FACTBOOK 2017

Business Segment and Market Data

As of July 2017

Value for our Next Century

2
Contents

I. “K” LINE at a Glance

By utilizing the most advanced technology in the world,
DRIVE GREEN HIGHWAY, a car carrier with a capacity of 3 Business Performance
7,500 vehicles and the goal of becoming an ultimate 4 Financial and ESG Highlights
energy-saving environmentally-friendly, was completed.
2019 5 Financial Data
Launched the business of Offshore Support Vessels to
support offshore oil drilling equipment and II. Management Policy and Medium-term
oil production platforms. Management Plan
2016 7 Management Policy
The first intermodal transportation over land and 8 Medium-term Management Plan “Revival for
sea among Japanese shipping companies was Greater Strides”
started on the North American continent using
Target for Key Performance Indicators
Double-Stack Train (DST). 2015 “K” LINE’s  Fleet Planning and Investment Plans /
100th Anniversary Three-year Investment Plan
9 Three Priority Initiatives
2007 (1) Rebuilding Portfolio Strategy
(2) Emphasizing Advancement of Management
and Function-specific Strategies
(3) Pursuing ESG Initiatives
1994
III. Business Segment Data
11 Containership
1986 16 Dry Bulk
19 Car Carrier

Japan’s first pure car 21 Tanker

carrier (PCC) TOYOTA MARU The super-sized (14,000TEU) container 23 LNG Carrier
1983 vessel MILLAU BRIDGE with
NO. 10 was completed.
the latest energy-saving technologies 24 Energy Transportation•Offshore Energy E&P Support
was completed. “K” LINE’s Business Fields
Established as 25 Offshore Energy Development
1970 “K” LINE Environmental Vision 2050
Kawasaki Kisen 26 Logistics and Terminal
(long-term environmental guidelines
Kaisha, Ltd.
for 2050) was formulated.
IV. Other Corporate Information
The wide-beam / shallow draft coal carrier
1968 CORONA ACE, the basic type for
27 “K” LINE Group’s CSR – ESG Initiatives –
Japan’s first LNG carrier the transport of thermal coal, was completed. Basic CSR Policy / CSR Initiatives / External
BISHU MARU Recognition / Environmental Preservation /
Our first full containership, was completed. Safety in Navigation and Cargo Operations /
1919 GOLDEN GATE BRIDGE, Corporate Governance / Risk Management /
was completed. Compliance
31 Outline of the Company / Stock Information
 3 “K” LINE at a Glance Management Policy and Medium-term Management Plan Business Segment Data Other Corporate Information

I. “K” LINE at a Glance | Business Performance

Profit Attributable to Owners of the Parent and Dividend “K” LINE Group Operating Revenues by Segment
(Billions of yen) Profit attributable to owners of the parent (left scale)  Dividend (right scale) (Yen / Share)
90 32 Others
83.0
59.9 62.4 3.4%
60 28
33.2 26
51.5 32.4 30.6 26.8
30 24
1.7 1.6
6.8
1.9 4.8 10.4 10.7
Container
16.6 Offshore Energy
0 20 50.4%
18 18 E＆P Support*2 FY2016
16.5
-30 16 Heavy Lifter ¥1,030.2
13.5
(41.4) (51.5) 1.9% billion
-60 12
10 9.5
(68.7) 8.5
-90 8 Bulk shipping*1
5 5 5.0 44.3%
4.5
3 3 4 3
-120 2.5 4
(139.5)
0 0 0 *1 Bulk Shipping includes Dry Bulker, Car Carrier, Tanker, LNG Carrier,
-150 0 Short Sea and Coastal Vessels, etc.
‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 *2 Offshore Energy E&P Support includes Offshore Support Vessels and Drillship.

Annual Revenue Ranking of Listed Shipping Companies “K” LINE Group Vessels in Operation

Heavy Lifter
15
Maersk Container
Offshore 67
Energy
NYK E&P Support
8
MOL Short Sea As of FY2016
and Coastal total 560*
49
COSCO
vessels
Tanker / LNG
64 Dry Bulker
260
“K”LINE FY2016 ¥1,030.2 billion Car Carrier
97

0 1,000 2,000 3,000 4,000

(Billions of yen) *Includes project-use vessels owned by special purpose companies (SPCs) and
short-term chartered vessels.
Source: Bloomberg
 4 “K” LINE at a Glance Management Policy and Medium-term Management Plan Business Segment Data Other Corporate Information

I. “K” LINE at a Glance | Financial and ESG Highlights

FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016
(Millions of yen)*1
Operating revenues ¥1,331,048 ¥1,244,317 ¥838,033 ¥985,085 ¥972,311 ¥1,134,772 ¥1,224,126 ¥1,352,421 ¥1,243,932 ¥1,030,191
Operating Operating income 129,649 71,604 (52,075) 58,610 (40,563) 14,887 28,854 47,988 9,428 (46,037)
results
(for the year) Ordinary income*2 125,868 60,011 (66,272) 47,350 (48,956) 28,589 32,455 48,981 3,339 (52,389)
Profit attributable to owners of the parent 83,012 32,421 (68,721) 30,603 (41,351) 10,669 16,642 26,818 (51,499) (139,479)
Total assets 968,630 971,603 1,043,885 1,032,505 1,066,649 1,180,434 1,254,742 1,223,328 1,115,224 1,045,210
Net assets 376,277 356,153 331,865 314,986 259,935 361,975 410,690 467,440 379,914 245,482
Equity capital*3 355,763 334,773 308,122 291,669 242,573 340,571 388,837 441,532 355,376 219,485
Interest-bearing liabilities 329,716 439,622 516,001 483,363 592,523 629,864 643,795 536,847 525,152 550,512
Financial Capital expenditures 161,333 168,446 181,489 148,993 239,197 134,555 93,378 89,502 116,593 68,048
position
(at year-end) Depreciation and amortization 36,362 39,427 45,281 44,722 50,044 59,668 52,244 53,527 48,303 47,421
Cash flows from operating activities 141,238 77,614 (23,941) 84,902 (2,909) 59,756 88,228 101,826 39,636 (43,919)
Cash flows from investing activities (145,541) (148,304) (63,737) (54,117) (83,233) (27,212) (5,113) (11,177) (29,569) (24,882)
Free cash flows (4,303) (70,690) (87,678) 30,785 (86,142) 32,544 83,115 90,648 10,066 (68,801)
Cash flows from financing activities (7,460) 99,844 109,411 (24,797) 86,307 26,364 (26,634) (119,254) (14,836) 26,436

Profit attributable to owners of the parent (¥) 131.36 50.89 (106.24) 40.08 (54.14) 12.07 17.75 28.60 (54.95) (148.82)
Per share Net assets (¥) 558.46 525.43 403.53 381.87 317.59 363.18 414.66 471.10 379.18 234.19
data Cash dividends applicable to the year (¥) 26.00 13.50 ̶ 9.50 ̶ 2.50 4.50 8.50 5.00 —
Dividend payout ratio (%) 19.8 26.5 ̶ 23.7 ̶ 20.7 25.4 29.7 — —
Return on equity (ROE)*4(%) 23.7 9.4 (21.4) 10.2 (15.5) 3.7 4.6 6.5 (12.9) (48.5)
Management Return on assets (ROA)*5(%) 13.5 6.2 (6.6) 4.6 (4.7) 2.5 2.7 4.0 0.3 (4.8)
index Debt equity ratio (DER)*6(Times) 0.93 1.31 1.67 1.66 2.44 1.85 1.66 1.22 1.48 2.51
Equity ratio (%) 36.7 34.5 29.5 28.2 22.7 28.9 31.0 36.1 31.9 21.0
Average during Exchange rate (¥ / US$) 115 101 93 86 79 82 100 109 121 109
the period Fuel oil price (US$ / ton) 407 504 407 489 672 671 626 541 295 265

Consolidated
Vessels in operation*7 499 504 499 522 559 566 583 584 575 560
business data
Consolidated employees 7,615 7,706 7,740 7,895 7,703 7,667 7,703 7,834 8,097 8,018
Unconsolidated employees 600 602 623 623 664 659 652 676 716 735
Land 432 417 433 437 486 481 478 504 541 552
Human Sea 168 185 190 186 178 178 174 172 175 183
resource
data Women (%) 19.5 18.6 18.5 18.9 22.9 22.8 24.4 25.4 26.3 24.9
Persons with disabilities (%) 2.56 2.05 2.12 1.60 1.60 1.90 1.93 1.87 1.94 2.29
Land 1 0 0 0 0 0 0 0 0 1
Industrial accidents
Sea 0 2 1 0 0 1 3 1 0 1
Directors 12 12 15 14 13 13 13 10 9 9
Outside Directors 0 0 2 2 2 2 2 2 2 3
Management*8
Audit & Supervisory Board Members 4 4 5 5 5 5 4 4 4 4
Outside Audit & Supervisory Board Members 2 2 3 3 3 3 3 3 3 2
Fuel oil (thousands of tons) 4,550 4,392 3,563 3,802 3,949 3,966 3,651 3,646 3,942 3,872
Environmental CO2 emissions (thousands of tons) 14,150 13,677 11,096 11,838 12,298 12,352 11,377 11,360 12,300 12,079
data*8, 9 SOx emissions (thousands of tons) 255 240 197 208 214 209 190 182 190 183
NOx emissions (thousands of tons) 405 410 303 308 323 319 292 283 290 274

Notes: *1. Rounded to millions of yen *6. Debt equity ratio: Interest-bearing liabilities / Equity capital
*2. Ordinary income consists of operating income and non-operating income / expenses. *7. Includes project-use vessels owned by special purpose companies (SPCs)
*3. Equity capital: Net assets – (Non-controlling interests + Stock acquisition rights) *8. For Kawasaki Kisen Kaisha, Ltd.
*4. Return on equity: Profit attributable to owners of the parent / Equity capital *9. Total amounts calculated based on fuels supplied to vessels for which “K” LINE arranged refueling. From 2008 onwards, the
*5. Return on assets: Ordinary income / Total assets figures are calculated on a calendar year basis.
 5 “K” LINE at a Glance Management Policy and Medium-term Management Plan Business Segment Data Other Corporate Information

I. “K” LINE at a Glance | Financial Data

Operating Revenues, Ordinary Income, Total Assets, Total Equity, Equity Ratio
Profit Attributable to Owners of the Parent
(Billions of yen) (Billions of yen) (Billions of yen) (%)
1,500 90 1,500 50
1,030.2
1,000 60
1,200 40
500 30 1,045.2

0 0
900 30

-30
(52.4) 21.0
600 20
-60

-90
300 219.5 10
-120
(139.5)
-150 0 0
2010 2011 2012 2013 2014 2015 2016 2010 2011 2012 2013 2014 2015 2016
Operating revenues (left scale)   Ordinary income (right scale)
Profit attributable to owners of the parent (right scale) Total assets (left scale)  Total equity (left scale)   Equity ratio (right scale)

Profit Attributable to Owners of the Parent, Ordinary Income, Interest Bearing Liabilities, Debt Equity Ratio (DER)
Return on Equity (ROE), Return on Assets (ROA)
(Billions of yen) (%) (Billions of yen) (Times)
60 20 700 7

30 10 600 6
550.5

0 0 500 5
(4.8)
-30 -10 400 4

-60 (52.4) -20 300 3

2.51
-90 -30 200 2

-120 -40 100 1

(139.5)
(48.5)
-150 -50 0 0
2010 2011 2012 2013 2014 2015 2016 2010 2011 2012 2013 2014 2015 2016
Profit attributable to owners of the parent (left scale)  Ordinary income (left scale)
ROE (right scale)    ROA (right scale) Interest bearing liabilities (left scale)   DER (right scale)
 6 “K” LINE at a Glance Management Policy and Medium-term Management Plan Business Segment Data Other Corporate Information

I. “K” LINE at a Glance | Financial Data

EV / EBITDA Ordinary Income, Ordinary Income on Revenue

(Billions of yen) (Times) (Billions of yen) (%)
150 90 60 6.0

40 4.0
100 60
20 2.0

50 30 (52.4)
0 0

-20 -2.0
0 0
(9)
-40 -4.0
-50 -30
-60 (5.1) -6.0

(77.2)
-100 -60 -80 -8.0
2010 2011 2012 2013 2014 2015 2016 2010 2011 2012 2013 2014 2015 2016

EBITDA (left scale)   EV / EBITDA (right scale) Ordinary income (left scale)   Ordinary income on revenue (right scale)

Operating Revenues, Assets Turnover Cash Flows

(Billions of yen) (Billions of yen)
1,500 1.5 120
100
1,200 1.2 80
1,030.2 60
0.95 40
900 0.9
20
(43.9)
0
600 0.6
-20
-40 (24.9)
300 0.3 -60
(68.8)
-80
0 0 -100
2010 2011 2012 2013 2014 2015 2016 2010 2011 2012 2013 2014 2015 2016

Operating revenues (left scale)   Assets turnover (right scale) Cash flows from operating activities  Cash flows from investing activities   Free cash flows
 7 “K” LINE at a Glance Management Policy and Medium-term Management Plan Business Segment Data Other Corporate Information

II. Management Policy and Medium-term Management Plan “Revival for Greater Strides”

Kawasaki Kisen Kaisha, Ltd. (“K” LINE) is pleased to introduce “K” LINE Group’s new management policy and medium-term management plan:
“Revival for Greater Strides” – “K” Value for our Next Century – which runs for three years, toward our 100th anniversary in 2019 in response to the big
business environment change in marine transportation industry and aiming the rebuilding of management base to allowing us to grow consistently.

Management Policy Corporate Principle and Vision, Important management theme

With the formulation of this management plan, we reconfirmed our approach to customers and society in our Corporate Vision.

~ : trust from all over the world ~

Corporate
Principle
As an integrated logistics company grown from shipping business,
the “K” LINE Group contributes to society so that people live well and prosperously.
We always recognize this principle in our operations.

Our aim is to become an important infrastructure for global society, and to be the best partner
with customers by providing the high-quality logistics services based on customer first policy.
Vision
Values the “K” LINE Group’s prizes
• Providing reliable and excellent services................... Contributing to society
• A fair way of business................................................. Fostering trust from society
• Relentless efforts to achieve innovation................... Generating new values
• Respecting humanity................................................... Corporate culture that respects individuality and diversity

We recognize the following three themes as important management issues for “K” LINE Group in responding to the
changing business environment.
• Maximize our strengths to ensure competitiveness
• Transform business portfolio to reduce influence from market volatility
• Achieve growth via technological and business model innovation
 8 “K” LINE at a Glance Management Policy and Medium-term Management Plan Business Segment Data Other Corporate Information

II. Management Policy and Medium-term Management Plan “Revival for Greater Strides”

Medium-term Management Plan “Revival for Greater Strides”

The three years to FY2019 (100th anniversary of our foundation) is the period we make “Revival for Greater Strides.” Our priority initiatives are (1) Rebuilding Port-
folio Strategy, (2) Emphasizing Advancement of Management and Function-specific Strategies, and (3) Pursuing ESG Initiatives.

Target for Key Performance Indicators

Medium-term Management Plan (FY2017-FY2019) Long-term target (mid-2020s)
Return to profit in three years from FY2017 Achieve ROA (ordinary income) of 6%, ROE of double digits
Achieve 6% ROA (ordinary income) in stable business, and expand business scale – Foster both growing fields and stable-income foundation via advanced management
> Increase ordinary income from stable business to over ¥30 billion in FY2019 from
Shareholders’ equity of ¥400 billion
¥25 billion in FY2016
– Verify benefits from containership business merger, plan to reset
Ratio of Shareholders’ equity – Targeting mid 20%’s
Dividend policy – Our priority is to stabilize our business base and financial strength. Dividend policy – Return to a stable dividend policy
We are aiming to resume paying dividends soon.

Fleet Planning and Investment Plans – Number of key fleet vessels (trend) Three-year Investment Plan (FY2017-FY2019 excludes Containership Business)
FY2015 FY2016 FY2019 Difference Careful selection of investments so as to improve financial strength
results results target (FY2019 vs. FY2015)
Strategic investment framework of ¥30 billion (three years)
Containerships 63 58 — —
Dry bulk carriers 225 200 194 (31)
Capesize 88 81 81 (7) Environment-related
Panamax 104 87 73 (31) investment
Strategic investment
Thermal coal carriers 24 23 31 +7 TOTAL ¥15 billion
framework
Wood chip carriers 9 9 9 0 ¥80 billion
Car carriers 102 93 91 (11) ¥30 billion
Fleet restructuring,
Tankers 23 22 23 0 including replacements
LNG carriers 41 42 49 +8
¥35 billion
Offshore E&P Support 8 8 8 0
Heavy lifter vessels 15 15 15 0
Short sea, coastal and other 51 48 50 (1) Strategic investment framework
In the three years of our “Revival for greater strides” plan, we will carefully screen investments with
Total 465 428 430 (35) a focus on improving our financial strength, our strategic investment framework for stable-income and
next-generation core businesses having been placed directly.
* Total and difference vs. FY2015 does not include containerships
 9 “K” LINE at a Glance Management Policy and Medium-term Management Plan Business Segment Data Other Corporate Information

II. Management Policy and Medium-term Management Plan “Revival for Greater Strides”

Three Priority Initiatives (1) Rebuilding Portfolio Strategy

What We Aim to Become Policies for each Business

Expand Stable Business and develop Next-generation core Business
Present Shape New Business
with growth potential
New Business Develop Next-generation Core Business • Expand fleet with fixed contracts; mainly capesize carriers, thermal coal carriers,
Dry Bulk
and wood chip carriers
Business
• Develop logistics & car distribution & • Reduce market-exposed core fleet, mainly small / mid-sized vessels
energy value chain
Stable Business • Create markets and services via techno- LNG Carrier • LNG Carrier – Expand project-linked vessels
Asset base ¥500 billion logical and business model innovation and Tanker • Enter energy value chain for LNG / LPG demand creation

Rebuilding Portfolio Strategy

Business • Expand stable oil tanker fleet, mainly VLCCs / LPG vessels
Ordinary income ¥25 billion Stable Business
ROA (ordinary income) 5.0% Offshore Energy
Increase Stable Business • Execute structural reforms to stabilize offshore support business
E&P Support
• Generate stable profit in new businesses
• Improve and expand stable medium / Business
long-term contracts
•Cost savings • Improve profitability and business stability via THE Alliance
Containership
• Improve service quality and business competitiveness via successful integration in
Business
2018
Containership Stabil
Business ize Re • Expand forwarding business by bolstering our global network centered on “K” Line
venu
es via Logistics Logistics
Merg
er Business • Expand local logistics in developing regions, centered on Asia where we have
Containership
Business strength, and expand other areas
(equity-method affiliate)
Market-sensitive Reduce • Add large-sized vessels / expand volume of high & heavy cargoes / improve opera-
Market- Car Carrier
Business sensitiv tional efficiency
e Busin Market-sensitive
ess Business
Business • Expand auto-mobile logistics business with a solid customer base

Three Priority Initiatives (2) Emphasizing Advancement of Management and Function-specific Strategies

1 Advancement of Management 2 Function-specific Strategies

> Commences from FY2017 (we plan to disclose more on this program at a later date)
Strengthen customer relationship management (CRM)
Total risk-return management Pursue high-quality service via technological and business model innovation
Introduce business assessment with a greater focus on capital costs Attract and retain human resources, nurture diversity
Introduce PDCA cycle management
 10 “K” LINE at a Glance Management Policy and Medium-term Management Plan Business Segment Data Other Corporate Information

II. Management Policy and Medium-term Management Plan “Revival for Greater Strides”

Three Priority Initiatives (3) Pursuing ESG Initiatives

Environment Safety Navigation & Cargo Operation

Named to Climate A List for 2016 and to the Supplier Engagement Leader Board by CDP
World Leading in Safety Navigation & Cargo Operation
New interim CO2 reduction target under “K” LINE Environmental Vision 2050 has been certified as
a “Science Based Target” (SBT) Keep serious maritime accidents at zero
Japanese SOx Scrubber System of eco-flagship DRIVE GREEN HIGHWAY acquired first certification Developed and introduced the K-IMS integrated vessel operation and per-
from Panama formance management system
Group environment management system established Constructed an energy management system
Bolster safe navigation hardware via K-DNA guidelines for installing safety
Society equipment
 olster stakeholder engagement, vessel tours to promote community engagement, implement
B
volunteer activities
Devise supply chain guidelines
Devise and launch a new personnel system aimed at achieving diverse working styles.
Offer diverse training to improve the know-how & skills and foster teamwork of maritime technical
personnel via “K” Line Maritime Academy, etc.

Governance: Corporate Governance System

Corporate Governance Clarified executive officer system Corporate Governance Structure
3rd
2016- stage
Initiatives Stronger monitoring of Board Shareholders’ Meeting
• Adoption of Unit Supervisory System Appointment /
Appointment /
• Evaluating board effectiveness Dismissal
Dismissal Inquiry
• Increased number of Outside Directors from 2 to 3 Directors Directors Nominating Advisory Committee
Reporting

Audit & Supervisory Board Members

• Appointment of a female to managerial position as Outside (Board of Directors)
Remuneration Advisory Committee

Reporting

Auditing
Audit & Supervisory Board Member

(Audit & Supervisory Board)

Supervising

Accounting Auditor
Containerships, Car Carriers, Port Business,
Review governance system Management Conference (Senior Managing
2nd
2015-2016 stage Executive Officers and above, etc.) Logistics, Affiliated Business Promotion Unit
• Improvement of functions of Board of Directors, Man- Dry and Liquid Bulk Carriers Unit
President & CEO
agement Conferences and Executive Officers Meetings
Executive Officers’ Meeting (Executive Officers
• Establishment of Nominating Advisory Committee & and Audit & Supervisory Board Members) General Affairs, Legal, Corporate Legal Risk
Remuneration Advisory Committee & Compliance, Human Resources, Corporate
• Corporate governance guidelines Directing Planning, Research, Project Office for
Containerships and Terminal Business Unit
Unit Supervisory System (Operating Organization)

1st Governance reform Marine Sector, Advanced Technology, Ship

-2015 stage Unit Supervising Executive Officers Technical and Environmental Affairs Unit
• Adoption of Executive Officer System (2006)
• Established single-year term system for board appointments Finance, Accounting, IR&PR Unit
Accounting Auditing Executive Officer in charge
(2009)
• Recruited outside directors to join our Board of Directors (2009) Information System Unit
 11 “K” LINE at a Glance Management Policy and Medium-term Management Plan Business Segment Data Other Corporate Information

III. Business Segment Data | Containership

Fleet Size of Container Operators (as of May 2017) Trade Capacity Share by Alliance
Others Others
Ranking Operator TEU Vessels Share
1% THE 6% THE
1 APM‐Maersk 3,317,023 633 16% Alliance Alliance
2 MSC 3,034,787 506 15% 21% 29%
3 CMA CGM 2,241,198 452 11% Asia-
Asia-Europe Ocean N. America
4 COSCO 1,726,355 317 8% Ocean
Alliance
Alliance
5 Hapag‐Lloyd 1,059,749 178 5% 42% 2M+HMM
41%
6 Evergreen 1,022,831 194 5% 2M+HMM 23%
37%
7 OOCL 665,560 106 3%
8 NYK 607,278 109 3%
Source：Alphaliner
9 Yang Ming 583,054 100 3%
10 Hamburg Süd 561,005 107 3%
11 MOL 512,013 78 2%
Container Fleet Capacity, Supply and Demand
12 UASC 485,554 50 2% （Million TEU） (%)
25 20
13 HMM 436,532 68 2% 16.0
13.4 14.3 12.8 13.8 13.2 14.3
14 PIL 371,712 142 2% 12.2 12.3 12.9
15 “K” LINE 368,610 63 2% 20 10
10.1 12.4 8.2
16 Zim 307,260 69 1% 9.3 8.9 9.7 10.0 10.8 5.5 6.0 5.8 6.3
9.1 7.9 4.6 4.7
5.9 8.6 2.2
17 Wan Hai 237,717 89 1% 5.6 4.8 5.1
3.7 3.0 3.2
18 X‐Press Feeders 142,077 87 1% 15 1.4 1.5 0

19 KMTC 119,416 60 1%
20 SITC 104,189 78 1%
10 -8.3 -10
Others 2,896,021 2,498 13%
Total 20,799,941 5,984

*1 HMM has a partial joint operation service with 2M. 5 -20

*2 “K” LINE, NYK and MOL announced establishment of the company for new integrated Con-
tainership Business in July 2017 and the services by the new company will start in April 2018.

Members of each alliance

THE Alliance “K” LINE, NYK, MOL, Hapag-Lloyd (UASC), Yang Ming 0 -30
‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17f ‘18f
2M APM-Maersk, MSC
Ocean Alliance CMA CGM, COSCO, Evergreen Fleet Capacity (left scale)  Forecast (left scale)
% Annual Capacity Growth (right scale)   % Global Throughput Growth (right scale)
Source: Alphaliner Source: Alphaliner
 12 “K” LINE at a Glance Management Policy and Medium-term Management Plan Business Segment Data Other Corporate Information

III. Business Segment Data | Containership

Asia-North America Cargo Volume Asia-North America Trade Commodity Composition

(1,000TEU)
16,000
15.6%
14,000 18.3%
9.1% 38.7%
Asia 44.4% North America 8.0%
12,000
→North America 7.6% →Asia 7.8%
10,000
4.5%
8,000 4.2% 6.9%
2.6% 3.4% 2.5%
3.2% 4.6%
6,000 3.0% 3.3% 3.4%
2.7%
2.9% 3.3%
4,000
Furnitures and Tire and Tubes Papers, Paperboard, Metal and Scrap
Household Goods Construction Tools and and its Products Fruits
2,000
Apparel and its Products Related Items Raw Woods and its Products Meats and its
General Electronic Vehicle Equipment and its Parts Animal Feed Processed Products
0
Equipments Audio and Visual Equipment like TVs or Videos  Apparel and its Products Fat, Oil and Oilseed
2011 2012 2013 2014 2015 2016
Auto Parts Toys Furnitures and Household Goods Others
Asia→North America Loading Port-wise North America→Asia Discharging Port-wise Plastic Products inc. Others Plastic inc. Resin
China  Japan  Other Asia China  Japan  Other Asia Blind, Flooring
Source: Japan Maritime Center / Piers Source: Japan Maritime Center

Asia-Europe Cargo Volume Container Cargo Movements (2016)

(1,000TEU)
16,000
6.90 million TEU（5%）
+190% Compared with 2001
12,000
EUROPE
USA
8,000
ASIA
20.46 million TEU（15%） 21.96 million TEU（17%）
+260% Compared with 2001 +210% Compared with 2001
4,000

Total: 132.8 million TEU

0
Others (incl South-North, Intra Asia)
+230% Compared with 2001
2011 2012 2013 2014 2015 2016 2017f 83.48 million TEU（63%）
+230% Compared with 2001
Asia→Europe  Europe→Asia Source: IHS Global Insight Source：IHS Global Insight
 13 “K” LINE at a Glance Management Policy and Medium-term Management Plan Business Segment Data Other Corporate Information

III. Business Segment Data | Containership

Transition of SCFI (Shanghai Containerized Freight Index) VLCS Fleet by Year of Delivery
(US$) (Vessels)
5,000 150
Great East
Japan Earthquake
4,000 2011/3/11 120

3,000 90
USWC Port Strike
2014/5–2015/2
2,000 60

1,000 30

0 0
7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17F ‘18F ‘19F
2009 2010 2011 2012 2013 2014 2015 2016 2017
>18000 TEU  13300-18000 TEU  10000-13300 TEU  7500-10000 TEU
MED   N.EUR   USWC   USEC (MED / N.EUR $ / TEU, USWC / USEC $ / FEU)
SCFI (Shanghai Containerized Freight Index) Source: Shanghai Shipping Exchange Source: Alphaliner

Newbuilding Price Index TEU Capacity of Containerships Sold for Demolition by Month
（Index, Dec. 1996=100） (1,000TEU)
140 110
100
130
90
120 80

110 70
60
100
50
90 40

80 30
20
70
10
60 0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4
2010 2011 2012 2013 2014 2015 2016 2017
Source: Clarkson Source: Alphaliner
 14 “K” LINE at a Glance Management Policy and Medium-term Management Plan Business Segment Data Other Corporate Information

III. Business Segment Data | Containership

“K” LINE Containership Fleet

Transition of“K”LINE Containership Fleet Scale
(FY) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 (Vessels) (1,000TEU)
100 400
14000TEU type — — — — — — — — １ 5 5

80
8000TEU type 3 4 6 8 8 9 13 13 13 13 13
300

5500TEU type 18 18 18 16 19 18 18 18 20 13 13
60

23 24 25 29 24 28 26 24 28 19 20 200
4200TEU type
40
1700TEU type 18 25 25 24 19 17 15 16 15 15 14
100
27 28 24 10 12 8 3 3 3 3 2 20
1200TEU type

Total 89 99 98 87 82 80 75 74 80 68 67
0 0
’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 (FY) ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 (FY)
1200TEU  1700TEU  4200TEU  5500TEU  8000TEU  14000TEU

Main Carriers Breakdown of Capacity Operated by Trade

(%) 0 10 20 30 40 50 60 70 80 90 100

“K”LINE 2 50 23 4 5 5 1 7 1 2

APM-Maersk 5 15 22 13 14 15 4 5 4 1 2

MSC 7 5 27 9 14 19 3 2 9 1 4

COSCO 1 24 28 8 3 8 3 21 1 1 2

Hapag-Lloyd 21 12 14 8 1 32 5 1 2 2 2

Yang Ming 1 28 32 12 5 4 11 2 4 1

OOCL 1 32 24 15 12 10 1 5

NYK 6 37 24 9 14 2 7 1

MOL 38 19 11 8 11 4 8 1

Eur-N. Am  FE-N. Am  FE-Eur  ME / Indian Sub-Conti related  Sub-Saharan Africa related  Lat Am related  ANZ / Oceania related  Intra-FE  Intra-Europe  Unassigned  Idle
Source: Alphaliner
 15 “K” LINE at a Glance Management Policy and Medium-term Management Plan Business Segment Data Other Corporate Information

III. Business Segment Data | Integrated Container Shipping Business

Containership Organizational Structure Operating Company Profile Environment of Container Shipping Business
—Evolution of the competitive landscape
Organizational Structure Function Tradename OCEAN NETWORK EXPRESS PTE. LTD. Fleet scale September 2015
（10,000 TEU）
Holding Company (Japan) Overall organizational Location Republic of Singapore
350
Ocean Network Express governance of Ocean 305
Representative Jeremy Nixon
Holdings, Ltd. Network Express 300
268
Shareholders / • Kawasaki Kisen Kaisha：31%
Contribution • Mitsui O.S.K. Lines：31% 250
Operating Company (Singapore) Operational Ratio • Nippon Yusen Kabushiki Kaisha：38%
Ocean Network Express headquarters of Ocean 200 179
Pte. Ltd. Network Express Approx. 300 Billion JPY
Amount of
(Including fleets, share of terminals as 150 16%
Contribution*
investment in kind) 14%
96 95
100 87
Container Shipping Businesses (Including 9% 70 63 62 59
Business 59 56 53 52 45 40 38 38
worldwide terminal operation except for
Hong Kong

Singapore

Domain 50 5% 5%
Japan) 4% 4%
Brazil

Operational regional
USA

3% 3% 3% 3% 3% 3% 3% 2% 2% 2% 2%
UK

headquarters 0
Date of Establishment: July 7th, 2017
Schedule 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
Service Start (planed): April 1st, 2018

APM-Maersk

MSC

CMA CGM

Hapag-Lloyd

Evergreen

COSCO

CSCL

Hamburg Süd

HJS

OOCL

MOL

APL

Yang Ming

NYK

UASC

“K” LINE

PIL

HMM
Regional Headquarters *Service start

The Aim of the Joint-Venture / Source of Competitiveness

By strengthening Fleet Scale June 2017
（10,000 TEU） 2-3 Mil TEU Class
the global
350 335
organization and 306
enhancing the liner 300

Operational Economy Competitiveness network,

1-1.99 Mil TEU Class
250 230
Efficiency of Scale (Profitability) we will be able Sum of 3J
200
to provide higher 174 Under 1 Mil TEU Class
153 144
quality services and 150 16%
15% 102
unlock new value in
100
11% 69
order to exceed 58 56
Best Practice Larger Synergy of Approx. 50 8% 7% 7% 37 37
35
Business Size 110 B JPY / year our clients’ 5% 23
3% 3% 3%
2% 2% 2% 1%
Creation of more syn- Achievement of econ- Profit stabilization by expectations. 0
ergy and enhancement 1 2 3 4 5 6 7 8 9 10 11 12 13 14
omy of scale by bring- accomplishment of * HL and UASC
of operational effi- APM-Maersk

MSC

CMA CGM

COSCO

Hapag-Lloyd+
UASC*

ONE**

Evergreen

OOCL

Yang Ming

Hamburg Süd

PIL

HMM

Zim

Wan Hai
ing three companies’ synergy of approx. 110 case is still under
ciency by integration of discussion
business B JPY / year **Excluding the
each company’s best
order book
practice
Source：Alphaliner
 16 “K” LINE at a Glance Management Policy and Medium-term Management Plan Business Segment Data Other Corporate Information

III. Business Segment Data | Dry Bulk

Dry Bulk (All Types) Fleet (as of June 2017) Capesize Fleet (as of June 2017)

Ranking Operator 100,000DWT Vessels Ranking Operator 100,000DWT Vessels

1 China COSCO Shipping 346.0 334 1 China COSCO Shipping 200.8 82
2 NYK 179.6 192 2 Berge Bulk Ltd. 107.0 43
3 “K” LINE 147.5 123 3 China Merchants Group 95.0 32
4 China Merchants Group 137.8 110 4 “K” LINE 94.7 47
5 MOL 134.9 116 5 NYK 92.0 47
6 Fredriksen Group 130.2 111 6 Angelicoussis Group 91.7 52
7 Berge Bulk Ltd. 109.8 51 7 MOL 89.4 42
8 Pan Ocean 92.8 69 8 Fredriksen Group 86.9 48
9 Angelicoussis Group 91.7 52 9 Polaris Shipping Co 81.9 32
10 Oldendorff Carriers 86.8 91 10 NS United 77.9 36

*Owned vessels and a part of chartered vessels Source: Clarkson *Owned vessels and a part of chartered vessels Source: Clarkson

Dry Bulk Delivery and Removal Progress 2016 Dry Bulk Cargo: Ocean Transport Commodity Breakdown (metric ton)
(Million ton)
200 Others 18%

180
Nickel Ore 1%
160
Contracting Deliveries 29% Iron Ore
140
Sugar 1%
120
100
Scrapping Bauxite・Alumina 3% 4.89 18% Steam Coal
80
billion ton
60 Soybean 3%
40 8% Steel Products

20
Coking Coal 5%

0
‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16‘17f‘18f Wheat・Coarse Grain 7% 7% Wood Products

Source: Clarkson Source: Clarkson

 17 “K” LINE at a Glance Management Policy and Medium-term Management Plan Business Segment Data Other Corporate Information

III. Business Segment Data | Dry Bulk

BDI (Baltic Dry Index)* and Transition of Scrapped Tonnage Coal Imports by China
(Million ton) (Million ton)
8,000 80 350

7,000 Financial Crisis 70 300

2008/9
6,000 60
250
5,000 9.11 Great East 50
Japan Earthquake 200
2001/9/11
4,000 2011/3/11 40
150
3,000 Asia Currency 30
Crisis
100
2,000 1997/7 20
Iraq War
2003/3 50
1,000 10

0 0 0
‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Scrapped Tonnage (right scale)   BDI (left scale) *BDI: 4/Jan/1985=1,000 Source: Clarkson Source: China Customs Statistics

Crude Steel Production and Iron Ore Imports by China Iron Ore Imports by Major Asian Countries
(Million ton) (Million ton)
1,200 1,500

1,000
1,200

800
900

600

600
400

300
200

0 0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017f

Crude Steel Production   Iron Ore Import Source: National Bureau of Statistics of China Total   China   Japan   Korea   Taiwan Source: Clarkson
China Customs Statistics
 18 “K” LINE at a Glance Management Policy and Medium-term Management Plan Business Segment Data Other Corporate Information

III. Business Segment Data | Dry Bulk

“K” LINE Dry Bulk Fleet

Transition of“K”LINE Dry Bulk Fleet Scale
(FY) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 (Vessels)
300
Capesize 62 61 61 68 77 88 99 99 99 93 95
250
Corona* 15 15 16 18 20 21 26 30 27 29 30

Panamax 35 42 35 44 49 48 42 56 55 56 56 200

Handymax 21 24 22 27 31 46 50 50 44 51 49 150

Small Handy 11 12 15 12 13 17 22 26 26 29 19 100

Chip + Pulp 15 15 17 16 16 16 13 10 10 9 11
50
Total 159 169 166 185 206 236 252 271 261 267 260
0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 (FY)

Capesize  Corona  Panamax  Handymax  Small Handy  Chip + Pulp

“K” LINE’s Dry Bulk Fleet Market Exposure 2017 (forecast) Dry Bulk Fleet Composition (as of the March 2017)
Chip + Pulp
4%
Capesize Capesize
Capesize Small Handy 15% 36%
Small Handy
30%
7%
Corona*
Handymax

Panamax In the Industry 19% “K”LINE

10,980 260
vessels vessels
Handymax
Panamax
23%
Small Handy
Corona
Chip + Pulp 12%

(Vessels) 0 20 40 60 80 100 Handymax Panamax

32% 22%
Long Term Contract  Market Exposure *Corona is Over-Panamax vessel used for Steaming Coal. Source：Clarkson
 19 “K” LINE at a Glance Management Policy and Medium-term Management Plan Business Segment Data Other Corporate Information

III. Business Segment Data | Car Carrier

Car Carrier Fleet Ranking (as of March 2017) Overseas Vehicle Production by Japanese Automakers
(1,000 cars)
20,000
Ranking Operator Vessels Share Capacity (unit) Share
1 WWL ASA 121 16.1% 814,000 20.0%
2 MOL 116 15.4% 634,250 15.6% 15,000
3 NYK 108 14.4% 642,000 15.8%
4 “K” LINE 93 12.4% 487,790 12.0%
10,000
5 Grimaldi 56 7.5% 242,000 6.0%
6 GLOVIS 54 7.2% 337,000 8.3%
7 HOEGH 46 6.1% 304,000 7.5% 5,000
8 UECC (NYK+WWL) 13 1.7% 32,088 0.8%
9 TOYOFUJI 8 1.1% 42,000 1.0%
0
Others 136 18.1% 529,200 13.0%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Total 751 4,064,328 Asia  USA  Other North America  EU  Other Europe
Source: Own-editing based on Hesnes “The Car Carrier Market 2016” Latin America  Middle and Near East Source: JAMA

Worldwide Car Ocean Transport Volume Japanese Construction Machine Sales Results
(1,000 cars) (Global Sales: Million Cars) (Billions of yen)
20,000 110 2,000

15,000 100 1,500

10,000 90 1,000

5,000 80 500

0 70 0
2012 2013 2014 2015 2016 2017f 2018f 2019f 2020f 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Europe  Korea  Japan  Others  Global Sales Source: IHS Global Insight Domestic   Export Source: Japan Construction Equipment Manufacturers Association
 20 “K” LINE at a Glance Management Policy and Medium-term Management Plan Business Segment Data Other Corporate Information

III. Business Segment Data | Car Carrier

“K” LINE Car Carrier Fleet

Transition of“K”LINE Fleet Scale
（FY） 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 (Vessels)
120
7000 units — — — — — — — — — 7 10

6000 units 13 17 22 24 28 34 35 41 46 46 43 100

5000 units 20 22 17 16 17 16 18 17 15 14 14
80

4000 units 30 30 25 14 21 23 20 19 18 15 9
60
3000 units 14 12 11 9 7 8 6 6 8 6 5
40
2000 units 8 8 8 6 6 6 6 6 6 6 7

Less than 2000 units 15 13 10 9 10 10 10 10 9 8 9 20

Total 100 102 93 78 89 97 95 98 102 102 97

0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 (FY)
(including short-term chartered vessels)
Less than 2000 units  2000 units  3000 units  4000 units  5000 units  6000 units  7000 units

Cars and Trucks Transported by “K” LINE Total Cars and Trucks Exported from Japan
(10,000 cars) (10,000 cars)
400 700

600

300
500

400
200
300

200
100

100

0 0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Japan / North America  Japan / Europe  Japan / Others   North America  EU  Middle and Near East  Russia  China  Other Asia
Others  Intra-Europe  Trade Bound for Japan Central America  South America  Others Source: JAMA
 21 “K” LINE at a Glance Management Policy and Medium-term Management Plan Business Segment Data Other Corporate Information

III. Business Segment Data | Tanker

VLCC Fleet Ranking (as of June 2017) Tanker Delivery and Removal Progress
(Million ton)

Ranking Operator 100,000DWT Vessels 100

1 China Merchants Grp 129.3 42 Contracting

2 NIOC 123.6 40 80
3 Bahri 116.1 37
4 China COSCO Shipping 106.2 35 60
5 Euronav NV 100.2 32 Deliveries
Scrapping
6 Angelicoussis Group 97.2 31
40
7 MOL 95.2 31
8 DHT Holdings 73.7 24
9 Gener8 Maritime 72.3 24 20

10 NYK 57.7 19
....

0
‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17 ytd
20 “K” LINE 24.1 7
Source: Clarkson Source: Clarkson Oil & Tanker Outlook

Tanker Freight Index (WS: World Scale) and Transition of Scrapped Tonnage Historical Oil Price Trends
(WS) (Million ton) (US$ / bbl)
160 40 140
9.11 Financial Crisis
2001/9/11 2008/9 120

120 30
100
Asia Currency
Crisis Great East
1997/7 Japan Earthquake 80
80 Iraq War 2011/3/11 20
2003/3 60

40
40 10

20

0 0 0
‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Scrapped Tonnage (right scale)   WS (left scale) WTI Brent Source: Clarkson
 22 “K” LINE at a Glance Management Policy and Medium-term Management Plan Business Segment Data Other Corporate Information

III. Business Segment Data | Tanker

Forecast of Oil Demand by Country Tanker Fleet and Order Book

(Million barrel / day) (Million ton) （Tankers 10,000+ dwt） (%)
100 OECD 600 50
Chemical / Other Specialised
USA Tanker Fleet
29.8 Europe
80 500 40
41.5 Japan
Orderbook as
Other OECD % Fleet Product Tanker
60 400 30
Fleet
Non-OECD
Russia
40 300 20
43.6 China
62.5
India
20 Middle East 200 10
Brazil Crude Tanker Fleet
Africa
0 Other Non-OECD 100 0
2000 2015 2020f 2025f 2030f 2035f 2040f
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Source: World Energy Outlook Source: Clarkson Oil & Tanker Outlook

“K” LINE Tanker Fleet

Transition of“K”LINE Tanker Fleet
(FY) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 (Vessels)
40
Oil Tankers /
5 6 6 9 9 8 8 7 7 7 7
VLCC

Oil Tankers / 30
10 12 13 14 10 8 5 5 4 4 3
AFRAMAX

Product Tankers /
5 5 6 6 6 6 4 4 4 3 3
LR II 20

Chemical Tankers — — — — — — 2 3 3 3 3

10
LPG Carriers 3 5 5 5 5 5 5 5 6 6 6

Total 23 28 30 34 30 27 24 24 24 23 22 0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 (FY)

Oil Tankers / VLCC  Oil Tankers / AFRAMAX  Product Tankers / LR II  Chemical Tankers  LPG Carriers

 23 “K” LINE at a Glance Management Policy and Medium-term Management Plan Business Segment Data Other Corporate Information

III. Business Segment Data | LNG Carrier

LNG Carrier Fleet Ranking (including co-owned) (as of June 2017) LNG Carrier Supply and Demand
(Vessels)
600
Ranking Operator Vessels
1 MOL 71
500
2 NYK 70
3 Nakilat 64 400

4 “K” LINE 42
300
5 TeeKay 32
6 MISC 26
200
6 Iino Lines 26
6 Maran Gas 26 100
9 GasLog 23
10 Golar 16 0
2011 2012 2013 2014 2015 2016 2017f 2018f 2019f 2020f 2021f 2022f
11 Bergesen Worldwide 15
The estimated number of NBs for new project   The number of NBs for new project (on order)  Demand for Spot LNGC
Source: “K” LINE Demand for LNGC engaged in long term project   LNGC Supply   LNGC Demand Source: “K” LINE

LNG Carrier Spot Market “K” LINE LNG Carrier Fleet (including co-owned)
($ / day) (Vessels)
160,000 50
138,000–150,000 cbm steam
140,000
160,000+cbm TFDE*
40
120,000

100,000 30
Financial Crisis
80,000 2008/9
20
60,000

Great East
40,000
Japan Earthquake 10
2011/3/11
20,000

0 0
1 7 1 7 1 7 1 7 1 7 1 7 1 7 1 7 1 7 1 7 1 7 1 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 (FY)
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
*TFDE（Tri Fuel Diesel Electric）propulsion system is propelled by electric motors utilizing power generated by diesel generators
being fueled by boil-off gas or marine diesel oil or heavy oil. Source: SSY LNG RADAR
 24 “K” LINE at a Glance Management Policy and Medium-term Management Plan Business Segment Data Other Corporate Information

III. Business Segment Data | Energy Transportation • Offshore Energy E&P Support “K” LINE’s Business Fields

The Oil and Natural Gas

Vessel and Facilities Used
Development Process

Jack-Up Rigs
Semi-Submersible Rigs
*Source: Japan Drilling Company
Development Upstream

Drilling
Exploration
Equipment

Drillship

Development Offshore
Production OIL / LNG FPSO*1
and Support
Production Facilities Semi-Submersible Rigs
Vessels
Midstream

Transport Tanker（crude oil, products, chemicals）

Transport
Vessel Gas Tanker（LPG, LNG）
Downstream

Refining Receiving
and FSRU*2
Facilities
Sale

*1.FPSO: Floating Production Storage and Offloading System “K” LINE’s Business Fields as of July 2017
*2.FSRU: Floating Storage and Regasification Unit
 25 “K” LINE at a Glance Management Policy and Medium-term Management Plan Business Segment Data Other Corporate Information

III. Business Segment Data | Offshore Energy Development

Offshore Support Vessels “K” LINE provides Offshore Support Vessels Services through its subsidiary company called K Line Offshore AS
(KOAS) in Norway.

PSV Spot Rates Annual Avg and Brent Crude Oil Prices
Platform Supply Vessel (PSV)
(£,000 / day) (US$ / bbl)
35 140
“5 high transport efficiency largest size PSVs” 30 120
PSVs are used to transport materials, equipment and fuel to 25 100
offshore rig. KOAS’s 5 PSVs have its deadweight capacity of 20 80
15 60
5,100 tons and deck area of 1,100 square meters. They are
10 40
categorized largest size PSVs on the market.(1.5 times larger
5 20
than general size) 0 0
‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16
900+m (left scale)
2
500-900m (left scale)
2
Brent crude oil prices (right scale) Source: PSV Spot Rates: Clarksons Platou
Brent crude oil prices: ICE

Anchor Handling Tug Supply (AHTS) AHTS Spot Rates Annual Avg and Brent Crude Oil Prices
Vessel (£,000 / day) (US$ / bbl)
70 140
“2 AHTSs with the world’s largest horsepower” 60 120
AHTSs are engaged in supporting for offshore drilling rigs when 50 100
they are moving locations, such as raising anchors with a mo- 40 80
30 60
tor power. KOAS’s 2 AHTSs have their length 95 meters, width
20 40
24 meters and 34,000BHP at the same level as VLCCs. KOAS’s
10 20
market share of largest AHTS over BHP30,000 is approx. 33%. 0 0
‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16
20,000+ BHP (left scale) 16-19,999 BHP (left scale)  Source: AHTS Spot Rates: Clarksons Platou
10-15,999 BHP (left scale) Brent crude oil prices (right scale) Brent crude oil prices: ICE

Mobile Offshore Drilling Unit

Vessel Specification In 2009 “K” LINE participates in ETESCO project for ultra-deepwater drillship with NYK,
ETESCO TAKATSUGU J
Mitsui & Co. and Japan Drilling.
Builder: Sumsung Heavy
•This ship has been under charter to Petrobras since April 2012. The first well will be drilled in
Industries Co., Ltd.
the Franco SW block in water approximately 2,000 meters deep about 200 kilometers off Rio
Delivery: December 2011
de Janeiro. The area is located in pre-salt fields in which Petrobras holds an interest.
Length overall: 228 m
Breadth: 42 m •It is capable of drilling in water depths of 10,000 feet (3,000 meters) and down to 30,000 feet
Displacement tonnage: 90,600 t (9,000 meters).
 26 “K” LINE at a Glance Management Policy and Medium-term Management Plan Business Segment Data Other Corporate Information

III. Business Segment Data | Logistics and Terminal

We Will Expand Our Global Network and Stable Revenue Base with “K” Line Logistics, Ltd. as the Core.

Container Terminal

Car Carrier Terminal

Antwerp
Tacoma
China (Tianjin, Qingdao, Shanghai): Japan Long Beach

( )
Warehousing business Tokyo, Yokohama,
India: Truck transportation service Osaka, Kobe
Singapore
Jakarta
China

India Storage Capacity Gantry

“K” LINE Container Terminal Length Depth Total Area
（flat space) Crane

Philippines Tokyo 660m 15m 259,500m2 4,370 TEU 5 units

Thailand Yokohama 350m 15m 153,500m2 2,690 TEU 3 units
Japan
Osaka 350m 14m 63,031m2 1,082 TEU 2 units
Vietnam
Kobe 700m 14m 269,510m2 5,505 TEU 5 units
Long Beach 1,603m 13-16m 1,044,089m2 18,200 TEU 15 units
USA
Tacoma 823m 15.5m 376,358m2 4,800 TEU 4 units
Belgium Antwerp 1,125m 17m 790,000m2 12,800 TEU 12 units

Bangkok: Finished vehicles transport Indonesia

service, truck transportation service, Finished Vehicles Transport Service
warehousing business, cold storage
business Land Transport (Container Transport Service /
Truck Transportation Service)
Warehousing Business
Australia
Cold Storage Business
PDI (Pre Delivery Inspection)
Australia: Finished vehicles transport
service, PDI business
Vietnam: PDI business, cold storage business
 27 “K” LINE at a Glance Management Policy and Medium-term Management Plan Business Segment Data Other Corporate Information

IV. Other Corporate Information | “K” LINE Group’s CSR – ESG Initiatives –

Basic CSR Policy CSR Initiatives

• Building a Management • Managing the Impact of • Creating New Values CSR Seminar
Structure that Emphasizes Business Activities In March 2017, “K” LINE held a seminar on the theme of “Corporate Management and CSR.”
Social Responsibility We invited Mr. Toshio Arima, a board member of UN Global Compact, as a speaker at the sem-
Corporate governance Human rights Human resource inar, which was attended by its executives and employees as well as persons in charge of CSR
development from our domestic group companies.
Stakeholder engagement Fair operating practices
(Compliance) Innovation
CSR Guidelines for Supply Chain
Environmental preservation Community involvement In July 2016, the “K” LINE Group formulated “CSR Guidelines for Supply Chain.” These guide-
and development lines outline corporate social responsibility initiatives to be promoted together with our busi-
Labor practices
Employment creation and ness partners across our entire supply chain and a range of collaborative requirements for each
Safety in navigation and
skills development of our business partners.
cargo operations
Risk management

External Recognition
ETHIBEL EXCELLENCE Investment Register
Forum Ethibel, a Belgium-based organization promoting socially re-
FTSE4Good Global Index sponsible investment, selects companies based on human rights,
An index series developed by FTSE Russell, a subsid- human resources, environment, business behavior, corporate gover-
iary of the London Stock Exchange Group of the UK. nance, community impact and other criteria. “K” LINE was included
Selects companies meeting international standards in the register in 2014 and 2017 consecutively.
for ESG-oriented management and information disclo-
sure. “K” LINE has been selected as a constituent for
15 years in a row since 2003. Morningstar Socially Responsible Investment Index
Morningstar Japan selects the top 150 domestic listed companies in
terms of social responsibility. It is Japan’s first socially responsible in-
vestment index. “K” LINE was selected again in the periodic review
FTSE Blossom Japan Index in December 2016.
An ESG index adopted by Government Pension In-
vestment Fund (GPIF) that reflects the performance of
companies with strong ESG practices. “K” LINE was SNAM Sustainability Index
selected as a constituent in July 2017.
An index launched by Sompo Japan Nipponkoa Asset Management
(SNAM) that emphasizes their own ESG rating system. “K” LINE has
been selected five years in a row since 2013.
Dow Jones Sustainability Asia/Pacific Index
An SRI (socially responsible investment) index pro-
vided jointly by US-based Dow Jones and Switzer- MSCI Japan Empowering Women Index (WIN)
land-based Robeco SAM that evaluates the sustain-
One of the ESG indices adopted by Government Pension Invest-
ability of the world’s leading companies based on
ment Fund (GPIF), it selects companies from various industries with
economic, environmental and social criteria. “K” LINE
high gender diversity scores as a theme-based social responsibility
has been selected as a constituent for six years in a
index. “K” LINE was selected in July 2017.
row since 2011.
 28 “K” LINE at a Glance Management Policy and Medium-term Management Plan Business Segment Data Other Corporate Information

IV. Other Corporate Information | “K” LINE Group’s CSR – ESG Initiatives –
Environment
Environmental Preservation: Securing Blue Seas for Tomorrow to the Year 2050 and to the Future Ahead

Trend in International Environmental Our Efforts for Advanced Technology Continue avoiding
Regulations • July 2017: Advanced Technology Group has
serious marine accidents
and be the industry’s leader
• January 2020: SOx emission regulation will be been established. in protection of
strengthened. the ecosystem
• June 2016: Integrated vessel operation and per- Replacing Reducing
• January 2018: CO2 emission amount reporting formance management system “K-IMS” was majority of energy currently CO2 emissions
system will start. developed. consumed with by half
new energy sources
• September 2017: Ballast Water Management • February 2016: DRIVE GREEN HIGHWAY was
Convention will come into force. delivered.
Zero emissions
• January 2016: NOx emission regulations were • July 2015: The state-of-the-art ship maneuver-
strengthened. ing simulator was introduced. Setting a new CO2 emission
reduction target of 25% for
• December 2015: Paris Agreement was adopted. • March 2015: ““K” LINE Environmental Vision 2030 against 2011 level
2050” was formulated.
• December 2013: “DRIVE GREEN PROJECT”
was launched.
DRIVE GREEN HIGHWAY, Two Other Major Achievements
Ship of the Year Awarded in 2016
The ship’s environmental performance, including a 25%
Continuing to reduction of CO2 emissions and an 80% reduction of NOx
avoid causing serious
marine accidents emissions, was recognized.
Reducing CO2 Japanese SOx Scrubber System for Ships Acquired
Introducing 2019 emissions by 10% from First Certification from Panama
2011 level Through steady work and close coordination with marine
LNG-fueled carriers (interim milestone) [accomplished in 2015] equipment manufacturers, a shipbuilding company and a
ship management company, we were able to equip the
Building and implementing ship with the system without any major problems. After detailed data collection through demon-
environmental flagships
strative operation and the application process, the system’s SOx emission control effect was rec-
ognized as meeting international standards, and obtained the certification.

Prevent marine Received “A Rank” for the Second Time on CDP* Climate
pollution and protect Change Questionnaire (October 2016)
the ecosystem
We were awarded with the highest rating for the survey made of more
Suppress than 5,500 listed companies across the world for climate change, and
Diversify energy Towards changing greenhouse gas
sources the risk to chance emissions
were also selected as a superior company for our supply chain program
in February 2017.
Reduce air
pollution to as close
to zero as possible Obtained Certification of SBT (Science Based Targets) (February 2017)
Each of 265 companies across the world declared to set an SBT and 44 companies including our
company (6 companies in Japan) were certified for their achievement.
 29 “K” LINE at a Glance Management Policy and Medium-term Management Plan Business Segment Data Other Corporate Information

IV. Other Corporate Information | “K” LINE Group’s CSR – ESG Initiatives –
Social
Safety in Navigation and Cargo Operations: Maintaining World-leading Safety in Navigation and Cargo Operations
Organizational
KL-Quality with KL Safety Standard Initiatives
Chart (1) F
 ive Initiatives to Prevent Accidents • “K” Line LNG Shipping (UK) Limited
Maintaining robust safety in navigation and Beforehand Management of LNG Carriers
Top Management cargo operations through decision-making • Taiyo Nippon Kisen Co., Ltd.
(1) Ship collisions
(2) Quay wall collisions when docking and Management of Car Carriers and Dry Bulk
Ship Safety Promotion Committee
Determination undocking at piers Carriers
of policies (3) Fires
Ship Safety Promotion Sub-committee
Special Committee for Liquefied Gas and Crude Oil Carriers (4) Main engine accidents (3) Efforts to Secure and Train Maritime

Reflection and feedback

(5) Accidents causing injury or death. Technical Personnel
Formulation of measures for
accident recurrence prevention and By taking specific hard and soft mea- Under the consistent maritime technical per-
prevention of accident beforehand sures for each case and performing effec- sonnel training programs based on the ““K”
Group Ship Management
Sales & Operations Department Ship & Engineering Department tive measurement together, we are trying Line Maritime Academy” scheme which tar-
Companies
to totally avoid ever causing a similar acci- gets all seafarers of our ships, we strive to
Formulation
of policies Safety Measures Conference with Ship Owners “K” LINE Safety Measures Committee dent again while effectively implementing train maritime technical personnel; and at the
the PDCA cycle. same time, by providing them equal oppor-
Proposal for measures for accident recurrence tunities (career path) when being involved in
prevention and prevention of accidents beforehand
(2) E
 ffort to Strengthen Ship both onboard and office work regardless of
Gathering on-site opinions
Management System their nationality, we are improving our activi-
• “K” Line Ship Management Co., Ltd. ties to secure and train skilled maritime tech-
Management of Containerships, Tankers nical personnel.
Chartered ship Owned ship
and Gas Carriers

Governance
Corporate Governance

Corporate Governance Structure Characteristics of our Corporate Governance Structure

“K” LINE is developing and strengthening its corporate governance and risk management (1) Unit Supervisory System It is required under the “Corporate Governance Code” that
framework in order to fulfill its social responsibility, respond to the mandate bestowed by its the Board of Directors, as their primary role and responsibility, “create an environment to sup-
stakeholders, including shareholders, and achieve sustainable growth. While thoroughly enforc- port appropriate risk taking by senior management.” As one part of establishing a corporate
ing its corporate ethics across the entire group, “K” LINE will continue to develop an organic governance system in line with this requirement, “K” LINE implemented the Unit Supervisory
and effective governance framework, strengthen its earnings / financial structure and enhance System in order to further streamline and enhance business execution.
its corporate value. > For details on “Corporate Governance Structure”, please refer to page 10
(2) Nominating Advisory Committee, Remuneration Advisory Committee In our insti-
tutional design as a corporation with an Audit & Supervisory Board, “K” LINE has voluntarily
established a “Nominating Advisory Committee” and a “Remuneration Advisory Committee”
in order to enhance the functions of the Board of Directors. Each of these committees is com-
prised of all Outside Directors, the Chairman and President & CEO and the Chair is appointed by
mutual vote of the Outside Directors residing on the committees.
 30 “K” LINE at a Glance Management Policy and Medium-term Management Plan Business Segment Data Other Corporate Information

IV. Other Corporate Information | “K” LINE Group’s CSR – ESG Initiatives –

Corporate Governance
Officer Remuneration Internal Control System
Policy and Procedures for the Determination of Officer Remuneration Remuneration The Board of Directors is responsible for establishing the internal control system, evaluating its effec-
for Executive Directors shall reflect “K” LINE’s medium- to long-term business performance tiveness and ensuring that it functions properly. In addition, through monitoring and verifying the
and the latent risks borne by said Executive Directors and to further enhance their willingness status of the internal control system, the Internal Audit Group plays a role in supporting the Board
to bring about sustainable growth and maximize corporate value. Remuneration for Outside of Directors in carrying out its responsibilities for the development, maintenance and enhancement
Directors shall reflect the amount of time devoted to business of “K” LINE and the responsibil- of the internal control system. The Audit & Supervisory Board Members oversee the processes by
ity borne by them. In line with this policy, the Remuneration Advisory Committee is responsible which the Directors establish the internal control system and confirm that it is functioning effec-
for the deliberation and determination of the design of our remuneration system and standards tively. Further, while respecting the autonomy of each of our group companies, “K” LINE supports
etc. and reporting back to the Board of Directors. The Board of Directors is responsible for deter- and supervises the establishment and effective management of internal control systems within each
mining levels of remuneration based on this report. of these companies to ensure that activities conducted across all group companies are appropriate.
Remuneration System In addition to monthly remuneration, remuneration paid to Directors
is comprised of a Performance-based Share Remuneration Plan (BBT=Board Benefit Trust) Taking Advantage of External Perspectives to Enhance Corporate Value
approved by the Ordinary General Meeting of Shareholders held in June 2016. The purpose of “K” LINE is actively seeking to appoint external officers, taking advantage of an external perspective
the BBT is to raise the motivation of Directors to make contributions to enhance the Group’s in order to enhance corporate value over the medium- to long-term. “K” LINE has established a set
medium- to long-term performance and corporate value. See below for an overview of our of criteria to determine the level of independence of Outside Directors and only Directors who do
remuneration system. not fall under any of the set conditions are considered to be independent. For more information on
Criteria for Independence of Outside Directors, please refer to the Notice of the Ordinary General
Meeting of Shareholders.
Remuneration Paid to Officers in FY2016
In order to support the smooth execution of duties of Outside Directors, they are provided with
Classification Number of people Amount paid the necessary briefings and information prior to meetings of the Board of Directors and receive
Directors (Outside) 12 (4) 316 million yen (29 million yen) reports on important business operations. Further, “K” LINE has appointed personnel to assist our
Audit & Supervisory Board Members and has established regulations concerning these appoint-
Audit & Supervisory Board Members (Outside) 6 (4) 84 million yen (23 million yen) ments in order to maintain the framework required to assist Audit & Supervisory Board Members in
Total 18 (8) 400 million yen (52 million yen) their role within the Company. These assistant personnel do not hold additional posts in connection
with their duties and are examined by the Audit & Supervisory Board Members in order to maintain
a level of independence from company Directors.

Risk Management Compliance

Board of Directors Global Compliance Policy
President & CEO As one part of strengthening an effective group compliance framework to ensure compliance with
competition laws and prevent bribery and corruption, in January 2017 we established the “K” LINE
Crisis Management Committee Control total activities related Group Global Compliance Policy. The Global Compliance Policy serves as a more specific guideline
to crisis and risk management on the group’s policy of compliance with domestic and international laws / regulations and social
Managing risks concerning the safety of “K” LINE’s ship norms for fair, transparent and free competition and fair trade as stated in our Charter of Conduct:
Ship Safety Promotion Committee operations, promoting actions to prevent marine accidents “K” Line Group Companies and “K” Line Implementation Guideline for Charter of Conduct, and
(including the resultant contamination of seawater) and
ensuring a quick response when accidents occur further clarifies our thinking on compliance as a company.
The Global Compliance Policy consists of the main policy and individual policies. The main policy
Disaster Response Committee Ensuring disaster preparedness and response sets forth common items applicable to general compliance, and the individual policies set forth items
Compliance Committee Handling compliance issues applicable to specific fields such as competition legislation and Anti-corruption Law. In response to
regulations grounded in laws and ordinances to promote fair competition that steadily become stricter
Management Risk Committee Managing other risks in management year after year, the “K” LINE Group aims to strengthen its compliance systems on a global level.
 31 “K” LINE at a Glance Management Policy and Medium-term Management Plan Business Segment Data Other Corporate Information

IV. Other Corporate Information | Outline of the Company / Stock Information

Outline of the Company / Stock Information

Outline of the Company (as of March 31, 2017) Stock Information (as of March 31, 2017)
Name Kawasaki Kisen Kaisha, Ltd. (“K” LINE) Authorized 2,000,000,000 shares of common stock
Established April 5, 1919
Paid-in capital ¥75,457.64 million Issued 939,382,298 shares of common stock
President Eizo Murakami
Number of 32,732
Employees On-land Duty 552 / At-sea Duty 183 shareholders
Total 735
Business lines Marine transportation, Land transportation, Shareholder registry Sumitomo Mitsui Trust Bank, Limited
Air transportation, Through transportation administrator 4-1, Marunouchi 1-chome, Chiyoda-ku, Tokyo
involving marine, land and air transportation,
Harbor transportation, etc. Listing of shares Tokyo, Nagoya and Fukuoka
Offices
Head office Iino Building, 1-1, Uchisaiwaicho 2-chome,
Chiyoda-ku, Tokyo 100-8540, Japan Principal Shareholders
Phone: (+81) 3-3595-5000 Number of Percentage
Fax: (+81) 3-3595-5001 Shareholders shares held of shares
(thousands) held (%)
Registered Shinko Building, 8 Kaigandori, Chuo-ku,
head office Kobe 650-0024, Japan ROYAL BANK OF CANADA TRUST COMPANY
(CAYMAN) LIMITED 210,164 22.37
Phone: (+81) 78-332-8020
Fax: (+81) 78-393-2676 CGML PB CLIENT ACCOUNT / COLLATERAL 80,084 8.52
Branches Nagoya: MLI FOR CLIENT GENERAL OMNI NON COLLATERAL
Nagoya International Center Building, 47-1, NON TREATY-PB 51,745 5.50
Nagono 1-chome, Nakamura-ku, Nagoya
Trust & Custody Services Bank, Ltd.(Kawasaki Heavy
450-0001, Japan
Industries, Ltd. retirement benefit trust account re-
Phone: (+81) 52-589-4510 entrusted by Mizuho Trust & Banking Co., Ltd.) 33,923 3.61
Fax: (+81) 52-589-4585
The Master Trust Bank of Japan, Ltd. (trust account) 30,498 3.24
Kansai:
Daidouseimei Kobe Building, 2-7, IMABARI SHIPBUILDING CO., LTD. 28,300 3.01
Sakaemachidori 1-chome, Chuo-ku, 28,174 2.99
JFE Steel Corporation
Kobe 650-0023, Japan
Phone: (+81) 78-325-8727 Japan Trustee Services Bank, Ltd. (trust account) 25,142 2.67
Fax: (+81) 78-393-2676 GOLDMAN SACHS INTERNATIONAL 19,324 2.05
Overseas Manila, Yangon, Dubai
Sompo Japan Nipponkoa Insurance Inc. 19,107 2.03
representative offices
Overseas agents Korea, China, Taiwan, Thailand, the Philippines, Singapore, Malaysia,
Indonesia, Vietnam, India, Australia, United Arab Emirates, U.K., “K” LINE’s Rating (as of April 2017)
Germany, France, the Netherlands, Belgium, Italy, Finland, Denmark,
Norway, Sweden, Spain, Portugal, Turkey, Canada, U.S.A., Mexico,
Chile, Peru, Brazil, South Africa, etc.
R&I JCR
Affiliated companies 26 (domestic), 317 (overseas)
(to be consolidated) BBB- (Negative) BBB (Negative)
IINO BUILDING,1-1, Uchisaiwaicho 2-chome,
Chiyoda-ku TOKYO 100-8540, JAPAN

KAWASAKI KISEN KAISHA, LTD.

IR&PR GROUP INVESTER RELATIONS DIVISION
TEL: (+81)-(0)3-3595-5000
URL: http://www.kline.co.jp/en/

[Disclaimer]
Information contained in FACTBOOK is provided solely for informational purposes and is not an offer or a solicitation of an offer to buy or sell securities.
You are requested to make investment decisions using your own judgment.
[Forward-looking statements]
This FACTBOOK contains forward-looking statements concerning future plans and forecast, these statements are based on information currently available.
Furthermore, “K” LINE therefore cautions readers that actual results may differ materially from economic conditions, supply and demand in the shipping industry, price of bunker, foreign currency exchange rates.