Outline of Consolidated Financial Results
for the Second Quarter ended September 30, 2012
October 30, 2012

Hitachi, Ltd.

Outline of Consolidated Financial Results
for the Second Quarter ended September 30, 2012

October 30, 2012

Contents1.
2.
3.

Outline of Consolidated Financial Results for
the Second Quarter ended September 30, 2012
Outlook for Fiscal 2012
Toward Achieving“2012 Mid-term Management Plan”

Copyright © 2012,2011, Hitachi, Ltd., All rights reserved.

2

Outline of Consolidated Financial Results
for the Second Quarter ended September 30, 2012

October 30, 2012

Contents1.
2.
3.

Outline of Consolidated Financial Results for
the Second Quarter ended September 30, 2012
Outlook for Fiscal 2012
Toward Achieving“2012 Mid-term Management Plan”

Copyright © 2012,2011, Hitachi, Ltd., All rights reserved.

3

1-1. Financial Results Highlights■Highlights of Fiscal 2012 1st Half Financial Results
Decreased 5% YoY, rose 1% compared to previous forecast*

Revenues(After adjustment for the effect of selling the HDD and small & medium-sized display businesses:rose 2%)• Lower year over year, mainly due to the effect of selling the HDD business.
• All segments exceeded the previous forecasts excluding Power Systems, Construction Machinery, andHigh Functional Materials & Components segments.

Declined 7 billion yen YoY, rose 13.6 billion yen
compared to previous forecast*

Operating income

Net other income(deductions)
Net income attributable
to Hitachi, Ltd.
stockholders(After adjustment for the effect of selling the HDD and small & medium-sized display businesses:rose 3.3 billion yen)
• Lower year over year, mainly due to the effect of selling the HDD business and business structurereforms conducted in flat-panel TVs• All segments exceeded the previous forecasts excluding Information & Telecommunication Systems,
Construction Machinery, and High Functional Materials & Components segments.

Declined 9.7 billion yen YoY, 17.3 billion yen worse
compared to previous forecast*• Lower than previous year and compared to forecasts due to an increase in equity in net loss of affiliatedcompanies (Renesas Electronics Corporation, etc.).

Declined 20.8 billion yen YoY, increase 0.1 billion yen
compared to previous forecast*• Posted profit for a 12th consecutive quarter despite the impact of the global economic slowdown and anincrease in equity in net loss of affiliated companies such as Renesas Electronics Corporation.

Positive 42.2 billion yen, improve 170.9 billion yen YoYFree cash flows• Increased, mainly due to the absence of the decline in cash from operations caused by the impact of
the Great East Japan Earthquake* Previous forecast announced on July 30, 2012
Copyright © 2012, Hitachi, Ltd., All rights reserved.

4

1-2. Consolidated Statements of Operations
Billions of Yen
Fiscal 2011/1H

Revenues

Fiscal 2012/1H

4,572.7

4,355.5

Year over year
[102%] *2[+3.3]

Previous forecast
comparison*1[95%][101%](217.1)

+55.5

(7.0)

+13.6

*2

Operating income

170.6

163.6

Net other income(deductions)(37.6)(47.3)(9.7)(17.3)

Income before
income taxes

133.0

116.2

(16.7)(3.7)

Income taxes

55.2

50.7

(4.5)

+0.7

Net income

77.7

65.5

(12.2)(4.4)

Net income attributable tononcontrolling interests

26.7

35.3

+8.6

(4.6)

Net income attributable to
Hitachi, Ltd. stockholders

50.9

30.1

(20.8)+0.1*1 Previous forecast announced on July 30, 2012
*2 Excludes impact of the HDD and small & medium-sized display businesses

Copyright © 2012, Hitachi, Ltd., All rights reserved.

51-3. Major Factors for Change in Operating Income (Year over Year)
Billions of Yen

Lower capacity utilization,
structural reform expenses, etc.:(34.7)

Operating income
Lower sales prices: (32.0)
Effect of selling businesses*:(10.3)

(7.0)

170.6

Effect of foreignexchange movements:(10.0)

+3.3

160.2

FY 20111H

163.6

Material procurement
cost cutting: +80.0

FY 2012
1H* The HDD and small & medium-sized display businesses
Copyright © 2012, Hitachi, Ltd., All rights reserved.

6

1-4.

Major Factors for Change in Net Income
Attributable to Hitachi, Ltd. stockholders

Billions of Yen

Effect of foreign exchange
movements: (12.1)

Operating
Net income attributable to Hitachi, Ltd. stockholders
IncomeStructural reform expenses: (10.7)

163.6
Losses on disposal of
fixed assets, gain (loss)
on securities, etc.: +2.6
[Others][Renesas Electronics Corporation*](133.5)Equity in net lossof affiliated companies: (27.3)

30.1
Fiscal 2012 1H
OperatingincomeNet income
attributable to
Hitachi, Ltd.
stockholders

Income taxes: (50.7)

Net income attributable
to noncontrollinginterests: (35.3)* Includes structural reform expenses
Copyright © 2012, Hitachi, Ltd., All rights reserved.

7

1-5.

Major Factors for Change in Net Income
Attributable to Hitachi, Ltd. stockholders (Year over Year)

Billions of Yen

Net income attributable tononcontrolling interests: (7.0)

Net income attributable to Hitachi, Ltd. stockholders

Impact of selling businesses*: (6.6)(20.8)

50.9

Decreasing of income
taxes: +1.8
Improved operating
income: +3.3

44.3

Improved equity in net lossof affiliated companies: +13.0

30.1
Losses on disposal of fixed assets,gain (loss) on securities, etc.: +0.4
Structural reform expenses
of Renesas Electronics Corporation :(25.7)FY2011 1H

FY2012 1H* The HDD and small & medium-sized display businesses
Copyright © 2012, Hitachi, Ltd., All rights reserved.

8

1-6. Revenues by Market
Billions of Yen
Fiscal 2011/1H2,572.4

Japan
Outside Japan
Asia
China
North America
EuropeOther Areas
Total

2,000.3

Ratio

56%
44%

Fiscal 2012/1H2,551.7
1,803.8

Ratio

59%
41%

1,003.2

22%

846.5

19%

529.7

12%

387.1

9%

392.1

9%

387.2

9%

374.4

8%

310.2

7%

230.5

5%

259.7

6%

4,572.7100%

4,355.5

100%

Year over year
[101%]*[103%]*[100%]*[95%] *
[112%] *[95%] *
[115%] *[102%]*

99%
90%
84%
73%
99%
83%
113%
95%

* Excludes impact of the HDD and small & medium-sized display businesses

Copyright © 2012, Hitachi, Ltd., All rights reserved.

91-7. Consolidated Balance Sheets
Billions of Yen
As of March 31,
2012

As of September 30,
2012

Change fromMarch 31, 2012

Total assets

9,418.5

9,159.8(258.7)

Total liabilities

6,644.5

6,360.8(283.6)2,396.4

2,354.7(41.7)

Total Hitachi, Ltd.
stockholders’ equity

1,771.7

1,788.0+16.2

Noncontrolling interests

1,002.2

1,010.8+8.6

Total Hitachi, Ltd.
stockholders’ equity ratio

18.8%

19.5%

0.7 points
improvement

0.86 times

0.84 times

0.02 points
improvement

Interest-bearing debt

D/E ratio(Including noncontrolling interests)

Copyright © 2012, Hitachi, Ltd., All rights reserved. 10

1-8. Consolidated Statements of Cash Flows
Billions of Yen
Fiscal 2011/1H

Fiscal 2012/1H

Year over year

Cash flows
from operating activities

93.1

263.1

+169.9Cash flows
from investing activities(221.7)(220.8)+0.9

Free cash flows(128.6)42.2+170.9104.0(55.9)(159.9)Cash flows
from financing activities

Copyright © 2012, Hitachi, Ltd., All rights reserved. 11

1-9.

Summary of Financial Statements
by Financial and Non-Financial Services

Summary Consolidated Balance Sheets

Billions of Yen
Manufacturing,Services and Others

Financial Services

Total assets

7,717.0

1,916.5

9,159.8

Total liabilities

5,172.6

1,651.7

6,360.8

1,363.3

1,202.3

2,354.7

1,647.1

151.6

1,788.0

Noncontrolling interests

897.1

113.2

1,010.8

Total Hitachi, Ltd. stockholders’ equity ratio

21.3%

7.9%

19.5%

0.54 times

4.54 times

0.84 times

Interest-bearing debt
Total Hitachi, Ltd. stockholders’ equity

D/E ratio(Including noncontrolling interests)

Summary Consolidated Statements of Cash Flows

Total *

Billions of Yen

Manufacturing,Services and Others

Financial Services

Total *Cash flows from operating activities

228.4

41.2

263.1

Cash flows from investing activities(158.7)(39.3)(220.8)

69.7

1.8

42.2

(82.5)(1.9)(55.9)

Free cash flows
Cash flows from financing activities* Total Figures exclude inter-segment transactions

Copyright © 2012, Hitachi, Ltd., All rights reserved. 12

1-10. Consolidated Capital Expenditure, Consolidated R&D Expenditure(1) Consolidated Capital Expenditure (Completion basis)
Fiscal 2011/1H

Billions of Yen

Fiscal 2012/1H

Year over year

288.3

364.6

[137%] *126%

Internal use Assets

154.6

180.3

[136%] *117%

Leasing Assets

133.7

184.2

Total

138%

* Excludes impact of the HDD and small & medium-sized display businesses(2) Consolidated R&D ExpenditureBillions of Yen
Fiscal 2011/1H

Total
Percentage of revenues

Fiscal 2012/1H

Year over year

199.1

165.7 [100%] *

4.4%

3.8%

83%
-

* Excludes impact of the HDD and small & medium-sized display businesses

Copyright © 2012, Hitachi, Ltd., All rights reserved. 13

1-11. Revenues by Business Segment
Billions of Yen
Fiscal 2011/1H

Fiscal 2012/1H

Year over year

Previous forecast
Comparison*1

Information & Telecommunication Systems

797.0

832.9

105%

104%

Power Systems

372.4

413.4

111%

92%

Social Infrastructure & Industrial Systems

513.5

545.3

106%

101%

Electronic Systems & Equipment

533.5

510.5

96%

100%

Construction Machinery

355.8

370.6

104%

98%

High Functional Materials & Components

700.6

674.3

96%

96%

Automotive Systems

365.6

401.8

110%

103%

Digital Media & Consumer Products

471.3

428.7

91%

102%

Financial Services

181.4

179.6

99%

120%

65%

101%

-

-

95%

101%

Others*2
Eliminations & Corporate items
Total

857.7

556.6

(576.5)(558.7)

4,572.7

4,355.5[101%]*3[102%]*3*1 Previous forecast announced on July 30, 2012
*2 Effective on April 1, 2012, Hitachi discontinued the Components & Devices Segment. The businesses, which were previously included in the
Components & Devices Segment, have been included in the Others. Figures for each segment, including figures for the previous fiscal year, reflect
the changed segmentation.
Copyright © 2012, Hitachi, Ltd., All rights reserved. 14*3 Excludes impact of the HDD and small & medium-sized display businesses

1-12. Operating Income (Loss) by Business Segment
Billions of Yen
Fiscal 2011/1H

Fiscal 2012/1H

Year over year

Previous forecast
comparison*1

31.0

27.2

(3.8)

(2.7)

Power Systems

0.6

7.4

+6.8

+1.4

Social Infrastructure & Industrial Systems

6.3

3.1

(3.1)

+0.1

Electronic Systems & Equipment

21.3

19.7

(1.5)

+5.7

Construction Machinery

25.8

22.8

(3.0)

(2.2)

High Functional Materials & Components

33.8

38.1

+4.3

(0.8)

Automotive Systems

15.8

19.2

+3.4

+2.2

5.2

(2.4)

(7.6)

+3.5

Financial Services

14.1

13.7

(0.4)

+0.7

Others*2

27.8

20.8 [+3.3]

(6.9)

+3.8

Eliminations & Corporate items(11.4)

(6.5)

+4.8

+1.4

Total

170.6

163.6 [+3.3]

(7.0)

+13.6

Information & Telecommunication Systems

Digital Media & Consumer Products*3*3*1 Previous forecast announced on July 30, 2012
*2 Effective on April 1, 2012, Hitachi discontinued the Components & Devices Segment. The businesses, which were previously included in the
Components & Devices Segment, have been included in the Others. Figures for each segment, including figures for the previous fiscal year, reflect
the changed segmentation.
Copyright © 2012, Hitachi, Ltd., All rights reserved. 15*3 Excludes impact of the HDD and small & medium-sized display businesses

Outline of Consolidated Financial Results
for the Second Quarter ended September 30, 2012

October 30, 2012

Contents1.
2.
3.

Outline of Consolidated Financial Results for
the Second Quarter ended September 30, 2012
Outlook for Fiscal 2012
Toward Achieving“2012 Mid-term Management Plan”

Copyright © 2012,2011, Hitachi, Ltd., All rights reserved. 16

2-1. Outlook for Fiscal 2012

Economic EnvironmentJapan

The economy is expected to slow in the second half of fiscal 2012 due to exports trended
downward amid a lackluster global economy and a drop-off in personal spending following
the end of the subsidy scheme for eco-friendly cars. Although firm public spending andhousing investment related to the reconstruction after the Great East Japan Earthquake
are expected.

U.S.

The economy is expected to maintain a recovery course, supported by an ongoing moderate
job market recovery, and progress reducing excessive household debt, as well as a housing
market upturn.

EuropeThe European economic sluggishness is expected to prolong, in part because of unavoidable
cuts in goods prices and wages so that southern European countries can regain export
competitiveness.

China

Although the Chinese economy is slowing due to waning external demand, highlighted bysluggish Europe-bound exports, the Chinese economy is expected to see expansion in internal
demand stoked by lower interest rates, expedited public spending in the interior parts of thecountry and other factors.

Emerging
countries

India should see renewed economic activity due to regulatory reforms announced by thegovernment, including relaxed regulations on foreign investment. ASEAN economies should
continue growing, led by internal demand.
Brazil is expected to see an economic recovery spurred by large-scale infrastructure
investment, although the economy is slowing due to anemic Europe-bound exports
and falling resource prices.
Copyright © 2012, Hitachi, Ltd., All rights reserved. 17

2-2. Outlook for Fiscal 2012
Hitachi continues to promote business structure reforms and accelerate theoverhauling cost structure under the Hitachi Smart Transformation Project in
response to the slowdown in economic growth in emerging markets following thedrop of the Chinese economy and the protracted European sovereign debt crisis.

Revenues

OperatingincomeNet other income(deductions)
Net income
attributable to
Hitachi, Ltd.
stockholders

Projecting a 7% YoY decrease
Lower revenues are expected on Construction Machinery and High Functional
Materials & Components segments.

Projecting a 67.7 billion yen YoY increase
Higher operating income are expected, centered on the Social Innovation
Business

Decline of 225.4 billon yen YoY
Lower due to the sale of the HDD business (191.0 billion yen) in fiscal 2011
and an increase in equity in net loss of affiliated companies(Renesas Electronics Corporation, etc.)

Projecting at least 200.0 billion yen
for the 3rd straight year
Copyright © 2012, Hitachi, Ltd., All rights reserved. 18

2-3. Outlook for Fiscal 2012
Projections for the 2nd half of fiscal 2012 assume an exchange rate of
78 yen to the U.S. dollar and 103 yen to the euro.

Fiscal 2011

Billions of Yen

Fiscal 2012
(Forecast)Year over year
[93%]

9,665.8

9,000.0(665.8)Operating income

412.2

480.0

+67.7

Net other income(deductions)

145.4(80.0)(225.4)

Income before
income taxes

557.7

400.0

(157.7)

Income taxes

144.9

110.0

(34.9)Net income

412.8

290.0

(122.8)Net income attributable tononcontrolling interests

65.6

90.0

+24.3

Net income attributable to
Hitachi, Ltd. stockholders

347.1

200.0

(147.1)

Revenues

Copyright © 2012, Hitachi, Ltd., All rights reserved. 19

2-4.

Major Factors of Net income
attributable to Hitachi, Ltd. stockholders【Fiscal 2011】【 Fiscal 2012】

Net other income[Includes profit on sale of the HDD business(191.0 billion yen)]: +145.4
Net other deductions: (80.0)

480.0
412.2
347.1

Income taxes:(144.9)Net income attributable
to noncontrolling interests:(65.6)

Income taxes:(110.0)200.0

Net income attributable
to noncontrolling interests:(90.0)

OperatingincomeNet income attributable
to Hitachi, Ltd.
stockholders

OperatingincomeNet income attributable
to Hitachi, Ltd.
stockholders
Copyright © 2012, Hitachi, Ltd., All rights reserved. 20

2-5. Outlook for Fiscal 2012 Revenues by Business Segment
Billions of Yen
Year overyear

Previous
forecast
Comparison*1

1,780.0

101%

101%

832.4

870.0

105%

104%

Social Infrastructure & Industrial Systems

1,204.9

1,260.0

105%

102%

Electronic Systems & Equipment

1,101.7

1,100.0

100%

98%

798.7

720.0

90%

90%

1,437.1

1,400.0

97%

97%

Automotive Systems

811.5

780.0

96%

98%

Digital Media & Consumer Products

858.8

830.0

97%

100%

Financial Services

353.2

320.0

91%

100%

1,719.7

1,150.067%

100%(1,216.8)(1,210.0)--

9,665.8

9,000.0

93%

99%

Information & Telecommunication Systems
Power Systems

Construction Machinery
High Functional Materials & Components

Others*2

Eliminations & Corporate items
Total

Fiscal 2011

Fiscal 2012
(Forecast)

1,764.2*1 Previous forecast announced on July 30, 2012
*2 Effective on April 1, 2012, Hitachi discontinued the Components & Devices Segment. The businesses, which were previously included in the
Components & Devices Segment, have been included in the Others. Figures for each segment, including figures for the previous fiscal year, reflect
the changed segmentation.
Copyright © 2012, Hitachi, Ltd., All rights reserved. 21

2-6.

Outlook for Fiscal 2012 Operating Income (Loss)by Business Segment
Billions of Yen
Year overyear

Previous
forecast
Comparison*1

120.0

+18.2

0.0

(33.9)

26.0

+59.9

+4.0

Social Infrastructure & Industrial Systems

49.1

56.0

+6.8

+1.0

Electronic Systems & Equipment

49.9

52.0

+2.0

0.0

Construction Machinery

63.1

58.0

(5.1)

(17.0)High Functional Materials & Components

77.0

80.0

+2.9

(15.0)

Automotive Systems

37.0

33.0

(4.0)

(4.0)

(10.9)

0.0

+10.9

0.0

Financial Services

30.2

28.0

(2.2)

+2.0

Others72.7

43.0(29.7)+3.0

Eliminations & Corporate items(23.8)(16.0)

+7.8

+26.0

Total

412.2

480.0

+67.7

0.0

Fiscal 2011

Fiscal 2012
(Forecast)Information & Telecommunication Systems

101.7

Power Systems

Digital Media & Consumer Products*2*1 Previous forecast announced on July 30, 2012
*2 Effective on April 1, 2012, Hitachi discontinued the Components & Devices Segment. The businesses, which were previously included in the
Components & Devices Segment, have been included in the Others. Figures for each segment, including figures for the previous fiscal year, reflect
the changed segmentation.
Copyright © 2012, Hitachi, Ltd., All rights reserved. 22

Outline of Consolidated Financial Results
for the Second Quarter ended September 30, 2012

October 30, 2012

Contents1.
2.
3.

Outline of Consolidated Financial Results for
the Second Quarter ended September 30, 2012
Outlook for Fiscal 2012
Toward Achieving“2012 Mid-term Management Plan”

Copyright © 2011,2012, Hitachi, Ltd., All rights reserved. 23

3-1. Initiatives to strengthen the management baseExecute the Hitachi Smart Transformation Project (Overall 5% cost reduction)●Newly established the Smart Transformation Project Initiatives Division in Aug. 2012
・Promote faster global shift of value chain

Production
costs－Globalize development and design(Shift development of software and mass production hardware to emerging countries
within the in-vehicle information business, etc.)－Strengthen global manufacturing and sales SCM*1 (unify management in the European market)

・Centralize common production technologies－Promote the centralization of circuit board assembly sites (from 28 to 5 sites), etc.

DirectMaterials
costs

・Execute cost structure reforms across entire value chains in line with group business plans
led by Group CPOs*2 established in Aug. (9 CPOs within 5 Groups)
・Expand global procurement－Expand corporate procurement sites to 25 cities by the end of fiscal 2012
－Move into full swing at China and Asia procurement headquarters

・Rigorously reduce and centralize indirect material costs and service expenses bytype of expense

Indirectcosts－Reduce leasing costs (co-locate offices: India, Taiwan, Yokohama),
logistics costs and outsourcing expenses－Centralize common operating expenses (communications, travel expenses, etc.)(Apply Group-wide common price to all Group companies)

・Promote shared services globally (Singapore, India)*1 SCM: Supply Chain Management *2 CPO: Chief Procurement Officer

Copyright © 2012, Hitachi, Ltd., All rights reserved. 24

3-2. Promote global growth strategies

・Established the Social Innovation Business Project Division (Apr.)

Corporate→Expand businesses by reinforcing sales to the Hitachi Group’s key accounts→Create new businesses (smart cities, health care, mining, etc.) in focused businesses
・Expand revenues from Brazil fourfold, to ¥120 billion in fiscal 2015 (compared to fiscal 2011)

・Build a common platform for global human resources management(scheduled for completion by the end of fiscal 2012)

Human
Resources→Promote optimum and borderless use of human resources and increase efficiency
・Build common HR management structures in key strategic regions→Support recruitment, education, compensation, industrial relations, etc.
(India: scheduled for completion by the end of fiscal 2012)

・Established Corporate Governance Guidelines (May)Governance・Made outside directors a majority of the board (including more non-Japanese directors) (Jun.)
・The Board of Directors’ meeting is scheduled to be held in India in Dec. 2012
→Strengthen corporate governance and promote globalized management

Copyright © 2012, Hitachi, Ltd., All rights reserved. 25

3-3.

Measures to expand and strengthen
the Social Innovation Business (1)・Established the Smart Information Systems Division and IT Platform Division Group (Apr.)

Information andTelecommunication Systems

・Hitachi Information & Communication Engineering and
Hitachi Computer Peripherals agreed to merge (Oct.)→Strengthen capabilities for providing solutions and developing platforms through reorganization

・Accelerate development of the world’s first 5MW wind power generation system(took over this business from Fuji Heavy Industries, Ltd.) (Jul.)・4 Group companies of the Power Systems Company agreed to merge (Oct.)
Power Systems

・Expanded orders in the thermal power plant business (India, South Korea and Poland)(first half of fiscal 2012)
・The acquisition of U.K. Horizon Nuclear Power (Scheduled for Nov.)→Promote global expansion and strengthen businesses by concentrating resources

SocialInfrastructure
and Industrial
Systems (1)・Signed the U.K. IEP* contract, received order for traffic management system prototype (Jul., Aug.)→Expand rail systems business in Europe
・Introduce a common platform system for design, procurement and productionin the elevator and escalator business (scheduled for Nov.)→Strengthen integrated management system for development and productionin 4 Asian countries (Japan, China, Singapore and Thailand)*IEP: Intercity Express Programme

Copyright © 2012, Hitachi, Ltd., All rights reserved. 26

3-4.

Measures to expand and strengthen
the Social Innovation Business (2)SocialInfrastructure
and Industrial
Systems (2)・Hitachi Plant Technologies: Entered the water treatment management business in China (Jun.)
・Hitachi Plant Technologies: Agreed to establish a joint venturewith El Seif Group in Saudi Arabia (Oct.)→Strengthen the infrastructure systems business globally

・Hitachi Construction Machinery: Received order for mining machineryfor gold mine in Turkey (Jul.)
Construction
Machinery・Hitachi Construction Machinery : Started shipping hydraulic excavators to
Africa and the Middle East from India (Sep.)→Strengthen price competitiveness and speed up global business development

・Hitachi Metals: Concluded a contract to make Hitachi Tool Engineering, Ltd. a wholly owned
subsidiary through a share exchange (Jul.)High Functional
Materials andComponents→Promote provision of total solutions and global sales expansion
・Hitachi Cable: Agreed to transfer logistics business to Hitachi Transport System (Aug.)→Promote greater management efficiency through business structure reforms
・Hitachi Chemical : Made Shin-Kobe Electric Machinery a wholly owned subsidiary (Mar.)→Develop total value chain in the energy storage device business

Copyright © 2012, Hitachi, Ltd., All rights reserved. 27

3-5. Toward Achieving “2012 Mid-term Management Plan”
FY2012 Target*1

FY2012 Forecast*2

Revenues

10,000 billion yen

9,000 billion yen

Operating income
ratioOver 5%5.3%

Net income attributable
to Hitachi stockholders

Consistently generate
at least 200 billion yen

200 billion yen*3

D/E ratio

Total Hitachi, Ltd.
Stockholders’ equity ratio

0.80 times or below

20.0%
20.0
%

0.80 times(Manufacturing, services and Others:
0.50 times)
times)

20.0%
20.0
%
(Manufacturing, services and Others:
22.0%)

Strengthen the business base to stabilize profitability
Leverage Hitachi’s strengths to promote a global growth strategy
Focus management resources on the Social Innovation Business*1 As of Jun 9, 2011 (includes impact of selling the HDD business). Exchange ratio: 80 yen to the U.S. dollar and 110 yen to the euro.
*2 Exchange ratio: 78 yen to the U.S. dollar and 103 yen to the euro.
*3 Including noncontrolling interests, and also including liabilities associated with the consolidation of securitization entities.

Copyright © 2012, Hitachi, Ltd., All rights reserved. 28

Cautionary Statement
Certain statements found in this document 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 with respect to certain future events and financial performance and include any statement that does not directly relate to any historical or
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 “forward-looking statements” are based upon current assumptions of future
events which may not prove to be accurate. Undue reliance should not be placed on “forward-looking statements,” as such statements speak only as of the date of this document.
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:•economic conditions, including consumer spending and plant and equipment investment in Hitachi’s major markets, particularly Japan, Asia, the United States and Europe, as well as levelsof demand in the major industrial sectors Hitachi serves, including, without limitation, the information, electronics, automotive, construction and financial sectors;•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, particularly against the
U.S. dollar and the euro;•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;•the potential for significant losses on Hitachi’s investments in equity method affiliates;•increased commoditization of information technology products and digital media-related products and intensifying price competition for such products, particularly in the Digital Media &Consumer Products segments;•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 forsuch products;•rapid technological innovation;•the possibility of cost fluctuations during the lifetime of, or cancellation of, long-term contracts for which Hitachi uses the percentage-of-completion method to recognize revenue from sales;•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;•fluctuations in product demand and industry capacity;•uncertainty as to Hitachi’s ability to implement measures to reduce the potential negative impact of fluctuations in product demand, exchange rates and/or price of raw materials or
shortages of materials, parts and components;•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 restructuring efforts to improve management efficiency by divesting or otherwise exiting underperforming businesses and to strengthen competitiveness;•uncertainty as to the success of cost reduction measures;•general socioeconomic and political conditions and the regulatory and trade environment of countries where Hitachi conducts business, particularly Japan, Asia, the United States andEurope, 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;•uncertainty as to the success of alliances upon which Hitachi depends, some of which Hitachi may not control, with other corporations in the design and development of certain key
products;•uncertainty as to Hitachi’s access to, or ability to protect, certain intellectual property rights, particularly those related to electronics and data processing technologies;•uncertainty as to the outcome of litigation, regulatory investigations and other legal proceedings of which the Company, its subsidiaries or its equity method affiliates have become or may
become parties;•the possibility of incurring expenses resulting from any defects in products or services of Hitachi;•the possibility of disruption of Hitachi’s operations by earthquakes, tsunamis or other natural disasters;•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 the accuracy of key assumptions Hitachi uses to evaluate its significant employee benefit-related costs; and•uncertainty as to Hitachi’s ability to attract and retain skilled personnel.
The factors listed above are not all-inclusive and are in addition to other factors contained in other materials published by Hitachi.

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