Outline of Consolidated Financial Results for Fiscal 2009
May 11, 2010

Hitachi, Ltd.

Outline of Consolidated Financial Results for Fiscal 2009
May 11, 2010

Contents
1. Outline of Consolidated Financial
Results for Fiscal 2009
2. Outlook for Fiscal 2010
3. Overview by Industry Segment

Copyright © 2010, Hitachi, Ltd., All rights reserved.

2

Outline of Consolidated Financial Results for Fiscal 2009
May 11, 2010

Contents
1. Outline of Consolidated Financial
Results for Fiscal 2009
2. Outlook for Fiscal 2010
3. Overview by Industry Segment

Copyright © 2010, Hitachi, Ltd., All rights reserved.

3

1-1. Financial Results Highlights
Highlights of Fiscal 2009 Results
Revenues decreased 10% YoY

Revenues- Revenues declined year over year most notably in the Information & Telecommunication
Systems, High Functional Materials & Components, and Components and Devices
segments in line with sluggish economic conditions.

Consolidated operating income rose 59% YoY

Operating income- Reduced fixed costs and materials procurement costs Companywide.
- Business structure reforms produced much improved earnings in the Automotive Systems
and Digital Media & Consumer products segments.
- Earnings declined in the Information & Telecommunication Systems and Construction
Machineryy segmentsgdue mainly
y to lower revenues.

Net other deductions improved 278.4 billion yen YoY

Net other deductions- Improvement in net equity in losses due to better performances by semiconductor-related
affiliates and other entities.
- Stabilization in forex markets eliminated exchange
g losses.
- Decrease in business restructuring expenses with the completion of the plan.

Income taxes decreased 357.2 billion yen YoY

Income taxes
Net income (loss)
attributable to Hitachi, Ltd.

Free cash flows- Incurred a one-off charge of 66.7 billion yen for write-offs of deferred tax assets
associated with making
g5p
publicly
y listed companiespwhollyy owned subsidiaries by
y TOBs.
This may lead to lower tax expenses from fiscal 2010.

Net loss attributable to Hitachi, Ltd. improved 680.3 billion yen YoY- Became profitable on a quarterly basis in terms of net income attributable to Hitachi, Ltd.
from the third q
quarter ((October-December 2009)) of fiscal 2009.
Free cash flows was a positive 267.7 billion yen (258.7 billion yen YoY improvement)- Achieved positive free cash flows for three straight years.
Copyright © 2010, Hitachi, Ltd., All rights reserved.

4

1-2. Consolidated Statements of Operations
Billions of yen

Revenues

Fiscal 2008

Fiscal 2009

10,000.3

8,968.5

Year-over-year[90%](1,031.8)[159%]

Operating income

127.1

202.1

Net other deductions((417.0))((138.5))

278.4

Income (loss) before
income taxes(289.8)

63.5

353.4

Income taxes

505.2

147.9

(357.2)Net loss(795.1)(84.3)

710.7

(7.7)

22.5

30.3

(787 3)(787.3)(106 9)(106.9)

680 3
680.3

Net income (loss) attributable
to noncontrolling interests
Net loss attributable to Hitachi
Hitachi, Ltd
Ltd.

75.0

Copyright © 2010, Hitachi, Ltd., All rights reserved.

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

Operating income

202.1

127.1

Fixed cost
reductions:
330.0
Lower capacity
utilization, etc.:(360.0)Fiscal 2008 Fiscal 2009

Lower sales prices:(200.0)Effect offoreign exchange
movements:(40.0)

Cost reductions:
345 0
345.0

Copyright © 2010, Hitachi, Ltd., All rights reserved.

6

1-4. Major Factors for Change in Net Income (Loss) Attributable to Hitachi, Ltd.
Operating 当社に帰属する
income→Net income 当期純損失(loss)
Attributable to Hitachi, Ltd.

Billions of yen

202.1

Losses on
disposal of fixed
asset, shareh
Net equity
write-downs,
in losses ofand others :affiliated(30.2)
companies:(58.1)

Incometaxes:(147.9)Includingwrite-downof deferred
tax assets :(67.0)

Structuralreform-related
expenses:(50.3)(106.9)FY2009OperatingincomeNet income (loss)
Attributable to
Hitachi, Ltd.

Net income attributable
to noncontrolling interests :(22.5)
Copyright © 2010, Hitachi, Ltd., All rights reserved.

71-5. Major Factors for Change in Net Loss Attributable to Hitachi, Ltd. (Year-over-year)
Net loss attributable
to Hitachi, Ltd.

Billions of yen

Structural reform-related
expenses:100.9
100 9((106.9))

Net loss on
Securities:42.8
Exchange losses
and other:30.8
Improved net equity
in income ofaffiliated companies: 104.0

Net income
attributable
to noncontrollinginterests: (30.3)
Decreasing ofincome taxes: 357.2
Including writedown of deferred
tax assets :323.0(787.3)Fiscal 2008 Fiscal 2009

Improved operating
income: 75.0

Copyright © 2010, Hitachi, Ltd., All rights reserved.

8

1-6. Revenues by Market
Billions of yen

Fiscal 2008

Ratio

Fiscal 2009

Ratio

Yearover-yearJapan

5,861.4

59%

5,313.7

59%

91%

Outside Japan

4,138.941%

3,654.741%

88%

1,911.2

19%

1,699.0

19%

89%

China

1,078.5

11%

991.6

11%

92%

North America

899.5

9%

729.6

8%

81%

Europe

904.4

9%

824.6

9%

91%

Other Areas

423.6

4%

401.2

5%

95%

10,000.3

100%

8,968.5

100%

90%

Asia

Total

Ratio of overseas revenues 41 % → 41 %Copyright © 2010, Hitachi, Ltd., All rights reserved.

91-7. Consolidated Balance Sheets
Billions of yen
As of March 31, 2009

As of March 31, 2010

Change fromMarch 31, 2009

Total assets

9,403.7

8,951.7(451.9)Total liabilities

7,224.3,

6,683.9,((540.4))

Interest-bearing debt

2,820.1

2,367.1(452.9)Total Hitachi, Ltd.
stockholders’’ equity

1 049 91,049.9

1 284 6
1,284.6

234 7
234.7

Noncontrolling interests

1,129.4

983.1(146.2)

11.2%

14.4%

3.2points
3
2points
improvement

1 29times
1.29times

1 04times
1.04times

0.25points
improvement

Total Hitachi,
Hitachi Ltd.
Ltd
stockholders’ equity ratio

D/E ratio(I l di noncontrolling(Including
t lli interests)i tt )Copyright © 2010, Hitachi, Ltd., All rights reserved. 10

1-8. Consolidated Statements of Cash Flows
Billions of yen
Change fromMarch 31, 2009

As of March 31, 2009

As of March 31, 2010

Cash flows
from operating activities

558.9

798.2

239.3

Cash flows
from investing activities(550.0)(530.5)

19.4

8.9

267.7

258.7

284.3

(502.3)(786.7)

Free cash flows
Cash flows
from financing activities

Copyright © 2010, Hitachi, Ltd., All rights reserved. 11

1-9. Consolidated Capital Investment, Consolidated R&D Expenditure(1) Consolidated capital investment

Billions of yen

Fiscalsca 2008
008
Consolidated capital investment

Fiscalsca 2009
009

Year-over-year
y

788.4

546.3

69%

Internal use assets

424.0

247.4

58%

Leasing assets

364.4

298.9

82%

(2) Consolidated R&D expenditureBillions of yen

Fiscal 2008

Fiscal 2009

Year-over-year

Consolidated R&D expenditures

416.5

372.4

89%

P
Percentaget
off revenues

4.2%

4.2%

-

Copyright © 2010, Hitachi, Ltd., All rights reserved. 12

1-10. Segment Information—New Segmentation
Segment Name

Major Companies, Group Companies

Segment Name

Major Companies, Group Companies

Information &Telecommunication
Systems

Information & Telecommunication
Systems Company

Automotive
Systems

Hitachi Automotive Systems, Ltd.,
Clarion Co., Ltd.

Power Systems

Power Systems Company

Social Infrastructure&Industrial Systems

Industrial & Social Infrastructure Systems
Company,
Urban Planning and Development Systems
Company,
Defense Systems Company,
Hitachi Plant Technologies, Ltd.,
Hitachi Industrial Equipment Systems Co., Ltd.

Components &Devices

Battery Systems Company,
Hitachi Maxell, Ltd.,
Hitachi Vehicle Energy,
Energy Ltd.,Ltd
Hitachi Displays, Ltd.,
Hitachi Global Storage Technologies

Digital media &Consumer Products

Hitachi Appliances, Inc.,
Hitachi Consumer Electronics Co., Ltd.

Financial Services

Hitachi Capital Corporation

OthersHitachiHit
hi Transport
Tt System,
S t
Ltd.,
Ltd
Chuo Shoji Ltd.,
Nikkyo Create,Ltd.,
Hitachi Life, Ltd.,
Hitachi Insurance Services,Ltd.
,
etc.

Electronic Systems &Equipment

Hitachi High-Technologies Corporation,
Hitachi Medical Corporation,
Hitachi Kokusai Electric, Inc.,
Hitachi Koki Co., Ltd.,
Hitachi Via Mechanics
Mechanics, Ltd.
Ltd

Construction Machinery

Hitachi Construction Machinery Co., Ltd.

High Functional
Materials & Components

Hitachi Metals, Ltd.,
Hitachi Cable,
Cable Ltd.,Ltd
Hitachi Chemical Co., Ltd.

Segment Information are prepared based on U.S.GAAPs starting from Fiscal 2009.
The Company has changed the business segment classification starting from Fiscal 2009.
Figures for Fiscal 2008 have been restated to reflect the reclassification.
Copyright © 2010, Hitachi, Ltd., All rights reserved. 13

1-11. Revenues by Industry Segment
Billions of yen

Fiscal 2008

Fiscal 2009

Year-over-year

1,945.3

1,705.5

88%

862.3

882.1

102%

Social Infrastructure &Industrial Systems

1 334 2
1,334.2

1 250 2
1,250.2

94%

Electronic Systems & Equipment

983.8

998.6

102%

Construction Machinery

724.6

583.6

81%

1,561.0

1,249.3

80%

Automotive Systems

681.7

638.8

94%

Components & Devices

978.2

754.8

77%

1,103.8

929.2

84%

Financial Services

401 3
401.3

419 6
419.6

105%

Others

830.8

763.6

92%

Eliminations & Corporate items(1 407 2)(1,407.2)(1 207 2)(1,207.2)

-

Total

10,000.3

8,968.5

90%

Information & Telecommunication Systems

Power Systems

High Functional Materials & Components

Digital media & Consumer Products

Copyright © 2010, Hitachi, Ltd., All rights reserved. 14

1-12. Operating Income (Loss) by Industry Segment
Billions of yen

Fiscal 2008

Fiscal 2009

Year-over-year

138.4

94.5

(43.8)

3.4

22.0

18.5

Social Infrastructure &Industrial Systems

34 4
34.4

42 0
42.0

76
7.6

Electronic Systems & Equipment

25.7

(5.2)

(30.9)

Construction Machinery

51.3

17.6

(
(33.6))High Functional Materials & Components

25.2

44.4

19.1

Automotive Systems(60.5)

(5.4)

55.0

Components & Devices

5.7

1.1

(4.6)

(110.5)

(7.2)

103.3

Financial Services

66
6.6

85
8.5

18
1.8

Others

24.5

19.4

(5.0)

Eliminations & Corporate items(17 4)(17.4)(29 8)(29.8)(12 3)(12.3)

Total

127.1

202.1

75.0

Information & Telecommunication Systems

Power Systems

Digital media & Consumer Products

Copyright © 2010, Hitachi, Ltd., All rights reserved. 15

1-13. Major Initiatives to Create a High Profit Structure in FY2009■Major Initiatives
Fixed cost reduction
Reduced material
procurement costs

Reduced 330.0 billion yen- Realigned
R li
d and
d iintegratedtt db
bases, ddownsized
i d ththe workforce,
kf
etc.
t

Reduced by 310.0 billion yen- Expanded centralized purchasing, strengthened global procurement, etc.

Income taxes

Wrote-off 67.0 billion yen in deferred tax assets (One-time write-off associated withmaking 5 publicly listed companies wholly owned subsidiaries). Expect substantiallylower tax expenses from fiscal 2010 due to the benefits of consolidated taxation.

Business structurereforms- Continued implementing business structure reforms in the Automotive Systems,
Systems andDigital Media & Consumer Products segments. Returned to profitability on a quarterly
basis in the Automotive System Segment from the third quarter (October-December2009) and in the Digital Media & Consumer Products Segment from the second
quarter (July-September(July September 2009) of fiscal 2009.
- HDD operations were profitable in the January-December 2009 fiscal year for thesecond year running.

■ FY2009 financial results by quarterly basis
First Quarter

Billi
Billions
off yen
Second Quarter

Third Quarter

Fourth Quarter

Operating income(loss)(50.5)

25.8

66.3

160.5

Net income(loss)
Attributable to Hitachi, Ltd.

(82.6)(50.5)

21.8

4.3

Copyright © 2010, Hitachi, Ltd., All rights reserved. 16

Outline of Consolidated Financial Results for Fiscal 2009
May 11, 2010

Contents
1. Outline of Consolidated Financial
Results for Fiscal 2009
2. Outlook for Fiscal 2010
3. Overview by Industry Segment

Copyright © 2010, Hitachi, Ltd., All rights reserved. 17

2-1. Outlook for Fiscal 2010
Projections for fiscal 2010 assume an exchange
rate of 85 yen to the U.S. dollar and 120 yen to the euro.

Billions of yen

Fiscal 2009

Fiscal 2010
(Forecast)

8 968 5
8,968.5

9 200 09,200.0

Operating income

202.1

340.0

137.8

Net other deductions(138.5)(25.0)

113.5

Income before income taxes

63.5

315.0

251.4

Income taxes

147.9

110.0

(37.9)Net income (loss)(84 3)(84.3)

205 0
205.0

289 3
289.3

Net income (loss) attributable
to noncontrolling interests

22.5

75.0

52.4

Net income (loss) attributable to
Hitachi, Ltd.

(106.9)

130.0

236.9

Revenues

Year-over-year[103%]

231 4
231.4[168%]

Copyright © 2010, Hitachi, Ltd., All rights reserved. 18

2-2. Reasons for Net Income (Loss) Attributable to Hitachi, Ltd. and Response【Fiscal 2010】【Fiscal 2009】

Billions of yen

340.0
Net otherdeductions:(138 5)(138.5)

Net otherdeductions:(25.0)

202.1

Incometaxes:(110.0)

Incometaxes:(147.9)

Attributable tononcontrollinginterests:(75 0)interests:(75.0)
OperatingincomeOperatingincomeAttributable tononcontrolling
Interests: ((22.5))

130 0
130.0

Net income
attributable
to Hitachi
Hitachi, Ltd.
Ltd

(106.9)Net loss
attributable
tt ib t bl
to Hitachi, Ltd.
Copyright © 2010, Hitachi, Ltd., All rights reserved. 19

2-3. Outlook for Fiscal 2010 Revenues by Industry Segment
Billions of yen

Fiscal 2009

Fiscal 2010
(Forecast)Year-over-year

1,705.5

1,730.0

101%

882.1

880.0

100%

1 250 2
1,250.2

1 090 01,090.087%

Electronic Systems & Equipment

998.6

1,070.0107%

Construction Machinery

583 6
583.6

720 0
720.0

123%

1,249.3

1,400.0112%

Automotive Systems

638.8

680.0

106%

Components & Devices

754.8

870.0

115%

Digital media & Consumer Products

929.2

920.0

99%

Fi
Financial
i lS
Services
i

419 6
419.6

360 0
360.0

86%

Others

763.6

780.0

102%

Eliminations & Corporate items(1 207 2)(1,207.2)(1,300.0)
1 300 0)-Total

8,968.5

9,200.0

103%

Information & Telecommunication Systems

Power Systems
Social Infrastructure & Industrial Systems

High Functional Materials & Components

Copyright © 2010, Hitachi, Ltd., All rights reserved. 20

2-4. Outlook for Fiscal 2010 Operating Income (Loss) by Industry Segment
Billions of yen

Fiscal 2009

Fiscal 2010
(Forecast)Year-over-year

Information & Telecommunication Systems

94.5

100.0

5.4

Power Systems

22.0

29.0

6.9

Social Infrastructure & Industrial Systems

42 0
42.0

37 0
37.0

(5 0)
(5.0)

Electronic Systems & Equipment

(5.2)

28.0

33.2

Construction Machinery

17 6
17.6

35 0
35.0

17 3
17.3

High Functional Materials & Components

44.4

82.0

37.5

Automotive Systems

(5.4)

17.0

22.4

Components & Devices

1.1

54.0

52.8

Digital media & Consumer Products

(7.2)

7.0

14.2

Fi
Financial
i lS
Services
i

85
8.5

15 0
15.0

64
6.4

Others

19.4

20.0

0.5

Eliminations & Corporate items(29 8)(29.8)(84 0)(84.0)(54 1)(54.1)

Total

202.1

340.0

137.8

Copyright © 2010, Hitachi, Ltd., All rights reserved. 21

Outline of Consolidated Financial Results for Fiscal 2009
May 11, 2010

Contents
1. Outline of Consolidated Financial
Results for Fiscal 2009
2. Outlook for Fiscal 2010
3. Overview by Industry Segment

Copyright © 2010, Hitachi, Ltd., All rights reserved. 22

3-1. Information & Telecommunication Systems
Revenues
2 000
2,000

Billions of yen

Result Overview•Figures in brackets are comparisonswith previous year

FY20091,945.3
1,705.5

1,730.0

1,500

Revenues: 1,705.5,
billion yen
y [88%][],
Operating income: 94.5 billion yen [(43.8) billion yen]
- Lower revenues and earnings due to constraints on IT investment.

FY2010（Forecast）
Revenues: 1,730.0 billion yen [101%],
Operating income: 100.0 billion yen [5.4 billion yen]
- The Japanese IT market is expected to bottom out in the firsthalf of FY2010 and then pick up slowly in the second half.

1 000
1,000
500
0

FY2008FY2009Main Initiatives

Operating income
150

FY2010(Forecast)Billions of yen- DevelopDl bbusinessicenteredt d on storage,t
consulting
lti servicesiand data centers.

138.4

94.5

100

Expand global business

100.0

Strengthen the cloud computing business- Develop eco-conscious data center services.
- Expand and enhance lineup of various cloud computing-related
solutions.

Promote consolidated group management50- Hitachi Software Engineering Co., Ltd.,y& Services,, Ltd. to merge.
g ((October 2010))
and Hitachi Systems
0

FY2008FY2009FY2010(Forecast)
Copyright © 2010, Hitachi, Ltd., All rights reserved. 23

3-2. Power Systems
Revenues

Billions of yen

Result Overview•Figures in brackets are comparisonswith previous year

FY2009
1 000
1,000
862.3

882.1

880.0

750

Revenues: 882.1billion yyen [[102%]] ,Operating income: 22.0 billion yen [18.5 billion yen]
- Expand the thermal power plants business overseas.
- Improved margins on large projects through better project
management, etc.

500

FY2010（Forecast）

250

Revenues: 880.0 billion yen [100%],
Operating income: 29.0billion yen [6.9 billion yen]
- Continue strengthening project management.
- Continue fixed cost-reduction initiatives.

0

FY2008FY2009Operating income

FY2010(Forecast)Billions of yen

29.0

30
22.0
20

Step up global business development.
- Thermal power plants:
Reinforce sales and production framework through stronger
cooperation with overseas bases and local partners.
- Nuclear power plants:
Win more orders in emerging economies through greater
cooperation with governments and power utilities

Step up activities in low
low-carbon
carbon energy technologies

10
3.4
0

Main Initiatives

FY2008FY2009FY2010(Forecast)- Improve the efficiency of thermal power plants/accelerate
development of carbon dioxide capture technologies.
- Continue to take part in constructing new ABWR plants
in the nuclear power plant field in Japan.
- Increase orders for wind power generation and mega-solar
systems.
- Actively promote joint research on smart grids anddemonstration businesses. (Japan, U.S., China, India, etc.)
Copyright © 2010, Hitachi, Ltd., All rights reserved. 24

3-3. Social Infrastructure & Industrial Systems
Revenues

Billions of yen

Result Overview•Figures in brackets are comparisonswith previous year

FY20091 500
1,500

1,334.2

1,250.2
1,090.0

1,000

FY2010（Forecast）

500

0

Revenues: 1,250.2 billion yyen [[94%]] ,Operating income: 42.0 billion yen [7.6 billion yen]
- Lower revenues due to decreased sales of elevators andescalators, and industrial equipment.
- Increased earnings through improved project management,
cost reductions, etc.

FY2008FY2009FY2010(Forecast)

Revenues: 1,090.0 billion yen [87%],
Operating income: 37.0 billion yen [(5.0) billion yen]
- Decrease in railway systems overseas and price drop in the social
and industrial fields
fields.
- Expect Chinese elevator and escalator business to continue growing.

Main Initiatives

Operating income

Billions of yen

42.0
40

37.0

34.4

Strengthen and expand the railway systems business- Expand
E
dU
U.K.
K and
d Chi
Chinese b
businesses,i
ffocus on hi
high-speedhdrailways and monorail projects.
- Strengthen cooperation with partners in Japan and overseas.

30

Increase competitiveness and globalize operationsin the social and industrial fields

20- Provide total solutions and develop the water business globally
through cooperation within the Hitachi Group.

10

Reinforce and expand the elevator and escalator business0- Win moreo e new
e oordersde s ooverseas,
e seas, espec
especiallya y in C
China.
a- Increase orders for renewing or replacing escalatorsand escalators in Japan.

FY2008FY2009FY2010(Forecast)

Copyright © 2010, Hitachi, Ltd., All rights reserved. 25

3-4. Electronic Systems & Equipment
Revenues
1,000

983 8
983.8

Billions of yen

998.6
998
6

1,070.0

750
500

FY2008FY2009Operating income (loss)
30

FY2009
Revenues: 998.6 billion yyen [[102%]] ,Operating loss: (5.2) billion yen [(30.9) billion yen]
- Revenues increased due to consolidation of
Hitachi Kokusai Electric Inc. and Hitachi Koki Co., Ltd.
- Lower earnings at Hitachi High-Technologies Corporation,
Hitachi Medical Corporation and Hitachi Koki, narrower loss
att Hitachi
Hit hi K
Kokusaiki El
Electric.
ti

FY2010（Forecast）

250
0•Figures in brackets are comparisonswith previous year

Result Overview

FY2010(Forecast)

Revenues: 1,070.0 billion yen [107%],
Operating income: 28.0 billion yen [33.2 billion yen]
- Higher revenues and earnings projected at every company
in line with recovering market conditions.

Main Initiatives
Billions of yen

28.0
25.7

Hitachi High-Technologies Corporation- ExpandEd salesl iintot growth
th fi
fieldsld suchh as semiconductorid tmanufacturing equipment for memory devices.
- Create new businesses and strengthen trading functions.

20

Hitachi Medical Corporation

10- Strengthen overseas production, sales and services framework- Reinforce product development capabilities (Quickly develop
next-generation products)

Hitachi Kokusai Electric Inc.

0
-10

- Expand business domains with new products in semiconductor
manufacturing equipment, strengthen service and parts business.

(5 2)
(5.2)

FY2008FY2009FY2010(Forecast)

Hitachi Koki Co., Ltd.
- Increase transactions globally, expand sales of engines andhorticultural tools.
Copyright © 2010, Hitachi, Ltd., All rights reserved. 26

3-5. Construction Machinery
Revenues

Billions of yen

724.6

720.0
583.6

600

200

FY2008FY2009FY2010(Forecast)Billions of yen

51 3
51.3

40

35.0

Revenues: 583.6 billion yyen [[81%]] ,Operating income: 17.6 billion yen [(33.6) billion yen]
- Lower revenues and earnings due to global market sluggishness.
- Improvement in China and other emerging countries.

17.6

20

Revenues: 720R
720.0
0 billibillion yen [123%][123%],
Operating income: 35.0 billion yen [17.3 billion yen]
- Projecting higher revenues and earnings in line with recovering
global demand for hydraulic excavators.
- Made an Indian equity-method affiliate a consolidated subsidiary.
(E d off March(End
M h 2010)

Strengthen overseas business on a regional basis- India:
I di L
Leverage th
the consolidation
lid ti off an equity-methoditth d affiliate
ffili t tto
strengthen local business and use as base to break intoneighboring emerging countries.
- Russia: Establish a sales company to facilitate the supply of products.
Strengthen the wheel loader business- MadeM d TCM a wholly
h ll ownedd subsidiaryb idi(D(Decemberb 2009) anddtransferred production bases to
Hitachi Construction Machinery Co., Ltd. (April 2010)- Acquired an equity interest in KCM Corporation,a subsidiary of Kawasaki Heavy Industries, Inc. (April 2010)

30

10
0

FY2009Main Initiatives

Operating income
50•Figures in brackets are comparisonswith previous year

FY2010（Forecast）

400

0

Result Overview

S
Strengthenbusiness targeting mines
FY2008FY2009FY2010(Forecast)- Acquired a company supplying mine management systems
in Canada (July 2009)
Copyright © 2010, Hitachi, Ltd., All rights reserved. 27

3-6. High Functional Materials & Components
Revenues

Billions of yen

Result Overview•Figures in brackets are comparisonswith previous year

FY20091 561 01,561.0
1,500
1,249.3

1,400.0

1,000

FY2010（Forecast）
Revenues: 1,400.0 billion yen [112%],
Operating income: 82.0 billion yen [37.5 billion yen]

500

0

Revenues: 1,249.3 billion yen [80%] ,Operating income: 44.4 billion yen [19.1 billion yen]
-Posted higher earnings on lower revenues, overcoming the impact ofa drop-off in the first half of fiscal 2009 with cost cuts and other actions.
- Improvement mainly in electronics-related products for LCD- andsemiconductor-related applications, and components for automotive
applications
applications.

FY2008FY2009Operating income
80

FY2010(Forecast)- Hitachi Cable, Ltd., Hitachi Metals, Ltd. and Hitachi Chemical Co., Ltd.
are all projecting higher revenues and earnings on the back of recovery
in electronics- and automotive-related markets as well as capital
investment.

Billions of yen

Main Initiatives

82 0
82.0

Hitachi Cable
Cable, Ltd
Ltd.

60

- Focusing on electric power infrastructure, next-generation energy,
industrial infrastructure.
- Aiming to raise overseas sales ratio (FY2012 target: 38%)

Hitachi Metals, Ltd.

44 4
44.4

- Aiming
Ai i to raise
i overseas sales
l ratioi (to( at leastl
50%
0% over theh next3 years)- Aiming to increase sales ratio generated by new products,
and respond to CO2 emissions regulations.

40
25.2
20

Hitachi Chemical Co.,, Ltd.
0

FY2008FY2009FY2010(Forecast)- Focusing on information & telecommunications, energy andenvironment, automobiles and life science fields.
- Develop new products and open up new markets.
Copyright © 2010, Hitachi, Ltd., All rights reserved. 28

3-7. Automotive Systems
Revenues
681.7

Billions of yen

638 8
638.8

680.0

600

400

200

Result Overview•Figures in brackets are comparisonswith previous year

FY2009
Revenues: 638.8 billion yen [94%] ,Operating loss: (5.4) billion yen [55 billion yen]
- Higher second-half revenues in line with rising automobile
shipments, centered on eco-conscious cars, failed to compensate
for a first-half decline, leading to lower overall revenues.
- The operating loss was much narrower due to improved capacity
utilizationtili ti and
d th
the b
benefits
fit off businessb i
structuret treforms.
f
The segment returned to profitability in the second half ofthe fiscal year.

FY2010（Forecast）
0

FY2008FY2009Operating income (loss)

FY2010(Forecast)Billions of yen

17.0

20

- Concentrate business resources on strengthening electronic
powertrain systems and engine management systems businesses
f eco-consciousforivehicles.
hi l

(5.4)
(20)

Continue with cost-structure reforms

(40)

(80)

Main Initiatives
Continue focusing on eco-conscious vehicles

0

(60)

Revenues: 680.0 billion yen [106%],
Operating income: 17.0 billion yen [22.4 billion yen]
- Projecting higher earnings and a return to profitability on increased
revenues due to rising automobile shipments in emerging
economies and elsewhere, and other factors.

- Strengthen the ability to provide systems leveraging electronic
control and other outstanding technologies.
(60.5)

FY2008Continue to optimize business bases
FY2009FY2010(Forecast)- Optimize production among Japanese and overseas bases
leveraging elemental technology strengths.
Copyright © 2010, Hitachi, Ltd., All rights reserved. 29

3-8. Components & Devices (1)Revenues

Billions of yen

Result Overview•Figures in brackets are comparisonswith previous year

FY2009
1,000

978 2
978.2
870.0
754.8

750

FY2010（Forecast）

500
250
0

FY2008FY2009FY2010(Forecast)Billions of yen

Hitachi Global Storage Technologies

54 0
54.0

- Entered the external HDD business with the acquisition of
Fabrik, Inc. (April 2009)- Acquired a Malaysian substrate manufacturing facility (July 2009)- Jointly developing SSD for enterprise use with U.S. company Intel,
which is planning to launch SSD products before the end of 2010.

50
40
30

Hitachi Maxell, Ltd.
- Expand sales of mid-sized lithium-ion batteries for power tools
and other applications.
- Promote development of laminated batteries for electricmotorcycles.

20

0

Revenues: 870.0 billion yen [115%],
Operating income: 54.0 billion yen [52.8 billion yen]
- Projecting higher revenues and earnings mainly due to expanding
sales of lithium-ion batteries, especially for mobile phones, as wellas growth in HDD shipments in line with recovering HDD
market conditions.

Main Initiatives

Operating income

10

Revenues: 754.8 billion yyen [[77%]] ,Operating income: 1.1 billion yen [(4.6) billion yen]
- HDD operations posted lower sales and earnings due toconstraints on IT investment.
- Sales of displays dropped for mobile phones and game consoles.

5.7

FY20081.1

FY2009Hitachi Displays, Ltd.
FY2010(Forecast)- Expand sales of high-resolution, touch screen products.
Copyright © 2010, Hitachi, Ltd., All rights reserved. 30

3-8. Components & Devices (2) (Overview of Hard Disk Drive Business）
FY 2008

FY 2010

Total

Three months
ended June 30

(A)

(B)

(C)

Jan – Dec.2008

Jan – Mar. 2009

Jan – Dec.2009

Billions of yen

573.3

97.7

451.7

79%

132.3

135%

Millions of dollars

5,574

1,026

4,821

86%

1,459

142%

Billions of yen

21.4

△5.4

9.2

43%

19.7

-

Milli
Millions
off dollars
d ll

208

△57

106

51%

217

-

Shipment PeriodR
Revenues

Operatingincome (loss)

FY 2009

Result Overview•Figures in brackets are comparisonswith previous year

Total

Three months ended June 30(C)/(A)X100(D) (Preliminary)
Jan – Mar. 2010

Main Initiatives

FY2009

Increase profitability and cut costs

Revenues: 451.7 billion yen [79%] ,Operating income: 9.2 billion yen [(12.2) billion yen]
- Posted lower revenues and earnings due to the impact ofconstrained IT investment in the first six months of 2009.
- Increased revenues and earnings in the October - December
quarter of 2009 thanks to recovering market conditions.

- Optimize the product mix.
- Create a more efficient supply chain.
- Efficiently utilize manufacturing bases.

FY2010（Forecast）- Projecting higher earnings on higher revenues mainly due torecovering market conditions and cost
cost-cutting
cutting benefits
benefits.

(D)/(B)X100

Strict management of operating costs- Improve business management to facilitate expansion.
- Selectively invest in high-profit fields.

Invest to drive sales growth and earnings- Invest to strengthen technological and production capabilities.
R i production
d ti efficiency
ffi i
and
d efficiently
ffi i tl utilize
tili assets.
t- RaiseCopyright © 2010, Hitachi, Ltd., All rights reserved. 31

3-9. Digital media & Consumer Products
Revenues

Billions of yen

Result Overview•Figures in brackets are comparisonswith previous year

FY20091,103.8

600

Revenues: 929.2 billion yyen [[84%]] ,Operating loss: (7.2) billion yen [103.3 billion yen]
- Significant year-over-year improvement in the operating loss due
to progress made with business structure reforms.
- Moved into the black on a quarterly basis from the second
quarter (July-September 2009).

400

FY2010（Forecast）

1,000

929.2

920.0

800

200
0

FY2008FY2009Operating income (loss)

FY2010(Forecast)Main Initiatives
Billions of yen

70
7.0
0
(7.2)

(20)

Revenues: 920.0 billion yen [99%],
Operating income: 7.0 billion yen [14.2 billion yen]
- Projecting a return to full-year profitability due to the benefits ofb ibusiness
structuret treformsfini th
the digitaldi it l media
di bbusiness.
iStrengthen B2B business- StrengthenStth efforts
ff t tot developdl theth LCD projector
j t market,
k tparticularly in emerging countries.

Continue work to stabilize the TV business operating base(40)

- Bolster the lineup by using OEM and manufacturing outsourcing,and improve the cost structure.

(60)

Expand the comprehensive air conditioning business globally(80)- Push ahead with business expansion in Brazil and other emerging
countries.

(100)
(120)

(110.5)

FY2008FY2009FY2010(Forecast)

Maintain and expand earnings in the home appliancesbusiness- Expand the business in a way that addresses the needs in eachcountry
Copyright © 2010, Hitachi, Ltd., All rights reserved. 32

3-10. Financial Services / Others
Financial Services

Others

Revenues
400

401.3

Billions of yen

419.6

Revenues
800

780.0

FY2009FY2010(Forecast)

600

200

400

100

200

FY2008FY2009Operating income

FY2010(Forecast)Billions of yen

0

FY2008Operating income

20.0
10

Billions of yen

24.5

15.0

15

19.4

20.0

FY2009FY2010(Forecast)

8.5
6.6

10.0

5

0

763.6

360.0

300

0

830.8

Billions of yen

FY2008FY2009FY2010(Forecast)

0.0

FY2008

Copyright © 2010, Hitachi, Ltd., All rights reserved. 33

Cautionary Statement
Certain statements found in this document may constitute “forward-looking statements” as defined in the U.S. Private Securities Litigation Reform Act of 1995. Such “forward-looking
statements” reflect management’s current views with respect to certain future events and financial performance and include any statement that does not directly relate to any historical or
current fact. Words such as “anticipate,” “believe,” “expect,” “estimate,” “forecast,” “intend,” “plan,” “project” and similar expressions which indicate future events and trends may identify“forward-looking statements.” Such statements are based on currently available information and are subject to various risks and uncertainties that could cause actual results to differ
materially from those projected or implied in the “forward-looking statements” and from historical trends. Certain “forward-looking statements” are based upon current assumptions of future
eventst whichhi h may nott prove tto b
be accurate.
t U
Undue
d reliancelishouldh ld nott b
be placedld on “f“forward-looking
d l ki statements,”t t
t ” as suchh statementst tt speakk only
l as off theth dated t off thisthi document.
dtFactors 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 investments in Hitachi’s major markets, particularly Japan, Asia, the United States and Europe, as well as levels of demand in the majorindustrial sectors which Hitachi serves, including, without limitation, the information, electronics, automotive, construction and financial sectors;- exchange rate fluctuations for the yen and other currencies in which Hitachi makes significant sales or in which Hitachi’s assets and liabilities are denominated, particularly against the U.S. dollar and the euro;- uncertainty as to Hitachi’s ability to access, or access on favorable terms, liquidity or long-term financing;- uncertainty as to general market price levels for equity securities in Japan, declines in which may require Hitachi to write down equity securities that it holds;- the potential for significant losses on Hitachi’s investments in equity method affiliates;- increased commoditization of information technology products and digital media-related products and intensifying price competition for such products, particularly in the Components & Devices and the Digital Media &Consumer Products segments;- uncertainty as to Hitachi’s ability to continue to develop and market products that incorporate new technology on a timely and cost-effective basis and to achieve market acceptance for such products;- rapid technological innovation;- the possibility of cost fluctuations during the lifetime of or cancellation of long-term contracts, for which Hitachi uses the percentage-of-completion method to recognize revenue from sales;- fluctuations in the price of raw materials including, without limitation, petroleum and other materials, such as copper, steel, aluminum and synthetic resins;- fluctuations in product demand and industry capacity;- uncertainty as to Hitachi’s ability to implement measures to reduce the potential negative impact of fluctuations in product demand, exchange rates and/or price of raw materials;- uncertainty as to Hitachi’s ability to achieve the anticipated benefits of its strategy to strengthen its Social Innovation Business;- uncertainty
y as to the success of restructuring
g efforts to improvep
managementgefficiency
y byy divestingg or otherwise exitingg underperformingpg businesses and to strengthengcompetitivenessp
and other cost reduction
measures;- general socio-economic and political conditions and the regulatory and trade environment of Hitachi’s major markets, particularly Japan, Asia, the United States and Europe, including, without limitation, direct orIndirect restrictions by other nations on imports, or differences in commercial and business customs including, without limitation, contract terms and conditions and labor relations;- uncertainty as to the success of alliances upon which Hitachi depends, some of which Hitachi may not control, with other corporations in the design and development of certain key products;- uncertainty as to Hitachi’s access to, or ability to protect, certain intellectual property rights, particularly those related to electronics and data processing technologies;- uncertainty as to the outcome of litigation, regulatory investigations and other legal proceedings of which the Company, its subsidiaries or its equity method affiliates have become or may become parties;- the possibility of incurring expenses resulting from any defects in products or services of Hitachi;- the possibility of disruption of Hitachi’s operations in Japan by earthquakes or other natural disasters;- uncertainty as to Hitachi’s ability to maintain the integrity of its information systems, as well as Hitachi’s ability to protect its confidential information and that of its customers;- uncertainty as to the accuracy of key assumptions Hitachi uses to valuate its significant employee benefit related costs; and- uncertainty as to Hitachi’s ability to attract and retain skilled personnel.

The factors listed above are not all-inclusive and are in addition to other factors contained in Hitachi’s periodic filings with the U.S. Securities and Exchange Commission and in othermaterials published by Hitachi.

Copyright © 2010, Hitachi, Ltd., All rights reserved. 34

Copyright © 2010, Hitachi, Ltd., All rights reserved. 35