Q.1 Since 4th Quarter Fiscal 2013 (January-March 2014) profit from your Containership
    Business improved by 2.9 billion yen from previous guidance announced as of 3rd Quarter
    announcement, please advise what factors affected profit most significantly. 
    Are there any factors that will have positive influence continuously in Fiscal 2014?  

A1. Although Ordinary Income for our Containership Business during 4th Quarter Fiscal 2013
    improved by 2.9 billion yen from the previous estimation, average freight rates in
    Asia-North America and Asia-Europe trades resulted in almost same level as assumptions.
    Therefore, factors producing improvement were: loading volume growth in Asia-Europe trades,
    further freight rate recovery in return leg of Asia-North America trades, improvement
    in related businesses, including logistics, etc. These are not temporary improvement factors,
    but it is too early to tell whether each of these factors can continue producing positive impact
    in and after Fiscal 2014.


Q.2  In terms of your view about Containership Business in Fiscal 2014,
     you have counted 7.7 billion yen from cost reduction efforts while profit guidance is
     almost flat for year-on-year basis, and freight rate level is also explained as being
     almost same as last year. So, where can we find the affirmative effects from the streamlining?

A2. As you have been aware, we have already calculated 7.7 billion yen of cost savings.
    Talking about breakdown of them, almost half comes from cost rationalization, including
    more efficient ship deployment and slow steaming, etc.
    The other half is not what we can call cost reduction in a strict sense, but rather
    some profit improving factors such as increased handling of reefer containers which have
    higher profitability than ordinary dry cargoes, or more collection of so-called
   ‘local charges’ that are miscellaneous income.

    Further, for Fiscal 2013, Ordinary Income included some temporary income such as
    gain from sale of container vans, or dividend from non-consolidated affiliated company, etc.,
    which will decrease in Fiscal 2014 compared to Fiscal 2013 and that works negatively for Fiscal 2014.
    Eventually our forecast for Fiscal 2014 is estimated as breakeven or just the same as Fiscal 2013. 


Q.3  Please let us know present freight indices for each trade.

A.3  Our freight indices are indicated in slide C-1, page 12, which is based on freight rate level
     during 2008 1st Quarter as 100. Mentioned there in 4th Quarter (January-March 2014) period,
     for Asia-North America trades, the figure was 99 and for this April the level was
     several points below that. We are planning rate restoration again in May
     and expect some recovery from this restoration.
    For Asia-Europe trades, during the 4th Quarter, average index was 83 as indicated in this table.
     However, for April, regrettably, it is about 10 points down from that level to low 70s.
     And same as in our Asia-North America trades, we will restore our freight rate level
     for Asia-Europe trades in May as well, so the rate will therefore increase even for a while.
     Then, some downward adjustment could be inevitable, but rate level will again be restored.
     Repeating such ups and downs again and again, rates will stay at a rather higher level
     during summer season overall, and for the 2nd Half, we are expecting rather lower level.
Q4. How are Service Contracts (SC) negotiations going for annual contracts in Asia-North America?

A4. In terms of SC negotiation situation, we have already completed almost 90% of negotiations
    with Beneficial Cargo Owners (BCO) who are mainly manufacturers or retailers directly
    making contracts with shipping companies. To our regret, the portion of contracts in which
    we could satisfactorily succeed with rate restorations is limited, but profitability itself
    in Asia-North America trades is estimated to be maintain at almost the same level
    as in the previous year. 
    Hereafter, we will be faced with fully tackling accomplishment of negotiations
    with that part of freight forwarders or NVOCCs(Non-Vessel Operating Common Carriers)
    with whom we have not yet closed our files.


[Dry Bulkers】

Q1. How many ‘free’ vessels in each ship type are there in your dry bulk fleet?

A1 .For our Cape-size, at this moment, basically all vessels in our fleet are under
   long-term contracts. For Panamax, 75% are under long-term cargo contracts,
   for Handy-max about 50% and for Small Handy slightly over 20%.

   As to Panamax, we have no ‘free’ vessels in the 1st Half, but some in the 2nd Half,
   when we can expect fair profit improvement in case the market level improves.
   Talking about Cape-size, at present we are in cargo-long situation, which means
   vessels in our fleet are slightly fewer than cargo demand. However, a portion of contracts
   for Cape-size fleet are linked to market freight rate level. So, in case the rate is
   recovering, we can expect some profit improvement in the 2nd Half.


Q2 Please tell us what is your current view about market recovery for Cape-size.

A2  We see Cape-size freight rate market starting to recover in June at the earliest, or
    at least in 3rd and 4th Quarters it surely will recover. The reason is first supply of
    dry bulkers is rather small in this year, reported by Clarkson that delivery of new-buildings
    within this year are slightly over 900 vessels. For guidance, last year actual delivery was
    slightly over 700 vessels while at the beginning of the year total was counted over 1200.
    So for this year it is also expected that orders for full 900 may not be delivered in reality.
    In that sense supply of new capacities is considerably limited.  
    On the other hand, import of iron ore by China was over 800million tons in 2013,
    and for this year, it is expected to grow by almost 100 million tons.
    Although economic situation in China has been opaque, considering quality of iron ore produced
    within China, we do not see the freight rate market slumping drastically.


[Car Carriers】

Q1. As profit from Car Carrier segment is planned to decrease in Fiscal 2014,
  is the main reason change in trade patterns?

A1. Trend for automobiles to be regionally manufactured and consumed has continued, and so
  production sites have moved away from Japan to Thailand or Mexico, for example, which means
  cargo volume is moving from longer distance trades to shorter distance trades, and
  revenues are inevitably drawn to the trend of declining when we carry same units of cars. 
     In the future, even if the number of cars transported decreases, we will pursue
    profitability improvement by means of concentrating on cargoes with higher profitability
    rather than unprofitable contracts, together with the policy leaning on so-called
    high and heavy cargoes from which we can earn more freight from the same number of units. 

[LNG Carriers】

Q1. In terms of LNG carriers, it is said that during this year procedures of many projects’
    bids should be completed. In case of “K”Line, please tell us your image about which projects
    you are targeting, and how you can win those projects, and finally how total investment amounts
    are affected. 

A1. As you have pointed out, for LNG projects, especially centering on shale gas projects
    in the U.S., but also many other projects in Australia and East Africa, etc. are scheduled.
    Limited only within this financial year, there are many shale projects ahead awaiting
    approval from the U.S. Government in which we will mainly tackle.
    Bidding has already started for some of them, but not yet for some others..
    We would like to accumulate a few contracts per year in sucha way so we can manage
    vessels by ourselves together with seafarer management. Investment cash flow concerning
    those new projects has already been included in our present plan under the policy that
    we will constrain our investment cash flow within 50.0 billion yen per year.  

[Heavy Lifters】

Q1. As you mentioned you were tackling rationalization in Heavy Lifter business,
    during this financial term what are you planning to do specifically?

A1. Offshore Energy E&P Support and Heavy Lifter Business entirely posted over 4.5 billion yen
    of ordinary loss for Fiscal 2013, of which considerable portion was attributed to
    Heavy Lifter business. That is the present unfortunate situation.

    For Fiscal 2014, shrinking of the deficit from the Heavy Lifter sector down to almost
    half is outlined in our plan.   

    In terms of the breakdown of cost reductions, the biggest factor is thorough slow steaming,
    and as this business is operated in Germany, interest costs for financing some ships
    are at significantly high level, so we have been arranging a few refinancing.
    Other than those, we have already executed various cost saving measures including
    cost saving in administration, etc.

    Almost half of improvement factor for this fiscal year is due to such cost reductions,
    and the other half is essentially depending on expected market recovery.
    Honestly, from last October to this March, overall business experienced extremely
    harsher circumstances, which had of course already been harsh until that time.
    Considering recent conditions, we have now basically felt responses that the market
    may have hit bottom, and that the number of contracts for off-shore service-related businesses
    which is new area for our Heavy Lifter fleet has increased. Consequently, we feel we may
    have to allow a little more time before this business turns into the black,
    but it has started on a recovery trend. 


Q.2 About Heavy Lifter business, what is your present idea for dealing with this business
    itself in the next few years if present tough market continues in the future?

A.2 Deficit from Heavy Lifter Business has continued for 4 years and we checked need of
    impairment loss as of end March 2014, but current decision is that there is no need
    for booking of impairment loss considering also cash flow in the future.
    From now on we hope market will recover as we carried out various cost savings step-by-step.
    We expect that profitability will recover by means of specialization in what we call
    off-shore business and super heavy cargo which are different from normal heavy lifter business.

Q.1  Please let me know about Investment CF (Cash Flow) of Fiscal Year 2013,
    and your idea about the future.

A.1  With regard to Investment CF for Fiscal Year 2013, our original plan in Medium-Term
     Management Plan in B-3 of Financial Highlights was 50.0 billion yen.
     Actual results of Investment CF for Fiscal Year 2013 was eventually 5.1 billion yen,
     although gross investment was about 110.0 billion yen in Fiscal Year 2013, off-set with
     proceeds from having newly-delivered ships off-balance-sheet by selling out and
     chartering back from potential ship owners, etc.
     Gross investment of Fiscal Year 2014 will be almost that same, about 110.0 billion yen.
     In contrast there will be proceeds from sale of assets such as making new vessels off-balance
     by sale and leasing back, also sale of old vessels. So net Investment CF is planned within
     50.0 billion yen, the same as original target in our Medium-Term Management Plan.

     We are planning to invest widely in Car Carriers and Bulk Carriers which is going on now,
     and also in LNG Carriers in some degree. Most Investment CF is already decided so
     after Fiscal Year 2015, it will not increase suddenly.
     Investment will increase little in Fiscal Year 2016 and 2017 as we are planning various investments.
     But we will replace our assets in reverse. So basically our intention is to keep
     Investment CF within 50.0 billion yen without fail during the next few years
     as we previously mentioned.
Q.2  My understanding is that amount of cash and cash equivalent is around 200.0 billion yen now.
     Financial standing has been improved widely, so just how much do you think
     is reasonable level in view of next few years?

A.2 I think we said that having the amount of 60.0 - 70.0 billion yen would usually be enough,
    and that idea has not yet changed so far as our financial standing has managed to
    successfully get through tough times.
    One of our strategies for growth in the future is Offshore Energy E&P Support business,
    and large amounts of money are needed if we go to such new areas like
    FPSO (Floating Production, Storage and Offloading) or further advanced high-tech off-shore
    support vessel business.
    Although we do not have any concrete plan as of now, we will need to have enough cash
    to some extent in order to make prompt action for such new business.
    Adding such need of cash, I think slightly more than the amount of 60.0 - 70.0 billion yen
   as I mentioned may be adequate. At any rate, current cash amount is too much as you point out,
   so we are giving thought to every possible way in addressing this issue.  


Q.3  How much was what we call stable profit in Ordinary Income of Fiscal Year 2013
    including Car Carriers? How much is your estimate this year?
A.3  Stable profit was around 42.0 billion yen in Fiscal Year 2013 and will be around
     48.0 billion yen in Fiscal Year 2014. Breakdown is as follows:
     it includes little less than 10.0 billion yen from Containership business;
     little more than 30.0 billion yen from entire Bulk Shipping Business that
     includes Car Carriers; and around 3.0 - 4.0 billion yen from Logistics and others.


Q.4  Is your estimate of Fiscal Year 2014 conservative overall?
     Looking at each business sector, which sector do you think most likely to improve?
    On the contrary, which do you think is most likely to worsen? 

A.4 Talking about first question, is it conservative or not, I think we can say it's neutral.
     It is now 3rd year since we announced our Medium-Term Management Plan and
     so far we have carried out almost in line with the plan.
     In that way, please understand our estimate for this year is the same as what we have done.
     We expect Car Carrier is most likely to improve, but there is worsening risk
     in Containership business, so we think they will offset  each other.