UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 6-K

Report of Foreign Private Issuer

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

KOMATSU LTD.

Translation of registrant’s name into English

3-6 Akasaka 2-chome, Minato-ku, Tokyo, Japan
Address of principal executive office

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F þ      Form 40-F o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes o      No þ

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-                    

 

 

INFORMATION TO BE INCLUDED IN REPORT

1.

Quarterly Report for the Third Quarter of the 141st Fiscal Year filed on February 10, 2010

On February 10, 2010, the registrant filed its Quarterly Report (“Shihanki Houkokusho”) with the Director of the Kanto Local Finance Bureau of Japan and provided it to the Tokyo Stock Exchange pursuant to the Financial Instruments and Exchange Law of Japan. This Quarterly Report contains, among other information, the Quarterly Consolidated Financial Statements for the nine months period ended December 31, 2009 and the three months period ended December 31, 2009.

Material information in the report, other than the Quarterly Consolidated Financial Statements, has already been reported by the registrant in its press release dated January 28, 2010, a copy of which was submitted under cover of Form 6-K on January 29, 2010 by the registrant.

Attached is an English translation of the registrant’s Quarterly Consolidated Financial Statements for the nine months period ended December 31, 2009 and the three months period ended December 31, 2009.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

[Quarterly Consolidated Financial Statements]

Consolidated Balance Sheets (Unaudited)

Komatsu Ltd. and Consolidated Subsidiaries

December 31, 2009 and March 31, 2009

		December 31, 2009								March 31, 2009
						Component								Component
		Millions of yen				ratio (%)				Millions of yen				ratio (%)
Assets
Current assets
Cash and cash equivalents		¥	93,491							¥	90,563
Time deposits			1,027								44
Trade notes and accounts receivable, less allowance for doubtful receivables of ¥13,262 million at December 31, 2009 and ¥15,330 million at March 31, 2009			403,998								373,901
Inventories (Note 3)			424,802								507,357
Deferred income taxes and other current assets (Notes 4, 9, 10 and 11)			104,942								131,374
Total current assets			1,028,260				52.8				1,103,239				56.0
Long-term trade receivables			148,797				7.7				102,969				5.2
Investments
Investments in and advances to affiliated companies			22,484								19,249
Investment securities (Notes 4, 10 and 11)			56,097								53,854
Other			2,695								12,017
Total investments			81,276				4.2				85,120				4.3
Property, plant and equipment —less accumulated depreciation of ¥622,674 million at December 31, 2009 and ¥589,629 million at March 31, 2009			527,649				27.1				525,462				26.7
Goodwill			29,656				1.5				28,661				1.5
Other intangible assets			61,111				3.1				60,346				3.1
Deferred income taxes and other assets (Notes 9, 10 and 11)			70,271				3.6				63,262				3.2
		¥	1,947,020				100.0			¥	1,969,059				100.0

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

		December 31, 2009								March 31, 2009
						Component								Component
		Millions of yen				ratio (%)				Millions of yen				ratio (%)
Liabilities and Equity
Current liabilities
Short-term debt		¥	189,802							¥	220,087
Current maturities of long-term debt (Note 10)			86,249								87,662
Trade notes, bills and accounts payable			182,945								214,375
Income taxes payable			8,156								10,818
Deferred income taxes and other current liabilities (Notes 9, 10 and 11)			179,514								199,345
Total current liabilities			646,666				33.2				732,287				37.2
Long-term liabilities
Long-term debt (Note 10)			362,653								292,106
Liability for pension and retirement benefits			49,432								53,822
Deferred income taxes and other liabilities (Notes 9, 10 and 11)			37,066								42,510
Total long-term liabilities			449,151				23.1				388,438				19.7
Total liabilities			1,095,817				56.3				1,120,725				56.9
Commitments and contingent liabilities (Note 8)			—								—
Komatsu Ltd. shareholders’ equity
Common stock:
Authorized 3,955,000,000 shares at December 31, 2009 and at March 31, 2009
Issued 998,744,060 shares at December 31, 2009 and at March 31, 2009			67,870								67,870
Outstanding 968,047,592 shares at December 31, 2009 and 967,822,292 shares at March 31, 2009
Capital surplus			140,421								140,092
Retained earnings:
Appropriated for legal reserve			31,160								28,472
Unappropriated			709,709								719,222
Accumulated other comprehensive income (loss) (Notes 4 and 9)			(103,552	)							(105,744	)
Treasury stock at cost, 30,696,468 shares at December 31, 2009 and 30,921,768 shares at March 31, 2009			(34,737	)							(34,971	)
Total Komatsu Ltd. shareholders’ equity			810,871				41.6				814,941				41.4
Noncontrolling interests			40,332				2.1				33,393				1.7
Total equity (Note 6)			851,203				43.7				848,334				43.1
		¥	1,947,020				100.0			¥	1,969,059				100.0

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

Consolidated Statements of Income (Unaudited)

Komatsu Ltd. and Consolidated Subsidiaries

Nine months ended December 31, 2009 and 2008

		Nine months ended								Nine months ended
		December 31, 2009								December 31, 2008
						Component								Component
		Millions of yen				ratio (%)				Millions of yen				ratio (%)
Net sales		¥	1,003,927				100.0			¥	1,642,689				100.0
Cost of sales			780,516				77.7				1,199,279				73.0
Selling, general and administrative expenses (Note 5)			181,204				18.0				242,444				14.8
Other operating income (expenses), net			(6,110	)			(0.6	)			(795	)			(0.0	)
Operating income			36,097				3.6				200,171				12.2
Other income (expenses), net			(1,409	)							(22,067	)
Interest and dividend income			5,215				0.5				6,696				0.4
Interest expense			(7,276	)			(0.7	)			(11,273	)			(0.7	)
Other, net			652				0.1				(17,490	)			(1.1	)
Income before income taxes and equity in earnings of affiliated companies			34,688				3.5				178,104				10.8
Income taxes
Current			24,169								58,994
Deferred			(12,330	)							1,476
Total			11,839				1.2				60,470				3.7
Income before equity in earnings of affiliated companies			22,849				2.3				117,634				7.2
Equity in earnings of affiliated companies			556				0.1				829				0.1
Net income			23,405				2.3				118,463				7.2
Less net income attributable to noncontrolling interests			(5,050	)			(0.5	)			(5,142	)			(0.3	)
Net income attributable to Komatsu Ltd.		¥	18,355				1.8			¥	113,321				6.9

		Yen
		Nine months ended				Nine months ended
		December 31, 2009				December 31, 2008
Net income attributable to Komatsu Ltd. per share (Note 7)
Basic		¥	18.96			¥	114.30
Diluted			18.95				114.21
Cash dividends per share (Note 13)			26.00				44.00

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

Three months ended December 31, 2009 and 2008

		Three months ended								Three months ended
		December 31, 2009								December 31, 2008
						Component								Component
		Millions of yen				ratio (%)				Millions of yen				ratio (%)
Net sales		¥	357,964				100.0			¥	431,401				100.0
Cost of sales			275,434				76.9				313,604				72.7
Selling, general and administrative expenses (Note 5)			61,721				17.2				76,220				17.7
Other operating income (expenses), net			(4,497	)			(1.3	)			(1,060	)			(0.2	)
Operating income			16,312				4.6				40,517				9.4
Other income (expenses), net			(76	)							(19,141	)
Interest and dividend income			1,250				0.3				2,282				0.5
Interest expense			(2,151	)			(0.6	)			(3,708	)			(0.9	)
Other, net			825				0.2				(17,715	)			(4.1	)
Income before income taxes and equity in earnings of affiliated companies			16,236				4.5				21,376				5.0
Income taxes
Current			8,681								5,644
Deferred			(3,485	)							1,425
Total			5,196				1.5				7,069				1.6
Income before equity in earnings of affiliated companies			11,040				3.1				14,307				3.3
Equity in earnings of affiliated companies			515				0.1				(505	)			(0.1	)
Net income			11,555				3.2				13,802				3.2
Less net income attributable to noncontrolling interests			(1,398	)			(0.4	)			(822	)			(0.2	)
Net income attributable to Komatsu Ltd.		¥	10,157				2.8			¥	12,980				3.0

		Yen
		Three months ended				Three months ended
		December 31, 2009				December 31, 2008
Net income attributable to Komatsu Ltd. per share (Note 7)
Basic		¥	10.49			¥	13.19
Diluted			10.49				13.19
Cash dividends per share (Note 13)			8.00				22.00

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

Consolidated Statements of Shareholders’ Equity (Unaudited)

Komatsu Ltd. and Consolidated Subsidiaries

Nine months ended December 31, 2009 and 2008

		Millions of yen
		Nine months ended				Nine months ended
		December 31, 2009				December 31, 2008
Common stock
Balance, beginning of year		¥	67,870			¥	67,870
Balance, end of period		¥	67,870			¥	67,870
Capital surplus
Balance, beginning of year		¥	140,092			¥	138,170
Sales of treasury stock			(84	)			1,629
Issuance and exercise of stock acquisition rights (Note 5)			413				352
Balance, end of period		¥	140,421			¥	140,151
Retained earnings, appropriated for legal reserve
Balance, beginning of year		¥	28,472			¥	26,714
Transfer from unappropriated retained earnings			2,688				627
Balance, end of period		¥	31,160			¥	27,341
Unappropriated retained earnings
Balance, beginning of year		¥	719,222			¥	685,986
Net income attributable to Komatsu Ltd.			18,355				113,321
Cash dividends paid to Komatsu Ltd. shareholders (Note 13)			(25,180	)			(43,803	)
Transfer to retained earnings appropriated for legal reserve			(2,688	)			(627	)
Balance, end of period		¥	709,709			¥	754,877
Accumulated other comprehensive income (loss)
Balance, beginning of year		¥	(105,744	)		¥	(28,779	)
Other comprehensive income(loss), for the period, net of tax			2,192				(90,649	)
Balance, end of period		¥	(103,552	)		¥	(119,428	)
Treasury stock
Balance, beginning of year		¥	(34,971	)		¥	(2,835	)
Purchase of treasury stock			(22	)			(33,080	)
Sales of treasury stock			256				826
Balance, end of period		¥	(34,737	)		¥	(35,089	)
Total Komatsu Ltd. shareholders’ equity		¥	810,871			¥	835,722
Noncontrolling interests
Balance, beginning of year		¥	33,393			¥	30,239
Net income attributable to noncontrolling interests			5,050				5,142
Cash dividends paid to noncontrolling interests			(1,735	)			(2,232	)
Other comprehensive income(loss), for the period, net of tax			2,110				(5,918	)
Other changes in noncontrolling interests			1,514				3,137
Balance, end of period		¥	40,332			¥	30,368
Total equity (Note 6)		¥	851,203			¥	866,090

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

Consolidated Statements of Cash Flows (Unaudited)

Komatsu Ltd. and Consolidated Subsidiaries

Nine months ended December 31, 2009 and 2008

		Millions of yen
		Nine months ended				Nine months ended
		December 31, 2009				December 31, 2008
Operating activities
Net income		¥	23,405			¥	118,463
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization			67,752				70,343
Deferred income taxes			(12,330	)			1,476
Net loss (gain) from sale of investment securities and subsidiaries			(807	)			2,182
Net loss (gain) on sale of property			(510	)			162
Loss on disposal of fixed assets			1,313				2,314
Pension and retirement benefits, net			(1,884	)			(2,266	)
Changes in assets and liabilities:
Decrease (increase) in trade receivables			(28,410	)			57,245
Decrease (increase) in inventories			86,846				(84,306	)
Increase (decrease) in trade payables			(30,792	)			(35,905	)
Increase (decrease) in income taxes payable			(2,721	)			(42,433	)
Other, net			13,457				(40,159	)
Net cash provided by (used in) operating activities			115,319				47,116
Investing activities
Capital expenditures			(69,103	)			(107,408	)
Proceeds from sale of property			11,077				4,481
Proceeds from sale of available for sale investment securities			720				619
Purchases of available for sale investment securities			(3,465	)			(12,803	)
Proceeds from sale of subsidiaries and equity investees, net of cash disposed			661				—
Acquisition of subsidiaries and equity investees, net of cash acquired			638				135
Collection of loan receivables			10,512				5,128
Disbursement of loan receivables			(1,116	)			(3,416	)
Decrease (increase) in time deposits			(521	)			(1,315	)
Net cash provided by (used in) investing activities			(50,597	)			(114,579	)
Financing activities
Proceeds from long-term debt			104,021				96,685
Repayments on long-term debt			(41,069	)			(54,944	)
Increase (decrease) in short-term debt, net			(70,869	)			129,114
Repayments of capital lease obligations			(25,876	)			(24,570	)
Sale (purchase) of treasury stock, net			150				(32,831	)
Dividends paid			(25,180	)			(43,803	)
Other, net			(1,752	)			(257	)
Net cash provided by (used in) financing activities			(60,575	)			69,394
Effect of exchange rate change on cash and cash equivalents			(1,219	)			(5,323	)
Net increase (decrease) in cash and cash equivalents			2,928				(3,392	)
Cash and cash equivalents, beginning of year			90,563				102,010
Cash and cash equivalents, end of period		¥	93,491			¥	98,618

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

Notes to Quarterly Consolidated Financial Statements (Unaudited)

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

Basis of Quarterly Financial Statements

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

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

Summary of Significant Accounting Policies

Komatsu adopted the FASB Accounting Standard Codification ^TM (“ASC”) 105, “Generally Accepted Accounting Principles” (Formerly the Statement of Financial Accounting Standards (“SFAS”) No. 168, “The FASB Accounting Standards Codification ^TM and the Hierarchy of Generally Accepted Accounting Principles — a replacement of FASB Statement No.162”) in September 2009. ASC 105 prescribes that FASB Accounting Standard Codification ^TM (“Codification”) is the single source of authoritative U.S. generally accepted accounting principle, doing away with the previous four-level hierarchy.

The financial statements that adopted ASC 105 should follow the Codification in place of legacy accounting pronouncements. SFAS No. 168 is superseded by ASC 105. The adoption of ASC 105 did not have a material impact on our consolidated results of operations and financial condition.

Starting in the fiscal year which began April 1, 2009, Komatsu adopted ASC 805, “Business Combinations”. ASC 805 establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any noncontrolling interest in the acquiree and the goodwill acquired or gain from a bargain purchase. ASC 805 also establishes disclosure requirements to enable the evaluation of the nature and financial effects of the business combination. The adoption of ASC 805 did not have a material impact on our consolidated results of operations and financial condition.

Starting in the fiscal year which began April 1, 2009, Komatsu adopted ASC 810, “Consolidation”. ASC 810 establishes accounting and reporting standards for the noncontrolling interests in a subsidiary and for the deconsolidation of a subsidiary. ASC 810 also establishes disclosure requirements that clearly identify and distinguish between the controlling and noncontrolling interests, and requires the separate disclosure of income attributable to controlling and noncontrolling interests. Previously reported amounts have been reclassified accordingly.

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

2. Supplemental Cash Flow Information

Additional cash flow information and noncash investing and financing activities for the nine months ended December 31, 2009 and 2008 are as follows:

		Millions of yen
		Nine months ended				Nine months ended
		December 31, 2009				December 31, 2008
Additional cash flow information:
Interest paid		¥	7,569			¥	10,828
Income taxes paid			6,544				97,234
Noncash investing and financing activities:
Capital lease obligations incurred		¥	12,663			¥	28,230

3. Inventories

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

		Millions of yen
		December 31,				March 31,
		2009				2009
Finished products, including finished parts held for sale		¥	272,622			¥	328,643
Work in process			113,040				128,345
Materials and supplies			39,140				50,369
Total		¥	424,802			¥	507,357

4. Investment Securities

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

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

		Millions of yen
						Gross unrealized holding
		Cost				Gains				Losses				Fair value
December 31, 2009
Investment securities available for sale:
Marketable equity securities		¥	25,109			¥	15,115			¥	100			¥	40,124
Other investment securities at cost			15,973
Current portion of other investment securities at cost			—
		¥	41,082

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

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

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

Proceeds from the sales of investment securities available for sale were ¥720 million and ¥619 million for the nine months ended December 31, 2009 and 2008, respectively.

Impairment losses and net realized gains or losses from sale of investment securities available for sale during the nine months ended December 31, 2009 and 2008 amounted to gains of ¥807 million and losses of ¥7,827 million, respectively. Impairment losses and net realized gains or losses from sale of investment securities available for sale during the three months ended December 31, 2009 and 2008 amounted to gains of ¥555 million and losses of ¥6,516 million, respectively. Such gains and losses were included in other income (expenses), net in the accompanying consolidated statements of income.

The cost of the marketable securities and investment securities sold was computed based on the average-cost method.

5. Stock Option Plan

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

Based on the resolutions of the shareholders’ meeting on June 22, 2007 and the Board of Directors on July 14, 2009, the Company issued 239 rights of its share acquisition rights to directors during the year ending March 31, 2010. The Company also issued 403 rights of its share acquisition rights to certain employees and certain directors of subsidiaries during the year ending March 31, 2010 based on the resolutions of the shareholders’ meeting on June 24, 2009 and the Board of Directors on July 14, 2009. The options vest 100% on each of the grant dates and are exercisable from September 1, 2010.

Komatsu recognizes compensation expense using the fair value method in accordance with ASC 718 “Compensation — Stock Compensation”. Compensation expenses during the nine months ended December 31, 2009 and 2008 were ¥413 million and ¥376 million, respectively, and were recorded in selling, general and administrative expenses. Compensation expenses after tax during the nine months ended December 31, 2009 and 2008 were ¥246 million and ¥224 million, respectively. Compensation expenses during the three months ended December 31, 2009 and 2008 were ¥310 million and ¥282 million, respectively, and were recorded in selling, general and administrative expenses. Compensation expenses after tax during the three months ended December 31, 2009 and 2008 were ¥184 million and ¥168 million, respectively.

6. Equity

The changes in the carrying amount of equity attributable to Komatsu Ltd. shareholders, equity attributable to noncontrolling interests and the total equity in the accompanying consolidated balance sheets for the nine months ended December 31, 2009 and 2008 are as follows:

		Millions of yen
		Komatsu Ltd.
		shareholders’				Noncontrolling
Nine months ended December 31, 2009		equity				interests				Total equity
Balance, beginning of year		¥	814,941			¥	33,393			¥	848,334
Cash dividends paid to Komatsu Ltd. shareholders			(25,180	)			—				(25,180	)
Cash dividends paid to noncontrolling interests			—				(1,735	)			(1,735	)
Other changes			563				1,514				2,077
Comprehensive income:
Net income			18,355				5,050				23,405
Other comprehensive income(loss), for the period, net of tax
Foreign currency translation adjustments			(2,018	)			1,431				(587	)
Net unrealized holding gains on securities available for sale			1,244				—				1,244
Pension liability adjustments			2,326				1				2,327
Net unrealized holding gains on derivative instruments			640				678				1,318
Total comprehensive income			20,547				7,160				27,707
Balance, end of period		¥	810,871			¥	40,332			¥	851,203

		Millions of yen
		Komatsu Ltd.
		shareholders’				Noncontrolling
Nine months ended December 31, 2008		equity				interests				Total equity
Balance, beginning of year		¥	887,126			¥	30,239			¥	917,365
Cash dividends paid to Komatsu Ltd. shareholders			(43,803	)			—				(43,803	)
Cash dividends paid to noncontrolling interests			—				(2,232	)			(2,232	)
Other changes			(30,273	)			3,137				(27,136	)
Comprehensive income:
Net income			113,321				5,142				118,463
Other comprehensive income(loss), for the period, net of tax
Foreign currency translation adjustments			(78,592	)			(5,922	)			(84,514	)
Net unrealized holding gains(losses) on securities available for sale			(13,450	)			4				(13,446	)
Pension liability adjustments			467				—				467
Net unrealized holding gains on derivative instruments			926				—				926
Total comprehensive income(loss)			22,672				(776	)			21,896
Balance, end of period		¥	835,722			¥	30,368			¥	866,090

7. Net Income Attributable to Komatsu Ltd. per Share

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

		Millions of yen
		Nine months ended				Nine months ended
		December 31, 2009				December 31, 2008
Net income attributable to Komatsu Ltd.		¥	18,355			¥	113,321

		Number of shares
		Nine months ended				Nine months ended
		December 31, 2009				December 31, 2008
Weighted average common shares outstanding, less treasury stock			968,000,628				991,427,410
Dilutive effect of:
Stock options			414,917				787,191
Weighted average diluted common shares outstanding			968,415,545				992,214,601

		Yen
		Nine months ended				Nine months ended
		December 31, 2009				December 31, 2008
Net income attributable to Komatsu Ltd.:
Basic		¥	18.96			¥	114.30
Diluted			18.95				114.21

		Millions of yen
		Three months ended				Three months ended
		December 31, 2009				December 31, 2008
Net income attributable to Komatsu Ltd.		¥	10,157			¥	12,980

		Number of shares
		Three months ended				Three months ended
		December 31, 2009				December 31, 2008
Weighted average common shares outstanding, less treasury stock			968,046,436				983,857,187
Dilutive effect of:
Stock options			483,967				276,274
Weighted average diluted common shares outstanding			968,530,403				984,133,461

		Yen
		Three months ended				Three months ended
		December 31, 2009				December 31, 2008
Net income attributable to Komatsu Ltd.:
Basic		¥	10.49			¥	13.19
Diluted			10.49				13.19

8. Contingent Liabilities

At December 31, 2009 and at March 31, 2009, Komatsu was contingently liable for discounted and transferred receivables on a recourse basis with the financial institutions of ¥12,980 million and ¥14,480 million, respectively.

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

For each guarantee provided, Komatsu would have to perform under a guarantee, if the borrower defaults on a payment within the contract terms. The contract terms are from 10 years to 30 years in the case of employees with housing loans, and from 1 year to 10 years in the case of loans relating to the affiliated companies and other companies. The maximum amount of undiscounted payments Komatsu would have had to make in the event of default was ¥80,319 million and ¥65,478 million at December 31, 2009 and at March 31, 2009, respectively. The fair value of the liabilities recognized for Komatsu’s obligations as guarantors under those guarantees at December 31, 2009 was insignificant. Certain of those guarantees were secured by collateral and insurance issued to Komatsu.

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

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

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

9. Derivative Financial Instruments

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

		Millions of yen
		December 31,				March 31,
		2009				2009
Forwards and options:
Sale of foreign currencies		¥	31,053			¥	30,868
Purchase of foreign currencies			44,200				48,424
Option contracts (purchased)			919				1,011
Interest rate swap, cross-currency swap and interest rate cap agreements			206,049				226,754

Net foreign currency exchange gains (losses) in the accompanying consolidated statements of income for the nine months ended December 31, 2009 and 2008 amounted to losses of ¥1,399 million and losses of ¥15,426 million, respectively. Net foreign currency exchange gains (losses) in the accompanying consolidated statements of income for the three months ended December 31, 2009 and 2008 amounted to gains of ¥1,475 million and losses of ¥11,152 million, respectively.

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

Millions of yen

December 31, 2009

Derivative Assets

Derivative Liabilities

Derivative instruments designated

Location on the consolidated

Estimated

Location on the consolidated

Estimated

as hedging instruments

Balance Sheets

fair value

Balance Sheets

fair value

Forwards contracts

Deferred income taxes and other current assets

¥

22

Deferred income taxes and other current liabilities

¥

453

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

Deferred income taxes and other current assets

247

Deferred income taxes and other current liabilities

850

Deferred income taxes and other assets

319

Deferred income taxes and other liabilities

—

Total

¥

588

¥

1,303

Derivative Assets

Derivative Liabilities

Location on the consolidated

Estimated

Location on the consolidated

Estimated

Undesignated derivative instruments

Balance Sheets

fair value

Balance Sheets

fair value

Forwards contracts

Deferred income taxes and other current assets

¥

67

Deferred income taxes and other current liabilities

¥

928

Option contracts

Deferred income taxes and other current assets

14

Deferred income taxes and other current liabilities

—

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

Deferred income taxes and other current assets

2,794

Deferred income taxes and other current liabilities

998

Deferred income taxes and other assets

8,202

Deferred income taxes and other liabilities

1,114

Total

¥

11,077

¥

3,040

Total Derivative Instruments

¥

11,665

¥

4,343

Millions of yen

March 31, 2009

Derivative Assets

Derivative Liabilities

Derivative instruments designated

Location on the consolidated

Estimated

Location on the consolidated

Estimated

as hedging instruments

Balance Sheets

fair value

Balance Sheets

fair value

Forwards contracts

Deferred income taxes and other current assets

¥

278

Deferred income taxes and other current liabilities

¥

430

Deferred income taxes and other assets

8

Deferred income taxes and other liabilities

—

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

Deferred income taxes and other current assets

2,351

Deferred income taxes and other current liabilities

—

Deferred income taxes and other assets

5,709

Deferred income taxes and other liabilities

—

Total

¥

8,346

¥

430

Derivative Assets

Derivative Liabilities

Undesignated derivative

Location on the consolidated

Estimated

Location on the consolidated

Estimated

instruments

Balance Sheets

fair value

Balance Sheets

fair value

Forwards contracts

Deferred income taxes and other current assets

¥

1,016

Deferred income taxes and other current liabilities

¥

1,387

Option contracts

Deferred income taxes and other current assets

19

Deferred income taxes and other current liabilities

—

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

Deferred income taxes and other current assets

766

Deferred income taxes and other current liabilities

980

Deferred income taxes and other assets

1,704

Deferred income taxes and other liabilities

3,058

Total

¥

3,505

¥

5,425

Total Derivative Instruments

¥

11,851

¥

5,855

The effects of derivative instruments on the consolidated statements of income for the nine months ended December 31, 2009 are as follows:

Derivative instruments designated as fair value hedging relationships

Millions of yen

Nine months ended

December 31, 2009

Location of

Amount of

Location of

Amount of

gains (losses)

gains (losses)

gains (losses)

gains (losses)

recognized in income

recognized in income

recognized in income

recognized in income

on derivatives

on derivatives

on hedged items

on hedged items

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

Other income (expenses), net: Other-net

¥

2,271

Other income (expenses), net: Other-net

¥

(494

)

Total

¥

2,271

¥

(494

)

Derivative instruments designated as cash flow hedging relationships

Millions of yen

Nine months ended

December 31, 2009

Ineffective portion and amount excluded

Effective portion

from effectiveness testing

Amount of

Location of

gains (losses)

gains (losses)

Amount of

Location of

Amount of

recognized in

reclassified

gains (losses) reclassified

gains (losses)

gains (losses)

OCI on

from accumulated

from accumulated

recognized in income

recognized in income

derivatives

OCI into income

OCI into income

on derivatives

on derivatives

Forwards contracts

¥

315

Other income (expenses), net: Other-net

¥

373

—

¥

—

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

181

Other income (expenses), net: Other-net

90

—

—

Total

¥

496

¥

463

¥

—

Derivative instruments not designated as hedging instruments relationships

		Millions of yen
		Nine months ended
		December 31, 2009
		Location of gains (losses) recognized		Amount of gains (losses) recognized
		in income on derivatives		in income on derivatives
Forwards contracts		Other income (expenses), net: Other-net		¥	691
Option contracts		Other income (expenses), net: Other-net			(3	)
Interest rate swaps, cross-currency swap and interest rate cap agreements		Cost of sales			(417	)
		Other income (expenses), net: Other-net			1,587
Total				¥	1,858

The effects of derivative instruments on the consolidated statements of income for the three months ended December 31, 2009 are as follows:

Derivative instruments designated as fair value hedging relationships

Millions of yen

Three months ended

December 31, 2009

Location of

Amount of

Location of

Amount of

gains (losses)

gains (losses)

gains (losses)

gains (losses)

recognized in income

recognized in income

recognized in income

recognized in income

on derivatives

on derivatives

on hedged items

on hedged items

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

Other income (expenses), net: Other-net

¥

(278

)

Other income (expenses),net: Other-net

¥

663

Total

¥

(278

)

¥

663

Derivative instruments designated as cash flow hedging relationships

Millions of yen

Three months ended

December 31, 2009

Ineffective portion and amount excluded

Effective portion

from effectiveness testing

Amount of

Location of

Amount of

Location of

Amount of

gains (losses)

gains (losses)

gains (losses)

gains (losses)

gains (losses)

recognized in

reclassified

reclassified

recognized in

recognized in

OCI on

from accumulated

from accumulated

income

income

derivatives

OCI into income

OCI into income

on derivatives

on derivatives

Forwards contracts

¥

(541

)

Other income (expenses), net: Other-net

¥

(312

)

—

¥

—

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

(3

)

Other income (expenses), net: Other-net

(1

)

—

—

Total

¥

(544

)

¥

(313

)

¥

—