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Review by Segment  189th period

Annual Business Report 189th period
April 1, 2017 through March 31, 2018

Railway Rolling Stock Business


 In the railway rolling stock business, our sales to the JR Companies amounted to 28,553 million. It was achieved through the sales of the N700S validation test vehicles to JR Central, N700A Shinkansen trains to JR Central and West Japan Railway Company, and the rail transport cars to East Japan Railway Company (hereinafter called as "JR East "). Our sales for the public and private railways reached 7,255 million, including the sales of the Model 70000 trains for Odakyu Electric Railway Co., Ltd.; the Model 3000 trains for Keisei Electric Railway Co., Ltd; the Model N3000 trains for Nagoya Cityfs Transportation Bureau; the Series 3150 and 3300 trains for Nagoya Railroad Co., Ltd.; and the Model 2000 trains for Enshu Railway Co., Ltd. For rail cars for overseas, we had sales of 5,646 million, including the Gallery type passenger car for the U.S.A. Consequently, our total sales for railway rolling stock recorded 41,455 million, down 14.6% from the previous year, with an increase in railway cars for the JR Companies and a decrease in rail cars for overseas and the public and private railways.


Transportation Equipment and Steel Structure Businesses

In the transportation equipment business, sales of chemical engineering machinery products mainly including consumer-purpose LPG bulk tank lorries are steadily in good shape, sale of industrial vehicle products such as carriers and AGV increased, and a decrease in sales of logistics equipment products such as container freight cars. As a result, sales reached 11,229 million, down 16.1% from the previous year.


In the steel structure business, sales included the Tokai- Kanjo Expressway Nagafuke Number 4 Bridge, Kita-Kanto Expressway Ota Parking Area Ramp Bridge, National Route 1 Seishin Bypass Mariko Viaduct, Fujigawa First Overpass, and large-scale renovation work for the Tokaido Shinkansen. Sales were up 30.7% from the previous year to 11,245 million. In all, sales for the transportation equipment and steel structure businesses were 22,475 million, up 2.2% from the previous year.


Construction Equipment Business

In the construction equipment business, the domestic sales in large pile driving rigs continuously showed healthy movement, due to construction works arise from the Great East Japan Earthquake and mands in public works in anticipation of the Tokyo Olympic Games. We also had an increase in sales of casting rotators and compact pile driving rigs. The export business included large pile driving rigs. As a result, the sales of construction equipment totaled 21,360 million, up 10.8% from the previous year.

The generator business showed a decrease in sales of exported products, however, there was an increase in sales of domestic products. The sales of generators reached 3,212 million, up 2.4% from the previous year. In all, sales in our construction equipment business were 24,573 million, up 9.6% from the previous year.



Engineering Business

Our main sales included; mechanical equipment for the Superconducting Maglev system for JR Central; agricultural plants for Japan Agricultural Cooperatives; and paper-manufacturing equipment for household paper manufacturers. We had a decrease in sales of vehicle inspection/repair facilities. Sales in the engineering business totaled 6,560 million, down 12.5% from the previous year.


Other Businesses 

Our main sales included laser processing machines and real estate leasing. We ended our railway memorabilia business during the year under review. The overseas sales for the year under review amount to 9,034 million, representing 9.5% of total sales, which includes 5,646 million for the railway rolling stock business and 3,386 million for the construction equipment business. The orders on hand at the end of the year under review reached 94,310 million. These comprised 62,766 million for the railway rolling stock business (34,121 million for rolling stock for JR Companies such as the N700A Shinkansen trains, 17,675 million for rail cars for other public and private railway companies, 10,969 million for rolling stock for overseas), 26,635 million for the transportation equipment and steel structure businesses (8,741 million for the transportation equipment business, 17,894 million for the steel structure business), 2,549 million for the construction equipment , and 2,316 million for the engineering business.


Investment in Plant and Equipment

Plant and equipment investment during the year under review totaled 1,780 million. Investment was mainly targeted at extension of plants in the construction equipment business to increase production volume. Investment was also made for renewal of equipment to maintain/improve the production capacity at each plant.


Financing Activities

Assets pledged as collateral for long-term debt from JR Central in the amount of 35,000 million ($330,189 thousand) for the payment of settlement money related to a large railway rolling stock project in the U.S.A. as of March 31, 2018 were as follows. The Company has transferred its factory assets of Toyokawa Plant, Kinuura Plant, and Narumi Plant to JR Central on April 20, 2017. The transfer was not treated as a buying and selling transaction since the relevant factory assets were transferred to JR Central and the Company continues to utilize these factory assets as before based on a lease agreement concluded between the Company and JR Central. The relevant factory assets were therefore still recorded under property, plant and equipment of the Company . As the relevant transactions do not fall under a finance lease transaction, the total transfer price was recorded as long-term debt for which the borrowing of the fund is 21,000 million.


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