Edgar Filing: KOMATSU LTD

Form 6-K

FORM 6-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 under

the Securities Exchange Act of 1934

For the month of October, 2007

COMMISSION FILE NUMBER: 1-7239

KOMATSU LTD.

Translation of registrant’s name into English

3-6 Akasaka 2-chome, Minato-ku, Tokyo, Japan

Address of principal executive office

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F x Form 40-F ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes ¨ No x

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-

INFORMATION TO BE INCLUDED IN REPORT

1.	Three company announcements made on October 30, 2007.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	KOMATSU LTD.
	(Registrant)

Date: October 31, 2007	By:	/s/ Kenji Kinoshita
		Kenji Kinoshita
		Director and Senior Executive Officer




				Komatsu Ltd.
				Corporate Communications Dept.
				Tel: +81-(0)3-5561-2616
				Date: October 30th, 2007
				URL: http://www.komatsu.com/

Consolidated Interim Business Results

for the Fiscal Year Ending March 31, 2008 (U.S. GAAP)

1. Results for the First Half of the Fiscal Year Ending March 31, 2008

(Amounts are rounded to the nearest million yen)

(1) Consolidated Financial Results

Millions of yen & US dollars

except per share amounts


	First half ended September 30, 2007 (A)				First half ended September 30, 2006 (B)		Changes Increase (A)-(B)			FY ended March 31, 2007
	Yen		Dollar		Yen		Yen		%	Yen
Net sales		1,080,042	9,392			888,491		191,551	21.6		1,893,343
Operating income		162,972	1,417			112,546		50,426	44.8		244,741
Income from continuing operations before income taxes, minority interests and equity in earnings of affiliated companies		158,584	1,379			108,078		50,506	46.7		236,491

Net income		103,800	903			67,208		36,592	54.4		164,638

Net income per share (Yen & US cents)
Basic	¥	104.36	90.7	¢	¥	67.65	¥	36.71		¥	165.70
Diluted	¥	104.21	90.6	¢	¥	67.51	¥	36.70		¥	165.40


Notes:	1	)	The translation of Japanese yen amounts into US dollar amounts hereafter is included solely for convenience and has been made for the first half ended September 30, 2007 at the rate of ¥115 to $1, the approximate rate of exchange at September 30, 2007.

	2	)	Equity in earnings of affiliated companies:
			First half period ended September 30, 2007: 3,310 millions of yen
			First half period ended September 30, 2006: 1,307 millions of yen
			The entire fiscal year ended March 31, 2007: 3,098 millions of yen

	3	)	In accordance with Statement of Financial Accounting Standards No.144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” the consolidated statements of income for the first half ended September 30, 2006 have been retrospectively reclassified as for the discontinued operations.

(2) Consolidated Financial Position

Millions of yen except

per share amounts


	As of September 30, 2007			As of September 30, 2006			As of March 31, 2007
Total assets		1,927,026			1,762,030			1,843,982
Shareholders’ equity		872,655			683,198			776,717
Shareholders’ equity ratio		45.3	%		38.8	%		42.1	%
Shareholders’ equity per share (Yen)	¥	877.02		¥	687.54		¥	781.57

(3) Consolidated Cash Flow

Millions of yen


	First half ended September 30, 2007		First half ended September 30, 2006		The entire FY ended March 31, 2007
Net cash provided by operating activities	86,702		102,512		162,124
Net cash used in investing activities	(33,416	)	(72,062	)	(99,620	)
Net cash used in financing activities	(27,488	)	(16,607	)	(41,389	)
Cash and cash equivalents, end of period	117,546		84,100		92,199

2. Dividends

Yen


	The entire FY ending March 31, 2008		The entire FY ended March 31, 2007
	(Results)	(Projection)	The entire FY ended March 31, 2007
Cash dividends per share:
Interim	20.0	—	13.0
Year-end	—	20.0	18.0
Total		40.0	31.0

3. Projections for the Fiscal Year Ending March 31, 2008

Millions of yen except

per share amounts


	The entire fiscal year
Net sales		2,210,000 (up 16.7%	)
Operating income		325,000 (up 32.8%	)
Income from continuing operations before income taxes, minority interests and equity in earnings of affiliated companies		316,000 (up 33.6%	)
Net income		205,000 (up 24.5%	)

Net income per share (basic)	¥	206.02


Notes:	1	)	Percentages shown above represent the rates of change compared with the corresponding periods a year ago.

	2	)	Refer to “Management Performance and Financial Conditions” for preconditions of the projections above and other related issues.

4. Others

(1) Changes in Group of Entities

Consolidated subsidiaries


Added:		10 companies
Added: (From affiliated companies)		1 company
Removed: (Merger etc.)		8 companies

Affiliated companies accounted for by the equity method


Added:		2 companies
Removed: (To consolidated subsidiaries)		1 company
Removed: (Exclusion)		1 company

Note:

See “Basis of Financial Statements (Consolidated)” on page 19 for more details.

(2) Changes in Accounting Principles, Procedures and Presentations

1) Changes resulting from revisions in accounting principles, etc.: None

2) Change in other matters except for 1) above: None

(3) Number of Shares of Common Stock Outstanding

1) The number of shares issued was as follows:


As of September 30, 2007:		998,744,060 shares
As of September 30, 2006:		998,744,060 shares
As of March 31, 2007:		998,744,060 shares

2) The number of shares of treasury stock was as follows:


As of September 30, 2007:		3,715,701 shares
As of September 30, 2006:		5,062,891 shares
As of March 31, 2007:		4,957,301 shares

3) The average number of shares outstanding was as follows:


First half period ended September 30, 2007:		994,615,040 shares
First half period ended September 30, 2006:		993,514,498 shares
The entire fiscal year ended March 31, 2007:		993,597,436 shares

Note:

See “Net Income per Share” on page 25 for the number of shares of common stock, which was used as the basis for calculating the amount of net income per share.

[Reference]

Financial Highlights of the Parent Company

The following financial information is prepared based on the non-consolidated financial results of the parent company in accordance with generally accepted accounting principles in Japan.

1. Results for the First Half of the Fiscal Year Ending March 31, 2008

(1) Non-Consolidated Financial Highlights

Millions of yen & US dollars

except per share amounts


	First half ended September 30, 2007 (A)				First half ended September 30, 2006 (B)		Changes Increase (A)-(B)			FY ended March 31, 2007
	Yen		Dollar		Yen		Yen		%	Yen
Net sales		424,136	3,688			355,793		68,343	19.2		758,529
Operating profit		59,399	517			39,001		20,398	52.3		90,475
Ordinary profit		71,929	625			45,546		26,383	57.9		98,149

Net income		56,765	494			30,725		26,040	84.8		82,843

Net income per share (Yen & US cents)
Basic	¥	57.04	49.6	¢	¥	30.91	¥	26.13		¥	83.34


Note:		The translation of Japanese yen amounts into US dollar amounts is included solely for convenience and has been made for the first half ended September 30, 2007, at the rate of ¥115 to $1, the approximate rate of exchange at September 30, 2007.

(2) Non-Consolidated Financial Position

Millions of yen except

per share amounts


	As of September 30, 2007			As of September 30, 2006			As of March 31, 2007
Total assets		1,013,291			920,942			974,858
Net assets		621,130			529,185			576,139
Equity ratio (%)		61.2	%		57.4	%		59.0	%
Net assets per share (Yen)	¥	623.11		¥	532.08		¥	578.74

2. Projections for the Fiscal Year Ending March 31, 2008

Millions of yen except

per share amount


	The entire fiscal year
Net sales		895,000 (up 18.0%)
Operating profit		113,000 (up 24.9%)
Ordinary profit		124,000 (up 26.3%)
Net income		90,000 (up 8.6%)

Net income per share (Yen)	¥	90.40


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

Management Performance and Financial Conditions

1. Outline of Operations and Business Results

For the interim period ended September 30, 2007, the Komatsu Group registered its sixth consecutive interim period of growth in consolidated interim sales and profits, which also represents record-high 6-month figures. These results reflect a continued improvement of the construction and mining equipment business as well as a good performance of the industrial machinery, vehicles and others business.

Consolidated net sales for the interim period under review reached ¥1,080.0 billion (US$9,392 million), up 21.6% from the previous interim period. For the construction and mining equipment business, demand remained strong against the backdrop of buoyant resource developments and infrastructure improvements around the world. While collaborating with its suppliers, the Komatsu Group continued to expand its production capacity by embarking on full-scale production at the Ibaraki Plant and building the second manufacturing facility for transmissions at the Awazu Plant. The Komatsu Group boosted interim sales by advancing sales of DANTOTSU products which feature enhanced fuel consumption and operating efficiency, by achieving price realization, and by reinforcing its product support capabilities. The Komatsu Group also stepped up interim sales of the industrial machinery, vehicles and others business, centering on forklift trucks and industrial machinery, as steady capital investments remained in Japan and overseas.

Operating income for the interim period totaled ¥162.9 billion (US$1,417 million), registering a substantial increase of 44.8% over the previous interim period. Operating income ratio improved to 15.1%, up 2.4 percentage points a year ago. The solid improvement in operating income reflects not only expanded sales centering on construction and mining equipment but also price realization both in Japan and overseas. As a result, income from continuing operations before income taxes, minority interests and equity in earnings of affiliated companies increased 46.7% over the previous interim period, to ¥158.5 billion (US$1,379 million) for the interim period under review. Net income for the interim period reached ¥103.8 billion (US$903 million), up 54.4% a year ago.

[Consolidated Results for the Year]


	First half ended September 30, 2007		Changes (2007/2006)		First half ended September 30, 2007
Net sales	¥	1,080.0 billion	21.6	%	US$	9,392 million
Operating income	¥	162.9 billion	44.8	%	US$	1,417 million
Income from continuing operations before income taxes, minority interests and equity in earnings of affiliated companies	¥	158.5 billion	46.7	%	US$	1,379 million
Income from discontinued operations	¥	4.9 billion	—		US$	43 million
Net income	¥	103.8 billion	54.4	%	US$	903 million

Results by operation are summarized below.

[Sales by Operation]


	First half ended September 30, 2007		Changes (2007/2006)		First half ended September 30, 2007
Construction and Mining Equipment	¥	914.3 billion	23.8	%	US$	7,951 million
Industrial Machinery, Vehicles and Others	¥	165.6 billion	10.6	%	US$	1,441 million
Total	¥	1,080.0 billion	21.6	%	US$	9,392 million


Note:		Segment profits mentioned in the review of operations below are obtained by subtracting cost of sales and selling, general and administrative expenses from net sales. Segment profit ratio is calculated by using sales after elimination of internal segment transactions.

Construction and Mining Equipment

Consolidated net sales of construction and mining equipment for the interim period under review expanded 23.8% over the previous interim period, to ¥914.3 billion (US$7,951 million), primarily reflecting expanded volume of sales and price realization efforts. Segment profit of the construction and mining equipment business advanced 44.1% to ¥146.1 billion (US$1,271 million), and segment profit ratio to 16.0%, up 2.3 percentage points from the previous interim period a year ago.

[Sales of Construction and Mining Equipment by Region]

Billions of yen


	First half ended September 30, 2007 (A) 1USD = ¥119 1EUR = ¥163	First half ended September 30, 2006 (B) 1USD = ¥115 1EUR = ¥147	Changes Increase (Decrease) (A)-(B)				The entire FY ended March 31, 2007 1USD = ¥117 1EUR = ¥151
Japan	131.4	133.2	(1.8	)	(1.4	)%	282.5
The Americas	243.6	245.0	(1.3	)	(0.6	)%	480.1
Europe & CIS	206.5	135.5	71.0		52.5	%	311.8
China	75.6	46.8	28.8		61.6	%	108.3
Asia & Oceania	151.6	107.6	43.9		40.8	%	229.8
The Middle East & Africa	105.3	70.3	34.9		49.7	%	154.8

Total	914.3	738.6	175.6		23.8	%	1,567.7

Japan

While public-sector investments remained slack, demand for new equipment increased, especially in the rental industry, reflecting not only an increase in private-sector investments but also further stock adjustment of the market driven by buoyant exports of used equipment. For the interim period under review, the Komatsu Group worked to expand sales of new equipment, realize prices and strengthen the rental and used equipment business. However, interim sales in Japan declined slightly from the previous period a year ago, due largely to intensified competition and the withdrawal from unprofitable businesses.

The Americas

In North America, the decline of U.S. housing starts became more evident, further reducing the demand for equipment, especially in the residential construction sector. In Latin America, meanwhile, demand expanded particularly in the mining sector. Amid such market conditions, the Komatsu Group worked to sharpen its competitiveness by expanding sales of DANTOTSU models which improve fuel consumption and offer KOMTRAX (Komatsu Machine Tracking System) as a standard feature, while continuing to optimize distributors’ inventories in North America. Additionally, the Komatsu Group worked to reinforce sales and product support capabilities for mining customers in North and Latin America. However, sales in the Americas declined slightly from the previous interim period, affected by declined North American demand.

Europe & CIS

Demand in Europe grew, including the five major markets of Germany, the United Kingdom, France, Italy and Spain as well as central and eastern Europe where infrastructure investments were buoyant in tandem with EU expansion. Under that environment, the Komatsu Group worked to accelerate sales of DANTOTSU models with machine capabilities enhanced by KOMTRAX as a standard feature, while improving the efficiency of production, including the reduction of production lead-time. In CIS (Commonwealth of Independent States), demand remained strong in resource and energy development-related sectors as well as urban infrastructure development, and the Komatsu Group worked to strengthen its distribution network and mining equipment business. As a result, interim sales in Europe & CIS made an impressive gain over the previous interim period a year ago.

China

Demand continued to advance in China, fueled by infrastructure development projects expanded nationwide, development of new mines and progress in mechanization of mining to improve management efficiency as the Chinese economy stayed on a high-growth track. The Komatsu Group concerted its efforts to expand sales of new equipment based on IT-capitalized information concerning business negotiations and equipment operations, while working to improve operational efficiency of sales and production. As a result, interim sales in China expanded sharply over the previous interim period a year ago.

Asia & Oceania

In Indonesia, the largest market in Southeast Asia, demand continued to grow in civil engineering, agricultural and forestry industries. Demand for mining equipment also remained strong there. In India, demand remained strong in infrastructure development and mining sectors. Demand for mining equipment also remained strong in Australia. Reflecting expanded local production and reinforced sales and product support capabilities for mining customers in Asia, interim sales in Asia & Oceania expanded substantially over the previous interim period a year ago.

The Middle East & Africa

Demand continued to accelerate in both regions, driven by expanded urban and infrastructure developments in Turkey, the largest market in the Middle East, and oil producing countries on the Gulf as well as by aggressive resource development in Africa. By carrying out proactive sales activities with distributors and reinforcing its product support capabilities, the Komatsu Group boosted interim sales in the Middle East & Africa over the previous interim period a year ago.

Industrial Machinery, Vehicles and Others

Consolidated net sales of industrial machinery, vehicles and other operations increased 10.6% over the previous interim period a year ago, to ¥165.6 billion (US$1,441 million) for the interim period under review, reflecting expanded sales of large presses in addition to boosted sales of forklift trucks by Komatsu Utility Co., Ltd. Segment profit of the industrial machinery, vehicles and others business improved 23.2% over the previous interim period, to ¥16.9 billion. (US$147 million) Segment profit ratio also improved to 10.2%, up 1.0 percentage point over the previous interim period a year ago.

In the forklift truck business, Komatsu Utility worked to reinforce its business foundation by expanding sales of new equipment and strengthening its sales and service capabilities in fast-growth markets, such as Asia and the Middle East, implementing aggressive sales of electric forklift trucks and launching the hybrid battery model in Japan, which achieves outstanding efficiency of energy consumption.

In the industrial machinery business, the Komatsu Group advanced interim sales by zooming in on demand for capital investments both in Japan and overseas, especially by the automobile industry. With respect to large presses, Komatsu worked to step up sales of DANTOTSU products such as the AC Servo press and expanded its production capacity by embarking on full-scale production at the Kanazawa Plant which began operation in January 2007. As a result, interim sales of large presses advanced over the previous interim period a year ago. In addition, the Komatsu Group advanced collaborative efforts with NIPPEI TOYAMA CORPORATION in which Komatsu made equity participation last year, including mutual use of sales and production facilities of the two.


Notes:	1)	Komatsu Forklift Co., Ltd. merged with Komatsu Zenoah Co. and changed its corporate name to Komatsu Utility Co., Ltd. in April 2007.

	2)	The outdoor power equipment business of Komatsu Zenoah Co. was sold to a Japanese subsidiary of Husqvarna AB of Sweden in April 2007.

2. Conditions of Consolidated Cash Flows

Net cash provided by operating activities declined by ¥15.8 billion from the previous interim period, to ¥86.7 billion (US$754 million), because working capital increased, offsetting an increase in net income resulting from good business performance. Net cash used in investing activities decreased by ¥38.6 billion from the previous interim period, to ¥33.4 billion (US$291 million), because aggressive investments were made in Japan and overseas to expand production capacities and improve productivity, offsetting proceeds from the sale of the outdoor power equipment business. Net cash used in financing activities amounted to ¥27.4 billion (US$239 million), an increase of ¥10.8 billion from the previous interim period.

As a result, cash and cash equivalents totaled ¥117.5 billion (US$1,022 million) at September 30, 2007, an increase of ¥25.3 billion compared to a year ago.

[Trends of Cash Flow Indicators]


	First half ended September 30, 2007	First half ended September 30, 2006	The entire FY ended March 31, 2007
Shareholders’ equity ratio (%)	45.3	38.8	42.1
Shareholders’ equity ratio at aggregate market value (%)	199.3	115.0	133.7
Years of debt redemption	2.0	1.8	2.2
Interest coverage ratio	10.3	14.1	10.5

Shareholders’ equity ratio: Shareholders’ equity/Total assets

Shareholders’ equity ratio at aggregate market value: Aggregate market value of outstanding shares of common stock/Total assets

Years of debt redemption term: Interest-bearing debt/Net cash provided by operating activities

Interest coverage ratio: Net cash provided by operating activities/Interest expense

3. Projections for the Fiscal Year Ending March 31, 2008

In the construction and mining equipment business, while there are some serious concerns such as declining demand for residential houses and deteriorating economic climate triggered by the subprime loan problem, we anticipate that global demand will remain buoyant driven by thriving infrastructure investments especially in China and India as well as strong resource development activities in Asia, Australia, Latin America, Africa and some other regions.

As of October 30, 2007, we have revised our earlier projections for consolidated and non-consolidated business results for the fiscal year ending March 31, 2008, which we announced on July 30, 2007, as follows.

1) Consolidated

Billions of yen


	Results for FY ended March 31, 2007 (A)	Current projection for FY ending March 31, 2008 (B)	Changes Increase (B)-(A)/(A)		Earlier projection for FY ending March 31, 2008
Net sales	1,893.3	2,210.0	16.7	%	2,180.0
Operating income	244.7	325.0	32.8	%	311.0
Income from continuing operations before income taxes, minority interests and equity in earnings of affiliated companies	236.4	316.0	33.6	%	302.0
Net income	164.6	205.0	24.5	%	198.0

2) Non-consolidated

Billions of yen


	Results for FY ended March 31, 2007 (A)	Current projection for FY ending March 31, 2008 (B)	Changes Increase (B)-(A)/(A)		Earlier projection for FY ending March 31, 2008
Net sales	758.5	895.0	18.0	%	880.0
Operating profit	90.4	113.0	24.9	%	105.0
Ordinary profit	98.1	124.0	26.3	%	118.0
Net income	82.8	90.0	8.6	%	85.0

Note: The table below shows our assumptions on foreign exchange rates.


	1^st half results	2^nd half projection	Full year projection
JPY/USD	119	115	117
JPY/EUR	163	155	159

4. Basic Policy for Redistribution of Profits for the Interim Period Ended September 30, 2007 and Projections for the Fiscal Year Ending March 31, 2008

Komatsu is building a sound financial position and flexible and agile corporate strength to increase its corporate value. Concerning cash dividends to shareholders, the Company maintains the policy of redistributing profits by first striving to continue stable dividends and then considering consolidated business results, while working for the goal of a consolidated payout ratio of 20% or higher.

With respect to interim cash dividends, the Board of Directors set ¥20 per share, an increase of ¥7 from ¥13 for the previous interim dividends paid a year ago. This decision was reached by considering the interim business results and future business prospects at the board meeting held on October 30, 2007.

Furthermore, the Company plans to increase the annual dividends per share by ¥9, to ¥40 (i.e., ¥20 for the interim and ¥20 for the fiscal year-end dividends per share).

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.

Komatsu Group

(As of September 30, 2007)


Business Categories and Principal Products & Services
Construction and Mining Equipment

Excavating Equipment		Hydraulic excavators, mini excavators, and backhoe loaders

Loading Equipment		Wheel loaders, mini wheel loaders, and skid steer loaders

Grading and Roadbed Preparation Equipment		Bulldozers, motor graders, and vibratory rollers

Hauling Equipment		Off-highway dump trucks, articulated dump trucks, and crawler carriers

Forestry Equipment		Harvesters, forwarders, and feller-bunchers

Tunneling Machines		Shield machines, tunnel-boring machines, and small-diameter pipe jacking machines

Recycling Equipment		Mobile debris crushers, mobile soil recyclers, and mobile tub grinders

Other Equipment		Railroad maintenance equipment

Engines and Components		Diesel engines, diesel generator sets, and hydraulic equipment

Casting Products		Steel castings and iron castings

Industrial Machinery, Vehicles and Others

Metal Forging and Stamping Presses		Large presses, AC-Servo presses, small and medium-sized presses, and forging presses

Sheet-Metal Machines and Machine Tools		Press brakes, shears, laser cutting machines, fine plasma cutting machines, and crank shaft millers

Industrial Vehicles and Logistics		Forklift trucks, packing and transport

Defense Systems		Ammunition and armored personnel carriers

Others		Commercial-use prefabricated structures, thermoelectric modules and temperature-control equipment for semiconductor manufacturing

Komatsu Group (Chart)

(As of September 30, 2007)

LOGO

Note:

Komatsu changed its business segment into two, i.e., Construction and Mining Equipment, and Industrial Machinery, Vehicles and Others, including Electronics in Industrial Machinery, Vehicles and Others from the current fiscal year.

Management Policy

1. Basic Management Policy

The cornerstone of Komatsu’s management is commitment to Quality and Reliability for maximization of its corporate value. This commitment is not limited to delivering safe and innovative products and services which incorporate the viewpoints of customers. Komatsu is continuing its efforts to enhance the Quality and Reliability of all organizations, businesses, employees and management of the entire Komatsu Group. It is the top management task of Komatsu to continue improving the Quality and Reliability of all these year after year.

2. Mid to Long-Range Management Plan, Target and Issues Ahead

We at the Komatsu Group define our corporate value as the total sum of trust given to us by society and all stakeholders. To increase this corporate value, we have designated the following two management goals.

To maintain our top-level profitability and financial position in the industry and enhance our position in the global marketplace, especially in Greater Asia.

To continue management, while keeping market value in mind, which reflects the amount of trust given to us by society and shareholders

To achieve these management goals, we have developed the mid-range management plan “Global Teamwork for 15” for the target year ending March 31, 2010. Under this new management plan, we are focusing our efforts on the following tasks.

We will continue to concert our efforts on the market introduction of DANTOTSU products, the further enhancement of our market position in Greater Asia and further improvements of fixed costs, on a permanent basis, all which have been carried over from the first-stage Reform of Business Structure project.

We will continue to work on value-chain reform, a core element of the second-stage Reform, and human resource development on a global, group-wide basis through the reform activities.

We will also tackle the following new tasks.

Establishment of flexible manufacturing operations

Expansion of utility equipment business

Expansion of parts business

Reinforcement of industrial machinery business


Numerical Targets	Items	Targets for Fiscal Year ending March 31, 2010
	Operating income ratio	15% or above
	ROE (Return on equity)	Keeping 20% level
	Net debt-to-equity ratio	0.2 or below

ROE = Net income for the year/[(shareholders’ equity at the beginning + shareholders’ equity at the end of the fiscal year)/2]

Net debt-to-equity ratio = (interest-bearing debt – cash and cash equivalents – time deposits)/shareholders’ equity


[Premises]	Items	Targets for Fiscal Year ending March 31, 2010
	Guideline on sales	¥2,400 billion ± ¥100 billion
	Guidelines on exchange rate	¥110/1USD ¥145/1EUR

The Komatsu Group is also strengthening its corporate governance to ensure sound and transparent management, while working to improve management efficiency. While promoting thorough compliance, we will also ensure that all employees of the Komatsu Group share The KOMATSU Way. In addition to improving our business performance, we will facilitate the development of both corporate strength and social responsibility in a well balanced manner.

Cautionary Statement

Condensed Consolidated Balance Sheets

Millions of yen


	As of September 30, 2007			As of September 30, 2006			Changes Increase (Decrease)			As of March 31, 2007
	(A)			(B)			(A)-(B)
Assets
Current assets:
Cash and cash equivalents	¥	117,546		¥	84,100		¥	33,446		¥	92,199
Time deposits		201			182			19			54
Trade notes and accounts receivable		471,421			432,452			38,969			478,063
Inventories		484,780			419,980			64,800			437,894
Assets held for sale		—			—			—			16,321
Other current assets		114,702			117,041			(2,339	)		119,214

Total current assets		1,188,650			1,053,755			134,895			1,143,745

Long-term trade receivables		82,355			61,788			20,567			73,669

Investments		158,287			122,793			35,494			155,146

Property, plant and equipment - Less accumulated depreciation		417,663			427,369			(9,706	)		388,393

Other assets		80,071			96,325			(16,254	)		83,029

Total		1,927,026			1,762,030			164,996			1,843,982

Liabilities and Shareholders’ Equity
Current liabilities:
Short-term debt (including current maturities of long-term debt)		163,647			209,645			(45,998	)		174,734
Trade notes and accounts payable		362,914			348,154			14,760			365,065
Income taxes payable		34,800			33,270			1,530			54,933
Liabilities held for sale		—			—			—			7,919
Other current liabilities		196,297			177,131			19,166			182,529

Total current liabilities		757,658			768,200			(10,542	)		785,180

Long-term liabilities		269,694			266,102			3,592			262,311

Minority interests		27,019			44,530			(17,511	)		19,774

Shareholders’ equity:
Common stock		67,870			67,870			—			67,870
Capital surplus		137,508			136,414			1,094			137,155
Retained earnings		627,618			457,210			170,408			541,717
Accumulated other comprehensive income *		42,374			25,276			17,098			33,501
Treasury stock		(2,715	)		(3,572	)		857			(3,526	)

Total shareholders’ equity		872,655			683,198			189,457			776,717

Total	¥	1,927,026		¥	1,762,030		¥	164,996		¥	1,843,982


	As of September 30, 2007			As of September 30, 2006			Changes Increase (Decrease)			As of March 31, 2007
*Accumulated other comprehensive income:
Foreign currency translation adjustments	¥	12,785		¥	2,518		¥	10,267		¥	9,204

Net unrealized holding gains on securities available for sale		44,884			34,093			10,791			39,807

Pension liability adjustments		—			(10,860	)		10,860			—

Pension liability adjustments-After application of SFAS No.158		(15,046	)		—			(15,046	)		(15,300	)

Net unrealized holding gains (losses) on derivative instruments		(249	)		(475	)		226			(210	)

Short & long-term debt	¥	351,004		¥	376,817		¥	(25,813	)	¥	349,074


Note:		In accordance with Statement of Financial Accounting Standards No.144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, assets and liabilities held for sale in connection with the discontinued operations were classified as held for sale as of March 31, 2007.

Condensed Consolidated Statements of Income

Millions of yen


	First half ended September 30, 2007			First half ended September 30, 2006			Changes Increase (Decrease)				The entire FY ended March 31, 2007
	(A)			(B)			(A)-(B)			%
Net sales	¥	1,080,042		¥	888,491		¥	191,551		21.6	¥	1,893,343
Cost of sales		767,689			637,215			130,474				1,356,511
Selling, general and administrative expenses		150,607			137,994			12,613				287,086
Other operating income (expenses)		1,226			(736	)		1,962				(5,005	)

Operating income		162,972			112,546			50,426		44.8		244,741

Other income (expenses)
Interest and dividend income		5,126			4,057			1,069				8,532
Interest expense		(8,383	)		(7,250	)		(1,133	)			(15,485	)
Other-net		(1,131	)		(1,275	)		144				(1,297	)

Other income (expenses)		(4,388	)		(4,468	)		80				(8,250	)

Income from continuing operations before income taxes, minority interests and equity in earnings of affiliated companies		158,584			108,078			50,506		46.7		236,491

Income taxes		58,345			42,752			15,593				79,745

Minority interests in income of consolidated subsidiaries		(4,727	)		(3,136	)		(1,591	)			(6,580	)

Equity in earnings of affiliated companies		3,310			1,307			2,003				3,098

Income from continuing operations		98,822			63,497			35,325		55.6		153,264

Income from discontinued operations		4,978			3,711			1,267		34.1		11,374

Net income	¥	103,800		¥	67,208		¥	36,592		54.4	¥	164,638


Note:		In accordance with Statement of Financial Accounting Standards No.144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” the consolidated statements of income for the first half ended September 30, 2006 have been retrospectively reclassified as for the discontinued operations.

Consolidated Statement of Shareholders’ Equity

Millions of yen


	First half ended September 30, 2007			First half ended September 30, 2006			The entire FY ended March 31, 2007
Common stock
Balance, beginning of period	¥	67,870		¥	67,870		¥	67,870

Balance, end of period	¥	67,870		¥	67,870		¥	67,870

Capital surplus
Balance, beginning of period	¥	137,155		¥	136,137		¥	136,137
Sales of treasury stock		238			36			394
Issuance and exercise of stock acquisition rights		115			265			663
Others		—			(24	)		(39	)

Balance, end of period	¥	137,508		¥	136,414		¥	137,155

Retained earnings, appropriated for legal reserve
Balance, beginning of period	¥	24,267		¥	23,416		¥	23,416
Transfer from unappropreated retained earnings		(72	)		519			851

Balance, end of period	¥	24,195		¥	23,935		¥	24,267

Unappropreated retained earnings
Balance, beginning of period	¥	517,450		¥	376,522		¥	376,522
Net income		103,800			67,208			164,638
Cash dividends paid		(17,899	)		(9,936	)		(22,859	)
Transfer to retained earnings appropriated for legal reserve		72			(519	)		(851	)

Balance, end of period	¥	603,423		¥	433,275		¥	517,450

Accumulated other comprehensive income (loss)
Balance, beginning of period	¥	33,501		¥	23,095		¥	23,095
Aggregate adjustment for the period resulting from translation of foreign currency financial statements		3,581			4,758			11,444
Net increase (decrease) in unrealized holding gains on securities available for sale		5,077			(2,817	)		2,897
Adjustment for the period of pension liability		—			439			11,299
Adjustment for the period of pension liability-After application of SFAS No.158		254			—			(15,300	)
Net increase (decrease) in unrealized holding gains (losses) on derivative instruments		(39	)		(199	)		66

Balance, end of period	¥	42,374		¥	25,276		¥	33,501

Treasury stock
Balance, beginning of period	¥	(3,526	)	¥	(4,043	)	¥	(4,043	)
Purchase of treasury stock		(118	)		(432	)		(632	)
Sales of treasury stock		929			903			1,149

Balance, end of period	¥	(2,715	)	¥	(3,572	)	¥	(3,526	)

Total shareholders’ equity	¥	872,655		¥	683,198		¥	776,717

Consolidated Statements of Cash Flows

Millions of yen


	First half ended September 30, 2007			First half ended September 30, 2006			Changes Increase (Decrease)			The entire FY ended March 31, 2007
	(A)			(B)			(A)-(B)
Operating activities
Net income	¥	103,800		¥	67,208		¥	36,592		¥	164,638
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		36,018			38,759			(2,741	)		72,709
Deferred income taxes		18,361			6,547			11,814			4,334
Net loss (gain) from sale of investment securities and subsidiaries		(8,190	)		676			(8,866	)		(19,101	)
Net loss (gain) on sale of property		(418	)		64			(482	)		(13	)
Loss on disposal of fixed assets		1,051			885			166			2,121
Impairment loss on long-lived assets held for use		59			2			57			81
Pension and retirement benefits, net		(9,886	)		1,074			(10,960	)		1,078
Changes in assets and liabilities:
Decrease (increase) in trade receivables		2,243			(17,936	)		20,179			(93,141	)
Decrease (increase) in inventories		(37,292	)		(45,207	)		7,915			(73,448	)
Increase (decrease) in trade payables		(10,165	)		39,782			(49,947	)		70,693
Increase (decrease) in income taxes payable		(20,518	)		(3,977	)		(16,541	)		19,680
Other, net		11,639			14,635			(2,996	)		12,493

Net cash provided by operating activities		86,702			102,512			(15,810	)		162,124

Investing activities
Capital expenditures		(52,719	)		(63,945	)		11,226			(122,860	)
Proceeds from sale of property		5,703			5,188			515			17,626
Proceeds from sale of available for sale investment securities		168			249			(81	)		1,844
Purchases of available for sale investment securities		(4,274	)		(2,538	)		(1,736	)		(6,737	)
Proceeds from sale of subsidiaries, net of cash disposed		16,372			—			16,372			35,368
Acquisition of subsidiaries and equity investees, net of cash acquired		2,576			(11,321	)		13,897			(24,621	)
Collection of loan receivables		4,565			3,058			1,507			5,736
Disbursement of loan receivables		(4,720	)		(2,625	)		(2,095	)		(5,974	)
Decrease (increase) in time deposits		(1,087	)		(128	)		(959	)		(2	)

Net cash used in investing activities		(33,416	)		(72,062	)		38,646			(99,620	)

Financing activities
Proceeds from long-term debt		30,514			7,446			23,068			44,781
Repayments on long-term debt		(41,832	)		(22,312	)		(19,520	)		(74,943	)
Increase (decrease) in short-term debt, net		4,823			13,476			(8,653	)		22,526
Repayments of capital lease obligations		(5,383	)		(5,752	)		369			(11,411	)
Sale (purchase) of treasury stock, net		811			471			340			517
Dividends paid		(17,899	)		(9,936	)		(7,963	)		(22,859	)
Other, net		1,478			—			1,478			—

Net cash used in financing activities		(27,488	)		(16,607	)		(10,881	)		(41,389	)

Effect of exchange rate change on cash and cash equivalents		(451	)		260			(711	)		1,087

Net increase (decrease) in cash and cash equivalents		25,347			14,103			11,244			22,202

Cash and cash equivalents, beginning of period		92,199			69,997			22,202			69,997

Cash and cash equivalents, end of period	¥	117,546		¥	84,100		¥	33,446		¥	92,199

Basis of Financial Statements (Consolidated)

1)	The number of consolidated subsidiaries and affiliated companies accounted for by the equity method


Number of consolidated subsidiaries:		148 companies
Number of companies accounted for by the equity method:		42 companies

2)	Changes in group of entities

Consolidated subsidiaries


Added:		10 companies
		Komatsu CIS, LLC and other 9 companies
Added: (From affiliated companies)		1 company
Removed: (Merger etc.)		8 companies
		Komatsu Zenoah Co. and other 7 companies

Affiliated companies accounted for by the equity method


Added:		2 companies
Removed: (To consolidated subsidiaries)		1 company
Removed: (Exclusion)		1 company

3)	Discontinued operations

In accordance with Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” assets and liabilities held for sale in connection with the discontinued operations were classified as held for sale on the consolidated balance sheet as of March 31, 2007. The result of discontinued operations, less applicable income taxes, is presented as income from discontinued operations in the consolidated statement of income. Previously reported amounts have been reclassified accordingly.

Business Segment Information

1. Information by Business Segment

(1) Sales and Segment Profit

Millions of yen


	First half ended September 30, 2007					First half ended September 30, 2006					The entire FY ended March 31, 2007
	Sales		Segment Profit		Segment Profit Ratio (%)	Sales		Segment Profit		Segment Profit Ratio (%)	Sales		Segment Profit		Segment Profit Ratio (%)
Construction and Mining Equipment	927,772		146,194		15.8	750,538		101,462		13.5	1,587,976		220,606		13.9
Industrial Machinery, Vehicles and Others	216,810		16,928		7.8	196,707		13,736		7.0	423,363		32,695		7.7
Subtotal	1,144,582		163,122		14.3	947,245		115,198		12.2	2,011,339		253,301		12.6
Corporate & Elimination	(64,540	)	(1,376	)	—	(58,754	)	(1,916	)	—	(117,996	)	(3,555	)	—
Total	1,080,042		161,746		15.0	888,491		113,282		12.7	1,893,343		249,746		13.2

Other operating income (expenses)			1,226					(736	)				(5,005	)
Operating income			162,972					112,546					244,741

Interest and dividend income			5,126					4,057					8,532
Interest expense			(8,383	)				(7,250	)				(15,485	)
Other-net			(1,131	)				(1,275	)				(1,297	)
Income from continuing operations before income taxes, minority interests and equity in earnings of affiliated companies			158,584					108,078					236,491

Note: Sales amount of every business segment includes inter-segment transactions as below:


	First half ended September 30, 2007	First half ended September 30, 2006	The entire FY ended March 31, 2007
Construction and Mining Equipment	13,420	11,844	20,253
Industrial Machinery, Vehicles and Others	51,120	46,910	97,743

Total	64,540	58,754	117,996


Notes:	1	)	Sales and segment profit by business segment for the first half ended September 30, 2006 have been retrospectively reclassified as for the discontinued operations.

	2	)	Starting in the first half ended September 30, 2007, Komatsu changed its business segments. Sales and segment profit by business segment for the first half ended September 30, 2006 and the entire fiscal year ended March 31, 2007 have been retrospectively reclassified according to the new business segment.

(2) Assets, Depreciation and Capital Investment

Millions of yen

As of Sept. 30,
2007

First half ended

Sept. 30, 2007

As of Sept. 30,
2006

First half ended

Sept. 30, 2006

Assets

Depreciation
and
Amortization

Capital
Investment

Assets

Depreciation
and
Amortization

Capital
Investment

Construction and Mining Equipment

1,490,171

31,297

57,986

1,250,029

28,346

46,172

Industrial Machinery, Vehicles and Others

310,479

4,267

7,132

415,179

3,848

8,955

Subtotal

1,800,650

35,564

65,118

1,665,208

32,194

55,127

Corporate & Elimination

126,376

—

96,822

—

Total

1,927,026

35,564

65,118

1,762,030

32,194

55,127


	As of Mar. 31, 2007	The entire FY ended March 31, 2007
	Assets	Depreciation and Amortization	Capital Investment
Construction and Mining Equipment	1,423,744	57,444	111,003
Industrial Machinery, Vehicles and Others	317,462	7,977	18,677

Subtotal	1,741,206	65,421	129,680

Corporate & Elimination	102,776	—	—

Total	1,843,982	65,421	129,680


Notes:	1)	Depreciation and capital investment by business segment for the first half ended September 30, 2006 have been retrospectively reclassified as for the discontinued operations.

	2)	Assets, depreciation and capital investment by business segment for the first half ended September 30, 2006 and the entire fiscal year ended March 31, 2007 have been retrospectively reclassified due to the change in business segments.

2. Information by Region

(1) Sales and Segment Profit


											Millions of yen

	First half ended September 30, 2007					First half ended September 30, 2006					The entire FY ended March 31, 2007
	Sales		Segment Profit		Segment Profit Ratio (%)	Sales		Segment Profit		Segment Profit Ratio (%)	Sales		Segment Profit		Segment Profit Ratio (%)
Japan	596,833		81,459		13.6	534,821		59,744		11.2	1,135,567		140,193		12.3
The Americas	290,688		31,994		11.0	282,436		31,377		11.1	566,013		51,842		9.2
Europe & CIS	227,267		25,479		11.2	146,483		12,242		8.4	332,959		32,104		9.6
Others	242,205		31,769		13.1	164,270		17,290		10.5	348,514		38,033		10.9
Subtotal	1,356,993		170,701		12.6	1,128,010		120,653		10.7	2,383,053		262,172		11.0
Corporate & Elimination	(276,951	)	(8,955	)	—	(239,519	)	(7,371	)	—	(489,710	)	(12,426	)	—
Total	1,080,042		161,746		15.0	888,491		113,282		12.7	1,893,343		249,746		13.2


Notes:	1	)	Sales by region includes inter-region transactions.

	2	)	Sales and segment profit by region for the first half ended September 30, 2006 have been retrospectively reclassified as for the discontinued operations.

(2) Assets


									Millions of yen

	As of September 30, 2007				As of September 30, 2006				As of March 31, 2007
	Assets		Ratio (%)		Assets		Ratio (%)		Assets		Ratio (%)
Japan	1,067,208		55.4		1,098,699		62.3		1,065,487		57.8
The Americas	490,404		25.4		446,394		25.3		481,144		26.1
Europe & CIS	255,942		13.3		173,693		9.9		221,012		12.0
Others	273,492		14.2		229,030		13.0		237,839		12.9
Subtotal	2,087,046		108.3		1,947,816		110.5		2,005,482		108.8
Corporate & Elimination	(160,020	)	(8.3	)	(185,786	)	(10.5	)	(161,500	)	(8.8	)
Total	1,927,026		100.0		1,762,030		100.0		1,843,982		100.0

3. Overseas Sales

(1) For the first half ended September 30, 2007

Millions of yen


	The Americas	Europe & CIS	Others	Total
Overseas sales	277,882	213,073	354,635	845,590
Consolidated net sales	—	—	—	1,080,042
Ratio of overseas sales to consolidated net sales (%)	25.7	19.7	32.9	78.3

(2) For the first half ended September 30, 2006

Millions of yen


	The Americas	Europe & CIS	Others	Total
Overseas sales	273,214	140,431	249,957	663,602
Consolidated net sales	—	—	—	888,491
Ratio of overseas sales to consolidated net sales (%)	30.8	15.8	28.1	74.7

(3) For the entire fiscal year ended March 31, 2007

Millions of yen


	The Americas	Europe & CIS	Others	Total
Overseas sales	537,836	324,071	544,333	1,406,240
Consolidated net sales	—	—	—	1,893,343
Ratio of overseas sales to consolidated net sales (%)	28.4	17.1	28.8	74.3


Notes:	1)	Overseas sales represent the sales of the Company and its consolidated subsidiaries to customers in countries or regions other than Japan.

	2)	Area segments are separated by the geographic proximity. Main countries or areas of each segment above are as follows:
		a)	The Americas:	North America and Latin America
		b)	Europe & CIS:	Germany, U.K. and Russia
		c)	Others:	China, Australia, and Southeast Asia

	3)	Overseas sales and consolidated net sales for the first half ended September 30, 2006 have been retrospectively reclassified as for the discontinued operations.

Consolidated Sales by Operation

Millions of yen


	First half ended September 30, 2007 (A)		First half ended September 30, 2006 (B)		Changes Increase (Decrease) (A)-(B)				The entire FY ended March 31, 2007
	Sales	Ratio (%)	Sales	Ratio (%)	Sales		(%)		Sales	(%)
Construction and Mining Equipment
Japan	131,445	12.2	133,277	15.0	(1,832	)	(1.4	)	282,596	14.9
Overseas	782,907	72.5	605,417	68.1	177,490		29.3		1,285,127	67.9
	914,352	84.7	738,694	83.1	175,658		23.8		1,567,723	82.8
Industrial Machinery, Vehicles and Others
Japan	103,007	9.5	91,612	10.3	11,395		12.4		204,507	10.8
Overseas	62,683	5.8	58,185	6.6	4,498		7.7		121,113	6.4
	165,690	15.3	149,797	16.9	15,893		10.6		325,620	17.2
Total
Japan	234,452	21.7	224,889	25.3	9,563		4.3		487,103	25.7
Overseas	845,590	78.3	663,602	74.7	181,988		27.4		1,406,240	74.3
	1,080,042	100.0	888,491	100.0	191,551		21.6		1,893,343	100.0

Notes: 1)

Consolidated sales by operation for the first half ended September 30, 2006 have been retrospectively reclassified as for the discontinued operations.

2)	Consolidated sales by operation for the first half ended September 30, 2006 and the entire fiscal year ended March 31, 2007 have been retrospectively reclassified due to the change in business segments.

Net Income per Share


			Millions of yen

	First half ended September 30, 2007	First half ended September 30, 2006	The entire FY ended March 31, 2007
Net Income	103,800	67,208	164,638

			Number of shares

	First half ended September 30, 2007	First half ended September 30, 2006	The entire FY ended March 31, 2007
Weighted average common shares outstanding, less treasury stock	994,615,040	993,514,498	993,597,436
Diluted effect of:
Stock options	1,436,122	1,946,493	1,788,951
Weighted average diluted common shares outstanding	996,051,162	995,460,991	995,386,387

			Yen

	First half ended September 30, 2007	First half ended September 30, 2006	The entire FY ended March 31, 2007
Net income per share:
Basic	104.36	67.65	165.70
Diluted	104.21	67.51	165.40

(end)


For Immediate Release

				Komatsu Ltd.
				Corporate Communications Dept.
				Tel: +81-(0)3-5561-2616
				Date: October 30, 2007
				URL: http://www.komatsu.com/

Revision of Projections for the Fiscal Year Ending March 31, 2008

Komatsu Ltd. has revised the projections for consolidated and non-consolidated results for the fiscal year ending March 31, 2008, which the Company announced on July 30, 2007.

1. Consolidated (U.S.GAAP)

Millions of yen

except per share amounts


	Earlier projection (A)		Current Projection (B)		Changes (B)-(A)				Results for FY ended March 31, 2007
Net sales		2,180,000 (up 15.1%)		2,210,000 (up 16.7%)		30,000	1.4	%		1,893,343
Operating income		311,000 (up 27.1%)		325,000 (up 32.8%)		14,000	4.5	%		244,741
Income from continuing operations before income taxes, minority interests and equity in earnings of affiliated companies		302,000 (up 27.7%)		316,000 (up 33.6%)		14,000	4.6	%		236,491
Net income		198,000 (up 20.3%)		205,000 (up 24.5%)		7,000	3.5	%		164,638
Net income per share	¥	199.04	¥	206.02	¥	6.98			¥	165.70

Note: The amounts in parentheses indicate the changes from the previous interim period.

2. Non-consolidated

Millions of yen

except per share amounts


	Earlier projection (A)		Current Projection (B)		Changes (B)-(A)				Results for FY ended March 31, 2007
Net sales		880,000 (up 16.0%)		895,000 (up 18.0%)		15,000	1.7	%		758,529
Operating profit		105,000 (up 16.1%)		113,000 (up 24.9%)		8,000	7.6	%		90,475
Ordinary profit		118,000 (up 20.2%)		124,000 (up 26.3%)		6,000	5.1	%		98,149
Net income		85,000 (up 2.6%)		90,000 (up 8.6%)		5,000	5.9	%		82,843
Net income per share	¥	85.40	¥	90.40	¥	5.00			¥	83.34

Note: The amounts in parentheses indicate the changes from the previous interim period.

3. Reasons for the Revision

As we had earlier projected concerning the global market conditions for construction and mining equipment, the decline in North American demand was covered by the increase in demand in other regions of the world. This demonstrated the strong growth of global demand during the first half period under review. However, we are anticipating larger sales in China, Latin America and some other regions of the world than our earlier projections, and thereby we have revised our projection of both consolidated and non-consolidated full-year business results based on the assumption of average foreign exchange rates below.


	1^st half results	2^nd half projection	Full year projection
JPY/USD	119	115	117
JPY/EUR	163	155	159

(end)

Cautionary Statement


For Immediate Release

				Komatsu Ltd.
				Corporate Communications Dept.
				Tel: +81-(0)3-5561-2616
				Date: October 30, 2007
				URL: http://www.komatsu.com/

Payment of Cash Dividends and Revision of Year-End Cash Dividends

In the Board meeting held on October 30, 2007, the Board of Directors of Komatsu Ltd. (President & CEO: Kunio Noji) made a resolution concerning the following cash dividends as of September 30, 2007, the date of record. The Company also revised the projection of year-end dividends.

1. Contents of the Dividends


	Detailed dividends resolved to be distributed	Latest projection (announced on April 26, 2007)	Interim results for FY ended March 31, 2007
Record date	September 30, 2007	Same as on left	September 30, 2006
Cash dividends per share	¥ 20.0	¥18.0	¥ 13.0
Total amount of dividends	¥ 19,911 million	—	¥ 12,922 million
Effective date	November 30, 2007	—	December 1, 2006
Resource for dividend	Retained earnings	—	Retained earnings

2. Reasons for the Revision

Concerning cash dividends to shareholders, Komatsu maintains the policy of redistributing profits by first striving to continue stable dividends and the considering consolidated business results, while working toward the goal of a consolidated payout ratio of 20% or higher.

For the interim period of the current fiscal year ending March 31, 2008, the Komatsu Group improved its business results centering on the construction and mining equipment business. Concerning the full-year business results, we have also revised our earlier projections upward.

After considering the interim business results and the future business outlook of the Komatsu Group, the Board of Directors set the interim dividends at ¥20 per share, an increase of ¥2 from the projected amount announced on April 26, 2007. The Company has also revised and set the year-end dividends at ¥20 per share, an increase of ¥2 yen from the earlier projection. As a result of these revisions, cash dividends for the year, ending March 31, 2008, will be ¥40 per share, an increase of ¥9 from the previous fiscal year.


	Cash dividends per share
Record date	Interim		Year-end		Total
Earlier projection (announced on April 26,2007)	¥	18.0	¥	18.0	¥	36.0
Current projection		—	¥	20.0	¥	40.0
Results for FY ending March 31, 2008	¥	20.0		—		—
Results for FY ended March 31, 2007	¥	13.0	¥	18.0	¥	31.0

(end)

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents