Ladies and Gentlemen, thank you very much for joining us today when you are very busy.
I apologize for talking to you while I am seated.

【Financial Highlights for Fiscal Year 2012】

A-1-1. Financial Results

 I will talk about the outline of 4th Quarter financial results indicated in this first slide.

In announcing 4th Quarter results of this past financial year which ended this March,
I can say in one sentence that the shipping industry worldwide has been continuously facing a severe situation
because, as is well known, vessel supply and cargo demand are tremendously imbalanced,
which has created a very harsh freight rate market.


It is under such business circumstances that we have come to face our financial closing of fiscal year 2012.
In short, we were finally able to post fair financial results thanks to the considerable contribution
from correction of yen appreciation during the last 4th Quarter.

Well, under such circumstances as I mentioned at the beginning, while every shipping company worldwide,
especially those focusing on a single area of shipping business, has been facing much harder business situation,
with some companies having failed, or incurred huge losses, we have properly carried out what needed to be done,
and in addition, the correction of yen appreciation at the final moment, with its adjustment being on the positive side,
which had previously depressed our profit significantly, greatly contributed to our profit improvement.

Now, talking about numerical data, Operating Revenues for this 4th Quarter were 332.2 billion yen,
which substantially exceeds same term last year because, as you know, many of our consolidated subsidiaries included
their last 2 quarters in this year's 4th Quarter reporting as a result of amendment of fiscal term
for our group companies so that all end in March, same as the company.

Then, as I mentioned before, due to the considerable benefit from correction of yen appreciation,
or actually yen depreciation, that occurred  in the 4th Quarter,
while Operating Income was 4.3 billion yen profit, Ordinary Income jumped to as much as  18.0 billion yen.

However, Net Income was only 1.3 billion yen for this 4th Quarter,
partly because of reversal of deferred tax assets, which I will explain in detail later.

As a result, full year Fiscal 2012 resulted in Operating Revenues being 1 trillion 134.8 billion yen,
Operating Income 14.9 billion yen, Ordinary Income 28.6 billion yen, and Net Income 10.7 billion yen.
Average exchange rate between U.S. dollar and yen during the full year was 82.33 yen per U.S. dollar,
and fuel oil price was 671 U.S. dollars per metric ton.
For guidance, the average exchange rate for 4th Quarter was 90.08 and fuel oil price was 648 U.S. dollars.

As to the effect of exchange rate, we have made "timely disclosure" today. You may find it slightly wordy,
but here are my comments. During the first three quarters of the past fiscal year,  from April 1 to December 31,  2012,
we have reported 3,032 million yen in exchange gains as non-operating income,
but as a result of drastic changes in exchange rates during the 4th Quarter, from January 1 to March 31,  2013,
exchange gains of 15,612 million yen arose.

Consequently, we have posted 18,644 million yen in exchange gains as non-operating income throughout the fiscal year,
which were primarily the result of foreign-exchange valuation of foreign currency-denominated assets and liabilities
arising from application of exchange rates as of the last day of the fiscal year ended March 2013.

Talking about the reversal of deferred tax assets, on March 29, 2013, a bill was adopted at the Diet session
to revise tax legislation concerning expansion of Japan's existing tonnage tax system.
Based on this new legislation, tax amount "K" Line pays in the future will decrease or taxable income will decrease,
so we have decided to reverse a portion of our deferred tax assets.
The amount is 12,571 million yen in income taxes-deferred.

Then, please see remarks indicated at the bottom of this slide, resumption of dividend payment.
As consolidated Net Income turned into black, we have decided to plan on paying 2.50 yen per share for year-end dividend
which the board of directors will submit as a resolution at annual general meeting of shareholders.

A-1-2. Financial Results (Business-wise Operating Revenues/Ordinary Income)

Next, let us go to Slide A-1-2 showing segment-wise financial results. Running through the slide,
Operating Revenues for Containership Business indicated at the top line, which consists of two business sectors,
containership and logistics, were 552.8 billion yen and Ordinary Income was 6.6 billion yen.
While almost all major containership companies incurred a loss, although some of them including Maersk made a profit,
“K” Line too marked a profit for the past financial year as well.
You can understand from the slide that both containership and logistic segments were in the black. 

Next, Bulk Shipping Business earned 24.1 billion yen Ordinary Income.
Major businesses in this segment are Dry Bulk Business and Car Carrier Business.
Each of them did fairly well for fiscal year 2012. Especially in the case of Dry Bulk Business, although
the market level during last year was the lowest in 25 years, due to considerable valuation profit
from revaluation of overseas subsidiaries’ foreign currency-denominated assets and liabilities,
which are managing business independently, summing up all such factors a profit of over 10.0 billion yen was posted in this business.

In Offshore Energy E&P Support & Heavy Lifter segment, competition in Heavy Lifter Business intensified significantly
as a result of scramble for cargoes, with substantial downturn in freight rate level, so this business regrettably incurred a loss.
However, Offshore Support Business and Drill Ship Business enjoyed smooth operations and made a profit.
This concludes my explanations regarding the segment-wise results for Fiscal 2012.

A-2. Key Points

This slide shows key points for our full-year results summed up item-wise as usual, which are explained as you can see.
Compared with previous estimates announced as of January 31, Operating Revenues increased by 4.8 billion yen and Ordinary Income by 12.6 billion yen.
Though we already announced previous estimates that included some yen depreciation, further yen depreciation
brought total improvement contribution to 12.6 billion, almost all of which was due to exchange rate effect.  

【Estimate for Fiscal Year 2013】

B-1. Estimate for Full Fiscal Year 2013

I have concluded my explanation for the results of this past year, so I will next talk about estimates for Fiscal 2013.
First, yearly Operating Revenues are estimated to be 1 trillion 160.0 billion yen, divided almost evenly between 1st Half and 2nd Half.
Operating Income is 31.0 billion yen; Ordinary Income 25.0 billion yen; and Net Income 13.0 billion yen.
Premises for these estimates are exchange rate between U.S. dollar and Japanese yen of 95 yen per U.S. dollar,
and fuel oil price of 620 U.S. dollars per metric ton throughout the year.

I suppose you might point out Ordinary Income being slightly down from fiscal 2012, but as I mentioned at the beginning,
fundamentals for shipping business themselves are still regretfully weak in terms of freight rate market in fiscal 2013,
same as last year, or even more dubious from observations at the beginning of this year. Cargo movements have not yet fully recovered,
so considering such continuous situations we are estimating Ordinary Income slightly on the conservative side.

Assuming we achieve our full-year plan, we are considering to pay annual dividend of 3.50 yen per share.

As quoted in this slide, sensitivity from exchange rate and fuel oil price on our yearly Ordinary Income for this Fiscal 2013
is estimated at 1 yen change in yen-U.S. dollar exchange rate will result in about 1.3 billion yen fluctuation in Ordinary Income,
and 10 U.S. dollars per one metric ton change in fuel oil price will result in about 1.5 billion yen effect on Ordinary Income.

Now I will explain segment-wise aspects indicated in the bottom table of this slide, which I worry might be slightly too small to read.
As for Containership Business, together with logistics business, yearly Ordinary Income is estimated as 8.0 billion yen.
Comparing to results  for previous year, we expect slight improvement in our plan and will be committed to even more cost reduction.

As to Bulk Shipping Business, dry bulk market until now has continued being in further weaker tone than last year.
Consequently profit from Dry Bulk Business will fall by a significant extent, still not falling into "minus" level,
which is our present proceeding plan.

However, profit from Car Carrier Business for fiscal 2013 is improving from previous 2012,
so we foresee somewhat conservative Ordinary Income for full-year basis as 25.0 billion yen.

B-2. Key Points

This slide shows Key Points of our estimate for Fiscal 2013.
As I mentioned, exchange rate assumption is set as 95 yen per one U.S. dollar which is 13 yen lower than results in previous year,
and its contribution to Ordinary Income is calculated at 16.4 billion yen.
Fuel oil price presumption is 620 U.S. dollars per metric ton versus 670 dollars for previous year,
which results in improvement factor of 6.6 billion yen for year-on-year comparison.
However, on the other hand, freight rate markets for overall business areas have not been favorable.
Therefore, not only in Containership Business but also in Dry Bulk Business, we will dispose of or return vessels
which do not generate a profit, and even in Containership Business unprofitable service routes will be further shrunk,
which could, however, reduce our overall business size.
So, we expect Operating Revenues to increase to some extent but Operating Income to decrease slightly.

B-3 Progress of Med-term Management Plan

Now let me explain comparison with our Med-Term Management Plan.

As you can see, left figures are results for Fiscal Year 2012, and compared with original plan,
we could make better results in Fiscal Year 2012 than originally estimated.
Shareholder's Equity especially was 340.6 billion yen against 260.0 billion yen in our plan.
As indicated at bottom of the chart, Equity Ratio improved from 23.4% in our plan to actually 28.9% in Fiscal Year 2012 results.

Similarly we could considerably improve Debt Equity Ratio (DER) and NET DER which include cash aspect.
Only result of Operating CF of 59.8 billion yen is lower than 67.0 billion yen in our original plan,
which we think is, to our regret, figures that reflect unfavorable business circumstances.

In 2013, we are aiming for further improvement of financial indices with target of limiting Investment CF to under 50.0 billion yen.

Although it is not described here, cash and cash equivalents at end of March total 162.1 billion yen on our balance sheet,
and we redeemed 25.5 billion yen of convertible bonds on April 4 this year which means current cash after redemption is about 137.0 billion yen
and we think this is more than sufficient liquidity for now. Additionally there will be redemption of 45.0 billion yen of bonds in 2014,
but considering current situation we think it is possible to redeem using cash reserves without problem,
so we are pleased to say that there is no cash problem at all.

B-4 Progress of Cost Saving Plan

I will now explain about progress of Cost Savings in Fiscal Year 2012 as we could actually save 32.5 billion yen
compared with original target of 28.0 billion yen. Although we have done usual Cost Savings,
center of cost savings in Containership business is operating cost, which is bunker savings above all.

In Bulk Shipping Business(Non-Containership business), bunker savings also represent the biggest part.
And we accomplished bunker saving last year to some extent.
Of course we achieved reduction of General & Administration Expenses as visible elements.
Total amount of cost savings was 32.5 billion yen.

In Fiscal Year 2013, although we have already done most of what we could do,
we think there will be even further room in operation part where we usually do cost savings.
Additionally, the most important thing that I believe is how to reduce bunker consumption per ton-mile,
so we do cost savings mainly by bunker savings and overall we will achieve 14.5 billion yen cost reduction in 2013.
Although I may say repeatedly, in our company we have bunker savings  in each business department so far;
however, from this April we set up a "Fuel Cost Control Department" for controlling bunker consumption and
enforcing fuel control of all our business departments in cross-sectional and integrated manner.
We are now trying to carry out thorough bunker savings  for improving mileage and
cutting total amount under this new department.

Just for information, bunker amount used by entire K-Line group was 389 ten thousand tons in 2011
and 383 ten thousand tons in 2012; cost was 207.4 billion yen in 2011; and 207.0 billion yen in 2012.
Bunker unit price for both years was about $670/ton which was almost the same in 2011 and 2012.
Bunker cost is so huge that we again feel that it would have such a big impact on cost-cutting
if we could succeed in reducing total  bunker cost by just 5%.

C. Division-wise Trends

Now I would like to briefly explain trend of each business division.

C-1. Division-wise Trends - Containership Business

In Containership Business, revenue increased and it turned into black in Fiscal Year 2012.
Freight was restored to some extent in Fiscal Year 2012 compared to lowest level in Fiscal Year 2011.
In addition, profitability recovered because we did Business Restructuring in advance
through clearing off loss-making ships and rationalization in loss-making trade routes.
In Fiscal 2013 we worry about Europe as cargo volume from Asia to Europe will not recover soon.
On the other hand, movements will go comparatively well in Asia to North America trade.
Our business plan this year is on the premise that freight rates will be almost same level as Fiscal 2012.
In addition, we will further progress slow-steaming and rationalize tonnage allocation
in order to carry out thorough cost savings which is needless to say.

C-2. Division-wise Trends - Dry Bulk Business

Regarding Dry Bulk Business, although I have commented again and again,
Dry Bulk market fell to its lowest level in 25 years during Fiscal 2012.
For Fiscal 2013, we think there's almost no sign of market recovery.
Current situation indicates that imbalance of supply and demand will remain very large.
As I said here many times, we have been trying to minimize market exposure for the past several years.
In Fiscal 2013, our market premise is as described here
: Capesize 1st Half $10,000/2nd Half $14,000/Full Year $12,000; Panamax 1st Half $8,500/2nd Half $8,500
; Handymax 1st Half $9,500/2nd Half $9,500; Small 1st Half $8,000/2ndHalf $8,000

Although it may be too conservative, we made our business plan on premise that we cannot hope for anything higher than this.
And as I briefly mentioned previously, we have been consistently trying to decrease market exposure for the past saveral years.
This year the market exposure of our Capesize fleet is slightly more than 10%.
We are unable to be optimistic as number of our Capesize vessels is so great.
I think it is possible to achieve our plan to at least some extent
because we will not expose ships to market as much as the 20% or 30% during this past year.

Also about Panamax, market exposure is slightly more than 20% and I think we do not have to worry so much.
In Handymax and Small, because these are basically market business as business structure,
there is no choice but to depend on market to some extent.
Market exposure of these is more than 50% which means it will be very tough unless current market level goes slightly upward.

C-3. Division-wise Trends - Car Carrier Business-

With regards to Car Carrier Business, loading results in Fiscal 2012 greatly recovered for year-on-year
because there was negative impact from the big earthquake in Japan and flooding in Thailand in the previous year.
Total loading result in Fiscal 2012 was 3.34 million units, including all trades that were not related to Japan,
but considering that there was no negative impact from disasters like the earthquake and flooding,
I felt increase of revenue and profit in F2012 were not enough to be honest.

As you can see in the material, export volume for North America, Southeast Asia and Middle East is steady.
Although cargo volume for Europe shows  downturn as mentioned here, rationalization for Atlantic routes,
also mentioned here in the bottom line, is going well.
We, K-Line, have a long history in Atlantic routes and this business has been very tough after Lehman's collapse,
but business will slightly improve here so please understand that profitability should also slightly improve this year.

C-4. Division-wise Trends - LNG Carriers and Oil Tankers

The material in Slide C-4 is about LNG Carriers and Oil Tankers. Regarding Oil Tankers, although current market has hit bottom,
same as Dry Bulk business, we have done restructuring such as down-sizing fleet 2 years ago and turned into small black in Fiscal 2012
as there was additional effect of weaker yen.
As to LNG carriers, we could secure stable profit by long- and middle-term contracts, and this situation will be the same for Fiscal 2013.
Considering that there will be no effect of weaker yen in Fiscal 2013,we are afraid that Oil Tankers in 2013 will again be very severe this year.
However, even though incurring a loss, negative impact to company is not so big because fleet scale of Oil Tanker is not so large.

C-5 Division-wise Trends - Offshore Energy E&P Support & Heavy Lifter Segment

And now, our last department shown is “Offshore E&P Support and Heavy Lifter Business."
As already explained, Offshore support vessels are going well.
In addition there was positive impact from evaluation gain of debt in Japanese yen so profit is improving.
And Drillship is working steadily and making a certain amount of profit.
The problem is Heavy Lifter business, with  Fiscal 2012 loss being bigger than Fiscal 2011.
Although current market is very tough, we have 2 very high-spec ships in our fleet and trying to go into
Offshore cargo transportation and Offshore installation operations to improve deficit by joining
large projects such as energy resource development and Petrochemical plants as mentioned in this slide.
Additionally, previous deficit will be shrunk because of reduction in goodwill amortization.
Needless to say, we think it is one of our most important management challenges to have firm plan
for rebuilding Heavy Lifter business to turn it into the black.

Thank you .