2015 Mid-term Management Plan
Progress and Prospects
May 12, 2014

Toshiaki Higashihara
President & COO
Hitachi, Ltd.

© Hitachi, Ltd. 2014. All rights reserved.

Contents
1. Outline of 2015 Mid-term Management Plan
2. Fiscal Year 2013 Progress Overview
3. Execution of Business Growth Measures
4. 2015 and Beyond© Hitachi, Ltd. 2014. All rights reserved.

11. Outline of 2015 Mid-term Management Plan

© Hitachi, Ltd. 2014. All rights reserved.

2

1. Outline of 2015 Mid-term Management Plan

Management
Focus

2015 Mid-term Management Plan
- Achieving Growth and Hitachi’s Transformation -Innovation

GlobalTransformation

Strengthen service
businesses that maximize
the utilization of IT andbring about innovation

Deliver Innovation to
Customers and Society
globally

Transform Hitachi:
To deliver innovation bystandardized and speedy
operation© Hitachi, Ltd. 2014. All rights reserved.

3

2. Fiscal Year 2013 Progress Overview© Hitachi, Ltd. 2014. All rights reserved.

4

2-1. Business Performance of FY2012-FY2015

Revenues
Operating income
ratio（ EBIT*1ratio ）Net income
attributable to
Hitachi, Ltd.
stockholders
Total Hitachi, Ltd.
stockholders’ equity
ratio

FY2012(Actual)

FY2013(Actual)

FY2014(Outlook)

FY2015(Target)9,041.0 billion
yen9,616.2 billion
yen

9,400.0 billion
yen

10 trillion yen

4.7%(4.0%)

5.5%(6.0%*2)

6.0%(5.5%)

Over 7%(Over 7%)175.3 billionyen

264.9 billion
yen

230 billion
yenOver 350
billion yen

23.2%

27.4%

28.0%

Over 30%(Manufacturing,
services & others)*1 EBIT: Earnings before Interest and Taxes*2 FY2013 Adjusted EBIT Ratio 4.7% ( excluding the gain associated with integration of the thermal power generation systems business )© Hitachi, Ltd. 2014. All rights reserved.

5

2-2. Progress Overview (1) [Portfolio Realignment]
Active investment for IT business and for business expecting synergies with IT
2014/2

2012/122011/9Strengthening initiatives

Acquired BlueArc(Storage Solution business)

Acquired Celerant
Consulting Investments(Consulting business)

Acquired PRIZM Payment Services(Financial Services business)

2012/11
Acquired a U.K. nuclear power business2014/3

2013/4

Acquired TEPCO Systems

Formed overseas power transmission& distribution business JV with TEPCO

2014/42013/7Merged Hitachi Metals & Hitachi Cable

2013/4

2011/4
Acquired Vantec(Transport business)

2014/3
Made Hitachi Medical a wholly
owned subsidiary

Merged Hitachi Plant Technologies

Rebuilding initiatives

2013/4

2014/4Formed the Automotive Systems Group

Formed hydroelectric power
generation business JV

2014/2Agreed to establish thermal power
generation business JV

2012/3
Transferred small- andmidsized LCD business2012/3

2012/8Transferred HDD
business

FY2011Formed the Health Care Group

2012/112011/10Stopped in-house TV
production

FY2012

Restructured the elevator andescalator business in Japan

Mitsubishi Hitachi Power Systems
started operations

2013/12Agreed to establish global air conditioning business JV

2013/11

2014/3

Sold all Hitachi Via Mechanics
shares

FY2013

Relisted Hitachi Maxell shares

FY2014© Hitachi, Ltd. 2014. All rights reserved.

6

2-2. Progress Overview (2)Service Revenues, Overseas Revenues,
Cost Reductions

Delivering solid results for 2015 Mid-Term Management Plan
Service revenue ratio
FY12
FY13
FY14
FY15
（Outlook）（Actual） （Actual）（Target）

30%

32%

35%

Over
40%

Overseas revenue ratio
FY12
FY15
FY13
FY14
（Outlook）（Actual） （Actual）（Target）

41%

45% 47%

Over
50%

Cost reduction benefits
FY14
FY12
FY15
FY13
（Outlook）（Actual） （Actual）（Target）

75 B 110 B 90 B
Yen Yen
Yen

90 B
Yen

 UK Rail Intercity Express Programme (IEP)◎ Financial close for 866 rolling stocks (122 train sets)◎ Providing with maintenance over a 27.5 year period◎ Gaining the profits since FY2013

 Water Purification Plants◎ Dahej, India and Basrah, Iraq

 Leading U.S. hospital Mayo Clinic◎ Proton beam therapy systems, IT systems for medical treatment

 Saudi Aramco◎ Centrifugal Compressors for Pipelines

 Big Data Research Laboratory◎ U.S., U.K. and other locations

 Hitachi Smart Transformation (ongoing) Operational management reforms(launched October 2013)
 Review of cash efficiency(launched December 2013)© Hitachi, Ltd. 2014. All rights reserved.

7

3. Execution of Business Growth Measures© Hitachi, Ltd. 2014. All rights reserved.

8

3-1. Macro Outlook toward FY2015
Economic conditions
 Growth ratios in emerging countries are spread out. India and Brazil tend to have weak
momentum.
 Chinese economy growth remains around 7%.
 Global competitiveness of the U.S. industry has recovered and manufacturing industry is
returning to the U.S.
 European market is behind in recovery due to the prolongation of the debt crisis.

Market and customer trends
 The shale gas revolution is making energy-supply portfolio change and the oil & gas
prices are fluctuating.
 Japanese market: Finance sector - Increased IT investment, Public sector - National
resilience, Power sector - Deregulation and separation of generation fromtransmission and distribution.
 Conventional markets such as healthcare, agriculture, etc are growing by employing
innovation.
 Shift from “concentration, ownership and consumption ” to “distribution, sharing andrecycling” - a trend that is accelerating.
© Hitachi, Ltd. 2014. All rights reserved.

93-2. Initiatives for Business Growth
Continuing initiatives for improving profitability and for countering to business environment changes

Continuing initiatives

 Expand the Social Innovation Business

Mid / long termbusiness growth“Toward true partnership with customers
by providing innovation through products, IT and services”
 Infrastructure Systems Group: Expand global business Information & Telecommunication Systems Group: Focus on Services business

New initiatives

Short term
 Initiatives for 2015 Mid-term Management Plan sales and profits growth Global strategy:
Sales growth in North America and China in addition to gaining the profits in Asia.
 Competitive products: Drive sales growth Service business expansion: Drive revenues and profits growth.
 Evolving the Hitachi Smart Transformation Project:
Develop cash-generating capability.
© Hitachi, Ltd. 2014. All rights reserved.

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3-3. Social Innovation BusinessToward true partnership with customers© Hitachi, Ltd. 2014. All rights reserved.

11

3-3. Social Innovation Business(1)“2015 Mid-Term Management Plan” with Expanding Social Innovation Business Globally

EnergyUrban
Development

Transportation

Healthcare

Water andNatural Resources

Logistics

Manufacturing
and construction

Finance© Hitachi, Ltd. 2014. All rights reserved.

12

3-3. Social Innovation Business(2) [Water business]
Water business growth in Asia and the Middle East
Large-scale overseas projects

Expanding water business Dahej (India): Seawater desalination PJ

 Effective use of water resources

 EPC*1 and 30-year supply of industrial water Expanding the products sales

 Basrah (Iraq): Water purification PJ
 One of Iraq’s largest water purification facilities(scale of order: approx. 25.0 billion yen)
 EPC and 5-year operation and maintenanceservices(RO*2 facilities, etc) and EPC
 Growing operating services
 Focus regions: Asia and the Middle East
Main bases and projects underway in Asia and the Middle East

Strategic partnering Upstream consulting, collaboration
with strategic partners (Hyflux, OTV, etc)

IT utilization
Bases Intelligent water systems
 Solutions as “One Hitachi”*1: Engineering, Procurement and Construction

Projects underway*2: Reverse Osmosis© Hitachi, Ltd. 2014. All rights reserved.

13

3-3. Social Innovation Business(3) [IT Services]Strengthening solutions business centered on North America
 Strengthening solution (Big data) business with Hitachi Consulting and
Hitachi Data Systems

Human
Data

Analytics
Data Management
Scalable Infrastructure Increasing sales and profits
through one-stop solution withintegrated Hitachi Group’s
products and services

Providing solutions
for each industry

Sales & profit growth
Building solutions（energy saving, surveillance etc）
Oil & gas, mining solutions（mining probing, etc）
Solutions for communication systems（traffic monitoring, etc）
・・・

MachineData

Visualization / Insight
Data Input

Business
Data

Solutions(marketing)

IT and analytics

Big Data Solution

Socialinfrastructure

Example: Energy saving solution for buildings
 Consulting: Hitachi Consulting Products and services: Hitachi Industrial
Equipment Systems (Inverters), etc.
 Finance: Hitachi Capital2013 AT&T Supplier Sustainability Award© Hitachi, Ltd. 2014. All rights reserved.

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3-3. Social Innovation Business(4) [Healthcare]
Solutions business throughout the entire care cycle with products, IT and services
 Various services by integrating securely-stored data in each care stage suchas prevention, screening, diagnosis, treatment and post-treatment care
Prevention and Check-ups

Products

File storage
virtualization

Cutting-edge
medical systems

EHR（Electronic Health Record）
PHM（Population Health Management）

Secure data storageand management
Ultrasoundsystems

Electronic patient
records

Particle beam
therapy systems

Blood analysis
equipment

ＩＴ
Screening, Diagnosis, Treatment
Data
center

MRI, X-ray CT
Referrals
Blood data
Medical charts

Services• Diet program (installation results fromover 200 companies, etc.)• Hitachi life microscope, etc.

Diagnostic
imagesRoot cause analysis and medical
cost estimation using apathology transition model

Clinical department related(disease related) system
Treatment planning system
Patient monitoring at hospital
Administration analysis

Post-treatment careHome treatment, Home care,
Patient monitoring at home

© Hitachi, Ltd. 2014. All rights reserved.

15

3-3. Social Innovation Business(4) [Healthcare]
Expanding healthcare business with competitive care cycle service
Treatment

Prevention & Check-ups

 Pathology transition model using Big Data
Wide-range of products effective for cancer
treatment, such as X-ray therapy systems
at Hitachi Health Insurance Society (Hitachi-kenpo)
and particle beam (proton and heavy particle  Services for predicting total future medicalbeam) therapy systems
costs for lifestyle diseases

Particle beam therapy systems

Pathology transition model 11 orders received globally, mainly in Japan and North America
 Spot scanning irradiation and real-time, tumor-tracking radiation
 Compact footprint 30% smaller than in the past *1

Kidney disease
Arteriosclerosis
Retinal disease
Complications
Cardiovascular disease

Conventional system
New system

Lifestylediseases
Treatmentroom

Abnormaltest values

Rotating
gantry30%
smaller*1 case of Proton beam therapy systems

Hypertension

Dyslipidemia

Hyperglycemia

Injector

Compact synchrotron

Diabetes

Elevatedblood pressure

Hitachi-kenpo
Approx. 110,000
members

Abnormal lipid
valuesObesity
Prediction error for
total medical cost:
Under 5% on average© Hitachi, Ltd. 2014. All rights reserved.

16

3-3. Social Innovation Business(5) [Japan]
Rebuild Japanese social infrastructure with Hitachi’s innovation
Finance : Increased IT Investment
 Reinvestment in IT system & global expansion(IT investment volume:
approx. 1.7 trillion yen/ Year) Increase mega & major banks projects- 24 hours trading Expand Asian business- Payment service (Prizm (India))
Manufacturing

Governments andMunicipalities

Finance

Agriculture

Healthcare

Logistics

Energy Introduction of the Social Security Number
System and Consolidation of the Pension
System Renovation of Public Administration IT System(IT investment volume:
approx. 1.6 trillion yen/ Year)

Transportation

Public : National Resilience, Safety

O&M*1 Cloud Services

Power : Electricity System Reform Nationwide Operation System Consumer’s electric usage data Management
System for electric power seller*1: Operation & Maintenance

PrivatePublicHitachi’s highly-reliable
Cloud service

Other Companies’
CloudsVmware,AWS, Microsoft,
Salesforce.com, etc.

© Hitachi, Ltd. 2014. All rights reserved.

17

3-4. Global Strategy
Sales growth in North America and China in addition to Asia

© Hitachi, Ltd. 2014. All rights reserved.

18

3-4. Global Strategy(1) [Regional Plan]
Sales growth in North America and China in addition to Asia
China
 Buildings
North America
Europe Governments
 Automobiles(FY2013)
 Railway
 Construction
 Finance
1,073.6 billion yen
 Nuclear power Finance Oil and gas(FY2015)
 Healthcare Healthcare
1,220.0 billion yen  Power(FY2013)(FY2015)
 Healthcare[13.6%]
812.1 billion yen 860.0 billion yen[5.9%](FY2013)910.2 billion yen

Asia Energy
 Water Buildings(FY2013)989.9 billion yen

Railway
Manufacturing● Automobiles(FY2015)
1,290.0 billion yen[30.3%][growth rate](FY2015)
1,000.0 billion yen[9.9%]

Further increases plannedin North America and China© Hitachi, Ltd. 2014. All rights reserved.

193-4. Global Strategy(2) [North America and China]
North America: Automobile business Production expansion in Mexicoand strengthen regional synergies
in the Americas
 Installed new base for automotive
components in Mexico corresponding
to automakers’ expansion into Mexico,and began mass production(April 2014)
 Supply to American automakers byleveraging the North America Free
Trade Agreement (NAFTA)

China: Building business Focus on growing market
 Deliver 95-unit elevators toGuangzhou CTF Financial
Centre, including two of theworld’s fastest*1 models(1,200 m/min) (2016)
Guangzhou CTF FinanceCenter (image) Upgrade and enhance the production,
sales and maintenance service network
using four-area management system in
China (Guangzhou, Shanghai, Tianjin andChengdu)Commenced elevator
production base inChengdu, China(July 2013)*1: As of April 21, 2014. Hitachi research© Hitachi, Ltd. 2014. All rights reserved.

20

3-4. Global Strategy(3) [Management and R&D]
Transformation from “globalization of operations” to “globalization of management”
 Speed up businesses by management in areas closer to customers Railway systems business: created Global CEO post (U.K., from April 2014)
 Information & telecommunication systems business:created Global Service Business Promotion Officer post (U.S., from April 2014)

Globalization of R&D
 Promote R&D solves customer’s issues in areas closer to the customers
 Leverage global resources and implement R&D globally
Overall strategy

U.S.

Big Data Lab.
(established in 2013/4)

The number of

Co-creating
researchwithcustomers
locally

overseas researchers*1:
290 (FY2013) → 400 (FY2015)*1: Total number of overseas researchers

Core research

U.S.

Natural resources, energy and communications

EuropeRailway, healthcare and energy

China

Finance, logistics and transportation

India

Energy and software development

Singapore

Transportation and natural resources

BrazilNatural resourcesJapan

Up-stream research, analytics bases and platforms© Hitachi, Ltd. 2014. All rights reserved.

21

3-5. Competitive Products
Driving sales growth© Hitachi, Ltd. 2014. All rights reserved.

22

3-5. Competitive products(1) [Policy]
Short-term sales growth through product competitiveness and sales capabilities

Direction

Initiatives

Sales and growth ratio in main products
Large
Growthpotential

Data storage

 Provide IT platform with features surpass
competitors’ function and performance Centrifugal
compressors

 Inverters
 Pumps
 Wind powergeneration

Medical systems

 Elevators andescalators②  Construction

 Integrated and strengthen the healthcare
business①

machinery Data storage
 Medical systems

Construction machinery Quick response to growing markets
by strengthening the global supply chain
Wind power generation

Large
Sales scale① Large potential for sales growth② Key products for creating services
and solutions business Cultivate offshore wind power generation
market with 5MW wind turbines
Inverters, pumps, and motors, etc.

 Needs-oriented, one-stop services forcustomers & markets using regional bases© Hitachi, Ltd. 2014. All rights reserved.

23

3-5. Competitive products(2) [Examples]
New products for customers and society
IT platform business

Power generation business

Needs

Needs

 High-speed, large-volume data accessfor Big Data analytics that creates value
 Scalability to flexibly respond to rapidchanges in business environments Offshore wind power generation market growthfollowing the determination of the FiT*1
purchase price Requirements for reliable and high-powersystems with high quality operation andmaintenanceEnterprise data storage platform(April 2014)

5MW downwind turbine(FY2015)

 High-speed data access that is threetimes faster than conventional Uninterrupted systems extension using
virtualization technologythat newly developed
Hitachi
Virtual Storage Platform G1000*1: Feed-in Tariff

 First half of FY2014: Begin field tests
 FY2015: Market launch
5MW downwind-typeoffshore wind power generation
system (HTW 5.0-126) (image)
Rated output: 5MW
Rotor diameter: 126 m
Hub height: Approx. 90 m
© Hitachi, Ltd. 2014. All rights reserved.

24

3-5. Competitive products(3) [Sales Strategy]
Strengthen competitiveness with overseas expansion of operations and management

 Provide one-stop, packaged system and solution matching market needs
 Increase investment for sales channel growth in each market（Example of industrial equipment： Increasing 80 sales bases in China, Asia, Europe and U.S.
[FY2012→FY2015]）[Example of Power Electronics Business］

EuropeU.S.
Japan

Middle East

India

Technology
transfers andsupportSoutheast
Asia

Establishing packaged system*1 businessin electric control products market in India

Expanding businesses from Indian baseto other bases around the world

Introduce outside production for outside sales model to otherproducts and regions (elevator and escalator business in Thailand, etc.)*1 “Motors・inverters・PLC(Programmable Logic Controller)” + “transformers, switchgear and digital control system”, etc.
© Hitachi, Ltd. 2014. All rights reserved.

25

3-6. Expansion of Service BusinessDriving revenues and profits growth© Hitachi, Ltd. 2014. All rights reserved.

26

3-6. Expansion of Service Business (1) [Policy]
Innovative services to drive revenues and profits growth Create new service sales organization and strengthen service businesses

customer’s (managements)
or society’s issues①

Solutions for
Customers’issues asa service Develop partner relationship withcustomers through deep understandingof the business environment tounderstand and share issues.
 Provide solutions by using the resourcesof the Hitachi Group, as “One Hitachi”.

Providing services thatsolve issues②
Daily operational issues

Product
services Fully support through operation andmaintenance for the entire productlifecycle.
 One-stop support structure including themaintenance for other companies’
products.
© Hitachi, Ltd. 2014. All rights reserved.

27

3-6. Expansion of Service Business (2) [Service for Products]
Improve the maintenance contract rate and expand maintenance for other companies’ products
China and the rest of Asia: Buildings business
Product sales + free warranty contract
Increase sales of elevators and escalators in
China and the rest of Asia (accounts for 75%
of the global demand for new installations)and expand the new installation base
Maintenance services (fee-based warranty contract)

Middle East: Oil and gas business Signed comprehensive agreement forthe supply of compressors with Saudi
Aramco (June 2011)
 Acquired Saihati Weir Engineering
Services, Saudi Arabia, to expand
maintenance services including othercompanies’ products (December 2011)

Switching to a “fee-based” contract
after the expiry of the free warranty
periodExpand “fee-based contract” inChina and other Asian countries
China

Revenues and profit growth

Hitachi Saihati
Engineering Services Co., Ltd.
ThailandMarket volume of elevatorsand escalators ready for
Malaysia
modernization(20 years or more)

Philippines
Singapore© Hitachi, Ltd. 2014. All rights reserved.

28

3-7. Expansion of Service Business (3)Solution for
Customers’ Issues
as a service

Transform rolling stock business into a solution business with a new business model UK IEP Rail Business Provide rolling stocks with maintenance service for27.5 years. Gaining the profits since FY2013
 Number of rolling stocks: 866
369 (contracted in 2012), 497 (contracted in April 2014)
 New factory in UK (Newton Aycliffe, 2016)
Existing Ashford depot + 11 depots
 Solutions for issues in UK Railways: Increasing rollingstocks operating ratio and measures to the aging rail cars

Inverness
Aberdeen
Edinburgh
Newcastle

Newton Aycliffe
Aycliff
Production
base(Newton（生産拠点予定）

under construction)
Leeds
Doncaster Expansion to European rail business Global CEO (UK, April 2014)
 Obtained ETCS*1 certification in FY2013(the first for a Japanese company)*1: European Train Control System

Maliphant(Swansea) Worcester

Bounce Green
Green
Bounds(London)North Pole
(London)Stoke Gifford(Bristol)

Ashford（現有車両基地）© Hitachi, Ltd. 2014. All rights reserved.

29

3-7. Evolution of
the Hitachi Smart Transformation Project
Developing cash-generating capability© Hitachi, Ltd. 2014. All rights reserved.

30

3-7. Evolution of the Hitachi Smart Transformation Project (1)Achieved cost reduction benefits of 110.0 billion yen in FY2013
Billion JPY

400.0

400.0

310.0

300.0

220.0
200.0
100.0
0.0

110.0
35.0

90.0

Cumulative benefit
Single-year benefit

90.0

110.0

75.0

35.0
FY2011（Actual）

FY2012（Actual）

FY2013（Actual）

FY2014（Outlook）

FY2015（Plan）

Establish new projects to boost operation efficiency and cash flow efficiency

 Operational management reforms
 Optimize the supply chain from demand prediction to service delivery by “end to end” viewpoint Review capital efficiency
 Maximize assets turnover according to business models© Hitachi, Ltd. 2014. All rights reserved.

31

3-7. Evolution of the Hitachi Smart Transformation Project (2)Achieve further cost reductions and cash generation by looking at the entire business flow

Evolution of Hitachi Smart Transformation Project

Other activities

 Maximize sales and minimize inventories by taking prompt
actions in response to changes in markets and customers• Operational management reforms• Review of cash efficiency• Supply chain optimization• IT utilization and visualization

 Review end to end operations
Revenues and profits growth and cash generation

Integration
Key action from FY2014 : From “Dot” to “Line” and then “Plane” and maximize accomplishments① Directly link management targets to frontline operations
・ Set KPI trees directly linked to management targets for each business according tocharacteristics of each business② Shift from “Function focus reform” to “Process focus reform”
・ Review the each function’s activity with the viewpoint of total operational flow
as “end to end” approach© Hitachi, Ltd. 2014. All rights reserved.

32

3-8. Global Human Resources Management
Leverage global talent to lead businesses Introduce global performance management
FY2012FY2013

FY2014Global Human
Resources
Database

Global Grading
SystemGlobalPerformance
Management

Completed database ofhuman resources
information on 250,000
employees

Completed grading of
50,000 positions(96% of the total)

Introduce to 36,000
employees; extent more in
FY2015 and FY2016

Scheduled to be reflected in remuneration for management positions



Establish a Group-wide, global human resources management platform
Maximize performance by strengthening the alignment of targets between organizations and individuals
Make a unified global effort to successfully place the right people in the right assignment

Establish the best “people and organizations” that increase a global competitiveness© Hitachi, Ltd. 2014. All rights reserved.

33

4. 2015 and Beyond© Hitachi, Ltd. 2014. All rights reserved.

34

4-1. Toward the Mid-term Management Plan Goals Position Charts
Growth will be driven by Infrastructure Systems and Information & Telecommunication Systems

FY2013 results

Circle size indicates revenue size

Operating income(Billion yen)

300.0
200.0
100.0

Infrastructure
Systems

Information & Telecommunication Systems
High Functional Materials & Components

Power
Systems

Construction Machinery
5.0 Automotive Systems 10.0

FY2015 targets
Operating income(Billion yen)

Infrastructure
Systems

300.0
200.0
100.0

Power Systems

Operating profit ratio (%)

Information & Telecommunication Systems
High Functional Materials& Components
Construction
Machinery
Automotive Systems

5.0

10.0

Operating profit ratio (%)© Hitachi, Ltd. 2014. All rights reserved.

35

4-2. 2015 and Beyond
Steady implementation of Mid-term Management Plan and achieve further growth

FY2015 Target

Revenues

10 trillion yen

Operating Income (EBIT) Ratio

Over 7%(Over 7%)

Net Income attributable to
Hitachi, Ltd. stockholders

Over 350 Billion yen

Net income attributable to
Hitachi, Ltd. stockholders per share

Over 70 yen

Total Hitachi, Ltd. stockholders’ equity ratio(Manufacturing, Services & Others)

Over 30%© Hitachi, Ltd. 2014. All rights reserved.

36

Serving the World with
Our Social Innovation Business
SOCIAL INNOVATION‐IT’S OUR FUTURE© Hitachi, Ltd. 2014. All rights reserved.

37

Cautionary Statement
Certain statements found in this document may constitute “forward-looking statements” as defined in the U.S. Private Securities Litigation Reform Act of 1995. Such “forward-looking
statements” reflect management’s current views with respect to certain future events and financial performance and include any statement that does not directly relate to any historical or
current fact. Words such as “anticipate,” “believe,” “expect,” “estimate,” “forecast,” “intend,” “plan,” “project” and similar expressions which indicate future events and trends may identify“forward-looking statements.” Such statements are based on currently available information and are subject to various risks and uncertainties that could cause actual results to differ
materially from those projected or implied in the “forward-looking statements” and from historical trends. Certain “forward-looking statements” are based upon current assumptions of future
events which may not prove to be accurate. Undue reliance should not be placed on “forward-looking statements,” as such statements speak only as of the date of this document.
Factors that could cause actual results to differ materially from those projected or implied in any “forward-looking statement” and from historical trends include, but are not limited to:• economic conditions, including consumer spending and plant and equipment investment in Hitachi’s major markets, particularly Japan, Asia, the United States and Europe, as well as
levels of demand in the major industrial sectors Hitachi serves, including, without limitation, the information, electronics, automotive, construction and financial sectors;• exchange rate fluctuations of the yen against other currencies in which Hitachi makes significant sales or in which Hitachi’s assets and liabilities are denominated, particularly against the
U.S. dollar and the euro;• uncertainty as to Hitachi’s ability to access, or access on favorable terms, liquidity or long-term financing;• uncertainty as to general market price levels for equity securities, declines in which may require Hitachi to write down equity securities that it holds;• uncertainty as to Hitachi’s ability to continue to develop and market products that incorporate new technologies on a timely and cost-effective basis and to achieve market acceptance forsuch products;• rapid technological innovation;• the possibility of cost fluctuations during the lifetime of, or cancellation of, long-term contracts for which Hitachi uses the percentage-of-completion method to recognize revenue fromsales;• fluctuations in the price of raw materials including, without limitation, petroleum and other materials, such as copper, steel, aluminum, synthetic resins, rare metals and rare-earth
minerals, or shortages of materials, parts and components;• fluctuations in product demand and industry capacity;• uncertainty as to Hitachi’s ability to implement measures to reduce the potential negative impact of fluctuations in product demand, exchange rates and/or price of raw materials or
shortages of materials, parts and components;• increased commoditization of information technology products and digital media-related products and intensifying price competition for such products;• uncertainty as to Hitachi’s ability to achieve the anticipated benefits of its strategy to strengthen its Social Innovation Business;• uncertainty as to the success of restructuring efforts to improve management efficiency by divesting or otherwise exiting underperforming businesses and to strengthen competitiveness;• uncertainty as to the success of cost reduction measures;• general socioeconomic and political conditions and the regulatory and trade environment of countries where Hitachi conducts business, particularly Japan, Asia, the United States andEurope, including, without limitation, direct or indirect restrictions by other nations on imports and differences in commercial and business customs including, without limitation, contract
terms and conditions and labor relations;• uncertainty as to the succe ss of alliances upon which Hitachi depends, some of which Hitachi may not control, with other corporations in the design and development of certain key
products;• uncertainty as to Hitachi’s access to, or ability to protect, certain intellectual property rights, particularly those related to electronics and data processing technologies;• uncertainty as to the outcome of litigation, regulatory investigations and other legal proceedings of which the Company, its subsidiaries or its equity method affiliates have become or
may become parties;• the possibility of incurring expenses resulting from any defects in products or services of Hitachi;• the potential for significant losses on Hitachi’s investments in equity method affiliates;• the possibility of disruption of Hitachi’s operations by earthquakes, tsunamis or other natural disasters;• uncertainty as to Hitachi’s ability to maintain the integrity of its information systems, as well as Hitachi’s ability to protect its confidential information or that of its customers;• uncertainty as to the accuracy of key assumptions Hitachi uses to evaluate its significant employee benefit-related costs; and• uncertainty as to Hitachi’s ability to attract and retain skilled personnel.
The factors listed above are not all-inclusive and are in addition to other factors contained in other materials published by Hitachi.

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