Komatsu : > 1st Quarter Report FY2022

(Translation)

This document has been translated from the Japanese original for the convenience of overseas stakeholders. In the event of any discrepancy between this document and the Japanese original, the original shall prevail.

Quarterly Report

From April 1, 2022 to June 30, 2022

(First Quarter of the 154th Fiscal Year)

KOMATSU LTD.

First Quarter of the 154th Fiscal Year (from April 1, 2022 to June 30, 2022)

Quarterly Report

Certain References and Information:

1. This is an English translation of the Quarterly Securities Report ("Shihanki Hokokusho") filed via the Electronic Disclosure for Investors' Network ("EDINET") system as set forth in Article 27-30-2 of the Financial Instruments and Exchange Act of Japan. Komatsu Ltd. filed its Quarterly Securities Report for the three months ended June 30, 2022 with the Director-General of the Kanto Local Finance Bureau on August 10, 2022. The Quarterly Securities Report contains, among other information, Quarterly Consolidated Financial Statements for the three months ended June 30, 2022. Material information in the Quarterly Securities Report, other than the Quarterly Consolidated Financial Statements, has already been reported by Komatsu Ltd. in its press release dated July 29, 2022. Attached is an English translation of Quarterly Consolidated Financial Statements for the three months ended June 30, 2022.
2. In this report, Komatsu Ltd. is hereinafter referred to as the "Company" and together with its consolidated subsidiaries as "Komatsu."

Cautionary Statement with respect to forward-looking statements:

This report contains forward-looking statements that reflect managements' views and assumptions in the light of information currently available with respect to certain future events, including expected financial position, operating results and business strategies. These statements can be identified by the use of terms such as "will," "believes," "should," "projects," "plans," "expects" and similar terms and expressions that identify future events or expectations. Actual results may differ materially from those projected, and the events and results of such forward- looking assumptions cannot be assured. Any forward-looking statements speak only as of the date of this report, and the Company assumes no duty to update such statements.

Factors that may cause actual results to differ materially from those predicted by such forward-looking statements include, but are not limited to, unanticipated changes in demand for Komatsu's principal products, owing to changes in the economic conditions in Komatsu's principal markets; changes in exchange rates or the impact of increased competition; unanticipated costs or delays encountered in achieving Komatsu's objectives with respect to globalized product sourcing and new information technology tools; uncertainties as to the results of Komatsu's research and development efforts and its ability to access and protect certain intellectual property rights; the impact of regulatory changes and accounting principles and practices; and the introduction, success and timing of business initiatives and strategies.

Financial Information

1. Basis of preparation of the quarterly consolidated financial statements

The quarterly consolidated financial statements of the Company are prepared in accordance with the accounting principles generally accepted in the United States of America, pursuant to Article 4, Supplementary Provisions of the "Ordinance on Terminology, Forms and Preparation Methods of Quarterly Consolidated Financial Statements," the Ordinance of the Cabinet Office No. 64 of 2007.

2. Audit certification

Pursuant to Article 193-2, paragraph 1 of the Financial Instruments and Exchange Act of Japan, the quarterly consolidated financial statements for the three months ended June 30, 2022 were reviewed by KPMG AZSA LLC.

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Quarterly Consolidated Financial Statements

Consolidated Balance Sheets (Unaudited)

Komatsu Ltd. and Consolidated Subsidiaries as of June 30, 2022 and March 31, 2022

			June 30, 2022			March 31, 2022
Assets	Millions of yen		Ratio (%)		Millions of yen		Ratio (%)
Current assets
Cash and cash equivalents (Note 15)	¥	383,543			¥	315,360
Time deposits (Note 15)			1,083					1,310
Trade notes and accounts receivable, net (Notes 3 and 9)		994,938					954,580
Inventories (Note 4)			1,174,640					988,011
Other current assets (Notes 14, 15 and 16)		187,377					162,020
Total current assets			2,741,581		56.9			2,421,281		55.7
Long-term trade receivables, net (Notes 3, 9 and 15)		579,155	12.0			501,868	11.5
Investments
Investments in and advances to affiliated companies		49,730					45,913
Investment securities (Note 5)			10,154					8,377
Other		3,465					3,493
Total investments			63,349	1.3			57,783	1.3
Property, plant and equipment
- less accumulated depreciation and amortization of ¥1,032,705
million at June 30, 2022 and ¥997,069 million at March 31, 2022		852,172	17.7			819,749	18.9
Operating lease right-of-use assets			63,924		1.3			61,516		1.4
Goodwill		206,002	4.3			187,615	4.3
Other intangible assets			177,535		3.7			169,003		3.9
- less accumulated amortization (Note 6)
Deferred income taxes and other assets (Notes 14, 15 and 16)		131,365	2.8			128,707	3.0
Total assets		¥	4,815,083		100.0		¥	4,347,522		100.0

			June 30, 2022			March 31, 2022
Liabilities and Equity	Millions of yen	Ratio (%)		Millions of yen		Ratio (%)
Current liabilities
Short-term debt (Note 15)	¥	409,851			¥	241,746
Current maturities of long-term debt (Note 15)			278,754					276,623
Trade notes, bills and accounts payable		347,433					338,974
Income taxes payable			44,597					68,337
Current operating lease liabilities		17,551					16,981
Other current liabilities (Notes 9, 14, 15 and 16)			410,849					381,360
Total current liabilities		1,509,035		31.4			1,324,021	30.5
Long-term liabilities
Long-term debt (Note 15)		475,266					429,011
Liability for pension and retirement benefits			96,326					93,407
Long-term operating lease liabilities		45,261					43,458
Deferred income taxes and other liabilities (Notes 9, 14, 15 and 16)			115,859					101,348
Total long-term liabilities		732,712		15.2			667,224	15.3
Total liabilities			2,241,747		46.6			1,991,245		45.8
Commitments and contingent liabilities (Note 13)
Equity
Komatsu Ltd. shareholders' equity
Common stock:
Authorized 3,955,000,000 shares
Issued 973,145,800 shares
Outstanding 945,313,027 shares at June 30, 2022 and
945,312,564 shares at March 31, 2022		69,219					69,393
Capital surplus			135,444					139,572
Retained earnings:
Appropriated for legal reserve			47,988					47,903
Unappropriated		1,929,907					1,902,501
Accumulated other comprehensive income (loss) (Notes 8 and 14)			312,036					122,414
Treasury stock at cost,
27,832,773 shares at June 30, 2022 and 27,833,236 shares at March 31, 2022		(49,329)				(49,272)
Total Komatsu Ltd. shareholders' equity			2,445,265		50.8			2,232,511		51.4
Noncontrolling interests		128,071		2.6			123,766	2.8
Total equity			2,573,336		53.4			2,356,277		54.2
Total liabilities and equity	¥	4,815,083		100.0	¥	4,347,522	100.0

The accompanying Notes are an integral part of these Quarterly Consolidated Financial Statements.

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Consolidated Statements of Income and Consolidated Statements of Comprehensive Income (Unaudited)

Komatsu Ltd. and Consolidated Subsidiaries

Three months ended June 30, 2022 and 2021

Consolidated Statements of Income

		Three months ended		Three months ended
		June 30, 2022		June 30, 2021
	Millions of yen	Ratio(%)			Millions of yen		Ratio(%)
Net sales (Notes 9, 11 and 14)	¥	763,808		100.0			¥	648,266		100.0
Cost of sales (Notes 6, 7 and 14)		545,401		71.4				475,081		73.3
Selling, general and administrative expenses (Notes 6, 7 and 10)		124,039		16.2				112,273	17.3
Other operating income (expenses), net		(806)		(0.1)				838	0.1
Operating income		93,562		12.2				61,750		9.5
Other income (expenses), net
Interest and dividend income		2,236		0.3				992	0.2
Interest expense		(4,672)		(0.6)				(2,967)	(0.5)
Other, net (Notes 5, 7, 8 and 14)		21,349		2.8				1,679	0.3
Total		18,913		2.5				(296)		(0.0)
Income before income taxes and equity in
earnings of affiliated companies		112,475		14.7				61,454	9.5
Income taxes (Note 8)
Current		24,297						15,720
Deferred		5,218						2,310
Total		29,515		3.9				18,030	2.8
Income before equity in earnings of affiliated companies		82,960		10.9				43,424		6.7
Equity in earnings of affiliated companies		1,045		0.1				761	0.1
Net income		84,005		11.0				44,185		6.8
Less: Net income attributable to noncontrolling interests		3,551		0.5				3,293		0.5
Net income attributable to Komatsu Ltd.	¥	80,454		10.5			¥	40,892		6.3
				Yen
Per share data (Note 12):
Net income attributable to Komatsu Ltd.:
Basic	¥	85.11					¥	43.27
Diluted	¥	85.10					¥	43.26

The accompanying Notes are an integral part of these Quarterly Consolidated Financial Statements.

Consolidated Statements of Comprehensive Income

		Millions of yen
	Three months ended	Three months ended
	June 30, 2022	June 30, 2021
Net income	¥	84,005		¥	44,185
Other comprehensive income (loss), for the period, net of tax
Foreign currency translation adjustments (Note 8)		197,525			12,230
Pension liability adjustments (Notes 7 and 8)		176			1,378
Net unrealized holding gains (losses) on derivative instruments (Notes 8 and 14)		(1,140)			861
Total		196,561			14,469
Comprehensive income		280,566			58,654
Less: Comprehensive income attributable to noncontrolling interests		11,966			3,180
Comprehensive income attributable to Komatsu Ltd.	¥	268,600		¥	55,474

The accompanying Notes are an integral part of these Quarterly Consolidated Financial Statements.

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