UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 6-K

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 under
the Securities Exchange Act of 1934

For the month of August, 2009

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 þ Form 40-F o

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 o No þ

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.

Quarterly Report for the First Quarter of the 141st Fiscal Year filed on August 7, 2009

On August 7, 2009, the registrant filed its Quarterly Report (Shihanki Houkokusho) with the Director of the Kanto Local Finance Bureau of Japan pursuant to the Financial Instruments and Exchange Law of Japan. This Quarterly Report contains, among other information, Quarterly Consolidated Financial Statements for the three months period ended June 30, 2009.

Material information in the report, other than the Quarterly Consolidated Financial Statements, has already been reported by the registrant in its press release dated July 28, 2009, a copy of which was submitted under cover of Form 6-K on July 29, 2009 by the registrant.

Attached is an English translation of the registrant’s Quarterly Consolidated Financial Statements for the three months ended June 30, 2009.

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.

[Quarterly Consolidated Financial Statements]

Consolidated Balance Sheets (Unaudited)

Komatsu Ltd. and Consolidated Subsidiaries

June 30, 2009 and March 31, 2009

		June 30, 2009								March 31, 2009
						Component								Component
		Millions of yen				ratio (%)				Millions of yen				ratio (%)
Assets
Current assets
Cash and cash equivalents		¥	86,162							¥	90,563
Time deposits			125								44
Trade notes and accounts receivable, less allowance for doubtful receivables of ¥15,843 million at June 30, 2009, ¥15,330 million at March 31, 2009			380,944								373,901
Inventories (Note 3)			487,808								507,357
Deferred income taxes and other current assets (Notes 4, 9, 10 and 11)			129,270								131,374
Total current assets			1,084,309				53.8				1,103,239				56.0
Long-term trade receivables			142,673				7.1				102,969				5.2
Investments
Investments in and advances to affiliated companies			21,852								19,249
Investment securities (Notes 4, 10, and 11)			58,058								53,854
Other			12,360								12,017
Total investments			92,270				4.6				85,120				4.3
Property, plant and equipment —less accumulated depreciation of ¥608,836 million at June 30, 2009, ¥589,629 million at March 31, 2009			539,191				26.8				525,462				26.7
Goodwill			30,033				1.5				28,661				1.5
Other intangible assets			60,440				3.0				60,346				3.1
Deferred income taxes and other assets (Notes 9, 10 and 11)			64,971				3.2				63,262				3.2
		¥	2,013,887				100.0			¥	1,969,059				100.0

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

		June 30, 2009								March 31, 2009
						Component								Component
		Millions of yen				ratio (%)				Millions of yen				ratio (%)
Liabilities and Equity
Current liabilities
Short-term debt		¥	254,699							¥	220,087
Current maturities of long-term debt (Notes 10)			89,418								87,662
Trade notes, bills and accounts payable			170,404								214,375
Income taxes payable			8,758								10,818
Deferred income taxes and other current liabilities (Notes 9, 10 and 11)			191,632								199,345
Total current liabilities			714,911				35.5				732,287				37.2
Long-term liabilities
Long-term debt (Notes 10)			355,413								292,106
Liability for pension and retirement benefits			51,742								53,822
Deferred income taxes and other liabilities (Notes 9, 10 and 11)			39,115								42,510
Total long-term liabilities			446,270				22.2				388,438				19.7
Total liabilities			1,161,181				57.7				1,120,725				56.9
Commitments and contingent liabilities (Note 8)			—								—
Komatsu Ltd. shareholders’ equity
Common stock:
Authorized 3,955,000,000 shares at June 30, 2009 and at March 31, 2009
Issued 998,744,060 shares at June 30, 2009 and at March 31, 2009			67,870								67,870
Outstanding 967,995,626 shares at June 30, 2009, 967,822,292 shares at March 31, 2009
Capital surplus			139,994								140,092
Retained earnings:
Appropriated for legal reserve			30,781								28,472
Unappropriated			704,245								719,222
Accumulated other comprehensive income (loss) (Notes 4 and 9)			(93,785	)							(105,744	)
Treasury stock at cost, 30,748,434 shares at June 30, 2009, 30,921,768 shares at March 31, 2009			(34,772	)							(34,971	)
Total Komatsu Ltd. shareholders’ equity			814,333				40.4				814,941				41.4
Noncontrolling interest			38,373				1.9				33,393				1.7
Total equity (Note 6)			852,706				42.3				848,334				43.1
		¥	2,013,887				100.0			¥	1,969,059				100.0

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

Consolidated Statements of Income (Unaudited)

Komatsu Ltd. and Consolidated Subsidiaries
Three months ended June 30, 2009 and 2008

		Three months ended								Three months ended
		June 30, 2009								June 30, 2008
						Component								Component
		Millions of yen				ratio (%)				Millions of yen				ratio (%)
Net sales		¥	320,428				100.0			¥	606,832				100.0
Cost of sales			252,473				78.8				439,836				72.5
Selling, general and administrative expenses (Note 5)			59,486				18.6				85,342				14.1
Other operating income (expenses)			(196	)			(0.1	)			1,610				0.3
Operating income			8,273				2.6				83,264				13.7
Other income (expenses)			455								9,504
Interest and dividend income			1,859				0.6				2,600				0.4
Interest expense			(2,731	)			(0.9	)			(3,929	)			(0.6	)
Other—net			1,327				0.4				10,833				1.8
Income before income taxes and equity in earnings of affiliated companies			8,728				2.7				92,768				15.3
Income taxes
Current			7,716								22,937
Deferred			(5,535	)							10,009
Total			2,181				0.7				32,946				5.4
Income before equity in earnings of affiliated companies			6,547				2.0				59,822				9.9
Equity in earnings of affiliated companies			(101	)			(0.0	)			762				0.1
Net income			6,446				2.0				60,584				10.0
Less net income attributable to the noncontrolling interest			(1,683	)			(0.5	)			(2,853	)			(0.5	)
Net income attributable to Komatsu Ltd.		¥	4,763				1.5			¥	57,731				9.5

		Yen
		Three months ended				Three months ended
		June 30, 2009				June 30, 2008
Net income attributable to Komatsu Ltd. per share (Note 7)
Basic		¥	4.92			¥	58.01
Diluted			4.92				57.94
Cash dividends per share (Note 13)			18.00				22.00

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

Consolidated Statements of Shareholders’ Equity (Unaudited)

Komatsu Ltd. and Consolidated Subsidiaries
Three months ended June 30, 2009 and 2008

		Millions of yen
		Three months ended				Three months ended
		June 30, 2009				June 30, 2008
Common stock
Balance, beginning of year		¥	67,870			¥	67,870
Balance, end of period		¥	67,870			¥	67,870
Capital surplus
Balance, beginning of year		¥	140,092			¥	138,170
Sales of treasury stock			(98	)			96
Issuance and exercise of stock acquisition rights (Note 5)			—				(25	)
Balance, end of period		¥	139,994			¥	138,241
Retained earnings, appropriated for legal reserve
Balance, beginning of year		¥	28,472			¥	26,714
Transfer from unappropriated retained earnings			2,309				218
Balance, end of period		¥	30,781			¥	26,932
Unappropriated retained earnings
Balance, beginning of year		¥	719,222			¥	685,986
Net income attributable to Komatsu Ltd.			4,763				57,731
Cash dividends paid to Komatsu Ltd. Shareholders (Note 13)			(17,431	)			(21,904	)
Transfer to retained earnings appropriated for legal reserve			(2,309	)			(218	)
Balance, end of period		¥	704,245			¥	721,595
Accumulated other comprehensive income (loss)
Balance, beginning of year		¥	(105,744	)		¥	(28,779	)
Other comprehensive income for the period, net of tax			11,959				32,872
Balance, end of period		¥	(93,785	)		¥	4,093
Treasury stock
Balance, beginning of year		¥	(34,971	)		¥	(2,835	)
Purchase of treasury stock			(7	)			(40	)
Sales of treasury stock			206				250
Balance, end of period		¥	(34,772	)		¥	(2,625	)
Total Komatsu Ltd. shareholders’ equity		¥	814,333			¥	956,106
Noncontrolling interest
Balance, beginning of year		¥	33,393			¥	30,239
Net income attributable to the noncontrolling interest			1,683				2,853
Cash dividends paid to the noncontrolling interest			(300	)			(239	)
Other comprehensive income for the period, net of tax			1,844				1,742
Other changes in noncontrolling interest			1,753				2,811
Balance, end of period		¥	38,373			¥	37,406
Total equity (Note 6)		¥	852,706			¥	993,512

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

Consolidated Statements of Cash Flows (Unaudited)

Komatsu Ltd. and Consolidated Subsidiaries
Three months ended June 30, 2009 and 2008

		Millions of yen
		Three months ended				Three months ended
		June 30, 2009				June 30, 2008
Operating activities
Net income		¥	6,446			¥	60,584
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization			22,003				22,842
Deferred income taxes			(5,535	)			10,009
Net loss (gain) from sale of investment securities and subsidiaries			65				664
Net loss (gain) on sale of property			(95	)			(8	)
Loss on disposal of fixed assets			396				502
Pension and retirement benefits, net			(1,290	)			(441	)
Changes in assets and liabilities:
Decrease (increase) in trade receivables			7,327				3,482
Decrease (increase) in inventories			32,124				(34,234	)
Increase (decrease) in trade payables			(46,896	)			(20,985	)
Increase (decrease) in income taxes payable			(2,373	)			(25,235	)
Other, net			(11,265	)			(10,051	)
Net cash provided by (used in) operating activities			907				7,129
Investing activities
Capital expenditures			(24,927	)			(30,281	)
Proceeds from sale of property			5,342				4,632
Proceeds from sale of available for sale investment securities			73				500
Purchases of available for sale investment securities			(1,500	)			(3,342	)
Acquisition of subsidiaries and equity investees, net of cash acquired			1,153				1,024
Collection of loan receivables			353				4,292
Disbursement of loan receivables			(677	)			(3,346	)
Decrease (increase) in time deposits			(88	)			(9	)
Net cash provided by (used in) investing activities			(20,271	)			(26,530	)
Financing activities
Proceeds from long-term debt			55,954				55,184
Repayments on long-term debt			(7,207	)			(27,941	)
Increase (decrease) in short-term debt, net			(6,217	)			20,496
Repayments of capital lease obligations			(9,430	)			(12,913	)
Sale (purchase) of treasury stock, net			101				210
Dividends paid			(17,431	)			(21,904	)
Other, net			(1,117	)			733
Net cash provided by (used in) financing activities			14,653				13,865
Effect of exchange rate change on cash and cash equivalents			310				3,334
Net increase (decrease) in cash and cash equivalents			(4,401	)			(2,202	)
Cash and cash equivalents, beginning of year			90,563				102,010
Cash and cash equivalents, end of period		¥	86,162			¥	99,808

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

Notes to Quarterly Consolidated Financial Statements (Unaudited)

1. Basis of Quarterly Financial Statements and Summary of Significant Accounting Policies

Basis of Quarterly Financial Statements

(1) Komatsu Ltd. (“Company”) and consolidated subsidiaries (together “Komatsu”) prepare the accompanying quarterly consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

(2) The Company and its domestic subsidiaries maintain their books of account in conformity with accounting principles generally accepted in Japan, and its foreign subsidiaries generally maintain their books of account in conformity with those in the country of their domicile. The accompanying consolidated financial statements reflect certain adjustments, not recorded in Komatsu’s books, to present them in conformity with U.S. GAAP. These adjustments are made mainly in connection with accounting for liability for pension and other retirement benefits, derivative financial instruments, and recognition of certain accrued expenses.

Summary of Significant Accounting Policies

Starting in the fiscal year which began April 1, 2009, Komatsu has adopted the Statement of Financial Accounting Standards (“SFAS”) No. 141 (revised 2007) (“SFAS No. 141R”), “Business Combinations”. SFAS No. 141R establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any noncontrolling interest in the acquiree and the goodwill acquired or gain from a bargain purchase. SFAS No. 141R also establishes disclosure requirements to enable the evaluation of the nature and financial effects of the business combination. The adoption of SFAS No. 141R did not have a material impact on our consolidated results of operations and financial condition.

Starting in the fiscal year which began April 1, 2009, Komatsu has adopted SFAS No. 160, “Noncontrolling interests in Consolidated Financial Statements — an amendment of ARB No. 51”. SFAS No. 160 establishes accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. SFAS No. 160 also establishes disclosure requirements that clearly identify and distinguish between the controlling and noncontrolling interests and requires the separate disclosure of income attributable to controlling and noncontrolllling interests. Previously reported amounts have been reclassified accordingly.

Excluding the above, there is no material change for Summary of Significant Accounting Policies stated in annual report for the year ended March 31, 2009.

2. Supplemental Cash Flow Information

Additional cash flow information and noncash investing and financing activities for the three months ended June 30, 2009 and 2008 are as follows:

		Millions of yen
		Three months ended				Three months ended
		June 30, 2009				June 30, 2008
Additional cash flow information:
Interest paid		¥	2,752			¥	3,806
Income taxes paid			10,694				49,039
Noncash investing and financing activities:
Capital lease obligations incurred		¥	4,273			¥	6,400

3. Inventories

At June 30, 2009 and at March 31, 2009, inventories comprised the following:

		Millions of yen
		June 30,				March 31,
		2009				2009
Finished products, including finished parts held for sale		¥	302,254			¥	328,643
Work in process			136,400				128,345
Materials and supplies			49,154				50,369
Total		¥	487,808			¥	507,357

4. Investment Securities

Investment securities at June 30, 2009 and at March 31, 2009 primarily consisted of securities available for sale.

The cost, gross unrealized holding gains and losses, and fair value for such investment securities by major security types at June 30, 2009 and at March 31, 2009 are as follows:

		Millions of yen
						Gross unrealized holding
		Cost				Gains				Losses				Fair value
June 30, 2009
Investment securities available for sale:
Marketable equity securities		¥	25,692			¥	18,638			¥	67			¥	44,263
Other investment securities at cost			13,795
Current portion of other investment securities at cost			99
		¥	39,586

		Millions of yen
						Gross unrealized holding
		Cost				Gains				Losses				Fair value
March 31, 2009
Investment securities available for sale:
Marketable equity securities		¥	24,112			¥	13,419			¥	465			¥	37,066
Other investment securities at cost			16,788
Current portion of other investment securities at cost			101
		¥	41,001

Other investment securities primarily include non-marketable equity securities. The fair value of other investment securities was not estimated as it was not practicable to estimate the fair value of investments and no significant events or changes that might have effected the fair value of those investments were observed.

Unrealized holding gains and losses are included as a component of accumulated other comprehensive income (loss) until realized.

Proceeds from the sales of investment securities available for sale were ¥73 million and ¥500 million for the three months ended June 30, 2009 and 2008, respectively.

Net realized gains or losses from sale of investment securities available for sale during the three months ended June 30, 2009 and 2008, amounted to losses of ¥65 million and losses of ¥664 million, respectively. Such gains and losses were included in “other income (expenses)” in the accompanying consolidated statements of income. The cost of the marketable securities and investment securities sold was computed based on the average-cost method.

5. Stock Option Plan

The Company intends to transfer treasury shares to directors and certain employees and certain directors of subsidiaries and affiliated companies under an agreement granting the right for them to request such transfers at a predetermined price. The purchase price is the amount calculated by taking the average of the closing prices applicable to ordinary transactions of shares of the Company on the Tokyo Stock Exchange on all days for a month immediately preceding the month in which the date of grant of the right falls and multiplying by 1.05, provided that the exercise price shall not be less than the closing price of the shares of the Company on the Tokyo Stock Exchange on the date of the grant.

The Company recognizes compensation expense using the fair value method in accordance with SFAS No. 123R “Share-Based Payment”. For the three months ended June 30, 2009 and 2008, no compensation expense was recorded as no right was granted.

6. Equity

The change in the carrying amount of equity attributable to Komatsu Ltd. shareholders, equity attributable to the noncontrolling interests and the total equity in the accompanying consolidated balance sheets for the three months ended June 30, 2009 and 2008 are as follows:

		Millions of yen
		Komatsu Ltd.
		shareholders’				Noncontrolling
Three months ended June 30, 2009		equity				interest				Total equity
Balance, beginning of year		¥	814,941			¥	33,393			¥	848,334
Cash dividends paid to Komatsu Ltd. shareholders			(17,431	)			—				(17,431	)
Cash dividends paid to the noncontrolling interest			—				(300	)			(300	)
Other changes			101				1,753				1,854
Comprehensive income:
Net income			4,763				1,683				6,446
Other comprehensive income for the period, net of tax
Foreign currency translation adjustments			7,131				1,590				8,721
Net unrealized holding gains on securities available for sale			3,477				—				3,477
Pension liability adjustments			1,323				—				1,323
Net unrealized holding gains on derivative instruments			28				254				282
Total comprehensive income			16,722				3,527				20,249
Balance, end of period		¥	814,333			¥	38,373			¥	852,706

		Millions of yen
		Komatsu Ltd.
		shareholders’				Noncontrolling
Three months ended June 30, 2008		equity				interest				Total equity
Balance, beginning of year		¥	887,126			¥	30,239			¥	917,365
Cash dividends paid to Komatsu Ltd. shareholders			(21,904	)			—				(21,904	)
Cash dividends paid to the noncontrolling interest			—				(239	)			(239	)
Other changes			281				2,811				3,092
Comprehensive income:
Net income			57,731				2,853				60,584
Other comprehensive income(loss) for the period, net of tax
Foreign currency translation adjustments			29,237				1,923				31,160
Net unrealized holding gains on securities available for sale			5,356				8				5,364
Pension liability adjustments			(392	)			2				(390	)
Net unrealized holding gains(losses) on derivative instruments			(1,329	)			(191	)			(1,520	)
Total comprehensive income			90,603				4,595				95,198
Balance, end of period		¥	956,106			¥	37,406			¥	993,512

7. Net Income Attributable to Komatsu Ltd. per Share

A reconciliation of the numerators and denominators of the basic and diluted net income attributable to Komatsu Ltd. per share computations is as follows:

		Millions of yen
		Three months ended				Three months ended
		June 30, 2009				June 30, 2008
Net income attributable to Komatsu Ltd.		¥	4,763			¥	57,731

		Number of shares
		Three months ended				Three months ended
		June 30, 2009				June 30, 2008
Weighted average common shares outstanding, less treasury stock			967,910,177				995,254,491
Dilutive effect of:
Stock options			343,666				1,100,277
Weighted average diluted common shares outstanding			968,253,843				996,354,768

		Yen
		Three months ended				Three months ended
		June 30, 2009				June 30, 2008
Net income attributable to Komatsu Ltd.:
Basic		¥	4.92			¥	58.01
Diluted		¥	4.92			¥	57.94

8. Contingent Liabilities

At June 30, 2009 and at March 31, 2009, Komatsu was contingently liable for discounted and transferred receivables on a recourse basis with the financial institutions of ¥13,757 million and ¥14,480 million, respectively.

Komatsu provides guarantees to third parties of loans of the employees, affiliated companies and other companies. The guarantees relating to the employees are mainly made for their housing loans. The guarantees of loans relating to the affiliated companies and other companies are made to enhance the credit of those companies.

For each guarantee provided, Komatsu would have to perform under a guarantee, if the borrower defaults on a payment within the contract terms. The contract terms are from 10 years to 30 years in the case of employees with housing loans, and from 1 year to 10 years in the case of loans relating to the affiliated companies and other companies. The maximum amount of undiscounted payments Komatsu would have had to make in the event of default was ¥71,527 million and ¥65,478 million at June 30, 2009 and at March 31, 2009, respectively. The fair value of the liabilities recognized for Komatsu’s obligations as guarantors under those guarantees at June 30, 2009 was insignificant. Certain of those guarantees were secured by collateral and insurance issued to Komatsu.

Management of Komatsu believes that losses from those contingent liabilities, if any, would not have a material effect on the consolidated financial statements.

Komatsu is involved in certain legal actions and claims arising in the ordinary course of its business. It is the opinion of management and legal counsel that such litigation and claims will be resolved without material effect on Komatsu’s financial position.

Komatsu conducts business activities with customers, dealers and associates around the world and its trade receivables from such parties are well diversified to minimize concentrations of credit risks. Management does not anticipate incurring losses on its trade receivables in excess of established allowances.

9. Derivative Financial Instruments

Notional principal amounts of derivative financial instruments outstanding at June 30, 2009 and at March 31, 2009 are as follows:

		Millions of yen
		June 30,				March 31,
		2009				2009
Forwards and options:
Sale of foreign currencies		¥	28,616			¥	30,868
Purchase of foreign currencies			47,736				48,424
Option contracts (purchased)			1,149				1,011
Interest rate swap, cross-currency swap and interest rate cap agreements			240,086				226,754

Net foreign currency exchange gains (losses) in the accompanying consolidated statements of income for the three months ended June 30, 2009 and 2008 amounted to gains of ¥1,771 million and gains of ¥5,536 million, respectively.

Fair values of derivative instruments at June 30, 2009 and at March 31, 2009 on the consolidated balance sheets are as follows:

Millions of yen

June 30, 2009

Derivative Assets

Derivative Liabilities

Derivative instruments designated

Location on the consolidated

Estimated

Location on the consolidated

Estimated

as hedging instruments

Balance Sheets

fair value

Balance Sheets

fair value

Forwards contracts

Deferred income taxes and other current assets

¥

233

Deferred income taxes and other current liabilities

¥

25

Deferred income taxes and other assets

4

Deferred income taxes and other liabilities

—

Interest rate swaps,cross-currency swap and interest rate cap agreements

Deferred income taxes and other current assets

2,758

Deferred income taxes and other current liabilities

1,469

Deferred income taxes and other assets

6,480

Deferred income taxes and other liabilities

—

Total

¥

9,475

¥

1,494

Derivative Assets

Derivative Liabilities

Location on the consolidated

Estimated

Location on the consolidated

Estimated

Undesignated derivative instruments

Balance Sheets

fair value

Balance Sheets

fair value

Forwards contracts

Deferred income taxes and other current assets

¥

366

Deferred income taxes and other current liabilities

¥

1,592

Option contracts

Deferred income taxes and other current assets

21

Deferred income taxes and other current liabilities

—

Interest rate swaps,cross-currency swap and interest rate cap agreements

Deferred income taxes and other current assets

690

Deferred income taxes and other current liabilities

1,352

Deferred income taxes and other assets

1,468

Deferred income taxes and other liabilities

2,201

Total

¥

2,545

¥

5,145

Total Derivative Instruments

¥

12,020

¥

6,639

Millions of yen

March 31, 2009

Derivative Assets

Derivative Liabilities

Derivative instruments designated

Location on the consolidated

Estimated

Location on the consolidated

Estimated

as hedging instruments

Balance Sheets

fair value

Balance Sheets

fair value

Forwards contracts

Deferred income taxes and other current assets

¥

278

Deferred income taxes and other current liabilities

¥

430

Deferred income taxes and other assets

8

Deferred income taxes and other liabilities

—

Interest rate swaps,cross-currency swap and interest rate cap agreements

Deferred income taxes and other current assets

2,351

Deferred income taxes and other current liabilities

—

Deferred income taxes and other assets

5,709

Deferred income taxes and other liabilities

—

Total

¥

8,346

¥

430

Derivative Assets

Derivative Liabilities

Location on the consolidated

Estimated

Location on the consolidated

Estimated

Undesignated derivative instruments

Balance Sheets

fair value

Balance Sheets

fair value

Forwards contracts

Deferred income taxes and other current assets

¥

1,016

Deferred income taxes and other current liabilities

¥

1,387

Option contracts

Deferred income taxes and other current assets

19

Deferred income taxes and other current liabilities

—

Interest rate swaps,cross-currency swap and interest rate cap agreements

Deferred income taxes and other current assets

766

Deferred income taxes and other current liabilities

980

Deferred income taxes and other assets

1,704

Deferred income taxes and other liabilities

3,058

Total

¥

3,505

¥

5,425

Total Derivative Instruments

¥

11,851

¥

5,855

The effect of derivative instruments on the consolidated statements of income for the three months ended June 30, 2009 are as follows:

Derivative instruments designated as fair value hedging relationships

		Millions of yen
		Three months ended
		June 30, 2009
		Location of		Amount of			Location of		Amount of
		gains (losses)		gains (losses)			gains (losses)		gains (losses)
		recognized in income		recognized in income			recognized in income		recognized in income
		on derivatives		on derivatives			on hedged items		on hedged items
Interest rate swaps,cross-currency swap and interest rate cap agreements		Other income (expenses), net: Other-net		¥	1,281		Other income (expenses),net: Other-net		¥	(1,398	)
Total				¥	1,281				¥	(1,398	)

Derivative instruments designated as cash flow hedging relationships

		Millions of yen
		Three months ended
		June 30, 2009
		Effective portion										Ineffective portion and amount excluded from
						Location of		Amount of				effectiveness testing
		Amount of				gains (losses)		gains (losses)				Location of				Amount of
		gains (losses)				reclassified		reclassified				gains (losses)				gains (losses)
		recognized in				from accumulated		from accumulated				recognized in income				recognized in income
		OCI on derivatives				OCI into income		OCI into income				on derivatives				on derivatives
Forwards contracts		¥	(734	)		Other income (expenses), net: Other-net		¥	(74	)		—				¥	—
Interest rate swaps, cross-currency swap and interest rate cap agreements			(18	)		—			—			—					—
Total		¥	(752	)				¥	(74	)						¥	—

Derivative instruments not designated as hedging instruments relationships

		Millions of yen
		Three months ended
		June 30, 2009
		Location of gains (losses) recognized		Amount of gains (losses) recognized
		in income on derivatives		in income on derivatives
Forwards contracts		Other income (expenses), net: Other-net		¥	(117	)
Option contracts		Other income (expenses), net: Other-net			4
Interest rate swaps,cross-currency swap		Cost of sales			(82	)
and interest rate cap agreements		Other income (expenses), net: Other-net			(937	)
Total				¥	(1,132	)

10. The Fair Value of Financial Instruments

(1) Cash and Cash Equivalents, Time Deposits, Trade Notes and Accounts Receivable, Other Current Assets, Short-Term Debt, Trade Notes, Bills and Accounts Payable, and Other Current Liabilities

The carrying amount approximates fair value because of the short maturity of these instruments.

(2) Investment Securities

The fair values of investment securities available for sale for which it is practicable to estimate fair value are based on quoted market prices and are recognized on the accompanying consolidated balance sheets.

(3) Installment Receivables

The fair values of installment receivables are based on the present value of future cash flows through maturity, discounted using estimated current interest rates. The fair values computed on such a basis approximate the carrying amounts.

(4) Long-Term Debt

The fair values of each of the long-term debts are based on the quoted price in the most active market or the present value of future cash flows associated with each instrument discounted using the current borrowing rate for similar debt of comparable maturity.

(5) Derivative Financial Instruments

The fair values of derivative financial instruments, consisting principally of foreign exchange contracts and interest rate swap agreements, are estimated by obtaining quotes from brokers and are recognized on the accompanying consolidated balance sheets.

The carrying amounts and the estimated fair values of the financial instruments, including financial instruments not qualifying as hedge, at June 30, 2009 and at March 31, 2009, are summarized as follows:

		Millions of yen
		June 30, 2009								March 31, 2009
		Carrying				Estimated				Carrying				Estimated
		amount				fair value				amount				fair value
Investment securities, marketable equity securities		¥	44,263			¥	44,263			¥	37,066			¥	37,066
Long-term debt, including current portion			444,831				439,344				379,768				376,108
Derivatives:
Forwards and options
Assets			624				624				1,321				1,321
Liabilities			1,617				1,617				1,817				1,817
Interest rate swap, cross-currency swap and interest rate cap agreements
Assets			11,396				11,396				10,530				10,530
Liabilities			5,022				5,022				4,038				4,038

Limitations

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could affect the estimates.

11. Fair value measurements

Komatsu adopted SFAS No. 157, “Fair value measurements”, which establishes a new framework for measuring fair value and expands related disclosures on April 1, 2008. SFAS No. 157 defines that fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. SFAS No. 157 establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. The three levels of inputs used to measure fair value are as follows:

Level 1 — Quoted prices in active markets for identical assets or liabilities

Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities, either directly or indirectly

Level 3 — Unobservable inputs for the assets or liabilities

Assets and liabilities that are measured at fair value on a recurring basis at June 30, 2009 and at March 31, 2009 are as follows:

		Millions of yen
June 30, 2009		Level 1				Level 2				Level 3				Total
Assets
Investment securities available for sale		¥	44,263			¥	—			¥	—			¥	44,263
Derivatives			—				12,002				—				12,002
Other			—				—				18				18
Total			44,263				12,002				18				56,283
Liabilities
Derivatives			—				6,639				—				6,639
Total			—				6,639				—				6,639

		Millions of yen
March 31, 2009		Level 1				Level 2				Level 3				Total
Assets
Investment securities available for sale		¥	37,066			¥	—			¥	—			¥	37,066
Derivatives			—				11,851				—				11,851
Other			—				—				919				919
Total			37,066				11,851				919				49,836
Liabilities
Derivatives			—				5,855				—				5,855
Total			—				5,855				—				5,855

Investment securities available for sale

Marketable equity securities are classified in Level 1 in the fair value hierarchy. Marketable equity securities are measured using a market approach based on the quoted market prices in active markets.

Derivatives

Derivatives primarily represent foreign exchange contracts and interest rate swap agreements. Derivatives are measured based on market observable market data in active markets and are classified in Level 2 in the fair value hierarchy.

Other

Other primarily represents the retained interests in securitizations of accounts receivables. Assets which are measured by the assumption of Komatsu are classified in Level 3 in the fair value hierarchy.

The following table summarizes information about changes of Level 3 for the three months ended June 30, 2009.

		Millions of yen
		Three months ended
		June 30, 2009
Balance, beginning of year		¥	919
Total gains or losses (realized / unrealized)			592
Included in earnings			606
Included in other comprehensive income (loss)			(14	)
Purchases, issuances and settlements			(1,493	)
Balance, end of period		¥	18

The amounts of unrealized gains on classified in Level 3 assets recognized in earnings for the three months ended June 30, 2009 related to assets still held at June 30, 2009 were ¥606 million. These gains were reported in other income (expenses), net of the consolidated statements income.

During three months ended June 30, 2009, there were no assets and liabilities that are measured at fair value on nonrecurring basis.

12. Committed Credit Lines

Certain consolidated subsidiaries maintain committed credit line agreements totaling ¥40,792 million and ¥14,956 million at June 30, 2009 and at March 31, 2009, respectively, with financial institutions to secure liquidity. At June 30, 2009 and at March 31, 2009, ¥13,173 million and ¥861 million, respectively, were available to be used under such credit line agreements.

13. Dividends

Payment amount of dividends

						Aggregate amount of
						dividends
Resolution		Type of stock				(Millions of yen)
Ordinary general meeting of shareholders held on June 24, 2009		Common stock					17,431

Dividend per

share

Resource of dividends

(Yen)

Record date

Effective date

Retained earnings

18

March 31, 2009

June 25, 2009

14. Business Segment Information

Under SFAS No. 131, “Disclosures about Segments of an Enterprise and Related Information”, operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, in deciding how to allocate resources and in assessing performance. The operating segments are managed separately because each operating segment represents a strategic business unit that offers different products and services.

Komatsu operates on a worldwide basis with two operating segments: 1) Construction, Mining and Utility Equipment and 2) Industrial Machinery and Others.

Segment profit is determined in a manner that is consistent with Japanese accounting principles by subtracting the cost of sales and selling, general and administrative expenses from net sales attributed to the operating segment. Segment profit is used by the chief operating decision maker in deciding how to allocate resources and in assessing performance, and excludes certain general corporate administration and finance expenses, such as costs of executive management, corporate development, corporate finance, human resources, internal audit, investor relations, legal and public relations. Segment profit also excludes certain non-recurring charges which may otherwise relate to operating segments, including impairments of long lived assets and goodwill.

Operating segments:

		Millions of yen
		Three months ended				Three months ended
		June 30, 2009				June 30, 2008
Net sales:
Construction, Mining and Utility Equipment—
Customers		¥	284,695			¥	534,078
Intersegment			786				1,419
Total			285,481				535,497
Industrial Machinery and Others—
Customers			35,733				72,754
Intersegment			4,043				5,990
Total			39,776				78,744
Elimination			(4,829	)			(7,409	)
Consolidated		¥	320,428			¥	606,832
Segment profit:
Construction, Mining and Utility Equipment		¥	7,437			¥	78,385
Industrial Machinery and Others			2,877				4,768
Total			10,314				83,153
Corporate expenses and elimination			(1,845	)			(1,499	)
Consolidated segment profit			8,469				81,654
Other operating income (expenses)			(196	)			1,610
Operating income			8,273				83,264
Interest and dividend income			1,859				2,600
Interest expense			(2,731	)			(3,929	)
Other-net			1,327				10,833
Consolidated income before income taxes		¥	8,728			¥	92,768