Q.With regard to Ordinary Income of Containership Business FY2012,
    would you please let us know improvement factors that account for the
    38.0 billion yen compared with that of FY2011.
A.Estimate of Ordinary Income of Containership Business FY2012 is 3.0 billion yen loss
   which equates to about 38.0 billion yen improvement compared with FY2011.
   Improvement factors include 25.0 billion yen from Freight restoration;
 10.0 billion yen from effects of allocation of larger size vessels at each service route,  
 rationalization of loss-making trades and disposal of uneconomical vessels;
  and 10.0 billion yen from operational cost savings and profit improvement of subsidiary companies.
  All of those improvement factors total 45.0 billion yen.
  On the other hand bunker cost will increase because bunker price will be $720/mt in FY2012
  versus $660/mt in FY2011, accounting for total cost increase factor being 7.0 billion yen.
  As a result the balance is profit of 38.0 billion yen.
Q.Please explain details of freight restoration total 25.0 billion yen.

A.Most freight restoration has already been completed and 80% out of a total of 25.0 billion yen
  will be achieved if we can succeed to restore freight to some extent next time on 1st May.
  Other rate restorations are Peak Season Surcharge for Europe and North America trades
  which will start from July or August. In addition we also expect freight restoration of North-South
  trade to some extent but have not factored in all of that. So there is a possibility that profit will
  exceed the estimate depending on freight restoration in North-South trade and homebound trades.
  We have also factored in freight adjustment for 3rd and 4th quarters.
Q.How about actual status of freight restoration?
A.What we had been observing first of all was how much spot market can be restored, and on the
   basis that this is 1st phase, 2nd phase is Service Contracts in North America trade, with 3rd phase
   being to what extent we can prevent freight drop in slack season.
  We can say that 1st phase of spot market was successfully achieved.
  With regard to Service Contracts in North America trade, almost 80% of negotiations are finished and
  we have secured freight restoration to some extent although it is not like rapid freight hike in spot market.
  We lost some cargos because we decided to not take less profitable cargos this year at all; however, it
  is recovering in latter stage as spot market increased.
  The last point is what the situation will be in slack season after October and November?
  Possibility of freight restoration is rather firm in Europe trade in spite of less cargo volume growth being
  expected, because we understand that carriers with large market shares are trying to negotiate with
  strong will. 

Q.How much slow steaming is possible from the point of technical matter?
A.Current slow steaming is about 35-40% of maximum output which is dropping from 23-24 knots to 17-18.
  There are technical matters in order to further cut down to dead slow speed of around 10-15% of maximum
  output.Supplementary equipment for turbo-charger is needed, otherwise ship engines might stop.
  We have been studying those issues and so far it appears almost possible to make further slow steaming.
  But that would mean transit time of our voyage would be longer, so we need to adjust with trends of industry
  to some extent. Idle capacity decreased recently and we think this was absorbed in slow steaming,
  so we are not afraid that capacity will increase and rate war will happen again.

【Bulk Shipping Business】

Q.Looking at Income Projections of Bulk Shipping Business (Non-Container Ships) of Medium-Term Management
    Plan, it seems that Operating Revenues will decrease in 2013 (530 bil yen in 2012, 500 bil yen in 2013 and 520
    bil yen in 2014).  Is there any reason for this? 
A.In 2012 we changed accounting term of consolidated subsidiaries and Operating Revenues of 56.0 billion yen
   increased because of this change, with a part of this amount being included in that of Bulk Shipping Business.

Q.In this fiscal year, profit of Bulk Shipping Business improved 20.0 billion yen for year-on-year comparison.
    Please let me know breakdown by business types. 
A.With regard to improvement of profit in Bulk Shipping Business in FY2012 compared with FY2011,
  Dry Bulk will have only a small decrease but there will big improvement in Car Carrier business.
  Others will show profit increase for all vessel types generally.

Q.There's big profit increase in 2H in FY2012 Bulk Shipping Business. Is there any special reason for this ?

A.Big factor is Dry Bulk because market  premise is totally different in 1H and 2H.

【Medium-Term Management Plan "K" Line Vision 100 : Bridge to the Future】

Q.Please explain about investment CF in Medium-Term Management Plan.
A.With regard to investment CF for FY2012, it will surely decrease to 60.0 billion yen
  but we are trying to decrease further to 50.0 billion yen by measures including asset sell-off.
  In FY 2012 we count sell-off of some ships in our business plan.
  In FY 2013 and 2014, we fixed our investment plan on the basis of scale being investment
  CF 50.0 billion yen per year, and after 2013 we will try to decrease investment further.
  With regard to finance of newbuildings in 2012, all have already been fixed so there is no
  problem at all in financing.
  About newbuildings for 2013, we will try to make them off-balance-sheet by lease and
  charter from potent shipowners which means there is a possibility of furtheer decreasing investment CF.

Q.With regard to dividend, please explain why it is not yet fixed this year and how about dividend plan
    in the future?

A.With regard to dividend policy in the future, there is no change in our dividend policy to steadily
   increase dividend payout as a percentage of consolidated net income, with a target of reaching 30%
   by the mid-2010s.  The reason that it is not yet fixed for this year is because 1H is still showing a loss.
   We will continue further study of whether it is possible to make a profit as planned this year and of course
   we would like to pay a dividend if we can manage to succeed in our plan for making a profit.
   As of today we have not dared to fix anything yet for this year as there are too many uncertain factors.