Komatsu : Consolidated Business Results for Three Months of the Fiscal Year Ending March 31, 2021 (U.S. GAAP)

Komatsu Ltd.

Corporate Communications Dept.

Tel: [phone]

Date: July 30, 2020

URL: https://home.komatsu/en/

Consolidated Business Results for Three Months of the Fiscal Year Ending

March 31, 2021 (U.S. GAAP)

1. Results for Three Months Ended June 30, 2020

(Amounts are rounded to the nearest million yen)

(1) Consolidated Financial Highlights

Millions of yen except per share amounts

Net sales Operating income

Income before income taxes and equity in earnings of affiliated companies

Three Months ended	Three Months ended	Changes
June 30, 2020	June 30, 2019	Increase (Decrease)
[A]	[B]
[A-B]	[(A-B)/B]
458,731	609,767	(151,036)	(24.8%)
26,919	74,760	(47,841)	(64.0%)
28,497	66,910	(38,413)	(57.4%)

Net income attributable to Komatsu Ltd.	16,251	47,476	(31,225)	(65.8%)
Net income attributable to Komatsu Ltd.
per share (Yen)
Basic			¥17.20	¥50.30		¥(33.10)
Diluted			¥17.20	¥50.25	¥(33.05)
Note: Comprehensive income for three months ended June 30, 2020 and 2019
2020:	33,911 millions of yen, up 111.3% from 2019
2019:	16,050 millions of yen, down 80.6% from 2018
(2) Consolidated Financial Position
					Millions of yen except per share amounts
				As of June 30, 2020	As of March 31, 2020
Total assets					3,660,884	3,653,686
Total equity					1,853,176	1,856,225
Komatsu Ltd. shareholders' equity			1,763,518	1,771,606
Komatsu Ltd. shareholders' equity ratio			48.2%			48.5%
Komatsu Ltd. shareholders' equity per share (Yen)			¥1,866.83	¥1,875.47

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2. Dividends

(For the fiscal years ended March 31, 2020 and ending March 31, 2021)

Yen

	2020	2021 Projections
First quarter period
Second quarter period	55.00	18.00
Third quarter period
Year-end	39.00	18.00
Total	94.00	36.00

Note: Changes in the latest projected cash dividend as of July 30, 2020: Applicable

3. Projections for the Fiscal Year Ending March 31, 2021

(From April 1, 2020 to March 31, 2021)

Millions of yen except per share amounts

			2021
				Changes
				Increase (Decrease)
	Net sales	2,068,000	(15.4%)
	Operating income	115,000	(54.1%)
	Income before income taxes and equity	108,000	(51.6%)
	in earnings of affiliated companies
	Net income attributable to Komatsu Ltd.	67,000	(56.4%)
	Net income attributable to Komatsu Ltd.

per share - Basic (Yen)

¥70.93

Notes: 1) Changes in the latest projected consolidated business results as of July 30, 2020: Applicable

1. Percentages shown above represent the rates of change compared with the corresponding period a year ago.

4. Others

1. Changes in important subsidiaries during the three-month period under review: None
2. Use of simplified accounting procedures and adoption of specific accounting procedures for the preparation of consolidated quarterly financial statements: None
3. Changes in significant accounting rules, procedures and presentation and changes in significant accounting policies and estimates
4. 1. Changes resulting from revisions in accounting standards, etc.: None
   2. Changes in other matters except for 1) above: None

Note: See (4) Others on page 11 for more details.

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(4) Number of common shares outstanding

1) The numbers of common shares issued (including treasury stock) were as follows: As of June 30, 2020: 972,581,230 shares

As of March 31, 2020: 972,581,230 shares

2) The numbers of shares of treasury were as follows: As of June 30, 2020: 27,923,432 shares

As of March 31, 2020: 27,959,273 shares

1. The weighted average numbers of common shares outstanding were as follows: Three months ended June 30, 2020: 944,058,787 shares
   Three months ended June 30, 2019: 943,653,998 shares

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Appendix

Management Performance and Financial Conditions

(1) Outline of Operations and Business Results …………..……………………… P.5

1. Financial Conditions ……………………………………………..……………. P.9
2. Projection for the Fiscal Year Ending March 31, 2021 ………………………… P.9
3. Others…………….………………………..…………………………………… P.11

Consolidated Financial Statements

1. Consolidated Balance Sheets …………………………………………………… P.12
2. Consolidated Statements of Income and
   Consolidated Statements of Comprehensive Income…………………………… P.14
3. Consolidated Statements of Cash Flows ……………………………………… P.16

(4) Note to the Going Concern Assumption ……………………………………… P.17

1. Business Segment Information ………………………………………………… P.17
2. Note in Case of Notable Changes in the Amount of Shareholders' Equity …… P.18

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Management Performance and Financial Conditions

(1) Outline of Operations and Business Results

Komatsu Ltd. ("Company") and its consolidated subsidiaries (together "Komatsu") have engaged in the three-yearmid-term management plan (FY2019 - 2021), "DANTOTSU Value - FORWARD Together for Sustainable Growth" for its 100th anniversary in 2021 and beyond. Under the mid-term management plan, launched in April 2019, Komatsu upholds three pillars of growth strategies of 1) value creation by means of innovation, 2) growth strategies based on business reforms, and 3) structural reforms for growth. The outlook remains unclear and uncertain for Komatsu's construction, mining and utility equipment business, as well as industrial machinery and others business, as mainly affected by slack business conditions impacted by the coronavirus (COVID-19) pandemic. However, Komatsu will continue to make efforts for sustainable growth through a positive cycle of improving earnings and solving ESG issues in the future.

For the first three-month period (April 1- June 30, 2020) of the fiscal year ending March 31, 2021, the second year of the mid-term management plan, consolidated net sales totaled JPY 458.7 billion, down 24.8% from the corresponding period a year ago. In the construction, mining and utility equipment business, demand fell, centering on North America, Europe and Asia, as particularly affected by the coronavirus (COVID-19) pandemic. As a result, sales declined from the corresponding period a year ago. In the industrial machinery and others business, demand for presses, sheet-metal machines, and machine tools fell against the coronavirus (COVID-19) pandemic. As a result, sales fell from the corresponding period a year ago.

With respect to profits for the first three-month period under review, operating income dropped by 64.0% from the corresponding period a year ago, to JPY 26.9 billion. This was mainly due to reduced sales volume, a change in the geographic composition of sales, and the Japanese yen's appreciation in the construction, mining and utility equipment business. The operating income ratio decreased by 6.4 percentage points to 5.9%. Income before income taxes and equity in earnings of affiliated companies fell by 57.4% to JPY 28.4 billion. Net income attributable to Komatsu Ltd. totaled JPY 16.2 billion, down 65.8%.

In July this year, Komatsu issued its first green bond, an unsecured straight bond, through a public offering on the Japanese market, for which it had decided on issuance in June. By raising funds limited for exclusive use in business, which works to help solve environmental problems, Komatsu is going to further accelerate its ESG management targets defined in the mid-term management plan to help realize a decarbonized society.

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[Consolidated Financial Highlights]
				Millions of yen
		Three Months	Three Months
		ended June 30,	ended June 30,	Changes
	2020	2019
	Increase
		1USD=JPY107.5	1USD=JPY110.0
		(Decrease)
		1EUR=JPY118.6	1EUR=JPY123.2
		1RMB=JPY15.1	1RMB=JPY16.2
		[A]	[B]	[(A-B)/B]
Net sales		458,731	609,767	(24.8%)
Construction, Mining and Utility Equipment	425,811	561,477	(24.2%)
Retail Finance	15,921	17,279	(7.9%)
Industrial Machinery and Others	25,022	34,021	(26.5%)
Elimination	(8,023)	(3,010)	-
Segment profit	26,638	72,743	(63.4%)
Construction, Mining and Utility Equipment	23,200	68,689	(66.2%)
Retail Finance	1,895	3,404	(44.3%)
Industrial Machinery and Others	1,707	554	208.1%
Corporate & elimination	(164)	96	-
Operating income	26,919	74,760	(64.0%)
Income before income taxes and equity	28,497	66,910	(57.4%)
in earnings of affiliated companies
Net income attributable to Komatsu Ltd.	16,251	47,476	(65.8%)

Note: Unless otherwise noted, all sales by segment in this report indicate the amounts before elimination of inter- segment transactions.

Business results by operation are described below.

Construction, Mining and Utility Equipment

For the first three-month period under review, sales of the construction, mining and utility equipment business decreased by 24.2% from the corresponding period a year ago, to JPY 425.8 billion. Segment profit fell by 66.2% to JPY 23.2 billion.

While demand plunged, as particularly affected by slack economic activities worldwide mainly due to the coronavirus (COVID-19) pandemic, Komatsu has been fulfilling its responsibilities for customers engaging in essential businesses to support critical social infrastructure by providing in the continuous supply of its products, parts and service for them.

Concerning the efforts of focus defined in the three pillars of growth strategies in the mid-term management plan, in the Autonomous Haulage System (AHS) business, Komatsu achieved a steady increase of AHS dump trucks in operation. The total as of June 30, 2020, was 251 units in 11 mines in four countries. Since the start of its commercial deployment in 2008, Komatsu has accomplished a cumulative total of 3 billion tons of hauled materials.

With respect to the "SMARTCONSTRUCTION Digital Transformation", a solutions business for construction workplaces, which consists of four IoT devices and eight applications, Komatsu is appealing its role as a solution of preventing the spread of the coronavirus (COVID-19) pandemic at construction workplaces. At the same time, it is working to accelerate the speed of achieving digital transformation of overseas construction workplaces in addition to Japan.

In Japan, Komatsu introduced the PC30E-5 electric mini excavator which emphasizes environmental benefits. In Strategic Markets, such as China and Southeast Asia, Komatsu promoted its efforts to launch and

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expand sales of new Strategic Market-specific models, such as PC210/215-10M0 and PC500LC-10M0. They feature improved environmental durability in addition to fuel economy and other leading-edge technologies.

[Sales to Outside Customers of Construction, Mining and Utility Equipment by Region]

					Millions of yen
		Three Months ended	Three Months ended	Changes
		June 30,2020	June 30,2019	Increase (Decrease)
		[A]	[B]	[A-B]	[(A-B)/B]
Japan	61,407	63,777	(2,370)	(3.7%)
	North America	99,067	143,434	(44,367)	(30.9%)
	Latin America	61,576	74,528	(12,952)	(17.4%)
Americas	160,643	217,962	(57,319)	(26.3%)
	Europe	35,809	59,147	(23,338)	(39.5%)
	CIS	24,337	34,050	(9,713)	(28.5%)
Europe & CIS	60,146	93,197	(33,051)	(35.5%)
China	43,172	36,237	6,935	19.1%
	Asia*	23,350	62,383	(39,033)	(62.6%)
	Oceania	50,583	56,135	(5,552)	(9.9%)
Asia* & Oceania	73,933	118,518	(44,585)	(37.6%)
	Middle East	4,222	6,936	(2,714)	(39.1%)
	Africa	16,482	23,971	(7,489)	(31.2%)
Middle East & Africa	20,704	30,907	(10,203)	(33.0%)
Total	420,005	560,598	(140,593)	(25.1%)

Note: *Excluding Japan and China

Komatsu's operations by region are described below.

Japan

For the first three-month period under review, while the coronavirus (COVID-19) pandemic had a small impact on public works, sales declined from the corresponding period a year ago, as adversely affected by slack conditions of private-sector construction, as well as limited sales and service activities of Komatsu under the state of emergency declared by the Japanese government.

Americas

In North America, sales dropped sharply from the corresponding period a year ago, mainly as demand for construction equipment plummeted especially in the rental industry, resulting from slack economic activities under the coronavirus (COVID-19) pandemic. Demand also declined in the energy-related sector due to adverse effects of falling crude prices. In Latin America, sales declined, as demand for construction and mining equipment dropped in Chile and other countries. At the same time, the effects of the coronavirus (COVID-19) pandemic were small, due to the government's economy-prioritized policy in Brazil.

Europe and CIS

In Europe, sales declined drastically from the corresponding period a year ago, as demand plunged especially in the major markets of Germany, the United Kingdom and France under restricted economic activities enforced by the respective governments. In CIS, sales decreased, especially affected by sluggish demand for mining equipment in coal mines, while demand was steady in gold mines.

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China

The coronavirus (COVID-19) pandemic pushed back the post-Chinese New Year sales season to March and onward from February this year, and Komatsu steadfastly captured demand which had dynamically expanded. As a result, sales improved from the corresponding period a year ago, even when the share of sales made by domestic manufacturers increased.

Asia and Oceania

In Asia, sales dropped sharply from the corresponding period a year ago, as adversely affected by not only sluggish demand for mining equipment in Indonesia, the largest market of the region, resulting from the declining price of thermal coal, but also reduced demand for construction equipment, mainly in Indonesia, India and the Philippines, as restricted economic activities enforced by the respective governments. In Oceania, sales declined, adversely affected by depreciation of the Australian dollar, while demand remained steady for mining equipment.

Middle East and Africa

In the Middle East, sales declined drastically from the corresponding period a year ago, as adversely affected by not only dropped demand against the coronavirus (COVID-19) pandemic, but also sluggish demand, especially in oil producing countries against the backdrop of sluggish crude oil prices. In Africa, sales dropped sharply, mainly affected by reduced demand as the governments restricted economic activities in response to the coronavirus (COVID-19) pandemic in Southern Africa.

Retail Finance

Revenues decreased by 7.9% from the corresponding period a year ago, to JPY 15.9 billion, supported by reduced assets centering on North America. Segment profit fell by 44.3% to JPY 1.8 billion, mainly reflecting adverse effects of extension of payments and revaluation of vehicles after lease use.

Industrial Machinery and Others

For the first three-month period under review, sales fell by 26.5% from the corresponding period a year ago, to JPY

25.0 billion, mainly affected by declined demand for and delayed installation of presses, sheet-metal machines, and machine tools at customers' workplaces under the coronavirus (COVID-19) pandemic. Meanwhile, sales of Excimer laser-related products in the semiconductor market remained steady. Segment profit expanded by 208.1% to JPY 1.7 billion.

In April this year, Komatsu Industries Corp. began sales of its TFP510-3 TWISTER, a universal, high- performance plasma cutting machine for medium and thick plates of mild steel, which integrates Komatsu's leading-edge plasma cutting technologies.

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(2) Financial Conditions

As of June 30, 2020, total assets increased by JPY 7.1 billion from the previous fiscal year-end, to JPY 3,660.8 billion, mainly affected by the Japanese yen's depreciation against the Australian dollar and some other currencies. There were also increased inventories, while receivables decreased. Interest-bearing debt increased by JPY 35.4 billion from the previous fiscal year-end, to JPY 1,047.8 billion. Komatsu Ltd. shareholders' equity decreased by JPY 8.0 billion from the previous fiscal year-end, to JPY 1,763.5 billion. As a result, Komatsu Ltd. shareholders' equity ratio decreased by 0.3 percentage points from the previous fiscal year-end, to 48.2%.

For the first three-month period under review, net cash provided by operating activities totaled JPY 55.0 billion. This is a decrease of JPY 2.8 billion from the corresponding period a year ago, due to increased inventories, while good progress was made in the collection of trade notes and account receivables. Net cash used in investing activities amounted JPY 35.4 billion, a decrease of JPY12.1 billion, mainly due to the purchase of fixed assets. Net cash used in financing activities amounted to JPY 12.0 billion (as compared to JPY 33.3 billion provided for the corresponding period a year ago), mainly due to the payment of cash dividends, while Komatsu funded by issuing commercial papers. After adding the effects of foreign exchange fluctuations to the total amount of each cash flow, as of June 30, 2020, cash and cash equivalents totaled JPY 255.1 billion, an increase of JPY 7.4 billion from the previous fiscal year-end.

1. Projection for the Fiscal Year Ending March 31, 2021 (From April 1, 2020 to March 31, 2021)

Concerning the projection for the fiscal year ending March 31, 2021, which was undecided in the "Consolidated Business Results for the Fiscal Year Ended March 31, 2020 (U.S. GAAP)", which Komatsu announced on May 18, 2020, Komatsu has calculated the projections based on information and predictions which are available as of today, and is projecting a decline in both sales and profits as follows.

In the construction, mining and utility equipment business, Komatsu anticipates a decline in sales, reflecting reduced demand as affected by the coronavirus (COVID-19) pandemic. Komatsu expects demand will enter a recovery phase in the third quarter in the Traditional Markets*, and in the fourth quarter in the Strategic Markets*. With respect to China, Komatsu anticipates steady demand, as the post-Chinese New Year sales season was pushed back from February this year and the Chinese government has implemented measures to support the economy, such as infrastructure investment. Komatsu also anticipates that demand for parts and service will recover before equipment, based on KOMTRAX data which shows a recovery trend of machine operations on worksites. Concerning profits, Komatsu estimates a decline, mainly due to reduced sales volume, a change in the geographic composition of sales, and the Japanese yen's appreciation.

In the retail finance business, Komatsu anticipates a decline in revenues mainly affected by a decrease in new contracts. Segment profit will fall mainly due to adverse effects of extension of payments and revaluation of vehicles after lease use.

In the industrial machinery and others business, Komatsu anticipates that challenging conditions will continue, such as a delay or curtailment of new capital investments in the automobile manufacturing industry. On the semiconductor market, however, Komatsu expects that demand will remain steady. As a result, Komatsu anticipates both sales and profits will increase.

As preconditions for its projection, Komatsu anticipates the foreign exchange rates will be USD1=JPY105, EUR1=JPY116, and RMB1=JPY15.0 in the second quarter through the fourth quarter, and assumes the average exchange rates for the full year will be as follows: USD1=JPY105.6, EUR1=JPY116.7 and RMB1=JPY15.0

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Notes*: Markets as Positioned by Komatsu

Traditional Markets: Japan, North America and Europe.

Strategic Markets: China, Latin America, Asia, Oceania, Africa, Middle East and CIS.

[Projections]			Millions of yen
	2021	2020
	Projections	Results	Changes
	1USD=JPY105.6	1USD=JPY108.7	Increase
	1EUR=JPY116.7	1EUR=JPY120.8	(Decrease)
	1RMB=JPY15.0	1RMB=JPY15.6
	[A]	[B]	[(A-B)/B]
Net sales	2,068,000	2,444,870	(15.4%)
Construction, Mining and Utility Equipment	1,845,000	2,211,263	(16.6%)
Retail Finance	68,000	70,910	(4.1%)
Industrial Machinery and Others	181,000	177,586	1.9%
Elimination	(26,000)	(14,889)	-
Segment profit	121,000	255,030	(52.6%)
Construction, Mining and Utility Equipment	98,000	227,311	(56.9%)
Retail Finance	10,000	12,673	(21.1%)
Industrial Machinery and Others	14,000	13,703	2.2%
Corporate & elimination	(1,000)	1,343	-
Operating income	115,000	250,707	(54.1%)
Income before income taxes and equity	108,000	223,114	(51.6%)
in earnings of affiliated companies
Net income attributable to Komatsu Ltd.	67,000	153,844	(56.4%)

Note: Unless otherwise noted, all sales by segment in this report indicate the amounts before elimination of inter- segment transactions.

Basic Policy for Redistribution of Profits and Dividends for the Fiscal Year under Review

Komatsu is building a sound financial position and is enhancing its competitiveness in order to increase its sustainable corporate value. Concerning cash dividends, Komatsu has the policy of continuing stable payment of dividends after comprehensively considering consolidated business results and reviewing future investment plans, cash flows and the like. Specifically, Komatsu has the policy of maintaining a consolidated payout ratio of 40% or higher.

As described earlier in this report, Komatsu anticipates that demand will decline in all regions, except for China, mainly in the construction, mining and utility equipment business, as affected by the coronavirus (COVID-

1. pandemic. Accordingly, Komatsu projects a decline in both consolidated sales and profits. Concerning the projection of cash dividends for the year, which was undecided in the "Consolidated Business Results for the Fiscal Year Ended March 31, 2020 (U.S. GAAP)", that Komatsu announced on May 18, 2020, Komatsu plans to pay JPY 18 per share for the interim dividend and JPY 18 for the year-end dividend. This was based on the above- mentioned basic policy after considering consolidated business results, and reviewing future business prospects. Therefore, the annual dividends will total JPY 36 per share, a decline from JPY 58 for the previous fiscal year ended March 31, 2020, and the consolidated payout ratio will become 50.8%.
2. • 10 -

1. Others

1. Changes in important subsidiaries during the three-month period under review: None
2. Use of simplified accounting procedures and adoption of specific accounting procedures for the preparation of consolidated quarterly financial statements: None
3. Changes in significant accounting rules, procedures and presentation and changes in significant accounting policies and estimates

1. Changes resulting from revisions in accounting standards, etc.: None
2. Changes in other matters except for a) above: None

Cautionary Statement

The announcement set forth herein contains forward-looking statements which reflect management's current views 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" 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.

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 the Company's principal products, owing to changes in the economic conditions in the Company's principal markets; changes in exchange rates or the impact of increased competition; unanticipated cost or delays encountered in achieving the Company's objectives with respect to globalized product sourcing and new Information Technology tools; uncertainties as to the results of the Company's research and development efforts and its ability to access and protect certain intellectual property rights; and, the impact of regulatory changes and accounting principles and practices.

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Consolidated Financial Statements

(1) Consolidated Balance Sheets

Assets
					Millions of yen
		As of June 30, 2020		As of March 31, 2020
			Ratio			Ratio
			(%)			(%)
Current assets
Cash and cash equivalents	¥	255,102		¥	247,616
Time deposits		2,128			2,057
Trade notes and accounts receivable, net		664,554			744,395
Inventories		866,723			805,309
Other current assets		148,826			147,413
Total current assets		1,937,333	52.9		1,946,790	53.3
Long-term trade receivables, net		435,937	11.9		420,918	11.5
Investments
Investments in and advances to affiliated companies		38,451			38,210
Investment securities		7,217			7,328
Other		2,475			2,436
Total investments		48,143	1.3		47,974	1.3
Property, plant and equipment		755,282	20.6		757,679	20.8
- less accumulated depreciation and amortization
Operating lease right-of-use assets		53,478	1.5		53,454	1.5
Goodwill		160,403	4.4		157,521	4.3
Other intangible assets		164,122	4.5		162,062	4.4
- less accumulated amortization
Deferred income taxes and other assets		106,186	2.9		107,288	2.9
Total	¥	3,660,884	100.0	¥	3,653,686	100.0

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Liabilities and Equity

							Millions of yen
			As of June 30, 2020		As of March 31, 2020
				Ratio				Ratio
				(%)				(%)
Current liabilities
Short-term debt	¥	473,332		¥	483,658
Current maturities of long-term debt		135,186			118,880
Trade notes, bills and accounts payable		204,263			220,160
Income taxes payable		22,793			23,169
Current operating lease liabilities		14,778			14,933
Other current liabilities		291,773			297,825
Total current liabilities		1,142,125	31.2		1,158,625	31.7
Long-term liabilities
Long-term debt		439,347			409,840
Liability for pension and retirement benefits		94,911			96,392
Long-term operating lease liabilities		38,659			38,624
Deferred income taxes and other liabilities		92,666			93,980
Total long-term liabilities		665,583	18.2		638,836	17.5
Total liabilities		1,807,708	49.4		1,797,461	49.2
Komatsu Ltd. shareholders' equity
Common stock		68,689			68,689
Capital surplus		136,381			136,459
Retained earnings:
Appropriated for legal reserve		47,178			46,813
Unappropriated		1,678,504			1,699,477
Accumulated other comprehensive income (loss)		(118,141)			(130,666)
Treasury stock		(49,093)			(49,166)
Total Komatsu Ltd. shareholders' equity		1,763,518	48.2		1,771,606	48.5
Noncontrolling interests		89,658	2.4		84,619	2.3
Total equity		1,853,176	50.6		1,856,225	50.8
Total	¥	3,660,884	100.0	¥	3,653,686	100.0

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1. Consolidated Statements of Income and Consolidated Statements of Comprehensive Income

Consolidated Statements of Income

		Millions of yen except per share amounts
		Three Months ended		Three Months ended
		June 30, 2020		June 30, 2019
			Ratio			Ratio
			(%)			(%)
Net sales	¥	458,731	100.0	¥	609,767	100.0
Cost of sales		334,720	73.0		427,357	70.1
Selling, general and administrative expenses		97,373	21.2		109,667	18.0
Other operating income (expenses), net		281	0.1		2,017	0.3
Operating income		26,919	5.9		74,760	12.3

Other income (expenses), net

Interest and dividend income		1,185	0.3		1,746	0.3
Interest expense		(3,841)	(0.8)		(6,650)	(1.1)
Other, net		4,234	0.9		(2,946)	(0.5)
Total other income (expenses), net		1,578	0.4		(7,850)	(1.3)
Income before income taxes and equity		28,497	6.2		66,910	11.0
in earnings of affiliated companies
Income taxes		9,818	2.1		17,831	2.9
Income before equity in earnings of affiliated		18,679	4.1		49,079	8.0
companies
Equity in earnings of affiliated companies		551	0.1		668	0.1
Net income		19,230	4.2		49,747	8.2
Less: Net income attributable to noncontrolling
	2,979	0.6		2,271	0.4
interests
Net income attributable to Komatsu Ltd.	¥	16,251	3.5	¥	47,476	7.8
Net income attributable to Komatsu Ltd.
per share (Yen)
Basic	¥	17.20		¥	50.30
Diluted	¥	17.20		¥	50.25

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Consolidated Statements of Comprehensive Income

								Millions of yen
		Three Months ended	Three Months ended
			June 30, 2020		June 30, 2019
Net income	¥	19,230		¥	49,747
Other comprehensive income (loss), for the period,
net of tax
Foreign currency translation adjustments		14,654			(33,311)
Pension liability adjustments		264			328
Net unrealized holding gains (losses) on derivative		(237)			(714)
instruments
Total other comprehensive income (loss), for the			14,681			(33,697)
period, net of tax
Comprehensive income			33,911			16,050
Less: Comprehensive income (loss) attributable to			5,135			(447)
noncontrolling interests
Comprehensive income attributable		¥	28,776		¥	16,497
to Komatsu Ltd.

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(3) Consolidated Statements of Cash Flows

						Millions of yen
		Three Months ended	Three Months ended
			June 30, 2020		June 30, 2019
Operating activities
¥	19,230		¥	49,747
Net income
Adjustments to reconcile net income to net cash provided by (used
in) operating activities:
Depreciation and amortization		31,822			32,677
Deferred income taxes		(258)			4,749
Impairment loss and net loss (gain) on valuation of investment		88			(18)
securities
Net loss (gain) on sale of fixed assets		(56)			(444)
Loss on disposal of fixed assets		353			694
Pension and retirement benefits, net		(1,110)			(1,554)
Changes in assets and liabilities:
Decrease (increase) in trade receivables		80,129			35,377
Decrease (increase) in inventories		(52,889)			(56,019)
Increase (decrease) in trade payables		(16,319)			(7,657)
Increase (decrease) in income taxes payable		(652)			(16,858)
Other, net		(5,310)			17,215
Net cash provided by (used in) operating activities			55,028			57,909
Investing activities		(37,267)			(43,998)
Capital expenditures
Proceeds from sale of fixed assets		3,127			4,390
Proceeds from sale of investment securities		7			415
Purchases of investment securities		(34)			(218)
Acquisition of subsidiaries and equity investees, net of cash		(1,717)			(7,459)
acquired
Other, net		439			(757)
Net cash provided by (used in) investing activities			(35,445)			(47,627)
Financing activities
Proceeds from debt issued (Original maturities greater than three		193,557			138,093
months)
Payment on debt (Original maturities greater than three months)		(148,444)			(115,411)
Short-term debt, net (Original maturities three months or less)		(18,955)			70,053
Dividends paid		(36,859)			(55,719)
Other, net		(1,343)			(3,685)
Net cash provided by (used in) financing activities			(12,044)			33,331
Effect of exchange rate change on cash and cash equivalents			(53)			1,395
Net increase (decrease) in cash and cash equivalents			7,486			45,008
Cash and cash equivalents, beginning of year			247,616			148,479
Cash and cash equivalents, end of period		¥	255,102		¥	193,487

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(4) Note to the Going Concern Assumption

None

(5) Business Segment Information

1) Information by Operating Segments (For Three Months ended June 30, 2020)

						Millions of yen
	Construction,		Industrial
	Mining and	Retail		Corporate &
	Machinery	Subtotal		Total
	Utility	Finance	elimination
	and Others
	Equipment
Net sales:
Customers	420,005	13,948	24,778	458,731	-		458,731
Intersegment	5,806	1,973	244	8,023	(8,023)		-
Total	425,811	15,921	25,022	466,754	(8,023)	458,731
Segment profit	23,200	1,895	1,707	26,802	(164)	26,638
(For Three Months ended June 30, 2019)
						Millions of yen
	Construction,		Industrial
	Mining and	Retail		Corporate &
	Machinery	Subtotal		Total
	Utility	Finance	elimination
	and Others
	Equipment
Net sales:
Customers	560,598	15,466	33,703	609,767	-		609,767
Intersegment	879	1,813	318	3,010	(3,010)		-
Total	561,477	17,279	34,021	612,777	(3,010)	609,767
Segment profit	68,689	3,404	554	72,647	96	72,743

Notes: 1) Business categories and principal products & services included in each operating segment are as follows:

1. Construction, Mining and Utility Equipment
   Excavating equipment, loading equipment, grading & roadbed preparation equipment, hauling equipment, forestry equipment, tunneling machines, underground mining equipment, recycling equipment, industrial vehicles, other equipment, engines & components, casting products, and logistics
2. Retail Finance Financing
3. Industrial Machinery and Others

Metal forging & stamping presses, sheet-metal machines, machine tools, defense systems, temperature-control equipment, and optical machinery

2) Transfers between segments are made at estimated arm's-length prices.

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2) Geographic Information

Net sales determined by customer location were as follows: (For Three Months ended June 30, 2020 and 2019)

							Millions of yen
	Japan	Americas	Europe &	China	Asia* &	Middle East	Total
	CIS	Oceania	& Africa
FY2020	74,243	173,149	62,282	46,700	81,593	20,764	458,731
FY2019	78,076	233,182	94,971	43,290	129,308	30,940	609,767

Note: * Excluding Japan and China

(6) Note in Case of Notable Changes in the Amount of Shareholders' Equity

None

(end)

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