10-Year Financial Data

Millions of yen

U.S. GAAPFor the year:

FY2008FY2009FY2010FY2011FY2012FY2013

FY2014

Revenues¥9,761,970¥10,000,369¥8,968,546¥9,315,807¥9,665,883¥9,041,071¥9,563,791

Operating income

127,146

202,159444,508

412,280

422,028

538,288

600,479

EBIT (Earnings before interest and taxes)(275,239)

77,815443,812573,218

358,015585,662551,018

Net income (loss) attributable to
Hitachi, Ltd. stockholders(787,337)(106,961)

238,869

347,179

175,326

264,975

241,301

Cash flows from operating activities

558,947

798,299

841,554447,155

583,508

439,406

447,348

Cash flows from investing activities(550,008)(530,595)(260,346)(195,584)(553,457)(491,363)(610,255)

Free cash flows
Cash flows from financing activities
Cash dividends declared
Capital expenditures(Property, plant and equipment)

8,939

267,704

581,208

251,571

30,051(51,957)(162,907)

284,388(502,344)(584,176)(167,838)(180,445)

32,968250,335

9,971‒

36,13336,727

47,69050,711

57,944

788,466

546,326

556,873649,234

742,537

849,877

848,716

Depreciation(Property, plant and equipment)

478,759441,697382,732

360,358

300,664

329,833

349,614

R&D expenditures

416,517372,470

395,180

412,514341,310351,426

335,515

At year-end:
Total assets

9,403,709

8,964,464

9,185,629

9,418,526

9,809,230

11,016,899

12,395,379

Property, plant and equipment

2,393,946

2,219,804

2,111,270

2,025,538

2,279,964

2,342,091

2,564,105

Total Hitachi, Ltd. stockholders equity

1,049,951

1,284,658

1,439,865

1,771,782

2,082,560

2,651,241

2,930,309

Interest-bearing debt

2,820,109

2,367,143

2,521,551

2,396,454

2,370,079

2,823,049

3,354,616
Yen

Per share data:
Net income (loss) attributable to
Hitachi, Ltd. stockholders:Basic¥(236.86)¥(29.20)¥52.89¥76.81¥37.28¥54.86¥49.97

Diluted(236.87)(29.20)

49.38

71.86

36.29

54.85

49.93

Cash dividends declared
Total Hitachi, Ltd. stockholders equity

3.0

‒

8.0

8.0

10.0

10.5

12.0

315.86287.13318.73382.26431.13549.02606.87%

Financial ratios:
Operating income ratio

1.3

2.3

4.8

4.3

4.7

5.6

6.2

EBIT ratio

‒2.8

0.9

4.8

5.9

4.0

6.1

5.6

Return on revenues

‒7.9

‒1.2

2.6

3.6

1.9

2.8

2.5

Return on equity (ROE)

‒48.9

‒9.2

17.5

21.6

9.1

11.2

8.6

Return on assets (ROA)

‒8.0

‒0.9

3.3

4.4

2.5

3.5

3.1

D/E ratio(Including non-controlling interests) (times)

1.29

1.04

1.03

0.86

0.75

0.73

0.78

Total Hitachi, Ltd. stockholders equity ratio

11.2

14.3

15.7

18.8

21.2

24.1

23.6

Notes: 1 In order to be consistent with financial reporting principles and practices generally accepted in Japan, operating income is presented as total revenues lesscost of sales and selling, general and administrative expenses. The Company believes that this is useful to investors in comparing the Company s financial
results with those of other Japanese companies. Under accounting principles generally accepted in the United States of America, restructuring charges, net
gain or loss on sales and disposal of rental assets and other property and impairment losses for long-lived assets are included as part of operating income.
2 The restructuring charges mainly represent special termination benefits incurred with the reorganization of our business structures and as the result of theCompany and its subsidiaries reviewing and reshaping the business portfolio.
3 EBIT is presented as income before income taxes less interest income plus interest charges.
4 Effective from fiscal 2014, a part of the thermal power generation systems business is classified as a discontinued operation in accordance with the provisionof ASC 205-20, Presentation of Financial Statements̶Discontinued Operations, which was not transferred to MITSUBISHI HITACHI POWER SYSTEMS,
LTD. for the business integration in the thermal power generation systems with Mitsubishi Heavy Industries, Ltd. The results of the discontinued operation arereported separately from continuing operations. In line with this classification, “Revenues” and Operating income for fiscal 2013 are reclassified.
5 ROA (Return on Assets) = Net income / Total Assets (Average between the end of current fiscal year and the end of previous fiscal year) x 100

76

Results of Value Creation

Millions of yen

IFRS
For the year:

FY2013

Revenues¥9,666,446

FY2014FY2015FY2016FY2017¥9,774,930 ¥10,034,305¥9,162,264¥9,368,614

Adjusted operating income

604,798

641,325

634,869

587,309714,630

EBIT

691,230

534,059

531,003475,182644,257

Net income attributable to
Hitachi, Ltd. stockholders

413,877

217,482

172,155

231,261

362,988

Net cash provided by operating activities

306,777

451,825

812,226

629,582

727,168

Net cash used in investing activities(550,179)(612,545)(730,799)(337,955)(474,328)

Free cash flows(243,402)(160,720)

81,427

291,627

252,840

Net cash provided by (used in) financing activities

228,840

233,206(26,467)(209,536)(321,454)

Cash dividends declared

50,711

57,94457,93962,76472,417

Capital expenditures(Property, plant and equipment)

491,170

431,201

528,551

377,545374,901

Depreciation(Property, plant and equipment)

331,228

350,783

366,547

302,757

265,413

R&D expenditures

354,487

334,814

333,730

323,963

332,920

At year-end:
Total assets

11,098,191

12,433,727

12,551,005

9,663,917

10,106,603

Property, plant and equipment

2,258,933

2,472,497

2,500,226

1,998,411

2,124,827

Total Hitachi, Ltd. stockholders equity

2,668,657

2,942,281

2,735,078

2,967,085

3,278,024

Interest-bearing debt

3,033,985

3,557,356

3,604,455

1,176,603

1,050,294
Yen

Per share data:
Earnings per share attributable to
Hitachi, Ltd. stockholders:Basic¥85.69¥45.04¥35.65¥47.90¥75.19Diluted

85.66

45.00

35.62

47.88

75.12

Cash dividends declared
Total Hitachi, Ltd. stockholders equity

10.5

12.0

12.0

13.0

15.0

552.62609.35566.48614.56679.00%Financial ratios:
Adjusted operating income ratio

6.3

6.6

6.3

6.4

7.6

EBIT ratio

7.2

5.5

5.3

5.2

6.9

Return on revenues

4.3

2.2

1.7

2.5

3.9

Return on equity (ROE)

17.5

7.8

6.1

8.1

11.6

Return on assets (ROA)

5.0

2.9

2.4

3.0

5.0

D/E ratio(Including non-controlling interests) (times)

0.78

0.83

0.87

0.29

0.23

Total Hitachi, Ltd. stockholders equity ratio

24.0

23.7

21.8

30.7

32.4

Notes: 1 In order to be consistent with financial reporting principles and practices generally accepted in Japan, adjusted operating income is presented as total
revenues less cost of sales and selling, general and administrative expenses. The Company believes that this is useful to investors in comparing theCompany s financial results with those of other Japanese companies.
2 A part of the thermal power generation systems business is classified as a discontinued operation in accordance with the provision of IFRS 5,
Non-current Assets Held for Sale and Discontinued Operations, which was not transferred to MITSUBISHI HITACHI POWER SYSTEMS, LTD. forthe business integration in the thermal power generation systems with Mitsubishi Heavy Industries, Ltd. The results of the discontinued operation
are reported separately from continuing operations.
3 From fiscal 2013, capital investment is stated exclusive of investment in lease assets classified as finance leases.
4 ROA (Return on Assets) = Net income / Total Assets (Average between the end of current fiscal year and the end of previous fiscal year) x 100

77

5-Year Non-Financial Data

Human Capital Development

FY2013

FY2014FY2015FY2016FY2017

323,919
33,50018.3
1.4

336,670
31,37518.4
1.4

335,244
37,35318.4
1.3

303,887
35,631
18.6
1.5

307,275
34,925
18.8
1.5

16.6
5.6
(3,415)
3.8
(418)
2.02
64.7
13.5

16.3
6.0
(3,670)
3.7
(434)
2.03
64.3
12.2

16.5
6.4
(3,727)
4.0
(474)
2.08
65.3
11.9

16.8
6.3
(3,365)
4.1
(509)
2.11
68.1
12.8

17.2
6.4
(3,459)
4.2
(577)
2.15
72.0
10.9

Global Human Capital
Number of non-Japanese employees*6

340

446

509

638

708

Occupational Health and Safety*7
Number of fatal accidents*1
Occupational accident rate*1
Occupational accident rate*8

1
0.10
0.14

1
0.09
0.27

2
0.07
0.22

1
0.18
0.18

0
0.17
0.25

Number of employees

Consolidated
Non-consolidated

Average service (years)*1
Turnover ratio (%)*1*2
Diversity and Inclusion
Ratio of female employees (%)*1
Global ratio (number) of female managers*3
Ratio (number) of female managers*4
Employment ratio of people with disabilities (%)*5
Paid leave ratio (%)*1
Average overtime hours/month*1

Scope of Data
*1 Hitachi, Ltd.
*2 Includes only voluntary resignations.
*3 All full-time, regular female managers excluding those dispatched to non-Group companies.
*4 “Female managers” in fiscal 2017 include managerial employees dispatched from Hitachi, Ltd. to non-Group companies and those accepted from non-Group
companies by Hitachi, Ltd. Earlier figures include regular managerial employees dispatched to non-Group companies but exclude those accepted from nonGroup companies.
*5 Including Hitachi, Ltd. and 17 special subsidiaries and related Group companies. Data compiled on June 1 of each fiscal year (2.23 in fiscal 2018).
*6 Employees at Hitachi, Ltd. as of the end of each fiscal year.
*7 January to December each year.
*8 195 Hitachi Group companies in Japan including Hitachi, Ltd. for 2013; 251 Hitachi Group companies in Japan including Hitachi, Ltd. for 2014; 240 HitachiGroup companies in Japan including Hitachi, Ltd. for 2015; 200 Hitachi Group companies in Japan including Hitachi, Ltd. for 2016; 201 Hitachi Group
companies in Japan including Hitachi, Ltd. for 2017.

Research and Development
Ratio of R&D expenditure to revenue (%)
Patent application ratio outside Japan (%)

FY2013

FY2014FY2015FY2016FY2017

3.7
59

3.4
59

3.3
59

3.5
57

3.6
56

FY2013

FY2014FY2015FY2016FY2017

16

20

20

20

18

FY2013

FY2014FY2015FY2016FY2017

̶

̶

̶

35

33

4,165
49.55
677
4,216

4,128
46.86
692
4,415

3,895
43.91
618
3,615

4,577*2
41.34*2
1,336*2
4,380*2*3

4,663*2
38.54*2
1,356*2
4,223*2*3

Scope of Data
Hitachi, Ltd. and consolidated subsidiaries (including variable interest entities).
Number of companies: FY2013: 948; FY2014: 996; FY2015: 1,057; FY2016: 865; FY2017 880.

Engaging in Responsible Procurement
Number of audits by external auditing organizations

Environment
Rate of reduction in CO2 emissions from use of products and services(base: FY2010)*1 (%)
CO2 emissions from factories and offices (kt-CO2)
Water use (million m3)
Waste and valuables generation (kt)Atmospheric emissions of chemical substances (t)Scope of Data
Hitachi, Ltd. and consolidated subsidiaries.
Number of companies: FY2013: 948; FY2014: 996; FY2015: 1,057; FY2016: 865; FY2017: 880.
Environmental performance data associated with Hitachi s business operations: Hitachi Group companies whose environmental load comprises 90% of the total(based on Hitachi calculations); data for each fiscal year indicates performance within the given scope for the fiscal year.
*1 New indicator established in fiscal 2016.
*2 Figures include a materials company that has become a consolidated member of the Hitachi Group since fiscal 2016.
*3 The management scope of chemical substances has been expanded from 41 to 50 substances since fiscal 2016.

Independent Assurance of Environmental and Social Data
To enhance the reliability of the data disclosed in the Hitachi Sustainability Report 2018, we have received independent assurance of key
environmental and social performance indicators by KPMG AZSA Sustainability Co., Ltd.
Please refer to the Third-Party Assurance Report on page 135 of the Hitachi Sustainability Report 2018 .
http://www.hitachi.com/sustainability/download/index.html

78Operating Results
Summary
Billions of yen
Years ended March 31:

Revenues
EBIT
Income fromcontinuing operations,
before income taxes
Net income attributable
to Hitachi, Ltd.
stockholders

2017

2018

Percentchange¥9,162.2
475.1¥9,368.6
644.2

2%
36%

469.0

638.6

36%

231.2

362.9

57%

Analysis of Statement of Operations

Revenues increased 2% to ¥9,368.6 billion, as comparedwith the year ended March 31, 2017, despite the effect ofthe move to transform the business portfolio such as
conversion of Hitachi Capital Corporation and Hitachi
Transport System, Ltd., into equity-method affiliates anddeconsolidation of Hitachi Koki Co., Ltd. (now Koki Holdings
Co., Ltd.) in the year ended March 31, 2017. This increase
was due mainly to higher revenues in the Construction
Machinery segment, in which overseas sales increased
mainly in China, and in the High Functional Materials &Components segment, in which sales of electronics- andautomotive-related products increased.
Cost of sales increased 1% to ¥6,866.5 billion, as
compared with the year ended March 31, 2017, and theratio of cost of sales to revenues was 73%, a decrease of
1% from the year ended March 31, 2017. Gross profit
increased 5% to ¥2,502.0 billion, as compared with theyear ended March 31, 2017.
Selling, general and administrative expenses were
¥1,787.4 billion, which was the same level as for the year
ended March 31, 2017, and the ratio of selling, generaland administrative expenses to revenues was 19%, ascompared with 20% for the year ended March 31, 2017.
Adjusted operating income increased by ¥127.3 billion to¥714.6 billion yen, as compared with the year ended March
31, 2017. The increase was due mainly to higher profits
owing to increased revenues in the Construction Machinery
segment, profitability improvement for the industry &distribution field, the power and energy business, and theindustrial equipment business in the Social Infrastructure &Industrial Systems segment. The increase was also
attributable to higher profits in the Information &Telecommunication Systems segment owing to an
improvement in the profitability of the system integration
business in Japan and the effect of the structural reform
implemented in the year ended March 31, 2017.
Other income decreased ¥88.6 billion to ¥12.0 billion
and other expenses decreased ¥5.8 billion to ¥140.6 billion,
as compared with the year ended March 31, 2017,
respectively. The details are as follows. Net gain on sales
and disposal of fixed assets worsened by ¥17.6 billion andturned to a loss of ¥2.5 billion, as compared with the year
ended March 31, 2017. Impairment losses decreased¥19.9 billion to ¥48.6 billion, as compared with the year
ended March 31, 2017. This mainly reflected impairment
losses on intangible assets, etc., in the Information &Telecommunication Systems segment. Net gain on
business reorganization and others decreased ¥71.5 billion
to ¥9.7 billion, as compared with the year ended March
31, 2017, due mainly to the absence of the partial sale ofthe shares of Hitachi Transport System, Ltd. and the saleof Hitachi Koki Co., Ltd. shares recorded in the year ended
March 31, 2017. Special termination benefits decreased¥8.9 billion to ¥15.7 billion, as compared with the year
ended March 31, 2017. Expenses related to competition
law and others increased ¥7.5 billion to ¥14.2 billion, as
compared with the year ended March 31, 2017.
Financial income (excluding interest income) was ¥7.0
billion, the same level as for the year ended March 31,
2017, and financial expenses (excluding interest charges)
decreased ¥14.9 billion to ¥11.2 billion, as compared withthe year ended March 31, 2017.
Share of profits of investments accounted for using theequity method was ¥62.4 billion, an improvement of ¥109.6
billion from the year ended March 31, 2017, for which an
impairment loss for the uranium enrichment business at aU.S. equity-method associate was posted in the Social
Infrastructure & Industrial Systems segment.
As a result of the foregoing, EBIT increased ¥169.0
billion to ¥644.2 billion, as compared with the year ended
March 31, 2017.
Interest income increased ¥2.0 billion to ¥14.9 billion andinterest charges increased ¥1.5 billion to ¥20.5 billion, as
compared with the year ended March 31, 2017, respectively.
Income from continuing operations, before income taxes
increased ¥169.5 billion to ¥638.6 billion, as compared withthe year ended March 31, 2017.
Income taxes increased ¥6.5 billion to ¥131.7 billion, as
compared with the year ended March 31, 2017, due mainly
to increased income from continuing operations, before
income taxes.
Loss from discontinued operations increased ¥10.0
billion to ¥16.0 billion, as compared with the year ended
March 31, 2017.
Net income increased ¥152.8 billion to ¥490.9 billion, as
compared with the year ended March 31, 2017.
Net income attributable to non-controlling interests
increased ¥21.1 billion to ¥127.9 billion, as compared withthe year ended March 31, 2017.
As a result of the foregoing, net income attributable to
Hitachi, Ltd. stockholders increased ¥131.7 billion to ¥362.9
billion, as compared with the year ended March 31, 2017.

Revenues by Geographic Area

The following is an overview of revenues attributed togeographic areas based on customer location.
Billions of yen
Years ended March 31:

2017

2018

PercentchangeJapan
Overseas Revenues
Subtotal
Asia
North America
EuropeOther Areas
Total Revenues¥4,757.6¥4,643.0-2%4,404.5
1,860.7
1,144.0
972.6
427.1¥9,162.2

4,725.5
2,081.1
1,177.5
964.4
502.3¥9,368.6

7%
12%
3%
-1%
18%
2%

79

Results of Value Creation

Operating and Financial Review

Japan
Revenues in Japan decreased 2% to ¥4,643.0 billion, as
compared with the year ended March 31, 2017. This wasdue mainly to reduced revenues in the Social Infrastructure& Industrial Systems segment, etc. and due to theconversion of Hitachi Transport System, Ltd. and Hitachi
Capital Corporation to equity-method associates in theprevious fiscal year, despite increased revenues in the High
Functional Materials & Components segment.
Overseas(Asia)
Revenues in Asia increased 12% to ¥2,081.1 billion, as
compared with the year ended March 31, 2017. This wasdue mainly to higher revenues in the Electronic Systems &Equipment segment, Construction Machinery segment,
and High Functional Materials & Components segment,
etc., despite reduced revenues as a result of theconversion of Hitachi Transport System, Ltd. and Hitachi
Capital Corporation to equity-method associates.
(North America)
Revenues in North America increased 3% to ¥1,177.5
billion, as compared with the year ended March 31, 2017.
This was due mainly to the higher revenues in the Social
Infrastructure & Industrial Systems segment gained by theindustrial products business expansion by acquisition andhigher revenues in the Construction Machinery segment,
despite reduced revenues in the Electronic Systems &Equipment segment due to the impact of thedeconsolidation of Hitachi Koki Co., Ltd.
(Europe)
Revenues in Europe decreased 1% to ¥964.4 billion, as
compared with the year ended March 31, 2017. This wasdue mainly to the impact of deconsolidation of Hitachi Koki
Co., Ltd. and the conversion of Hitachi Capital Corporation
to an equity-method associate. This decrease was almost
partially offset by higher revenues in the Social Infrastructure& Industrial Systems segment, reflecting substantial sales
growth in the railway systems business, and higher
revenues in the High Functional Materials & Components
segment due mainly to acquisitions.
(Other Areas)
Revenues in other areas increased 18% to ¥502.3 billion,
as compared with the year ended March 31, 2017.
This was due mainly to higher revenues in Construction
Machinery segment owing to acquisitions, etc.
As a result of the foregoing, overseas revenues increased
7% to ¥4,725.5 billion, as compared with the year ended
March 31, 2017, and the ratio to total revenues was 50%,
which was 2% increase as compared with the year ended
March 31, 2017.

80

Summary of Financial Condition, etc.
Liquidity and Capital Resources

Our management considers maintaining an appropriate levelof liquidity and securing adequate funds for current and futurebusiness operations to be important financial objectives.
Through efficient management of working capital andselective investment in new plants and equipment, we areworking to optimize the efficiency of capital utilization
throughout our business operations. We endeavor to
improve our group cash management by centralizing suchmanagement among us and our overseas financial
subsidiaries. Our internal sources of funds include cash
flows generated by operating activities and cash on hand.
Our management also considers short-term investments
to be an immediately available source of funds. In addition,
we raise funds both in the capital markets and fromJapanese and international commercial banks in response
to our capital requirements. Our management policy is tofinance capital expenditures primarily by internally generated
funds and to a lesser extent by funds raised through theissuance of debt and equity securities in domestic andforeign capital markets. In order to flexibly access funding,we maintain our shelf registration with the maximum
outstanding balance of ¥300.0 billion.
We maintain commitment line agreements with anumber of domestic banks under which we may borrow inorder to ensure efficient access to necessary funds.
These commitment line agreements generally provide fora one-year term, renewable upon mutual agreement between
us and each of the lending banks, as well as anothercommitment line agreement with a contract term of three
years ending on July 29, 2019. As of March 31, 2018, ourunused commitment lines totaled ¥503.2 billion, including
those of ¥400.0 billion which the Company maintained.
We receive debt ratings from Moody s Japan K.K.
(Moody s), Standard & Poor s Rating Japan (S&P), as wellas Rating and Investment Information, Inc. (R&I). Our debt
ratings as of March 31, 2018 were as follows:
Long-term

Short-term

Moody sRating Company

A3

P–2

S&P

A–

A–2

R&I

A+

a–1

With our current ratings, we believe that our access to
the global capital markets will remain sufficient for our
financing needs. We seek to improve our credit ratings inorder to ensure financial flexibility for liquidity and capitalmanagement, and to continue to maintain access to
sufficient funding resources through the capital markets.

Billions of yen
Years ended March 31:

2017

2018

Net cash provided by operating activities¥ 629.5¥ 727.1

Net cash used in investing activities(337.9)(474.3)

Net cash used in financing activities(209.5)(321.4)

Effect of exchange rate changes
on cash and cash equivalents(16.1)

1.3

Change in cash and cash equivalents

65.9(67.2)Cash and cash equivalents at
beginning of year
Cash and cash equivalents at end of year

699.3

765.2

¥ 765.2¥ 697.9(Cash Flows from Operating Activities)
Net income in the year ended March 31, 2018 increased by¥152.8 billion, as compared with the year ended March 31,
2017. Net cash outflow from a change in inventories
increased by ¥158.4 billion, as compared with the year
ended March 31, 2017. Net cash flow from a change intrade payables deteriorated by ¥13.6 billion. Net cash flowfrom a change in trade receivables improved by ¥244.0
billion. As a result, net cash outflow from changes inworking capital decreased. As a result of the foregoing, net
cash provided by operating activities was ¥727.1 billion in
the year ended March 31, 2018, an increase of ¥97.5 billion
compared with the year ended March 31, 2017.
(Cash Flows from Investing Activities)
Net amount of investments related to property, plant andequipment*1 was ¥406.4 billion, a decrease of ¥56.1 billion
as compared with the year ended March 31, 2017.
Proceeds from sales of investments in securities and otherfinancial assets (including investments in subsidiaries andinvestments accounted for using the equity method)
decreased by ¥70.7 billion compared with the year ended
March 31, 2017 for which partial sales of the shares ofHitachi Transport System, Ltd. and Hitachi Capital
Corporation, and the sale of all shares of Hitachi Koki Co.,
Ltd. were conducted. Purchase of investments in securities
and other financial assets (including investments in
subsidiaries and investments accounted for using the equity
method) increased ¥65.8 billion, compared with the year
ended March 31, 2017, due mainly to payment for theacquisition of “Sullair" air compressor business. As a resultof the foregoing, net cash used in investing activities was¥474.3 billion in the year ended March 31, 2018, an
increase of ¥136.3 billion compared with the year ended
March 31, 2017.
*1 The sum of the purchase of property, plant and equipment, thepurchase of intangible assets and the purchase of leased assets,less the proceeds from sale of property, plant, equipment andintangible assets, the proceeds from sale of leased assets and thecollection of lease receivables(Cash Flows from Financing Activities)
The net cash outflow from a change in short-term debt
decreased by ¥128.9 billion compared with the year ended
March 31, 2017. Payments related to long-term debt*2 inthe year ended March 31, 2018 were ¥113.5 billion, as
compared with ¥115.5 billion of proceeds related to longterm debt in the year ended March 31, 2017. As a result of
the foregoing, net cash used in financing activities was¥321.4 billion in the year ended March 31, 2018, an
increase of ¥111.9 billion compared with the year ended
March 31, 2017.
*2 The proceeds from long-term debt, less the payments on
long-term debt

As a result of the above items, as of March 31, 2018,
cash and cash equivalents amounted to ¥697.9 billion,a decrease of ¥67.2 billion from March 31, 2017. Free cash
flows, the sum of cash flows from operating and investing
activities, were an inflow of ¥252.8 billion in the year ended
March 31, 2018, a decrease of ¥38.7 billion from the year
ended March 31, 2017.

Assets, Liabilities, and Equity

As of March 31, 2018, total assets amounted to ¥10,106.6
billion, an increase of ¥442.6 billion from March 31, 2017.
This was due mainly to the acquisition of “Sullair" aircompressor business in the Social Infrastructure & Industrial
Systems segment and corporate acquisitions undertaken by
Hitachi Chemical Company, Ltd. in the High Functional
Materials & Components segment. Cash and cash
equivalents as of March 31, 2018 amounted to ¥697.9
billion, a decrease of ¥67.2 billion from the amount as ofMarch 31, 2017.
As of March 31, 2018, total interest-bearing debt, thesum of short-term debt and long-term debt, amounted to¥1,050.2 billion, a decrease of ¥126.3 billion from March 31,2017 as a result of bond redemption and repayment ofborrowings. As of March 31, 2018, short-term debt,
consisting mainly of borrowings from banks and commercial
paper, amounted to ¥121.4 billion, a decrease of ¥74.9
billion from March 31, 2017. As of March 31, 2018, current
portion of long-term debt amounted to ¥117.1 billion,a decrease of ¥73.0 billion from March 31, 2017. As of
March 31, 2018, long-term debt (excluding current portion),
consisting mainly of debentures, and loans principally frombanks and insurance companies, amounted to ¥811.6
billion, an increase of ¥21.6 billion from March 31, 2017.
As of March 31, 2018, total Hitachi, Ltd. stockholders
equity amounted to ¥3,278.0 billion, an increase of ¥310.9
billion from March 31, 2017. This is due mainly to postingnet income attributable to Hitachi, Ltd. stockholders.
As a result, the ratio of total Hitachi, Ltd. stockholders
equity to total assets as of March 31, 2018 was 32.4%,
compared with 30.7% as of March 31, 2017.
Non-controlling interests as of March 31, 2018 were¥1,233.6 billion, an increase of ¥103.7 billion fromMarch 31, 2017.
Total equity as of March 31, 2018 was ¥4,511.6 billion,
an increase of ¥414.6 billion from March 31, 2017. The ratio
of interest-bearing debt to total equity was 0.23, comparedwith 0.29 as of March 31, 2017.
81

Results of Value Creation

Cash Flows

Consolidated Statement of Financial Position
March 31, 2018 and 2017

Millions of yen

Assets2017

2018

Current assets
Cash and cash equivalents¥ 765,242

Trade receivables

2,433,149

2,501,414

Inventories

1,225,907

1,375,232

Investments in securities and other financial assets

388,792

373,324

Other current assets

189,516

203,866

Total current assets

5,002,606

5,151,800

Investments accounted for using the equity method

691,251

743,407

Investments in securities and other financial assets

758,350

716,431¥

697,964

Non-current assets

Property, plant and equipment

1,998,411

2,124,827

Intangible assets

919,201

1,054,370

Other non-current assets

294,098

315,768

Total non-current assets

4,661,311

4,954,803¥9,663,917¥10,106,603

Total Assets

Note: Changes in presentation have been made due to materiality of some accounts balances as a result of business reorganization and others. ‘Investments insecurities and other financial assets,’ which were included in ‘Other current assets’ as of March 31, 2017, have been reclassified and presented separately.
‘Lease receivables,’ which were separately presented under current and non-current assets, have been included in ‘Investments in securities and otherfinancial assets’ under current and non-current assets, respectively. ‘Other financial liabilities,’ which were separately presented under non-current liabilities,
have been included in ‘Other non-current liabilities.’ The consolidated statement of financial position as of March 31, 2017 has been reclassified in order toreflect these changes in presentation.

82

2017

2018

Current liabilities
Short-term debt

¥ 196,357¥

121,439

Current portion of long-term debt

190,233

117,191

Other financial liabilities

274,270

254,735

Trade payables

1,402,233

1,536,983

Other current liabilities

1,657,766

1,765,046

Total current liabilities

3,720,859

3,795,394

Long-term debt

790,013811,664

Retirement and severance benefits

635,684

575,156

Other non-current liabilities

420,366

412,718

Total non-current liabilities

1,846,063

1,799,538

5,566,922

5,594,932

Common stock

458,790458,790

Capital surplus

577,573575,809

1,793,570

2,105,395

141,068

142,167

Non-current liabilities

Total Liabilities
EquityHitachi, Ltd. stockholders equity

Retained earnings
Accumulated other comprehensive income
Treasury stock, at cost
Total Hitachi, Ltd. stockholders equity
Non-controlling interests
Total Equity
Total Liabilities and Equity(3,916)(4,137)

2,967,085

3,278,024

1,129,910

1,233,647

4,096,995

4,511,671¥9,663,917¥10,106,603

83

Results of Value Creation

Millions of yen

Liabilities

Consolidated Statement of Profit or Loss
Years ended March 31, 2018 and 2017

Millions of yen

2017

2018

Revenues¥ 9,162,264¥ 9,368,614

Cost of sales(6,782,677)(6,866,522)

Gross profit

2,379,587

2,502,092(1,792,278)(1,787,462)

Selling, general and administrative expenses

587,309714,630

Other income

Adjusted operating income

100,742

12,068Other expenses(146,568)(140,686)

Financial income

7,091

7,005

Financial expenses(26,206)(11,243)

Share of profits (losses) of investments accounted
for using the equity method(47,186)

62,483475,182644,257

Interest income

EBIT (Earnings before interest and taxes)

12,923

14,928Interest charges(19,014)(20,539)

469,091

638,646(125,112)(131,708)

343,979

506,938

Income from continuing operations, before income taxes
Income taxes
Income from continuing operations
Loss from discontinued operations
Net income(5,950)¥338,029(16,020)¥

490,918

Net income attributable to:84

Hitachi, Ltd. stockholders

231,261

362,988

Non-controlling interests

106,768

127,930

Years ended March 31, 2018 and 2017

Millions of yen

2017

2018

¥338,029¥490,918

Net changes in financial assets measured at fair value through OCI

59,934

1,530

Remeasurements of defined benefit plans

46,08622,753

Share of OCI of investments accounted for using the equity method(1,887)

3,302

104,133

27,585

Foreign currency translation adjustments(64,761)(8,042)

Net changes in cash flow hedges

21,303

5,703

Share of OCI of investments accounted for using the equity method

1,166

(45)

Total items that can be reclassified into net income(42,292)(2,384)

Other comprehensive income (OCI)

61,841

25,201¥399,870¥516,119

Hitachi, Ltd. stockholders

299,397382,341

Non-controlling interests

100,473

133,778

Net income
Other comprehensive income (OCI)
Items not to be reclassified into net income

Total items not to be reclassified into net income
Items that can be reclassified into net income

Comprehensive income
Comprehensive income attributable to:85

Results of Value Creation

Consolidated Statement of Comprehensive Income

Consolidated Statement of Changes in Equity
Years ended March 31, 2018 and 2017

Millions of yen

2017

As of March 31, 2016

Accumulated
otherTotal Hitachi, Ltd.
comprehensive Treasury stock, stockholders
Non-controllingincomeat costequityinterests

Commonstock

CapitalsurplusRetainedearnings¥1,609,761¥ 83,543¥(3,806)¥2,735,078¥1,390,492

Total equity¥458,790¥586,790

Reclassified into
retained earnings¥4,125,570‒‒

10,486(10,486)

‒

‒

‒

‒

Net income‒‒

231,261‒‒

231,261

106,768

338,029

Other comprehensive
income (loss)

‒

‒

‒

68,136‒

68,136(6,295)61,841

Cash dividends‒‒(57,938)‒‒(57,938)(38,283)(96,221)

Changes in treasury stock

‒

(15)

‒

‒

(110)

(125)

‒

(125)

Equity transactions and
other

‒

(9,202)

‒

(125)

‒

(9,327)(322,772)(332,099)

Total changes in equity‒(9,217)

183,80957,525(110)

232,007(260,582)(28,575)

As of March 31, 2017

¥458,790¥577,573¥1,793,570¥141,068¥(3,916)¥2,967,085¥1,129,910¥4,096,995

Millions of yen

2018

As of March 31, 2017

Accumulated
otherTotal Hitachi, Ltd.
comprehensive Treasury stock, stockholders
Non-controllingincomeat costequityinterests

Commonstock

CapitalsurplusRetainedearnings¥458,790¥577,573¥1,793,570¥141,068¥(3,916)¥2,967,085¥1,129,910

Total equity¥4,096,995

Reclassified into
retained earnings‒‒

16,428(16,428)

‒

‒

‒

‒

Net income‒‒

362,988‒‒362,988

127,930

490,918

Other comprehensive
income‒‒‒19,353‒

19,353

5,848

25,201

Cash dividends‒‒(67,591)‒‒(67,591)(34,395)(101,986)

Changes in treasury stock

‒

(27)

‒

‒

(221)

(248)

‒

(248)

Equity transactions and
other

‒

(1,737)‒(1,826)‒(3,563)

4,354

791

Total changes in equity‒(1,764)

311,825

1,099

(221)

310,939

103,737

414,676

As of March 31, 2018

¥458,790¥575,809¥2,105,395¥142,167¥(4,137)¥3,278,024¥1,233,647¥4,511,671

86Years ended March 31, 2018 and 2017

Millions of yen

2017

2018

¥ 338,029¥ 490,918

Depreciation and amortization

415,183

364,432

Change in trade receivables(196,824)

47,216

Change in inventories(22,731)(181,207)

Change in trade payables

111,589

97,923Other(15,664)(92,114)629,582

727,168

Purchase of property, plant and equipment(316,116)(349,388)

Purchase of intangible assets(101,034)(90,924)

Purchase of leased assets(292,943)(3,263)

Proceeds from sale of property, plant and equipment,
and intangible assets

52,20827,448Proceeds from sale of leased assets

14,5399,628Collection of lease receivables

180,726‒

Proceeds from sale (purchase) of investments in securities andother financial assets (including investments in subsidiaries andinvestments accounted for using the equity method), net

71,653(64,936)

Other

53,012(2,893)(337,955)(474,328)

291,627

252,840

Change in interest-bearing debt

(118,314)(218,409)

Dividends paid to stockholders(57,935)(67,568)

Dividends paid to non-controlling interests(36,508)(32,066)

Cash flows from operating activities
Net income
Adjustments to reconcile net income to net cash provided by operating activities

Net cash provided by (used in) operating activities
Cash flows from investing activities

Net cash provided by (used in) investing activities
Free cash flows
Cash flows from financing activities

Other

3,221

(3,411)(209,536)(321,454)

Effect of exchange rate changes on cash and cash equivalents(16,164)

1,336

Change in cash and cash equivalents

65,927(67,278)

Net cash provided by (used in) financing activities

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

699,315765,242¥ 765,242¥ 697,964

87

Results of Value Creation

Consolidated Statement of Cash Flows