[Translation]

Quarterly Report(The Second Quarter of 149th Business Term)
From July 1, 2017 to September 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]

November 14, 2017

[Fiscal Year]

The Second Quarter of 149th Business Term (from July 1, 2017 to September 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 …………………………………………………………………………………………………………

2

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

2

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

2

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

2

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

8

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

8(1) Total number of shares, etc. ……………………………………………………………………………………………

8(2) Information on the stock acquisition rights, etc. ………………………………………………………………………

8(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 …………………………

8(6) Major shareholders ……………………………………………………………………………………………………

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

10

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

10

IV. Financial Information ………………………………………………………………………………………………………

10

Part 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)
Six months ended
September 30, 2016

Six months ended
September 30, 2017

Year ended
March 31, 2017

4,353,774

4,376,467[2,223,307][2,287,798]

214,165

293,062

Net income attributable to Hitachi, Ltd.

113,500

160,613stockholders[57,050][85,545](81,156)

212,260

299,397

Total Hitachi, Ltd. stockholders’ equity

2,624,281

3,145,445

2,967,085

Total equity

3,864,800

4,341,864

4,096,995

Total assets

11,779,351

10,042,334

9,663,917

Earnings per share attributable to Hitachi, Ltd.

23.51

33.27

stockholders, basic (yen)[11.82][17.72]

23.50

33.24

47.88

22.3

31.3

30.7

Net cash provided by operating activities

284,948

278,472

629,582

Net cash used in investing activities(216,541)(234,463)(337,955)

145,967(59,587)(209,536)

851,528

768,179

765,242

Revenues
Income from continuing operations, before
income taxes

Comprehensive income attributable to Hitachi,Ltd. stockholders

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

9,162,264
469,091
231,26147.90(Notes) 1. Hitachi's consolidated financial statements have been prepared in conformity with the International Financial ReportingStandards (“IFRS”) as issued by the International Accounting Standards Board.
2. Revenues do not include the consumption tax, etc.
3. The figures of “Revenues,” “Net income attributable to Hitachi, Ltd. stockholders” and “Earnings per share attributable
to Hitachi, Ltd. stockholders, basic” in square bracket are those for the three months ended September 30, 2016 and2017, respectively.
2. Description of Business
There were no material changes in principal businesses of Hitachi during the six months ended September 30, 2017. The
Hitachi Group is comprised of the Company, 887 consolidated subsidiaries, and 389 equity-method associates and joint-ventures.
Changes in principal affiliated companies during the six months ended September 30, 2017 were as follows.
Positioning of principal affiliated companies
Main products and services
Manufacturing
Sales and services
Information &[Consolidated subsidiaries]
Telecommunication（Chang in company name）
Systems
Hitachi Vantara Corporation
Social Infrastructure &[Consolidated subsidiaries]
Industrial（New）
Systems
Sullair US Purchaser, Inc.
(Notes) 1.Hitachi Data Systems Corporation changed its name to Hitachi Vantara Corporation as of September 26, 2017.
2.Sullair US Purchaser, Inc. has bocome a consolidated subsidiary of the Company on July 12, 2017 as Hitachi America,
Ltd., a consolidated subsidiary of the Company, acquired Sullair US Purchaser, Inc., which is the holding company ofcompanies that manufacture and sell air compressors with the “Sullair” brand.

1II. Business Overview
1. Risk Factors
There were no new risk factors recognized during the six months ended September 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 September 30, 2017.
3. Analyses of Consolidated Financial Condition, Operating Results and Cash Flows(1) Outline of Business Results
Results of Operations
During the six months ended September 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’s active infrastructure spending underpinned economic growth. The Japanese economy has continued its
moderate recovery trend, reflecting firm consumer spending due to improving employment and income and upward trend incapital investment.
Under these conditions, results of operations in the six months ended September 30, 2017 were as follows.
Revenues increased 1% to ¥4,376.4 billion, as compared with the six months ended September 30, 2016, due mainly tohigher revenues in the Construction Machinery segment, in which overseas sales has increased mainly in China, and in the High
Functional Materials & Components segment, in which sales of the electronics- and automotive-related products has increased.
The increase was almost offset by the offset effect of the move to transform business portfolio such as conversion 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 was ¥3,205.5 billion, which was the same level as the six months ended September 30, 2016, and the ratio of
cost of sales to revenues decreased 1% to 73%. Gross profit increased 3% to ¥1,170.8 billion, as compared with the six months
ended September 30, 2016.
Selling, general and administrative expenses (“SG&A”) decreased 4% to ¥867.6 billion, as compared with the six months
ended September 30, 2016, and the ratio of SG&A to revenues decreased 1% to 20%, as compared with the six months ended
September 30, 2016.
Other income decreased ¥45.7 billion to ¥3.2 billion, as compared with the six months ended September 30, 2016, due
mainly to the 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 six months ended September 30, 2016. Other expenses decreased ¥9.0 billion to ¥42.2 billion, as
compared with the six months ended September 30, 2016, due mainly to a decrease in restructuring charges (structural reform
expenses).
Financial income (excluding interest income) increased ¥7.4 billion to ¥11.6 billion and financial expenses (excludinginterest charges) decreased ¥18.6 billion to ¥0.9 billion, as compared with the six months ended September 30, 2016,
respectively.
Share of profits of investments accounted for using the equity method increased ¥18.1 billion to ¥21.4 billion, as comparedwith the six months ended September 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 ¥77.9 billion to ¥296.4 billion, as compared with the six months ended September
30, 2016.
Interest income increased ¥1.1billion to ¥6.7 billion and interest charges increased ¥0.1 billion to ¥10.1 billion, as comparedwith the six months ended September 30, 2016.
Income from continuing operations, before income taxes increased ¥78.8 billion to ¥293.0 billion, as compared with the six
months ended September 30, 2016.
Income taxes increased ¥19.2 billion to ¥72.8 billion, as compared with the six months ended September 30, 2016.
Loss from discontinued operations was ¥1.2 billion, as compared with the income of ¥24 million for the six months ended
September 30, 2016.
Net income increased ¥58.3 billion to ¥218.9 billion, as compared with the six months ended September 30, 2016.
Net income attributable to non-controlling interests increased ¥11.1 billion to ¥58.3 billion, as compared with the six months
ended September 30, 2016.
As a result of the foregoing, net income attributable to Hitachi, Ltd. stockholders increased ¥47.1 billion to ¥160.6 billion, as
compared with the six months ended September 30, 2016.

2

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 increased 1% to ¥933.3 billion, as compared with the six months ended September 30, 2016, due mainly to theimpact of foreign currency translation and higher revenues from system integration business for the Japanese market, despite
lower sales of ATMs.
Segment profit increased ¥50.7 billion to ¥70.3 billion, as compared with the six months ended September 30, 2016, due
mainly to the effect of structural reform centered on the storage business, increased sales of highly profitable high-end flash
storage, profitability improvement in system integration business in Japan and a decrease in restructuring charges.
(Social Infrastructure & Industrial Systems)
Revenues increased 1% to ¥1,039.1 billion, as compared with the six months ended September 30, 2016, due mainly torevenue increase in railway systems business resulting from a rise in the sales of high-speed trains for the U.K. and that inindustrial products business by acquiring air compressor business with Sullair brand (Sullair Business), despite the withdrawal
from low-profitable business in the industry and distribution field.
Segment profit increased ¥21.4 billion to ¥24.9 billion, as compared with the six months ended September 30, 2016, due
mainly to an improvement in profitability of industrial products business and power & energy business.
(Electronic Systems & Equipment)
Revenues decreased 4% to ¥513.6 billion, as compared with the six months ended September 30, 2016, due mainly to thedeconsolidation of Hitachi Koki Co., Ltd. in the year ended March 31, 2017, despite increased revenues at Hitachi Kokusai
Electric Inc. and Hitachi High-Technologies Corporation owing to higher sales of semiconductor production equipment.
Segment profit increased ¥12.9 billion to ¥39.4 billion, as compared with the six months ended September 30, 2016, due
mainly to higher earnings at Hitachi Kokusai Electric Inc.
(Construction Machinery)
Revenues increased 31% to ¥440.2 billion, as compared with the six months ended September 30, 2016, due mainly toincreased sales of contsruction machinery in China and other oveaseas countries, and corporate acquisitions in Australia and the
U.S. conducted by Hitachi Construction Machinery Co., Ltd. in the year ended March 31, 2017.
Segment profit increased ¥37.4 billion to ¥41.0 billion, as compared with the six months ended September 30, 2016, due
mainly to the increased revenues and higher share of profits of investments accounted for using the equity methods.
(High Functional Materials & Components)
Revenues increased 14% to ¥802.2 billion, as compared with the six months ended September 30, 2016, due mainly toincreased sales of the electronics- and automotive-related products at Hitachi Metals, Ltd. and Hitachi Chemical Company, Ltd.,and corporate acquisition in Italy conducted by Hitachi Chemical Company, Ltd. in the year end of March 31, 2017.
Segment profit increased ¥1.8 billion to ¥51.5 billion, as compared with the six months ended September 30, 2016, due
mainly to increased sales, despite posting expenses related to competion law and others at Hitachi Chemical Company, Ltd.
(Automotive Systems)
Revenues increased 4% to ¥488.9 billion, as compared with the six months ended September 30, 2016, due mainly toincreased sales of automotive parts mainly in China and Japan and the positive impact of foreign currency translation.
Segment profit increased ¥1.6 billion to ¥22.2 billion, as compared with the six months ended September 30, 2016, due
mainly to the increased revenues.
(Smart Life & Ecofriendly Systems)
Revenues decreased 4% to ¥276.3 billion, as compared with the six months ended September 30, 2016.
Segment profit increased ¥8.6 billion to ¥18.4 billion, as compared with the six months ended September 30, 2016, due
mainly to an increase in share of profits of investments accounted for using the equity method and the effect of the cost reduction
efforts.
(Others)
Revenues decreased 23% to ¥277.0 billion, as compared with the six months ended September 30, 2016, due mainly to theconversion of Hitachi Transport System, Ltd. to an equity-method associate in May 2016.
Segment profit decreased ¥1.8 billion to ¥10.6 billion, as compared with the six months ended September 30, 2016.

3

Revenues by Market
Revenues in Japan decreased 5% to ¥2,110.9 billion, as compared with the six months ended September 30, 2016, due
mainly to the conversion of Hitachi Capital Corporation and Hitachi Transport System, Ltd. to equity-method associates, despite
higher revenues in the High Functional Materials & Components and Automotive System segments.
Overseas revenues increased 6% to ¥2,265.5 billion, as compared with the six months ended September 30, 2016, due
mainly to increased revenues in Asia mainly in the Electronic Systems & Equipment and Construction Machinery segments,
despite decreased revenues in Europe mainly in the Electronic Systems & Equipment segment, in which Hitachi Koki Co., Ltd.
was deconsolidated.
As a result, the ratio of overseas revenues to total revenues increased 3% to 52%, as compared with the six months ended
September 30, 2016.
(2) Summary of Financial Condition, etc.
Liquidity and Capital Resources
During the six months ended September 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 six months ended September 30, 2017 increased by ¥58.3 billion, as compared with the six months ended
September 30, 2016. Net cash inflow from a change in trade receivables increased by ¥90.2 billion. Trade payables decreased by¥39.9 billion as compared with an increase of ¥22.8 billion for six months ended September 30, 2016. Net cash outflow from achange in inventories increased by ¥53.5 billion and income taxes paid increased by ¥34.7 billion, respectively, as compared withsix months ended September 30, 2016.
As a result of the foregoing, Net cash provided by operating activities was ¥278.4 billion in the six months ended September
30, 2017, a decrease of ¥6.4 billion compared with the six months ended September 30, 2016
(Cash flows from investing activities)
Net amount of investments related to property, plant and equipment* was ¥204.0 billion in the six months ended September
30, 2017. This net sum decreased by ¥75.5 billion compared with the six months ended September 30, 2016. Purchase ofinvestments in securities and other financial assets (including investments in subsidiaries and investments accounted for using theequity method) in the six months ended September 30, 2017 increased by ¥143.5 billion, as compared with the six months ended
September 30, 2016, by acquiring air compressor business with Sullair brand. Proceeds from sale of investments in securities andother financial assets (including investments in subsidiaries and investments accounted for using the equity method) in the six
months ended September 30, 2017 increased by ¥70.4 billion, as compared with the six months ended September 30, 2016. As aresult of the foregoing, net cash used in investing activities was ¥234.4 billion in the six months ended September 30, 2017, anincrease of ¥17.9 billion compared with the six months ended September 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 six months ended September 30, 2017 was ¥61.2 billion ascompared with ¥10.6 billion of net cash outflow in the six months ended September 30, 2016. Payments related to long-term
debt** in six months ended September 30, 2017 was ¥71.3 billion, as compared with ¥207.3 billion of proceeds related to longterm debt in six months ended September 30, 2016.
As a result of the foregoing, net cash flows used in financing activities was ¥59.5 billion in the six months ended September
30, 2017, as compared with ¥145.9 billion of net cash inflow in the six months ended September 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 September 30, 2017 was ¥768.1 billion, an increase of ¥2.9
billion from March 31, 2017. Free cash flows, the sum of cash flows from operating and investing activities, were an inflow of¥44.0 billion in the six months ended September 30, 2017, a decrease of ¥24.3 billion in the six months ended September 30,
2016.

4

Assets, Liabilities and Equity
The following is an overview of Hitachi’s assets, liabilities and equity as of September 30, 2017.
Total assets were ¥10,042.3 billion, an increase of ¥378.4 billion from March 31, 2017. This was due mainly to theacquisition of air compressor business with Sullair brand and an increase in inventories reflecting production progress.
Total interest-bearing debt, the sum of short-term debt and long-term debt, was ¥1,271.5 billion, an increase of ¥94.9 billion
from March 31, 2017. This was due mainly to an increase in short-term debt.
Total Hitachi, Ltd. stockholders’ equity increased by ¥178.3 billion from March 31, 2017, to ¥3,145.4 billion, due mainly toposting net income attributable to Hitachi, Ltd. stockholders. The ratio of total Hitachi, Ltd. stockholders’ equity to total assets
increased 0.6% from March 31, 2017 to 31.3%.
Non-controlling interests were ¥1,196.4 billion, an increase of ¥66.5 billion from March 31, 2017.
Total equity was ¥4,341.8 billion, an increase of ¥244.8 billion from March 31, 2017. The ratio of interest-bearing debt tototal equity was 0.29, which was the same level as of March 31, 2017.
(3) Management Policy
There were no material changes in Hitachi’s management policy during the six months ended September 30, 2017.
(4) Challenges Facing Hitachi Group
1) Business and Financial Condition
There were no material changes in Hitachi’s business strategy during the six months ended September 30, 2017.
2) Fundamental Policy on the Conduct of Persons Influencing Decision on the Company’s Financial and Business Policies
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(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 six months ended September 30, 2017 were ¥162.2
billion, 3.7% of revenues. A breakdown of R&D expenditures by segment is shown below.
(Billions of yen)Segment

Six months ended
September 30, 2017

Information & Telecommunication Systems

24.6

Social Infrastructure & Industrial Systems

26.0

Electronic Systems & Equipment

24.8

Construction Machinery

11.9

High Functional Materials & Components

23.0

Automotive Systems

35.8

Smart Life & Ecofriendly Systems

3.5

Others1.3

Corporate Items

10.9
Total

162.2

6

(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.

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

Total number of shares authorized to
be issued (shares)

Class
Common stock

10,000,000,000

Total

10,000,000,0002) Issued shares

Class

Number of shares
Number of sharesissued as of the end ofissued as of theStock exchange on which
second quarter (shares) filing date (shares)
the Company is listed(September 30, 2017) (November 14, 2017)

Commonstock

4,833,463,387

4,833,463,387

Total

4,833,463,387

4,833,463,387

Description

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

Tokyo, Nagoya--(Note) The "Number of shares issued as of the filing date" does not include shares issued upon exercise of stock acquisition rightsfrom November 1, 2017 to November 14, 2017.
(2) Information on the stock acquisition rights, etc.
Not applicable.
(3) Information on moving strike convertible bonds, etc.
Not applicable.
(4) Information on shareholder right plans
Not applicable.
(5) Changes in the total number of issued shares and the amount of common stock and other

Date

From July 1, 2017
to September 30, 2017

Change in
the total
number ofissued shares(shares)

Balance of thetotal number ofissued shares(shares)－

4,833,463,387

8

Change in Balance of Change in Balance ofcapitalcapitalcommon common
reserve
reservestock
stock(Millions (Millions (Millions (Millionsof yen)of yen)of yen)of yen)－458,790－

176,757

(6) Major shareholders(As of September 30, 2017)
Name

Address

Share
Ownership(shares)

Ownership percentage
to the total number ofissued shares (%)

The Master Trust Bank of Japan, Ltd.
(Trust Account)11-3, Hamamatsucho 2-chome,
Minato-ku, Tokyo

298,102,000

6.17Japan Trustee Services Bank, Ltd.
(Trust Account)

8-11, Harumi 1-chome, Chuo-ku, Tokyo

264,835,415

5.48

Hitachi Employees’ Shareholding
Association

6-6, Marunouchi 1-chome, Chiyoda- ku,Tokyo105,177,384

2.18

Nippon Life Insurance Company

6-6, Marunouchi 1-chome, Chiyoda- ku,
Tokyo93,264,995

1.93Japan Trustee Services Bank, Ltd.
(Trust Account 5)

8-11, Harumi 1-chome, Chuo-ku, Tokyo

90,666,000

1.88Japan Trustee Services Bank, Ltd.
(Trust Account 9)8-11, Harumi 1-chome, Chuo-ku, Tokyo

84,834,000

1.76State Street Bank West ClientTreaty 505234(Standing proxy: Mizuho Bank, Ltd.)

1776 Heritage Drive, North Quincy, MA
02171, U.S.A.
(15-1, Konan 2-chome, Minato-ku, Tokyo)

82,004,162

1.70

The Dai-ichi Life Insurance
Company, Limited

13-1, Yurakucho 1-chome, Chiyoda- ku,
Tokyo71,361,222

1.48

State Street Bank and Trust Company
505225(Standing proxy: Mizuho Bank, Ltd.)

P.O. Box 351
Boston, Massachusetts 02101 U.S.A.
(15-1, Konan 2-chome, Minato-ku, Tokyo)

69,619,564

1.44Japan Trustee Services Bank, Ltd.
(Trust Account 7)

8-11, Harumi 1-chome, Chuo-ku, Tokyo

67,769,000

1.40

1,227,633,742

25.40

Total

-

(Notes) 1. The number of shares held by The Dai-Ichi Life Insurance Company, Limited includes its contribution of 6,560,000
shares to the retirement allowance trust (the holder of said shares, as listed in the Shareholders’ Register, is “Dai-Ichi
Life Insurance Account, Retirement Allowance Trust, Mizuho Trust & Banking Co., Ltd.”).
2. Some reports on substantial shareholdings under the Financial Instruments and Exchange Act for the Company areavailable for public inspection. However, the information in the reports is not described in the above table since theCompany does not confirm the actual status of shareholdings as of the end of September 30, 2017. The major contentsof the reports are as follows.
Holders

Mitsubishi UFJ Trust and Banking Corporation and three otherpersons

Date on which the duty to file report

May 23, 2011

Number of shares

237,294,613 shares

Ownership percentage to the total number
of issued shares

5.24%

Holders

BlackRock Japan Co. Ltd and seven other persons

Date on which the duty to file report

April 14, 2017

Number of shares

304,755,969 shares

Ownership percentage to the total number
of issued shares

6.31%

Holders

Sumitomo Mitsui Trust Bank, Limited and two other persons

Date on which the duty to file report

July 31, 2014

Number of shares

244,372,374 shares

Ownership percentage to the total number
of issued shares

5.06%

9

(7) Information on voting rights
1) Issued shares(As of September 30, 2017)Classification

Number of shares (shares)

Number of voting
rightsDescription

－

－

－

－

－

－

－

－

－

－

－

4,806,516－

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.)

Common stock

5,741,000

Shares with full voting right (others)

Common stock

4,806,516,000

Shares less than one unit

Common stock

21,206,387－－

4,833,463,387－－

4,806,516－

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.
2) Treasury stock, etc.
(As of September 30, 2017)

Name ofshareholder

Hitachi, Ltd.

Address

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

Aoyama Special Steel

1-12, Minato 1-chome, Chuo-ku,

Co., Ltd.

TokyoISHII DENKOSHA
Co., Ltd.

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

Total shares
held (shares)

Ownership
percentage tothe total
number ofissued shares(%)

5,575,000－

5,575,000

0.12

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

5,741,000－

5,741,000

0.12

1-11, Oroshishinmachi 3chome, Higashi-ku, Niigata-shi,
Niigata

SAITA KOUGYOU

5-3, Takinogawa 5-chome, Kita-

CO., LTD.

ku, Tokyo

Nitto Jidosha

3268, Nagaoka, Ibarakimachi,

Kiki K.K.

Higashiibaraki-gun, Ibaraki

Mizuho Co., Inc.
Total

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

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 September 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
September 30, 2017

March 31, 2017

768,179
2,347,003
1,414,028
299,613
241,946765,2422,433,149
1,225,907
388,792
189,516

5,070,769

5,002,606

716,118
740,149
2,088,687
1,118,568
308,043

691,251
758,350
1,998,411
919,201
294,098

Total non-current assets

4,971,565

4,661,311

Total assets

10,042,334

9,663,917

293,794
133,804
255,102
1,425,855
674,037
528,311492,548

196,357
190,233
274,270
1,402,233
687,905
472,132
497,7293,803,451

3,720,859

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

843,987
623,457
429,575

790,013635,684
420,366

Total non-current liabilities

1,897,019

1,846,063

Total liabilities

5,700,470

5,566,922

458,790579,230
1,929,557
181,863(3,995)

458,790
577,573
1,793,570
141,068(3,916)

3,145,445

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

1,196,419

1,129,910

Total equity

4,341,864

4,096,995

Total liabilities and equity

10,042,334

9,663,917

See accompanying notes to condensed quarterly consolidated financial statements.

F-1

Condensed Quarterly Consolidated Statement of Profit or Loss
Six months ended September 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 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
4,376,467(3,205,599)
1,170,868(867,625)
3,284(42,214)
11,624(937)
21,492
296,492
6,724(10,154)
293,062(72,855)
220,207(1,274)
218,933

2016
4,353,774(3,219,608)
1,134,166(901,326)
49,070(51,240)
4,207(19,631)3,319
218,565
5,576(9,976)214,165(53,562)
160,60324
160,627

160,61358,320113,500
47,127

33.53
33.50

23.50
23.50

33.27
33.24

23.51
23.50

Condensed Quarterly Consolidated Statement of Comprehensive Income
Six months ended September 30, 2017 and 2016

Millions of yen
2017
218,933

2016
160,627

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

6,422
850
7,272

(16,437)
(464)
(821)
(17,722)

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

56,459(672)
9,484
65,271(229,617)
23,756(41,638)(247,499)

72,543
291,476(265,221)(104,594)

212,260
79,216(81,156)(23,438)

Net income

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 Profit or Loss
Three months ended September 30, 2017 and 2016

Millions of yen

Revenues
Cost of sales
Gross profit
Selling, general and administrative expenses
Other income
Other expenses
Financial income
Financial expenses
Share of profits 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
Loss from discontinued operations
Net income
Net income attributable to:
Hitachi, Ltd. stockholders
Non-controlling interests
Earnings per share from continuing operations,
attributable to Hitachi, Ltd. stockholders (note 11)
Basic
DilutedEarnings per share attributable to Hitachi, Ltd. stockholders (note 11)
Basic
Diluted2017
2,287,798(1,675,703)
612,095(440,693)
2,732(31,363)
6,975
(463)
3,915
153,198
3,534(5,223)
151,509(37,661)
113,848(1,204)112,6442016
2,223,307(1,635,381)
587,926(446,569)
6,319(41,721)911(6,291)
5,519
106,094
3,031(4,714)
104,411(20,177)
84,234(409)
83,82585,54527,09957,05026,775

17.97
17.95

11.90
11.90

17.72
17.70

11.82
11.81

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

Millions of yen

Net income

2017
112,6442016
83,825

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

21,800274
22,074

15,042(333)
14,709Items 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

38,215(3,326)
2,083
36,972(48,549)
13,020(15,906)(51,435)

59,046
171,690(36,726)
47,099131,929
39,761

28,40818,691Other comprehensive income (OCI)
Comprehensive income
Comprehensive income attributable to:
Hitachi, Ltd. stockholders
Non-controlling interests
See accompanying notes to condensed quarterly consolidated financial statements.

F-3

Condensed Quarterly Consolidated Statement of Changes in Equity
Six months ended September 30, 2017

Millions of yen
2017
Accumulated
othercomprehensive
incomeCommonstock

CapitalsurplusRetainedearnings(note 7)458,790

577,573

1,793,570

141,068(3,916)

Balance at beginning of period

Treasurystock,
at cost

Total
Hitachi, Ltd.
stockholders’equityNoncontrollinginterests

Total equity

2,967,085

1,129,910

4,096,995

Changes in equity
Reclassified into retained earnings

-

-

9,170

(9,170)

-

-

-

-

Net income--

160,613--160,61358,320218,933

Other comprehensive income

-

-

-

51,647-51,647

20,89672,543

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

Dividends to non-controlling interests

-

-

-

-

-

-

(19,280)(19,280)

Acquisition of treasury stock

-

-

-

-

(132)

(132)

-

(132)

Sales of treasury stock

-

(25)

-

-

53

28

-

28

-

1,682

-

(1,682)

-

-

6,573

6,573

Total changes in equity

-

1,657

135,987

40,795(79)

178,360

66,509244,869

Balance at end of period

458,790579,230

1,929,557

181,863(3,995)

3,145,445

1,196,419

4,341,864

Changes in non-controlling interests

Six months ended September 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

-

-

2,275

(2,275)

-

-

-

-

Net income--

113,500--

113,500

47,127

160,627

Other comprehensive loss

-

-

-

(194,656)-(194,656)(70,565)(265,221)

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

-

-

-

-

-

-

(27,780)(27,780)

Acquisition of treasury stock

-

-

-

-

(52)

(52)

-

(52)

Sales of treasury stock

-

(15)

-

-

39

24

-

24

Changes in non-controlling interests

-

(478)

-

(166)

-

(644)

(98,755)(99,399)

Total changes in equity

-

(493)

86,806(197,097)(13)(110,797)(149,973)(260,770)

Balance at end of period

458,790586,297

1,696,567(113,554)(3,819)2,624,281

1,240,519

3,864,800

See accompanying notes to condensed quarterly consolidated financial statements.

F-4

Condensed Quarterly Consolidated Statement of Cash flows
Six months ended September 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 of investments accounted for using the equity method
Financial income and expenses
Net gain 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

218,933

160,627

179,787
1,271
72,871(21,492)(1,516)(2,068)
1,382
212,053(167,202)(6,063)(39,945)(15,247)(40,286)(5,108)231,410
24,14353,585(3,319)797(47,114)(289)
121,847(113,607)(821)
22,892(20,376)(65,258)(1,736)387,370
6,909
8,930(10,493)(114,244)

362,781
5,123
5,899(9,389)(79,466)

278,472

284,948(168,605)(44,115)(1,760)
6,809
3,614
-

(154,710)(49,114)(262,051)
14,865
8,023
163,334(156,443)(12,930)

136,387(10,350)

65,903
10,139(234,463)(216,541)

61,236
92,622(163,939)
2,707(33,772)(18,287)
(132)
33
(22)
(33)

(10,683)
470,142(262,779)
3,756(28,962)(21,302)(52)
24(4,225)60(12)(59,587)

145,967

Effect of exchange rate changes on cash and cash equivalents

18,515(62,161)

Change in cash and cash equivalents

2,937

152,213

Cash and cash equivalents at beginning of period

765,242699,315

Cash and cash equivalents at end of period

768,179

851,528

See accompanying notes to condensed quarterly consolidated financial statements.

F-5

Notes to Condensed Quarterly Consolidated Financial Statements
September 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 six months ended September 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, changes in presentation have been made effective
the fiscal year beginning April 1, 2017 due to materiality of some account balances as a result of business reorganization andothers. “Investments in securities 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 noncurrent 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 orderto reflect these changes 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 six months ended September 30, 2017 are computed using the estimated annual effective tax rate.

F-6

Notes to Condensed Quarterly Consolidated Financial Statements
September 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-7

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

2016
868,158

827,474

Social Infrastructure & Industrial Systems

934,154902,665

Electronic Systems & Equipment

460,959

489,022

Construction Machinery

439,967

328,361High Functional Materials & Components

776,703

676,094

Automotive Systems

487,466

470,138

Smart Life & Ecofriendly Systems

261,123

272,874

Others145,068

214,795

Financial Services
Subtotal-

170,583

4,373,598

4,352,006

Corporate items
Total

2,869

1,768

4,376,467

4,353,774

Revenues from Intersegment Transactions
Millions of yen
2017

2016

Information & Telecommunication Systems

65,17999,610Social Infrastructure & Industrial Systems

105,037

127,225

Electronic Systems & Equipment

52,691

48,484

Construction Machinery

309

6,576

High Functional Materials & Components

25,522

27,177

Automotive Systems

1,484

1,756

Smart Life & Ecofriendly Systems

15,251

14,583

Others131,935

144,580

Financial Services

-

8,629

Subtotal

397,408

478,620

Corporate items and Eliminations(397,408)(478,620)

-

-

Total

F-8

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

2016

Information & Telecommunication Systems

933,337

927,084

Social Infrastructure & Industrial Systems

1,039,191

1,029,890

Electronic Systems & Equipment

513,650

537,506

Construction Machinery

440,276

334,937

High Functional Materials & Components

802,225

703,271

Automotive Systems

488,950

471,894

Smart Life & Ecofriendly Systems

276,374

287,457

Others277,003359,375-

179,212Subtotal

4,771,006

4,830,626

Corporate items and Eliminations(394,539)(476,852)

Total

4,376,467

4,353,774

Financial Services

Segment Profit (Loss)
Millions of yen
2017

2016

Information & Telecommunication Systems

70,370Social Infrastructure & Industrial Systems

24,9103,432Electronic Systems & Equipment

39,48026,481

Construction Machinery

41,0573,564High Functional Materials & Components

51,52749,709Automotive Systems

22,26820,643

Smart Life & Ecofriendly Systems

18,462

9,788

Others

10,661

12,551

Financial Services

19,609-22,841

Subtotal

278,735

168,618

Corporate items and Eliminations

17,75749,947

Total

296,492

218,565Interest income

6,724

5,576

Interest charges(10,154)(9,976)

Income from continuing operations, before income taxes

293,062

214,165

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-9

Notes to Condensed Quarterly Consolidated Financial Statements
September 30, 2017(5) Business Acquisitions and Divestitures
The following are the main Business Acquisitions and Divestitures for the six months ended September 30, 2017, including theperiod 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. Furthermore, on October 11, 2017, the Company signed a memorandum of understanding to amend the basic
agreement (the Amendment Memorandum) with HKE and HVJ.
HKE commenced the tender offer on October 12, 2017 pursuant to the Amendment Memorandum, but it has not been
completed by the approval date of this quarterly report. Assuming the tender offer is completed successfully and all relatedtransactions are completed, it is expected that 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 of this 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
in North America, in order to expand global business of industrial equipment business. In accordance with the agreement, on
July 12, 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 Sullair business.
The following table summarizes the fair value of the consideration paid for the Sullair business and the provisional amounts of
the assets acquired and liabilities assumed recognized as of the acquisition date.
Millions of yen
Cash and cash equivalents
9,341
Trade receivables
9,351
Inventories
7,409
Other current assets
790
Non-current assets (excluding intangible assets)
9,296
Intangible assets
Goodwill (deductible for tax purposes)
17,121
Goodwill (not deductible for tax purposes)
46,907
71,170
Other intangible assets
171,385
Total
Current liabilities
Non-current liabilities
Total

67,282
10,81578,097

Cash paid for acquisition

93,288The goodwill mainly comprises excess earning power and expected synergies arising from the acquisition.
Hitachi America, Ltd. repaid USD 517 million (¥57,502 million) of loans which were included in the Sullair business, inaddition to the acquisition.

F-10

Notes to Condensed Quarterly Consolidated Financial Statements
September 30, 2017
The Company is currently evaluating the fair values to be assigned to assets and liabilities of the Sullair business at theacquisition date, and therefore the above amounts are subject to change.
The operating results of the Sullair business for the period from the acquisition date to September 30, 2017 were not material.
On a pro forma basis, revenues and net income attributable to Hitachi, Ltd. stockholders using an assumed acquisition date for
the Sullair business of April 1, 2017 would not differ materially from the amounts reported in the condensed quarterly
consolidated financial statements for the six months ended September 30, 2017.
The following are the main Business Acquisitions and Divestitures for the six months ended September 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
the Company 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-11

Notes to Condensed Quarterly Consolidated Financial Statements
September 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-12

Notes to Condensed Quarterly Consolidated Financial Statements
September 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 September 30 andMarch 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
September 30, 2017
Carrying amounts

March 31, 2017

Estimated
fair values

Carrying amounts

Estimated
fair values

AssetsInvestments in securities and otherfinancial assets
Lease receivables

86,17086,63581,01182,007

Debt securities

56,58756,593

155,745

155,751

Long-term loans receivable

99,765

101,416

102,384

103,257

Lease obligations

50,51050,502

49,70350,027

Bonds

159,846

163,577

159,820

164,037

Long-term debt

767,435

774,158

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-13

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

-

-

887

887

11,590

6,914

8,834

27,338-28,6707,834

36,504334,497

110

112,623447,230

346,087

35,694130,178

511,959-

61,261-

61,261-

61,261-

61,261

Derivatives
FVTOCI financial assets:
Investments in securities and otherfinancial assets
Equity securities
Total financial assets at fair value
FVTPL financial liabilities:
Other financial liabilities
Derivatives
Total financial liabilities at fair value
March 31, 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-14

Notes to Condensed Quarterly Consolidated Financial Statements
September 30, 2017
The following tables present the changes in Level 3 instruments measured on a recurring basis for the six months ended
September 30, 2017 and 2016.
September 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)

67

26

Gain in OCI [2]

5,539

-

-

5,539

Purchases

1,758

484

1,706

3,948

Sales and redemption(4,705)(589)-(5,294)

Acquisitions and divestitures

266

1

-

267

Other

176

(6)

-

170

113,510

8,834

7,834

130,178

6

20

67

93

Balance at end of period
Unrealized gain relating tofinancial assets held at end of period [4]September 30, 2016
Level 3 financial assets
Balance at beginning of period

Millions of yen
Equitysecurities

Debt
securities

Derivatives

Total

117,317

38,025

6,061

161,403

(88)

(73)

-

(161)

Loss in profit or loss [1]Loss in OCI [2](1,896)--(1,896)

Purchases

1,909

1,794

-

3,703

Sales and redemption(1,547)(10,966)-(12,513)

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

(168)

-

-

(168)

Other
Balance at end of period

320

(231)

-

89

112,506

27,982

6,061

146,549

(88)

(143)

-

(231)

Unrealized 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 September 30 and March 31, 2017 were ¥16,739 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-15

Notes to Condensed Quarterly Consolidated Financial Statements
September 30, 2017
(7) Dividends
Dividends paid on common stock for the six months ended September 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 on common stock whose record date falls in the six months ended September 30, 2017 and the effective date falls in thenext period are as follows:

Decision
The Board of Directors
on October 26, 2017

Cash dividends

Appropriation

Cash dividends(millions of yen)fromper share (yen)33,795Retained earnings

Record date

Effective date

7.0 September 30, 2017 November 28, 2017

Dividends paid on common stock for the six months ended September 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

6.0

Record date

Effective date

March 31, 2016

May 30, 2016

Dividends on common stock whose record date falls in the six months ended September 30, 2016 and the effective date falls in thenext period are as follows:

Decision
The Board of Directors
on October 28, 2016

Cash dividends

Appropriation

Cash dividends(millions of yen)fromper share (yen)28,968Retained earnings

F-16

Record date

Effective date

6.0 September 30, 2016 November 28, 2016

Notes to Condensed Quarterly Consolidated Financial Statements
September 30, 2017(8) Other Income and Expenses
The main components of other income and expenses for the six months ended September 30, 2017 and 2016 are as follows:
Millions of yen
2017

2016

Net gain (loss) on sales and disposals of fixed assets(1,412)289

Impairment losses(1,271)(24,143)

Net gain on business reorganization and others

2,068

47,114

Special termination benefits(4,488)(9,277)

Expenses related to competition law and others(13,839)(692)

Impairment losses are mainly recognized on property, plant and equipment, investment properties and intangible assets. Net gain 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 six months ended September 30, 2017 and2016 were ¥5,759 million and ¥35,468 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 six months ended September 30, 2017 and 2016 are as follows:
Millions of yen
2017

2016

Dividends received

3,954

4,207

Exchange gain (loss)

6,518(18,847)

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

F-17

Notes to Condensed Quarterly Consolidated Financial Statements
September 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 six months ended September 30, 2017 and 2016 are as
follows:
Millions of yen
2017

2016

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

505

1,171

(1,763)(1,124)(1,258)

47

(16)

(23)

(1,274)24
Millions of yen

2017

2016

Cash flows from discontinued operations
Cash flows from operating activities

2,036(1,455)

Cash flows from investing activities(5)-

Cash flows from financing activities

(967)

1,939

F-18

Notes to Condensed Quarterly Consolidated Financial Statements
September 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 six months
ended September 30, 2017 and 2016 are as follows:
Six months ended September 30
Number of shares

Weighted average number of shares on which basic EPS is calculated

2017

2016

4,827,973,540

4,828,184,694

4,417,815

845,435

4,832,391,355

4,829,030,129

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
Basic161,887

113,476

Other

-

(0)

Diluted161,887

113,476(1,274)

24

Other

-

-

Diluted(1,274)24

160,613

113,500

Other

-

(0)

Diluted160,613

113,500

Effect 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

Yen
2017

2016

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

33.53

23.50

Diluted

33.50

23.50

Basic

(0.26)

0.00

Diluted(0.26)

0.00

Basic

33.27

23.51

Diluted

33.24

23.50

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

EPS attributable to Hitachi, Ltd. stockholders

F-19

Notes to Condensed Quarterly Consolidated Financial Statements
September 30, 2017
The computations of net income attributable to Hitachi, Ltd. stockholders used to derive basic and diluted EPS for the threemonths ended September 30, 2017 and 2016 are as follows:
Three months ended September 30
Number of shares

Weighted average number of shares on which basic EPS is calculated

2017

2016

4,827,918,486

4,828,177,222

4,480,400

1,645,900

4,832,398,886

4,829,823,122

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
Basic86,74957,459

Other

-

(0)

Diluted86,74957,459(1,204)

(409)

Other

-

-

Diluted

(1,204)(409)

85,54557,050Effect of dilutive securities

Net 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)

Diluted85,54557,050
Yen

2017

2016

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

17.97

11.90

Diluted

17.95

11.90

Basic

(0.25)(0.08)

Diluted(0.25)(0.08)

Basic

17.72

11.82

Diluted

17.70

11.81

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

EPS attributable to Hitachi, Ltd. stockholders

F-20

Notes to Condensed Quarterly Consolidated Financial Statements
September 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 (¥140,634 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(¥31,816 million) and EUR 105 million (¥13,901 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 (¥84,648 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-21

Notes to Condensed Quarterly Consolidated Financial Statements
September 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 (¥21,432 million) in compensation primarily for performance related deficiencies of a power plant.
As of September 30, 2017, the amount of compensation claimed by the customer was changed to EUR 163 million (¥21,759
million). Although, the Company, the subsidiary in Europe and the consortium consisting of the Company and the subsidiary inEurope 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. 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.
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 thedetails of the demand letter lacked legal grounds under any agreement and thus the Company cannot accept it.
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 it
F-22

Notes to Condensed Quarterly Consolidated Financial Statements
September 30, 2017
lacks legal grounds under any agreement as does the request of March 2016. On August 21, 2017, the Company received a noticefrom the Japan Commercial Arbitration Association (hereinafter, the “JCAA”) stating that MHI had filed a request for arbitration
with the JCAA on July 31, 2017 in order to claim for payment of ZAR 90,779 million (approximately ¥774.3 billion when ZAR
1 = ¥8.53) as the said transfer price adjustment, etc. against the Company. The Company will address this claim and explain its
position in the arbitration proceedings.
The Company has recorded provisions based on reasonable estimates for the aforementioned agreement related to the South
African Business. The amount of the said transfer price adjustment, etc. to be determined under the agreement may be different
from the accrued amount.
(13) Approval of Condensed Quarterly Consolidated Financial Statements
The condensed quarterly consolidated financial statements were approved on November 14, 2017 by Toshiaki Higashihara,
President and CEO of the Company.

F-23

[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]

November 14, 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 second quarter of the 149th fiscal year (from July 1, 2017 to
September 30, 2017) were adequate under the Financial Instruments and Exchange Act.
2. Special Notes
None.

A-2