[Translation]

Quarterly Report(The First Quarter of 149th Business Term)
From April 1, 2017 to June 30, 2017

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]

August 7, 2017

[Fiscal Year]

The First Quarter of 149th Business Term (from April 1, 2017 to June 30, 2017)[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]

Masachika Sawada, Manager, Legal Division[Contact Address]

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

03-3258-1111[Contact Person]

Masachika Sawada, 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

1. Key Financial Data ..............................................................................................................................................................

1

2. Description of Business .......................................................................................................................................................

1

II. Business Overview .................................................................................................................................................................

1

1. Risk Factors .........................................................................................................................................................................

1

2. Material Agreements, etc. ...................................................................................................................................................

1

3. Analyses of Consolidated Financial Condition, Operating Results and Cash Flows .........................................................

2

III. Information on the Company ................................................................................................................................................

7

1. Information on the Company’s Stock, etc. .........................................................................................................................

7(1) Total number of shares, etc. ..........................................................................................................................................

7(2) Information on the stock acquisition rights, etc. ...........................................................................................................

7(3) Information on moving strike convertible bonds, etc. ..................................................................................................

8(4) Information on shareholder right plans .........................................................................................................................

8(5) Changes in the total number of issued shares and the amount of common stock and other .........................................

9(6) Major shareholders ........................................................................................................................................................

9(7) Information on voting rights ..........................................................................................................................................

9

2. Changes in Senior Management .........................................................................................................................................

10

IV. Financial Information ........................................................................................................................................................... 10Part II Information on Guarantors, etc. for the Company ..............................................................................................................

10[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)
Three months ended
June 30, 2016

Three months ended
June 30, 2017

2,130,467

2,088,669

9,162,264

109,754

141,553

469,091

56,45075,068231,261(109,564)

80,331

299,397

Total Hitachi, Ltd. stockholders’ equity

2,596,434

3,013,091

2,967,085

Total equity

3,821,494

4,165,236

4,096,995

Total assets

11,658,434

9,691,466

9,663,917

11.69

15.55

47.90

11.69

15.54

47.88

22.3

31.1

30.7

Net cash provided by operating activities

84,991

126,933

629,582

Net cash used in investing activities(81,401)(104,625)(337,955)

34,36318,855(209,536)

682,922

813,019765,242

Revenues
Income from continuing operations, before
income taxes
Net income attributable to Hitachi, Ltd.
stockholders
Comprehensive income attributable to Hitachi,Ltd. stockholders

Earnings 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 (%)

Net cash provided by (used in) financing
activities
Cash and cash equivalents at end of period

Year ended
March 31, 2017

(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. A part of the thermal power generation systems business is classified as a discontinued operation in accordance with theprovision of IFRS 5 “Non-current Assets Held for Sale and Discontinued Operations,” which was not transferred to
MITSUBISHI HITACHI POWER SYSTEMS, LTD. for the business integration in the thermal power generation
systems with Mitsubishi Heavy Industries, Ltd. The results of the discontinued operation are reported separately fromcontinuing operations.
2. Description of Business
There were no material changes in principal businesses of Hitachi during the three months ended June 30, 2017. The HitachiGroup is comprised of the Company, 864 consolidated subsidiaries, and 380 equity-method associates and joint-ventures.
There were no material changes in principal affiliated companies during the three months ended June 30, 2017.

II. Business Overview
1. Risk Factors
There were no new risk factors recognized during the three months ended June 30, 2017.
There were no material changes in the risk factors stated in the Annual Securities Report for the 148th business term
pursuant to the Financial Instruments and Exchange Act of Japan.
2. Material Agreements, etc.
No material agreements were entered into during the three months ended June30, 2017.

1

3. Analyses of Consolidated Financial Condition, Operating Results and Cash Flows(1) Outline of Business Results
Results of Operations
During the three months ended June 30, 2017, the global economy expanded at a moderate pace. In the U.S. , consumer
spending and capital investment remained firm. In Europe, mainly in Germany, the economy continued to recover slowly. In
China, government spending underpinned economic growth, while a pick-up in exports in Southeast Asia and India among otherregions put emerging economies on track to recovery. The Japanese economy has continued its moderate recovery trend,
reflecting firm consumer spending due to improving employment and income and upward trend in capital investment.
Under these conditions, results of operations in the three months ended June 30, 2017 were as follows.
Revenues decreased 2% to ¥2,088.6 billion, as compared with the three months ended June 30, 2016, due mainly to theconversion of Hitachi Transport System, Ltd. and Hitachi Capital Corporation to equity-method associates and deconsolidation of
Hitachi Koki Co., Ltd. in the year ended March 31, 2017.
Cost of sales decreased 3% to ¥1,529.8 billion and the ratio of cost of sales to revenues decreased 1% to 73% , as comparedwith the three months ended June 30, 2016 respectively. Gross profit increased 2% to ¥558.7 billion, as compared with the threemonths ended June 30, 2016.
Selling, general and administrative expenses (“SG&A”) decreased 6% to ¥426.9 billion, as compared with the three months
ended June 30, 2016, and the ratio of SG&A to revenues was 20%, a decrease of 1% compared with the three months ended June30, 2016.
Other income decreased ¥44.5 billion to ¥0.6 billion, as compared with the three months ended June 30, 2016, due mainly tothe absense of net gain on business reorganization and others related to the sale of a part of shares of Hitachi Transport System,
Ltd. recorded in the three months ended June 30, 2016. Other expenses decreased ¥1.0 billion to ¥10.9 billion, as compared withthe three months ended June 30, 2016, due mainly to lower impairment losses, despite posting expenses related to competition
law and others.
Financial income (excluding interest income) increased ¥1.1 billion to ¥4.6 billion and financial expenses (excluding interest
charges) decreased ¥13.0 billion to ¥0.4 billion, as compared with the three months ended June 30, 2016, due mainly to
improvement in exchange gain (loss).
Share of profits of investments accounted for using the equity method was ¥17.5 billion, as compared with the share of lossof ¥2.2billion for the three months ended June 30, 2016.
EBIT (earnings before interest and taxes, which is presented as income from continuing operations, before income taxes lessinterest income plus interest charges) increased ¥30.8 billion to ¥143.2 billion, as compared with the three months ended June 30,
2016.
Interest income increased ¥0.6 billion to ¥3.1 billion and interest charges decreased ¥0.3 billion to ¥4.9 billion, as comparedwith the three months ended June 30, 2016, respectively.
Income from continuing operations, before income taxes increased ¥31.7 billion to ¥141.5 billion, as compared with thethree months ended June 30, 2016.
Income taxes increased ¥1.8 billion to ¥35.1 billion, as compared with the three months ended June 30, 2016.
Loss from discontinued operations was ¥70 million, as compared with the income of ¥0.4 billion for the three months ended
June 30, 2016.
Net income increased ¥29.4 billion to ¥106.2 billion, as compared with the three months ended June 30, 2016.
Net income attributable to non-controlling interests increased ¥10.8 billion to ¥31.2 billion, as compared with the threemonths ended June 30, 2016.
As a result of the foregoing, net income attributable to Hitachi, Ltd. stockholders increased ¥18.6 billion to ¥75.0 billion, as
compared with the three months ended June 30, 2016.
Operations by Segment
The following is an overview of results of operations by segment. Revenues for each segment include intersegment
transactions. Segment profit is measured by EBIT. Since Hitachi Capital Corporation, which belonged to the Financial Services
segment, was converted into an equity-method associate in October 2016, the Financial Services segment is not presented as areportable segment from the year ending March 31, 2018.
(Information & Telecommunication Systems)
Revenues were ¥434.7 billion, which were same level as the three months ended June 30, 2016, due mainly to higher
revenues from the system integration business for the Japanese market, despite decreased sales of storage and ATMs in Japan.
Segment profit increased ¥25.1 billion to ¥25.9 billion, as compared with the three months ended June 30, 2016, due mainly
to the effect of structural reform centered on the storage business, a decrease in restructuring charges and improvement inexchange profit (loss).
(Social Infrastructure & Industrial Systems)
Revenues were ¥478.7 billion, which were the same level as the three months ended June 30, 2016, due mainly to revenue
increase in railway systems business resulting from a rise in the sales of high-speed trains for the U.K., despite the withdrawal
2

from low-profitable business in the industry and distribution field and lower revenues in the large industrial products businessowing to sluggish market conditions affected by low oil price.
Segment profit was ¥16.5 billion, as compared with the loss of ¥6.1 billion for three months ended June 30, 2016, due
mainly to the withdrawal from low-profitable business in the industry and distribution field, an improvement in profitability ofindustrial products business, higher earnings resulting from increased sales in railway systems business and an improvement inshare of profits of investments accounted for using the equity method.
(Electronic Systems & Equipment)
Revenues decreased 4% to ¥245.1 billion, as compared with the three months ended June 30, 2016, due mainly to thedeconsolidation of Hitachi Koki Co., Ltd. as a result of the sale of shares in Hitachi Koki in the year ended March 31, 2017,
despite increased revenues at Hitachi Kokusai Electric Inc. and Hitachi High-Technologies Corporation owing to higher sales ofsemiconductor production equipment.
.
Segment profit increased ¥7.4 billion to ¥18.9 billion, as compared with the three months ended June 30, 2016, due mainly
to higher earnings at Hitachi Kokusai Electric Inc. resulting from higher revenues.
(Construction Machinery)
Revenues increased 31% to ¥211.4 billion, as compared with the three months ended June 30, 2016, due mainly to increased
sales of construction machinery in China and other countries, and the consolidation of Bradken Limited in Australia, H-E Parts
International LLP and HEP Australia Holdings Pty Ltd in the U.S. by Hitachi Construction Machinery Co., Ltd. in the year ended
March 31, 2017. This increase was partially offset by the impact of conversion of Hitachi Sumitomo Heavy Industries
Construction Crane Co., Ltd. into an equity-method associate.
Segment profit increased ¥16.4 billion to ¥17.8 billion, as compared with the three months ended June 30, 2016, due mainly
to the increased revenues.
(High Functional Materials & Components)
Revenues increased 12% to ¥393.3 billion, as compared with the three months ended June 30, 2016, due mainly to increased
sales of the electronics- and automotive-related products at Hitachi Metals, Ltd. and Hitachi Chemical Co., Ltd., and theacquisition of FIAMM Energy Technology S.p.A. in Italy by Hitachi Chemical Co., Ltd., in the year ended March 31, 2017.
Segment profit increased ¥10.6 billion to ¥34.0 billion, as compared with the three months ended June 30, 2016, due mainly
to higher revenues and an improvement in exchange profit (loss).
(Automotive Systems)
Revenues increased 5% to ¥244.1 billion, as compared with the three months ended June 30, 2016, due mainly to increased
sales of automotive parts mainly in China, where the demand for new cars was firm, and in the Japanese market where new car
sales also remained firm.
Segment profit increased ¥2.0 billion to ¥9.8 billion, as compared with the three months ended June 30, 2016, due mainly tohigher revenues.
(Smart Life & Ecofriendly Systems)
Revenues decreased 6% to ¥131.1 billion, as compared with the three months ended June 30, 2016, due mainly to thesluggish demand in Southeast Asia and lower sales from a part of the home appliances products in Japan.
Segment profit increased ¥4.0 billion to ¥7.4 billion, as compared with the three months ended June 30, 2016, due mainly tothe effect of cost reduction efforts and an increase in share of profits of investments accounted for using the equity method.
(Others)
Revenues decreased 38% to ¥132.8 billion, as compared with the three months ended June 30, 2016, due mainly to theconversion of Hitachi Transport System, Ltd. to an equity-method associate in May 2016.
Segment profit decreased ¥2.0 billion to ¥2.8 billion, as compared with the three months ended June 30, 2016, due mainly to
lower revenues.
Revenues by Market
Revenues in Japan decreased 7% to ¥976.0 billion, as compared with the three months ended June 30, 2016, due mainly to
lower revenues in the Others segment, in which Hitachi Transport System, Ltd. was converted to an equity-method associate,
and the Electronic Systems & Equipment segment, in which Hitachi Koki Co., Ltd. was deconsolidated. This decrease waspartially offset by higher revenues in the High Functional Materials & Components and the Automotive Systems Segments.
Overseas revenues increased 3% to ¥1,112.6 billion, as compared with the three months ended June 30, 2016, due mainly tohigher revenues in Asia mainly in the Electronic Systems & Equipment and the Construction Machinery Segments, despite lower
revenues in Europe and North America.
As a result, the ratio of overseas revenues to total revenues increased 2% to 53%, as compared with the three months ended
June 30, 2016.
3

(2) Summary of Financial Condition, etc.
Liquidity and Capital Resources
During the three months ended June 30, 2017, 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 three months ended June 30, 2017 increased by ¥29.4 billion, as compared with the three months ended
June 30, 2016. Net cash provided by operating activities was ¥126.9 billion in the three months ended June 30, 2017, anincrease of ¥41.9 billion as compared with the three months ended June 30, 2016, due mainly to an increase of ¥80.7 billion in
net cash inflow from a change in trade receivables, despite an increase of ¥71.3 billion in net cash outflow from a change intrade payables, as compared with the three months ended June 30, 2016.
(Cash flows from investing activities)
Net amount of investments related to property, plant and equipment* was ¥96.9 billion in the three months ended June 30,
2017. This net sum decreased by ¥29.0 billion as compared with the three months ended June 30, 2016. Purchase of investments
in securities and other financial assets (including investments in subsidiaries and investments accounted for using the equity
method) in the three months ended June 30, 2017 increased by ¥23.0 billion, as compared with the three months ended June 30,
2016, due mainly to spending on the acquisitions of Bradken Limited. Net proceeds from sale of investments in securities andother financial assets (including investments in subsidiaries and investments accounted for using the equity method) in the threemonths ended June 30, 2017 decreased by ¥27.3 billion, as compared with the three months ended June 30, 2016, in which thetransfer of a part of shares of Hitachi Transport System, Ltd. was conducted. As a result of the foregoing, net cash used ininvesting activities was ¥104.6 billion in the three months ended June 30, 2017, an increase of ¥23.2 billion compared with thethree months ended June 30, 2016.
* The sum of the purchase of property, plant and equipment, the purchase of intangible assets and the purchase of leased assets,less the proceeds from sale of property, plant and equipment, and intangible assets, the proceeds from sale of leased assets andthe collection of lease receivables(Cash flows from financing activities)
Net cash inflow from a change in short-term debt in the three months ended June 30, 2017 increased by ¥53.9 billion, as
compared with the three months ended June 30, 2016. Proceeds related to long-term debt** in three months ended June 30,
2017 decreased by ¥67.8 billion, as compared with the three months ended June 30, 2016. As a result of the foregoing, net cash
provided by financing activities was ¥18.8 billion in the three months ended June 30, 2017, a decrease of ¥15.5 billion
compared as the three months ended June 30, 2016.
** 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 June 30, 2017 was ¥813.0 billion, an increase of ¥47.7 billion
from March 31, 2017. Free cash flows, the sum of cash flows from operating and investing activities, were an inflow of ¥22.3
billion in the three months ended June 30, 2017, an increase of ¥18.7 billion in the three months ended June 30, 2016.
Assets, Liabilities and Equity
The following is an overview of Hitachi’s assets, liabilities and equity as of June 30, 2017.
Total assets were ¥9,691.4 billion, an increase of ¥27.5 billion from March 31, 2017.
Total interest-bearing debt, the sum of short-term debt and long-term debt, was ¥1,268.1 billion, an increase of ¥91.5 billion
from March 31, 2017.
Total Hitachi, Ltd. stockholders’ equity increased by ¥46.0 billion from March 31, 2017, to ¥3,013.0 billion, due mainly toposting net income attributable to Hitachi, Ltd. stockholders. The ratio of total Hitachi, Ltd. stockholders’ equity to total assets
increased 0.4% from March 31, 2017 to 31.1%.
Non-controlling interests were ¥1,152.1 billion, an increase of ¥22.2 billion from March 31, 2017.
Total equity was ¥4,165.2 billion, an increase of ¥68.2 billion from March 31, 2017. The ratio of interest-bearing debt tototal equity was 0.30, as compared with 0.29 as of March 31, 2017.
(3) Management Policy
There were no material changes in Hitachi’s management policy during the three months ended June 30 , 2017.
(4) Challenges Facing Hitachi Group
1) Business and Financial Condition
There were no material changes in Hitachi’s business strategy during the three months ended June 30 , 2017.
2) Fundamental Policy on the Conduct of Persons Influencing Decision on the Company’s Financial and Business Policies
4

The Group invests a great deal of business resources in fundamental research and in the development of market-leading
products and businesses that will bear fruit in the future, and realizing the benefits from these management policies requiresthat they be continued for a set period of time. For this purpose, the Company keeps its shareholders and investors wellinformed of not just the business results for each period but also of the Company’s business policies for creating value in the
future.
The Company does not deny the significance of the vitalization of business activities and performance that can be brought
about through a change in management control, but it recognizes the necessity of determining the impact on company value
and the interests of all shareholders of the buying activities and buyout proposals of parties attempting to acquire a large shareof stock of the Company or a Group company by duly examining the business description, future business plans, past
investment activities, and other necessary aspects of such a party.
There is no party that is currently attempting to acquire a large share of the Company’s stocks nor is there a specificthreat, neither does the Company intend to implement specified so-called anti-takeover measures in advance of the appearanceof such a party, but the Company does understand that it is one of the natural duties bestowed upon it by the shareholders andinvestors to continuously monitor the state of trading of the Company’s stock and then to immediately take what the Company
deems to be the best action in the event of the appearance of a party attempting to purchase a large share of the Company’s
stock. In particular, together with outside experts, the Company will evaluate the buyout proposal of the party and holdnegotiations with the buyer, and if the Company deems that said buyout will not maintain the Company’s value and is not in
the best interest of the shareholders, then the Company will quickly determine the necessity, content, etc., of specificcountermeasures and prepare to implement them. The same response will also be taken in the event a party attempts to acquirea large percentage of the shares of a Group company.
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 148th business term pursuant to the Financial Instruments andExchange Act of Japan. The Hitachi Group’s R&D expenditures in the three months ended June 30, 2017 were ¥74.2 billion,
equivalent to 3.6% of revenues. A breakdown of R&D expenditures by segment is shown below.
(Billions of yen)Segment

Three months ended
June 30, 2017

Information & Telecommunication Systems

12.1

Social Infrastructure & Industrial Systems

11.9

Electronic Systems & Equipment

10.5

Construction Machinery

4.5

High Functional Materials & Components

11.2

Automotive Systems

15.8

Smart Life & Ecofriendly Systems

1.7

Others0.7

Corporate

5.3
Total

74.2

5

(6) Forward-Looking Statements
Certain statements found in “3. Analyses of Consolidated Financial Condition, Operating Results and Cash Flows” and otherdescriptions 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 with respect to certain future eventsand 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 andare 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 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:• 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 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;• the possibility of cost fluctuations during the lifetime of, or cancellation of, long-term contracts for which Hitachi uses thepercentage-of-completion method to recognize revenue from sales;• credit conditions of Hitachi’s customers and suppliers;• 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 productdemand, exchange rates and/or price of raw materials or shortages of materials, parts and components;
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;• 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 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;• the potential for significant losses on Hitachi’s investments in equity-method associates and joint ventures;• 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;• uncertainty as to the success of cost structure overhaul;• uncertainty as to Hitachi’s access to, or ability to protect, certain intellectual property;• 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;• 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 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; 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.

6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

10,000,000,000

Total

10,000,000,0002) Issued shares

Class

Number of sharesissued as of the endof first quater (shares)(June 30, 2017)

Number of sharesissued as of thefiling date (shares)(August 7, 2017)

Commonstock

4,833,463,387

4,833,463,387

Total

4,833,463,387

4,833,463,387

Stock exchange on which
the Company is listed

Tokyo, Nagoya

Description
The number of shares
per one unit of sharesis 1,000 shares.

－－(Note) The "Number of shares issued as of the filing date" does not include shares issued upon exercise of stock acquisition rightsfrom August 1, 2017 to August 7, 2017.
(2) Information on the stock acquisition rights, etc.
The stock acquisition rights which the Company issued during the three months ended June 30, 2017 are as follows.
Date of resolution

April 6, 2017

Number of stock acquisition rights

22,906

Number of stock acquisition rights held by the Company－

Class of shares to be issued upon exercise of stock acquisitionrightsNumber of shares to be issued upon exercise of stockacquisition rights

Common stock
2,290,600 shares (Note 1)

Amount to be paid in upon exercise of stock acquisition rights¥1 per share

Exercise period of stock acquisition rights

From April 27, 2017 to April 26, 2047

Issue price for shares issued upon exercise of stock acquisitionrights and amount of capitalization

Issue price: ¥368.6 (Note 2)
Amount of capitalization: (Note 3)

Conditions for the exercise of stock acquisition rights(Note 4, 5)

Matters regarding acquisition of stock acquisition rights
through transfer

Acquisition of stock acquisition rights through transfer
shall be subject to the approval of the Board of Directors.

Matters regarding substitute payment－

Matters regarding grant of stock acquisition rights uponorganizational restructuring(Note 6)(Notes) 1. If the Company implements a stock split (including gratis allotment of shares of common stock; the same shall apply
to references to a stock split hereinafter) or a reverse stock split with respect to common stock of the Company after
the date of allotment of the stock acquisition rights, the Number of Shares to be Issued with respect to the stockacquisition rights not exercised at that time will be adjusted in accordance with following formula:
Number of Shares to be Issued
Number of Shares to be
Ratio of stock split or=×after adjustment
Issued before adjustment
reverse stock split
In addition, if there is an unavoidable ground requiring an adjustment of the Number of Shares to be Issued, theNumber of Shares to be Issued may be adjusted to the extent necessary by a resolution of the Board of Directors.
Any fractions of less than one share resulting from the adjustment will be rounded down.
2. Issue price for shares issued upon exercise of stock acquisition rights is the sum of the amount to be paid in upon
exercise of stock acquisition rights (¥1 per share) and the fair value of the stock acquisition right as calculated at thedate of allotment.
3. The amount of common stock to be increased upon issuing shares through the exercise of stock acquisition rights shallbe one half of the maximum amount of common stock, etc. to be increased calculated in accordance with Article 17,
Paragraph 1 of the Ordinance on Company Accounting. Any fractions of less than one yen resulting from thecalculation shall be rounded up to the nearest yen.

7

4. A holder of stock acquisition rights may exercise all the stock acquisition rights together only within 10 days (in casethe last day is not a business day, the following business day) from the day immediately following the date on which
he/she ceases to be an Executive Officer, a Director or a Corporate Officer of the Company.
5. The number of stock acquisition rights which a holder of stock acquisition rights may exercise shall be determinedbased on the ratio of (i) the total shareholder return for shares of Hitachi for three years from the beginning of the
fiscal year in which the date of allotment of the stock acquisition rights falls to (ii) the growth rate of TOPIX (Tokyo
Stock Price Index) for the same period (the “TSR/TOPIX Growth Rate Ratio”), in accordance with the stock priceconditions:a. In case the TSR/TOPIX Growth Rate Ratio is 120% or more
All the stock acquisition rights allotted (the “Allotted Rights”) may be exercised.
b. In case the TSR/TOPIX Growth Rate Ratio is 80% or more but less than 120%
Only a part of the Allotted Rights may be exercised according to the degree of the TSR/TOPIX Growth Rate
Ratio (*).
*Number of stock acquisitionrights exercisable=

Number of
TSR/TOPIX×{(× 1.25) – 0.5}
Allotted Rights
Growth Rate Ratio

Any fraction less than one stock acquisition right will be rounded down.
c. In case the TSR/TOPIX Growth Rate Ratio is less than 80%
No Allotted Rights may be exercised.
6. In the event that the Company engages in a merger (only if the Company is to be dissolved as a result of the merger),an absorption-type company split or incorporation-type company split (in each case, only if the Company is to be a
split company), or share exchange or share transfer (in each case, only if the Company is to be a wholly-owned
subsidiary) (hereafter all of which are collectively referred to as “Corporate Reorganization”), then stock acquisitionrights for the entities specified under Article 236, Paragraph 1, Item 8 (a) through (e) of the Companies Act (suchentity hereinafter referred to as the “Reorganized Company”) shall be issued to the Stock Acquisition Right Holders
holding stock acquisition rights remaining in effect (the “Remaining Stock Acquisition Rights”) immediately prior to
the effective date of the Corporate Reorganization (hereinafter respectively referring to an effective date of absorptiontype merger in case of an absorption-type merger, a date of incorporation of a company incorporated through aconsolidation-type merger in case of a consolidation-type merger, an effective date of absorption-type company split
in case of an absorption-type company split, a date of incorporation of a company incorporated through anincorporation-type company split in case of an incorporation-type company split, an effective date of a share exchange
in case of a share exchange, or a date of incorporation of a wholly owning parent company incorporated through sharetransfer). However, these stock acquisition rights shall be granted only if provisions for issuing the stock acquisitionrights of the Reorganized Company in accordance with the following conditions are included in an absorption-typemerger agreement, a consolidation-type merger agreement, an absorption-type company split agreement, anincorporation-type company split plan, a share exchange agreement, or a share transfer plan.
(1) The number of stock acquisition rights of the Reorganized Company to be issued
The number of stock acquisition rights equal to the number of Remaining Stock Acquisition Rights held byrespective Stock Acquisition Right Holders shall be issued.
(2) The class of shares of the Reorganized Company to be issued upon exercise of stock acquisition rights
Common shares of the Reorganized Company shall be issued.
(3) The number of shares of the Reorganized Company to be issued upon exercise of stock acquisition rights
The number shall be determined in accordance with terms and conditions of Remaining Stock Acquisition
Rights, taking into account the conditions and other factors concerning Corporate Reorganization.
(4) Amount of assets to be contributed upon the exercise of stock acquisition rights
The amount of assets contributed upon the exercise of stock acquisition rights to be issued shall be amountderived by multiplying the amount to be paid in per share to be delivered upon exercise of stock acquisitionrights of the Reorganized Company (the “Post-reorganization Exercise Price”) prescribed below by the numberof shares of the Reorganized Company to be issued determined in accordance with paragraph (3) of this section.
The Post-Reorganization exercise price shall be one yen.
(5) Exercise period of stock acquisition rights
The exercise period of stock acquisition rights shall be from the later of the first day of the exercise period ofstock acquisition rights or the effective date of the Corporate Reorganization to the expiration date of theexercise period of stock acquisition rights.
(6) Matters concerning common stock and capital reserve to be increased due to the issuance of shares upon theexercise of stock acquisition rights
The matters shall be determined in accordance with terms and conditions of Remaining Stock Acquisition
Rights.
(7) Restrictions on acquisition of stock acquisition rights through transfer
The acquisition of stock acquisition rights through transfer shall be subject to the approval of the ReorganizedCompany.
(8) Conditions for the exercise of stock acquisition rights
The matters shall be determined in accordance with terms and conditions of Remaining Stock Acquisition
Rights.
(9) Matters concerning the acquisition of stock acquisition rights
The matters shall be determined in accordance with terms and conditions of Remaining Stock Acquisition
Rights.
(3) Information on moving strike convertible bonds, etc.
Not applicable.
(4) Information on shareholder right plans
Not applicable.

8(5) Changes in the total number of issued shares and the amount of common stock and other

Date

Change in
the total
number ofissued shares(shares)

From April 1, 2017
to June 30, 2017－

Change in Balance of Change in Balance ofBalance of thecommon common capital
capitaltotal number of
stock
stock
reserve
reserveissued shares(Millions (Millions (Millions (Millions(shares)of yen)of yen)of yen)of yen)4,833,463,387－

458,790－

176,757(6) Major shareholders
Not applicable.
(7) Information on voting rights
Information on voting rights as of March 31, 2017 is stated in this item because the Company does not identify the number ofvoting rights as of June 30, 2017 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 June 30, 2017.
1) Issued sharesClassification

Number of shares (shares)

Shares without voting right
Shares with restricted voting right(treasury stock, etc.)
Shares with restricted voting right(others)
Shares with full voting right (treasury
stock, etc.)(As of March 31, 2017)
Number of voting
Description
rights

－

－

－

－

－

－

－

－

－

－

－

4,806,073－

Common stock

5,626,000

Shares with full voting right (others)

Common stock

4,806,073,000

Shares less than one unit

Common stock

21,764,387－－

4,833,463,387－－

4,806,073－

Number of issued shares
Total number of voting rights－(Note) The “Shares with full voting right (others)” column includes 26,000 shares registered in the name of Japan Securities
Depository Center, Incorporated (account for managing stocks whose shareholders have not transferred titles) and 26 voting
rights for those shares.

92) Treasury stock, etc.

(As of March 31, 2017)

Name ofshareholder

Hitachi, Ltd.
Aoyama Special
Steel Co., Ltd.
ISHIIDENKOSHA
Co., Ltd.
SAITAKOUGYOU CO.,LTD.
Nitto Jidosha
Kiki K.K.
Mizuho Co., Inc.

Address

Number of
Ownership
Number ofshares held
percentage toshares held
under the Total shares
the total
under own name names of held (shares) number of(shares)othersissued shares(shares)(%)

6-6, Marunouchi 1-chome,
Chiyoda-ku, Tokyo
1-12, Minato 1-chome,
Chuo-ku, Tokyo
1-11, Oroshishinmachi 3chome, Higashi-ku, Niigatashi, Niigata
5-3, Takinogawa 5-chome,
Kita-ku, Tokyo
3268, Nagaoka,
Ibarakimachi,
Higashiibaraki-gun, Ibaraki
4-1, Koishikawa 5-chome,
Bunkyo-ku, Tokyo

Total

－

5,460,000－

5,460,000

0.11

10,000－10,000

0.00

1,000

－

1,000

0.00

88,000－88,0000.00

52,000－52,0000.00

15,000－15,0000.00

5,626,000－

5,626,000

0.12

2. Changes in Senior Management
There were no changes in senior management from the filing date of the Annual Securities Report for the 148th businessterm pursuant to the Financial Instruments and Exchange of Act of Japan to June 30 , 2017.

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.

10Condensed Quarterly Consolidated Financial Statements
Condensed Quarterly Consolidated Statement of Financial Position
Millions of yen
June 30, 2017

March 31, 2017

813,019
2,198,191
1,368,312
387,345244,726

765,2422,433,149
1,225,907
388,792
189,516

5,011,593

5,002,606

704,860
709,266
2,018,447
938,391
308,909691,251
758,350
1,998,411
919,201
294,098

Total non-current assets

4,679,873

4,661,311

Total assets

9,691,466

9,663,917

329,980
134,926
294,569
1,365,719
565,020
519,322
470,605

196,357
190,233
274,270
1,402,233
687,905
472,132
497,7293,680,141

3,720,859

Non-current liabilities
Long-term debt (note 6)
Retirement and severance benefits
Other non-current liabilities (note 2)

803,213630,362
412,514790,013635,684
420,366

Total non-current liabilities

1,846,089

1,846,063

Total liabilities

5,526,230

5,566,922

458,790577,041
1,843,440
137,733(3,913)458,790
577,573
1,793,570
141,068(3,916)

3,013,091

2,967,085

AssetsCurrent assets
Cash and cash equivalents
Trade receivables
Inventories
Investments in securities and other financial assets (note 2 and 6)
Other current assets (note 2)
Total current assets
Non-current assets
Investments accounted for using the equity method
Investments in securities and other financial assets (note 2 and 6)
Property, plant and equipment
Intangible assets
Other non-current assets

Liabilities
Current liabilities
Short-term debt
Current portion of long-term debt (note 6)
Other financial liabilities (note 6)
Trade payables
Accrued expenses
Advances received
Other current liabilities
Total current liabilities

EquityHitachi, Ltd. stockholders’ equity
Common stock
Capital surplus
Retained earnings (note 7)
Accumulated other comprehensive income
Treasury stock, at cost
Total Hitachi, Ltd. stockholders’ equity
Non-controlling interests

1,152,145

1,129,910

Total equity

4,165,236

4,096,995

Total liabilities and equity

9,691,466

9,663,917

See accompanying notes to condensed quarterly consolidated financial statements.

F-1

Condensed Quarterly Consolidated Statement of Profit or Loss
Three months ended June 30, 2017 and 2016

Millions of yen

Revenues
Cost of sales
Gross profit
Selling, general and administrative expenses
Other income (note 8)
Other expenses (note 8)
Financial income (note 9)
Financial expenses (note 9)
Share of profits (losses) of investments accounted for using the equity method
EBIT (Earnings before interest and taxes)
Interest income
Interest charges
Income from continuing operations, before income taxes
Income taxes
Income from continuing operations
Income (loss) from discontinued operations (note 10)
Net income
Net income attributable to:
Hitachi, Ltd. stockholders
Non-controlling interests
Earnings per share from continuing operations,
attributable to Hitachi, Ltd. stockholders (note 11)
Basic
DilutedEarnings per share attributable to Hitachi, Ltd. stockholders (note 11)
Basic
Diluted2017
2,088,669(1,529,896)
558,773(426,932)
604(10,903)
4,649
(474)
17,577143,294
3,190(4,931)
141,553(35,194)
106,359(70)
106,2892016
2,130,467(1,584,227)
546,240(454,757)
45,174(11,942)3,480(13,524)(2,200)112,471
2,545(5,262)
109,754(33,385)
76,369433
76,80275,06831,22156,45020,352

15.56
15.55

11.60
11.60

15.55
15.54

11.69
11.69

Condensed Quarterly Consolidated Statement of Comprehensive Income
Three months ended June 30, 2017 and 2016

Millions of yen

Net income

2017
106,289

2016
76,802Other 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(15,378)576(14,802)(31,479)
(464)
(488)
(32,431)

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

18,2442,654
7,401
28,299(181,068)
10,736(25,732)(196,064)

13,497
119,786(228,495)(151,693)

80,33139,455(109,564)(42,129)

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

F-2

Condensed Quarterly Consolidated Statement of Changes in Equity
Three months ended June 30, 2017

Millions of yen
2017

Balance at beginning of period

Accumulated
othercomprehensive
incomeCommonstock

CapitalsurplusRetainedearnings(note 7)458,790

577,573

1,793,570

141,068

Treasurystock,
at cost(3,916)

Total
Hitachi, Ltd.
stockholders’equityNoncontrollinginterests

Total equity

2,967,085

1,129,910

4,096,995

Changes in equity
Reclassified into retained earnings

-

-

8,598

(8,598)

-

-

-

-

Net income--

75,068--75,06831,221

106,289

Other comprehensive income

-

-

-

5,263

-

5,263

8,234

13,497

Dividends to Hitachi, Ltd. stockholders--(33,796)--(33,796)-(33,796)

Dividends to non-controlling interests

-

-

-

-

-

-

(17,130)(17,130)

Acquisition of treasury stock

-

-

-

-

(45)

(45)

-

(45)

Sales of treasury stock

-

(25)

-

-

48

23

-

23

Changes in non-controlling interests

-

(507)

-

-

-

(507)

(90)

(597)

Total changes in equity

-

(532)

49,870(3,335)3

46,00622,23568,241

Balance at end of period

458,790577,041

1,843,440

137,733(3,913)

3,013,091

1,152,145

4,165,236

Three months ended June 30, 2016

Millions of yen
2016
Accumulated
othercomprehensive
income(loss)

Noncontrollinginterests(note 5)

Total equity

Commonstock

Capitalsurplus458,790586,790

1,609,761

83,543(3,806)

2,735,078

1,390,492

4,125,570

Reclassified into retained earnings

-

-

1,268

(1,268)

-

-

-

-

Net income--

56,450--56,45020,35276,802Other comprehensive loss

-

-

-

(166,014)-(166,014)(62,481)(228,495)

Dividends to Hitachi, Ltd. stockholders--(28,969)--(28,969)-(28,969)

Balance at beginning of period

Treasurystock,
at cost

Total
Hitachi, Ltd.
stockholders’equityRetainedearnings(note 7)

Changes in equity

Dividends to non-controlling interests

-

-

-

-

-

-

(20,551)(20,551)

Acquisition of treasury stock

-

-

-

-

(23)

(23)

-

(23)

Sales of treasury stock

-

(3)

-

-

8

5

-

5

Changes in non-controlling interests

-

(85)

-

(8)

-

(93)

(102,752)(102,845)

Total changes in equity

-

(88)

28,749(167,290)(15)(138,644)(165,432)(304,076)

Balance at end of period

458,790586,702

1,638,510(83,747)(3,821)2,596,434

1,225,060

3,821,494

See accompanying notes to condensed quarterly consolidated financial statements.

F-3

Condensed Quarterly Consolidated Statement of Cash flows
Three months ended June 30, 2017 and 2016

Millions of yen

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) loss 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
Change in inventories
Change in other assets
Change in trade payables
Change in retirement and severance benefits
Change in other liabilities
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
Purchase of leased assets
Proceeds from sale of property, plant and equipment, and intangible assets
Proceeds from sale of leased assets
Collection of lease receivables
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
Proceeds from partial sales of shares of consolidated subsidiaries to non-controlling interests
Other
Net cash provided by (used in) financing activities

2017

2016

106,289

76,802

87,211471
35,210(17,577)(2,429)8(60)
311,857(137,106)(2,577)(72,344)(6,208)(87,234)(4,350)116,425
5,650
33,4082,200(450)(44,723)
2,423
231,126(120,572)(58,769)(971)(10,020)(85,043)(337)

211,161
3,174
6,712(5,596)(88,518)

147,1492,502
3,848(5,779)(62,729)

126,933

84,991(78,909)(21,595)(1,320)
3,603
1,253
-

(82,462)(20,251)(122,009)
5,545
4,098
89,074(32,299)(9,205)29,809(5,167)

57,140(3,331)(104,625)(81,401)

115,435
21,118(67,504)257(33,838)(16,559)
(45)
28
(22)
(15)

61,445150,121(128,638)(29,007)(18,301)(23)
5(1,294)60(5)18,85534,363

Effect of exchange rate changes on cash and cash equivalents

6,614(54,346)

Change in cash and cash equivalents

47,777(16,393)

Cash and cash equivalents at beginning of period

765,242699,315

Cash and cash equivalents at end of period

813,019

682,922

See accompanying notes to condensed quarterly consolidated financial statements.

F-4

Notes to Condensed Quarterly Consolidated Financial Statements
June 30, 2017
(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 three months ended June 30, 2017
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 informationand telecommunication systems, social infrastructure and industrial systems, electronic systems and equipment, construction
machinery, high functional materials and components, automotive systems, smart life and ecofriendly systems and others.
(2) Basis of Presentation
As the Company meets the requirements of a “Specified Company” pursuant to Article 1-2 of the Ordinance on the Terminology,
Forms, and Preparation Methods of Quarterly Consolidated Financial Statements (Cabinet Office Ordinance No.64 of 2007), thecondensed quarterly consolidated financial statements of the Company have been prepared in accordance with International
Accounting Standards (IAS) 34 “Interim Financial Reporting,” as permitted by the provision of Article 93 of the Ordinance. They
do not include all the information and disclosures required for a complete 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, 2017.
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 effects 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, 2017.
Regarding the condensed quarterly consolidated statement of financial position as of June 30, 2017, changes in presentation havebeen made due to materiality of some accounts balances as a result of business reorganization and others. “Investments insecurities and other financial assets,” which were included in “Other current assets” as of March 31, 2017, have been reclassified
and presented separately. “Lease receivables,” which were separately presented under current and non-current assets, have been
included in “Investments in securities and other financial assets” under current and non-current assets, respectively. “Other
financial liabilities,” which were separately presented under non-current liabilities, have been included in “Other non-current
liabilities.” The consolidated statement of financial position as of March 31, 2017 has been reclassified in order to reflect thesechanges in presentation.
As a result, regarding the consolidated statement of financial position as of March 31, 2017, “Other current assets” of ¥346,427
million have been reclassified as “Investments in securities and other financial assets.” In addition, “Lease receivables” of ¥42,365
million and ¥38,646 million, which were presented separately under current and non-current assets, have been reclassified as“Investments in securities and other financial assets” under current and non-current assets, respectively. “Other financial
liabilities” of ¥53,422 million, which were presented separately under non-current liabilities, have been reclassified as “Other noncurrent liabilities.”(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, 2017.
Income taxes for the three months ended June 30, 2017 are computed using the estimated annual effective tax rate.

F-5

Notes to Condensed Quarterly Consolidated Financial Statements
June 30, 2017(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 Social Infrastructure & Industrial Systems, Electronic Systems & Equipment and High Functional Materials &Components for financial reporting purposes so that financial statement users better understand the Company’s financial position
and business performance. The Company aggregates operating segments based on the similarities of economic characteristics
mainly using profit margin ratios of operating segment. The primary products and services included in each segment are as
follows:
Information & Telecommunication Systems:
Systems integration, Consulting, Cloud services, Servers, Storage, Software, Telecommunication & network and ATMs
Social Infrastructure & Industrial Systems:
Industrial machinery and plants, Elevators, Escalators, Railway systems, Thermal, Nuclear and Renewable energy power
generation systems and Transmission & distribution systems
Electronic Systems & Equipment:
Semiconductor processing equipment, Test and measurement equipment, Advanced industrial products and Medical electronics
equipment
Construction Machinery:Hydraulic excavators, Wheel loaders and Mining machinery
High Functional Materials & Components:
Semiconductor and display related materials, Circuit boards and materials, Automotive parts (molded plastics, etc.), Energy
storage devices, Specialty steels, Magnetic materials and components, High grade casting components and materials and Wires andcablesAutomotive Systems:
Engine management systems, Electric powertrain systems, Drive control systems and Car information systems
Smart Life & Ecofriendly Systems:
Air-conditioning equipment, Room air conditioners, Refrigerators and Washing machines
Others:
Optical disk drives, Property management and others
In October 2016, the Company sold a certain number of shares of Hitachi Capital Corporation (Hitachi Capital). As a result,
Hitachi Capital and its subsidiaries, which were included in the Financial Services segment, became equity-method associates of
the Company. Accordingly, from the beginning of the third quarter of the year ended March 31, 2017, the Company includes its
share of profit (loss) of investments accounted for using the equity method of Hitachi Capital and its subsidiaries in Corporate
items and Eliminations.

F-6

Notes to Condensed Quarterly Consolidated Financial Statements
June 30, 2017
The following tables show business segment information for the three months ended June 30, 2017 and 2016.
Revenues from Outside Customers
Millions of yen
2017
Information & Telecommunication Systems

2016
408,856

389,412Social Infrastructure & Industrial Systems

432,584

426,175

Electronic Systems & Equipment

219,536

231,539

Construction Machinery

211,416

158,529High Functional Materials & Components

380,598

338,040

Automotive Systems

243,518

232,238

Smart Life & Ecofriendly Systems

123,642

132,654

Others67,733

136,164

Financial Services
Subtotal-

84,921

2,087,883

2,129,672

Corporate items
Total

786

795

2,088,669

2,130,467

Revenues from Intersegment Transactions
Millions of yen
2017

2016

Information & Telecommunication Systems

25,92845,666Social Infrastructure & Industrial Systems

46,12756,877

Electronic Systems & Equipment

25,572

24,390Construction Machinery
High Functional Materials & Components
Automotive Systems

83

2,773

12,756

13,369670

683

Smart Life & Ecofriendly Systems

7,525

7,175

Others65,15776,940Financial Services

-

4,363

Subtotal

183,818

232,236

Corporate items and Eliminations(183,818)(232,236)

-

-

Total

F-7

Notes to Condensed Quarterly Consolidated Financial Statements
June 30, 2017
Total Revenues
Millions of yen
2017

2016

Information & Telecommunication Systems

434,784

Social Infrastructure & Industrial Systems

478,711

483,052

Electronic Systems & Equipment

245,108

255,929

Construction Machinery

211,499

161,302

High Functional Materials & Components

393,354351,409

Automotive Systems

244,188

232,921

Smart Life & Ecofriendly Systems

131,167

139,829

Others132,890

213,104-

89,284

Subtotal

2,271,701

2,361,908

Corporate items and Eliminations(183,032)(231,441)

Total

2,088,669

2,130,467

Financial Services

435,078

Segment Profit (Loss)
Millions of yen
2017

2016

Information & Telecommunication Systems

25,920Social Infrastructure & Industrial Systems

16,528(6,146)

Electronic Systems & Equipment

18,998

11,500Construction Machinery

17,862

1,433

High Functional Materials & Components

34,05523,372

Automotive Systems

9,836

7,800

Smart Life & Ecofriendly Systems

7,412

3,348

Others

2,814

4,824

Financial Services
Subtotal
Corporate items and Eliminations
Total

757

-

11,222

133,425

58,1109,869

54,361

143,294

112,471

Interest income

3,190

2,545

Interest charges(4,931)(5,262)

Income from continuing operations, before income taxes

141,553

109,754

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 leading-edge R&D, a part of net gain (loss)
on business reorganization and share of profit (loss) of investments accounted for using the equity method, and others.

F-8

Notes to Condensed Quarterly Consolidated Financial Statements
June 30, 2017(5) Business Acquisitions and Divestitures
The following are the main Business Acquisitions and Divestitures for the three months ended June 30, 2017, including the period
up to the approval date of the condensed quarterly consolidated financial statements.
(a) Sale of shares and business reorganization of Hitachi Kokusai Electric Inc. (Hitachi Kokusai)
On April 26, 2017, the Company signed a basic agreement with HKE Holdings G.K. (HKE), which is indirectly held andoperated by a related investment fund whose equity interests are wholly owned by Kohlberg Kravis Roberts & Co. L.P. andwith HVJ Holdings Inc. (HVJ), in which is invested by funds which are managed, operated, provided with information and thelike by Japan Industrial Partners, Inc., regarding (i) a tender offer scheduled to be conducted by HKE for the common shares ofHitachi Kokusai, which is a consolidated subsidiary of the Company in the Electronic Systems & Equipment segment and ashare consolidation of the share of Hitachi Kokusai, and the acquisition of treasury shares by Hitachi Kokusai, through which
Hitachi Kokusai becomes a wholly-owned subsidiary of HKE, (ii) an absorption-type company split of the thin-film processsolutions business of Hitachi Kokusai, whereby HKE will be the company succeeding in the absorption-type split, to be
conducted by HKE and Hitachi Kokusai after Hitachi Kokusai becomes a wholly-owned subsidiary of HKE, and (iii) thetransfer by HKE of 20% of the share of Hitachi Kokusai to the Company and 20% of the share of Hitachi Kokusai to HVJ thatis scheduled to take place after the absorption-type company split, and other transactions that are incidental or related to thosetransactions.
It is expected that upon the completion of the transaction, the Company's ownership ratio of shares of Hitachi Kokusai will
decrease from 51.7% to 20.0% and Hitachi Kokusai will turn into an equity-method associate of the Company. The effects ofthis transaction on the Company’s consolidated financial statements are currently being evaluated.
(b) Acquisition of “Sullair” business
On April 25, 2017, the Company signed an agreement with Accudyne Industries Borrower, S.C.A. (Accudyne) to acquire
Accudyne’s subsidiaries and certain related assets that manufacture and sell air compressors under the “Sullair” brand mainly inNorth America, in order to expand global business of industrial equipment business. In accordance with the agreement, on July12, 2017 (the acquisition date), the Company and Hitachi America, Ltd., a subsidiary of the Company, acquired the Sullairbusiness by acquiring all the shares of holding companies of the business.
The total consideration, paid in cash, for the shares of the business was USD 836 million (¥92,833 million). Furthermore,
Hitachi America, Ltd. repaid USD 517 million (¥57,502 million) of loans which were included in the business, in addition to
the acquisition.
Due to the short period of time between the acquisition date and the issuance date of the condensed quarterly consolidated
financial statements, the initial accounting for the business combination is incomplete and therefore the Company is unable toprovide disclosures related to the amounts recognized as of the acquisition date for each major class of assets acquired andliabilities assumed and the amount of goodwill.
On a pro forma basis, revenues and net income attributable to Hitachi, Ltd. stockholders using an assumed acquisition date forthe business of April 1, 2017 would not differ materially from the amounts reported in the condensed quarterly consolidated
financial statements for the three months ended June 30, 2017.
The following are the main Business Acquisitions and Divestitures for the three months ended June 30, 2016.
(a) Sale of shares of Hitachi Transport System, Ltd. (HTS)On March 30, 2016, the Company concluded an agreement regarding the transfer of common stocks of HTS, a subsidiary of theCompany included in the Others in segment information, in order to expand the scope of the Social Innovation Business byenhancing logistics platforms. In accordance with this agreement, a certain number of shares of HTS common stocks owned by
the Company were transferred to SG Holdings Co., Ltd. on May 19, 2016.
As a result of this transfer of shares, the Company’s ownership ratio of shares of HTS decreased from 59.0% to 30.0%, andHTS ceased to be the Company’s consolidated subsidiary and became its equity-method associate. A gain on the sale of sharesof HTS in the amount of ¥44,958 million was recognized in Other income in the condensed quarterly consolidated statement of
profit or loss. Changes in non-controlling interests in the condensed quarterly consolidated statement of changes in equity
include derecognition of non-controlling interest in HTS as a result of its deconsolidation.

F-9

Notes to Condensed Quarterly Consolidated Financial Statements
June 30, 2017
(6) 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 receivables, Short-term debt, Other
payables 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 based on 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-10

Notes to Condensed Quarterly Consolidated Financial Statements
June 30, 2017(b) Financial Instruments Measured at Amortized Cost
The carrying amounts and estimated fair values of the financial instruments measured at amortized cost as of June 30 and March
31, 2017 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
June 30, 2017
Carrying amounts

March 31, 2017

Estimated
fair values

Carrying amounts

Estimated
fair values

AssetsInvestments in securities and otherfinancial assets
Lease receivables

80,73881,49181,01182,007

Debt securities

155,484

155,490

155,745

155,751

Long-term loans receivable

102,804

103,529

102,384

103,257

Lease obligations

49,98950,29949,70350,027

Bonds

159,839

163,632

159,820

164,037

Long-term debt

728,311734,056

770,723

777,341

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-11

Notes to Condensed Quarterly Consolidated Financial Statements
June 30, 2017
The following tables present the assets and liabilities that are measured at fair value on a recurring basis as of June 30 and March
31, 2017.
June 30, 2017Class 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

-

-

865

865

11,502

6,762

8,799

27,063-32,167

6,061

38,228306,796

117

113,543

420,456

318,298

39,046129,268

486,612-56,495-56,495-56,495-56,495Derivatives
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, 2017Class 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

-

-

704

704

11,593

6,814

8,991

27,398-40,724

6,061

46,785355,310

104

109,766

465,180

366,903

47,642

125,522

540,067-

57,763-57,763-57,763-57,763

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

F-12

Notes to Condensed Quarterly Consolidated Financial Statements
June 30, 2017
The following tables present the changes in Level 3 instruments measured on a recurring basis for the three months ended June30, 2017 and 2016.
June 30, 2017
Level 3 financial assets

Millions of yen
Equitysecurities

Debt
securities

Derivatives

Total

Balance at beginning of period

110,470

8,991

6,061

125,522

Gain (loss) in profit or loss [1]

6

(47)

-

(41)

Gain in OCI [2]

3,791

-

-

3,791

Purchases

517

369

-

886

Sales and redemption

(544)

(521)

-

(1,065)

-

1

-

1

168

6

-

174

114,408

8,799

6,061

129,268

6

20

-

26

Acquisitions and divestitures
Other
Balance at end of period
Unrealized gain relating tofinancial assets held at end of period [4]June 30, 2016
Level 3 financial assets

Millions of yen
Equitysecurities

Debt
securities

Derivatives

Total

Balance at beginning of period

117,317

38,025

6,061

161,403

Gain (loss) in profit or loss [1]

33

(36)

-

(3)

Loss in OCI [2](1,587)--(1,587)Purchases

1,624

1,252

-

2,876

Sales and redemption(411)(5,616)-(6,027)

Acquisitions and divestitures(3,341)(567)-(3,908)Transfer from Level 3 [3]

(168)

-

-

(168)

Other
Balance at end of period

93

(246)

-

(153)

113,560

32,812

6,061

152,433

33

(84)

-

(51)

Unrealized gain (loss) relating tofinancial assets held at end of period [4][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 (loss) in OCI related to FVTOCI financial assets is included in Net changes in financial assets measured at fair value
through OCI in the condensed quarterly consolidated statement of comprehensive income.
[3] Transfer from Level 3 is mainly the result of an investee being listed on the stock market.
[4] 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.
Written put options on non-controlling interests of subsidiaries are not included in the above table. Such put options areclassified as Level 3 financial liabilities measured on a recurring basis, and changes in fair value are recognized in Capitalsurplus. The fair value of the put options above as of June 30 and March 31, 2017 were ¥15,868 million and ¥14,495 million,
respectively, included in Other financial liabilities in the condensed quarterly consolidated statement of financial position.
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.

F-13

Notes to Condensed Quarterly Consolidated Financial Statements
June 30, 2017
(7) Dividends
Dividends paid on common stock for the three months ended June 30, 2017 are as follows:

Decision
The Board of Directors
on May 12, 2017

Cash dividends

Appropriation

Cash dividends(millions of yen)fromper share (yen)33,796

Retained earnings

7.0

Record date

Effective date

March 31, 2017

May 29, 2017

Dividends paid on common stock for the three months ended June 30, 2016 are as follows:

Decision
The Board of Directors
on May 13, 2016

Cash dividends

Appropriation

Cash dividends(millions of yen)fromper share (yen)28,969Retained earnings

F-14

6.0

Record date

Effective date

March 31, 2016

May 30, 2016

Notes to Condensed Quarterly Consolidated Financial Statements
June 30, 2017(8) Other Income and Expenses
The main components of other income and expenses for the three months ended June 30, 2017 and 2016 are as follows:
Millions of yen
2017
Net gain (loss) on sales and disposals of fixed assets

2016
44

(2,423)(471)(5,650)(8)44,723Special termination benefits(2,578)(1,424)

Expenses related to competition law and others(3,920)-

Impairment losses
Net gain (loss) on business reorganization and others

Impairment losses are mainly recognized on property, plant and equipment, investment properties and intangible assets. Net gain
(loss) on business reorganization and others include gains and losses related to obtaining and losing control of investees and gains
and losses related to obtaining and losing significant influence over investees.
Restructuring charges (structural reform expenses) included in other expenses for the three months ended June 30, 2017 and 2016
were ¥3,049 million and ¥7,074 million, respectively. Restructuring charges (structural reform expenses) mainly include
impairment losses and special termination benefits.

(9) Financial Income and Expenses
The main components of financial income and expenses for the three months ended June 30, 2017 and 2016 are as follows:
Millions of yen
2017

2016

Dividends received

3,232

3,386

Exchange gain (loss)

401(12,915)

Dividends received for the three months ended June 30, 2017 and 2016 are from FVTOCI financial assets.

F-15

Notes to Condensed Quarterly Consolidated Financial Statements
June 30, 2017(10) Discontinued Operations
In the Social Infrastructure & Industrial Systems, the Company classified the part of thermal power generation systems business
which was not transferred to Mitsubishi Hitachi Power Systems, 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 three months ended June 30, 2017 and 2016 are as follows:
Millions of yen
2017

2016

Profit or loss from discontinued operations
Revenues

245

1,127

Cost of sales and expenses

(299)

(671)

(54)

456

(16)

(23)

(70)

433

Income (loss) from discontinued operations, before taxes
Income taxes
Income (loss) from discontinued operations

Millions of yen
2017

2016

Cash flows from discontinued operations
Cash flows from operating activities

362

(790)

Cash flows from investing activities--

Cash flows from financing activities

189

415

F-16

Notes to Condensed Quarterly Consolidated Financial Statements
June 30, 2017(11) Earnings Per Share (EPS) Information
The computations of net income attributable to Hitachi, Ltd. stockholders used to derive basic and diluted EPS for the threemonths ended June 30, 2017 and 2016 are as follows:
Number of shares

Weighted average number of shares on which basic EPS is calculated

2017

2016

4,828,029,198

4,828,192,248

3,924,332

33,771

4,831,953,530

4,828,226,019

Effect of dilutive securities
Stock options
Number of shares on which diluted EPS is calculated

Millions of yen
2017

2016

Net income from continuing operations,
attributable to Hitachi, Ltd. stockholders
Basic75,13856,017

Other

-

(0)

Diluted75,13856,017

(70)

433

Other

-

-

Diluted(70)

433

75,06856,450Effect of dilutive securities

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

Net income attributable to Hitachi, Ltd. stockholders
Basic
Effect of dilutive securities
Other

-

(0)

Diluted75,06856,450
Yen

2017

2016

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

15.56

11.60

Diluted

15.55

11.60

Basic

(0.01)

0.09

Diluted(0.01)

0.09

Basic

15.55

11.69

Diluted

15.54

11.69

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

EPS attributable to Hitachi, Ltd. stockholders

F-17Notes to Condensed Quarterly Consolidated Financial Statements
June 30, 2017(12) Contingencies(a)Litigation
In June 2009, a subsidiary in Japan received a grand jury subpoena in connection with the investigation conducted by the
Antitrust Division of the U.S. Department of Justice and received requests for information from the European Commission in
respect of alleged antitrust violations relating to optical disk drives. In November 2011, the subsidiary in Japan paid a fine in
relation to the investigation from the Antitrust Division of the U.S. Department of Justice. In July 2012, the subsidiary in Japan
received a statement of objections from the European Commission in respect of alleged antitrust violations. In October 2015, theEuropean Commission announced the amount of the fine for the subsidiary in Japan in respect of alleged antitrust violations, andin June 2016, two subsidiaries in Japan and Korea paid the fines.
In July 2011, a subsidiary in the U.S.A. received a grand jury subpoena from the Antitrust Division of the U.S. Department ofJustice, the Company and a subsidiary in Europe received requests for information from the European Commission, and a
subsidiary in Canada received requests for information from the Canadian Competition Bureau, all in respect of alleged antitrust
violations relating to automotive equipment. In November 2013, a subsidiary in Japan, which had been also primarily responsible
for responding to the investigation from the Antitrust Division of the U.S. Department of Justice, paid fines. In January 2016, theCompany and the subsidiary in Japan which had been also primarily responsible for responding to the investigation from
European Commission reached a settlement with the European Commission, and paid fines in April 2016.
In April 2014, a subsidiary in the U.S.A. received a grand jury subpoena in connection with the investigation conducted by the
Antitrust Division of the U.S. Department of Justice in respect of alleged antitrust violations relating to automotive equipment.
In August 2016, a subsidiary in Japan, which had been also primarily responsible for responding to the investigation, concluded
an agreement in which the subsidiary will pay fines, and paid fines in March 2017.
In June 2014, a subsidiary in Japan was investigated by the Japan Fair Trade Commission in respect of alleged antitrust violations
relating to capacitors. In March 2016, the subsidiary received a notice that the investigation was over from the Japan Fair Trade
Commission. The subsidiary in Japan and subsidiaries in Europe, the U.S.A., and others are being investigated by competition
authorities in each country or region, all in respect of alleged antitrust violations relating to capacitors. In April 2016, thesubsidiary in Japan concluded an agreement in which the subsidiary will pay fines, and in June 2016, the subsidiary in Japan paid
the fines. In November 2015, the subsidiaries in Japan received a statement of objections from the European Commission in
respect of alleged antitrust violations.
In addition to the above, the Company, its subsidiaries and associates have cooperated with the competent authorities. Depending
upon the outcome of these matters, fines or surcharge payments, the amount of which is uncertain, may be imposed on them.
Also, in connection with pending and settled antitrust violations, civil disputes, including class action lawsuits, involving theCompany and some of these companies have arisen in a number of countries, including in the U.S.A. and Canada. An amount,which was considered to be a reasonable estimate in respect of these claims, was accrued for the potential losses in relation tocertain of these civil disputes.
In August 2012, a subsidiary in Europe received a complaint filed by a customer in Europe seeking compensation forconsequential losses of EUR 1,058 million (¥135,468 million), additional costs and interest allegedly incurred by the delay in theconstruction process of a power plant against, jointly and severally, the Company, the subsidiary in Europe, a consortium
including the Company and the subsidiary in Europe, and two other companies. In addition, in October 2013 and February 2016,
the subsidiary in Europe received additional complains requesting compensation for consequential losses of EUR 239 million(¥30,647 million) and EUR 105 million (¥13,390 million), respectively. In June 2016, the Company was informed that thecustomer added an associate in Europe as one of the defendants. Although the Company, the subsidiary and the associate inEurope and the consortium will vigorously defend themselves against this lawsuit, there can be no assurance that they will not beheld liable for any amounts claimed.
In December 2013, the Company, a subsidiary in Europe and a consortium consisting of the Company and the subsidiary inEurope, jointly and severally received a request from a customer in Europe to refer a dispute to arbitration demanding EUR 637
million (¥81,539 million) in compensation for consequential losses allegedly incurred by the delay in the construction process ofa power plant. In November 2016, an arbitral award was issued by an arbitral tribunal and the award was paid in February 2017.
In addition, a settlement regarding a part of unsettled matters was paid in July 2017. The customer, the Company, the subsidiary

F-18

Notes to Condensed Quarterly Consolidated Financial Statements
June 30, 2017
in Europe and the consortium consisting of the Company and the subsidiary in Europe continue their negotiations to achieve a
final settlement regarding other unsettled matters.
In addition, in December 2015, these companies, jointly and severally received a request for arbitration from the customer
demanding EUR 161 million (¥20,645 million) in compensation primarily for performance related deficiencies of a power plant.
As of June 30, 2017, the amount of compensation claimed by the customer was changed to EUR 163 million (¥20,960 million).
Although, the Company, the subsidiary in Europe and the consortium consisting of the Company and the subsidiary in Europe
will vigorously defend themselves against this lawsuit, there can be no assurance that they will not be held liable for any amounts
claimed.
In January 2016, a subsidiary in Europe notified its customer in Europe that the subsidiary had commenced arbitration
proceedings to resolve a disagreement about construction of a power plant, and then the arbitration was started. While thesubsidiary is seeking payments of the unpaid amounts based on the contract, a counterclaim was filed by the customer. Thus,
there can be no assurance that the subsidiary will not be held liable for any amounts.
The Company and its subsidiaries execute a number of business reorganizations, including mergers, acquisitions and divestitures.
Contracts for these reorganizations include clauses for transaction price adjustments subsequent to the reorganizations. There is apossibility 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 the Company 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. Accordingly, except as otherwise stated, no accrual for potential loss has been made. 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 theordinary course of business and have not been finally adjudicated. These actions when ultimately concluded and determined will
not, in the opinion of management, have a material adverse effect on the condensed quarterly consolidated financial position or
results of operations of the Company and subsidiaries.
(b)Other
On February 1, 2014 (hereinafter the “effective date of company split”), the Company and Mitsubishi Heavy Industries, Ltd.
(hereinafter “MHI”) integrated their thermal power generation systems businesses into MHI’s consolidated subsidiary,
MITSUBISHI HITACHI POWER SYSTEMS, LTD. (hereinafter “MHPS”), through a spin-off in the form of an absorption-typecompany-split. As part of this business integration, assets and liabilities associated with boiler construction projects for Medupi
and Kusile Power Stations for which the Company’s consolidated subsidiaries in the Republic of South Africa, Hitachi Power
Africa Proprietary Limited (hereinafter “HPA”) and other companies received orders in 2007, as well as their contractual status
in relation to customers, and rights and obligations thereof were transferred from HPA to MHI’s consolidated subsidiary,
Mitsubishi Hitachi Power Systems Africa Proprietary Limited (hereinafter “MHPS Africa”) (hereinafter, the “Transfer of South
African Business”).
Under the agreement executed between the Company and MHI regarding the Transfer of South African Business, the Company
and HPA shall be liable for contingent liabilities resulting from events that occurred before the effective date of company split aswell as claims that had already been made as of the said date, while MHPS and MHPS Africa shall be held responsible for the
execution of business on and after the effective date of company split. Given these conditions, it has been agreed upon todetermine the final transfer price upon agreement on future construction schedule as of the effective date of company split andconfirmation of estimated project cash flows based on such schedule between the parties, and settle the difference with theprovisional price.
The said transfer price adjustment for the Transfer of South African Business is still under discussion between the Company and
MHI and not yet agreed upon at the moment. On March 31, 2016, MHI requested the Company to pay ZAR 48,200 million(approximately ¥379.0 billion when ZAR 1 = ¥7.87) to MHPS Africa as a portion of transfer price adjustment, etc. The Company
replied to MHI on April 6, 2016 that the details of the demand letter lacked legal grounds under any agreement and thus theCompany cannot accept it.

F-19

Notes to Condensed Quarterly Consolidated Financial Statements
June 30, 2017
On January 31, 2017, MHI extended the amount above and requested the Company to pay ZAR 89,700 million (approximately¥763.4 billion when ZAR 1 = ¥8.51). The Company again replied to MHI that the Company cannot accept the request since itlacks legal grounds under any agreement as does the request of March 2016. On July 31, 2017, MHI announced that it had
submitted to the Japan Commercial Arbitration Association (hereinafter, the “JCAA”) an arbitration claim against the Company
for payment of ZAR 90,779 million (approximately ¥774.3 billion when ZAR 1 = ¥8.53) as the said transfer price adjustment,
etc. The Company has not received the notice of the request for arbitration from the JCAA up to the time of filing this quarterly
report.
The Company has recorded provisions based on reasonable estimates for the aforementioned agreement related to the South
African Business. The actual amount of payment resulting from the said transfer price adjustment, etc. may be different from theaccrued amount.
(13) Approval of Condensed Quarterly Consolidated Financial Statements
The condensed quarterly consolidated financial statements were approved on August 7, 2017 by Toshiaki Higashihara, President
and CEO of the Company.

F-20

[Cover][Document Filed]

Confirmation Letter[Applicable Law]

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

Director, Kanto Local Finance Bureau[Filing Date]

August 7, 2017

[Company Name]

Kabushiki Kaisha Hitachi Seisakusho[Company Name in English]

Hitachi, Ltd.

[Title and Name of Representative]

Toshiaki Higashihara, President & CEO[Name and title of CFO]

Mitsuaki Nishiyama, Senior Vice President and Executive Officer[Address of Head Office]6-6, Marunouchi 1-chome, Chiyoda-ku, Tokyo[Place Where Available for Public Inspection]

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. Mitsuaki Nishiyama, Senior Vice President and Executive Officer,
confirmed that statements contained in the Quarterly Report for the first quarter of 149th fiscal year (from April 1, 2017 to June 30,2017) were adequate under the Financial Instruments and Exchange Act.
2. Special Notes
None.

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