PERFORMANCE

48 Financial

46

48

Segment Information

50

Financial and Non-Financial Highlights

52

10-Year Financial Data

54

Operating and Financial Review

60

Consolidated Statement of Financial Position

62

Consolidated Statement of Profit or Loss

63

Consolidated Statement of Comprehensive Income

64

Consolidated Statement of Changes in Equity

65

Consolidated Statement of Cash Flows

Hitachi, Ltd. Integrated Report 201766

Summarized Consolidated Statement of Financial
Position by Manufacturing, Services and Othersand Financial Services

67

Summarized Consolidated Statement of Profit or
Loss by Manufacturing, Services and Others andFinancial Services

67

Summarized Consolidated Statement of Cash
Flows by Manufacturing, Services and Others andFinancial Services

Segment Information
Revenues

Information & Telecommunication Systems

Main Products and Services

Revenues and Profit

Systems integration
Consulting
Cloud services
Servers
Storage
SoftwareTelecommunications & network
ATMs(Billions of yen)

Adjusted operating income ratio

Share of Revenues
FY 2016
7.7%

6.6%

6.7%

2,034.0

2,109.3

5.2%

5.2%

1,982.8

FY 2016
A storage system

Social Infrastructure & Industrial Systems

Main Products and Services

Revenues and Profit

Industrial machinery and plants
Elevators
Escalators
Railway systems
Thermal, nuclear and renewableenergy power generation
systems
Transmission & distribution
systems(Billions of yen)

A Class 800 train for the UK Intercity
Express Programme (IEP)Electronic Systems & Equipment

15

16

(FY)

2,331.9

2,066.2
5.3%

4.3%

14

3.5%

–0.9%

15

16

Revenues and Profit

Semiconductor manufacturing
equipment
Measurement and analysis
equipment
Advanced industrial products
Medical equipment(Billions of yen)
6.4%
5.6%
1,131.6

3.3%

1.2%

Main Products and Services

30

％

23

％

Overseas Revenue Ratio
FY 2016

(FY)

39

％

Share of Revenues
FY 2016
7.0%

5.9%
5.7%
1,127.6％

Share of Revenues
FY 2016

2,333.1

20

Overseas Revenue Ratio

3.9%

14

EBIT ratio

5.7%
1,170.3

12％

Overseas Revenue Ratio
FY 2016
Hokkaido University Hospital s particle
beam cancer therapy system

Construction Machinery

14

48

Hitachi, Ltd. Integrated Report 2017

16

(FY)

Main Products and Services

Revenues and Profit

Share of Revenues

Hydraulic excavators
Wheel loaders
Mining machinery(Billions of yen)

FY 2016

815.7

758.3

60
7

753.9

7.4%
7.3%

Hitachi Construction Machinery's
ultralarge hydraulic excavator andmining dump truck

15

14

3.4%
3.5%

Overseas Revenue Ratio

3.0%

3.0%

FY 2016

15

16

(FY)

70

％

％

％

Adjusted operating income ratio

High Functional Materials & Components

Main Products and Services

Revenues and Profit

Share of Revenues(Billions of yen)

FY 2016

Hitachi Metals Nd-Fe-B NEOMAX®
magnets

Semiconductor- anddisplay-related materials
Printed wiring boards andrelated materials
Automotive parts(molded plastic products, etc.)
Energy storage devices
Specialty steels
Magnetic materials andcomponents
High-grade casting components
Wires and cables

Automotive Systems

Main Products and Services

Revenues and Profit

Engine management systems
Electric powertrain systems
Drive control systems
Car information systems(Billions of yen)

1,529.4

1,564.0

1,464.6

9.8%
8.4%

8.1%
7.9%

8.1%

EBIT ratio

14

％

8.2%

FY 2016

16

(FY)

5.1%

992.2
6.6%
5.7%

FY 2016
3.7%

14

15

16

10

(FY)

Main Products and Services

Revenues and Profit

Share of Revenues

Refrigerators
Washing machines
Vacuum cleaners
Room air conditioners
Air-conditioning equipment(Billions of yen)

FY 2016

57
6

754.2
681.0
6.2%

％

Overseas Revenue Ratio

5.4%

Hitachi Automotive Systems motor fora hybrid vehicle％

Share of Revenues
FY 2016

1,001.1

57

557.3
5.7%

Strategic Focus

936.9

15

％

％
Value Creation

4.6%

Overseas Revenue Ratio

Hitachi Appliances robot cleaner
minimaru

3.5%

14

15

4.0%

16

FY 2016

(FY)

20

％

Financial Services*2

Revenues and Profit

Share of Revenues

Revenues and Profit

Share of Revenues(Billions of yen)

FY 2016(Billions of yen)

FY 2016

1,274.2

6

1,252.7

4.0%
4.2%
3.3%

3.2%

3.4%
3.2%
653.7

15

16

％
10.9%

Overseas Revenue Ratio
FY 2016

14

356.2

(FY)

26

12.8%

12.7%

12.4%

11.9%
179.2

FY 2016

14

15

16

％

Overseas Revenue Ratio

9.9%

％

2

365.3

Management & Governance

Others*1

3.8%

(FY)

36

％

*1 From fiscal 2016, the Others (Logistics and Other Services) has been renamed to the Others due to conversion of Hitachi Transport System, Ltd. into
an equity-method associate on May 19, 2016.
*2 As Hitachi Capital Corporation was converted into an equity-method associate as of October 3, 2016, there is no company which belongs to the Financial
Services Segment. Accordingly, only the result for the first half of fiscal 2016 was recorded in this segment for fiscal 2016.
Hitachi, Ltd. Integrated Report 201749

Performance

14

CEO Message

Overseas Revenue Ratio

6.2%

Smart Life & Ecofriendly Systems

Our Business Model

Revenues

Financial and Non-Financial Highlights

Revenues / Overseas sales ratio

Operating income (Adjusted operating income) /Operating income (Adjusted operating income) ratio / EBIT / EBIT ratio(Billions of yen)(%)

12,00060

800

810,000

50

600

6

8,000

40

400

4

6,000

30

200

2

4,000

20

0

0

2,000

10

–200

–2

0

–400

0

07

08

09

10

11

12

13

14

13

U.S. GAAP

14

15

16

(FY)

(Billions of yen)

07

(%)

08

09

IFRS

Asia
North America
Revenues ( Japan
Overseas sales ratio (right scale)

Europe

10

11

12

13

14

13

U.S. GAAP

Other Areas) (left scale)

14

15

–4

16 (FY)IFRS

Operating income (Adjusted operating income) (left scale)
EBIT (left scale)Operating income (Adjusted operating income) ratio (right scale)
EBIT ratio (right scale)

Return on equity (ROE) / Return on assets (ROA)

Cash flows(%)(Billions of yen)
900

30
20

450

10
0

0

–10
–20

–450

–30
–40
–50

07

08

09

10

11

12

13

14

13

U.S. GAAP
ROE

15

16 (FY)

–900

07

08

09

IFRS

10

11

12

13

14

13

U.S. GAAP

ROA

14

15

16 (FY)IFRSCash flows from operating activities
Free cash flows

Cash flows from investing activities

Capital expenditures*1 / Depreciation

R&D expenditures / R&D expenditures as a percentage ofconsolidated revenues(Billions of yen)(Billions of yen)

1,000

500

5

800

400

4

600

300

3

400

200

2

200

100

1

0

07

08

09

10

11

12

U.S. GAAP
Capital expenditures50

14

Depreciation

Hitachi, Ltd. Integrated Report 2017

13

14

13

14

15

IFRS

16

(FY)

0

07

(%)

08

09

10

11

U.S. GAAP

12

13

14

13

14

15

16 (FY)IFRS

R&D expenditures (left scale)R&D expenditures as a percentage of consolidated revenues (right scale)0CO2 emissions from factories and offices*3(%)（ kt-CO 2）
50

Our Business Model

Rate of reduction in CO2 emissions from use of products
and services*2

4,000

40

3,000

30
2,000

1,000

12

13

14

15

16

0

(FY)

12

13

14

15

Number of employees* 4*5

Global number and ratio of female managers*6

16

(FY)

(People)(People)(%)

40,0004,000

830,0003,000

620,0002,000

410,000

1,000

2

12

Male

Female

13

14

15

16

0

(FY)

12

Number (left)

Occupational accident rate at companies surveyed in Japan

13

14

15

16

(FY)

15

16

(CY)

0

Ratio (right)

Value Creation

0

Strategic Focus

100

CEO Message

20

Number of registered patents

300

15,0000.20

200

10,000

0.10

100

5,000

0

0

0

12

13

Occupational accident rate (left)

14

15

Companies surveyed (right)

16

(FY)

12

Japanese patents

13

14

Foreign patents*7*1 In line with IFRS standards, capital investment is stated exclusive of investment in lease assets classified as finance leases.
*2 This new indicator is calculated from fiscal 2016 onward as a percentage of the fiscal 2010 amount.
*3 Fiscal 2016 figure includes a materials company that became a consolidated member of the Hitachi Group that year. *4 Number of full-time employees*5 Hitachi, Ltd. *6 No data available for fiscal 2012. *7 Total number of patents registered in the United States, Europe, and China. The number of patents
registered in Europe is based on European patent applications under European Patent Convention (EPC).

Hitachi, Ltd. Integrated Report 201751

Performance

0.30

Management & Governance(%)

10-Year Financial Data

U.S. GAAPFor the year:

Revenues

FY 2007

FY 2008

FY 2009

FY 2010

FY 2011

FY 2012FY 2013¥11,226,735 ¥10,000,369¥8,968,546¥9,315,807¥9,665,883¥9,041,071¥9,563,791

Operating income

345,516

127,146

202,159444,508

412,280

422,028

538,288

EBIT (Earnings before interest and taxes)

335,729(275,239)

77,815443,812573,218

358,015585,662

Net income (loss) attributable to
Hitachi, Ltd. stockholders(58,125)(787,337)(106,961)

238,869

347,179

175,326

264,975

Cash flows from operating activities

791,837

558,947

798,299

841,554447,155

583,508

439,406

Cash flows from investing activities(637,618)(550,008)(530,595)(260,346)(195,584)(553,457)(491,363)

Free cash flows

154,219

8,939

267,704

581,208

251,571

30,051(51,957)

Cash flows from financing activities(185,556)

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

32,968Cash dividends declared

19,947

9,971‒

36,13336,727

47,69050,711

Capital expenditures(Property, plant and equipment)

969,087

788,466

546,326

556,873649,234

742,537

849,877

Depreciation (Property, plant and equipment)

541,470

478,759441,697382,732

360,358

300,664

329,833

R&D expenditures

428,171416,517372,470

395,180

412,514341,310351,426

Total assets

10,530,847

9,403,709

8,964,464

9,185,629

9,418,526

9,809,230

11,016,899

Property, plant and equipment

2,653,918

2,393,946

2,219,804

2,111,270

2,025,538

2,279,964

2,342,091

Total Hitachi, Ltd. stockholders' equity

2,170,612

1,049,951

1,284,658

1,439,865

1,771,782

2,082,560

2,651,241

Interest-bearing debt

2,531,506

2,820,109

2,367,143

2,521,551

2,396,454

2,370,079

2,823,049

Number of employees

347,810

361,796359,746

361,745

323,540

326,240

320,725

Basic¥(17.48)¥(236.86)¥(29.20)¥52.89¥76.81¥37.28¥54.86

Diluted(17.77)(236.87)(29.20)

49.38

71.86

36.29

54.85

At year-end:

Per share data:
Net income (loss) attributable to
Hitachi, Ltd. stockholders:Cash dividends declared
Total Hitachi, Ltd. stockholders' equity

6.0

3.0

‒

8.0

8.0

10.0

10.5

652.95315.86287.13318.73382.26431.13549.02

5.6

Financial ratios:
Operating income ratio

3.1

1.3

2.3

4.8

4.3

4.7

EBIT ratio

3.0

‒2.8

0.9

4.8

5.9

4.0

6.1

Return on revenues

‒0.5

‒7.9

‒1.2

2.6

3.6

1.9

2.8

Return on equity (ROE)

‒2.5

‒48.9

‒9.2

17.5

21.6

9.1

11.2

Return on assets (ROA)

0.5

‒8.0

‒0.9

3.3

4.4

2.5

3.5

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

0.76

1.29

1.04

1.03

0.86

0.75

0.73

Total Hitachi, Ltd. stockholders' equity ratio

20.6

11.2

14.3

15.7

18.8

21.2

24.1

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 The Company has changed the number of employees to exclude temporary employees starting from the year ended March 31, 2010. The figures for the prioryears have been restated to reflect the current year's presentation.
5 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 Statements - Discontinued Operations, which was not transferred to MITSUBISHI HITACHI POWER SYSTEMS,
LTD. for the business integration in the thermal power generation systems with Mitsubishi Heavy Industries, Ltd. The results of the discontinued operation
are reported separately from continuing operations. In line with this classification, Revenues and Operating income for fiscal 2013 are reclassified.
6 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

52

Hitachi, Ltd. Integrated Report 2017

Our Business Model

IFRSMillions of yen

FY 2014

For the year:

FY 2013¥9,761,970

Revenues¥9,666,446

FY 2014

FY 2015

FY 2016¥9,774,930 ¥10,034,305¥9,162,264

600,479

Adjusted operating income

604,798

641,325

634,869

587,309551,018

EBIT

691,230

534,059

531,003475,182

241,301

Net income attributable to
Hitachi, Ltd. stockholders

413,877

217,482

172,155

231,261

447,348

Net cash provided by operating activities

306,777

451,825

812,226

629,582(610,255)

Net cash used in investing activities(550,179)(612,545)(730,799)(337,955)(162,907)

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

81,427

291,627

250,335

Net cash provided by (used in) financing activities

228,840

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

57,944

Cash dividends declared

50,711

57,94457,93962,764

848,716

Capital expenditures(Property, plant and equipment)

491,170

431,201

528,551

377,545

349,614

Depreciation (Property, plant and equipment)

331,228

350,783

366,547

302,757

335,515

R&D expenditures

354,487

334,814

333,730

323,963

CEO Message

Millions of yen

Total assets

11,098,191

12,433,727

12,551,005

9,663,917

2,564,105

Property, plant and equipment

2,258,933

2,472,497

2,500,226

1,998,411

2,930,309

Total Hitachi, Ltd. stockholders' equity

2,668,657

2,942,281

2,735,078

2,967,085

3,354,616

Interest-bearing debt

3,033,985

3,557,356

3,604,455

1,176,603

333,150

Number of employees

323,919

336,670

335,244

303,887

Yen

Strategic Focus

At year-end:
12,395,379

Yen

Per share data:

Basic¥85.69¥45.04¥35.65¥47.9049.93

Diluted

85.66

45.00

35.62

47.88

12.0
606.87

Cash dividends declared
Total Hitachi, Ltd. stockholders' equity

10.5

12.0

12.0

13.0

552.62609.35566.48614.56%%

6.2

Adjusted operating income ratio

6.3

6.6

6.3

6.4

5.6

EBIT ratio

7.2

5.5

5.3

5.2

2.5

Return on revenues

4.3

2.2

1.7

2.5

8.6

Return on equity (ROE)

17.5

7.8

6.1

8.1

3.1

Return on assets (ROA)

5.0

2.9

2.4

3.0

0.78

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

0.78

0.83

0.87

0.29

23.6

Total Hitachi, Ltd. stockholders' equity ratio

24.0

23.7

21.8

30.7

Management & Governance

Financial ratios:

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 administrative expenses.
The Company believes that this is useful to investors in comparing the Company's financial results with those ofother Japanese companies.
2 A part of the thermal power generation systems business is classified as a discontinued operation in accordancewith the provision of IFRS 5, Non-current Assets Held for Sale and Discontinued Operations, which was nottransferred to MITSUBISHI HITACHI POWER SYSTEMS, LTD. for the business integration in the thermal power
generation systems with Mitsubishi Heavy Industries, Ltd. The results of the discontinued operation are reported
separately 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 endof previous fiscal year) x 100

Hitachi, Ltd. Integrated Report 201753

Performance¥49.97

Value Creation

Earnings per share attributable to
Hitachi, Ltd. stockholders:Operating and Financial Review

Operating Results
Effective from April 1, 2016, the Company changed thename of the Others (Logistics and Other services)segment to the Others segment.

Summary
Billions of yen
Years ended March 31:

Revenues

2016

2017

Percentchange¥10,034.3¥9,162.2

–9%

EBIT

531.0

475.1

–11%

Income fromcontinuing operations,
before income taxes

517.0

469.0

–9%

Net income attributable
to Hitachi, Ltd.
stockholders

172.1

231.2

34%

Analysis of Statement of Operations
Revenues decreased 9% to ¥9,162.2 billion, as comparedwith the year ended March 31, 2016. This was due mainly
to lower revenues in the Information & Telecommunication
Systems, High Functional Materials & Components, Smart
Life & Ecofriendly Systems, Others and Financial Services
segments. This decrease was partially offset by higher
revenues in the Electronic Systems & Equipment segment.
Cost of sales decreased 9% to ¥6,782.6 billion, as
compared with the year ended March 31, 2016, and theratio of cost of sales to revenues was 74%, which was thesame level as the year ended March 31, 2016. Gross profit
decreased 8% to ¥2,379.5 billion, as compared with theyear ended March 31, 2016.
Selling, general and administrative expenses decreased¥148.0 billion to ¥1,792.2 billion, as compared with the year
ended March 31, 2016, and the ratio of selling, general andadministrative expenses to revenues was 20%, ascompared with 19% for the year ended March 31, 2016.

54

Hitachi, Ltd. Integrated Report 2017

Other income increased ¥43.2 billion to ¥100.7 billion andother expenses increased ¥4.6 billion to ¥146.5 billion, as
compared with the year ended March 31, 2016. The details
are as follows.
Net gain on sales and disposal of fixed assets improvedby ¥19.5 billion, as compared with the year ended March
31, 2016, to a gain of ¥15.0 billion.
Impairment losses increased ¥23.8 billion to ¥68.5 billion,
as compared with the year ended March 31, 2016. This
mainly reflected impairment losses on software for sale andother intangible assets in the Information &Telecommunication Systems segment.
Net gain on business reorganization and others increased¥26.1 billion to ¥81.3 billion, as compared with the year
ended March 31, 2016, reflecting the partial sale of theshares of Hitachi Transport System, Ltd. in the Others
segment and the sale of Hitachi Koki Co., Ltd. shares in theElectronic Systems & Equipment segment.
Special termination benefits decreased ¥20.8 billion to¥24.6 billion, as compared with the year ended March
31, 2016.
Expenses related to competition law and others
decreased ¥15.5 billion to ¥6.7 billion, as compared with theyear ended March 31, 2016.
Financial income (excluding interest income)decreased ¥3.5 billion to ¥7.0 billion and financial
expenses (excluding interest charges) decreased ¥4.0
billion to ¥26.2 billion, as compared with the year ended
March 31, 2016.
Share of loss of investments accounted for using theequity method was ¥47.1 billion, a deterioration of ¥47.3
billion as compared with the year ended March 31, 2016,
mainly reflecting the posting of an impairment loss inconnection with the uranium enrichment business at an U.S.
equity-method associate in the Social Infrastructure &Industrial Systems segment.
EBIT decreased ¥55.8 billion to ¥475.1 billion, as
compared with the year ended March 31, 2016.

Our Business Model

Operations by Segment
The following is an overview of results of operations bysegment. Revenues for each segment include intersegment
transactions. Segment profit is measured by EBIT.

Strategic Focus

CEO Message(Information & Telecommunication Systems)
Revenues decreased 6% to ¥1,982.8 billion, as comparedwith the year ended March 31, 2016, due mainly to thenegative impact of foreign currency translation causing
lower sales from overseas subsidiaries and to lower sales
from ATMs for overseas markets.
Segment profit decreased ¥32.6 billion to ¥76.4 billion, as
compared with the year ended March 31, 2016, due mainly
to the posting of business structural reform expenses,
despite the effect of business structural reform centered on
the telecommunications & network business, improvementin profitability of the social infrastructure-related information
systems, among other positives.

Hitachi, Ltd. Integrated Report 2017Management & GovernanceValue Creation(Social Infrastructure & Industrial Systems)
Revenues were ¥2,331.9 billion, which was the same level
as the year ended March 31, 2016. This mainly reflected
decreases in revenues in the elevators and escalators
business due to the negative impact of foreign currencytranslation, and in the power and energy business becauseof the absence of a large project posted for the year ended
March 31, 2016, despite substantial revenue growth in therailway systems business due to the acquisition of thebusinesses of AnsaldoBreda S.p.A. (excluding a part of its
operations), the acquisition of Ansaldo STS S.p.A. (both ofwhich are in Italy), and an increase in revenues for the U.K.
Segment loss was ¥19.9 billion, a deterioration of ¥49.1
billion from the year ended March 31, 2016, due mainly tothe posting of an impairment loss regarding the uranium
enrichment business of an equity-method associate in the
U.S. and lower earnings in the elevators and escalators
business because of the negative impact of foreign
currency translation.

55

Performance

Interest income increased ¥0.8 billion to ¥12.9 billion
and interest charges decreased ¥6.9 billion to ¥19.0
billion, as compared with the year ended March 31,
2016.
Income from continuing operations, before income taxes
decreased ¥47.9 billion to ¥469.0 billion, as compared withthe year ended March 31, 2016.
Income taxes decreased ¥40.0 billion to ¥125.1 billion,
as compared with the year ended March 31, 2016, due
mainly to recording tax expenses in the year ended
March 31, 2016 in connection with the partial transfer ofshares of Hitachi Transport System, Ltd. and Hitachi
Capital Corporation.
Loss from discontinued operations decreased ¥51.1
billion to ¥5.9 billion, as compared with the year ended
March 31, 2016.
Net income increased ¥43.2 billion to ¥338.0 billion, as
compared with the year ended March 31, 2016.
Net income attributable to non-controlling interests
decreased ¥15.8 billion to ¥106.7 billion, as compared withthe year ended March 31, 2016.
As a result of the foregoing, net income attributable to
Hitachi, Ltd. stockholders increased ¥59.1 billion to ¥231.2
billion, as compared with the year ended March 31, 2016.

(Electronic Systems & Equipment)
Revenues increased 4% to ¥1,170.3 billion, as comparedwith the year ended March 31, 2016, due mainly toincreased revenues at Hitachi Koki Co., Ltd. because of theacquisition of Germany-based metabo Aktiengesellschaft,despite a decrease in revenues at Hitachi Kokusai ElectricInc. mainly owing to lower sales of telecommunicationequipment and video surveillance systems in Japan.
Segment profit increased ¥2.4 billion to ¥66.7 billion, as
compared with the year ended March 31, 2016, due
mainly to higher earnings at Hitachi High-Technologies
Corporation due to firm sales of semiconductor production
equipment and higher earnings at Hitachi Koki Co., Ltd.
because of the increased revenues, despite a decrease inearnings at Hitachi Kokusai Electric Inc. mainly because ofa decline in revenues and the posting of businessstructural reform expenses.
(Construction Machinery)
Revenues decreased 1% to ¥753.9 billion, as comparedwith the year ended March 31, 2016, due mainly to thenegative impact of foreign currency translation caused byappreciation of the yen, despite the recovery of demand forhydraulic excavators in China and India.
Segment profit decreased ¥3.1 billion to ¥22.7 billion, as
compared with the year ended March 31, 2016, due mainly
to the absence of a gain on business reorganization andothers related to the sale of shares of UniCarriers Holdings
Corporation recorded for the year ended March 31, 2016,
despite the effect of business structural reforms, decreases
in business structural reform expenses and an improvement
in exchange gain or loss.
(High Functional Materials & Components)
Revenues decreased 6% to ¥1,464.6 billion, as comparedwith the year ended March 31, 2016, due mainly to a fall inrevenues at Hitachi Metals, Ltd. due to the negative impactof foreign currency translation causing a fall in sales fromoverseas subsidiaries and a decline in demand associatedwith the slower economies in China and emerging countries
in Asia.
Segment profit decreased ¥30.2 billion to ¥123.3 billion,
as compared with the year ended March 31, 2016, due
mainly to the decrease in revenues and the absence ofgains on business reorganization and others related to thesales of equity interest in Hitachi Tool Engineering, Ltd. by
Hitachi Metals, Ltd. in the year ended March 31, 2016.

56

Hitachi, Ltd. Integrated Report 2017

(Automotive Systems)
Revenues decreased 1% to ¥992.2 billion, as comparedwith the year ended March 31, 2016, due mainly to negative
impact of foreign currency translation, despite sales growthparticularly in North America and China, where demand forautomobiles was firm.
Segment profit increased ¥11.8 billion to ¥65.8 billion, as
compared with the year ended March 31, 2016, due mainly
to posting of gain on sales and disposals of fixed assets
despite the decline in revenues.
(Smart Life & Ecofriendly Systems)
Revenues decreased 18% to ¥557.3 billion, as comparedwith the year ended March 31, 2016, due mainly to theeffect of reorganization of the air-conditioning systems
business with an equity-method associate that is a joint
venture with Johnson Controls Inc.
Segment profit decreased ¥10.1 billion to ¥31.8 billion, as
compared with the year ended March 31, 2016, due mainly
to the effect of a decline in revenues from the reorganizationof the air-conditioning systems business and the absence ofa gain on business reorganization and others in association
with the reorganization of the air-conditioning systems
business recorded in the year ended March 31, 2016.
(Others)
Revenues decreased 48% to ¥653.7 billion, and segment
profit decreased ¥19.9 billion to ¥20.6 billion, as comparedwith the year ended March 31, 2016, respectively. This wasdue mainly to the conversion of Hitachi Transport System,
Ltd. to an equity-method associate.
(Financial Services)
As Hitachi Capital Corporation was converted to an
equity-method associate as of October 2016, there is nocompany which belongs to the Financial Services
segment. Accordingly, only the results for the period inwhich said company was a consolidated subsidiary arerecorded. As a result, revenues decreased 51% to¥179.2 billion, and segment profit decreased ¥23.8
billion to ¥22.8 billion, as compared with the year ended
March 31, 2016, respectively.

2017

Percentchange¥ 5,231.5¥4,757.6–9%4,802.7

4,404.5–8%

Asia2,112.3

1,860.7–12%

North America

1,280.3

1,144.0–11%

Europe

951.1

972.6

2%

Other Areas

459.0

427.1

–7%

Total Revenues¥10,034.3¥9,162.2

–9%

Japan
Overseas Revenues
SubtotalJapan
Revenues in Japan decreased 9% to ¥4,757.6 billion, as
compared with the year ended March 31, 2016. This wasdue to lower revenues across all segments, particularly in
the Others segment, reflecting the conversion of Hitachi
Transport System, Ltd. to an equity-method associate andin the Financial Services segment in which Hitachi Capital
Corporation was converted to an equity-method associate.
Overseas
Overseas revenues decreased 8% to ¥4,404.5 billion, as
compared with the year ended March 31, 2016, and theratio to total revenues was 48%, which was the same level
as the year ended March 31, 2016.

Our Business Model
CEO Message

2016

Years ended March 31:(Europe)
Revenues in Europe increased 2% to ¥972.6 billion, as
compared with the year ended March 31, 2016. This wasdue mainly to higher revenues in the Social Infrastructure &Industrial Systems segment, reflecting substantial growth in
the railway systems business, and the Electronic Systems &Equipment segment, in which Hitachi Koki Co., Ltd.
recorded increased revenues due to the acquisition of
metabo Aktiengesellschaft, despite lower revenues in the
Others and the Financial Services segments, etc.

Strategic Focus

Billions of yen(Other Areas)
Revenues in other areas decreased 7% to ¥427.1 billion, as
compared with the year ended March 31, 2016. This wasdue mainly to lower revenues in the Smart Life & Ecofriendly
Systems and the Others segments, despite higher revenues
in the Social Infrastructure & Industrial Systems segment,
reflecting increased revenues in the railway systems
business, and the Electronic Systems & Equipment
segment, reflecting increased revenues by Hitachi HighTechnologies Corporation.

Value Creation

The following is an overview of revenues attributed togeographic areas based on customer location.

(North America)
Revenues in North America decreased 11% to ¥1,144.0
billion, as compared with the year ended March 31,
2016. This was due mainly to lower revenues in the
Information & Telecommunication Systems, High
Functional Materials & Components and Others
segments, despite higher revenues in the Social
Infrastructure & Industrial Systems segment.

Management & Governance(Asia)
Revenues in Asia decreased 12% to ¥1,860.7 billion, as
compared with the year ended March 31, 2016. This wasdue mainly to lower revenues in the Social Infrastructure &Industrial Systems segment, reflecting reduced revenues inthe elevators and escalators business, particularly in China,
the Others segment in which Hitachi Transport System, Ltd.
was converted to an equity-method associate, and the
Smart Life & Ecofriendly Systems segment due to thereorganization of the air-conditioning systems business,despite higher revenues in the Electronic Systems &Equipment and the Construction Machinery segments.

Hitachi, Ltd. Integrated Report 201757

Performance

Revenues by Geographic Area

Summary of Financial Condition, etc.
Liquidity and Capital Resources
Our management considers maintaining an appropriate levelof liquidity and securing adequate funds for current andfuture business operations to be important financial
objectives. Through efficient management of working capitaland selective investment in new plants and equipment, we
are working 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 tobe an immediately available source of funds. In addition, weraise funds both in the capital markets and from Japaneseand international commercial banks in response to ourcapital requirements. Our management s policy is to financecapital expenditures primarily by internally generated funds
and to a lesser extent by funds raised through the issuanceof debt and equity securities in domestic and foreign capital
markets. In order to flexibly access funding, we maintain ourshelf registration with the maximum outstanding balance of¥300.0 billion.
We maintain commitment line agreements with a numberof domestic banks under which we may borrow in order toensure efficient access to necessary funds. These
commitment line agreements generally provide for a oneyear 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, 2017, ourunused commitment lines totaled ¥599.0 billion, includingthese of ¥400.0 billion which the Company maintained.

58

Hitachi, Ltd. Integrated Report 2017

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, 2017 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 theglobal capital markets will remain sufficient for our financing
needs. We seek to improve our credit ratings in order toensure financial flexibility for liquidity and capitalmanagement, and to continue to maintain access to
sufficient funding resources through the capital markets.

Cash Flows
Billions of yen
Years ended March 31:

2016

2017

Net cash provided by operating activities¥ 812.2¥ 629.5

Net cash used in investing activities(730.7)(337.9)Net cash used in financing activities(26.4)(209.5)

Effect of exchange rate changes
on cash and cash equivalents(57.3)(16.1)

Change in cash and cash equivalents

(2.3)

65.9

701.7

699.3

¥ 699.3¥ 765.2

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

(Cash Flows from Operating Activities)
Net income in the year ended March 31, 2017 increased by¥43.2 billion, as compared with the year ended March 31,
2016. Trade payables increased by ¥111.5 billion in the year
ended March 31, 2017, as compared with the decrease of¥1.6 billion in the year ended March 31, 2016. However,change in trade receivables and change in inventories
decreased net cash flow by ¥143.7 billion and ¥67.0 billion,
respectively. As a result of the foregoing, net cash provided
by operating activities was ¥629.5 billion in the year ended
March 31, 2017, a decrease of ¥182.6 billion comparedwith the year ended March 31, 2016.

*1 The sum of the purchase of property, plant and equipment, thepurchase of intangible assets and the purchase of leased assets, lessthe proceeds from sale of property, plant, equipment and intangible
assets, the proceeds from sale of leased assets and the collection oflease receivables

equity amounted to ¥2,967.0 billion, an increase of ¥232.0
billion from March 31, 2016. This is due mainly to theposting of net income attributable to Hitachi, Ltd.
stockholders, despite the impact of converting Hitachi
Capital Corporation into an equity-method associate. As aresult, the ratio of total Hitachi, Ltd. stockholders equity tototal assets as of March 31, 2017 was 30.7%, comparedwith 21.8% as of March 31, 2016.
Non-controlling interests as of March 31, 2017 was¥1,129.9 billion, a decrease of ¥260.5 billion from March
31, 2016.
Total equity as of March 31, 2017 was ¥4,096.9 billion, adecrease of ¥28.5 billion from March 31, 2016. The ratio ofinterest-bearing debt to total equity was 0.29, comparedwith 0.87 as of March 31, 2016.

Value Creation

Strategic Focus

CEO Message

As of March 31, 2017, total assets amounted to ¥9,663.9
billion, a decrease of ¥2,887.0 billion from March 31, 2016.
This was due mainly to the conversion of Hitachi Capital
Corporation and Hitachi Transport System, Ltd. into equitymethod associates and the sale of Hitachi Koki Co., Ltd.
Cash and cash equivalents as of March 31, 2017 amounted
to ¥765.2 billion, an increase of ¥65.9 billion from theamount as of March 31, 2016.
As of March 31, 2017, total interest-bearing debt, thesum of short-term debt and long-term debt, amounted to¥1,176.6 billion, a decrease of ¥2,427.8 billion from March
31, 2016. As of March 31, 2017, short-term debt,
consisting mainly of borrowings from banks and commercial
paper, amounted to ¥196.3 billion, a decrease of ¥675.0
billion from March 31, 2016. As of March 31, 2017, current
portion of long-term debt amounted to ¥190.2 billion, adecrease of ¥461.2 billion from March 31, 2016. As of
March 31, 2017, long-term debt (excluding current portion),
consisting mainly of debentures, and loans principally frombanks and insurance companies, amounted to ¥790.0
billion, a decrease of ¥1,291.5 billion from March 31, 2016.
As of March 31, 2017, total Hitachi, Ltd. stockholders

Management & Governance(Cash Flows from Financing Activities)
The net cash outflow from a change in short-term debt
increased by ¥164.0 billion compared with the year ended
March 31, 2016. Proceeds related to long-term debt*2
were ¥115.5 billion, a decrease of ¥65.1 billion comparedwith the year ended March 31, 2016. As a result of theforegoing, net cash used in financing activities was ¥209.5
billion in the year ended March 31, 2017, an increase in net
cash outflow of ¥183.0 billion compared with the year
ended March 31, 2016.

Our Business Model

Assets, Liabilities and Equity*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, 2017,
cash and cash equivalents amounted to ¥765.2 billion, net
increase of ¥65.9 billion from March 31, 2016. Free cash
flows, the sum of cash flows from operating and investing
activities, represented an inflow of ¥291.6 billion in the year
ended March 31, 2017, an increase in net cash inflow of¥210.2 billion from the year ended March 31, 2016.

Hitachi, Ltd. Integrated Report 201759

Performance(Cash Flows from Investing Activities)
Net amount of investments related to property, plant andequipment*1 was ¥462.6 billion, a decrease of ¥189.7 billion
as compared with the year ended March 31, 2016.
Proceeds from sale of investments in securities and otherfinancial assets (including investments in subsidiaries andinvestments accounted for using the equity method)
increased by ¥111.1 billion compared with the year ended
March 31, 2016, reflecting partial sales of the shares ofHitachi Transport System, Ltd. and Hitachi Capital
Corporation, and the sale of all shares of Hitachi Koki Co.,
Ltd. Purchase of investments in securities and otherfinancial assets (including investments in subsidiaries andinvestments accounted for using the equity method) was¥177.3 billion, a decrease of ¥19.3 billion compared with theyear ended March 31, 2016, in which the acquisition of thebusinesses of AnsaldoBreda S.p.A. (excluding a part of its
operations), the acquisition of Ansaldo STS S.p.A., and theacquisition of Pentaho Corporation were conducted. As aresult of the foregoing, net cash used in investing activitieswas ¥337.9 billion in the year ended March 31, 2017, adecrease of ¥392.8 billion compared with the year ended
March 31, 2016.

Consolidated Statement of Financial Position
March 31, 2017 and 2016

Millions of yen

Assets2016

2017

699,315¥ 765,242

2,992,770

2,433,149

Current assets
Cash and cash equivalents
Trade receivables
Lease receivables¥

338,758

42,365

1,299,855

1,225,907

Other current assets

541,857

535,943

Total current assets

5,872,555

5,002,606

Investments accounted for using the equity method

676,960

691,251

Investments in securities and other financial assets

1,329,974

719,704

727,485

38,646

Property, plant and equipment

2,500,226

1,998,411

Intangible assets

1,070,403

919,201

Other non-current assets

373,402

294,098

Total non-current assets

6,678,450

4,661,311¥12,551,005¥9,663,917

Inventories

Non-current assets

Lease receivables

Total Assets

60

Hitachi, Ltd. Integrated Report 2017

Our Business Model

Millions of yen

Liabilities

2016

2017

871,417¥ 196,357

651,518

190,233

Current portion of long-term debt
Other financial liabilities¥

280,048274,270

Trade payables

1,451,918

1,402,233

Other current liabilities

1,739,315

1,657,766

Total current liabilities

4,994,216

3,720,859

Long-term debt

2,081,520

790,013

Other financial liabilities

115,155

53,422Retirement and severance benefits

783,670

635,684

Other non-current liabilities

450,874

366,944

Total non-current liabilities

3,431,219

1,846,063

8,425,435

5,566,922

Common stock

458,790458,790

Capital surplus

586,790

577,573

Total Liabilities

Strategic Focus

Non-current liabilities

Equity1,609,761

1,793,570

Accumulated other comprehensive income

83,543141,068

Treasury stock, at cost

(3,806)(3,916)

2,735,078

2,967,085

1,390,492

1,129,910

4,125,570

4,096,995¥12,551,005¥9,663,917

Total Hitachi, Ltd. stockholders' equity
Non-controlling interests
Total Equity
Total Liabilities and Equity

Management & Governance

Retained earnings

Value Creation

Hitachi, Ltd. stockholders' equity

Hitachi, Ltd. Integrated Report 201761

Performance

Short-term debt

CEO Message

Current liabilities

Consolidated Statement of Profit or Loss
Years ended March 31, 2017 and 2016

Millions of yen

2016

2017

¥10,034,305¥ 9,162,264

Cost of sales(7,459,073)(6,782,677)

Gross profit

2,575,232

2,379,587(1,940,363)(1,792,278)

634,869

587,309

Other income

57,539100,742

Other expenses(141,881)(146,568)

Financial income

10,615

7,091

Financial expenses(30,295)(26,206)

Revenues

Selling, general and administrative expenses
Adjusted operating income

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

156(47,186)

531,003475,182

Interest income

12,02812,923

Interest charges(25,991)(19,014)517,040

469,091(165,206)(125,112)

351,834

343,979(57,081)(5,950)EBIT (Earnings before interest and taxes)

Income from continuing operations, before income taxes
Income taxes
Income from continuing operations
Loss from discontinued operations
Net income¥

294,753¥

338,029

Net income attributable to:62

Hitachi, Ltd. stockholders

172,155

231,261

Non-controlling interests

122,598

106,768

Hitachi, Ltd. Integrated Report 2017

Consolidated Statement of Comprehensive Income
Our Business Model

Years ended March 31, 2017 and 2016

Millions of yen

Net income

2016

2017

¥ 294,753¥338,029

Other comprehensive income (OCI)
Net changes in financial assets measured at fair value through OCI(50,323)59,934Remeasurements of defined benefit plans(140,844)

46,086(4,275)(1,887)(195,442)

104,133

Total items not to be reclassified into net income

Foreign currency translation adjustments(190,099)(64,761)

Net changes in cash flow hedges

32,78521,303

Share of OCI of investments accounted for using the equity method(26,239)

1,166

Total items that can be reclassified into net income(183,553)(42,292)

Other comprehensive income (OCI)(378,995)

61,841¥ (84,242)¥399,870

Hitachi, Ltd. stockholders(127,557)

299,397

Non-controlling interests

43,315

100,473

Comprehensive income (loss)

Strategic Focus

Items that can be reclassified into net income

Management & GovernanceValue Creation

Comprehensive income (loss) attributable to:

Hitachi, Ltd. Integrated Report 201763

Performance

Share of OCI of investments accounted for using the equity method

CEO Message

Items not to be reclassified into net income

Consolidated Statement of Changes in Equity
Years ended March 31, 2017 and 2016

Millions of yen

2016
Accumulated
otherTotal Hitachi, Ltd.
comprehensive Treasury stock, stockholders'
Non-controllingincomeat costequityinterests

Commonstock

CapitalsurplusRetainedearnings

As of March 31, 2015

¥458,790¥608,416¥1,477,517¥ 401,100¥(3,542)¥2,942,281¥1,354,061¥4,296,342

Reclassified into
retained earnings‒‒

18,030(18,030)

‒

‒

‒

‒

Total equity

Net income‒‒

172,155‒‒

172,155

122,598

294,753

Other comprehensive loss

‒

‒

‒

(299,712)‒(299,712)(79,283)(378,995)

Cash dividends‒‒(57,941)‒‒(57,941)(39,502)(97,443)

Changes in treasury stock

‒

(4)

‒

‒

(264)

(268)

‒

(268)

Equity transactions and
other

‒

(21,622)

‒

185

‒

(21,437)

32,618

11,181

Total changes in equity‒(21,626)

132,244(317,557)(264)(207,203)

36,431(170,772)

As of March 31, 2016

¥458,790¥586,790¥1,609,761¥ 83,543¥(3,806)¥2,735,078¥1,390,492¥4,125,570

Millions of yen

2017

64

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

Commonstock

CapitalsurplusRetainedearnings

As of March 31, 2016

¥458,790¥586,790¥1,609,761¥ 83,543¥(3,806)¥2,735,078¥1,390,492¥4,125,570

Reclassified into
retained earnings‒‒

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 andotherTotal equity‒(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

Hitachi, Ltd. Integrated Report 2017

Consolidated Statement of Cash Flows
Our Business Model

Years ended March 31, 2017 and 2016

Millions of yen

2016

2017

¥ 294,753¥ 338,029

Cash flows from operating activities
Net income
Depreciation and amortization

507,790415,183

Change in trade receivables(53,092)(196,824)

Change in inventories

44,342(22,731)

Change in trade payables(1,602)

111,589

Other

20,035(15,664)

812,226

629,582

Purchase of property, plant and equipment(369,494)(316,116)

Purchase of intangible assets(116,438)(101,034)

Purchase of leased assets(539,420)(292,943)

22,632

52,208Net cash provided by (used in) operating activities

CEO Message

Adjustments to reconcile net income to net cash provided by operating activities

23,834

14,539Collection of lease receivables

326,497

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(58,756)

71,653Other(19,654)

53,012(730,799)(337,955)

81,427

291,627

Change in interest-bearing debt

110,821(118,314)

Dividends paid to stockholders(57,907)(57,935)

Dividends paid to non-controlling interests(41,671)(36,508)

Other(37,710)3,221(26,467)(209,536)

Effect of exchange rate changes on cash and cash equivalents(57,348)(16,164)

Change in cash and cash equivalents(2,388)65,927

701,703699,315¥ 699,315¥ 765,242

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

Value Creation

Proceeds from sale of leased assets

Net cash provided by (used in) financing activities

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

Hitachi, Ltd. Integrated Report 2017Management & GovernanceCash flows from financing activities

65

Performance

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

Strategic Focus

Cash flows from investing activities

Summarized Consolidated Statement of Financial Position by
Manufacturing, Services and Others and Financial Services
Years ended March 31, 2017 and 2016
Billions of yen

2016
Manufacturing,Servicesand Others

Financial
Services¥4,995.6

2017

Total

Manufacturing,Servicesand Others

Financial
Services

Total¥1,256.8¥ 5,872.5¥5,002.6‒¥5,002.6

660.9

157.0

699.3

765.2

‒

765.2

2,472.0710.7

2,992.7

2,433.1‒

2,433.1

AssetsCurrent assets
Cash and cash equivalents
Trade receivables

45.6

311.9

338.7

42.3

‒

42.3

1,291.5

3.7

1,299.8

1,225.9‒

1,225.9

525.3

73.3

541.8

535.9

‒

535.9

4,922.3

1,834.6

6,678.4

4,661.3‒

4,661.3

Investments accounted for using
the equity method

676.3

20.4

676.9

691.2

‒

691.2

Investments in securities andother financial assets

681.6

675.9

1,329.9

719.7

‒

719.7

Lease receivables
Inventories
Other current assets
Non-current assets

38.2

729.8

727.4

38.6

‒

38.6

Property, plant and equipment

2,193.6307.5

2,500.2

1,998.4‒

1,998.4

Intangible assets

1,007.7

62.6

1,070.4

919.2

‒

919.2

324.6

38.1

373.4

294.0

‒

294.0

¥9,917.9¥3,091.4¥12,551.0¥9,663.9‒¥9,663.9¥4,095.5¥1,323.2¥ 4,994.2¥3,720.8‒¥3,720.8

Short-term debt

529.8

497.6

871.4

196.3

‒

196.3

Current portion of long-term debt

234.9

485.6

651.5

190.2

‒

190.2

Other financial liabilities

265.5

40.1

280.0

274.2

‒

274.2

1,379.0228.9

1,451.9

1,402.2‒

1,402.2
1,657.7

Lease receivables

Other non-current assets
Total Assets
Liabilities and Equity
Current liabilities

Trade payables

1,686.1

70.8

1,739.3

1,657.7‒

Non-current liabilities

2,038.0

1,421.1

3,431.2

1,846.0‒

1,846.0

Long-term debt

750.3

1,356.2

2,081.5

790.0

‒

790.0

Other financial liabilities

85.0

28.7

115.1

53.4

‒

53.4

Retirement and severance benefits

774.1

9.5

783.6

635.6

‒

635.6

Other current liabilities

428.5

26.6

450.8

366.9

‒

366.9

6,133.5

2,744.4

8,425.4

5,566.9‒

5,566.9

Hitachi, Ltd. stockholders' equity

2,540.8

201.3

2,735.0

2,967.0‒

2,967.0

Non-controlling interests

1,243.5

145.7

1,390.4

1,129.9‒

1,129.9

Total Equity

3,784.3

347.0

4,125.5

4,096.9‒

4,096.9

Total Liabilities and Equity¥9,917.9¥3,091.4¥12,551.0¥9,663.9‒¥9,663.9¥1,515.0¥2,339.5¥3,604.4¥1,176.6‒¥1,176.6

Total Hitachi, Ltd. stockholders'equity ratio

25.6%

6.5%

21.8%

30.7%

‒

30.7%

D/E ratio (including non-controllinginterests) (times)

0.40

6.74

0.87

0.29

‒

0.29

Other non-current liabilities
Total Liabilities

Interest-bearing debt

66

Hitachi, Ltd. Integrated Report 2017

Our Business Model

Summarized Consolidated Statement of Profit or Loss by
Manufacturing, Services and Others and Financial Services
March 31, 2017 and 2016
Billions of yen

2016
Financial
Services¥9,833.9¥365.3

2017

Total

Manufacturing,Servicesand Others

Financial
Services

Total¥10,034.3¥9,053.3¥179.2¥9,162.2

Adjusted operating income

586.8

45.2

634.8

566.8

21.3

587.3

EBIT

490.2

46.6

531.0

458.1

22.8

475.1

Income from continuing operations,
before income taxes

476.9

46.6

517.0

452.4

22.8

469.0

Net income attributable
to Hitachi, Ltd. stockholders

152.1

19.7

172.1

227.8

9.7

231.2

CEO Message

Revenues

Manufacturing,Servicesand Others

Summarized Consolidated Statement of Cash Flows by Manufacturing,Services and Others and Financial Services
March 31, 2017 and 2016
Billions of yen

2016

¥

Total

(7.4)

¥ 812.2¥ 638.7¥

Financial
Services

Total

2.2

¥ 629.5

Cash flows from investing activities(518.7)(218.8)(730.7)(153.2)(274.6)(337.9)

Free cash flows

324.4(226.2)

81.4

485.5

(272.4)

291.6

Cash flows from financing activities(262.7)265.4(26.4)(367.1)117.5(209.5)

Effect of exchange rate changes
on cash and cash equivalents(55.5)(1.8)(57.3)(14.0)(2.1)(16.1)

6.1

37.3

(2.3)

104.3

(157.0)65.9

Cash and cash equivalents
at beginning of year

654.7

119.7

701.7

660.9

157.0

699.3

Cash and cash equivalents
at end of year

¥ 660.9¥ 157.0¥ 699.3¥ 765.2‒¥ 765.2

363.5(264.8)

113.3

213.8

(109.2)

100.2

Change in cash and cash equivalents

Core free cash flows

Strategic Focus¥ 843.1

Financial
Services

Value Creation

Cash flows from operating activities

2017
Manufacturing,Servicesand Others

Hitachi, Ltd. Integrated Report 2017Management & GovernanceNotes: 1 The consolidated financial statements by Manufacturing, Services and Others and Financial Services represent
unaudited financial information prepared by the Company for the purpose of this supplementary information.
2 Total figures exclude inter-segment transactions.
3 As Hitachi Capital was converted into an equity‒method associate as of October 3, 2016, there is no company thatbelongs to Financial Services. Accordingly, there is no balance of total assets, total liabilities and total equity in thesummarized consolidated statement of financial position for Financial Services as of March 31, 2017.
In addition, only the results for the first half of fiscal 2016 were recorded in the summarized consolidated statement of
profit or loss for Financial Services and only the cash flows for the first half of fiscal 2016 and the decrease in cash
and cash equivalents owned by Hitachi Capital as of the date were recorded in the summarized consolidated
statement of cash flows for Financial Services.
4. Core free cash flows are operating cash flows plus collection of investments in leases less cash outflows forthe purchase of property, plant and equipment, intangible assets, software, and assets to be leased.

67

Performance

Manufacturing,Servicesand Others