FY2012.1Q 0  FY2013.1Q 0 )© 2013 KAWASAKI HEAVY INDUSTRIES, LTD. All Rights Reserved

6

I. Consolidated Results for First Quarter FY2013

Ship & Offshore Structure
Main Products： LNG carriers, LPG carriers, VLCCs, Bulk carriers, Submarines, Offshore structures

 FY2013.1Q （ vs. FY2012.1Q )（Billion Yen / In accumulated amount）（Forecast in April 120.0）

Orders Received

120.0

105.7

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 small-scale bulk
carriers
Operating Income: Improved 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<Units of O rde rs Re ce ive d and Sale s of Ne w Building Ships>

Orders Rec eived(unit)Sales

FY2012.1Q FY2013.1Q FY2012.1Q FY2013.1Q

30.3

1Q

37.8

42.9

LNG carriers

27.1

2Q

3Q

FY2012

1Q

FY2013
Forecast

Net Sales（Forecast in April 70.0）

90.3

70.0

68.6
45.8
22.7
1Q

21.0
2Q

3Q

FY2012

4.4

4.1

1Q

1Q

-0.6

2Q

FY2013
Forecast

3.3（Forecast in April 0）03Q

FY2012

1Q

1

 FY2013 Forecast （ vs. FY2012 ）LPG carriers

1

Bulk carriers

1

1

Submarines
Total

3

2

1 (1)

2(2)

1 (1)

1(1)

1 (1)

2(2)

15 (13)

6(4)

1 (1)

1(1)

19 (17)

12(10)

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

Orders Received: Expected to increase due to orders received of new building shipincluding gas carriers
Net Sales: Expected to decrease due to stagnation of ship price and decrease inamount of shipbuilding
Operating Income: Expected to decrease due to sales decrease, percentage
increase in lower margin vessels and other factors<For Reference> Business Development in Overseas

Operating Income

1.0

1

Sm all-size d LNG carrie rs

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 company, and its capacity was
expanded in 2008. At NACKS, various types of commercial vessels are built for domestic shipping
company such as COSCO as well as for Japanese and European customers.
As a parent company of NACKS, KHI has also supported DACKS, which was initially established by NACKS
and COSCO Group, since its establishment in July 2007. In order to make it more competitive 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, executed a shareholders agreement with Estaleiro Enseada do Paraguaçu S.A. (EEP) in May
2012 and acquired a 30% stake in EEP.
With a view to expanding operations and boosting profitability at two shipyards in China and developing
the new shipyard in Brazil as the third overseas shipyard, KHI will further deepen cooperation between its
bases at home and three overseas shipyards, and actively pursue shipbuilding by taking advantage of thefeature of each shipyard.

© 2013 KAWASAKI HEAVY INDUSTRIES, LTD. All Rights Reserved

7

I. Consolidated Results for First 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) FY2013.1Q （ vs. FY2012.1Q ）（Billion Yen / In accumulated amount）（Forecast in April 160.0）

Orders Received

160.0
124.4
93.1

Orders Received: Increased due to orders received for subway cars for Washington
Metropolitan Area Transit Authority, subway cars for Sapporo City Transportation
BureauNet Sales: Increased due to sales increase for overseas markets including
Singapore and North America, despite sales decrease in the domestic market suchas for public and private railway companies
Operating Income: Increased due to increase of high profitability projects and theeffect of the depreciation of the yen

66.9

1Q

 FY2013 Forecast （ vs. FY2012 ）

35.0

25.3

2Q

3Q

FY2012

1Q

FY2013
Forecast（Forecast in April 155.0）

Net Sales

155.0

129.9

<For Reference> Present Status of Overseas Projects

94.1
28.8
1Q

51.4

30.5

2Q

3Q

FY2012

1Q

FY2013
Forecast（Forecast in April 6.0）

Operating Income

6.0

0.1

2Q

1Q

-3.1

2.2

1.9

FY2012

1Q

3Q

-0.5

Orders Received: Expected to increase due to increase in orders received foroverseas market
Net Sales: Expected to increase due to sales increase for overseas market mainly inNorth America
Operating Income: Expected to increase due to sales increase, improvement in
profitability and other factors

FY2013
Forecast

North America- Extensively working to win orders mainly for heavy rails, commuter rails and highspeed rails.
- Extension of product lineup such as efSET® and 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- There are construction and expansion plans of the urban transport systems inseveral Asian cities, and High-speed railways projects in India.
- KHI will work to win new projects in the markets such as Taiwan and Singapore,
where we have the solid track record.
- Dedicated Freight Corridor - Western Corridor (Delhi – Mumbai)
Japanese ODA project, working to receive orders for electric locomotives andmaintenance base facilities and others.

© 2013 KAWASAKI HEAVY INDUSTRIES, LTD. All Rights Reserved

8

I. Consolidated Results for First Quarter FY2013

Aerospace
Main Products : Aircrafts for Japan Ministry of Defense, Component parts for commercial aircrafts, Commercial helicopter, Missiles, Space equipment

 FY2013.1Q （ vs. FY2012.1Q ）（Billion Yen / In accumulated amount）
Orders Received（Forecast in April 250.0）

283.4

250.0

138.3

Orders Received: Increase in orders received for component parts for Boeing 777
and 787
Net Sales: Increased due to sales for the Japan Ministry of Defense (MOD)remaining constant to the previous same period and an increase for component
parts for Boeing 777 and 787
Operating Income: Increased significantly due to sales increase, the effect of thedepreciation of the yen and reversal of provision for loss on construction contracts
accompanying yen depreciation< S ales units of c omponent parts for c ommerc ial airc rafts >(unit)

91.0

FY2012.1Q FY2013.1Q

41.5

34.4

Boeing 777
Boeing 767

1Q

2Q

3Q

FY2012

1Q（Forecast in April 290.0）

Net Sales<For Reference> Present Status of Main Projects

55.6
3Q

FY2012

1Q

Embraer190/195

FY2013
Forecast

165.8

2Q

 FY2013 Forecast （ vs. FY2012 )Orders received: Expected to decrease due to decrease mainly in orders received
for MODNet Sales: Expected to increase due to sales increase for MOD including C-2
transport aircraft and component parts for Boeing 787
Operating Income: Expected to increase due to sales increase and other factors

109.1

1Q

Embraer170/175

26
5
13
8
11

290.0
239.1

49.6

Boeing 787

FY2013
Forecast

21
7
10
6
21

Aircrafts for MOD（Forecast in April 19.0）

Operating Income

19.0

Commercial aircrafts

14.8
9.3
0.8
1Q

7.5

4.3

2Q

3Q

FY2012In March 2013, KHI delivered the first mass production of P-1 patrol aircraft to MOD. KHI issteadily working on the mass production of P-1, as well as C-2 transport aircraft.

1Q

FY2013
Forecast

Component parts for Boeing 777- KHI’s production rate for 777 program has increased 7
to 8.3 units per month corresponding to the increase in production rate by the Boeing
Company.
Component parts for Boeing 787- KHI has achieved to deliver the 100th component parts
to Boeing in August 2012 since the first delivery of it in January 2007. KHI has completed 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 First 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 FY2013.1Q （ vs. FY2012.1Q )（Billion Yen / In accumulated amount）
Orders Received（Forecast in April 220.0）

255.5

220.0

131.6
32.5
1Q

35.6
3Q

Note : Please see page 11 of Flash Report for the First Quarter of the Fiscal Year Ending March 31, 2014 concerning change inaccounting methodology for the first quarter financial result

Operating Income: Decreased due to sales decrease, decline in profit margin and other factors

 FY2013 Forecast （ vs. FY2012 ）

65.4

2Q

Orders Received: Increased due to increase in orders received for hydraulic machineries, despite
the effect of change in accounting methodology regarding commercial aircraft jet engines
Net Sales: Decreased due to the effect of change in accounting methodology regarding commercial
aircraft jet engines and sales decrease of marine diesel engines

FY2012

1Q

FY2013
Forecast

Orders Received: Expected to decrease due to the effect of changes in accounting policies
regarding commercial aircraft jet engines sales
Net Sales: Expected to decrease due to the effect of changes in accounting policies regarding
commercial aircraft jet engines sales, despite sales increase due to the depreciation of the yen
Operating Income: Expected to increase due to the effect of the depreciation of the yen andother factors（Forecast in April 185.0）

Net Sales

207.0

185.0

144.6

<For Reference>
Major Projects for Commercial Aircraft Jet Engines
Trent1000

TrentXWB

AircraftBoeing 787

Airbus A350

Airbus A320neo

Participation TypeRRSP（※)RRSP（※)

International Collaboration Program

93.2
45.3

1Q

36.4
2Q

3Q

FY2012

1Q

FY2013
Forecast

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

First IPC module shipped to Rolls-Royce inMarch 2011.

Made decision to collaborate in a programfor development and production.
Design w ork in progress.

Present Status（※）（Forecast in April 11.0）

Operating Income

11.0

2.6

3.2

1Q

2Q

4.6

7.0
0.8

3Q

FY2012

1Q

FY2013
Forecast

PW1100G - JM

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

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

The L30A of 30MW class Gas Turbine, which KHI completed development in February 2012, has been
operating very successfully at its first commercial plant. Also, KHI built an overhaul facility for gas
turbines in Malaysia to enhance its after-sales services.
Furthermore, including the first delivery of a gas engine to India in June 2013, KHI reinforcing promotionof our gas engines by establishing a sales division in Malaysia.
In addition, KHI established a new organization in April 2013 to enhance its energy solution business.
KHI will actively develop Energy and Environmental business in domestic and overseas markets.

© 2013 KAWASAKI HEAVY INDUSTRIES, LTD. All Rights Reserved

10

I. Consolidated Results for First 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

 FY2013.1Q （ vs. FY2012.1Q ）（Billion Yen / In accumulated amount）（Forecast in April 130.0）

Orders Received

130.0

113.6

37.1

51.3

69.4

 FY2013 Forecast （ vs. FY2012 )

16.6
1Q

2Q

3Q

FY2012

1Q

FY2013
Forecast（Forecast in April 115.0）

Net Sales
115.8

115.0

71.1
46.4
19.8
1Q

16.7
2Q

3Q

FY2012

1Q

Operating Income

FY2013
Forecast（Forecast in April 7.0）

9.7

7.0
3.1

3.7

0.1
1Q

1Q

2Q

Orders Received: Decreased from the previous same period, which was marked bylarge-scale overseas project
Net Sales: Decreased due to sales decrease of material handling systems andlarge-scale overseas projects, despite continued robust sales of LNG tanks
Operating Income: Deteriorated due to sales decrease, decline in profit marginand other factors

3Q

FY2012-0.6

FY2013
Forecast

Orders Received: Expected to increase due to orders received of energy related
projects, and projects related infrastructure for resource-producing countries
Net Sales: Expected to remain at the same level as in the previous fiscal year due
to sales increase in projects related environment and industrial infrastructure,despite sales decrease in large-scale overseas projects
Operating Income: Expected to decrease due to decline in profit margin resulting
from severe competitiveness<For Reference>
Orders Received of Energy and Environmental Projects- In parallel with an expected increase of worldwide energy consumption, a lot of
floating LNG facilities are planned to be constructed. Under these circumstances,
KHI’s proven track record of boilers for land and marine use (more than 1,200
units) and technical capability, which has realized reliable and robust boilers thatcan operate under severe offshore condition, are highly evaluated, and in July
2011, KHI won the contract with Technip to supply 7 units of boilers for the Shell’s
floating LNG facility of “Prelude”, the world’s first floating LNG facility.
- In April 2012, KHI won the contract of 4 massive cryogenic tanks for Ichthys LNG
Project in Australia. This project is very important for Japan in terms of the stablesupply 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 projectbased on its proven track record and the EPC technologies.

© 2013 KAWASAKI HEAVY INDUSTRIES, LTD. All Rights Reserved11

I. Consolidated Results for First Quarter FY2013

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

Net Sales

Net Sales: Increased due to sales increase of motorcycles in the UnitedStates and emerging markets, mainly Thailand and Indonesia

290.0

251.8

Operating Income: Improved due to sales increase, improvement in
profitability and other factors

158.8
103.9

67.4

53.4
1Q

2Q

3Q

FY2012

1Q

 FY2013 Forecast （ vs. FY2012 )FY2013
Forecast

Net Sales: Expected to increase due to sales increase in emerging countries,
the depreciation of the yen and other factors（Forecast in April 10.0）

Operating Income

10.0
2.3

2.4

FY2012

1Q

-0.3

1Q

-2.2

-2.0

2Q

3Q

FY2012.1Q
Domestic
North America (incl. Canada)

EuropeEmerging Countries & Others

Total

Amount5
3.6
20 (13)
13.0
12
8.7
78
18.3

(T hous ands of unit / Billion Y en)

115

43.6

FY2012
Unit
Amount14
12.1
118 (74)
79.7
55
38.5
357
86.2
544

216.5

FY2013 Forecast

FY2013.1Q
Unit

Amount5
4.3
20 (13)
17.3
11
9.6
91
25.3
127

56.5

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 .

UnitAmount14
12.1
117 (68)
89.5
56
41.2
433
107.9
620

Operating Income: Expected to increase due to sales increase and otherfactors<For Reference>
Businesses Development in Emerging Countries

FY2013
Forecast＜Wholesales by Geografic Area for Consumer Products＞

Unit

 FY2013.1Q （ vs. FY2012.1Q )250.7

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 the business
operation 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.

2 ) Figures in the parenthes is ( ) repres ent motorc yc le s ales units .

© 2013 KAWASAKI HEAVY INDUSTRIES, LTD. All Rights Reserved

12

I. Consolidated Results for First 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

 FY2013.1Q （ vs. FY2012.1Q ）（Billion Yen / In accumulated amount）（Forecast in April 150.0）

Orders Received

150.0
109.7
78.4

Orders Received: Increased due to increase in orders received forindustrial robots for overseas automotive industries, despite decrease in
hydraulic components for construction machinery in emerging countries,
mainly China
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

55.6
29.8

28.6

1Q

2Q

3Q

FY2012

1Q

 FY2013 Forecast （ vs. FY2012 ）FY2013
Forecast（Forecast in April 140.0）

Net Sales

140.0

130.4
93.8

Orders Received & Net Sales: Expected to increase due to demand
recovery of hydraulic components for construction machinery in emerging
countries mainly China and industrial robots for manufacturers ofsemiconductor production equipments
Operating Income: Expected to increase due to sales increase and otherfactors

67.0
36.1

1Q

<For Reference> Businesses Development in Emerging Countries

25.1
2Q

3Q

FY2012

1Q

FY2013
Forecast（Forecast in April 14.0）

Operating Income

14.0
8.4
3.9

4.9

1Q

2Q

4.8
1.5
3Q

FY2012

1Q

FY2013
Forecast

In August 2006, production of hydraulic pumps started at Chinese subsidiary in Suzhou. Also, in Zhejiang,
the joint venture of hydraulic machinery manufacturing was established with a Chinese company andproduction started in April 2010, while the sales subsidiary in Shanghai provides the products
manufactured at the above manufacturing companies to customers throughout China.
Afterward, KHI reinforced business operation in China through the construction of the new plant at thesubsidiary in Suzhou, expansion of the plant in Zhejiang and establishment of the subsidiary for aftersales service in Shanghai.
For the Chinese construction machinery market, the demand of some small-sized construction
machineries show signs of recovery. However, the demand of medium to large-sized construction
machinery that KHI mainly involves remains at a low level, though it was bottoming out. But thecontinued 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 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, in February 2012,KHI set up the joint venturewith Wipro Limited in Bangalore for manufacture, sales, and servicing of hydraulic components forconstruction machinery.

© 2013 KAWASAKI HEAVY INDUSTRIES, LTD. All Rights Reserved

13

I. Consolidated Results for First Quarter FY2013

Financial Condition and Cash Flows【Financial Condition】(Billion Yen)FY2012End ofJune 2012

FY2013End ofJune 2013

End ofMarch 2013

1,374.2

1,466.2

1,525.0

305.4

338.2

313.9

(22.2%)(23.0%)(20.5%)

Interest-bearing debt

435.0

484.6

521.1

（Net Interest-bearing debt）（401.6）（446.1）(482.3)

Net Debt Equity Ratio

131.4%

131.9%

153.6%

Total Assets

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

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

FY2012.1Q

FY2013.1Q

Cash flows from operating activities

7.9

- 1.1

Cash flows from investing activities- 30.6- 18.3

Free Cash Flows- 22.6- 19.4

22.6

20.1

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

14II． Forecast for FY2013
Revision of Forecast
for the Second Quarter (Accumulated) of FY2013(Billion Yen / In accumulated amount)(FYI)
FY2012.2Q

FY2013.2Q Forecast
Forecast
in April

Forecast
in July

Net Sales

610.0

610.0

0

574.9

Operating Income

20.0

24.0

+ 4.0

10.3

Recurring Profit

17.0

18.0

+ 1.0

20.1

Net Income

11.0

11.5

ActualChange

+ 0.5

12.4

Reasons for the Revision(vs. Forecast in April)- The forecast for operating income ofsecond quarter (accumulated) was
revised 4.0 billion yen to 24.0 billion
yen on reflection of the first quarter
financial results, where actual
foreign exchange rate exceeded thatof the assumed rate. In comparison,recurring profit and net income wererevised only 1.0 billion yen to 18.0
billion yen and 0.5 billion yen to 11.5
billion yen respectively, due toeffects of the depreciation of the yen
being limited by FX hedging.
- Meanwhile, the full year forecast
remains unchanged because of
uncertainty about worldwide
economies.

Exchange Rates (actual & assumed)

Yen / US$

95

95

79.92

Yen / EUR

120

120

101.79© 2013 KAWASAKI HEAVY INDUSTRIES, LTD. All Rights Reserved

15II． Forecast for FY2013

Consolidated Operating Performance* No changes in the forecast for FY2013 from April 25, 2013.
(Billion Yen)FY2012
Actual

FY2013
Forecast

Changevs. FY2012< Orders Received >Orders Received

1,369.5

1,450.0+ 80.5Net Sales

1,288.8

1,380.0+ 91.2

Operating Income

42.0

60.0

+ 18.0Recurring Profit

39.3

53.0

+ 13.7Net Income

30.8

34.0

+ 3.2

Expected to increase as a whole due to increase inorders received in Rolling Stock, Precision Machinery andMotorcycle & Engine segments, despite decrease in
Aerospace segment< Net Sale >Expected to increase as a whole due to sales increase in
Aerospace, Rolling Stock and Motorcycle & Engine
segments, despite sales decrease in Ship & Offshore
Structure segment< Profits >Expected to increase by continuing to pursue ongoing
initiatives to improve earnings across all operations
through such means as reducing fixed and overhead
costs and boosting productivity

Exchange Rates (actual & assumed)

Yen / US$

82.86

95

Yen / EUR

107.76120

Note : Assumed rates are applied to the outstanding foreign exchange exposure as of July 30, 2013(For Reference)

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

US$
EUR

Operating
Income1.7(1.9)
0.2(0.3)

Recurring
Profit0.8(0.8)0(0)* Figures in the parenthesis ( ) represent impact as of April 25, 2013

© 2013 KAWASAKI HEAVY INDUSTRIES, LTD. All Rights Reserved

16II． Forecast for FY2013

Forecast by Segment* No changes in the forecast for FY2013 from April 25, 2013.
(Billion Yen)

Orders Received

Net Sales

Operating Income

FY2012FY2013

ChangeFY2012FY2013

ChangeFY2012FY2013

ChangeShip & Offshore Structure

105.7

120.0

+ 14.390.3

70.0- 20.3

4.1

0

- 4.1

Rolling Stock

124.4

160.0

+ 35.6

129.9

155.0

+ 25.1

2.2

6.0

+ 3.8

Aerospace

283.4

250.0

- 33.4

239.1

290.0

+ 50.9

14.8

19.0

+ 4.2

Gas Turbine & Machinery

255.5

220.0

- 35.5

207.0

185.0

- 22.0

7.0

11.0

+ 4.0

Plant & Infrastructure

113.6

130.0

+ 16.4

115.8

115.0

- 0.8

9.7

7.0

- 2.7

Motorcycle & Engine

251.8

290.0

+ 38.2

251.8

290.0

+ 38.2

2.3

10.0

+ 7.7

Precision Machinery

109.7

150.0

+ 40.3

130.4

140.0

+ 9.6

8.4

14.0

+ 5.6

Others

125.1

130.0

+ 4.9

124.2

135.0

+ 10.8

1.2

3.0

+ 1.8

-

-

-

-

-

-

- 8.0

- 10.0- 2.0

1,369.5 1,450.0+ 80.5

1,288.8 1,380.0+ 91.242.0

60.0+ 18.0Eliminations and corporate
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

17II． Forecast for FY2013

R&D/CAPEX/Number of Employees* No changes in the forecast for FY2013 from April 25, 2013.
(Billion Yen / Persons)

FY2012
Actual

FY2013
Forecast

ChangeR&D Expenses

41.7

44.0

+ 2.3

CAPEX
(Construction Base)

78.6

84.0

+ 5.4

Depreciation & Amortization

48.3

43.0

- 5.3

Domestic

25,22225,700+ 478

Overseas

8,788

9,200

+ 412

34,01034,900+ 890

Number of Employees© 2013 KAWASAKI HEAVY INDUSTRIES, LTD. All Rights Reserved

18

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

19