[Translation]

Quarterly Report(The First Quarter of 148th Business Term)
From April 1, 2016 to June 30, 2016

6-6, Marunouchi 1-chome, Chiyoda-ku, Tokyo

Hitachi, Ltd.

[Cover][Document Filed]

Quarterly Report (“Shihanki Hokokusho”)[Applicable Law]

Article 24-4-7, Paragraph 1 of the Financial Instruments and Exchange Act of Japan[Filed with]

Director, Kanto Local Finance Bureau[Filing Date]

August 8, 2016

[Fiscal Year]

The First Quarter of 148th Business Term (from April 1, 2016 to June 30, 2016)[Company Name]

Kabushiki Kaisha Hitachi Seisakusho[Company Name in English] Hitachi, Ltd.
[Title and Name ofToshiaki Higashihara, President & CEO

Representative][Address of Head Office]6-6, Marunouchi 1-chome, Chiyoda-ku, Tokyo[Phone No.]

03-3258-1111[Contact Person]

Taro Kaiho, Manager, Legal Division[Contact Address]

6-6, Marunouchi 1-chome, Chiyoda-ku, Tokyo[Phone No.]

03-3258-1111[Contact Person]

Taro Kaiho, Manager, Legal Division[Place Where Available forTokyo Stock Exchange, Inc.

Public Inspection](2-1, Nihombashi Kabutocho, Chuo-ku, Tokyo)
Nagoya Stock Exchange, Inc.
(8-20, Sakae 3-chome, Naka-ku, Nagoya)

This is an English translation of the Quarterly Report filed with the Director of the Kanto Local Finance Bureau via
Electronic Disclosure for Investors’ NETwork (“EDINET”) pursuant to the Financial Instruments and Exchange Act of Japan.
The translation of the Confirmation Letter for the original Quarterly Report is included at the end of this document.
Unless the context indicates otherwise, the term “Company” refers to Hitachi, Ltd. and the term “Hitachi” refers to theCompany and its consolidated subsidiaries.
Unless otherwise stated, in this document, where we present information in millions or hundreds of millions of yen, we
have truncated amounts of less than one million or one hundred million, as the case may be. Accordingly, the total of figures
presented in columns or otherwise may not equal the total of the individual items. We have rounded all percentages to thenearest percent, one-tenth of one percent or one-hundredth of one percent, as the case may be.
References in this document to the “Financial Instruments and Exchange Act” are to the Financial Instruments andExchange Act of Japan and other laws and regulations amending and/or supplementing the Financial Instruments andExchange Act of Japan.

Contents
Part I Information on the Company ............................................................................................................................. 1
I. Overview of the Company ................................................................................................................................... 1
1. Key Financial Data...................................................................................................................................... 1
2. Description of Business .............................................................................................................................. 1
II. Business Overview ............................................................................................................................................. 2
1. Risk Factors................................................................................................................................................. 2
2. Material Agreements, etc. ........................................................................................................................... 2
3. Analyses of Consolidated Financial Condition, Operating Results and Cash Flows ................................. 2
III. Information on the Company ............................................................................................................................ 9
1. Information on the Company’s Stock, etc. ................................................................................................. 9(1) Total number of shares, etc. ................................................................................................................... 9(2) Information on the stock acquisition rights, etc. .................................................................................... 9(3) Information on moving strike convertible bonds, etc. ........................................................................... 9(4) Information on shareholder right plans .................................................................................................. 9(5) Changes in the total number of issued shares and the amount of common stock and other .................. 9(6) Major shareholders ................................................................................................................................. 9(7) Information on voting rights................................................................................................................. 10
2. Changes in Senior Management ............................................................................................................... 10
IV. Financial Information ..................................................................................................................................... 11Part II Information on Guarantors, etc. for the Company .......................................................................................... 11[Condensed Quarterly Consolidated Financial Statements] ........................................................................................F-1[Confirmation Letter] .................................................................................................................................................. A-1

Part I Information on the Company
I. Overview of the Company
1. Key Financial Data
Consolidated financial data, etc.
(Millions of yen, unless otherwise stated)
Three months ended Three months ended
Year ended
June 30, 2015
June 30, 2016
March 31, 2016
Revenues

2,314,023

2,130,467

10,034,305

142,694

109,754

517,040

54,95856,450172,155

100,910(109,564)(127,557)

Total Hitachi, Ltd. stockholders’ equity

3,013,956

2,596,434

2,735,078

Total equity

4,400,980

3,821,494

4,125,570

Total assets

12,516,062

11,658,434

12,551,005

Earnings per share attributable to Hitachi, Ltd.
stockholders, basic (yen)

11.38

11.69

35.65

Earnings per share attributable to Hitachi, Ltd.
stockholders, diluted (yen)

11.36

11.69

35.62

Total Hitachi, Ltd. stockholders’ equity ratio (%)

24.1

22.3

21.8

Net cash provided by operating activities

105,432

84,991

812,226

Net cash used in investing activities(133,977)(81,401)(730,799)

7,402

34,363(26,467)

689,993682,922699,315

Income from continuing operations, before income
taxes
Net income attributable to Hitachi, Ltd.
stockholders
Comprehensive income attributable to Hitachi, Ltd.
stockholders

Net cash provided by (used in) financing activities
Cash and cash equivalents at end of period(Notes)

1. Our consolidated financial statements have been prepared in conformity with the International
Financial Report Standards (“IFRS”) as issued by the International Accounting Standards Board.
2. Revenues do not include the consumption tax, etc.
3. A part of the thermal power generation systems business is classified as a discontinued operation inaccordance 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. for thebusiness integration in the thermal power generation systems with Mitsubishi Heavy Industries, Co.,
Ltd. The results of the discontinued operation are reported separately from continuing operations.

2. Description of Business
There were no material changes in principal businesses of Hitachi during the three months ended June 30,
2016. The Hitachi Group is comprised of the Company, 940 consolidated subsidiaries, and 357 equity-method
associates and joint-ventures. Consolidated trust accounts are not included in the number of consolidated
subsidiaries.
Changes of businesses in each segment and principal affiliated companies during the three months ended
June 30, 2016 were as follows. Effective from April 1, 2016, the Company changed the name of the “Others(Logistics and Other services)” segment to the “Others” segment.
••

Hitachi Medical Corporation, which belongs to the Electronic Systems & Equipment segment, changed its
name to Hitachi Healthcare Manufacturing, Ltd. as of April 1, 2016, following the reorganization of Hitachi’shealthcare business.
Hitachi Transport System, Ltd., which belonged to the Others segment, has become an equity-method
associate of the Company as a result of transfer of a part of its shares in Hitachi Transport System, Ltd. on
May 19, 2016. Consequentry, Hitachi Transport System, Ltd. and its major services of logistics have notbelonged to any of segments since then.
1II. Business Overview
1. Risk Factors
There were no new risk factors recognized during the three months ended June 30, 2016.
There were no material changes in the risk factors stated in the Annual Securities Report for the 147th
business term pursuant to the Financial Instruments and Exchange Act of Japan.
2. Material Agreements, etc.
No material agreements were entered into during the three months ended June 30, 2016.
3. Analyses of Consolidated Financial Condition, Operating Results and Cash Flows(1) Outline of Business Results
Results of Operations
During the three months ended June 30, 2016, the global economy remained largely flat, reflecting the
instability of financial and foreign exchange markets caused by growing concerns over the UK’s departure fromthe EU, and the continued economic slowdown in China and emerging markets, despite improvement in theemployment situation and continued recovery of consumer spending in the U.S. The Japanese economy also
remained standstill, due mainly to the appreciation of the yen since the end of 2015.
Under these conditions, results of operations in the three months ended June 30, 2016 were as follows.
Revenues decreased 8% to ¥2,130.4 billion, as compared with the three months ended June 30, 2015, due
mainly to group-wide decrease in yen-based revenues of overseas subsidiaries after currency translation alongwith the appreciation of the yen, lower revenues in the Information & Telecommunication Systems,
Construction Machinery, High Functional Materials & Components, Smart Life & Ecofriendly Systems andOthers segments. This decrease was partially offset by increased revenues in the Social Infrastructure &Industrial Systems segment.
Cost of sales decreased 7% to ¥1,584.2 billion, as compared with the three months ended June 30, 2015,
and the ratio of cost of sales to revenues accounted for 74%, which was the same level as the three months ended
June 30, 2015. Gross profit decreased 9% to ¥546.2 billion, as compared with the three months ended June 30,
2015.
Selling, general and administrative expenses (“SG&A”) decreased 7% to ¥454.7 billion, as compared withthe three months ended June 30, 2015, and the ratio of SG&A to revenues was 21%, which was the same level as
the three months ended June 30, 2015.
Other income increased ¥16.0 billion to ¥45.1 billion, as compared with the three months ended June 30,
2015, due mainly to posting net gain on business reorganization and others related to the sale of a part of sharesof Hitachi Transport System, Ltd. Other expenses decreased ¥0.4 billion to ¥11.9 billion, as compared with thethree months ended June 30, 2015, due mainly to the absence of expenses related to competition law and others
posted in the three months ended June 30, 2015 and lower special termination benefits, despite an increase inimpairment losses and posting net loss on sales and disposals of fixed assets.
Financial income (excluding interest income) decreased ¥6.3 billion to ¥3.4 billion and financial expenses(excluding interest charges) increased ¥13.5 billion to ¥13.5 billion, as compared with the three months ended
June 30, 2015, respectively. This was due mainly to posting exchange loss.
Share of loss of investments accounted for using the equity method was ¥2.2 billion, as compared withprofits of ¥4.5 billion in the three months ended June 30, 2015.
EBIT (earnings before interest and taxes, which is presented as income from continuing operations, before
income taxes less interest income plus interest charges) decreased ¥33.9 billion to ¥112.4 billion, as comparedwith the three months ended June 30, 2015.
Interest income decreased ¥0.4 billion to ¥2.5 billion and interest charges decreased ¥1.5 billion to ¥5.2
billion, as compared with the three months ended June 30, 2015, respectively.
Income from continuing operations, before income taxes decreased ¥32.9 billion to ¥109.7 billion, as
compared with the three months ended June 30, 2015.
Income taxes decreased ¥12.6 billion to ¥33.3 billion, as compared with the three months ended June 30,
2015.
Income from discontinued operations was ¥0.4 billion, as compared with loss of ¥1.6 billion in the threemonths ended June 30, 2015.
Net income decreased ¥18.2 billion to ¥76.8 billion, as compared with the three months ended June 30,
2015.

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Net income attributable to non-controlling interests decreased ¥19.7 billion to ¥20.3 billion, as comparedwith the three months ended June 30, 2015.
As a result of the foregoing, net income attributable to Hitachi, Ltd. stockholders increased ¥1.4 billion to¥56.4 billion, as compared with the three months ended June 30, 2015.
Operations by Segment
The following is an overview of results of operations by segment. Revenues for each segment include
intersegment transactions. Segment profit is measured by EBIT.
(Information & Telecommunication Systems)
Revenues decreased 4% to ¥435.0 billion, as compared with the three months ended June 30, 2015, due
mainly to the negative impact of foreign currency translation for overseas subsidiaries, and decreased revenues
from ATMs for overseas markets, and public systems in which large contracts were recorded in the three months
ended June 30, 2015.
Segment profit decreased ¥7.6 billion to ¥0.7 billion, as compared with the three months ended June 30,
2015, due mainly to posting restructuring charges, including impairment losses mainly in thetelecommunications & network business, and exchange loss, despite the effect of structural reform centered on
the telecommunications & network business.
(Social Infrastructure & Industrial Systems)
Revenues increased 11% to ¥483.0 billion, as compared with the three months ended June 30, 2015, due
mainly to substantial revenue increase in the rail systems business resulting from the acquisition of the businessof AnsaldoBreda S.p.A. (excluding a part of its operations) and Ansaldo STS S.p.A., despite the negative impactof foreign currency translation for overseas subsidiaries.
Segment loss was ¥6.1 billion, as compared with profit of ¥8.6 billion in the three months ended June 30,
2015, due mainly to increasing loss of the power and energy business and posting exchange loss, despite
increased revenues.
(Electronic Systems & Equipment)
Revenues decreased 1% to ¥255.9 billion, as compared with the three months ended June 30, 2015, due
mainly to lower revenues at Hitachi Kokusai Electric Inc. owing to the end of a phase of aggressive capital
investment by semiconductor manufacturers, despite increased revenues at Hitachi Koki Co., Ltd. due to theacquisition of metabo Aktiengesellschaft, a German company.
Segment profit decreased ¥5.7 billion to ¥11.5 billion, as compared with the three months ended June 30,
2015, due mainly to lower earnings at Hitachi Kokusai Electric Inc. owing to lower revenues, and postingexchange loss, despite higher earnings at Hitachi High-Technologies Corporation which recorded firm sales ofclinical analyzers.
(Construction Machinery)
Revenues decreased 9% to ¥161.3 billion, as compared with the three months ended June 30, 2015, due
mainly to the impact of weaker local currencies in Asia and Africa and continued sluggish market conditions in
Asia, including China, as well as the Americas.
Segment profit decreased ¥3.8 billion to ¥1.4 billion, as compared with the three months ended June 30,
2015, due mainly to lower revenues and posting exchange loss.
(High Functional Materials & Components)
Revenues decreased 13% to ¥351.4 billion, as compared with the three months ended June 30, 2015, due
mainly to lower revenues at both of Hitachi Metals, Ltd. and Hitachi Chemical Company, Ltd. owing to thenegative impact of foreign currency translation for overseas subsidiaries and lower sales of electronics- andautomotive-related products.
Segment profit decreased ¥38.9 billion to ¥23.3 billion, as compared with the three months ended June 30,
2015, due mainly to the absence of net gain on business reorganization and others related to the sale of equity
interest in Hitachi Tool Engineering, Ltd. by Hitachi Metals, Ltd. recorded in the three months ended June 30,
2015 and posting exchange loss.

3

(Automotive Systems)
Revenues decreased 3% to ¥232.9 billion, as compared with the three months ended June 30, 2015, due
mainly to lower sales in Japan and the negative impact of foreign currency translation for overseas subsidiaries,
despite higher sales especially in North America and China, where demand for automobiles was firm.
Segment profit decreased ¥3.8 billion to ¥7.8 billion, as compared with the three months ended June 30,
2015, due mainly to higher R&D expenses related to Advanced Driver Assistance Systems in addition to lower
income along with decreased domestic sales.
(Smart Life & Ecofriendly Systems)
Revenues decreased 31% to ¥139.8 billion, as compared with the three months ended June 30, 2015, due
mainly to the effect of reorganization of the air-conditioning systems business with an equity-method associate,a joint venture company with Johnson Controls, Inc.
Segment profit decreased ¥5.0 billion to ¥3.3 billion, as compared with the three months ended June 30,
2015, due mainly to the effect of the reorganization of the air-conditioning business.
(Others)
Revenues decreased 30% to ¥213.1 billion, as compared with the three months ended June 30, 2015, due
mainly to the conversion of Hitachi Transport System, Ltd. to an equity-method associate.
Segment profit decreased ¥7.4 billion to ¥4.8 billion, as compared with the three months ended June 30,
2015, due mainly to lower revenues.
(Financial Services)
Revenues decreased 2% to ¥89.2 billion, as compared with the three months ended June 30, 2015, due
mainly to decreased overseas revenues owing primarily to foreign currency translation, despite the strong
performance of business in the U.S.
Segment profit decreased ¥1.4 billion to ¥11.2 billion, as compared with the three months ended June 30,
2015, due mainly to lower revenues.
Revenues by Market
Revenues in Japan decreased 6% to ¥1,047.0 billion, as compared with the three months ended June 30,
2015, due mainly to lower revenues in the High Functional Materials & Components, Automotive Systems andOthers segments.
Overseas revenues decreased 9% to ¥1,083.4 billion, as compared with the three months ended June 30,
2015, due mainly to lower revenues in Asia mainly in the Smart Life & Ecofriendly Systems segment, and in
North America mainly in the High Functional Materials & Components segment. This decrease was partially
offset by higher revenues in Europe mainly in the Social Infrastructure & Industrial Systems segment.
As a result, the ratio of overseas revenues to total revenues decreased 1% to 51%, as compared with thethree months ended June 30, 2015.
(2) Summary of Financial Condition, etc.
Liquidity and Capital Resources
During the three months ended June 30, 2016, there were no major changes in the Company’s policies ofmaintaining liquidity and ensuring funds, efforts for improvement in fund management efficiency, and ideas
regarding funding sources and fundraising.
Cash Flows(Cash Flows from Operating Activities)
Net income in the three months ended June 30, 2016 decreased by ¥18.2 billion, as compared with thethree months ended June 30, 2015. Working capital in the three months ended June 30, 2016 improved, due
mainly to decreased net cash outflow from a change in trade payables by ¥119.2 billion, as compared withthe three months ended June 30, 2015, despite decreased net cash inflow from a change in trade receivables
by ¥64.2 billion, as compared with the three months ended June 30, 2015. Dividends received decreased by¥10.2 billion as compared with the three months ended June 30, 2015. As a result of the foregoing, net cash
provided by operating activities was ¥84.9 billion in the three months ended June 30, 2016, a decrease of¥20.4 billion as compared with the three months ended June 30, 2015.
4

(Cash Flows from Investing Activities)

Net amount of investments related to property, plant and equipment* was ¥126.0 billion in the threemonths ended June 30, 2016, an increase of ¥13.3 billion as compared with the three months ended June30, 2015. Purchase of investments in securities and other financial assets (including investments in
subsidiaries and investments accounted for using the equity method) in the three months ended June 30,
2016 decreased by ¥64.5 billion, as compared with the three months ended June 30, 2015 in which Hitachi
Data Systems Corporation acquired Pentaho Corporation. Proceeds from sale of investments in securities
and other financial assets (including investments in subsidiaries and investments accounted for using theequity method) increased by ¥23.8 billion as compared with the three months ended June 30, 2015, due
mainly to the transfer of a part of shares of Hitachi Transport System, Ltd. As a result of the foregoing, net
cash used in investing activities was ¥81.4 billion in the three months ended June 30, 2016, a decrease of¥52.5 billion as compared with the three months ended June 30, 2015.
* The sum of the purchase of property, plant and equipment, the purchase of intangible assets and thepurchase of leased assets, less the proceeds from sale of property, plant and equipment, and intangible
assets, the proceeds from sale of leased assets and the collection of lease receivables(Cash Flows from Financing Activities)
Net cash inflow from a change in short-term debt in the three months ended June 30, 2016 increasedby ¥17.0 billion, as compared with the three months ended June 30, 2015. Proceeds related to long-term
debt** in the three months ended June 30, 2016 was ¥21.4 billion, an increase of ¥7.2 billion as comparedwith the three months ended June 30, 2015. As a result of the foregoing, net cash provided by financing
activities was ¥34.3 billion in the three months ended June 30, 2016, an increase of ¥26.9 billion ascompared with the three months ended June 30, 2015.
** The proceeds from long-term debt, less the payments on long-term debt
As a result of the foregoing, cash and cash equivalents as of June 30, 2016 was ¥682.9 billion, a decreaseof ¥16.3 billion from March 31, 2016. Free cash flows, the sum of cash flows from operating and investing
activities, were an inflow of ¥3.5 billion in the three months ended June 30, 2016, compared with an outflow of¥28.5 billion in the three months ended June 30, 2015.
Assets, Liabilities and Equity
The following is an overview of Hitachi’s assets, liabilities and equity as of June 30, 2016.
Total assets were ¥11,658.4 billion, a decrease of ¥892.5 billion from March 31, 2016. This was due
mainly to decreases in the value of assets denominated in foreign currency owing to the appreciation of the yen,converting Hitachi Transport System, Ltd. to an equity-method associate and progress on collecting tradereceivables recorded as of March 31, 2016.
Total interest-bearing debt, the sum of short-term debt and long-term debt, was ¥3,494.2 billion, adecrease of ¥110.2 billion from March 31, 2016. This was due mainly to the impact of the appreciation of theyen.
Total Hitachi, Ltd. stockholders’ equity decreased by ¥138.6 billion from March 31, 2016, to ¥2,596.4
billion, due mainly to posting other comprehensive loss owing primarily to the appreciation of the yen, despite
posting net income attributable to Hitachi, Ltd. stockholders. The ratio of total Hitachi, Ltd. stockholders’ equity
to total assets increased 0.5% from March 31, 2016 to 22.3%.
Non-controlling interests were ¥1,225.0 billion, a decrease of ¥165.4 billion from March 31, 2016.
Total equity was ¥3,821.4 billion, a decrease of ¥304.0 billion from March 31, 2016. The ratio ofinterest-bearing debt to total equity was 0.91, as compared with 0.87 as of March 31, 2016.
(3) Challenges Facing Hitachi Group

1) Business and Financial Condition
There were no material changes in Hitachi’s business strategy during the three months ended June 30, 2016.
2) Fundamental Policy on the Conduct of Persons Influencing Decision on the Company’s Financial andBusiness Policies
The Group invests a great deal of business resources in fundamental research and in the development ofmarket-leading products and businesses that will bear fruit in the future, and realizing the benefits from thesemanagement policies requires that they be continued for a set period of time. For this purpose, the Company
keeps its shareholders and investors well informed of not just the business results for each period but also of theCompany’s business policies for creating value in the future.
The Company does not deny the significance of the vitalization of business activities and performance thatcan be brought about through a change in management control, but it recognizes the necessity of determining
the impact on company value and the interests of all shareholders of the buying activities and buyout proposals
5

of parties attempting to acquire a large share of stock of the Company or a Group company by duly examining
the business description, future business plans, past investment activities, and other necessary aspects of such aparty.
There is no party that is currently attempting to acquire a large share of the Company’s stocks nor is therea specific threat, neither does the Company intend to implement specified so-called anti-takeover measures inadvance of the appearance of such a party, but the Company does understand that it is one of the natural duties
bestowed upon it by the shareholders and investors to continuously monitor the state of trading of theCompany’s stock and then to immediately take what the Company deems to be the best action in the event of
the appearance of a party attempting to purchase a large share of the Company’s stock. In particular, together
with outside experts, the Company will evaluate the buyout proposal of the party and hold negotiations with thebuyer, and if the Company deems that said buyout will not maintain the Company’s value and is not in the bestinterest of the shareholders, then the Company will quickly determine the necessity, content, etc., of specificcountermeasures and prepare to implement them. The same response will also be taken in the event a party
attempts to acquire a large percentage of the shares of a Group company.
(4) Research and Development
There were no material changes in the research and development of the Hitachi Group (the Company andconsolidated subsidiaries) stated in the Annual Securities Report for the 147th business term pursuant to the
Financial Instruments and Exchange Act of Japan. The Hitachi Group’s R&D expenditures in the three months
ended June 30, 2016 were ¥76.4 billion, 3.6% of revenues. A breakdown of R&D expenditures by segment isshown below.
(Billions of yen)Three months ended
Segment
June 30, 2016
Information & Telecommunication Systems
13.1
Social Infrastructure & Industrial Systems
10.9
Electronic Systems & Equipment
11.2
Construction Machinery
4.1
High Functional Materials & Components
11.2
Automotive Systems
18.1
Smart Life & Ecofriendly Systems
1.5
Others0.9
Financial Services
0.0
Corporate
4.9
Total
76.4
(5) Property, Plants and Equipment
The major property, plants and equipment materially changed during the three months ended June 30,
2016 are as follows.
Hitachi Group(As of June 30, 2016)
Segment

Others (Note)(Note)

Land[Area inthousandsof m2]
37,572[2,063]

Book value (Millions of yen)Tools,
Buildings
Machinery furniture
and
Other
and vehicles
andstructures
fixtures62,997

7,033

17,5381,548

Constructionin progress

904

Total

127,592

Number of
employees

14,281The book value of the facilities in the Others segment materially decreased due mainly to the fact that Hitachi
Transportation Ltd. has become an equity-method associate of the Company from its subsidiary on May 19, 2016.

6

The Company(As of June 30, 2016)
Facility(Main location)

Healthcare
Business Unit
(Note)(Taito-ku, Tokyo)(Note)

Segment

Book value (Millions of yen)
Details ofLand
Tools,
Number ofmajor facilities [Area in Buildings Machinery furniture
Construction
employees
and
and
Total
Other
and equipment thousands
andin progressstructures vehicles
2of m ]
fixtures

Electronic Manufacturingfor
Systems & facilities
medicalEquipment equipment

6,614
[93]

5,179

578

1,701

669

567 15,311

2,986

The Company newly discloses the facilities of Healthcare Business Unit as the major property, plants and equipment,
since the book value of the facilities materially increased due mainly to the absorption-type company split in which theCompany succeeded non-manufacturing divisions of Hitachi Medical Corporation and Hitachi Aloka Medical, Ltd. on
April 1, 2016. In addition, the Company reorganized in-house companies into business units.

(6) Plans for Capital Investment, Disposals of Property, Plants and Equipment, etc.
The Hitachi Group (the Company and consolidated subsidiaries) engages in diverse operations in Japan andoverseas, and has not decided on specific plans to newly install or expand each of facilities as of the end of theconsolidated fiscal year and each quarter of the consolidated fiscal year. For this reason, it discloses amounts ofcapital investment by segment.
The amount of capital investment for the fiscal year ending March 31, 2017 is updated as follows (newinstallation and expansions, based on the amount recorded as tangible fixed assets and the investment property)
from the amount initially planned as of March 31, 2016.
(Billions of yen)
The amount of capital investment
for the fiscal year ending March 31, 2017
Segment
Initial Plan
Updated Plan
45.0
45.0
Information & Telecommunication Systems
70.0
70.0
Social Infrastructure & Industrial Systems
20.0
20.0
Electronic Systems & Equipment
20.0
20.0
Construction Machinery
110.0
110.0
High Functional Materials & Components
80.0
80.0
Automotive Systems
15.0
15.0
Smart Life & Ecofriendly Systems
20.0
20.0
OthersFinancial Services (Note 4)
45.0
70.0
Subtotal
425.0
450.0
Corporate Items & Eliminations
0.0
0.0
Total
425.0
450.0
(Notes) 1. The figures in the above table include the amount of the tangible fixed assets leased under financelease transactions and the investment property, each of which is recorded as property, plant andequipment and other non-current assets, respectively.
2. These planned investments are expected to be mostly financed with the Hitachi Group’s own capital.
3. There are no plans to dispose or sell principal facilities, with the exception of disposing and selling
facilities due to routine upgrading.
4. Even though Hitachi Capital Corporation was planned to be accounted as the Company’s
equity-method associate following the share transfer in August 2016, the effective date of transfer ofshares was changed to October, 2016 or after, subject to the regulation, permission andauthorization. As a result of the rescheduling, the amount of capital investment for the fiscal year
ending March 31, 2017 in the Financial Services segment was updated.
(7) Forward-Looking Statements
Certain statements found in “3. Analyses of Consolidated Financial Condition, Operating Results and Cash
Flows” and other descriptions in this report 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

7

subject to various risks and uncertainties that could cause actual results to differ materially from those projectedor 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 report.
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:
•
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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 majorindustrial sectors Hitachi serves;
exchange rate fluctuations of the yen against other currencies in which Hitachi makes significant sales or inwhich 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 towrite down equity securities that it holds;
fluctuations in the price of raw materials including, without limitation, petroleum and other materials, suchas copper, steel, aluminum, synthetic resins, rare metals and rare-earth minerals, or shortages of materials,
parts and components;
the possibility of cost fluctuations during the lifetime of, or cancellation of, long-term contracts for which
Hitachi uses the percentage-of-completion method to recognize revenue from sales;credit conditions of Hitachi’s customers and suppliers;
fluctuations in product demand and industry capacity;
uncertainty as to Hitachi’s ability to implement measures to reduce the potential negative impact offluctuations in product demand, exchange rates and/or price of raw materials or shortages of materials, partsand components;
uncertainty as to Hitachi’s ability to continue to develop and market products that incorporate newtechnologies on a timely and cost-effective basis and to achieve market acceptance for such products;
increased commoditization of and intensifying price competition for 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 acquisitions of other companies, joint ventures and strategic alliances andthe possibility of incurring related expenses;
uncertainty as to the success of restructuring efforts to improve management efficiency by divesting orotherwise exiting underperforming businesses and to strengthen competitiveness;the potential for significant losses on Hitachi’s investments in equity-method associates and joint ventures;
general socioeconomic and political conditions and the regulatory and trade environment of countries where
Hitachi conducts business, particularly Japan, Asia, the United States and Europe, including, without
limitation, direct or indirect restrictions by other nations on imports and differences in commercial andbusiness customs including, without limitation, contract terms and conditions and labor relations;
uncertainty as to the success of cost structure overhaul;
uncertainty as to Hitachi’s ability to attract and retain skilled personnel;
uncertainty as to Hitachi’s access to, or ability to protect, certain intellectual property rights;
uncertainty as to the outcome of litigation, regulatory investigations and other legal proceedings of which
the Company, its subsidiaries or its equity-method associates and joint ventures have become or may
become parties;
the possibility of incurring expenses resulting from any defects in products or services of Hitachi;
the possibility of disruption of Hitachi’s operations by natural disasters such as earthquakes and tsunamis,the spread of infectious diseases, and geopolitical and social instability such as terrorism and conflict;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; anduncertainty as to the accuracy of key assumptions Hitachi uses to evaluate its employee benefit-related
costs.

The factors listed above are not all-inclusive and are in addition to other factors contained elsewhere in thisreport and in other materials published by Hitachi.

8III. Information on the Company
1. Information on the Company’s Stock, etc.
(1) Total number of shares, etc.
1) Total number of shares

Common stock

Total number of shares authorized to be issued(shares)
10,000,000,000

Total

10,000,000,000

Class2) Issued shares
Class

Number of sharesissued as of the end of
first quarter (shares)(June 30, 2016)

Number of sharesissued as of thefiling date (shares)(August 8, 2016)

Commonstock

4,833,463,387

4,833,463,387

Tokyo, Nagoya

Total

4,833,463,387

4,833,463,387－

Stock exchange on which
the Company is listed

Description
The number ofshares per one unit ofshares is 1,000
shares.
－(2) Information on the stock acquisition rights, etc.
Not applicable.
(3) Information on moving strike convertible bonds, etc.
Not applicable.
(4) Information on shareholder right plans
Not applicable.
(5) Changes in the total number of issued shares and the amount of common stock and other

Date
From April 1, 2016
to June 30, 2016

Change in the Balance of the Change in Balance of Change in Balance of
total number total number of common
commoncapitalcapitalof issued
stock
stock
reserve
reserveissued sharesshares(Millions of (Millions of (Millions of (Millions of(shares)(shares)
yen)
yen)
yen)
yen)
－

4,833,463,387(6) Major shareholders
Not applicable.

9－458,790－

176,757

(7) Information on voting rights
Information on voting rights as of March 31, 2016 is stated in this item because the Company does not
identify the number of voting rights as of June 30, 2016 due to the lack of information on the number of theCompany’s shares held by the entity which the Company holds one quarter or more of all voting rights of such
entity as of June 30, 2016.

1) Issued shares(As of March 31, 2016)
Number of voting Description
rightsClassification

Number of shares (shares)

Shares without voting right

－

－

－

－

－

－

－

－

－

－

－

Shares with restricted voting
right (treasury stock, etc.)
Shares with restricted voting
right (others)
Shares with full voting right(treasury stock, etc.)
Shares with full voting right(others)
Shares less than one unit

Common stock

5,413,000

Common stock

4,805,569,000

4,805,569－

Common stock

22,481,387－－

4,833,463,387－－

Number of issued shares

Total number of voting－
4,805,569－
rights(Note) The “Shares with full voting right (others)” column includes 26,000 shares registered in the nameof Japan Securities Depository Center, Incorporated (account for managing stocks whose
shareholders have not transferred titles) and 26 voting rights for those shares.
2) Treasury stock, etc.

Name ofshareholder

Hitachi, Ltd.
Aoyama Special
Steel Co., Ltd.
ISHIIDENKOSHA
Co., Ltd.
SAITAKOUGYOU
CO., LTD.

Address

6-6, Marunouchi 1-chome,
Chiyoda-ku, Tokyo
9-11, Shinkawa 2-chome,
Chuo-ku, Tokyo
1-11, Oroshishinmachi
3-chome, Higashi-ku,
Niigata-shi, Niigata

5,247,000－

5,247,000

0.11

10,000－10,000

0.00

1,000

－

1,000

0.00

5-3, Takinogawa 5-chome,
Kita-ku, Tokyo

88,000－88,0000.00

52,000－52,0000.00

15,000－15,0000.00

5,413,000－

5,413,000

0.11Mizuho Co., Inc.

3268, Nagaoka,
Ibarakimachi,
Higashiibaraki-gun,Ibaraki
4-1, Koishikawa 5-chome,
Bunkyo-ku, Tokyo

Total

－

Nitto Jidosha
Kiki K.K.

(As of March 31, 2016)
Ownership
Number of
Number of shares held
percentage tounder the Total sharesshares held
the total
names of held (shares) number ofunder own
othersname (shares)
issued shares(shares)(%)

2. Changes in Senior Management
There were no changes in senior management from the filing date of the Annual Securities Report for the147th business term pursuant to the Financial Instruments and Exchange Act of Japan to June 30, 2016.

10

IV. Financial Information
Refer to the condensed quarterly consolidated financial statements incorporated in this Quarterly Report.

Part II Information on Guarantors, etc. for the Company
Not applicable.

11

CONDENSED QUARTERLY CONSOLIDATED FINANCIAL STATEMENTSCONDENSED QUARTERLY CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
Millions of yen
June 30, 2016

March 31, 2016

682,922
2,561,978352,362
1,352,518
594,364

699,315
2,992,770
338,758
1,299,855
541,857

5,544,144

5,872,555

712,069
1,177,127
730,279
2,234,767
947,108
312,940

676,960
1,329,974
727,485
2,500,226
1,070,403
373,402

Total non-current assets

6,114,290

6,678,450

Total assets

11,658,434

12,551,005

Current liabilities
Short-term debt
Current portion of long-term debt (note 6)
Other financial liabilities (note 6)
Trade payables
Accrued expenses
Advances received
Other current liabilities

829,243676,517300,044
1,312,475
564,669
498,130
455,603871,417651,518
280,048
1,451,918
727,402480,457
531,456

Total current liabilities

4,636,681

4,994,216

Non-current liabilities
Long-term debt (note 6)
Other financial liabilities (note 6)
Retirement and severance benefits
Other non-current liabilities

1,988,485
88,737
737,298
385,7392,081,520
115,155
783,670
450,874

Total non-current liabilities

3,200,259

3,431,219

Total liabilities

7,836,940

8,425,435

Hitachi, Ltd. stockholders’ equity
Common stock
Capital surplus
Retained earnings (note 7)
Accumulated other comprehensive income (loss)
Treasury stock, at cost

458,790586,702
1,638,510(83,747)(3,821)

458,790586,790
1,609,761
83,543(3,806)

Total Hitachi, Ltd. stockholders’ equity

2,596,434

2,735,078

1,225,060

1,390,492

Total equity

3,821,494

4,125,570

Total liabilities and equity

11,658,434

12,551,005

AssetsCurrent assets
Cash and cash equivalents
Trade receivables (note 6)
Lease receivables (note 6)
Inventories
Other current assets (note 6)
Total current assets
Non-current assets
Investments accounted for using the equity method
Investments in securities and other financial assets (note 6)
Lease receivables (note 6)
Property, plant and equipment
Intangible assets
Other non-current assets

Liabilities

EquityNon-controlling interests

See accompanying notes to condensed quarterly consolidated financial statements.

F-1

CONDENSED QUARTERLY CONSOLIDATED STATEMENTS OF PROFIT OR LOSS ANDCONDENSED QUARTERLY CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Condensed Quarterly Consolidated Statements of Profit or Loss
Three months ended June 30, 2016 and 2015

Millions of yen
2016
2015
Revenues
2,130,467
2,314,023
Cost of sales(1,584,227) (1,711,256)
Gross profit
546,240
602,767
Selling, general and administrative expenses(454,757)(487,377)
Other income (note 8)
45,174
29,127
Other expenses (note 8)(11,942)(12,387)
Financial income (note 9)
3,480
9,807
Financial expenses (note 9)(13,524)(11)
Share of profits (losses) of investments accounted for using the equity method(2,200)4,542
112,471
146,468
EBIT (Earnings before interest and taxes)
Interest income
2,545
3,007
Interest charges(5,262)(6,781)
109,754
142,694
Income from continuing operations, before income taxes
Income taxes(33,385)(46,057)
Income from continuing operations
76,36996,637
Income (loss) from discontinued operations (note 10)433(1,603)76,802
95,034
Net income
Net income attributable to:
Hitachi, Ltd. stockholders
Non-controlling interests
Earnings per share from continuing operations,
attributable to Hitachi, Ltd. stockholders (note 11)
Basic
DilutedEarnings per share attributable to Hitachi, Ltd. stockholders (note 11)
Basic
DilutedSee accompanying notes to condensed quarterly consolidated financial statements.

F-2

56,45020,352

54,95840,076

11.60
11.60

11.71
11.69

11.69
11.69

11.38
11.36

Condensed Quarterly Consolidated Statements of Comprehensive Income
Three months ended June 30, 2016 and 2015

Millions of yen
2016
2015
76,802
95,034

Net income
Other comprehensive income (OCI)
Items not to be reclassified into net income
Net changes in financial assets measured at fair value through OCI
Remeasurements of defined benefit plans
Share of OCI of investments accounted for using the equity method(31,479)
(464)
(488)
(32,431)

8,280
52
379
8,711

(181,068)
10,736(25,732)(196,064)

45,461(18,504)
23,49450,451Other comprehensive income (OCI)
Comprehensive income (loss)(228,495)(151,693)

59,162
154,196

Comprehensive income (loss) attributable to:
Hitachi, Ltd. stockholders
Non-controlling interests(109,564)(42,129)

100,91053,286

Total items not to be reclassified into net income
Items that can be reclassified into net income
Foreign currency translation adjustments
Net changes in cash flow hedges
Share of OCI of investments accounted for using the equity method
Total items that can be reclassified into net income

See accompanying notes to condensed quarterly consolidated financial statements.

F-3

CONDENSED QUARTERLY CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Three months ended June 30, 2016

Millions of yen
2016
Accumulated
othercomprehensive
income(loss)

Treasurystock,
at cost

Total
Hitachi, Ltd.
stockholders’equityNoncontrollinginterests(note 5)

Total equity

Commonstock

CapitalsurplusRetainedearnings(note 7)458,790586,790

1,609,761

83,543(3,806)

2,735,078

1,390,492

4,125,570

-

-

1,268
56,450-(1,268)(166,014)-

56,450(166,014)

20,352(62,481)

76,802(228,495)--(28,969)--(28,969)-(28,969)

-

(3)

-

-

(23)
8

(23)
5

(20,551)-(20,551)
(23)
5

-

(85)

-

(8)

-

(93)

(102,752)(102,845)

Total changes in equity

-

(88)

28,749(167,290)(15)(138,644)(165,432)(304,076)

Balance at end of period

458,790586,702

1,638,510(83,747)(3,821)2,596,434

1,225,060

3,821,494

Balance at beginning of period
Changes in equity
Reclassified into retained
earnings
Net income
Other comprehensive loss
Dividends to Hitachi, Ltd.
Stockholders
Dividends to non-controllinginterests
Acquisition of treasury stock
Sales of treasury stock
Changes in non-controllinginterests

Three months ended June 30, 2015

Millions of yen
2015

Balance at beginning of period
Changes in equity
Reclassified into retained
earnings
Net income
Other comprehensive income
Dividends to Hitachi, Ltd.
stockholders
Dividends to non-controllinginterests
Acquisition of treasury stock
Sales of treasury stock
Changes in non-controllinginterests

Accumulated
othercomprehensive
incomeTreasurystock,
at cost

Total
Hitachi, Ltd.
stockholders’equityNoncontrollinginterests

Total equity

Commonstock

CapitalsurplusRetainedearnings(note 7)458,790

608,416

1,477,517

401,100(3,542)

2,942,281

1,354,061

4,296,342

-

-

927
54,958-(927)
45,952-

54,95845,95240,076
13,21095,034
59,162--(28,971)--(28,971)-(28,971)

-

1

-

-

(82)
3

(82)
4

(20,800)-(20,800)
(82)
4

-

(259)

-

73

-

(186)

477

291

Total changes in equity

-

(258)

26,91445,098(79)

71,67532,963

104,638

Balance at end of period

458,790

608,158

1,504,431

446,198(3,621)

3,013,956

1,387,024

4,400,980

See accompanying notes to condensed quarterly consolidated financial statements.

F-4

CONDENSED QUARTERLY CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months ended June 30, 2016 and 2015

Millions of yen
2016

2015

76,802

95,034116,425
5,650
33,4082,200(450)(44,723)
2,423
231,126(120,572)(58,769)(971)(10,020)(85,043)(337)
147,1492,502
3,848(5,779)(62,729)
84,991

121,450385
46,057(4,386)(326)(28,722)(61)
295,344(125,442)(30,449)(120,184)(22,640)(67,479)(856)
157,725
3,462
14,082(7,531)(62,306)
105,432(82,462)(20,251)(122,009)
5,545
4,098
89,074(85,339)(18,390)(119,927)
1,713
5,529
103,722(9,205)(73,776)

57,140(3,331)(81,401)

33,30019,191(133,977)

61,445150,121(128,638)(29,007)(18,301)(23)
544,442
116,291(102,014)
88(29,014)(21,763)(82)
4(1,294)

(489)

60
(5)
34,363(61)
7,402

Effect of exchange rate changes on cash and cash equivalents
Change in cash and cash equivalents(54,346)(16,393)

9,433(11,710)

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

699,315
682,922

701,703689,993

Cash flows from operating activities:
Net income
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization
Impairment losses
Income taxes
Share of (profits) losses of investments accounted for using the equity method
Financial income and expenses
Net gain on business reorganization and others(Gain) loss on sale of property, plant and equipment
Change in trade receivables
Change in inventories
Change in other assets
Change in trade payables
Change in retirement and severance benefits
Change in other liabilities
Other
SubtotalInterest received
Dividends received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities:
Purchase of property, plant and equipment
Purchase of intangible assets
Purchase of leased assets
Proceeds from sale of property, plant and equipment, and intangible assets
Proceeds from sale of leased assets
Collection of lease receivables
Purchase of investments in securities and other financial assets(including investments in subsidiaries andinvestments accounted for using the equity method)
Proceeds from sale of investments in securities and other financial assets(including investments in subsidiaries andinvestments accounted for using the equity method)Other
Net cash provided by (used in) investing activities
Cash flows from financing activities:
Change in short-term debt, net
Proceeds from long-term debt
Payments on long-term debt
Proceeds from payments from non-controlling interests
Dividends paid to Hitachi, Ltd. stockholders
Dividends paid to non-controlling interests
Acquisition of common stock for treasury
Proceeds from sales of treasury stock
Purchase of shares of consolidated subsidiaries from
non-controlling interests
Proceeds from partial sales of shares of consolidated
subsidiaries to non-controlling interests
Other
Net cash provided by (used in) financing activities

See accompanying notes to condensed quarterly consolidated financial statements.

F-5

Notes to Condensed Quarterly Consolidated Financial Statements
June 30, 2016
(1) Nature of Operations
Hitachi, Ltd. (the Company) is a corporation domiciled in Japan, whose shares are listed on the Tokyo
Stock Exchange. The condensed quarterly consolidated financial statements of the Company as of and forthe three months ended June 30, 2016 comprise the Company, its subsidiaries, and the Company’s
interests in associates and joint ventures. The Company’s and its subsidiaries’ businesses are global anddiverse, and include manufacturing and services in nine segments consisting of information andtelecommunication systems, social infrastructure and industrial systems, electronic systems andequipment, construction machinery, high functional materials and components, automotive systems,
smart life and ecofriendly systems, others (logistics and other services) and financial services.
(2) Basis of Presentation
As the Company meets the requirements of a “Specified Company” pursuant to Article 1-2 of theOrdinance on the Terminology, Forms, and Preparation Methods of Quarterly Consolidated Financial
Statements (Cabinet Office Ordinance No.64 of 2007), the condensed quarterly consolidated financial
statements of the Company have been prepared in accordance with International Accounting Standards(IAS) 34 “Interim Financial Reporting”, as permitted by the provision of Article 93 of the Ordinance.
They do not include all the information and disclosures required for a complete set of financial statements
prepared in accordance with International Financial Reporting Standards (IFRS), and should be read in
conjunction with the financial statements and notes included in the Company’s annual consolidated
financial statements for the year ended March 31, 2016.
Management of the Company has made a number of judgments, estimates and assumptions relating to theapplication of accounting policies, reporting of revenues and expenses and assets and liabilities in the
preparation of these condensed quarterly consolidated financial statements. Actual results could differ
from those estimates.
Estimates and assumptions are continually evaluated. The effects of a change in accounting estimates, ifany, is recognized in the reporting period in which the change was made and in future periods.
Judgments, estimates and assumptions that could have a material effect on these condensed quarterly
consolidated financial statements are basically the same as those disclosed in the Company’s annual
consolidated financial statements for the year ended March 31, 2016.
(3) Significant Accounting Policies
Significant accounting policies adopted in preparation of the condensed quarterly consolidated financial
statements are consistent with those used in the preparation of the Company’s annual consolidated
financial statements for the year ended March 31, 2016.
Income taxes for three month ended June 30, 2016 are computed using the estimated annual effective tax
rate.

F-6

Notes to Condensed Quarterly Consolidated Financial Statements
June 30, 2016(4) Segment Information
The operating segments of the Company are the components for which separate financial information isavailable and which is evaluated regularly by the chief operating decision maker in deciding how toallocate resources and in assessing performance.
The Company discloses its business in nine reportable segments, corresponding to categories of activities
classified primarily by the similarities for the nature of markets, products and services, and economic
characteristics. Several operating segments are aggregated into Social Infrastructure & Industrial Systems,
Electronic Systems & Equipment and High Functional Materials & Components for financial reporting
purposes so that financial statement users better understand the Company’s financial position andbusiness performance. The Company aggregates operating segments based on the similarities of
economic characteristics mainly using profit margin ratios of operating segment. The primary products
and services included in each segment are as follows:
Information & Telecommunication Systems:
Systems integration, Consulting, Cloud services, Servers, Storage, Software, Telecommunication &network and ATMs
Social Infrastructure & Industrial Systems:
Industrial machinery and plants, Elevators, Escalators, Railway systems, Thermal, Nuclear andRenewable energy power generation systems and Transmission & distribution systems
Electronic Systems & Equipment:
Semiconductor processing equipment, Test and measurement equipment, Advanced industrial products,
Medical electronics equipment and Power tools
Construction Machinery:Hydraulic excavators, Wheel loaders and Mining machinery
High Functional Materials & Components:
Semiconductor and display related materials, Circuit boards and materials, Automotive parts (molded
plastics, etc.), Energy storage devices, Specialty steels, Magnetic materials and components, High grade
casting components and materials and Wires and cables
Automotive Systems:
Engine management systems, Electric power train systems, Drive control systems and Car information
systems
Smart Life & Ecofriendly Systems:
Air-conditioning equipment, Room air conditioner, Refrigerators and Washing machines
Others
Optical disk drives, Property management and others
Financial Services:
Leasing and Loan guarantees
Effective from April 1, 2016, the Company changed the name of Others (Logistics and other services) to
Others.

F-7

Notes to Condensed Quarterly Consolidated Financial Statements
June 30, 2016
The following tables show business segment information for the three months ended June 30, 2016 and2015.
Revenues from Outside Customers

Information & Telecommunication Systems
Social Infrastructure & Industrial Systems
Electronic Systems & Equipment
Construction Machinery
High Functional Materials & Components
Automotive Systems
Smart Life & Ecofriendly Systems
OthersFinancial Services
Subtotal
Corporate items
Total

2016
389,412426,175
231,539
158,529
338,040
232,238
132,654
136,164
84,9212,129,672
795
2,130,467

Millions of yen
2015
387,876
397,093234,253
173,701
387,935
239,868
195,048
212,007
86,0632,313,844
179
2,314,023

2016
45,66656,877
24,3902,773
13,369683
7,175
76,9404,363
232,236(232,236)-

Millions of yen
2015
63,70838,651
24,5063,654
14,7581,236
8,637
93,317
4,722
253,189(253,189)-

Revenues from Intersegment Transactions

Information & Telecommunication Systems
Social Infrastructure & Industrial Systems
Electronic Systems & Equipment
Construction Machinery
High Functional Materials & Components
Automotive Systems
Smart Life & Ecofriendly Systems
OthersFinancial Services
Subtotal
Corporate items and Eliminations
Total

F-8

Notes to Condensed Quarterly Consolidated Financial Statements
June 30, 2016
Total Revenues
2016
435,078
483,052
255,929
161,302351,409
232,921
139,829
213,104
89,2842,361,908(231,441)
2,130,467

Information & Telecommunication Systems
Social Infrastructure & Industrial Systems
Electronic Systems & Equipment
Construction Machinery
High Functional Materials & Components
Automotive Systems
Smart Life & Ecofriendly Systems
OthersFinancial Services
Subtotal
Corporate items and Eliminations
Total

Millions of yen
2015
451,584435,744258,759
177,355
402,693
241,104
203,685
305,324
90,7852,567,033(253,010)
2,314,023

Segment Profit (Loss)
Millions of yen
2015
757
8,423
(6,146)
8,646
11,50017,283
1,433
5,235
23,37262,2987,800
11,690
3,348
8,427
4,824
12,236
11,222
12,66058,110146,898
54,361(430)
112,471
146,468
2,545
3,007(5,262)(6,781)

2016
Information & Telecommunication Systems
Social Infrastructure & Industrial Systems
Electronic Systems & Equipment
Construction Machinery
High Functional Materials & Components
Automotive Systems
Smart Life & Ecofriendly Systems
OthersFinancial Services
Subtotal
Corporate items and Eliminations
Total
Interest income
Interest charges
Income from continuing operations,
before income taxes

109,754

142,694

Segment profit (loss) is measured by EBIT.
Intersegment transactions are generally recorded at the same prices used in arm’s length transactions.
Corporate items include unallocated corporate expenses, such as expenditures for leading-edge R&D, apart of net gain on business reorganization, and others.

F-9

Notes to Condensed Quarterly Consolidated Financial Statements
June 30, 2016(5) Business Acquisitions and Divestitures
On May 13, 2016, the Company has concluded an agreement regarding the transfer of common stocks of
Hitachi Capital Corporation (Hitachi Capital), a subsidiary of the Company in the Financial Services
segment, in order to strengthen finance functions and accelerate the concentration of management
resources in the Social Innovation Business. In accordance with this agreement, a certain number ofshares of Hitachi Capital common stocks owned by the Company will be transferred to Mitsubishi UFJ
Financial Group, Inc. and Mitsubishi UFJ Lease & Financial Co., Ltd in the fiscal year ending March 31,
2017. As a result of this transfer of shares, the Company’s ownership ratio of voting rights in Hitachi
Capital will decrease from 60.6% to 33.4%, and Hitachi Capital will cease to be the Company’s
consolidated subsidiary and will be its associate accounted for using the equity-method. The effects ofthis transaction on the Company’s consolidated financial statements are currently being evaluated.
On March 30, 2016, the Company has concluded an agreement regarding the transfer of common stocksof Hitachi Transport System, Ltd. (HTS), a subsidiary of the Company included in the Others in segment
information, in order to expand the scope of the Social Innovation Business by enhancing logistics
platforms. In accordance with this agreement, a certain number of shares of HTS common stocks ownedby the Company were transferred to SG Holdings Co., Ltd. on May 19, 2016. As a result of this transferof shares, the Company’s ownership ratio of voting rights in HTS decreased from 59.02% to 30.01%, andHTS ceased to be the Company’s consolidated subsidiary and became its associate accounted for using
the equity-method. A gain on the sale of shares of HTS in the amount of 44,958 million yen wasrecognized in Other income in the condensed quarterly consolidated statement of profit or loss. Changes
in non-controlling interests in the condensed quarterly consolidated statement of changes in equity
include derecognition of non-controlling interest in HTS as a result of its deconsolidation
On February 7, 2015, Hitachi Data Systems Corporation (HDS), a subsidiary of the Company in the
Information & Telecommunications Systems segment, signed a definitive agreement with theshareholders of Pentaho Corporation (Pentaho) to acquire all the shares of Pentaho, for enhancing
big-data technologies and solutions. Pentaho integrates data, develops technologies for big-data analysis
and visualization, and delivers solutions and supports. On May 29, 2015, HDS acquired all the shares ofPentaho in accordance with the definitive agreement, and HDS obtained control of Pentaho, and it
became a wholly owned subsidiary.
The following table summarizes the fair value of the consideration paid for Pentaho, the assets acquired
and liabilities assumed recognized as of the acquisition date.
Millions of yen
Cash and cash equivalents
988
Trade receivables
807
Other current assets
182
Non-current assets (excluding intangible assets)
82
Intangible assets
Goodwill (not deductible for tax purposes)
55,901
10,275
Other intangible assets
Total
68,235Current liabilities
Non-current liabilities
Total

3,449
9
3,458

Cash paid for acquisition

64,777

The goodwill mainly comprises excess earning power and expected synergies arising from theacquisition.
F-10

Notes to Condensed Quarterly Consolidated Financial Statements
June 30, 2016

The results of operations of Pentaho for the period from the acquisition date to June 30, 2015 were notmaterial.
On a pro forma basis, revenues and net income attributable to Hitachi, Ltd. stockholders using anassumed acquisition date for Pentaho of April 1, 2015 would not differ materially from the amounts
reported in the condensed quarterly consolidated financial statements for the three months ended June 30,
2015.

F-11

Notes to Condensed Quarterly Consolidated Financial Statements
June 30, 2016
(6) Fair Value of Financial Instruments(a) Fair Value Measurements
The following methods and assumptions are used to measure the fair value of financial assets andliabilities.
Cash and cash equivalents, Short-term loans receivable, Short-term debt, Other payables andTrade payables
The carrying amount approximates the fair value because of the short maturity of these instruments.
Trade receivables
Fair value is measured by the present value of future cash flows discounted by risk-free rates after
considering early settlements, cancellation and the balance of doubtful accounts, for each type ofreceivable, class of receivable based on collection records and term of collection.
Lease receivables
Fair value is based on the present value of lease payments receivable based on years to maturity, using
discount rates that reflect the time to maturity and credit risk.
Investments in securities and Other financial assets
Investment securities with quoted market prices are estimated using the quoted share prices. In theabsence of an active market for investment securities, quoted prices for similar investment securities,
quoted prices associated with transactions that are not distressed for identical or similar investment
securities or other relevant information including market interest rate curves, referenced credit spreads
or default rates, are used to determine fair value. If significant inputs of fair value measurement areunobservable, the Company uses price information provided by financial institutions to evaluate suchinvestments. The information provided is corroborated by the income approach using its own valuation
model, or the market approach using comparisons with prices of similar securities.
The fair value of long-term loans receivable is estimated based on the present value of future cash flows
using the interest rate applicable to an additional loan of the same type.
Derivative assets are measured at fair value based on quoted prices associated with transactions that are
not distressed, prices in inactive markets, or based on models using interest rate curves and forward andspot prices for currencies and commodities. If significant inputs are unobservable, the Company mainly
uses the income approach or the market approach to corroborate relevant information provided byfinancial institutions and other available information.
Fair values of subordinated interests and beneficiary interests in trust that are retained in transactions oftransferring financial assets are estimated by discounting future cash flows based on economic
assumptions including expected rate of credit loss and discount rate since significant inputs for
estimation of the fair value are unobservable.
Long-term debt
The fair value of long-term debt is estimated based on quoted market prices or the present value of
future cash flows using the market interest rates applicable to the same contractual terms.
Other financial liabilities
Derivative liabilities are measured at fair value based on quoted prices associated with transactions thatare not distressed, prices in inactive markets, or based on models using interest rate curves and forward
and spot prices for currencies and commodities. If significant inputs are unobservable, the Company
uses mainly the income approach or the market approach to corroborate relevant information provided
by financial institutions and other available information.
F-12

Notes to Condensed Quarterly Consolidated Financial Statements
June 30, 2016
Contract guarantee deposits are financial liabilities received from some customers and other parties as acredit enhancement to trade and lease receivables, and normally returned after the underlying assets are
fully collected. The fair value of contract guarantee deposits is measured by discounting the sum of theprincipals over the time to the contractual return dates, using the risk-free discount rate.
(b) Financial Instruments Measured at Amortized Cost
The carrying amounts and estimated fair values of the financial instruments measured at amortized cost
are as follows.
The fair value estimated for financial assets and liabilities measured at amortized cost is classified in
Level 2 of the fair value hierarchy.

AssetsTrade receivables [1]Lease receivables
Investments in securities and otherfinancial assets [2]Debt securities
Long-term loans receivable
Liabilities
Long-term debt [3]Lease obligations
Bonds
Long-term debt
Other financial liabilities
Contract guarantee deposits

June 30, 2016
Carrying
Estimatedamounts
fair values

Millions of yen
March 31, 2016
Carrying
Estimatedamounts
fair values

3,142,605
1,082,641

3,163,734
1,119,597

3,676,298
1,066,243

3,691,667
1,104,607

65,72388,331

65,76689,54475,32690,94475,31991,77337,869714,367
1,912,766

37,602
731,269
1,935,963

44,600742,941
1,945,497

44,696755,325
1,970,687

28,96728,852

31,987

31,528[1] Trade receivables are included in Trade receivables and Investments in securities and other financial
assets in the condensed quarterly consolidated statements of financial position.
[2] Investments in securities and other financial assets are included in Other current assets andInvestments in securities and other financial assets in the condensed quarterly consolidated statementsof financial position.
[3] Long-term debt is included in Current portion of long-term debt and Long-term debt in thecondensed quarterly consolidated statements of financial position.
(c)Financial Instruments Measured at Fair Value in Condensed Quarterly Consolidated
Statements of Financial Position
Financial instruments measured at fair value on a recurring basis after the initial recognition are classified
into three levels of the fair value hierarchy based on the measurement inputs’ observability as follows:
Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets
Level 2: Valuations measured by direct or indirect observable inputs other than Level 1
Level 3: Valuations measured by significant unobservable inputs
When several inputs are used for a fair value measurement, the level is determined based on the inputthat is significant with the lowest level in the fair value measurement as a whole.

F-13

Notes to Condensed Quarterly Consolidated Financial Statements
June 30, 2016
Transfers between levels are deemed at the beginning of each quarter period.
The following tables present the assets and liabilities that are measured at fair value on a recurring basis.
June 30, 2016
Class of financial instruments
FVTPL financial assets:
Investments in securities and otherfinancial assets [1]Equity securities
Debt securities
Derivatives
FVTOCI financial assets:
Investments in securities and otherfinancial assets [1]Equity securities
Total financial assets at fair value
FVTPL financial liabilities:
Other financial liabilities
Derivatives
Total financial liabilities at fair value
March 31, 2016
Class of financial instruments
FVTPL financial assets:
Investments in securities and otherfinancial assets [1]Equity securities
Debt securities
Derivatives
FVTOCI financial assets:
Investments in securities and otherfinancial assets [1]Equity securities
Total financial assets at fair value
FVTPL financial liabilities:
Other financial liabilities
Derivatives
Total financial liabilities at fair value

Level 1

Level 2Millions of yen
Total

Level 3

16
10,659-7,248
95,8522,750
32,8126,061

2,766
50,719101,913

239,932
250,607206
103,306

110,810
152,433

350,948506,346-

75,25575,255-75,25575,255

Level 1

Level 2Millions of yen
Total

Level 316
12,051-

7,427
37,4891,781
38,025
6,061

1,797
57,50343,550280,978
293,045220
45,136

115,536
161,403396,734
499,584-

82,617
82,617-

82,617
82,617[1] Investments in securities and other financial assets are included in Other current assets andInvestments in securities and other financial assets in the condensed quarterly consolidated statementsof financial position.

F-14

Notes to Condensed Quarterly Consolidated Financial Statements
June 30, 2016
The following tables present the changes in Level 3 instruments measured on a recurring basis for thethree months ended June 30, 2016 and 2015.
Millions of yen

June 30, 2016
Level 3 financial assets
Balance at beginning of period
Gain (loss) in profit or loss [1]Loss in OCI [2]Purchases
Sales and redemption
Acquisitions and divestitures
Transfer from Level 3 [3]OtherBalance at end of period
Unrealized gain (loss) relating tofinancial assets still held at end of
period [4]Equitysecurities
117,31733(1,587)
1,624(411)(3,341)(168)
93
113,560

Debt
securities
38,025(36)
1,252(5,616)(567)(246)
32,81233(84)

Equitysecurities
112,632
(111)
5,237
406
(722)
124
(1,134)507
116,939Debt
securities
57,299(279)
960(5,389)197
251
53,039

5,137

(44)

Derivatives
6,061
6,061

161,403(3)(1,587)2,876(6,027)(3,908)(168)(153)
152,433-(51)

Millions of yen

June 30, 2015
Level 3 financial assets
Balance at beginning of period
Loss in profit or loss [1]Gain in OCI [2]Purchases
Sales and redemption
Acquisitions and divestitures
Transfer from Level 3 [3]OtherBalance at end of period
Unrealized gain (loss) relating tofinancial assets still held at end of
period [4]Total

Derivatives

Total

6,061
6,061

169,931
(390)
5,237
7,427
(6,111)321(1,134)758
176,039-

5,093[1] Gain (loss) in profit or loss related to FVTPL financial assets is included in Financial income andFinancial expenses in the condensed quarterly consolidated statements of profit or loss.
[2] Gain (loss) in OCI related to FVTOCI financial assets is included in Net changes in financial assets
measured at fair value through OCI in the condensed quarterly consolidated statements ofcomprehensive income.
[3] Transfer from Level 3 is mainly the result of an investee being listed on the stock market.
[4] Unrealized gain (loss) related to FVTPL financial assets still held at the end of period are includedin Financial income and Financial expenses in the condensed quarterly consolidated statements ofprofit or loss.

F-15

Notes to Condensed Quarterly Consolidated Financial Statements
June 30, 2016
Valuation techniques and unobservable inputs used for measuring financial instruments categorized as
Level 3 on a recurring basis as of June 30 and March 31, 2016 are as follows:
June 30, 2016
Level 3 financial instruments

Fair value

Subordinated interests and beneficiaryinterests in trusts that are retained
relating to securitization of financial
assetsMarch 31, 2016
Level 3 financial instruments

21,038Fair value

Subordinated interests and beneficiaryinterests in trusts that are retained
relating to securitization of financial
assets25,389Valuationtechnique
DCF

Valuationtechnique
DCF

Millions of yen
Range

Unobservable inputs
Discount rate
Expected rate of credit lossof the entire transferredfinancial assets

0.01-0.69%
0.15-0.36%

Millions of yen
Range

Unobservable inputs
Discount rate
Expected rate of credit lossof the entire transferredfinancial assets

0.05-1.25%
0.15-0.36%

The impact on the fair value is not material if unobservable inputs are changed to reasonably possible
alternative assumptions in estimating the fair value of subordinated interests and beneficiary interests intrusts that are retained relating to securitization of financial assets.
Fair values are measured by finance departments in accordance with the Company’s policies andprocedures. Valuation models are determined so that they reflect each financial instrument’s nature,
characteristics and risks most appropriately. The finance departments continually examine changes inimportant inputs that could affect the fair value. In case the fair value of a financial instrument wassignificantly impaired, administrators review and approve the impairment loss.
(7)

Dividends
Dividends declared on common stock for the three months ended June 30, 2016 are as follows:

Decision
The Board of Directors
on May 13, 2016

Cash dividends(millions of yen) Appropriation from28,969Retained earnings

Cashdividends
per share(yen)

Record date

Effective date

6.0

March 31, 2016

May 30, 2016

Dividends declared on common stock for the three months ended June 30, 2015 are as follows:

Decision
The Board of Directors
on May 14, 2015

Cash dividends(millions of yen) Appropriation from28,971Retained earnings

F-16

Cash
dividends
per share(yen)

Record date

Effective date

6.0

March 31, 2015

June 1, 2015

Notes to Condensed Quarterly Consolidated Financial Statements
June 30, 2016(8) Other Income and Expenses
Millions of yen
2015

2016
Net gain (loss) on sales and disposals of fixed
assetsImpairment losses
Net gain on business reorganization and others
Special termination benefits
Expenses related to competition law and others(2,423)(5,650)44,723(1,424)-61(385)
28,722(5,608)(4,653)

Net gain on business reorganization and others include gains and losses related to obtaining and losing
control of investees and gains and losses related to obtaining and losing significant influence overinvestees.
Restructuring charges (structural reform expenses) included in other expenses for the three months
ended June 30, 2016 and 2015 were ¥7,074 million and ¥5,993 million, respectively. Restructuring
charges (structural reform expenses) mainly include impairment losses and special termination benefits.
(9) Financial Income and Expenses
2016
Dividends received
Exchange gain (loss)

3,386(12,915)

Millions of yen
2015
3,843
5,344

Dividends received for the three months ended June 30, 2016 and 2015 are from FVTOCI financial
assets.

F-17

Notes to Condensed Quarterly Consolidated Financial Statements
June 30, 2016(10) Discontinued Operations
In the Social Infrastructure & Industrial Systems, the Company classified the part of thermal power
generation system business which was not transferred to Mitsubishi Hitachi Power Systems, Ltd. forbusiness integration in the thermal power generation systems business with Mitsubishi Heavy Industries,
Ltd. but was operated by the Company and certain subsidiaries as discontinued operations in thecondensed quarterly consolidated statements of profit or loss since the projects were completed in theyear ended March 31, 2015.
Profit or loss and cash flows from the discontinued operations for the three months ended June 30, 2016
and 2015 are as follows:
Millions of yen
2015
2016
Profit or loss from discontinued operations
41
Revenues
1,127(1,644)
Cost of sales and expenses(671)
Income (loss) from discontinued operations,(1,603)456
before taxes
Income taxes(23)(1,603)
Income (loss) from discontinued operations
433
Millions of yen
2015

2016
Cash flows from discontinued operations
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities

(790)
415

F-18

(148)
16

Notes to Condensed Quarterly Consolidated Financial Statements
June 30, 2016(11) Earnings Per Share (EPS) Information
The computations of net income attributable to Hitachi, Ltd. stockholders used to derive basic anddiluted EPS for the three months ended June 30, 2016 and 2015 are as follows:
Number of shares
2015

2016
Weighted average number of shares on which basic
EPS is calculated
Effect of dilutive securities
Number of shares on which diluted EPS is
calculated

4,828,192,248
33,771

4,828,521,644-

4,828,226,019

4,828,521,644

2016

Millions of yen
2015

Net income from continuing operations,
attributable to Hitachi, Ltd. stockholders
Basic
Effect of dilutive securities
Other
DilutedNet Income (loss) from discontinued operations,
attributable to Hitachi, Ltd. stockholders
Basic
Effect of dilutive securities
Other
Diluted
Net income attributable to Hitachi, Ltd. stockholders
Basic
Effect of dilutive securities
Other
Diluted56,01756,561(0)56,017(95)
56,466433(1,603)433(1,603)56,45054,958(0)56,450(95)
54,863Yen

2016
EPS from continuing operations,
attributable to Hitachi, Ltd. stockholders
Basic
DilutedEPS from discontinued operations,
attributable to Hitachi, Ltd. stockholders
Basic
DilutedEPS attributable to Hitachi, Ltd. stockholders
Basic
Diluted

F-19

2015
11.60
11.60

11.71
11.69

0.09
0.09

(0.33)(0.33)

11.69
11.69

11.38
11.36

Notes to Condensed Quarterly Consolidated Financial Statements
June 30, 2016(12) Contingencies(a) Litigation
In June 2009, a subsidiary in Japan received a grand jury subpoena in connection with theinvestigation conducted by the Antitrust Division of the U.S. Department of Justice and received
requests for information from the European Commission in respect of alleged antitrust violations
relating to optical disk drives. In November 2011, the subsidiary in Japan paid a fine in relation to
the investigation from the Antitrust Division of the U.S. Department of Justice. In July 2012, thesubsidiary in Japan received a statement of objections from the European Commission in respect ofalleged antitrust violations. In October 2015, the European Commission announced the amount of
the fine for the subsidiary in Japan in respect of alleged antitrust violations, and in June 2016, two
subsidiaries in Japan and Korea paid the fines.
In July 2011, a subsidiary in the U.S.A. received a grand jury subpoena from the Antitrust Divisionof the U.S. Department of Justice, the Company and a subsidiary in Europe received requests for
information from the European Commission, and a subsidiary in Canada received requests for
information from the Canadian Competition Bureau, all in respect of alleged antitrust violations
relating to automotive equipment. In November 2013, a subsidiary in Japan, which had been also
primarily responsible for responding to the investigation from the Antitrust Division of the U.S.
Department of Justice, paid fines. In January 2016, the Company and the subsidiary in Japan which
had been also primarily responsible for responding to the investigation from European Commission
reached a settlement with the European Commission, and paid fines in April 2016.
In April 2014, a subsidiary in the U.S.A. received a grand jury subpoena in connection with theinvestigation conducted by the Antitrust Division of the U.S. Department of Justice in respect ofalleged antitrust violations relating to automotive equipment. A subsidiary in Japan which had been
also primarily responsible for responding to the investigation made provision for estimated loss on areasonable basis.
In June 2014, a subsidiary in Japan was investigated by the Japan Fair Trade Commission in respectof alleged antitrust violations relating to capacitors. In March 2016, the subsidiary received a noticethat the investigation was over from the Japan Fair Trade Commission. The subsidiary in Japan andsubsidiaries in Europe, the U.S.A., and others are being investigated by competition authorities ineach country or region, all in respect of alleged antitrust violations relating to capacitors. In April
2016, the subsidiary in Japan concluded an agreement in which the subsidiary will pay fines, and inJune 2016, the subsidiary in Japan paid the fines. In November 2015, the subsidiaries in Japan
received a statement of objections from the European Commission in respect of alleged antitrust
violations.
In addition to the above, the Company, its subsidiaries and associates have cooperated with thecompetent authorities. Depending upon the outcome of these matters, fines or surcharge payments,
the amount of which is uncertain, may be imposed on them. Also, in connection with pending andsettled antitrust violations, civil disputes, including class action lawsuits, involving the Company andsome of these companies have arisen in a number of countries, including in the U.S.A. and Canada.
An amount, which was considered to be a reasonable estimate in respect of these claims, wasaccrued for the potential losses in relation to certain of these civil disputes.
In August 2012, a subsidiary in Europe received a complaint filed by a customer in Europe seeking
compensation for consequential losses of EUR 1,058 million (¥121,092 million), additional costs andinterest allegedly incurred by the delay in the construction process of a power plant against, jointly
and severally, the Company, the subsidiary in Europe, a consortium including the Company and thesubsidiary in Europe, and two other companies. In addition, in October 2013 and February 2016, thesubsidiary in Europe received additional complains requesting compensation for consequential losses
F-20

Notes to Condensed Quarterly Consolidated Financial Statements
June 30, 2016of EUR 239 million (¥27,395 million) and EUR 105 million (¥11,969 million), respectively. In
June 2016, the Company was informed that the customer added an associate in Europe as one of the
defendants. Although the Company, the subsidiary and the associate in Europe and the consortium
will vigorously defend themselves against this lawsuit, there can be no assurance that they will not
be held liable for any amounts claimed.
In December 2013, the Company, a subsidiary in Europe and a consortium consisting of theCompany and the subsidiary in Europe, jointly and severally received a request from a customer inEurope to refer a dispute to arbitration seeking compensation for EUR 606 million (¥69,411 million)
including consequential losses allegedly incurred by the delay in the construction process of a power
plant. As of June 30, 2016, the amount of compensation claimed by the customer was changed to
EUR 637 million (¥72,886 million). In December 2015, these companies, jointly and severally
received a request for arbitration from the customer demanding EUR 161 million (¥18,454 million)in compensation for performance related deficiencies of a power plant. Although the Company, thesubsidiary in Europe, and the consortium consisting of the Company and the subsidiary in Europe,
will vigorously defend themselves against this claim, there can be no assurance that they will not beheld liable for any amounts claimed.
In January 2016, a subsidiary in Europe notified its customer in Europe that the subsidiary hadcommenced arbitration proceedings to resolve a disagreement about construction of a power plant,
and then the arbitration was started. While the subsidiary is seeking payments of the unpaid amounts
based on the contract, a counterclaim was filed by the customer. Thus, there can be no assurance thatthe subsidiary will not be held liable for any amounts.
The Company and its subsidiaries execute a number of business reorganizations, including mergers,
acquisitions and divestitures. Contracts for these reorganizations include clauses for transaction priceadjustments subsequent to the reorganizations. As the result of price adjustments, etc. there is apossibility that the Company pays for any amounts.
Depending upon the outcome of the above legal proceedings, there may be an adverse effect on the
consolidated financial position or results of operations. Currently, the Company is unable to estimate
the adverse effect, if any, of many of these proceedings. Accordingly, except as otherwise stated, noaccrual for potential loss has been made. The actual amount of fines, surcharge payments or any
other payments resulting from these legal proceedings may be different from the accrued amounts.
In addition to the above, the Company and its subsidiaries are subject to legal proceedings andclaims which have arisen in the ordinary course of business and have not been finally adjudicated.
These actions when ultimately concluded and determined will not, in the opinion of management,
have a material adverse effect on the consolidated financial position or results of operations of theCompany and subsidiaries.
(b) Other
On February 1, 2014 (hereinafter the “effective date of company split”), the Company and
Mitsubishi Heavy Industries, Ltd. (hereinafter “MHI”) integrated their thermal power generation
systems businesses into MHI’s consolidated subsidiary, MITSUBISHI HITACHI POWER
SYSTEMS, LTD. (hereinafter “MHPS”), through a spin-off in the form of an absorption-typecompany-split. As part of this business integration, assets and liabilities associated with boiler
construction projects for Medupi and Kusile Power Stations for which the Company’s consolidated
subsidiaries in the Republic of South Africa, Hitachi Power Africa Proprietary Limited (hereinafter“HPA”) and other companies received orders in 2007, as well as their contractual status in relation tocustomers, and rights and obligations thereof were transferred from HPA to MHI’s consolidated
subsidiary, Mitsubishi Hitachi Power Systems Africa Proprietary Limited (hereinafter “MHPS
F-21

Notes to Condensed Quarterly Consolidated Financial Statements
June 30, 2016
Africa”) (hereinafter, the “Transfer of South African Business”).
Under the agreement executed between the Company and MHI regarding the Transfer of South
African Business, the Company and HPA shall be liable for contingent liabilities resulting fromevents that occurred before the effective date of company split as well as claims that had alreadybeen made as of the said date, while MHPS and MHPS Africa shall be held responsible for the
execution of business on and after the effective date of company split. Given these conditions, it has
been agreed upon to determine the final transfer price upon agreement on future construction
schedule as of the effective date of company split and confirmation of estimated project cash flows
based on such schedule between the parties, and settle the difference with the provisional price.
The said transfer price adjustment for the Transfer of South African Business is still under discussion
between the Company and MHI and not yet agreed upon at the moment. On March 31, 2016, MHI
requested the Company to pay ZAR 48,200 million (approximately ¥379.0 billion when ZAR 1 =¥7.87) to MHPS Africa as a portion of transfer price adjustment, etc. The Company replied to MHI
on April 6, 2016 that the details of the demand letter lacked legal grounds under any agreement andthus the Company cannot accept it.
The Company has recorded provisions based on reasonable estimates for the aforementioned
agreement related to the South African Business. The actual amount of payment resulting from thetransfer price adjustment may be different from the accrued amount.
(13) Approval of Condensed Quarterly Consolidated Financial Statements
The condensed quarterly consolidated financial statements for the first quarter of 2016 were approvedon August 8, 2016 by Toshiaki Higashihara, President and CEO of the Company.

F-22

[Cover][Document Filed]

Confirmation Letter[Applicable Law]

Article 24-4-8, Paragraph 1 of the Financial Instruments and Exchange Act ofJapan[Filed with]

Director, Kanto Local Finance Bureau[Filing Date]

August 8, 2016

[Company Name]

Kabushiki Kaisha Hitachi Seisakusho[Company Name in English] Hitachi, Ltd.
[Title and Name ofToshiaki Higashihara, President & CEO

Representative][Name and title of CFO]

Mitsuaki Nishiyama, Senior Vice President and Executive Officer[Address of Head Office]6-6, Marunouchi 1-chome, Chiyoda-ku, Tokyo[Place Where Available forTokyo Stock Exchange, Inc.

Public Inspection](2-1, Nihombashi Kabutocho, Chuo-ku, Tokyo)
Nagoya Stock Exchange, Inc.
(8-20, Sakae 3-chome, Naka-ku, Nagoya)A-1

1. Matters Related to Adequacy of Statements Contained in the Quarterly Report
Mr. Toshiaki Higashihara, President & CEO, and Mr. Mitsuaki Nishiyama, Senior Vice President andExecutive Officer, confirmed that statements contained in the Quarterly Report for the first quarter of
148th fiscal year (from April 1, 2016 to June 30, 2016) were adequate under the Financial Instruments andExchange Act.
2. Special Notes
None.

A-2