Hitachi’s History of Transformation(Fiscal 2005 – Fiscal 2014)

In fiscal 2014, ended March 31, 2015, Hitachi achieved record-high operating income for the second consecutive year.
Targeting the achievement of the goals outlined in the 2015 Mid-term Management Plan as well as further growth in the years
ahead, Hitachi will work to accelerate its transformation into a company that is a leader in global markets, and will strive to increase
corporate value.
Transformation of Business Portfolio

Fiscal 2005 – Fiscal 2009
Strengthening Initiatives• Made Clarion a consolidated subsidiary• Established joint venture with GE
in nuclear power generation systemsbusiness• Made Hitachi Kokusai Electric a

Fiscal 2010 – Fiscal 2012
Rebuilding Initiatives• Sold precision small motor business toNidec Corporation• Withdrew from consumer PC business• Transferred semiconductor manufacturing

Strengthening Initiatives• Established joint venture in the hydroelectric
power generation systems business with
Mitsubishi Electric Corporation and
Mitsubishi Heavy Industries, Ltd.

subsidiary in Singapore to a semicon-consolidated subsidiary• Acquired BlueArc, a network storage

ductor foundrysolution business in the United States• Made Hitachi Koki a consolidated• Dissolved joint venture in the transmission

subsidiaryand distribution systems business• Made five listed companies* wholly• Acquired a nuclear energy company in theowned consolidated subsidiaries

United Kingdom* Hitachi Information Systems, Hitachi Software
Engineering, Hitachi Systems & Services, Hitachi
Plant Technologies, and Hitachi Maxell(Millions of yen)

600,000

25.0%
22.9%
20.6%

500,000

400,000

Stockholders’ equity ratio
Operating income (left scale)

11.2%

14.3%

EBIT (earnings before interest and taxes)* (left scale)
300,000

Fiscal 2008
• Financial crisis caused by Lehman Shock• One-off write-down of deferred tax assets

200,000

100,000

0–100,000

Net income (loss) attributable to Hitachi, Ltd.
stockholders per share(right scale)–200,000–300,0002005

Fiscal 2006
• Recorded additional costs due to turbine
damage at a nuclear power station in Japanand to thermal power plant construction
overseas• Falling sales prices for hard disk drives anddigital media
2006* EBIT is presented as income before income taxes less interest income plus interest charges.
Note: All figures are based on U.S. GAAP.

2Fiscal 2007
• Implemented one-off
write-down of deferred tax
assets due to worsening of conditions in digital media field2007

Fiscal 2009
• Raised funds through theissuance of new shares• Introduced in-housecompany system

2008

2009

Hitachi, Ltd. | Annual Report 2015

Fiscal 2013 – Fiscal 2014
Rebuilding Initiatives• Transferred plasma display panel plant toSolar Frontier K.K.
• Integrated Renesas Technology, an equity
method company in the semiconductorbusiness, with NEC Electronics Corporation• Transferred business in large LCD panels forTVs to Panasonic Corporation• Casio Hitachi Mobile Communications,an equity method company in the mobilephone business, integrated mobile phone
operations with NEC Corporation• Transferred hard disk drive businessto Western Digital Corporation• Integrated small and medium-sized LCD
business with Japan Display Inc.
• Stopped in-house production of flat-panel TVs

Strengthening Initiatives• Absorbed Hitachi Plant Technologies• Hitachi Metals and Hitachi Cable were merged• Established joint venture with Mitsubishi
Heavy Industries, Ltd. in thermal power
generation systems business• Made Hitachi Medical a wholly owned
subsidiary• Acquired Prizm Payment Services, a providerof payment services to financial institutionsin India• Signed a basic agreement to establish a
joint venture with Johnson Controls, Inc.
in the air-conditioning systems business• Built a strategic partnership with ABBin the high-voltage direct current powertransmission business in Japan• Hitachi Data Systems reached agreement
to acquire Pentaho Corporation,a big-data analytics software company
in the United States• Agreed to acquire the signalling and rollingstock operations of Finmeccanica S.p.A.

Rebuilding Initiatives• Transferred printed circuit board production
equipment business to an investment fund
• Relisted Hitachi Maxell shares• Discontinued production of semiconductors
for information & telecommunications
equipment

(Yen)

120

24.1%
23.6%
21.2%

15.7%

100

18.8%
80

60

40

200

Fiscal 2010
• Celebrated 100thanniversary of founding

2010

Fiscal 2011
• Achieved new record high in net income• Transferred hard disk drive business• Started cost structure reform project

2011

Fiscal 2012
• Introduced Group system• Increased number of non-Japanese
directors, outside directors
became majority

2012

Fiscal 2013
• Achieved new record
high in EBIT

Fiscal 2014
• Achieved newrecord high inoperating income〜〜–200–220

2013

2014
(FY)

–240

3