[Translation]

Quarterly Report(The Third Quarter of 152nd Business Term)
From October 1, 2020 to December 31, 2020

6-6, Marunouchi 1-chome, Chiyoda-ku, Tokyo

Hitachi, Ltd.

[Cover][Document Filed]

Quarterly Report (“Shihanki Hokokusho”)[Applicable Law]

Article 24-4-7, Paragraph 1 of the Financial Instruments and Exchange Act of Japan[Filed with]

Director, Kanto Local Finance Bureau[Filing Date]

February 10, 2021

[Fiscal Year]

The Third Quarter of 152nd Business Term (from October 1, 2020 to December 31, 2020)[Company Name]

Kabushiki Kaisha Hitachi Seisakusho[Company Name in English]

Hitachi, Ltd.

[Title and Name of Representative]

Toshiaki Higashihara, President & CEO[Address of Head Office]6-6, Marunouchi 1-chome, Chiyoda-ku, Tokyo[Phone No.]

03-3258-1111[Contact Person]

Takahiro Yamada, Manager, Legal Division[Contact Address]

6-6, Marunouchi 1-chome, Chiyoda-ku, Tokyo[Phone No.]

03-3258-1111[Contact Person]

Takahiro Yamada, Manager, Legal Division[Place Where Available for PublicTokyo Stock Exchange, Inc.

Inspection](2-1, Nihombashi Kabutocho, Chuo-ku, Tokyo)
Nagoya Stock Exchange, Inc.
(8-20, Sakae 3-chome, Naka-ku, Nagoya)

This is an English translation of the Quarterly Report filed with the Director of the Kanto Local Finance Bureau via Electronic
Disclosure for Investors’ NETwork (“EDINET”) pursuant to the Financial Instruments and Exchange Act of Japan.
The translation of the Confirmation Letter for the original Quarterly Report is included at the end of this document.
Unless the context indicates otherwise, the term “Company” refers to Hitachi, Ltd. and the term “Hitachi” refers to theCompany and its consolidated subsidiaries.
Unless otherwise stated, in this document, where we present information in millions or hundreds of millions of yen, we havetruncated amounts of less than one million or one hundred million, as the case may be. Accordingly, the total of figures presented incolumns or otherwise may not equal the total of the individual items. We have rounded all percentages to the nearest percent, onetenth of one percent or one-hundredth of one percent, as the case may be.
References in this document to the “Financial Instruments and Exchange Act” are to the Financial Instruments and Exchange Act
of Japan and other laws and regulations amending and/or supplementing the Financial Instruments and Exchange Act of Japan.

Contents
Part I Information on the Company ………………………………………………………………………………………………

1

I. Overview of the Company ……………………………………………………………………………………………………
1. Key Financial Data ………………………………………………………………………………………………………

1
1

2. Description of Business ……………………………………………………………………………………………………
II. Business Overview …………………………………………………………………………………………………………

2
3

1. Risk Factors ………………………………………………………………………………………………………………
2. Management’s Discussion and Analysis of Consolidated Financial Condition, Results of Operations and Cash Flows …

33

3. Material Agreements, etc. …………………………………………………………………………………………………
III. Information on the Company ………………………………………………………………………………………………

9
10

1. Information on the Company’s Stock, etc. ……………………………………………………………………………… 10(1) Total number of shares, etc. …………………………………………………………………………………………… 10(2) Information on the stock acquisition rights, etc. ……………………………………………………………………… 10(3) Information on moving strike convertible bonds, etc. ………………………………………………………………… 10(4) Changes in the total number of issued shares and the amount of common stock and other ………………………… 10(5) Major shareholders …………………………………………………………………………………………………… 10(6) Information on voting rights …………………………………………………………………………………………
2. Changes in Senior Management …………………………………………………………………………………………

11
12

IV. Financial Information ……………………………………………………………………………………………………… 12
Part II Information on Guarantors, etc. for the Company ………………………………………………………………………… 12[Condensed Quarterly Consolidated Financial Statements] ……………………………………………………………………… F1[Confirmation Letter] ……………………………………………………………………………………………………………… A1

Part I Information on the Company
I. Overview of the Company
1. Key Financial Data
Consolidated financial data, etc.
(Millions of yen, unless otherwise stated)
Nine months ended
December 31, 2019

Nine months ended
December 31, 2020

Year ended
March 31, 2020

6,344,181[2,122,854]

5,979,000[2,218,943]

8,767,263

Income from continuing operations, before
income taxes

52,121

498,959

180,268

Net income (loss) attributable to Hitachi, Ltd.
stockholders

55,146[(134,147)]

307,878[57,123]

87,596

65,516359,131(8,465)

Total Hitachi, Ltd. stockholders’ equity

3,229,473

2,928,327

3,159,986

Total equity

4,362,253

3,646,915

4,266,739

Total assets

10,281,357

10,941,428

9,930,081

57.10[(138.91)]

318.73[59.13]

90.71

57.03

318.33

90.60

31.4

26.8

31.8

Net cash provided by operating activities

307,847

426,400

560,920

Net cash used in investing activities(492,022)(766,075)(525,826)

Net cash provided by financing activities

86,883435,173

2,837

Cash and cash equivalents at end of period

694,460

917,238

812,331

Revenues

Comprehensive income attributable to Hitachi,Ltd. stockholders

Earnings (loss) per share attributable to Hitachi,Ltd. stockholders, basic (yen)Earnings per share attributable to Hitachi, Ltd.
stockholders, diluted (yen)Total Hitachi, Ltd. stockholders’ equity ratio (%)(Notes) 1. Hitachi's consolidated financial statements have been prepared in conformity with the International Financial ReportingStandards (“IFRS”) as issued by the International Accounting Standards Board.
2. Revenues do not include the consumption tax, etc.
3. The figures of “Revenues,” “Net income (loss) attributable to Hitachi, Ltd. stockholders” and “Earnings (loss) per share
attributable to Hitachi, Ltd. stockholders, basic” in square bracket are those for the three months ended December 31,
2019 and 2020, respectively.

12. Description of Business
There were no material changes in principal businesses of Hitachi during the nine months ended December 31, 2020. The
Hitachi Group is comprised of the Company, 850 consolidated subsidiaries, and 347 equity-method associates and joint-ventures.
Changes in Business Unit (BU) of the Company and principal affiliated companies during the nine months ended December
31, 2020 were as follows.
(As of December 31, 2020)
BU and principal affiliated companies
Main products and services
BU
Affiliated companies(Change by organization merger) (Note 1)
IT
Defense Systems BU
Energy[Consolidated subsidiaries](New) (Note 2)
Hitachi ABB Power Grids Ltd
Industry[Consolidated subsidiaries](Change in company name) (Note 3)
Hitachi Industrial Holdings Americas, Inc.
Smart Life[Consolidated subsidiaries](Reclassification of segment) (Note(Reclassification of segment) (Note 4)
4)
Hitachi High-Tech Corporation
Medical and Life Science Products,
Analytical Equipment,
Semiconductor Processing
Equipment, Manufacturing andInspection Equipment, Advanced
Industrial Products[Consolidated subsidiaries]
Hitachi Chemical(Excluded by the share transfers) (Note 5)(Excluded by the share transfer)
Hitachi Chemical Company, Ltd.
(Note 5)Functional Materials (Electronics
Materials, Printed Wiring Boards
Materials, Electronics
Components), Advanced
Components and Systems(Mobility Components, Energy
Storage Devices, Life Sciencerelated Products)
Others[Consolidated subsidiaries](Dissolved by the merger) (Note 6)
Hitachi Life, Ltd.
(Change in company name) (Note 6)
Hitachi Real Estate Partners, Ltd.
(Notes) 1. Defense Systems BU merged with Social Infrastructure Systems BU on April 1, 2020.
2. Hitachi ABB Power Grids Ltd became a consolidated subsidiary of the Company on July 1, 2020 as the Company
acquired a part of the stocks of Hitachi ABB Power Grids Ltd.
3. Sullair US Purchaser, Inc. changed its name to Hitachi Industrial Holdings Americas, Inc. on April 1, 2020.
4. Hitachi High-Tech Corporation became a wholly-owned subsidiary of the Company on May 20, 2020. As a result, Hitachi
High-Tech segment was abolished and merged into Smart Life segment.
5. Hitachi Chemical Company, Ltd. has ceased to be an affiliate of the Company through the share transfer on April 20,
2020. As a result, Hitachi Chemical segment was abolished.
6. Hitachi Urban Investment, Ltd. merged with Hitachi Life, Ltd. and changed its name to Hitachi Real Estate Partners, Ltd.
on April 1, 2020.

2

II. Business Overview
1. Risk Factors
There were no new risk factors recognized during the nine months ended December 31, 2020.
There were no material changes in the risk factors stated in the Annual Securities Report for the 151st business term
pursuant to the Financial Instruments and Exchange Act of Japan.
2. Management’s Discussion and Analysis of Consolidated Financial Condition, Results of Operations and Cash Flows(1) Analysis of Results of Operations
Results of Operations
The results of operations in the nine months ended December 31, 2020 were as follows.
Revenues decreased 6% to 5,979.0 billion yen, as compared with the nine months ended December 31, 2019, due mainly todecreased revenues owing to the sale of shares of Hitachi Chemical Company, Ltd. and lower revenues in the Smart Life sector,
Hitachi Metals and Hitachi Construction Machinery due mainly to the impact of COVID-19 (the new coronavirus infection). Thisdecrease was partially offset by increased revenues in the Energy sector due mainly to the acquisition of the power grid businessfrom ABB Ltd.
Cost of sales decreased 4% to 4,452.1 billion yen and the ratio of cost of sales to revenues increased 1% to 74%, ascompared with the nine months ended December 31, 2019, respectively. Gross profit decreased 11% to 1,526.8 billion yen, as
compared with the nine months ended December 31, 2019.
Selling, general and administrative expenses (“SG&A”) decreased 5% to 1,209.9 billion yen, as compared with the ninemonths ended December 31, 2019. The ratio of SG&A to revenues was 20%, the same level as the nine months ended December
31, 2019.
Adjusted operating income (presented as revenues less cost of sales as well as SG&A) decreased 128.7 billion yen to 316.9
billion yen, as compared with the nine months ended December 31, 2019, due mainly to lower profits in Hitachi Construction
Machinery, the Smart Life sector and Hitachi Metals, despite increased revenues in the IT sector.
Other income increased 262.4 billion yen to 291.5 billion yen, as compared with the nine months ended December 31, 2019,
due mainly to the gains on business reorganization and others by selling shares of Hitachi Chemical Company, Ltd. Other
expenses decreased 357.0 billion yen to 111.3 billion yen, as compared with the nine months ended December 31, 2019, due
mainly to the loss due to the settlement of the South African project conducted by Mitsubishi Hitachi Power Systems, Ltd.
(“MHPS”) posted in the nine months ended December 31, 2019.
Financial income (excluding interest income) decreased 8.8 billion yen to 3.3 billion yen and financial expenses (excludinginterest charges) increased 3.3 billion yen to 4.2 billion yen, as compared with the nine months ended December 31, 2019,respectively.
Share of profits of investments accounted for using the equity method decreased 30.0 billion yen to profit of 7.4 billion yen,
as compared with the nine months ended December 31, 2019.
EBIT (earnings before interest and taxes, which is presented as income from continuing operations, before income taxes lessinterest income plus interest charges) increased 448.5 billion yen to 503.5 billion yen, as compared with the nine months ended
December 31, 2019.
Interest income decreased 2.9 billion yen to 12.4 billion yen and interest charges decreased 1.2 billion yen to 17.0 billion
yen, as compared with the nine months ended December 31, 2019, respectively.
Income from continuing operations, before income taxes increased 446.8 billion yen to 498.9 billion yen, as compared with
the nine months ended December 31, 2019.
Income taxes was expense of 184.2 billion yen, as compared with profit of 35.2 billion yen in the nine months ended
December 31, 2019.
Loss from discontinued operations improved 0.5 billion yen to 0.6 billion yen as compared with the nine months ended
December 31, 2019.
Net income increased 227.8 billion to 314.0 billion yen, as compared with the nine months ended December 31, 2019.
Net income attributable to non-controlling interests decreased 24.8 billion yen to 6.1 billion yen, as compared with the ninemonths ended December 31, 2019.
As a result of the foregoing, net income attributable to Hitachi, Ltd. stockholders increased 252.7 billion yen to 307.8 billion
yen, as compared with the nine months ended December 31, 2019.
Operations by Segment
The following is an overview of results of operations by segment. Revenues for each segment include intersegment
transactions. Effective from April 1, 2020, the Company reclassified Hitachi High-Tech segment in the Smart Life segment andabolished Hitachi Chemical segment. Accordingly, the amounts previously reported for the nine months ended December 31,
2019 have been restated in conformity with the new segments.

3

(IT)
Revenues decreased 4% to 1,433.8 billion yen, as compared with the nine months ended December 31, 2019, due mainly todecreased overseas revenues in North America and higher revenues by the transient services in the front business posted in thenine months ended December 31, 2019.
Adjusted operating income increased 8.2 billion yen to 173.9 billion yen, as compared with the nine months ended
December 31, 2019, due mainly to improved profitability resulted from cost structure overhaul, despite decreased revenues.
EBIT increased 3.5 billion yen to 161.7 billion yen, as compared with the nine months ended December 31, 2019, due
mainly to increased adjusted operating income, despite the decrease in gains from selling the land of former production basis
posted in the nine months ended December 31, 2019.
(Energy)
Revenues increased 208% to 755.9 billion yen, as compared with the nine months ended December 31, 2019, due mainly toincreased revenues by acquiring the power grid business from ABB Ltd and higher revenues in the nuclear energy business.
Adjusted operating income worsened 7.2 billion yen to loss of 8.7 billion yen, as compared with the nine months ended
December 31, 2019, due mainly to posting amortization of intangible assets owing to acquiring the power grid business from
ABB Ltd, despite increased revenues and improved profitability in the nuclear energy business.
EBIT improved 368.6 billion yen to net loss of 10.5 billion yen as compared with the nine months ended December 31,
2019, due mainly to the loss due to the settlement of the South African project conducted by MHPS posted in the nine months
ended December 31, 2019, despite decreased adjusted operating income.
(Industry)
Revenues decreased 1% to 550.0 billion yen, as compared with the nine months ended December 31, 2019, due mainly tothe deterioration of market conditions affected by the impact of COVID-19, despite increased revenues by acquiring JR
Technology Group, LLC.
Adjusted operating income decreased 1.6 billion yen to 23.9 billion yen, as compared with the nine months ended December
31, 2019, due mainly to decreased revenues, despite improved profitability resulted from cost reduction, etc.
EBIT decreased 4.2 billion yen to 25.9 billion yen as compared with the nine months ended December 31, 2019, due mainly
to the decrease in share of profits of investments accounted for using the equity method.
(Mobility)
Revenues increased 4% to 862.6 billion yen, as compared with the nine months ended December 31, 2019, due mainly tohigher revenues in the building systems business in China, despite decreased revenues from the railway systems business.
Adjusted operating income decreased 1.9 billion yen to 59.3 billion yen, as compared with the nine months ended December
31, 2019, due mainly to decreased revenues in the railway systems business, despite increased revenues and the profitability
improvement resulted from cost reduction, etc. in the building systems business.
EBIT decreased 21.4 billion yen to 70.1 billion yen, as compared with the nine months ended December 31, 2019, due
mainly to the gains posted in the nine months ended December 31, 2019 by selling a part of shares of Agility Trains West
(Holdings) Limited stock.
(Smart Life)
Revenues decreased 8% to 1,461.7 billion yen, as compared with the nine months ended December 31, 2019, due mainly to
lower sales in the automotive systems business in North America and Japan as well as decreased demand in trading business, etc.
in the measurement & analysis systems business.
Adjusted operating income decreased 29.4 billion yen to 62.7 billion yen, as compared with the nine months ended
December 31, 2019, due mainly to decreased revenues.
EBIT decreased 61.5 billion yen to 23.4 billion yen, as compared with the nine months ended December 31, 2019, due
mainly to decreased adjusted operating income and impairment losses on property, plant and equipment in the automotive
systems business.
(Hitachi Construction Machinery)
Revenues decreased 19% to 558.7 billion yen, as compared with the nine months ended December 31, 2019, due mainly tothe impact of COVID-19 and foreign currency translation.
Adjusted operating income decreased 40.4 billion yen to 17.4 billion yen, as compared with the nine months ended
December 31, 2019, due mainly to decreased revenues, despite the cost reduction, etc.
EBIT decreased 44.8 billion yen to 13.6 billion yen, as compared with the nine months ended December 31, 2019, due
mainly to decreased adjusted operating income.

4

(Hitachi Metals)
Revenues decreased 19% to 541.4 billion yen, as compared with the nine months ended December 31, 2019, due mainly tothe decrease in demand for products for automobile owing to the impact of COVID-19.
Adjusted operating income worsened 20.4 billion yen to loss of 8.5 billion yen, as compared with the nine months ended
December 31, 2019, due mainly to decreased revenues.
EBIT improved 14.5 billion yen to loss of 38.3 billion yen, as compared with the nine months ended December 31, 2019,
due mainly to the impairment losses posted in the nine months ended December 31, 2019, owing to the lower than expected
revenues for the magnetic material business, despite decreased adjusted operating income.
(Others)
Revenues decreased 10% to 316.1 billion yen, as compared with the nine months ended December 31, 2019.
Adjusted operating income decreased 4.1 billion to 12.6 billion yen, and EBIT decreased 10.6 billion yen to 16.0 billion yen,
as compared with the nine months ended December 31, 2019, respectively.
Revenues by Market
Revenues in Japan decreased 11% to 2,811.0 billion yen, as compared with the nine months ended December 31, 2019, due
mainly to the decrease in revenues resulting from the sale of shares of Hitachi Chemical Company, Ltd. and decreased revenues
in the Smart Life sector.
Overseas revenues decreased 1% to 3,167.9 billion yen, as compared with the nine months ended December 31, 2019, due
mainly to the decrease in revenues resulting from the sale of shares of Hitachi Chemical Company, Ltd., decreased revenues in
Hitachi Construction Machinery, Hitachi Metals and the IT sector. This decrease was partially offset by increased revenues in the
Energy sector resulting from acquiring the power grid business from ABB Ltd, in the Mobility sector due mainly to higher sales
from the building systems business in China, and in the Industry sector resulting from acquiring JR Technology Group, LLC in
North America.
As a result, the ratio of overseas revenues to total revenues increased 3% to 53%, as compared with the nine months ended
December 31, 2019.
(2) Analysis of Financial Condition and Cash Flows
Liquidity and Capital Resources
During the nine months ended December 31, 2020, there were no major changes in the Company’s policies of maintaining
liquidity and ensuring funds, efforts for improvement in fund management efficiency, and ideas regarding funding sources andfundraising.
Cash Flows(Cash Flows from Operating Activities)
Net income in the nine months ended December 31, 2020 increased by 227.8 billion yen, as compared with the nine months
ended December 31, 2019. Net cash inflow from a change in trade receivables and contract assets decreased by 27.0 billion yen,
as compared with the nine months ended December 31, 2019. However, net cash outflow from a change in inventories decreasedby 122.9 billion yen, as compared with the nine months ended December 31, 2019. Net cash outflow from a change in trade
payables decreased by 46.9 billion yen, as compared with the nine months ended December 31, 2019.
As a result of the foregoing, net cash provided by operating activities was 426.4 billion yen in the nine months ended
December 31, 2020, an increase of 118.5 billion yen compared with the nine months ended December 31, 2019.
(Cash Flows from Investing Activities)
Net amount of investments related to property, plant and equipment* was 212.3 billion yen in the nine months ended
December 31, 2020. This net sum decreased by 64.8 billion yen compared with the nine months ended December 31, 2019.
Proceeds from sale of investments in securities and other financial assets (including investments in subsidiaries and investments
accounted for using the equity method) in the nine months ended December 31, 2020 increased by 387.3 billion yen, as comparedwith the nine months ended December 31, 2019, due mainly to the sale of shares of Hitachi Chemical Company, Ltd. Purchase ofinvestments in securities and other financial assets (including investments in subsidiaries and investments accounted for using theequity method) in the nine months ended December 31, 2020 increased by 776.3 billion yen, as compared with the nine months
ended December 31, 2019, due mainly to the purchase of shares of Hitachi ABB Power Grids Ltd.
As a result of the foregoing, net cash used in investing activities was 766.0 billion yen in the nine months ended December
31, 2020, an increase of 274.0 billion yen compared with the nine months ended December 31, 2019.
* The sum of the purchase of property, plant and equipment and the purchase of intangible assets, less the proceeds from sale ofproperty, plant and equipment, and intangible assets.
(Cash Flows from Financing Activities)
Net cash outflow related to purchase of shares of consolidated subsidiaries from non-controlling interests in the nine months
ended December 31, 2020 increased by 531.6 billion yen, as compared with the nine months ended December 31, 2019, due
mainly to the purchase of shares of Hitachi High-Tech Corporation. However, net cash inflow from a change in short-term debt
in the nine months ended December 31, 2020 increased by 446.6 billion yen, as compared with the nine months ended December
531, 2019. And, net cash inflow related to long-term debt** in the nine months ended December 31, 2020 was 280.9 billion yen,
as compared with 141.0 billion yen of net cash outflow related to long-term debt in the nine months ended December 31, 2019.
As a result of the foregoing, net cash flows provided by financing activities were 435.1 billion yen in the nine months ended
December 31, 2020, an increase of 348.2 billion yen compared with the nine months ended December 31, 2019.
** The proceeds from long-term debt, less the payments on long-term debt.
As a result of the foregoing, cash and cash equivalents as of December 31, 2020 were 917.2 billion yen, an increase of 104.9
billion yen from March 31, 2020. Free cash flows, the sum of cash flows from operating and investing activities worsened 155.5
billion yen compared with the nine months ended December 31, 2019 to an outflow of 339.6 billion yen in the nine months ended
December 31, 2020.
Assets, Liabilities and Equity
The following is an overview of Hitachi’s assets, liabilities and equity as of December 31, 2020.
Total assets were 10,941.4 billion yen, an increase of 1,011.3 billion yen from March 31, 2020, due mainly to increased
assets resulting from acquiring the power grid business from ABB Ltd. This increase was partially offset by decreased assets due
mainly to the purchase of shares of Hitachi High-Tech Corporation, the delivering shares of MHPS and the sale of shares ofHitachi Chemical Company, Ltd.
Total interest-bearing debt, the sum of short-term debt and long-term debt, was 2,600.4 billion yen, an increase of 1,115.3
billion yen from March 31, 2020.
Total Hitachi, Ltd. stockholders’ equity decreased by 231.6 billion yen from March 31, 2020, to 2,928.3 billion yen. The
ratio of total Hitachi, Ltd. stockholders’ equity to total assets was 26.8%, as compared with 31.8% as of March 31, 2020.
Non-controlling interests were 718.5 billion yen, a decrease of 388.1 billion yen from March 31, 2020.
Total equity was 3,646.9 billion yen, a decrease of 619.8 billion yen from March 31, 2020. The ratio of interest-bearing debt
to total equity was 0.71, as compared with 0.35 as of March 31, 2020.
(3) Management Policy
There were no material changes in Hitachi’s management policy during the nine months ended December 31, 2020.
(4) Challenges Hitachi Group Faces
1) Business and Financial Challenges Hitachi Group Faces
There were no material changes in Hitachi’s business and financial challenges during the nine months ended December
31, 2020.
2) Fundamental Policy on the Conduct of Persons Influencing Decision on the Company’s Financial and Business Policies
There were no material changes in Hitachi’s fundamental policy during the nine months ended December 31, 2020.

6

(5) Research and Development
There were no material changes in the research and development of the Hitachi Group (the Company and consolidated
subsidiaries) stated in the Annual Securities Report for the 151st business term. The Hitachi Group’s R&D expenditures in thenine months ended December 31, 2020 were 202.7 billion yen, 3.4% of revenues. A breakdown of R&D expenditures by segment
is shown below.
(Billions of yen)
Nine months ended
December 31, 2020

SegmentIT

40.0

Energy20.5

Industry

7.7

Mobility

20.3

Smart Life

71.0

Hitachi Construction Machinery

17.8

Hitachi Metals

10.8

Others1.8

Corporate Items

12.3
Total

202.7

(6) Property, Plant and Equipment
The major property, plants and equipment materially changed during the nine months ended December 31, 2020 are as
follows.
Breakdown by Segment(As of December 31, 2020)
Book value (Millions of yen)Segment

Land[Area inthousandsof m2]

Energy28,191(Note 1)

[10,751]

Smart Life

54,550(Note 2)

[7,889]Hitachi High-Tech-(Note 2)[-]

Hitachi Chemical-(Note 3)[-]

Buildings
andstructures

MachineryandvehiclesTools,
furnitureandfixtures

Right-of-use
Assets74,194

102,071

14,67840,898155

20,491

280,678

44,017129,181

158,986

46,88130,933-35,763456,294

55,881

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Constructionin progress

Other

Number of
employees

Total(Notes) 1. The book value of the facilities in the Energy segment materially increased due mainly to the fact that Hitachi ABB Power
Grids Ltd became a consolidated subsidiary of the Company on July 1, 2020.
2. The book value of the facilities in the Smart Life segment materially increased due mainly to the fact that Hitachi HighTech Corporation became a wholly-owned subsidiary of the Company on May 20, 2020, and the Hitachi High-Techsegment was abolished and reclassified in the Smart Life segment.
3. Hitachi Chemical Company, Ltd. has ceased to be a consolidated subsidiary of the Company due to the share transfer on
April 20, 2020. As a result, there are not the property, plants and equipment in the Hitachi Chemical segment.

7

Domestic subsidiaries
The Yamazaki Works and Shimodate Works of Hitachi Chemical Company, Ltd. are no longer the facilities of theCompany's domestic subsidiaries due to the fact that Hitachi Chemical Company, Ltd. has ceased to be a consolidated subsidiaryof the Company as a result of the share transfer on April 20, 2020.
Overseas subsidiaries
Hitachi ABB Power Grids Ltd became a consolidated subsidiary of the Company on July 1, 2020. The property, plants andequipment of the company are as follows.
(As of December 31, 2020)

Subsidiary(Main location)

Hitachi ABBPower Grids Ltd(Zurich,Switzerland)

Segment

EnergyBook value (Millions of yen)
Details ofLand
Tools,
major facilities [Area in Buildings Machinery furniture Right-ofand
and
use
Other
and equipment thousands
andstructures vehicles
Assetsfixturesof m2]
Manufacturing
facilities for
power gridproducts, etc.

14,321[2,222]

62,76398,193

11,80937,142-

Constructionin progress

Total

Number of
employees

19,951

244,179

35,304(Note) The figures are presented in consolidated basis of Hitachi ABB Power Grids Ltd.
(7) Plans for Capital Investment, Disposals of Property, Plants and Equipment, etc.
The Hitachi Group (the Company and consolidated subsidiaries) engages in diverse operations in Japan and overseas, andhas not decided on specific plans to newly install or expand each of facilities as of the end of the consolidated fiscal year andeach quarter of the consolidated fiscal year. For this reason, it discloses amounts of capital investment by segment.
The amount of capital investment for the fiscal year ending March 31, 2021 is updated as follows (new installation andexpansions, based on the amount recorded as tangible fixed assets and the investment property) . The amount of capital
investment which is shown in the Initial Plan is the amount planned as of the filing date of the Annual Securities Report for the
151st business term.
The amount of capital investment
for the fiscal year ending March 31, 2021
Segment(Billions of yen)
Initial Plan
Updated Plan
IT
Energy

90.0
25.0

85.0
33.0

Industry
Mobility

23.0
25.0

22.0
23.0

Smart Life
Hitachi Construction Machinery

110.0
65.0

129.0
53.0

Hitachi Metals
Others

33.0
12.0

32.0
31.0

Corporate Items & Elimination
Total

3.0
386.0

3.0
411.0

(Notes) 1. The figures in the above table include the amount of the right-of-use assets and the investment property, each ofwhich is recorded as property, plant and equipment and other non-current assets, respectively.
2. These planned investments are expected to be mostly financed with the Hitachi Group’s own capital.
3. There are no plans to dispose or sell principal facilities, with the exception of disposing and selling facilities due toroutine upgrading.

8(8) Forward-Looking Statements
Certain statements found in “2. Management’s Discussion and Analysis of Consolidated Financial Conditions, Operating
Results and Cash Flows” and other descriptions in this report may constitute “forward-looking statements” as defined in the U.S.
Private Securities Litigation Reform Act of 1995. Such “forward-looking statements” reflect management’s current views withrespect to certain future events and financial performance and include any statement that does not directly relate to any historicalor current fact. Words such as “anticipate,” “believe,” “expect,” “estimate,” “forecast,” “intend,” “plan,” “project” and similar
expressions which indicate future events and trends may identify “forward-looking statements.” Such statements are based on
currently available information and are subject to various risks and uncertainties that could cause actual results to differ
materially from those projected or implied in the “forward-looking statements” and from historical trends. Certain “forwardlooking statements” are based upon current assumptions of future events which may not prove to be accurate. Undue relianceshould not be placed on “forward-looking statements,” as such statements speak only as of the date of this report.
Factors that could cause actual results to differ materially from those projected or implied in any “forward-looking
statement” and from historical trends include, but are not limited to:• exacerbation of social and economic impacts of the spread of COVID-19;• economic conditions, including consumer spending and plant and equipment investment in Hitachi’s major markets, as wellas levels of demand in the major industrial sectors Hitachi serves;• exchange rate fluctuations of the yen against other currencies in which Hitachi makes significant sales or in which Hitachi’s
assets and liabilities are denominated;• uncertainty as to Hitachi’s ability to access, or access on favorable terms, liquidity or long-term financing;• uncertainty as to general market price levels for equity securities, declines in which may require Hitachi to write down
equity securities that it holds;• fluctuations in the price of raw materials including, without limitation, petroleum and other materials, such as copper, steel,aluminum, synthetic resins, rare metals and rare-earth minerals, or shortages of materials, parts and components;• estimates, fluctuations in cost and cancellation of long-term projects for which Hitachi uses the percentage-of-completion
method to recognize revenue from sales;• increased commoditization of and intensifying price competition for products;• uncertainty as to Hitachi’s ability to attract and retain skilled personnel;• uncertainty as to Hitachi’s ability to continue to develop and market products that incorporate new technologies on a timely
and cost-effective basis and to achieve market acceptance for such products;• fluctuations in demand of products, etc. and industry capacity;• uncertainty as to Hitachi’s ability to implement measures to reduce the potential negative impact of fluctuations in demandof products, etc., exchange rates and/or price of raw materials or shortages of materials, parts and components;• credit conditions of Hitachi’s customers and suppliers;• uncertainty as to Hitachi’s ability to achieve the anticipated benefits of its strategy to strengthen its Social Innovation
Business;• uncertainty as to the success of acquisitions of other companies, joint ventures and strategic alliances and the possibility of
incurring related expenses;• uncertainty as to the success of restructuring efforts to improve management efficiency by divesting or otherwise exiting
underperforming businesses and to strengthen competitiveness;• general socioeconomic and political conditions and the regulatory and trade environment of countries where Hitachi
conducts business, particularly Japan, Asia, the United States and Europe, including, without limitation, direct or indirect
restrictions by other nations on imports and differences in commercial and business customs including, without limitation,
contract terms and conditions and labor relations;• the potential for significant losses on Hitachi’s investments in equity-method associates and joint ventures;• uncertainty as to the success of cost structure overhaul;• the possibility of disruption of Hitachi’s operations by natural disasters such as earthquakes and tsunamis, the spread of
infectious diseases, and geopolitical and social instability such as terrorism and conflict;• uncertainty as to the outcome of litigation, regulatory investigations and other legal proceedings of which the Company, its
subsidiaries or its equity-method associates and joint ventures have become or may become parties;• the possibility of incurring expenses resulting from any defects in products or services of Hitachi;• uncertainty as to Hitachi’s ability to maintain the integrity of its information systems, as well as Hitachi’s ability to protect
its confidential information or that of its customers;• uncertainty as to Hitachi’s access to, or ability to protect, certain intellectual property; and• uncertainty as to the accuracy of key assumptions Hitachi uses to evaluate its employee benefit-related costs.
The factors listed above are not all-inclusive and are in addition to other factors contained elsewhere in this report and inother materials published by Hitachi.
3. Material Agreements, etc.
No material agreements were entered into during the nine months ended December 31, 2020.

9

III. Information on the Company
1. Information on the Company’s Stock, etc.
(1) Total number of shares, etc.
1) Total number of shares
Class

Total number of shares authorized to
be issued (shares)

Common stock

2,000,000,000

Total

2,000,000,0002) Issued shares

Class

Number of sharesissued as of the end of
third quarter (shares)(December 31, 2020)

Number of sharesissued as of thefiling date (shares)(Note)(February 10, 2021)

Stock exchange on which
the Company is listed

Description

The number of shares per

Commonstock

967,885,277

967,885,277

Tokyo, Nagoya

Total

967,885,277

967,885,277-

one unit of shares is 100
shares.
-(Note) The "Number of shares issued as of the filing date" does not include shares issued upon exercise of stock acquisition rightsfrom November 1, 2020 to the filing date.
(2) Information on the stock acquisition rights, etc.
1) Details of stock option plans
Not applicable.
2) Details of other stock acquisition rights, etc.
Not applicable.
(3) Information on moving strike convertible bonds, etc.
Not applicable.
(4) Changes in the total number of issued shares and the amount of common stock and other

Date

From October 1, 2020
to December 31, 2020

Change in
the total
number ofissued shares(shares)－

Balance of thetotal number ofissued shares(shares)

Change incommonstock(Millionsof yen)Balance ofcommonstock(Millionsof yen)Change incapitalreserve(Millionsof yen)Balance ofcapitalreserve(Millionsof yen)967,885,277－

460,790－

178,756(5) Major shareholders
Not applicable.

10(6) Information on voting rights
Information on voting rights as of September 30, 2020 is stated in this item because the Company does not identify the
number of voting rights as of December 31, 2020 due to the lack of information on the number of the Company’s shares held by
the entity which the Company holds one quarter or more of total number of voting rights of such entity as of December 31, 2020.
1) Issued shares(As of September 30, 2020)
Classification

Number of voting
rightsNumber of shares (shares)

Shares without voting right
Shares with restricted voting right (treasury
stock, etc.)
Shares with restricted voting right (others)

Description

－

－

－

－

－

－

－

－

－

－

－

Shares with full voting right (treasury stock, etc.)

Common stock

1,065,500

Shares with full voting right (others)

Common stock

964,367,100

Shares less than one unit

Common stock

2,452,677－－

967,885,277－－

Number of issued shares
Total number of voting rights

9,643,671

9,643,671－－－(Note) The “Shares with full voting right (others)” column includes 5,300 shares registered in the name of Japan Securities
Depository Center, Incorporated (account for managing stocks whose shareholders have not transferred titles) and 53 voting
rights for those shares.
2) Treasury stock, etc.
(As of September 30, 2020)

Name ofshareholder

Address

Hitachi, Ltd.

6-6, Marunouchi 1-chome,
Chiyoda-ku, Tokyo

Aoyama Special SteelCo., Ltd.

9-11, Shinkawa 2-chome, Chuoku, Tokyo

Number ofshares held
under own name(shares)Number ofshares held
under thenames ofothers(shares)

Total shares
held (shares)

Ownership
percentage tothe total
number ofissued shares(%)

1,032,300－

1,032,300

0.11

2,100

－

2,100

0.00

17,600－17,600

0.00

SAITA KOUGYOU

5-3, Takinogawa 5-chome, Kita-

CO., LTD.

ku, Tokyo

Nitto Jidosha
Kiki K.K.

3268, Nagaoka, Ibarakimachi,
Higashiibaraki-gun, Ibaraki

10,500－10,5000.00

Mizuho Co., Inc.

4-1, Koishikawa 5-chome,
Bunkyo-ku, Tokyo

3,000

－

3,000

0.00

1,065,500－

1,065,500

0.11

Total

－

11

2. Changes in Senior Management
Changes in senior managements from the filing date of the Annual Securities Report for the 151st business term to
December 31, 2020 were as follows.
Changes in Responsibility [Effective November 1, 2020]
Former Position and Responsibility

New Position and Responsibility

Position

Position

Responsibility
Assistant to the
President (building

Responsibility

Representative

Assistant to theRepresentative

Executive Officer
Executive Vice

President (building
systems business andExecutive Officer
Executive Vice

President andExecutive Officer

railway systems
business)

President andExecutive Officer

systems business,railway systems

Name

Alistair Dormer

business andenvironmental strategy)(Note) Matters delegated to the Executive Officer by the Board of Directors are described in “Responsibility” column.
IV. Financial Information
Refer to the condensed quarterly consolidated financial statements incorporated in this Quarterly Report.

Part II Information on Guarantors, etc. for the Company
Not applicable.

12

Condensed Quarterly Consolidated Financial Statements
Condensed Quarterly Consolidated Statement of Financial Position
Millions of yen
Note
AssetsCurrent assets
Cash and cash equivalents
Trade receivables and contract assets
Inventories
Investments in securities and other financial assets
Other current assets

6
7
5

Total current assets
Non-current assets
Investments accounted for using the equity method
Investments in securities and other financial assets
Property, plant and equipment
Goodwill
Other intangible assets
Other non-current assets

5
5,7
5
5

December 31, 2020

March 31, 2020

917,238
2,362,274
1,668,315
305,366
229,350

812,3312,260,205
1,408,937
279,951
456,165

5,482,543

5,217,589

432,998
476,622
2,139,425
1,058,894
877,276
473,670

480,375
440,5142,165,311
635,927
479,794
510,571

Total non-current assets
Total assets

5,458,885

4,712,492

10,941,428

9,930,081

Liabilities
Current liabilities
Short-term debt
Current portion of long-term debt
Other financial liabilities
Trade payables
Accrued expenses
Contract liabilities
Other current liabilities

976,562
261,807286,785
1,338,323
562,355
889,461438,297

183,303
231,237
252,403
1,270,668
604,415615,096
576,056

4,753,590

3,733,178

1,362,044
500,629678,250

1,070,502
514,375
345,287

2,540,923

1,930,164

7,294,513

5,663,342

460,790
2,491,792(20,825)(3,430)459,862
464,795
2,296,208(57,070)(3,809)7
7

5

Total current liabilities
Non-current liabilities
Long-term debt
Retirement and severance benefits
Other non-current liabilities
Total non-current liabilities
Total liabilities

77

EquityHitachi, Ltd. stockholders’ equity
Common stock
Capital surplus
Retained earnings
Accumulated other comprehensive income
Treasury stock, at cost

5,7
8

Total Hitachi, Ltd. stockholders’ equity

2,928,327

3,159,986

718,588

1,106,753

Total equity

3,646,915

4,266,739

Total liabilities and equity

10,941,428

9,930,081

Non-controlling interests

5,7

See accompanying notes to condensed quarterly consolidated financial statements.

F-1

Condensed Quarterly Consolidated Statement of Profit or Loss
Nine months ended December 31, 2020 and 2019
Revenues
Cost of sales
Gross profit
Selling, general and administrative expenses
Other income
Other expenses
Financial income
Financial expenses
Share of profits (losses) of investments accounted for using the equity
methodEBIT (Earnings before interest and taxes)
Interest income
Interest charges
Income from continuing operations, before income taxes
Income taxes
Income from continuing operations
Loss from discontinued operations
Net income
Net income attributable to:
Hitachi, Ltd. stockholders
Non-controlling interests
Earnings per share from continuing operations,
attributable to Hitachi, Ltd. stockholders
Basic
DilutedEarnings per share attributable to Hitachi, Ltd. stockholders
Basic
DilutedMillions of yen
Note
9

5,10
5,10
11
11

12

2020
5,979,000(4,452,102)
1,526,898(1,209,986)
291,504(111,374)
3,338(4,257)2019
6,344,181(4,631,184)
1,712,997(1,267,363)
29,006(468,413)
12,183
(880)

7,413

37,420503,536
12,426(17,003)498,959(184,204)
314,755(686)
314,069

54,95015,413(18,242)
52,12135,26687,387(1,187)
86,200307,878
6,191

55,146
31,054319.44319.04

Yen
58.33
58.26

318.73318.33

57.10
57.03

13

13

Condensed Quarterly Consolidated Statement of Comprehensive Income
Nine months ended December 31, 2020 and 2019
Note

Millions of yen

Net income

2020
314,0692019
86,200

Other comprehensive income (OCI)
Items not to be reclassified into net income
Net changes in financial assets measured at fair value through OCI
Remeasurements of defined benefit plans
Share of OCI of investments accounted for using the equity method
Total items not to be reclassified into net income

49,568364
49,93228,368787
29,155

Items that can be reclassified into net income
Foreign currency translation adjustments
Net changes in cash flow hedges
Share of OCI of investments accounted for using the equity method
Total items that can be reclassified into net income

1,095
3,690
10,112
14,897(44,168)
14,179(1,296)(31,285)

64,829378,898(2,130)84,070359,131
19,76765,516
18,554

Other comprehensive income (OCI)
Comprehensive income
Comprehensive income attributable to:
Hitachi, Ltd. stockholders
Non-controlling interests
See accompanying notes to condensed quarterly consolidated financial statements.
F-2

Condensed Quarterly Consolidated Statement of Profit or Loss
Three months ended December 31, 2020 and 2019

Millions of yen
Note

Revenues
Cost of sales
Gross profit
Selling, general and administrative expenses
Other income
Other expenses
Financial income
Financial expenses
Share of profits (losses) of investments accounted for using the equity
methodEBIT (Earnings before interest and taxes)
Interest income
Interest charges
Income (loss) from continuing operations, before income taxes
Income taxes
Income (loss) from continuing operations
Income (loss) from discontinued operations
Net income (loss)
Net income (loss) attributable to:
Hitachi, Ltd. stockholders
Non-controlling interests
Earnings (loss) per share from continuing operations,
attributable to Hitachi, Ltd. stockholders
Basic
DilutedEarnings (loss) per share attributable to Hitachi, Ltd. stockholders
Basic
Diluted52020
2,218,943(1,650,693)
568,250(432,126)
9,086(42,263)
2,899
(917)

2019
2,122,854(1,556,393)
566,461(418,030)
236(401,895)
7,747-

12,401

9,914

117,330
4,223(6,848)
114,705(47,349)
67,356
0
67,356(235,567)
5,016(6,304)(236,855)
125,912(110,943)(391)(111,334)

57,123
10,233(134,147)
22,813

59.13
59.06

Yen
(138.50)(138.50)

59.13
59.06

(138.91)(138.91)13

13

Condensed Quarterly Consolidated Statement of Comprehensive Income
Three months ended December 31, 2020 and 2019
Note

Millions of yen

Net income (loss)

2020
67,3562019(111,334)

Other comprehensive income (OCI)
Items not to be reclassified into net income
Net changes in financial assets measured at fair value through OCI
Remeasurements of defined benefit plans
Share of OCI of investments accounted for using the equity method
Total items not to be reclassified into net income

25,326(164)
25,162

8,319
654
8,973

Items that can be reclassified into net income
Foreign currency translation adjustments
Net changes in cash flow hedges
Share of OCI of investments accounted for using the equity method
Total items that can be reclassified into net income(6,248)559
2,471(3,218)52,004
9,534
15,676
77,21421,94489,30086,187(25,147)

73,276
16,024(65,755)
40,608Other comprehensive income (OCI)
Comprehensive income
Comprehensive income attributable to:
Hitachi, Ltd. stockholders
Non-controlling interests
See accompanying notes to condensed quarterly consolidated financial statements.
F-3

Condensed Quarterly Consolidated Statement of Changes in Equity
Nine months ended December 31, 2020

Millions of yen
2020

Commonstock

Capitalsurplus(notes 5
and 7)

Retainedearnings(note 8)

Accumulated
othercomprehensive
income459,862

464,795

2,296,208(57,070)(3,809)Balance at beginning of period

Treasurystock,
at cost

Total
Hitachi, Ltd.
stockholders’equityNoncontrollinginterests(notes 5
and 7)

Total equity

3,159,986

1,106,753

4,266,739

Changes in equity
Reclassified into retained earnings

-

-

9,593

(9,593)

-

-

-

-

Net income--

307,878--

307,878

6,191

314,069

Other comprehensive income

-

-

-

51,253-

51,253

13,57664,829Dividends to Hitachi, Ltd. stockholders--(96,653)--(96,653)-(96,653)

Dividends to non-controlling interests

-

-

-

-

-

-

(21,526)(21,526)

Acquisition of treasury stock

-

-

-

-

(94)

(94)

-

(94)

Sales of treasury stock

-

107

-

-

473

580

-

580

Issuance of new shares

928

928

-

-

-

1,856

-

1,856

-

(465,830)(25,234)(5,415)-(496,479)(386,406)(882,885)

Total changes in equity

928(464,795)

195,584

36,245379(231,659)(388,165)(619,824)

Balance at end of period

460,790-

2,491,792(20,825)(3,430)2,928,327

718,588

3,646,915

Changes in non-controlling interests

Nine months ended December 31, 2019

Millions of yen
2019

Balance at beginning of period
Cumulative effects of changes inaccounting policies

Commonstock

CapitalsurplusRetainedearnings(note 8)458,790

463,786

2,287,587

Accumulated
othercomprehensive
income56,360Treasurystock,
at cost(3,920)

Total
Hitachi, Ltd.
stockholders’equityNoncontrollinginterests

Total equity

3,262,603

1,151,800

4,414,403--(2,596)--(2,596)(1,075)(3,671)

458,790

463,786

2,284,991

56,360(3,920)3,260,007

1,150,725

4,410,732

Reclassified into retained earnings--

15,210(15,210)

-

-

-

-

Net income--

55,146--55,146

31,054

86,200

Other comprehensive income

-

-

-

10,370-10,370(12,500)(2,130)

Dividends to Hitachi, Ltd. stockholders--(91,761)--(91,761)-(91,761)

Restated balance
Changes in equity

Dividends to non-controlling interests

-

-

-

-

-

-

(40,266)(40,266)

Acquisition of treasury stock

-

-

-

-

(129)

(129)

-

(129)

Sales of treasury stock

-

(138)

-

-

274

136

-

136

Issuance of new shares

1,072

1,072

-

-

-

2,144

-

2,144

-

(4,425)-(2,015)-(6,440)3,767(2,673)

Changes in non-controlling interests
Total changes in equity

1,072(3,491)(21,405)(6,855)145(30,534)(17,945)(48,479)

Balance at end of period

459,862460,295

2,263,586

49,505(3,775)

3,229,473

1,132,780

4,362,253

See accompanying notes to condensed quarterly consolidated financial statements.

F-4

Condensed Quarterly Consolidated Statement of Cash Flows
Nine months ended December 31, 2020 and 2019

Millions of yen
Note

Cash flows from operating activities:
Net income
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization
Impairment losses
Income taxes
Share of (profits) losses of investments accounted for using the equity method
Financial income and expenses
Net (gain) loss on business reorganization and others(Gain) loss on sale of property, plant and equipment
Change in trade receivables and contract assets
Change in inventories
Change in trade payables
Change in accrued expenses
Change in retirement and severance benefits
Other
SubtotalInterest received
Dividends received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities:
Purchase of property, plant and equipment
Purchase of intangible assets
Proceeds from sale of property, plant and equipment, and intangible assets
Purchase of investments in securities and other financial assets(including investments in subsidiaries and investments accounted for using the equity method)
Proceeds from sale of investments in securities and other financial assets(including investments in subsidiaries and investments accounted for using the equity method)Other
Net cash provided by (used in) investing activities
Cash flows from financing activities:
Change in short-term debt, net
Proceeds from long-term debt
Payments on long-term debt
Proceeds from payments from non-controlling interests
Dividends paid to Hitachi, Ltd. stockholders
Dividends paid to non-controlling interests
Acquisition of common stock for treasury
Proceeds from sales of treasury stock
Purchase of shares of consolidated subsidiaries from non-controlling interests
Other
Net cash provided by (used in) financing activities

2
2

5

2020

2019

314,069

86,200351,115
74,403
184,204(7,413)1,464(287,604)(3,753)289,687(177,631)(83,317)(70,293)(12,497)(3,708)316,482
76,933(35,267)(37,420)(1,117)(27,508)
1,642
316,753(300,531)(130,254)(147,730)(16,318)
359,480

568,726
16,855
13,426(16,508)(156,099)

461,345
18,60012,983(18,849)(166,232)

426,400

307,847(166,130)(78,335)
32,115(232,758)(64,939)
20,502(1,010,889)(234,499)

440,490
16,67453,170(33,498)(766,075)(492,022)

803,683
465,316(184,323)
5,190(96,691)(25,511)(94)
580(532,955)(22)

357,02288,484(229,559)
5,004(91,766)(40,509)(129)
136(1,340)(460)

435,173

86,883

Effect of exchange rate changes on cash and cash equivalents
Change in cash and cash equivalents

9,409(15,841)

104,907(113,133)

Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

812,331917,238

807,593
694,460

See accompanying notes to condensed quarterly consolidated financial statements.

F-5

Notes to Condensed Quarterly Consolidated Financial Statements
December 31, 2020
(1) Nature of Operations
Hitachi, Ltd. (the Company) is a corporation domiciled in Japan, whose shares are listed on the Tokyo Stock Exchange. The
condensed quarterly consolidated financial statements of the Company as of and for the nine months ended December 31, 2020
comprise the Company, its subsidiaries and the Company’s interests in associates and joint ventures. The Company’s and its
subsidiaries’ businesses are global and diverse, and include manufacturing and services in eight segments consisting of IT, Energy,
Industry, Mobility, Smart Life, Hitachi Construction Machinery, Hitachi Metals and Others.
(2) Basis of Presentation
As the Company meets the requirements of a “Specified Company applying Designated International Financial ReportingStandards” pursuant to Article 1-2 of the Ordinance on Terminology, Forms and Preparation Methods of Quarterly Consolidated
Financial Statements (Cabinet Office Ordinance No.64 of 2007), the condensed quarterly consolidated financial statements of theCompany have been prepared in accordance with International Accounting Standards (IAS) 34 “Interim Financial Reporting,” aspermitted by the provision of Article 93 of the Ordinance. They do not include all the information and disclosures required for acomplete set of financial statements prepared in accordance with International Financial Reporting Standards (IFRS), and should
be read in conjunction with the financial statements and notes included in the Company’s annual consolidated financial statements
for the year ended March 31, 2020.
Management of the Company has made a number of judgments, estimates and assumptions relating to the application of
accounting policies, reporting of revenues and expenses and assets and liabilities in the preparation of these condensed quarterly
consolidated financial statements. Actual results could differ from those estimates.
Estimates and assumptions are continually evaluated. The effect of a change in accounting estimates, if any, is recognized in thereporting period in which the change was made and in future periods.
Judgments, estimates and assumptions that could have a material effect on these condensed quarterly consolidated financial
statements are basically the same as those disclosed in the Company’s annual consolidated financial statements for the year ended
March 31, 2020.
For the nine months ended December 31, 2020, the Company tested fixed assets, such as goodwill, for impairment and assessed
the realizability of deferred tax assets, etc., which require management to make estimates of future cash flows or future taxable
income, based on the assumption that the impact of the slowdown in the global economy caused by the spread of COVID-19
would not be material in the longer term, on the other hand the decrease in demand would continue in part of the business in the
short term, although the situation varies from one segment or region to another since the Company is engaged in a wide range ofbusiness activities around the globe. The Company judged that this is the best assumption as of December 31, 2020. However, if
the impact lasts longer or is wider than the assumption described above, it could affect significant accounting estimates orjudgements regarding impairment of fixed assets, such as goodwill, and assessments of the realizability of deferred tax assets, etc.
Regarding the condensed quarterly consolidated statement of cash flows, changes in presentation have been made effective from
April 1, 2020 for improved clarity. “Change in accrued expenses”, which was previously included in “Change in other liabilities”,
has been reclassified and separately presented. “Change in other assets” and “Change in other liabilities”, which were separately
presented, have been included in “Other” under cash flows from operating activities. The condensed quarterly consolidated
statement of cash flows for the nine months ended December 31, 2019 has been reclassified in order to reflect these changes inpresentation.
As a result, regarding the condensed quarterly consolidated statement of cash flows for the nine months ended December 31, 2019,“Change in other liabilities” of (147,730) million yen has been reclassified as “Change in accrued expenses”. In addition, “Change
in other assets” of (2,543) million yen and “Change in other liabilities” of 357,101 million yen, which were separately presented,
have been reclassified as “Other” under cash flows from operating activities.

F-6

Notes to Condensed Quarterly Consolidated Financial Statements
December 31, 2020
(3) Significant Accounting Policies
Significant accounting policies adopted in preparation of the condensed quarterly consolidated financial statements are consistent
with those used in the preparation of the Company’s annual consolidated financial statements for the year ended March 31, 2020.
Income taxes for the nine months ended December 31, 2020 are computed using the estimated annual effective tax rate.

F-7

Notes to Condensed Quarterly Consolidated Financial Statements
December 31, 2020
(4) Segment Information
The operating segments of the Company are the components for which separate financial information is available and which isevaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance.
The Company discloses its business in eight reportable segments, corresponding to categories of activities classified primarily by
the similarities for the nature of markets, products and services, and economic characteristics. Several operating segments areaggregated into Energy, Industry, Mobility and Smart Life for financial reporting purposes so that users of the financial statements
better understand the Company’s financial position and business performance. The Company aggregates operating segments basedon the similarities of economic characteristics mainly using gross profit margin ratios of operating segments. The primary products
and services included in each segment are as follows:IT:
Systems integration, Consulting, Control systems, Cloud services, Software, IT products (Storage, Servers) and ATMs
Energy:Energy solutions (Nuclear, Renewable energy, Thermal, Power grid)Industry:
Industry & distribution systems, Water & environment systems and Industrial machinery
Mobility:
Building systems (Elevators, Escalators) and Railway systems
Smart Life:
Smart life & ecofriendly systems (Refrigerators, Washing machines, Room air conditioners, Air-conditioning equipment),
Automotive systems (Powertrain systems, Chassis systems, Advanced driver assistance systems), Medical and life science
products, Analytical equipment, Semiconductor processing equipment, Manufacturing and inspection equipment, and Advanced
industrial products
Hitachi Construction Machinery:Hydraulic excavators, Wheel loaders, Mining machinery, Maintenance and services, Construction solutions and Mine management
systems
Hitachi Metals:
Specialty steel products, Functional components and equipment, Magnetic materials and power electronics materials, and Wires,
cables and related products
Others:
Optical disk drives, Property management and others
Effective from April 1, 2020, due to making Hitachi High-Tech Corporation a wholly-owned subsidiary of the Company during
the three months ended June 30, 2020, Hitachi High-Tech segment was unified to Smart Life segment. Figures for the nine months
ended December 31, 2019 have been restated on the basis of the reclassification.
In April 2020, the Company sold all shares of Hitachi Chemical Company, Ltd. (currently Showa Denko Materials Co., Ltd.). As aresult, Hitachi Chemical Company, Ltd. was deconsolidated. Accordingly, Hitachi Chemical segment ceased to be a businesssegment, but the segment figures for the nine months ended December 31, 2020 and 2019 are disclosed individually to enhancefair disclosure.

F-8

Notes to Condensed Quarterly Consolidated Financial Statements
December 31, 2020
The following tables show business segment information for the nine months ended December 31, 2020 and 2019.
Revenues from External Customers
Millions of yen
2020
IT

2019

1,324,577

1,385,112

EnergyIndustry

722,031441,094

203,155442,631

Mobility
Smart Life856,760
1,389,820

825,288
1,498,148

Hitachi Construction Machinery
Hitachi Metals

558,280
522,933

686,906
648,394

Hitachi Chemical
Others154,627

465,070
181,851

Subtotal
Corporate items

5,970,122
8,878

6,336,555
7,626

Total

5,979,000

6,344,181

Revenues from Intersegment Transactions
Millions of yen
2020

2019

IT

109,238

109,154

EnergyIndustry

33,952109,001

42,577112,349

Mobility
Smart Life

5,927
71,965

7,383
95,645

Hitachi Construction Machinery
Hitachi Metals

447
18,470282
22,569Hitachi Chemical
Others161,564

14,628
169,839

Subtotal
Corporate items and Eliminations

510,564(510,564)

574,426(574,426)

-

-

Total
Total Revenues

Millions of yen
2020
IT

2019

1,433,815

1,494,266

EnergyIndustry

755,983
550,095

245,732
554,980

Mobility
Smart Life

862,687
1,461,785

832,671
1,593,793

Hitachi Construction Machinery
Hitachi Metals

558,727
541,403

687,188
670,963

Hitachi Chemical
Others316,191

479,698
351,690

Subtotal
Corporate items and Eliminations

6,480,686(501,686)

6,910,981(566,800)

Total

5,979,000

6,344,181

F-9

Notes to Condensed Quarterly Consolidated Financial Statements
December 31, 2020
Segment Profit (Loss)
Millions of yen
2020

2019

IT

161,741

158,184

EnergyIndustry(10,536)
25,936(379,214)
30,200

Mobility
Smart Life

70,152
23,44491,60884,985

Hitachi Construction Machinery
Hitachi Metals

13,633(38,313)58,459(52,864)

Hitachi Chemical
Others

16,06724,085
26,734

Subtotal
Corporate items and Eliminations

262,124
241,412

42,177
12,773

Total

503,536

54,950Interest income
Interest charges

12,426(17,003)

15,413(18,242)

Income from continuing operations, before income taxes

498,959

52,121

Segment profit (loss) is measured by EBIT.
Intersegment transactions are generally recorded at the same prices used in arm’s length transactions. Corporate items include
corporate expenses not allocated to individual business segments, such as expenditures for advanced R&D, a part of net gain (loss) on
business reorganization and share of profits (losses) of investments accounted for using the equity method, and others.

F-10Notes to Condensed Quarterly Consolidated Financial Statements
December 31, 2020
(5) Business Acquisitions and Divestitures
The following are the main Business Acquisitions and Divestitures for the nine months ended December 31, 2020, including theperiod up to the approval date of the condensed quarterly consolidated financial statements.
(a) Reorganization of automotive systems business
On October 30, 2019, the Company and Hitachi Automotive Systems, Ltd. (HiAMS), a consolidated subsidiary of theCompany in the Smart Life segment, signed an agreement with Honda Motor Co., Ltd. (Honda), and Keihin Corporation(Keihin), Showa Corporation (Showa), and Nissin Kogyo Co., Ltd (Nissin Kogyo) (together, “the Associates of Honda”), to
integrate management of HiAMS and the Associates of Honda, in order to strengthen development and distribution of global
and competitive solutions in the CASE area.
On January 1, 2021, HiAMS and the Associates of Honda conducted an absorption-type merger in which HiAMS is thesurviving company and each of the Associates of Honda are the disappearing companies, and established Hitachi Astemo, Ltd.
(Astemo). As a result, the Company’s ownership ratio of shares of Astemo became 66.6% and Astemo became a consolidated
subsidiary of the Company.
The consideration is the common shares of HiAMS. The fair value of the consideration is allocated as follows: 88,747 million
yen for Keihin, 59,062 million yen for Showa, and 48,242 million yen for Nissin Kogyo. The fair value of the consideration
was based on the valuation of HiAMS and the Associates of Honda agreed by the Company and Honda. For the agreement, theCompany verified the validity of the valuation by taking into account the results of fair value measurements conducted by third-party valuation specialists and other factors.
In addition to this acquisition, the Company’s ownership interest in the former HiAMS decreased from 100% prior to the
execution of this acquisition to 66.6%, and the Company will recognize increases in capital surplus and non-controllinginterests in the amounts of approximately 120 billion yen and 80 billion yen, respectively, for the year ending March 31, 2021.
Acquisition related costs of 2,948 million yen have been posted up to the year ended March 31, 2020, and approximately 2,000
million yen is expected to be recorded in the year ending March 31, 2021. Acquisition related costs included in Other expenses
in the condensed quarterly consolidated statement of profit or loss for the nine months ended December 31, 2020 and 2019were 453 million yen and 2,579 million yen, respectively.
Due to a time constraint between the acquisition date and the filing date of the quarterly report, the initial accounting treatment
for the reorganization of the automotive systems business has not been completed. Accordingly, no disclosure has been made to
the amounts of assets acquired and liabilities assumed that were recognized at the date of acquisition, the amounts of noncontrolling interests, or the balance of goodwill.
Furthermore, due to the time constraint for preparing pro forma data, the impact on revenues and net income for the ninemonths ended December 31, 2020 assuming that such acquisition was made as of April 1, 2020 has also not been disclosed.
(b) Settlement regarding the South African projectAt the meeting of the Board of Directors held on December 18, 2019, the Company approved a settlement with Mitsubishi
Heavy Industries, Ltd. (MHI) regarding the transfer price adjustment, etc. for the South African project previously in theprocess of arbitration based on economic rationality and business strategy, etc., and reached a settlement agreement with MHI
on the same day. As a result of the conclusion of this settlement, it was agreed that all common shares of Mitsubishi Hitachi
Power Systems, Ltd. (MHPS) held by the Company would be transferred to MHI, and the Company would pay 130,000 million
yen to MHI comprising a settlement payment of 200,000 million yen offset by a consideration of 70,000 million yen in loans
receivable to Mitsubishi Hitachi Power Systems Africa Proprietary Limited (MHPS Africa) to be transferred to MHI.
Accordingly, the Company recorded other accounts payable of 200,000 million yen related to the settlement payment to MHI
and other provision of 273,272 million yen related to the transfer of shares of MHPS. The Company also reversed the provisionof 105,041 million yen related to the transfer price adjustment, etc. of the South African project, which had been recorded prior
to the conclusion of this agreement. As a result of the above, the Energy segment recorded a loss of 375,967 million yen due tothe settlement, which is included in Other expenses in the condensed quarterly consolidated statement of profit or loss for thenine months ended December 31, 2019. Regarding the assets to be transferred to MHI under this agreement, the shares of
MHPS previously included in Investments accounted for using the equity method and the loans receivable to MHPS Africa
previously included in Investments in securities and other financial assets classified as non-current assets in the condensed
quarterly consolidated statement of financial position, the total of which was 333,614 million yen, were reclassified to Other
current assets in the condensed quarterly consolidated statement of financial position since they met the criteria as held-for-saleassets in accordance with IFRS 5 “Non-current Assets Held for Sale and Discontinued Operations”.
Furthermore, on March 30, 2020, the Company transferred to MHI, the loans receivable to MHPS Africa, and paid 130,000
million yen to MHI comprising the settlement payment offset by the consideration in loans receivable. On September 1, 2020,
all shares of MHPS held by the Company, 263,614 million yen, which had been classified as held-for-sale assets, weretransferred to MHI, and MHPS ceased to be an associate. Accordingly, the Company reversed other provision of 273,272
million yen related to the transfer of shares of MHPS, which had been included in Other current liabilities in the condensed
F-11

Notes to Condensed Quarterly Consolidated Financial Statements
December 31, 2020
quarterly consolidated statement of financial position. On September 14, 2020, the Company and MHI received a notice fromthe Japan Commercial Arbitration Association stating that the arbitration was closed.
On September 1, 2020, MHPS changed its name to Mitsubishi Power, Ltd.
(c) Acquisition of ABB's power grids business
On December 17, 2018, the Company decided to acquire the power grid business of ABB Ltd (ABB) and signed an acquisition
agreement with ABB in order to strengthen and expand energy solution business globally. Pursuant to this agreement, theCompany invested 80.1% in Hitachi ABB Power Grids Ltd (Hitachi ABB Power Grid), which was spun off from ABB, and theacquisition was completed on July 1, 2020. As a result, Hitachi ABB Power Grid became a subsidiary of the Company. The
Company has a call option to purchase 19.9% of the shares of Hitachi ABB Power Grid held by ABB, and ABB has a put
option to sell 19.9% of the shares of Hitachi ABB Power Grid held by ABB to the Company exercisable after 2023.
The following table summarizes the fair value of the consideration paid for Hitachi ABB Power Grid and the provisionalamounts of the assets acquired, liabilities assumed, goodwill and non-controlling interests recognized as of the acquisition date.

Millions of yen
65,466
378,063
174,198
63,883
239,287

Cash and cash equivalents
Trade receivables and contract assets
Inventories
Other current assets
Property, plant and equipment
Intangible assets
Goodwill
Other intangible assets
Other non-current assets
Total

444,144444,501
19,216
1,828,758

Trade payables
Contract liabilities
Other current liabilities
Long-term debt
Other non-current liabilities
Total

199,789
143,466
213,191
349,189
119,894
1,025,529

Cash paid for the acquisitionNon-controlling interests
Total

722,062
81,167803,229

The goodwill mainly comprises excess earning power and expected synergies arising from the acquisition.
Non-controlling interests are measured based on the proportionate share of the fair value of the identifiable net assets of Hitachi
ABB Power Grid.
The Company is currently evaluating the fair values to be assigned to assets and liabilities of Hitachi ABB Power Grid at theacquisition date and therefore the above amounts are subject to change. In addition, the Cash paid for the acquisition may vary
due to transaction price adjustment.
Acquisition related costs of 5,391 million yen have been posted up to the year ended March 31, 2020, and approximately 3,000
million yen is expected to be recorded in the year ending March 31, 2021. Acquisition related costs included in Other expenses
in the condensed quarterly consolidated statement of profit or loss for the nine months ended December 31, 2020 and 2019were 2,686 million yen and 1,388 million yen, respectively.
In addition to this acquisition, the Company repaid 3,000 million U.S. dollars (323,190 million yen) of certain loans owed by
Hitachi ABB Power Grid from ABB's subsidiary, ABB Capital B.V., and the repayment is included in Purchase of investments
in securities and other financial assets (including investments in subsidiaries and investments accounted for using the equity
method) under Cash flows from investing activities in the condensed quarterly consolidated statement of cash flows for thenine months ended December 31, 2020.
F-12

Notes to Condensed Quarterly Consolidated Financial Statements
December 31, 2020
The results of operations of Hitachi ABB Power Grid from the date of acquisition to December 31, 2020 (prior to eliminationof intercompany transactions) included in the condensed quarterly consolidated statement of profit or loss are Revenues of
507,047 million yen, EBIT of (8,431) million yen, and Net income of (8,739) million yen. EBIT and Net income include
depreciation and amortization of 37,328 million yen on Other intangible assets and PP&E that were recognized as a result of
this acquisition.
Assuming that such acquisition occurred as of April 1, 2020, the results of operations of the Company for the nine months
ended December 31, 2020 (pro forma information not subject to quarterly review) are as follows:
Millions of yen
6,201,479
493,327
302,684

Revenues
EBIT
Net income

Hitachi ABB Power Grid's historical financial information has been adjusted from U.S. GAAP to IFRS to generate pro forma
information. EBIT and Net income include depreciation and amortization of 52,795 million yen on Other intangible assets andPP&E that were recognized as a result of this acquisition.
(d) Additional acquisition of shares of Hitachi High-Tech Corporation (Hitachi High-Tech)
On January 31, 2020, the Company decided to conduct a tender offer to acquire all issued shares of Hitachi High-Tech, aconsolidated subsidiary of the Company in the Smart Life segment, to establish the measurement and analysis platform tostrengthen Lumada. The Company commenced the tender offer on February 17, 2020, and the tender offer was completed on
April 6, 2020.
Furthermore, the Company conducted a series of procedures to make Hitachi High-Tech a wholly-owned subsidiary of theCompany. As a result, the Company’s ownership ratio of shares of Hitachi High-Tech increased to 100% on May 20, 2020.
The total consideration paid was 531,084 million yen, and the Company recognized decreases in capital surplus of 321,627
million yen and non-controlling interest of 209,457 million yen, respectively, for the nine months ended December 31, 2020.
(e) Sale of all shares of Hitachi Chemical Company, Ltd. (Hitachi Chemical)
On December 18, 2019, the Company signed a tender offer agreement with Showa Denko K.K. (Showa Denko) and HC
Holdings K.K. (HC Holdings), a wholly-owned subsidiary of Showa Denko, under which the Company agrees to tender all
shares of common stock in Hitachi Chemical held by the Company, in response to a tender offer to be carried out by HC
Holdings for the shares of common stock of Hitachi Chemical, a consolidated subsidiary of the Company in the Hitachi
Chemical segment. HC Holdings commenced the tender offer on March 24, 2020, and the tender offer was completed on April
20, 2020. The consideration received by the Company was 495,145 million yen.
As a result, the Company’s ownership ratio of shares of Hitachi Chemical decreased from 51.4% to 0%, and Hitachi Chemical
was deconsolidated. A gain on the sale of shares of Hitachi Chemical in the amount of 278,839 million yen was recognized in
Other income in the condensed quarterly consolidated statement of profit or loss. Furthermore, non-controlling interest in
Hitachi Chemical decreased 220,402 million yen in Changes in non-controlling interests in the condensed quarterly
consolidated statement of changes in equity as a result of its deconsolidation.
On October 1, 2020, Hitachi Chemical changed its name to Showa Denko Materials Co., Ltd.

F-13

Notes to Condensed Quarterly Consolidated Financial Statements
December 31, 2020
The following are the main Business Acquisitions and Divestitures for the nine months ended December 31, 2019.
(a) Acquisition of robotic systems integration business
On April 23, 2019, the Company signed an agreement with JR Intermediate Holdings, LLC (JR Intermediate) to acquire allinterests of JR Technology Group, LLC (JR Technology), a subsidiary of JR Intermediate, in order to expand the robotic
systems integration business globally. On December 27, 2019, Hitachi America, Ltd., a consolidated subsidiary of theCompany, executed the acquisition. As a result, the Company’s ownership ratio of interests of JR Technology became 100%and JR Technology turned into a subsidiary of the Company. Furthermore, Hitachi America, Ltd. repaid 231 million U.S.
dollars (25,304 million yen) of certain loans owed by JR Technology, in addition to the acquisition cost.
The following table summarizes the fair value of the consideration paid for JR Technology and the amounts of the assets
acquired and liabilities assumed recognized as of the acquisition date.
Millions of yen
3,056
26,315
433
871
9,352

Cash and cash equivalents
Trade receivables and contract assets
Inventories
Other current assets
Non-current assets (excluding intangible assets)
Intangible assets
Goodwill (deductible for tax purposes)
Other intangible assets
Total

84,33456,008180,369

Current liabilities
Non-current liabilities
Total

18,382
31,88350,265

Cash paid for the acquisition

130,104

The goodwill mainly comprises excess earning power and expected synergies arising from the acquisition.
The operating results of JR Technology for the period from the acquisition date to December 31, 2019 were not material.
On a pro forma basis, revenues and net income using an assumed acquisition date for JR Technology of April 1, 2019 would
not differ materially from the amounts reported in the consolidated financial statements for the nine months ended December
31, 2019.

F-14

Notes to Condensed Quarterly Consolidated Financial Statements
December 31, 2020(b) Acquisition of Chassis Brakes International B.V. (Chassis Brakes)
On July 24, 2019, the Company and HiAMS, a consolidated subsidiary of the Company in the Smart Life segment, signed anagreement with Caliper Acquisition International S.à r.l. (Caliper), a special purpose vehicle of KPS Capital Partners, for
HiAMS to acquire all shares of Chassis Brakes in order to further strengthen core businesses and build HiAMS’s global
presence. On October 11, 2019, the acquisition was executed. As a result, the Company’s ownership ratio of shares of Chassis
Brakes became 100% and Chassis Brakes turned into a subsidiary of the Company. Furthermore, Hitachi International(Holland) B.V., a consolidated subsidiary of the Company, repaid 194 million euro (23,066 million yen) of certain loans owed
by Chassis Brakes, in addition to the acquisition cost.
The following table summarizes the fair value of the consideration paid for Chassis Brakes and the amounts of the assets
acquired and liabilities assumed recognized as of the acquisition date.
Millions of yen
3,666
13,815
10,894
5,940
28,548Cash and cash equivalents
Trade receivables and contract assets
Inventories
Other current assets
Non-current assets (excluding intangible assets)
Intangible assets
Goodwill (not deductible for tax purposes)
Other intangible assets
Total

47,66334,139144,665

Current liabilities
Non-current liabilities
Total

50,07434,51384,587

Cash paid for the acquisition

60,078The goodwill mainly comprises excess earning power and expected synergies arising from the acquisition.
The operating results of Chassis Brakes for the period from the acquisition date to December 31, 2019 were not material.
On a pro forma basis, revenues and net income using an assumed acquisition date for Chassis Brakes of April 1, 2019 would
not differ materially from the amounts reported in the consolidated financial statements for the nine months ended December
31, 2019.
On January 1, 2021, HiAMS changed its name to Hitachi Astemo, Ltd.
The following are the material Business Acquisitions and Divestitures other than the above.
(a) Reorganization of the Global Home Appliances Business (excluding Japan)
On December 16, 2020, Hitachi Global Life Solutions, Inc. (Hitachi GLS), a consolidated subsidiary of the Company in the
Smart Life segment, and Arçelik A.S. (Arçelik) signed a share purchase agreement to establish a new joint venture company.
Based on the agreement, Hitachi GLS plans to establish a new company and aims to transfer its global home appliancesbusiness outside of Japan into the new company in the spring of 2021, and Hitachi GLS plans to transfer 60% of the shares ofcommon stock of the new company to Arçelik. The consideration is expected to be approximately 0.3 billion U.S. dollars(approximately 31.5 billion yen). Assuming the transaction is settled, it is expected that Hitachi GLS’s ownership ratio ofshares of the new company will decrease from 100% to 40%, and the new company will turn into an equity-method associateof the Company.

F-15

Notes to Condensed Quarterly Consolidated Financial Statements
December 31, 2020(b) Sale of Diagnostic Imaging-related Business
On December 18, 2019, the Company signed an agreement with FUJIFILM Corporation (Fujifilm) regarding the transfer of the
Diagnostic Imaging-related Business included in the Company, the Company’s subsidiaries and associates in the Smart Lifesegment to Fujifilm.
The Company plans to transfer all shares of common stock of a new company established by the Company to Fujifilm after the
Diagnostic Imaging-related Business is succeeded to the new company from the Company through an absorption-typecompany split. The consideration is expected to be approximately 179 billion yen.
Assuming the transaction is settled, it is expected that the Company’s ownership ratio of shares of the new company will
decrease from 100% to 0%, and the new company will be deconsolidated. An expected gain on the sale of shares of the newcompany in the amount of approximately 111 billion yen will be recognized in Other income in the consolidated statement of
profit or loss.

F-16

Notes to Condensed Quarterly Consolidated Financial Statements
December 31, 2020
(6) Trade Receivables and Contract Assets
The components of trade receivables and contract assets are as follows:
Millions of yen
December 31, 2020
Accounts receivable

March 31, 2020

1,556,090

1,684,225

Contract assets

657,657

429,117

Others148,527

146,863

Total

2,362,274

2,260,205

Trade receivables and contract assets are stated as net of the allowance for doubtful receivables.
Others include notes receivable and electronically recorded monetary claims.
(7) Fair Value of Financial Instruments(a) Fair Value Measurements
The following methods and assumptions are used to measure the fair value of financial assets and liabilities.
Cash and cash equivalents, Trade receivables, Short-term loans receivable, Other accounts receivable, Short-term debt,
Other accounts payable and Trade payables
The carrying amount approximates the fair value because of the short maturity of these instruments.
Investments in securities and other financial assets
The fair value of lease receivables is based on the present value of lease payments receivable calculated for each group of years
to maturity using discount rates that reflect the time to maturity and credit risk.
Investment securities with quoted market prices are estimated using the quoted share prices. In the absence of an active market
for investment securities, quoted prices for similar investment securities, quoted prices associated with transactions that are notdistressed for identical or similar investment securities or other relevant information including market interest rate curves,referenced credit spreads or default rates, are used to determine fair value. If significant inputs of fair value measurement areunobservable, the Company uses price information provided by financial institutions to evaluate such investments. The
information provided is corroborated by the income approach using its own valuation model, or the market approach using
comparisons with prices of similar securities.
The fair value of long-term loans receivable is estimated based on the present value of future cash flows using the interest rateapplicable to an additional loan of the same type.
Derivative assets are measured at fair value based on quoted prices associated with transactions that are not distressed, prices ininactive markets, or based on models using interest rate curves and forward and spot prices for currencies and commodities. If
significant inputs are unobservable, the Company mainly uses the income approach or the market approach to corroborate
relevant information provided by financial institutions and other available information.
Long-term debt
The fair value of long-term debt is estimated based on quoted market prices or the present value of future cash flows using themarket interest rates applicable to the same contractual terms.
Other financial liabilities
Derivative liabilities are measured at fair value based on quoted prices associated with transactions that are not distressed, prices
in inactive markets, or based on models using interest rate curves and forward and spot prices for currencies and commodities. If
significant inputs are unobservable, the Company uses mainly the income approach or the market approach to corroborate
relevant information provided by financial institutions and other available information.

F-17

Notes to Condensed Quarterly Consolidated Financial Statements
December 31, 2020(b) Financial Instruments Measured at Amortized Cost
The carrying amounts and estimated fair values of the financial instruments measured at amortized cost as of December 31 andMarch 31, 2020 are as follows.
The fair value estimated for financial assets and liabilities measured at amortized cost is classified in Level 2 of the fair value
hierarchy.
Millions of yen
December 31, 2020
Carrying amounts

March 31, 2020

Estimated
fair values

Carrying amounts

Estimated
fair values

AssetsInvestments in securities and otherfinancial assets
Lease receivables

84,69486,056

83,55384,834

Debt securities

72,04972,05173,04873,051Long-term loans receivable

18,56020,44526,642

28,576

Bonds

354,964

356,934

385,293

386,082Long-term borrowings

967,588970,664

637,648

640,929

Liabilities
Long-term debt [1][1] Long-term debt is included in Current portion of long-term debt and Long-term debt in the condensed quarterly consolidated
statement of financial position.
(c) Financial Instruments Measured at Fair Value
Financial instruments measured at fair value on a recurring basis after the initial recognition are classified into three levels of thefair value hierarchy based on the measurement inputs’ observability as follows:
Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets
Level 2: Valuations measured by direct or indirect observable inputs other than Level 1
Level 3: Valuations measured by significant unobservable inputs
When several inputs are used for a fair value measurement, the level is determined based on the input that is significant with thelowest level in the fair value measurement as a whole.
Transfers between levels are deemed at the beginning of each quarter period.

F-18Notes to Condensed Quarterly Consolidated Financial Statements
December 31, 2020
The following tables present the assets and liabilities that are measured at fair value on a recurring basis as of December 31 andMarch 31, 2020.
December 31, 2020
Class of financial instruments

Millions of yen
Level 1

Level 2

Level 3

Total

FVTPL financial assets:
Investments in securities and otherfinancial assets
Equity securities

118

-

5,236

5,354

Debt securities

13,231

5,076

6,406

24,713-25,05482

25,136

189,583-

108,327

297,910

202,932

30,130120,051

353,113-

39,394-39,394-39,394-39,394

Derivatives
FVTOCI financial assets:
Investments in securities and otherfinancial assets
Equity securities
Total financial assets at fair value
FVTPL financial liabilities:
Other financial liabilities
Derivatives
Total financial liabilities at fair value
March 31, 2020
Class of financial instruments

Millions of yen
Level 1

Level 2

Level 3

Total

FVTPL financial assets:
Investments in securities and otherfinancial assets
Equity securities
Debt securities
Derivatives

-

-

4,001

4,001

8,638

4,550

8,617

21,805-44,4096,147

50,556

135,452-

108,884

244,336

144,090

48,959127,649

320,698-

24,021-

24,021-

24,021-

24,021FVTOCI financial assets:
Investments in securities and otherfinancial assets
Equity securities
Total financial assets at fair value
FVTPL financial liabilities:
Other financial liabilities
Derivatives
Total financial liabilities at fair value

F-19

Notes to Condensed Quarterly Consolidated Financial Statements
December 31, 2020
The following tables present the changes in Level 3 instruments measured on a recurring basis for the nine months ended
December 31, 2020 and 2019.
December 31, 2020
Level 3 financial assets

Millions of yen
Equitysecurities

Debt
securities

Derivatives

Total

Balance at beginning of period

112,885

8,617

6,147

127,649

Gain (loss) in profit or loss [1]Gain in OCI [2]

(223)
2,099

57
-

(4)
-

(170)
2,099

Purchases
Sales and redemption

3,645(1,340)364(1,973)(6,061)

4,009(9,374)

Acquisitions and divestitures
Other(3,584)
81

(656)
(3)

-

(4,240)78

Balance at end of period

113,563

6,406

82

120,051

(236)

57

(4)

(183)

Unrealized gain (loss) relating tofinancial assets held at end of period [3]December 31, 2019
Level 3 financial assets
Balance at beginning of period

Millions of yen
Equitysecurities

Debt
securities

Derivatives

Total

105,077

9,344

7,059

121,480

Loss in profit or loss [1]Gain in OCI [2]

(92)
1,845

(18)
-

(184)
-

(294)
1,845

Purchases
Sales and redemption

2,848(1,658)384(1,005)-

3,232(2,663)Acquisitions and divestitures
Other

(505)
(3,662)

(46)
(38)

-

(551)
(3,700)

Balance at end of period

103,853

8,621

6,875

119,349

(92)

4

(184)

(272)

Unrealized gain (loss) relating tofinancial assets held at end of period [3][1] Gain (loss) in profit or loss related to FVTPL financial assets is included in Financial income and Financial expenses in thecondensed quarterly consolidated statement of profit or loss.
[2] Gain in OCI related to FVTOCI financial assets is included in Net changes in financial assets measured at fair value throughOCI in the condensed quarterly consolidated statement of comprehensive income.
[3] Unrealized gain (loss) relating to FVTPL financial assets held at the end of period is included in Financial income andFinancial expenses in the condensed quarterly consolidated statement of profit or loss.
Fair values are measured by the finance departments in accordance with the Company’s policies and procedures. Valuation
models are determined so that they reflect each financial instrument’s nature, characteristics and risks most appropriately. The
finance departments continually examine changes in important inputs that could affect the fair value. In case the fair value of afinancial instrument was significantly impaired, administrators review and approve the impairment loss.
(d) OtherIn the Company and subsidiaries, put options on shares of subsidiaries of non-controlling interests are recognized as financial
liabilities at the present value of the exercise price. The Company derecognizes non-controlling interests and recognizes thedifference between the present value and non-controlling interests as capital surplus.
Put options on non-controlling interests of Hitachi ABB Power Grids Ltd are measured at the present value of the exercise priceand the carrying amount of the put options was 228,218 million yen as of December 31, 2020 included in Other non-current
liabilities in the condensed quarterly consolidated statement of financial position.

F-20

Notes to Condensed Quarterly Consolidated Financial Statements
December 31, 2020
(8) Dividends
Dividends paid on the Company’s common stock for the nine months ended December 31, 2020 are as follows:

Decision
The Board of Directors
on May 13, 2020
The Board of Directors
on October 28, 2020

Cash dividends(millions of yen)

Appropriation
fromCash dividends
per share (yen)Record date

Effective date

March 31, 2020

June 8, 2020

48,311Retained earnings

50.0

48,342Retained earnings

50.0 September 30, 2020 November 30, 2020

Dividends paid on the Company’s common stock for the nine months ended December 31, 2019 are as follows:

Decision
The Board of Directors
on May 10, 2019
The Board of Directors
on October 30, 2019

Cash dividends(millions of yen)

Appropriation
fromCash dividends
per share (yen)Record date

Effective date

March 31, 2019

May 31, 2019

48,280Retained earnings

50.0

43,481Retained earnings

45.0 September 30, 2019 November 29, 2019

F-21

Notes to Condensed Quarterly Consolidated Financial Statements
December 31, 2020
(9) Revenues(a) Disaggregation of revenue
The Company derives revenues primarily from contracts with customers. The following table shows the disaggregation ofrevenue attributable to each reportable segment and geographic area.
Effective from April 1, 2020, the Company reclassified its reportable segments. Accordingly, figures for the nine months ended
December 31, 2019 have been restated on the basis of the reclassification. Details of the reclassification are described in note 4.
(Millions of yen)
December 31, 2020
Overseas
Revenues
Subtotal

Total
Revenues

26,992

379,1121,433,815

158,061

92,317539,293755,983

70,346

11,517

9,721

145,406

550,095

362,988

36,609182,581

33,211

615,389862,687

696,532

354,098

195,736

149,634

65,785765,253

1,461,785

Hitachi Construction Machinery

142,647

128,388

71,353

71,919144,420

416,080

558,727

Hitachi Metals

248,788

115,200

142,088

24,96010,367

292,615

541,403

-

-

-

-

-

-

-

Others267,105

33,735

6,905

5,784

2,662

49,086

316,191

Subtotal

3,278,452

1,342,072

766,015

708,672

385,475

3,202,234

6,480,686

Corporate items and Eliminations(467,381)(25,731)(4,050)(2,678)(1,846)(34,305)(501,686)

Total

2,811,071

1,316,341

761,965

705,994

383,629

3,167,929

5,979,000

Japan

Asia

North
America

Europe

Other
Areas

1,054,703

128,866

119,038

104,216

Energy216,690

164,975

123,940

Industry

404,689

53,822

Mobility

247,298

Smart Life

IT

Hitachi Chemical(Millions of yen)
December 31, 2019
Overseas
Revenues
Subtotal

Total
Revenues

29,761

426,286

1,494,266

3,086

2,227

32,488245,732

37,0398,467

16,078128,113554,980

300,342

32,805219,541

29,977

582,665

832,671789,747

344,539

252,948

143,940

62,619804,046

1,593,793

Hitachi Construction Machinery

145,410

161,321130,043

98,628

151,786

541,778

687,188

Hitachi Metals

309,153

128,268

185,81132,662

15,069361,810

670,963

Hitachi Chemical

171,997

209,896

36,26647,968

13,571

307,701

479,698

Others291,875

39,255

10,901

5,166

4,493

59,815

351,690

Subtotal

3,666,279

1,411,967

831,640

675,514

325,5813,244,702

6,910,981

Corporate items and Eliminations(512,864)(39,270)(6,551)(4,267)(3,848)(53,936)(566,800)

Total

3,153,415

1,372,697

825,089

671,247

321,733

3,190,766

6,344,181

Japan

Asia

North
America

Europe

Other
Areas

1,067,980

140,494

139,975

116,056

Energy213,244

21,323

5,852

Industry

426,867

66,529

Mobility

250,006

Smart Life

IT

F-22

Notes to Condensed Quarterly Consolidated Financial Statements
December 31, 2020
The IT segment consists of Front Business and Services & Platforms, for which revenue amounted to 984,571 million yen and
561,970 million yen for the nine months ended December 31, 2020 and 1,001,008 million yen and 606,621 million yen for thenine months ended December 31, 2019, respectively (including intersegment transactions). Front Business is operated mainly inJapan, and Services & Platforms is operated mainly in Japan, North America and Europe.
Effective from April 1, 2020, the IT segment changed its scope of business field. Figures for the nine months ended December
31, 2019 have been restated on the basis of the reclassification.
(b) Information about satisfaction of performance obligations
The following is information about satisfaction of performance obligations related to major goods and services of eachreportable segment.
(IT)
Front Business primarily provides goods and services such as system integration, consulting and cloud services. These longterm projects provide goods and services according to customers’ specifications over a specified period of time, and revenue
is recognized mainly based on the pattern of the cost accrual (the progress of the project mostly based on the cost incurred
relative to the estimated total cost) or the passage of time as performance obligations are satisfied over time.
Many of the contracts require payments based on milestones, and in some cases, payments are made before performanceobligations are satisfied.
Services & Platforms primarily sells control systems, software and IT products. Revenue is recognized when control over the
goods is transferred to customers as performance obligations are satisfied at the point in time upon the completion or upondelivery of the goods. The Company’s general terms and conditions apply, and there are no significant transactions in which
payment terms include deferred payments, etc.
(Energy, Industry and Mobility)
The Energy segment includes revenue from businesses such as energy solutions, which are operated mainly in Japan, Asia,
Europe, and North America. The Industry segment includes revenue from businesses such as industry & distribution systems,
which are operated mainly in Japan. The Mobility segment includes revenue from building systems and railway systems
businesses. The building systems business is operated mainly in China and the railway systems business is operated mainly inEurope.
Long-term projects related to contracts such as construction in these segments involve manufacturing and providing goods
based on customers’ specifications over a specified period of time. As performance obligations are satisfied over time,revenue is recognized mainly based on the pattern of the cost accrual (the progress of the project mostly based on the cost
incurred relative to the estimated total cost). In addition, these segments provide certain services promised in the contracts
such as maintenance throughout the duration of the contract, and recognize revenue over time based on the passage of time.
Many of the contracts require payments based on milestones, and, in some cases, payments are made before performanceobligations are satisfied.
Further, in the sale of industrial equipment, etc. included in the Industry segment, and in the sale of elevators, etc. included in
the Mobility segment, revenue is recognized when control over the goods is transferred to customers as performanceobligations are satisfied at the point in time upon the completion or upon delivery of the goods. The Company’s generalterms and conditions apply, and there are no significant transactions in which payment terms include deferred payments, etc.
(Other)In the Smart Life, Hitachi Construction Machinery, and Hitachi Metals segments, performance obligations are generally
satisfied at a point in time upon completion or upon delivery of the goods, and revenue is recognized when control overgoods is transferred to customers. The Company’s general terms and conditions apply, and there are no significant
transactions in which payment terms include deferred payments, etc.
These segments provide certain services promised in the contracts such as maintenance throughout the duration of thecontract, and they recognize revenue over time based on the passage of time. The Company’s general terms and conditions
apply, and there are no significant transactions in which payment terms include deferred payments, etc.

F-23

Notes to Condensed Quarterly Consolidated Financial Statements
December 31, 2020(10) Other Income and Expenses
The main components of other income and expenses for the nine months ended December 31, 2020 and 2019 are as follows:
Millions of yen
2020
Net gain (loss) on sales and disposals of fixed assets

2019
2,911

(1,651)

Impairment losses(74,403)(76,933)

Net gain (loss) on business reorganization and others

287,604

27,508Special termination benefits(9,873)(8,062)-(375,967)

Loss due to the settlement of the South African project

Impairment losses are mainly recognized on property, plant and equipment, investment properties, goodwill and other intangible
assets. Net gain (loss) on business reorganization and others include gains and losses related to obtaining and losing control ofinvestees and gains and losses related to obtaining and losing significant influence over investees.
Restructuring charges (structural reform expenses) included in other expenses for the nine months ended December 31, 2020 and2019 were 84,276 million yen and 86,358 million yen, respectively. Restructuring charges (structural reform expenses) mainly
include impairment losses and special termination benefits.
The impairment loss recognized for the nine months ended December 31, 2020 mainly consists of the following:
Impairment losses include 37,781 million yen in the Smart Life segment, mainly consisting of 27,639 million yen in impairment
losses due to the decrease in productivity at some domestic factories in the Automotive Systems business, representing impairment
losses on property, plant and equipment of 26,351 million yen and on intangible assets of 1,288 million yen. The recoverable
amount was determined on the basis of fair value less costs of disposal, which was measured at 10,615 million yen as of December
31, 2020, the date on which impairment losses were recognized. A market approach was used in measuring the fair value of therelevant assets. These fair value measurements were based on real estate appraisal value, and thus classified as Level 3 of fair value
hierarchy.
Impairment losses include 24,589 million yen in the Hitachi Metals segment, mainly consisting of 15,657 million yen in impairment
losses due to the lower than expected future revenue projected for the magnetic materials business, representing impairment losses
on property, plant and equipment of 10,356 million yen and on intangible assets of 5,301 million yen. The recoverable amount wasdetermined on the basis of value in use, which was measured at 74,875 million yen as of September 30, 2020, the date on which
impairment losses were recognized. The value in use was discounted at 10.1% (before tax), which was derived from the weighted
average cost of capital.
The impairment loss recognized for the nine months ended December 31, 2019 mainly consists of the following:
Impairment losses include 61,431 million yen due to the lower than expected future revenue projected for the magnetic materials
business in the Hitachi Metals segment consisting of impairment losses on property, plant and equipment of 22,479 million yen andon intangible assets of 38,952 million yen. The recoverable amount was determined on the basis of value in use, which wasmeasured at 106,313 million yen as of September 30, 2019, the date on which impairment losses were recognized. The value in use
was discounted at 9.6% (before tax), which was derived from the weighted average cost of capital.
The detail of loss due to the settlement of the South African project is disclosed in note 5.
(11) Financial Income and Expenses
The main components of financial income and expenses for the nine months ended December 31, 2020 and 2019 are as follows:
Millions of yen
2020

2019

Dividends received

2,677

4,628

Exchange gain (loss)(2,340)

7,542

Dividends received for the nine months ended December 31, 2020 and 2019 are from FVTOCI financial assets.

F-24

Notes to Condensed Quarterly Consolidated Financial Statements
December 31, 2020(12) Discontinued Operations
In the Energy segment, the Company classified the part of thermal power generation systems business which was not transferredto Mitsubishi Hitachi Power Systems, Ltd. (currently Mitsubishi Power, Ltd.) for business integration in the thermal power
generation systems business with Mitsubishi Heavy Industries, Ltd. but was operated by the Company and certain subsidiaries as
discontinued operations in the condensed quarterly consolidated statement of profit or loss since the projects were completed in
the year ended March 31, 2015.
Profit or loss and cash flows from the discontinued operations for the nine months ended December 31, 2020 and 2019 are as
follows:
Millions of yen
2020

2019

Profit or loss from discontinued operations
Revenues
Cost of sales and expenses
Loss from discontinued operations, before income taxes
Income taxes
Loss from discontinued operations

7

24

(693)

(1,212)(686)(1,188)

-

1

(686)

(1,187)
Millions of yen

2020

2019

Cash flows from discontinued operations
Cash flows from operating activities(611)(2,181)

Cash flows from investing activities--

Cash flows from financing activities

736

2,247

F-25

Notes to Condensed Quarterly Consolidated Financial Statements
December 31, 2020(13) Earnings Per Share (EPS) Information
The calculations of basic and diluted EPS attributable to Hitachi, Ltd. stockholders for the nine months ended December 31, 2020
and 2019 are as follows:
Nine months ended December 31
Number of shares
2020
Weighted average number of shares on which basic EPS is calculated

2019

965,946,407

965,702,013

Stock options

691,800

890,960

Restricted stock

523,601

361,911

Restricted stock units

11,836-

967,173,644

966,954,884

Effect of dilutive securities

Number of shares on which diluted EPS is calculated

Millions of yen
2020

2019

Net income from continuing operations,
attributable to Hitachi, Ltd. stockholders
Basic308,564

Effect of dilutive securities
Diluted56,333--

308,564

56,333(686)(1,187)

-

-

(686)

(1,187)

307,878

55,146--

307,878

55,146Net loss from discontinued operations,
attributable to Hitachi, Ltd. stockholders
Basic
Effect of dilutive securities
Diluted
Net income attributable to Hitachi, Ltd. stockholders
Basic
Effect of dilutive securities
Diluted

Yen
2020

2019

EPS from continuing operations,
attributable to Hitachi, Ltd. stockholders
Basic319.4458.33

Diluted319.04

58.26

Basic

(0.71)(1.23)

Diluted(0.71)(1.23)

Basic

318.73

57.10

Diluted318.3357.03

EPS from discontinued operations,
attributable to Hitachi, Ltd. stockholders

EPS attributable to Hitachi, Ltd. stockholders

F-26

Notes to Condensed Quarterly Consolidated Financial Statements
December 31, 2020
The calculations of basic and diluted EPS attributable to Hitachi, Ltd. stockholders for the three months ended December 31,
2020 and 2019 are as follows:
Three months ended December 31
Number of shares
2020
Weighted average number of shares on which basic EPS is calculated

2019

965,986,653

965,716,582

Stock options

691,800-

Restricted stock

499,486-

Effect of dilutive securities

Restricted stock units
Number of shares on which diluted EPS is calculated

10,196-

967,188,135

965,716,582
Millions of yen

2020

2019

Net income (loss) from continuing operations,
attributable to Hitachi, Ltd. stockholders
Basic57,123(133,756)--

57,123(133,756)

Basic

0

(391)

Effect of dilutive securities--

Diluted0(391)

57,123(134,147)--

57,123(134,147)

Effect of dilutive securities
Diluted
Net income (loss) from discontinued operations,
attributable to Hitachi, Ltd. stockholders

Net income (loss) attributable to Hitachi, Ltd. stockholders
Basic
Effect of dilutive securities
Diluted

Yen
2020

2019

EPS from continuing operations,
attributable to Hitachi, Ltd. stockholders
Basic

59.13

(138.50)

Diluted

59.06(138.50)

Basic

0.00

(0.40)

Diluted

0.00(0.40)

Basic

59.13

(138.91)

Diluted

59.06(138.91)

EPS from discontinued operations,
attributable to Hitachi, Ltd. stockholders

EPS attributable to Hitachi, Ltd. stockholders

Note: Stock options and restricted stock are excluded from the calculations of diluted EPS attributable to Hitachi, Ltd.
stockholders for the three months ended December 31, 2019 because they are antidilutive.

F-27

Notes to Condensed Quarterly Consolidated Financial Statements
December 31, 2020(14) Contingencies
Litigation
In November 2017, a subsidiary in Japan received a complaint that was filed against three companies, namely a construction
company of a condominium complex, the subsidiary and a secondary subcontractor, by a contractee in Japan seeking
approximately 45.9 billion yen in compensation for expenses allegedly incurred arising from concerns over partial
deficiencies of piling work during the construction phases of the condominium complex, which the subsidiary contracted as
the primary subcontractor. In July 2018, the compensation claim against these three companies was amended toapproximately 51.0 billion yen by the contractee.
In relation to the aforementioned lawsuit, in April 2018, the subsidiary in Japan received a complaint that was filed against
the subsidiary and the secondary subcontractor, by the construction company of the condominium complex seeking
approximately 49.6 billion yen in compensation for expenses allegedly incurred arising from the aforementioned lawsuit. In
July 2018, the compensation claim against these two companies was amended to approximately 54.8 billion yen by theconstruction company of the condominium complex. Although the subsidiary in Japan will address these claims and explain
its position, there can be no assurance that it will not be held liable for any amounts claimed.
In December 2017, a subsidiary in Europe received a complaint filed by a customer in Europe seeking compensation forconsequential losses of 263 million euro (33,394 million yen) and interest allegedly incurred by performance defects of apower plant. As of December 31, 2020, the amount of compensation claimed by the customer was changed to 270 million
euro (34,281 million yen). Although the subsidiary in Europe will vigorously defend itself against this lawsuit, there can be
no assurance that it will not be held liable for any amounts claimed.
The Company and its subsidiaries execute a number of business reorganizations, including mergers, acquisitions anddivestitures. Contracts for these reorganizations include clauses for transaction price adjustments subsequent to thereorganizations. There is a possibility products or services provided by the Company and its subsidiaries contain defects. As
the result of price adjustments, or in compensation for defects in products or services etc. there is a possibility that theCompany pays for any amounts.
Depending upon the outcome of the above legal proceedings, there may be an adverse effect on the consolidated financial
position or results of operations. Currently, the Company is unable to estimate the adverse effect, if any, of many of theseproceedings. The actual amount of fines, surcharge payments or any other payments resulting from these legal proceedings
may be different from the accrued amounts.
In addition to the above, the Company and its subsidiaries are subject to legal proceedings and claims which have arisen in
the ordinary course of business and have not been finally adjudicated. These actions when ultimately concluded anddetermined will not, in the opinion of management, have a material adverse effect on the condensed quarterly consolidated
financial statements of the Company and subsidiaries.
(15) Approval of Condensed Quarterly Consolidated Financial Statements
The condensed quarterly consolidated financial statements were approved on February 10, 2021 by Toshiaki Higashihara,
President and CEO of the Company.

F-28

[Cover][Document Filed][Applicable Law]

Confirmation Letter
Article 24-4-8, Paragraph 1 of the Financial Instruments and Exchange Act of Japan[Filed with][Filing Date]

Director, Kanto Local Finance Bureau
February 10, 2021

[Company Name][Company Name in English]

Kabushiki Kaisha Hitachi Seisakusho
Hitachi, Ltd.

[Title and Name of Representative][Title and Name of CFO]

Toshiaki Higashihara, President & CEO
Yoshihiko Kawamura, Senior Vice President and Executive Officer[Address of Head Office][Place Where Available for Public Inspection]

6-6, Marunouchi 1-chome, Chiyoda-ku, Tokyo
Tokyo Stock Exchange, Inc.
(2-1, Nihombashi Kabutocho, Chuo-ku, Tokyo)
Nagoya Stock Exchange, Inc.
(8-20, Sakae 3-chome, Naka-ku, Nagoya)A-1

1. Matters Related to Adequacy of Statements Contained in the Quarterly Report
Mr. Toshiaki Higashihara, President & CEO, and Mr. Yoshihiko Kawamura, Senior Vice President and Executive Officer,
confirmed that statements contained in the Quarterly Report for the third quarter of the 152nd fiscal year (from October 1, 2020 to
December 31, 2020) were adequate under the Financial Instruments and Exchange Act.
2. Special Notes
None.

A-2