Kawasaki Heavy Industries : Flash Report for the Second Quarter of the Fiscal Year Ending March 31, 2020(Consolidated Basis) (PD...

KAWASAKI HEAVY INDUSTRIES, LTD. AND CONSOLIDATED SUBSIDIARIES

FLASH CONSOLIDATED FINANCIAL RESULTS	October 31, 2019
For six months ended September 30, 2019 and 2018 and one year ended March 31, 2019	(Consolidated)

Operating results

		Millions of yen	Thousands of U.S. dollars
	Six months ended			Six months ended			Six months ended
Net sales		Sep. 30, 2019			Sep. 30, 2018			Sep. 30, 2019
	736,565		688,107		$	6,822,573
Operating profit		8,678			8,454			80,382
Profit attributable to owners of parent		(3,733)			(3,592)			(34,578)
Earnings per share (Yen)		(22.34)			(21.50)

Financial position

		Millions of yen / Thousand shares	Thousands of U.S. dollars
		As of			As of		As of
Total assets		Sep. 30, 2019			March. 31, 2019		Sep. 30, 2019
	1,949,784		1,838,855		$ 18,060,245
Net assets		473,181			492,261	4,382,929
Number of shares issued and outstanding		167,044			167,045
Equity Ratio		23.4%			25.9%

Cash flows

		Millions of yen	Thousands of U.S. dollars
	Six months ended			Six months ended		Six months ended
Operating activities		Sep. 30, 2019			Sep. 30, 2018		Sep. 30, 2019
	(249,491)		(113,421)		$ (2,310,958)
Investing activities		(33,030)			(47,533)	(305,947)
Financing activities		249,981			149,311	2,315,496
Cash and cash equivalents at end of period		38,172			50,468	353,575

Fiscal year forecast					Millions of yen
		Net sales			Operating profit			Profit attributable to
						owners of parent
One year ending March 31, 2020		1,660,000		56,000		25,000

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(Consolidated)

Notes : 1. This "FLASH CONSOLIDATED FINANCIAL RESULTS" and following financial statements have been prepared in conformity with generally accepted accounting principles and practices in Japan.

2. All US$ amounts in these statements represent the arithmetical results of translating Japanese yen to U.S. dollars on the basis of ￥107.96=$1, the rate prevailing as of September 30, 2019, solely for the convenience of the readers.

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							(Consolidated)
Consolidated Balance Sheets
As of September 30 and March 31, 2019
		Millions of yen			Thousands of
				U.S. dollars
		As of		As of			As of
Assets		Sep. 30, 2019		Mar. 31, 2019			Sep. 30, 2019
Current assets
Cash and deposits		41,736	74,311	$	386,588
Notes and accounts receivable - trade		520,325	427,665			4,819,609
Merchandise and finished goods		76,561	68,176			709,161
Work in process		424,937	405,087			3,936,060
Raw materials and supplies		125,245	119,558			1,160,106
Other		61,130	45,333			566,228
Allowance for doubtful accounts		(3,488)	(3,792)			(32,308)
Total current assets		1,246,447		1,136,340			11,545,452
Non-current assets
Property, plant and equipment
Buildings and structures, net		197,321	194,939			1,827,723
Other		288,554	290,729			2,672,786
Total property, plant and equipment		485,876		485,669			4,500,519
Intangible assets		18,737		16,797			173,555
Investments and other assets
Other		200,126	201,471			1,853,705
Allowance for doubtful accounts		(1,404)	(1,422)			(13,005)
Total investments and other assets		198,722		200,048			1,840,700
Total non-current assets		703,337		702,514			6,514,793
Total assets		1,949,784		1,838,855			18,060,245
Liabilities
Current liabilities
Notes and accounts payable - trade		217,756	247,191			2,017,006
Electronically recorded obligations - operating		102,419	123,083			948,675
Short-term borrowings		187,295	100,023			1,734,856
Income taxes payable		3,929	10,390			36,393
Provision for sales promotion expenses		5,321	497			49,287
Provision for bonuses		17,806	21,168			164,931
Provision for construction warranties		11,857	13,096			109,828
Provision for loss on construction contracts		17,728	27,609			164,209
Advances received		159,767	181,419			1,479,872
Other		262,431	139,800			2,430,817
Total current liabilities		986,313		864,280			9,135,911
Non-current liabilities
Bonds payable		140,000	140,000			1,296,777
Long-term borrowings		195,959	187,568			1,815,107
Retirement benefit liability		100,347	97,602			929,483
Provision for the in-service issues of		9,990	11,468			92,534
commercial aircraft jet engines
Other		43,993	45,674			407,494
Total non-current liabilities		490,290		482,313			4,541,404
Total liabilities		1,476,603		1,346,593			13,677,316
Net assets
Shareholders' equity
Share capital		104,484	104,484			967,803
Capital surplus		54,542	54,542			505,206
Retained earnings		310,077	324,606			2,872,147
Treasury shares		(131)	(130)			(1,213)
Total shareholders' equity		468,973		483,502			4,343,951
Accumulated other comprehensive income
Valuation difference on available-for-sale securities		2,488	2,682			23,046
Deferred gains or losses on hedges		(171)	(227)			(1,584)
Foreign currency translation adjustment		(10,088)	(4,556)			(93,442)
Remeasurements of defined benefit plans		(3,666)	(5,014)			(33,957)
Total accumulated other comprehensive income		(11,437)		(7,115)			(105,937)
Non-controlling interests		15,645		15,874			144,915
Total net assets		473,181		492,261			4,382,929
Total liabilities and net assets		1,949,784		1,838,855			18,060,245

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(Consolidated)

Consolidated Statements of Profit and Loss

For six months ended September 30, 2019 and 2018

		Millions of yen			Thousands of
				U.S. dollars
		Six months ended			Six months ended		Six months ended
Net sales		Sep. 30, 2019			Sep. 30, 2018			Sep. 30, 2019
	736,565		688,107		$	6,822,573
Cost of sales		629,707			581,972			5,832,781
Gross profit		106,857			106,135			989,783
Selling, general and administrative expenses
Salaries and allowances		27,384			26,537			253,649
Research and development expenses		23,739			21,240			219,887
Other		47,055			49,903			435,856
Total selling, general and administrative expenses		98,179			97,680			909,402
Operating profit		8,678			8,454			80,382
Non-operating income
Interest income		314			239			2,908
Dividend income		180			180			1,667
Share of profit of entities accounted for using equity method		924			802			8,559
Foreign exchange gains		-			3,102			-
Other		1,473			1,398			13,644
Total non-operating income		2,893			5,724			26,797
Non-operating expenses
Interest expenses		1,860			1,546			17,229
Foreign exchange losses		5,772			-			53,464
Payments for the in-service issues of		1,157			9,745			10,717
commercial aircraft jet engines
Other		1,951			2,680			18,072
Total non-operating expenses		10,741			13,971			99,491
Ordinary profit		830			207			7,688
Extraordinary income
Gain on sales of non-current assets		1,277			-			11,828
Total extraordinary income		1,277			-			11,828
Profit before income taxes		2,107			207			19,516
Income taxes		5,122			2,940			47,443
Loss		(3,015)			(2,733)			(27,927)
Profit attributable to non-controlling interests		718			859			6,651
Loss attributable to owners of parent		(3,733)			(3,592)			(34,578)

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Consolidated Statements of Cash Flows

For six months ended September 30, 2019 and 2018

Cash flows from operating activities Profit before income taxes Depreciation

Increase (decrease) in allowance for doubtful accounts Increase (decrease) in provision for bonuses

Increase (decrease) in provision for construction warranties Increase (decrease) in provision for loss on construction contracts

Increase (decrease) in retirement benefit liability

Increase (decrease) in provision for the in-service issues of commercial aircraft jet engines

Interest and dividend income Interest expenses

Share of loss (profit) of entities accounted for using equity method Loss (gain) on sales of non-current assets

Decrease (increase) in trade receivables Decrease (increase) in inventories Increase (decrease) in trade payables Decrease (increase) in advance payments - trade Increase (decrease) in advances received Decrease (increase) in other current assets Increase (decrease) in other current liabilities Other, net

Subtotal

Interest and dividends received Interest paid

Income taxes paid

Net cash provided by (used in) operating activities Cash flows from investing activities

Purchase of property, plant and equipment and intangible assets

Proceeds from sales of property, plant and equipment and intangible assets Purchase of investment securities

Proceeds from sales of investment securities Purchase of shares of subsidiaries and associates Net decrease (increase) in short-term loans receivable Long-term loan advances

Collection of long-term loans receivable Other, net

Net cash provided by (used in) investing activities Cash flows from financing activities

Net increase (decrease) in short-term borrowings Proceeds from long-term borrowings Repayments of long-term borrowings Proceeds from issuance of bonds Redemption of bonds

Dividends paid

Dividends paid to non-controlling interests Other, net

Net cash provided by (used in) financing activities

Effect of exchange rate change on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

				(Consolidated)
		Millions of yen			Thousands of
				U.S. dollars
Six months ended		Six months ended		Six months ended
	Sep. 30, 2019			Sep. 30, 2018			Sep. 30, 2019
	2,107		207	$	19,516
	30,133			29,342			279,113
	(206)			1,465			(1,908)
	(3,356)			(2,968)			(31,086)
	(1,168)			(1,367)			(10,819)
	(9,864)			2,409			(91,367)
	4,833			4,868			44,767
	(1,478)			9,745			(13,690)
	(495)			(420)			(4,585)
	1,860			1,546			17,229
	(924)			(802)			(8,559)
	(1,277)			-			(11,828)
	(93,246)			(9,526)			(863,709)
	(42,352)			(78,347)			(392,293)
	(49,292)			(28,770)			(456,577)
	(4,739)			(1,939)			(43,896)
	(20,308)			(12,247)			(188,107)
	(10,547)			(7,059)			(97,694)
	(39,131)			(17,295)			(362,458)
	561			3,434			5,196
	(238,893)			(107,727)			(2,212,792)
	722			477			6,688
	(1,863)			(1,541)			(17,256)
	(9,456)			(4,630)			(87,588)
	(249,491)			(113,421)			(2,310,958)
	(33,242)			(43,587)			(307,910)
	1,509			334			13,977
	(439)			(557)			(4,066)
	458			136			4,242
	(2,931)			(2,081)			(27,149)
	(551)			(51)			(5,104)
	(34)			(91)			(315)
	47			82			435
	2,152			(1,717)			19,933
	(33,030)			(47,533)			(305,947)
	250,750			144,642			2,322,619
	19,000			7,779			175,991
	(23,112)			(7,617)			(214,079)
	20,000			20,000			185,254
	(10,000)			(10,000)			(92,627)
	(5,863)			(5,032)			(54,307)
	(503)			(679)			(4,659)
	(289)			218			(2,677)
	249,981			149,311			2,315,496
	2,401			(2,250)			22,240
	(30,139)			(13,893)			(279,168)
	68,311			64,362			632,744
	38,172			50,468			353,575

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