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Questions and Answers at the Conference on Results for Six Months ended September 30, 2011
/ (Click the questions for the corresponding answers.)

Q1: Please describe the changes in segment profit of the construction, mining and utility equipment business from the first half period under review and your projection for the second half period.

Q2: Does the operating profit ratio of the construction, mining and utility equipment business differ depending on country or region?

Q3: How is Komatsu going to meet the challenge of local makers of construction equipment in China?

Q4: Please explain the background of repurchasing and retiring your own shares at this time?

back to top Q1
Please describe the changes in segment profit of the construction, mining and utility equipment business from the first half period under review and your projection for the second half period.

A1
We are projecting that segment profit for the second half period of the current fiscal year will increase by about 30 billion yen from the first half period, due to an increase of 87 billion yen in sales. While we are estimating a foreign exchange loss of about 8 billion yen from the first half period due to the Japanese yen's appreciation, we should be able to absorb this loss by increasing selling prices and reducing production costs. As a result, we are anticipating an increase of about 30 billion yen from the first half period.

back to top Q2
Does the operating profit ratio of the construction, mining and utility equipment business differ depending on country or region?

A2
Operating profit ratio by region varies depending on how fixed costs are allocated at operations in different regions. As a rough view, however, the regions where their operating profit ratios are over the average of the construction, mining and utility equipment business include China, as well as Latin America, Oceania and Africa which generate a large sales percentage of mining equipment in total sales. Operating profit ratios in Europe and North America are slightly under the average. In Japan where we have the lowest ratio of all regions, we returned to profitability and recorded an operating profit for the first half period under review. In terms of gross profit, there is no big difference among all regions.

back to top Q3
How is Komatsu going to meet the challenge of local makers of construction equipment in China?

A3
We are keeping the same strategies as before. In addition to supplying high-quality, high-performance and high-reliability products, we are concerting our efforts to ensure no downtime of customers' machines through after-sales service by using our KOMTRAX and other ICT advantages. As the number of used equipment imported from Japan has declined, local makers have increased sales of their inexpensive equipment. However, we are consistently targeting the high-end market, and therefore we will not change our strategies.

back to top Q4
Please explain the background of repurchasing and retiring your own shares at this time?

A4
At present, our stock price is very low. Secondly, we have completed major capital investment to expand production capacity and have no immediate plans for further investment. Therefore, it is good timing with respect to our cash flow, and so we have decided to repurchase and retire our own shares in order to further promote returns to shareholders and improve capital efficiency in management.

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