[Translation]

Quarterly Report(The Second Quarter of 152nd Business Term)
From July 1, 2020 to September 30, 2020

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]

November 12 , 2020

[Fiscal Year]

The Second Quarter of 152nd Business Term (from July 1, 2020 to September 30, 2020)[Company Name]

Kabushiki Kaisha Hitachi Seisakusho[Company Name in English]

Hitachi, Ltd.

[Title and Name of Representative]

Toshiaki Higashihara, President & CEO[Address of Head Office]6-6, Marunouchi 1-chome, Chiyoda-ku, Tokyo[Phone No.]

03-3258-1111[Contact Person]

Takahiro Yamada, Manager, Legal Division[Contact Address]

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

03-3258-1111[Contact Person]

Takahiro Yamada, Manager, Legal Division[Place Where Available for PublicTokyo Stock Exchange, Inc.

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 havetruncated amounts of less than one million or one hundred million, as the case may be. Accordingly, the total of figures presented incolumns or otherwise may not equal the total of the individual items. We have rounded all percentages to the nearest percent, onetenth 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 and Exchange Act
of Japan and other laws and regulations amending and/or supplementing the Financial Instruments and Exchange Act of Japan.

Contents
Part I Information on the Company ………………………………………………………………………………………………

1

I. Overview of the Company ……………………………………………………………………………………………………
1. Key Financial Data ………………………………………………………………………………………………………

1
1

2. Description of Business ……………………………………………………………………………………………………
II. Business Overview …………………………………………………………………………………………………………

2
3

1. Risk Factors ………………………………………………………………………………………………………………
2. Management’s Discussion and Analysis of Consolidated Financial Condition, Results of Operations and Cash Flows …

33

3. Material Agreements, etc. …………………………………………………………………………………………………
III. Information on the Company ………………………………………………………………………………………………

9
10

1. Information on the Company’s Stock, etc. ……………………………………………………………………………… 10(1) Total number of shares, etc. …………………………………………………………………………………………… 10(2) Information on the stock acquisition rights, etc. ……………………………………………………………………… 10(3) Information on moving strike convertible bonds, etc. ………………………………………………………………… 10(4) Changes in the total number of issued shares and the amount of common stock and other ………………………… 10(5) Major shareholders …………………………………………………………………………………………………… 11(6) Information on voting rights …………………………………………………………………………………………
2. Changes in Senior Management …………………………………………………………………………………………

12
13

IV. Financial Information ……………………………………………………………………………………………………… 13
Part II Information on Guarantors, etc. for the Company ………………………………………………………………………… 13[Condensed Quarterly Consolidated Financial Statements] ……………………………………………………………………… F1[Confirmation Letter] ……………………………………………………………………………………………………………… A1

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)
Six months ended
September 30, 2019

Six months ended
September 30, 2020

Year ended
March 31, 2020

4,221,327[2,118,745]

3,760,057[2,165,780]

8,767,263

Income from continuing operations, before
income taxes

288,976384,254

180,268

Net income attributable to Hitachi, Ltd.
stockholders

189,293[68,990]

250,755[27,504]

87,596131,271285,855(8,465)

Total Hitachi, Ltd. stockholders’ equity

3,341,211

2,915,955

3,159,986

Total equity

4,445,844

3,572,774

4,266,739

Total assets

9,719,596

10,616,015

9,930,081

196.02[71.44]259.60[28.47]90.71

195.77259.29

90.60

34.4

27.5

31.8

Net cash provided by operating activities

205,688

214,491

560,920

Net cash used in investing activities(207,079)(703,884)(525,826)

Net cash provided by financing activities

70,137433,819

2,837

Cash and cash equivalents at end of period

841,702759,882

812,331

Revenues

Comprehensive income attributable to Hitachi,Ltd. stockholders

Earnings per share attributable to Hitachi, Ltd.
stockholders, basic (yen)Earnings per share attributable to Hitachi, Ltd.
stockholders, diluted (yen)Total Hitachi, Ltd. stockholders’ equity ratio (%)(Notes) 1. Hitachi's consolidated financial statements have been prepared in conformity with the International Financial ReportingStandards (“IFRS”) as issued by the International Accounting Standards Board.
2. Revenues do not include the consumption tax, etc.
3. The figures of “Revenues,” “Net income attributable to Hitachi, Ltd. stockholders” and “Earnings per share attributable
to Hitachi, Ltd. stockholders, basic” in square bracket are those for the three months ended September 30, 2019 and2020, respectively.

12. Description of Business
There were no material changes in principal businesses of Hitachi during the six months ended September 30, 2020. The
Hitachi Group is comprised of the Company, 846 consolidated subsidiaries, and 360 equity-method associates and joint-ventures.
Changes in Business Unit (BU) of the Company and principal affiliated companies during the six months ended September 30,
2020 were as follows.
(As of September 30, 2020)
BU and principal affiliated companies
Main products and services
BU
Affiliated companies(Change by organization merger) (Note 1)
IT
Defense Systems BU
Energy[Consolidated subsidiaries](New) (Note 2)
Hitachi ABB Power Grids Ltd
Industry[Consolidated subsidiaries](Change in company name) (Note 3)
Hitachi Industrial Holdings Americas, Inc.
Smart Life[Consolidated subsidiaries](Reclassification of segment) (Note(Reclassification of segment) (Note 4)
4)
Hitachi High-Tech Corporation
Medical and Life Science Products,
Analytical Equipment,
Semiconductor Processing
Equipment, Manufacturing andInspection Equipment, Advanced
Industrial Products[Consolidated subsidiaries]
Hitachi Chemical(Excluded by the share transfers) (Note 5)(Excluded by the share transfer)
Hitachi Chemical Company, Ltd.
(Note 5)Functional Materials (Electronics
Materials, Printed Wiring Boards
Materials, Electronics
Components), Advanced
Components and Systems(Mobility Components, Energy
Storage Devices, Life Sciencerelated Products)
Others[Consolidated subsidiaries](Dissolved by the merger) (Note 6)
Hitachi Life, Ltd.
(Change in company name) (Note 6)
Hitachi Real Estate Partners, Ltd.
(Notes) 1. Defense Systems BU merged with Social Infrastructure Systems BU on April 1, 2020.
2. Hitachi ABB Power Grids Ltd became a consolidated subsidiary of the Company on July 1, 2020 as the Company
acquired a part of the stocks of Hitachi ABB Power Grids Ltd.
3. Sullair US Purchaser, Inc. changed its name to Hitachi Industrial Holdings Americas, Inc. on April 1, 2020.
4. Hitachi High-Tech Corporation became a wholly-owned subsidiary of the Company on May 20, 2020. As a result, Hitachi
High-Tech segment was abolished and merged into Smart Life segment.
5. Hitachi Chemical Company, Ltd. has ceased to be an affiliate of the Company through the share transfer on April 20,
2020. As a result, Hitachi Chemical segment was abolished.
6. Hitachi Urban Investment, Ltd. merged with Hitachi Life, Ltd. and changed its name to Hitachi Real Estate Partners, Ltd.
on April 1, 2020.

2

II. Business Overview
1. Risk Factors
There were no new risk factors recognized during the six months ended September 30, 2020.
There were no material changes in the risk factors stated in the Annual Securities Report for the 151st business term
pursuant to the Financial Instruments and Exchange Act of Japan.
2. Management’s Discussion and Analysis of Consolidated Financial Condition, Results of Operations and Cash Flows(1) Analysis of Results of Operations
Results of Operations
The results of operations in the six months ended September 30, 2020 were as follows.
Revenues decreased 11% to 3,760.0 billion yen, as compared with the six months ended September 30, 2019, due mainly todecreased revenues owing to the sale of shares of Hitachi Chemical Company, Ltd. and lower revenues in the Smart Life sector,
Hitachi Construction Machinery and Hitachi Metals due mainly to the impact of COVID-19 (the new coronavirus infection). Thisdecrease was partially offset by increased revenues in the Energy sector due to the acquisition of the power grid business from
ABB Ltd.
Cost of sales decreased 9% to 2,801.4 billion yen and the ratio of cost of sales to revenues increased 2% to 75%, ascompared with the six months ended September 30, 2019, respectively. Gross profit decreased 16% to 958.6 billion yen, as
compared with the six months ended September 30, 2019.
Selling, general and administrative expenses (“SG&A”) decreased 8% to 777.8 billion yen and the ratio of SG&A torevenues increased 1% to 21%, as compared with the six months ended September 30, 2019, respectively.
Adjusted operating income (presented as revenues less cost of sales as well as SG&A) decreased 116.4 billion yen to 180.7
billion yen, as compared with the six months ended September 30, 2019, due mainly to lower profits in the Smart Life sector,
Hitachi Construction Machinery and Hitachi Metals, etc.
Other income increased 245.0 billion yen to 283.2 billion yen, as compared with the six months ended September 30, 2019,
due mainly to the gains on business reorganization and others by selling shares of Hitachi Chemical Company, Ltd. Other
expenses decreased 5.9 billion yen to 69.9 billion yen, as compared with the six months ended September 30, 2019, due mainly tothe impairment losses posted in the six months ended September 30, 2019 owing to the lower than expected revenues for themagnetic material business in Hitachi Metals.
Financial income (excluding interest income) decreased 2.8 billion yen to 2.0 billion yen and financial expenses (excludinginterest charges) increased 3.6 billion yen to 4.9 billion yen, as compared with the six months ended September 30, 2019,respectively.
Share of profits of investments accounted for using the equity method worsened 32.4 billion yen to loss of 4.9 billion yen, as
compared with the six months ended September 30, 2019.
EBIT (earnings before interest and taxes, which is presented as income from continuing operations, before income taxes lessinterest income plus interest charges) increased 95.6 billion yen to 386.2 billion yen, as compared with the six months ended
September 30, 2019.
Interest income decreased 2.1 billion yen to 8.2 billion yen and interest charges decreased 1.7 billion yen to 10.1 billion yen,
as compared with the six months ended September 30, 2019, respectively.
Income from continuing operations, before income taxes increased 95.2 billion yen to 384.2 billion yen, as compared withthe six months ended September 30, 2019.
Income taxes increased 46.2 billion yen to 136.8 billion yen, as compared with the six months ended September 30, 2019.
Loss from discontinued operations improved 0.1 billion yen to 0.6 billion yen as compared with the six months ended
September 30, 2019.
Net income increased 49.1 billion to 246.7 billion yen, as compared with the six months ended September 30, 2019.
Net income attributable to non-controlling interests worsened 12.2 billion yen to loss of 4.0 billion yen, as compared withthe six months ended September 30, 2019.
As a result of the foregoing, net income attributable to Hitachi, Ltd. stockholders increased 61.4 billion yen to 250.7 billion
yen, as compared with the six months ended September 30, 2019.
Operations by Segment
The following is an overview of results of operations by segment. Revenues for each segment include intersegment
transactions. Effective from April 1, 2020, the Company reclassified Hitachi High-Tech segment in the Smart Life segment andabolished Hitachi Chemical segment. Accordingly, the amounts previously reported for the six months ended September 30,
2019 have been restated in conformity with the new segments.

3

(IT)
Revenues decreased 5% to 947.4 billion yen, as compared with the six months ended September 30, 2019, due mainly todecreased overseas revenues in North America and higher revenues by the transient services in the front business posted in thesix months ended September 30, 2019.
Adjusted operating income decreased 1.0 billion yen to 108.0 billion yen, as compared with the six months ended September
30, 2019, due mainly to decreased revenues, despite improved profitability resulted from cost structure overhaul.
EBIT decreased 8.0 billion yen to 97.8 billion yen, as compared with the six months ended September 30, 2019, due mainly
to decreased adjusted operating income and decrease in gains from selling the land of former production basis posted in the six
months ended September 30, 2019.
(Energy)
Revenues increased 147% to 398.8 billion yen, as compared with the six months ended September 30, 2019, due mainly toincreased revenues by acquiring the power grid business from ABB Ltd and higher revenues in the nuclear energy business.
Adjusted operating income worsened 7.3 billion yen to loss of 7.0 billion yen, as compared with the six months ended
September 30, 2019, due mainly to posting amortization of intangible assets owing to acquiring the power grid business from
ABB Ltd, despite increased revenues and improved profitability in both of the nuclear energy business and the energy business.
EBIT worsened 11.6 billion yen to net loss of 10.5 billion yen as compared with the six months ended September 30, 2019,
due mainly to decreased adjusted operating income and posting structural reform expenses by acquiring the power grid businessfrom ABB Ltd.
(Industry)
Revenues decreased 1% to 362.5 billion yen, as compared with the six months ended September 30, 2019, due mainly to thedeterioration of market conditions affected by the impact of COVID-19, despite increased revenues by acquiring JR Technology
Group, LLC.
Adjusted operating income increased 0.1 billion yen to 13.9 billion yen, as compared with the six months ended September
30, 2019, due mainly to reduction in expenses, despite decreased revenues.
EBIT decreased 4.9 billion yen to 15.7 billion yen as compared with the six months ended September 30, 2019, due mainly
to the decrease in share of profits of investments accounted for using the equity method.
(Mobility)
Revenues increased 2% to 538.7 billion yen, as compared with the six months ended September 30, 2019, due mainly tohigher revenues in the building systems business in China, despite decreased revenues from the railway systems business.
Adjusted operating income increased 1.2 billion yen to 39.8 billion yen, as compared with the six months ended September
30, 2019, due mainly to the profitability improvement resulted from cost reduction, etc. in the building systems business as wellas increased revenues.
EBIT decreased 22.5 billion yen to 41.3 billion yen, as compared with the six months ended September 30, 2019, due
mainly to the gains posted in the six months ended September 30, 2019 by selling a part of shares of Agility Trains West
(Holdings) Limited stock.
(Smart Life)
Revenues decreased 12% to 930.8 billion yen, as compared with the six months ended September 30, 2019, due mainly to
lower sales in the automotive systems business in North America and Japan as well as decreased demand in trading business, etc.
in the measurement & analysis systems business.
Adjusted operating income decreased 32.3 billion yen to 27.3 billion yen, as compared with the six months ended September
30, 2019, due mainly to decreased revenues.
EBIT decreased 40.4 billion yen to 18.2 billion yen, as compared with the six months ended September 30, 2019, due
mainly to decreased adjusted operating income.
(Hitachi Construction Machinery)
Revenues decreased 25% to 360.9 billion yen, as compared with the six months ended September 30, 2019, due mainly tothe impact of COVID-19 and foreign currency translation.
Adjusted operating income decreased 34.0 billion yen to 10.4 billion yen, as compared with the six months ended September
30, 2019, due mainly to decreased revenues, despite the cost reduction.
EBIT decreased 36.8 billion yen to 5.9 billion yen, as compared with the six months ended September 30, 2019, due mainly
to decreased adjusted operating income.

4

(Hitachi Metals)
Revenues decreased 25% to 340.8 billion yen, as compared with the six months ended September 30, 2019, due mainly to adecrease in demand for products for automobile owing to the impact of COVID-19.
Adjusted operating income worsened 18.2 billion yen to loss of 12.3 billion yen, as compared with the six months ended
September 30, 2019, due mainly to decreased revenues.
EBIT improved 17.5 billion yen to loss of 38.7 billion yen, as compared with the six months ended September 30, 2019, due
mainly to the impairment losses posted in the six months ended September 30, 2019 owing to the lower than expected revenues
for the magnetic material business, despite decreased adjusted operating income.
(Others)
Revenues decreased 12% to 208.6 billion yen, as compared with the six months ended September 30, 2019.
Adjusted operating income decreased 4.3 billion to 7.5 billion yen, and EBIT decreased 3.7 billion yen to 10.4 billion yen,
as compared with the six months ended September 30, 2019, respectively.
Revenues by Market
Revenues in Japan decreased 14% to 1,833.6 billion yen, as compared with the six months ended September 30, 2019, due
mainly to a decrease in revenues resulting from the sale of shares of Hitachi Chemical Company, Ltd. and decreased revenues in
the Smart Life sector.
Overseas revenues decreased 8% to 1,926.4 billion yen, as compared with the six months ended September 30, 2019, due
mainly to a decrease in revenues resulting from the sale of shares of Hitachi Chemical Company, Ltd., decreased revenues in
Hitachi Construction Machinery and Hitachi Metals, and decreased revenues in the Smart Life sector due mainly to lower sales
from the automotive systems business in North America. This decrease was partially offset by increased revenues in the Energy
sector resulting from acquiring the power grid business from ABB Ltd, in the Mobility sector due mainly to higher sales from thebuilding systems business in China, and in the Industry sector resulting from acquiring JR Technology Group, LLC in North
America.
As a result, the ratio of overseas revenues to total revenues increased 1% to 51%, as compared with the six months ended
September 30, 2019.
(2) Analysis of Financial Condition and Cash Flows
Liquidity and Capital Resources
During the six months ended September 30, 2020, there were no major changes in the Company’s policies of maintaining
liquidity and ensuring funds, efforts for improvement in fund management efficiency, and ideas regarding funding sources andfundraising.
Cash Flows(Cash Flows from Operating Activities)
Net income in the six months ended September 30, 2020 increased by 49.1 billion yen, as compared with the six months
ended September 30, 2019. Net cash outflow from a change in trade payables increased by 12.1 billion yen, as compared with thesix months ended September 30, 2019. However, net cash outflow from a change in inventories decreased by 95.3 billion yen, as
compared with the six months ended September 30, 2019. Net cash inflow from a change in trade receivables and contract assets
increased by 9.6 billion yen, as compared with the six months ended September 30, 2019.
As a result of the foregoing, net cash provided by operating activities was 214.4 billion yen in the six months ended
September 30, 2020, an increase of 8.8 billion yen compared with the six months ended September 30, 2019.
(Cash Flows from Investing Activities)
Net amount of investments related to property, plant and equipment* was 146.5 billion yen in the six months ended
September 30, 2020. This net sum decreased by 52.4 billion yen compared with the six months ended September 30, 2019.
Proceeds from sale of investments in securities and other financial assets (including investments in subsidiaries and investments
accounted for using the equity method) in the six months ended September 30, 2020 increased by 389.7 billion yen, as comparedwith the six months ended September 30, 2019, due mainly to the sale of shares of Hitachi Chemical Company, Ltd. Purchase ofinvestments in securities and other financial assets (including investments in subsidiaries and investments accounted for using theequity method) in the six months ended September 30, 2020 increased by 958.2 billion yen, as compared with the six months
ended September 30, 2019, due mainly to the purchase of shares of Hitachi ABB Power Grids Ltd.
As a result of the foregoing, net cash used in investing activities was 703.8 billion yen in the six months ended September
30, 2020, an increase of 496.8 billion yen compared with the six months ended September 30, 2019.
* The sum of the purchase of property, plant and equipment and the purchase of intangible assets, less the proceeds from sale ofproperty, plant and equipment, and intangible assets.
(Cash Flows from Financing Activities)
Net cash outflow related to purchase of shares of consolidated subsidiaries from non-controlling interests in the six months
ended September 30, 2020 increased by 531.7 billion yen, as compared with the six months ended September 30, 2019, due
mainly to the purchase of shares of Hitachi High-Tech Corporation. However, net cash inflow from a change in short-term debt
5

in the six months ended September 30, 2020 increased by 882.3 billion yen, as compared with the six months ended September
30, 2019. And, net cash outflow related to long-term debt** in the six months ended September 30, 2020 decreased by 6.4 billion
yen, as compared with the six months ended September 30, 2019.
As a result of the foregoing, net cash flows provided by financing activities were 433.8 billion yen in the six months ended
September 30, 2020, an increase of 363.6 billion yen compared with the six months ended September 30, 2019.
** 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 September 30, 2020 were 759.8 billion yen, a decrease of 52.4
billion yen from March 31, 2020. Free cash flows, the sum of cash flows from operating and investing activities, were an outflow
of 489.3 billion yen in the six months ended September 30, 2020, an increase of 488.0 billion yen compared with the six months
ended September 30, 2019.
Assets, Liabilities and Equity
The following is an overview of Hitachi’s assets, liabilities and equity as of September 30, 2020.
Total assets were 10,616.0 billion yen, an increase of 685.9 billion yen from March 31, 2020, due mainly to increased assets
resulting from acquiring the power grid business from ABB Ltd. The increase was partially offset by decreased assets due mainly
to the purchase of shares of Hitachi High-Tech Corporation, the delivering shares of Mitsubishi Hitachi Power Systems, Ltd., andthe sale of shares of Hitachi Chemical Company, Ltd.
Total interest-bearing debt, the sum of short-term debt and long-term debt, was 2,510.8 billion yen, an increase of 1,025.8
billion yen from March 31, 2020.
Total Hitachi, Ltd. stockholders’ equity decreased by 244.0 billion yen from March 31, 2020, to 2,915.9 billion yen. The
ratio of total Hitachi, Ltd. stockholders’ equity to total assets was 27.5%, as compared with 31.8% as of March 31, 2020.
Non-controlling interests were 656.8 billion yen, a decrease of 449.9 billion yen from March 31, 2020.
Total equity was 3,572.7 billion yen, a decrease of 693.9 billion yen from March 31, 2020. The ratio of interest-bearing debt
to total equity was 0.70, as compared with 0.35 as of March 31, 2020.
(3) Management Policy
There were no material changes in Hitachi’s management policy during the six months ended September 30, 2020.
(4) Challenges Hitachi Group Faces
1) Business and Financial Challenges Hitachi Group Faces
There were no material changes in Hitachi’s business and financial challenges during the six months ended September 30,
2020.
2) Fundamental Policy on the Conduct of Persons Influencing Decision on the Company’s Financial and Business Policies
There were no material changes in Hitachi’s fundamental policy during the six months ended September 30, 2020.

6

(5) Research and Development
There were no material changes in the research and development of the Hitachi Group (the Company and consolidated
subsidiaries) stated in the Annual Securities Report for the 151st business term pursuant to the Financial Instruments andExchange Act of Japan. The Hitachi Group’s R&D expenditures in the six months ended September 30, 2020 were 129.6 billion
yen, 3.4% of revenues. A breakdown of R&D expenditures by segment is shown below.
(Billions of yen)Six months ended
September 30, 2020

Segment
IT

26.4

Energy9.8

Industry

5.2

Mobility

12.7

Smart Life

47.7

Hitachi Construction Machinery

10.9

Hitachi Metals

7.3

Others1.2

Corporate Items

8.1
Total

129.6

(6) Property, Plant and Equipment
The major property, plants and equipment materially changed during the six months ended September 30, 2020 are as
follows.
Breakdown by Segment(As of September 30, 2020)
Book value (Millions of yen)Segment

Land[Area inthousandsof m2]

Energy19,474(Note 1)

[10,710]

Smart Life

55,427(Note 2)

[7,904]

Hitachi High-Tech-(Note 2)[-]

Hitachi Chemical-(Note 3)[-]

Buildings
andstructures

MachineryandvehiclesTools,
furnitureandfixtures

Right-of-use
Assets

67,791133,025

3,006

28,669176

18,690270,831

43,626

133,471

175,472

48,49429,012-

43,058484,934

55,617

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Constructionin progress

Other

Number of
employees

Total(Notes) 1. The book value of the facilities in the Energy segment materially increased due mainly to the fact that Hitachi ABB Power
Grids Ltd became a consolidated subsidiary of the Company on July 1, 2020. The book value of "Tools, furniture andfixtures" of the company is disclosed as part of "Machinery and vehicles" as of September 30, 2020.
2. The book value of the facilities in the Smart Life segment materially increased due mainly to the fact that Hitachi HighTech Corporation became a wholly-owned subsidiary of the Company on May 20, 2020, and the Hitachi High-Techsegment was abolished and reclassified in the Smart Life segment.
3. Hitachi Chemical Company, Ltd. has ceased to be a consolidated subsidiary of the Company due to the share transfer on
April 20, 2020. As a result, there are not the property, plants and equipment in the Hitachi Chemical segment.

7

Domestic subsidiaries
The Yamazaki Works and Shimodate Works of Hitachi Chemical Company, Ltd. are no longer the facilities of theCompany's domestic subsidiaries due to the fact that Hitachi Chemical Company, Ltd. has ceased to be a consolidated subsidiaryof the Company as a result of the share transfer on April 20, 2020.
Overseas subsidiaries
Hitachi ABB Power Grids Ltd became a consolidated subsidiary of the Company on July 1, 2020. The property, plants andequipment of the company are as follows.
(As of September 30, 2020)

Subsidiary(Main location)

Hitachi ABBPower Grids Ltd(Zurich,Switzerland)

Segment

EnergyBook value (Millions of yen)
Details ofLand
Tools,
major facilities [Area in Buildings Machinery furniture Right-ofand
and
use
Other
and equipment thousands
andstructures vehicles
Assetsfixturesof m2]
Manufacturing
facilities for
power gridproducts, etc.

5,677
[2,180]56,703

129,221-25,718-Constructionin progress

Total

Number of
employees

18,155

235,474

34,803(Note) The figures are presented in consolidated basis of Hitachi ABB Power Grids Ltd. The book value of "Tools, furniture andfixtures" of the company is disclosed as part of "Machinery and vehicles" as of September 30, 2020.
(7) 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 and overseas, andhas not decided on specific plans to newly install or expand each of facilities as of the end of the consolidated fiscal year andeach quarter of the consolidated fiscal year. For this reason, it discloses amounts of capital investment by segment.
The amount of capital investment for the fiscal year ending March 31, 2021 is updated as follows (new installation andexpansions, based on the amount recorded as tangible fixed assets and the investment property) .
The amount of capital investment
for the fiscal year ending March 31, 2021
Segment(Billions of yen)
Initial Plan
Updated Plan
IT
Energy

90.0
25.0

91.0
31.0

Industry
Mobility

23.0
25.0

23.0
27.0

Smart Life
Hitachi Construction Machinery

110.0
65.0

111.0
60.0

Hitachi Metals
Others

33.0
12.0

33.0
21.0

Corporate Items & Elimination
Total

3.0
386.0

3.0
400.0

(Notes) 1. The figures in the above table include the amount of the right-of-use assets and the investment property, each ofwhich is recorded as property, plant and equipment 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 toroutine upgrading.

8(8) Forward-Looking Statements
Certain statements found in “2. Management’s Discussion and Analysis of Consolidated Financial Conditions, 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 withrespect to certain future events and financial performance and include any statement that does not directly relate to any historicalor 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 “forwardlooking statements” are based upon current assumptions of future events which may not prove to be accurate. Undue relianceshould 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:• exacerbation of social and economic impacts of the spread of COVID-19;• economic conditions, including consumer spending and plant and equipment investment in Hitachi’s major markets, as wellas levels of demand in the major industrial sectors Hitachi serves;• 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;• 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;• 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;• estimates, fluctuations in cost and cancellation of long-term projects for which Hitachi uses the percentage-of-completion
method to recognize revenue from sales;• increased commoditization of and intensifying price competition for products;• uncertainty as to Hitachi’s ability to attract and retain skilled personnel;• 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 for such products;• fluctuations in demand of products, etc. and industry capacity;• uncertainty as to Hitachi’s ability to implement measures to reduce the potential negative impact of fluctuations in demandof products, etc., exchange rates and/or price of raw materials or shortages of materials, parts and components;• credit conditions of Hitachi’s customers and suppliers;• 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 and the possibility of
incurring related expenses;• uncertainty as to the success of restructuring efforts to improve management efficiency by divesting or otherwise exiting
underperforming businesses and to strengthen competitiveness;• 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 and business customs including, without limitation,
contract terms and conditions and labor relations;• the potential for significant losses on Hitachi’s investments in equity-method associates and joint ventures;• uncertainty as to the success of cost structure overhaul;• 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 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;• 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 Hitachi’s access to, or ability to protect, certain intellectual property; and• uncertainty 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 this report and inother materials published by Hitachi.
3. Material Agreements, etc.
No material agreements were entered into during the six months ended September 30, 2020.

9

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

Total number of shares authorized to
be issued (shares)

Common stock

2,000,000,000

Total

2,000,000,0002) Issued shares

Class

Number of sharesissued as of the end of
second quarter (shares)(September 30, 2020)

Number of sharesissued as of thefiling date (shares)(Note)(November 12, 2020)

Stock exchange on which
the Company is listed

Description

The number of shares per

Commonstock

967,885,277

967,885,277

Tokyo, Nagoya

Total

967,885,277

967,885,277-

one unit of shares is 100
shares.
-(Note) The "Number of shares issued as of the filing date" does not include shares issued upon exercise of stock acquisition rightsfrom November 1, 2020 to the filing date.
(2) Information on the stock acquisition rights, etc.
1) Details of stock option plans
Not applicable.
2) Details of other stock acquisition rights, etc.
Not applicable.
(3) Information on moving strike convertible bonds, etc.
Not applicable.
(4) Changes in the total number of issued shares and the amount of common stock and other

Date

From July 1, 2020
to September 30, 2020

Change in
the total
number ofissued shares(shares)－

Balance of thetotal number ofissued shares(shares)

Change incommonstock(Millionsof yen)Balance ofcommonstock(Millionsof yen)Change incapitalreserve(Millionsof yen)Balance ofcapitalreserve(Millionsof yen)967,885,277－

460,790－

178,75610

(5) Major shareholders(As of September 30, 2020)

Name

Address

The Master Trust Bank of Japan, Ltd.

11-3, Hamamatsucho 2-chome,(Trust Account)

Minato-ku, Tokyo

Custody Bank of Japan, Ltd.
(Trust Account)Hitachi Employees’ Shareholding
Association
Custody Bank of Japan, Ltd.
(Trust Account 5)

90,239,800

9.33

8-12, Harumi 1-chome, Chuo-ku, Tokyo

57,555,200

5.95

6-6, Marunouchi 1-chome, Chiyoda- ku,
Tokyo21,255,496

2.20

8-12, Harumi 1-chome, Chuo-ku, Tokyo

20,038,400

2.07

20,018,898

2.07

20,000,099

2.07

18,457,389

1.91

17,687,054

1.83

16,652,291

1.72

15,080,812

1.56

296,985,439

30.72

State Street Bank and Trust Company

P.O. Box 351, Boston, Massachusetts 02101

505223(Standing proxy: Mizuho Bank, Ltd.)U.S.A.
(15-1, Konan 2-chome, Minato-ku, Tokyo)

Nippon Life Insurance Company

Share
Ownership(shares)

Ownership
percentage to thetotal number ofissued shares(excluding treasury
stock) (%)

6-6, Marunouchi 1-chome, Chiyoda- ku,
TokyoState Street Bank and Trust Company

P.O. Box 351, Boston, Massachusetts 02101

505001(Standing proxy: Mizuho Bank, Ltd.)U.S.A.
(15-1, Konan 2-chome, Minato-ku, Tokyo)
C/O City Bank, New York 111

NATS CUMCO(Standing proxy: Mizuho Bank, Ltd.)SSBTC CLIENT OMNIBUS
ACCOUNT(Standing proxy: The Hongkong andShanghai Banking Corporation

Wall Street, New York, NY, U.S.A.
(15-1, Konan 2-chome, Minato-ku, Tokyo)

One Lincoln Street, Boston MA USA 02111(11-1, Nihombashi 3-chome, Chuo-ku, Tokyo)

Limited)JP Morgan Chase Bank 385781(Standing proxy: Mizuho Bank, Ltd.)

25 Bank Street, Canary Wharf,
London, E14 5JP, United Kingdom(15-1, Konan 2-chome, Minato-ku, Tokyo)

Total

-

(Notes) 1. NATS CUMCO is the nominee name of the depositary bank, Citibank, N.A., for the aggregate of the Company’s
American Depositary Receipts (ADRs) holders.
2. Some reports on substantial shareholdings regarding the Company under the Financial Instruments and Exchange Act areavailable for public inspection. However, the information in the reports is not described in the above table since theCompany does not confirm the actual status of shareholdings as of September 30, 2020. The major contents of the reports
are as follows. On October 1, 2018, the Company completed the share consolidation of every five shares into one share forits common stock. The reports whose date on which the duty to file report is prior to the effective date of the shareconsolidation show the number of shares before the share consolidation.
Holders

BlackRock Japan Co. Ltd and seven other persons

Date on which the duty to file report

April 14, 2017

Number of shares

304,755,969 shares

Ownership percentage to the total number
of issued shares

6.31%

11

Sumitomo Mitsui Trust Asset Management Co., Ltd. and one other

Holders

personDate on which the duty to file reportFebruary 15, 2019

Number of shares

48,728,827 shares

Ownership percentage to the total number
of issued shares

5.04%

Holders

Asset Management One Co., Ltd. and four other persons

Date on which the duty to file report

September 13, 2019

Number of shares

49,553,000 shares

Ownership percentage to the total number
of issued shares

5.12%(6) Information on voting rights
1) Issued shares(As of September 30, 2020)
Classification

Number of shares (shares)

Number of voting
rightsDescription

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.)

Common stock

1,065,500

Shares with full voting right (others)

Common stock

964,367,100

Shares less than one unit

Common stock

2,452,677－－

967,885,277－－

Number of issued shares
Total number of voting rights－

9,643,671

9,643,671－－(Note) The “Shares with full voting right (others)” column includes 5,300 shares registered in the name of Japan Securities
Depository Center, Incorporated (account for managing stocks whose shareholders have not transferred titles) and 53 voting
rights for those shares.

122) Treasury stock, etc.
(As of September 30, 2020)

Name ofshareholder

Hitachi, Ltd.

Address

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

Aoyama Special Steel

9-11, Shinkawa 2-chome, Chuo-

Co., Ltd.

ku, Tokyo

SAITA KOUGYOU
CO., LTD.

5-3, Takinogawa 5-chome, Kitaku, Tokyo

Nitto Jidosha

3268, Nagaoka, Ibarakimachi,

Kiki K.K.

Higashiibaraki-gun, Ibaraki

Mizuho Co., Inc.
Total

Number ofshares held
under own name(shares)

Total shares
held (shares)

Ownership
percentage tothe total
number ofissued shares(%)

1,032,300－

1,032,300

0.11

2,100

－

2,100

0.00

17,600－17,6000.00

10,500－10,500

0.00

3,000

－

3,000

0.00

1,065,500－

1,065,500

0.11

4-1, Koishikawa 5-chome,
Bunkyo-ku, Tokyo－

Number ofshares held
under thenames ofothers(shares)

2. Changes in Senior Management
There were no changes in senior managements from the filing date of the Annual Securities Report for the 151st businessterm pursuant to the Financial Instruments and Exchange of Act of Japan to September 30, 2020.

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.

13

Condensed Quarterly Consolidated Financial Statements
Condensed Quarterly Consolidated Statement of Financial Position
Millions of yen
Note
AssetsCurrent assets
Cash and cash equivalents
Trade receivables and contract assets
Inventories
Investments in securities and other financial assets
Other current assets

6
7
5

Total current assets
Non-current assets
Investments accounted for using the equity method
Investments in securities and other financial assets
Property, plant and equipment
Goodwill
Other intangible assets
Other non-current assets

55,7

September 30, 2020

March 31, 2020

759,882
2,297,557
1,567,723
287,670
235,279

812,3312,260,205
1,408,937
279,951
456,165

5,148,111

5,217,589

459,963446,717
2,143,043
1,008,260
935,429474,492

480,375
440,5142,165,311
635,927
479,794
510,571

Total non-current assets
Total assets

5,467,904

4,712,492

10,616,015

9,930,081

Liabilities
Current liabilities
Short-term debt
Current portion of long-term debt
Other financial liabilities
Trade payables
Accrued expenses
Contract liabilities
Other current liabilities

1,293,466
283,451
224,855
1,257,657
613,329790,035
441,193

183,303
231,237
252,403
1,270,668
604,415615,096
576,056

4,903,986

3,733,178

933,934
509,049
696,272

1,070,502
514,375
345,287

7
7

5

Total current liabilities
Non-current liabilities
Long-term debt
Retirement and severance benefits
Other non-current liabilities
Total non-current liabilities
Total liabilities

7
7

2,139,255

1,930,164

7,043,241

5,663,342

460,790
2,493,601(35,047)(3,389)459,862
464,795
2,296,208(57,070)(3,809)2,915,955

3,159,986

656,819

1,106,753

Total equity

3,572,774

4,266,739

Total liabilities and equity

10,616,015

9,930,081

EquityHitachi, Ltd. stockholders’ equity
Common stock
Capital surplus
Retained earnings
Accumulated other comprehensive income
Treasury stock, at cost

7
8

Total Hitachi, Ltd. stockholders’ equity
Non-controlling interests

See accompanying notes to condensed quarterly consolidated financial statements.

F-1

Condensed Quarterly Consolidated Statement of Profit or Loss
Six months ended September 30, 2020 and 2019
Revenues
Cost of sales
Gross profit
Selling, general and administrative expenses
Other income
Other expenses
Financial income
Financial expenses
Share of profits (losses) of investments accounted for using the equity
methodEBIT (Earnings before interest and taxes)
Interest income
Interest charges
Income from continuing operations, before income taxes
Income taxes
Income from continuing operations
Loss from discontinued operations
Net income
Net income attributable to:
Hitachi, Ltd. stockholders
Non-controlling interests
Earnings per share from continuing operations,
attributable to Hitachi, Ltd. stockholders
Basic
DilutedEarnings per share attributable to Hitachi, Ltd. stockholders
Basic
DilutedMillions of yen
Note
9

5,10
5,10
11
11

12

2020
3,760,057(2,801,409)
958,648(777,860)
283,232(69,925)
2,091(4,992)

2019
4,221,327(3,074,791)
1,146,536(849,333)
38,156(75,904)
4,920(1,364)(4,988)27,506386,206
8,203(10,155)384,254(136,855)
247,399(686)
246,713290,517
10,397(11,938)
288,976(90,646)
198,330(796)
197,534

250,755(4,042)

189,2938,241

260.31260.00Yen
196.84
196.60259.60259.29196.02
195.77

13

13

Condensed Quarterly Consolidated Statement of Comprehensive Income
Six months ended September 30, 2020 and 2019
Note

Millions of yen

Net income

2020
246,713

2019
197,534

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
Total items not to be reclassified into net income

24,242528
24,77020,049133
20,182Items 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

7,343
3,131
7,641
18,115(96,172)
4,645(16,972)(108,499)

42,885289,598(88,317)
109,217285,855
3,743

131,271(22,054)

Other comprehensive income (OCI)
Comprehensive income
Comprehensive income attributable to:
Hitachi, Ltd. stockholders
Non-controlling interests
See accompanying notes to condensed quarterly consolidated financial statements.
F-2

Condensed Quarterly Consolidated Statement of Profit or Loss
Three months ended September 30, 2020 and 2019

Millions of yen
Note

Revenues
Cost of sales
Gross profit
Selling, general and administrative expenses
Other income
Other expenses
Financial income
Financial expenses
Share of profits (losses) of investments accounted for using the equity
methodEBIT (Earnings before interest and taxes)
Interest income
Interest charges
Income from continuing operations, before income taxes
Income taxes
Income from continuing operations
Loss from discontinued operations
Net income
Net income attributable to:
Hitachi, Ltd. stockholders
Non-controlling interests
Earnings per share from continuing operations,
attributable to Hitachi, Ltd. stockholders
Basic
DilutedEarnings per share attributable to Hitachi, Ltd. stockholders
Basic
Diluted2020
2,165,780(1,621,981)
543,799(421,381)
1,093(56,814)115(4,499)2019
2,188,745(1,586,401)
602,344(429,529)
4,079(83,953)
5,112
(478)

(16,525)

10,43145,7884,547(5,790)44,545(23,974)
20,571(349)
20,222

108,006
5,434(6,336)
107,104(49,420)
57,684(387)
57,29727,504(7,282)

68,990(11,693)

28.83
28.80

Yen
71.84
71.75

28.47
28.44

71.44
71.35

13

13

Condensed Quarterly Consolidated Statement of Comprehensive Income
Three months ended September 30, 2020 and 2019
Note

Millions of yen

Net income

2020
20,222

201957,297

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
Total items not to be reclassified into net income

6,780
489
7,269

19,921
108
20,029Items 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(3,672)
1,958
12,503
10,789(29,503)
4,350(21,560)(46,713)

18,05838,280(26,684)
30,613

43,564(5,284)53,821(23,208)

Other comprehensive income (OCI)
Comprehensive income
Comprehensive income attributable to:
Hitachi, Ltd. stockholders
Non-controlling interests
See accompanying notes to condensed quarterly consolidated financial statements.
F-3

Condensed Quarterly Consolidated Statement of Changes in Equity
Six months ended September 30, 2020

Millions of yen
2020

Commonstock

Capitalsurplus(notes 5
and 7)

Retainedearnings(note 8)

Accumulated
othercomprehensive
income459,862

464,795

2,296,208(57,070)(3,809)Balance at beginning of period

Treasurystock,
at cost

Total
Hitachi, Ltd.
stockholders’equityNoncontrollinginterests(notes 5
and 7)

Total equity

3,159,986

1,106,753

4,266,739

Changes in equity
Reclassified into retained earnings

-

-

7,653

(7,653)

-

-

-

-

Net income (loss)--

250,755--

250,755(4,042)

246,713

Other comprehensive income

-

-

-

35,100-35,1007,785

42,885

Dividends to Hitachi, Ltd. stockholders--(48,311)--(48,311)-(48,311)

Dividends to non-controlling interests

-

-

-

-

-

-

(19,300)(19,300)

Acquisition of treasury stock

-

-

-

-

(51)

(51)

-

(51)

Sales of treasury stock

-

107

-

-

471

578

-

578

Issuance of new shares

928

928

-

-

-

1,856

-

1,856

-

(465,830)(12,704)(5,424)-(483,958)(434,377)(918,335)

Total changes in equity

928(464,795)

197,393

22,023420(244,031)(449,934)(693,965)

Balance at end of period

460,790-

2,493,601(35,047)(3,389)2,915,955

656,819

3,572,774

Changes in non-controlling interests

Six months ended September 30, 2019

Millions of yen
2019

Balance at beginning of period
Cumulative effects of changes inaccounting policies

Commonstock

CapitalsurplusRetainedearnings(note 8)458,790

463,786

2,287,587

Accumulated
othercomprehensive
income56,360Treasurystock,
at cost(3,920)

Total
Hitachi, Ltd.
stockholders’equityNoncontrollinginterests

Total equity

3,262,603

1,151,800

4,414,403--(2,596)--(2,596)(1,075)(3,671)

458,790

463,786

2,284,991

56,360(3,920)3,260,007

1,150,725

4,410,732

Reclassified into retained earnings--

14,051(14,051)

-

-

-

-

Net income--

189,293--

189,293

8,241

197,534

Other comprehensive income

-

-

-

(58,022)-(58,022)(30,295)(88,317)

Dividends to Hitachi, Ltd. stockholders--(48,280)--(48,280)-(48,280)(26,207)

Restated balance
Changes in equity

Dividends to non-controlling interests

-

-

-

-

-

-

(26,207)

Acquisition of treasury stock

-

-

-

-

(75)

(75)

-

(75)

Sales of treasury stock

-

(138)

-

-

273

135

-

135

Issuance of new shares

1,072

1,072

-

-

-

2,144

-

2,144

-

(4,163)-172-(3,991)

2,169(1,822)

Changes in non-controlling interests
Total changes in equity

1,072(3,229)155,064(71,901)

198

81,204(46,092)

35,112

Balance at end of period

459,862

460,557

2,440,055(15,541)(3,722)

3,341,211

1,104,633

4,445,844

See accompanying notes to condensed quarterly consolidated financial statements.

F-4

Condensed Quarterly Consolidated Statement of Cash FlowsSix months ended September 30, 2020 and 2019

Millions of yen
Note

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) loss on business reorganization and others(Gain) loss on sale of property, plant and equipment
Change in trade receivables and contract assets
Change in inventories
Change in trade payables
Change in accrued expenses
Change in retirement and severance benefits
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
Proceeds from sale of property, plant and equipment, and intangible assets
Purchase of investments in securities and other financial assets(including investments in subsidiaries and investments accounted for using the equity method)
Proceeds from sale of investments in securities and other financial assets(including investments in subsidiaries and investments 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
Other
Net cash provided by (used in) financing activities

2
2

5

2020

2019

246,713

197,534

225,857
41,605
136,855
4,988
445(282,424)(27)
261,231(90,468)(152,436)(18,022)(7,940)(73,885)

207,830
69,66990,645(27,506)(1,415)(28,086)
1,030
251,569(185,832)(140,314)(57,465)(20,167)(54,009)292,492
6,762
12,308(10,308)(86,763)

303,483
13,1207,148(12,267)(105,796)

214,491

205,688(113,636)(50,078)
17,214(167,342)(41,796)
10,180(1,006,259)(48,038)

435,737
13,13846,001(6,084)(703,884)(207,079)

1,125,074
16,026(110,664)
2,593(48,223)(18,540)(51)
578(532,955)(19)

242,723
44,889(145,990)
2,603(48,163)(24,772)(75)
135(1,205)(8)

433,819

70,137

Effect of exchange rate changes on cash and cash equivalents
Change in cash and cash equivalents

3,125(34,637)(52,449)

34,109Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

812,331759,882

807,593
841,702

See accompanying notes to condensed quarterly consolidated financial statements.

F-5

Notes to Condensed Quarterly Consolidated Financial Statements
September 30, 2020
(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 for the six months ended September 30, 2020
comprise the Company, its subsidiaries and the Company’s interests in associates and joint ventures. The Company’s and its
subsidiaries’ businesses are global and diverse, and include manufacturing and services in eight segments consisting of IT, Energy,
Industry, Mobility, Smart Life, Hitachi Construction Machinery, Hitachi Metals and Others.
(2) Basis of Presentation
As the Company meets the requirements of a “Specified Company applying Designated International Financial ReportingStandards” pursuant to Article 1-2 of the Ordinance on Terminology, Forms and Preparation Methods of Quarterly Consolidated
Financial Statements (Cabinet Office Ordinance No.64 of 2007), the condensed quarterly consolidated financial statements of theCompany have been prepared in accordance with International Accounting Standards (IAS) 34 “Interim Financial Reporting,” aspermitted by the provision of Article 93 of the Ordinance. They do not include all the information and disclosures required for acomplete 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, 2020.
Management of the Company has made a number of judgments, estimates and assumptions relating to the application 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 effect of a change in accounting estimates, if any, is recognized in thereporting 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, 2020.
For the six months ended September 30, 2020, the Company tested fixed assets, such as goodwill, for impairment and assessed therealizability of deferred tax assets, etc., which require management to make estimates of future cash flows or future taxable
income, based on the assumption that the impact of the slowdown in the global economy caused by the spread of COVID-19
would not be material in the longer term, on the other hand the decrease in demand would continue in part of the business in the
short term, although the situation varies from one segment or region to another since the Company is engaged in a wide range ofbusiness activities around the globe. The Company judged that this is the best assumption as of September 30, 2020. However, if
the impact lasts longer or is wider than the assumption described above, it could affect significant accounting estimates orjudgements regarding impairment of fixed assets, such as goodwill, and assessments of the realizability of deferred tax assets, etc.
Regarding the condensed quarterly consolidated statement of cash flows, changes in presentation have been made effective from
April 1, 2020 for improved clarity. “Change in accrued expenses”, which was previously included in “Change in other liabilities”,
has been reclassified and separately presented. “Change in other assets” and “Change in other liabilities”, which were separately
presented, have been included in “Other” under cash flows from operating activities. The condensed quarterly consolidated
statement of cash flows for the six months ended September 30, 2019 has been reclassified in order to reflect these changes inpresentation.
As a result, regarding the condensed quarterly consolidated statement of cash flows for the six months ended September 30, 2019,“Change in other liabilities” of (57,465) million yen has been reclassified as “Change in accrued expenses”. In addition, “Change
in other assets” of 2,290 million yen and “Change in other liabilities” of (61,436) million yen, which were separately presented,
have been reclassified as “Other” under cash flows from operating activities.

F-6

Notes to Condensed Quarterly Consolidated Financial Statements
September 30, 2020
(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, 2020.
Income taxes for the six months ended September 30, 2020 are computed using the estimated annual effective tax rate.

F-7

Notes to Condensed Quarterly Consolidated Financial Statements
September 30, 2020
(4) Segment Information
The operating segments of the Company are the components for which separate financial information is available and which isevaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance.
The Company discloses its business in eight 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 areaggregated into Energy, Industry, Mobility and Smart Life for financial reporting purposes so that users of the financial statements
better understand the Company’s financial position and business performance. The Company aggregates operating segments basedon the similarities of economic characteristics mainly using gross profit margin ratios of operating segments. The primary products
and services included in each segment are as follows:IT:
Systems integration, Consulting, Control systems, Cloud services, Software, IT products (Storage, Servers) and ATMs
Energy:Energy solutions (Nuclear, Renewable energy, Thermal, Power grid)Industry:
Industry & distribution systems, Water & environment systems and Industrial machinery
Mobility:
Building systems (Elevators, Escalators) and Railway systems
Smart Life:
Smart life & ecofriendly systems (Refrigerators, Washing machines, Room air conditioners, Air-conditioning equipment),
Automotive systems (Powertrain systems, Chassis systems, Advanced driver assistance systems), Medical and life science
products, Analytical equipment, Semiconductor processing equipment, Manufacturing and inspection equipment, and Advanced
industrial products
Hitachi Construction Machinery:Hydraulic excavators, Wheel loaders, Mining machinery, Maintenance and services, Construction solutions and Mine management
systems
Hitachi Metals:
Specialty steel products, Functional components and equipment, Magnetic materials and power electronics materials, and Wires,
cables and related products
Others:
Optical disk drives, Property management and others
Effective from April 1, 2020, due to making Hitachi High-Tech Corporation (Hitachi High-Tech) a wholly-owned subsidiary of
the Company during the three months ended June 30, 2020, Hitachi High-Tech segment was unified to Smart Life segment.
Figures for the six months ended September 30, 2019 have been restated on the basis of the reclassification.
In April 2020, the Company sold all shares of Hitachi Chemical Company, Ltd. (currently Showa Denko Materials Co., Ltd.). As aresult, Hitachi Chemical Company, Ltd. was deconsolidated. Accordingly, Hitachi Chemical segment ceased to be a businesssegment, but the segment figures for the six months ended September 30, 2020 and 2019 are disclosed individually to enhance fairdisclosure.

F-8

Notes to Condensed Quarterly Consolidated Financial Statements
September 30, 2020
The following tables show business segment information for the six months ended September 30, 2020 and 2019.
Revenues from External Customers
Millions of yen
2020

2019

IT

876,360

921,911

EnergyIndustry

376,751
290,063

133,726
292,686

Mobility
Smart Life

534,885
883,938

525,105
989,630

Hitachi Construction Machinery
Hitachi Metals

360,824
329,064

480,385
442,125

Hitachi Chemical
Others101,858

306,856
123,916

Subtotal
Corporate items

3,753,743
6,314

4,216,340
4,987

Total

3,760,057

4,221,327

Revenues from Intersegment Transactions
Millions of yen
2020

2019

IT

71,13473,335

EnergyIndustry

22,07872,43727,89774,025

Mobility
Smart Life

3,839
46,9194,849
65,707

Hitachi Construction Machinery
Hitachi Metals

78
11,767174
14,763

Hitachi Chemical
Others106,816

9,772
112,385

Subtotal
Corporate items and Eliminations

335,068(335,068)

382,907(382,907)

-

-

Total
Total Revenues

Millions of yen
2020

2019

IT

947,494995,246

EnergyIndustry

398,829
362,500

161,623
366,711

Mobility
Smart Life

538,724
930,857

529,954
1,055,337

Hitachi Construction Machinery
Hitachi Metals

360,902
340,831480,559456,888

Hitachi Chemical
Others

208,674

316,628
236,301

Subtotal
Corporate items and Eliminations

4,088,811(328,754)

4,599,247(377,920)

Total

3,760,057

4,221,327

F-9

Notes to Condensed Quarterly Consolidated Financial Statements
September 30, 2020
Segment Profit (Loss)
Millions of yen
2020

2019

IT

97,820105,841

EnergyIndustry(10,563)
15,705

1,071
20,648

Mobility
Smart Life

41,385
18,25863,92858,725

Hitachi Construction Machinery
Hitachi Metals

5,990(38,799)

42,855(56,329)

Hitachi Chemical
Others

10,494

15,512
14,253

Subtotal
Corporate items and Eliminations

140,290245,916

266,504
24,013

Total

386,206

290,517

Interest income
Interest charges

8,203(10,155)

10,397(11,938)

Income from continuing operations, before income taxes

384,254

288,976

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
corporate expenses not allocated to individual business segments, such as expenditures for advanced R&D, a part of net gain (loss) on
business reorganization and share of profits (losses) of investments accounted for using the equity method, and others.

F-10Notes to Condensed Quarterly Consolidated Financial Statements
September 30, 2020
(5) Business Acquisitions and Divestitures
The following are the main Business Acquisitions and Divestitures for the six months ended September 30, 2020, including theperiod up to the approval date of the condensed quarterly consolidated financial statements.
(a) Settlement regarding the South African projectAt the meeting of the Board of Directors held on December 18, 2019, the Company approved a settlement with Mitsubishi
Heavy Industries, Ltd. (MHI) regarding the transfer price adjustment, etc. for the South African project previously in theprocess of arbitration based on economic rationality and business strategy, etc., and reached a settlement agreement with MHI
on the same day. As a result of the conclusion of this settlement, it was agreed that all common shares of Mitsubishi Hitachi
Power Systems, Ltd. (MHPS) held by the Company would be transferred to MHI, and the Company would pay 130,000 million
yen to MHI comprising a settlement payment of 200,000 million yen offset by a consideration of 70,000 million yen in loans
receivable to Mitsubishi Hitachi Power Systems Africa Proprietary Limited (MHPS Africa) to be transferred to MHI.
Accordingly, the Company recorded other accounts payable of 200,000 million yen related to the settlement payment to MHI
and other provision of 273,272 million yen related to the transfer of shares of MHPS. The Company also reversed the provisionof 105,041 million yen related to the transfer price adjustment, etc. of the South African project, which had been recorded prior
to the conclusion of this agreement. As a result of the above, the Energy segment recorded a loss of 375,967 million yen due tothe settlement, which is included in Other expenses in the condensed quarterly consolidated statement of profit or loss for thenine months ended December 31, 2019. Regarding the assets to be transferred to MHI under this agreement, the shares of
MHPS previously included in Investments accounted for using the equity method and the loans receivable to MHPS Africa
previously included in Investments in securities and other financial assets classified as non-current assets in the condensed
quarterly consolidated statement of financial position, the total of which was 333,614 million yen, were reclassified to Other
current assets in the condensed quarterly consolidated statement of financial position since they met the criteria as held-for-saleassets in accordance with IFRS 5 “Non-current Assets Held for Sale and Discontinued Operations”.
Furthermore, on March 30, 2020, the Company transferred to MHI, the loans receivable to MHPS Africa, and paid 130,000
million yen to MHI comprising the settlement payment offset by the consideration in loans receivable. On September 1, 2020,
all shares of MHPS held by the Company, 263,614 million yen, which had been classified as held-for-sale assets, weretransferred to MHI, and MHPS ceased to be an associate. Accordingly, the Company reversed other provision of 273,272
million yen related to the transfer of shares of MHPS, which had been included in Other current liabilities in the condensed
quarterly consolidated statement of financial position. On September 14, 2020, the Company and MHI received a notice fromthe Japan Commercial Arbitration Association stating that the arbitration was closed.
On September 1, 2020, MHPS changed its name to Mitsubishi Power, Ltd.

F-11

Notes to Condensed Quarterly Consolidated Financial Statements
September 30, 2020(b) Acquisition of ABB's power grids business
On December 17, 2018, the Company decided to acquire the power grid business of ABB Ltd (ABB) and signed an acquisition
agreement with ABB in order to strengthen and expand energy solution business globally. Pursuant to this agreement, theCompany invested 80.1% in Hitachi ABB Power Grids Ltd (Hitachi ABB Power Grid), which was spun off from ABB, and theacquisition was completed on July 1, 2020. As a result, Hitachi ABB Power Grid became a subsidiary of the Company. The
Company has a call option to purchase 19.9% of the shares of Hitachi ABB Power Grid held by ABB, and ABB has a put
option to sell 19.9% of the shares of Hitachi ABB Power Grid held by ABB to the Company exercisable after 2023.
The following table summarizes the fair value of the consideration paid for Hitachi ABB Power Grid and the provisionalamounts of the assets acquired, liabilities assumed, goodwill and non-controlling interests recognized as of the acquisition date.

Millions of yen
65,466
382,560
173,854
60,646234,656

Cash and cash equivalents
Trade receivables and contract assets
Inventories
Other current assets
Property, plant and equipment
Intangible assets
Goodwill
Other intangible assets
Other non-current assets
Total

402,366
510,866
19,333
1,849,747

Trade payables
Contract liabilities
Other current liabilities
Long-term debt
Other non-current liabilities
Total

199,251
143,497
208,160
346,071
138,556
1,035,535

Cash paid for the acquisitionNon-controlling interests
Total

722,062
92,150814,212The goodwill mainly comprises excess earning power and expected synergies arising from the acquisition.
Non-controlling interests are measured based on the proportionate share of the fair value of the identifiable net assets of Hitachi
ABB Power Grid.
The Company is currently evaluating the fair values to be assigned to assets and liabilities of Hitachi ABB Power Grid at theacquisition date and therefore the above amounts are subject to change. In addition, the Cash paid for the acquisition may vary
due to transaction price adjustment.
Acquisition related costs of 5,391 million yen have been posted up to the year ended March 31, 2020, and approximately 3,000
million yen is expected to be recorded in the year ending March 31, 2021. Acquisition related costs included in Other expenses
in the condensed quarterly consolidated statement of profit or loss for the six months ended September 30, 2020 and 2019 were2,456 million yen and 523 million yen, respectively.
In addition to this acquisition, the Company repaid 3,000 million U.S. dollars (323,190 million yen) of certain loans owed by
Hitachi ABB Power Grid from ABB's subsidiary, ABB Capital B.V., and the repayment is included in Purchase of investments
in securities and other financial assets (including investments in subsidiaries and investments accounted for using the equity
method) under Cash flows from investing activities in the condensed quarterly consolidated statement of cash flows for the six
months ended September 30, 2020.
The results of operations of Hitachi ABB Power Grid from the date of acquisition to September 30, 2020 (prior to eliminationof intercompany transactions) included in the condensed quarterly consolidated statement of profit or loss are Revenues of
233,626 million yen, EBIT of (12,615) million yen, and Net income of (9,665) million yen. EBIT and Net income include
F-12

Notes to Condensed Quarterly Consolidated Financial Statements
September 30, 2020
depreciation and amortization of 22,624 million yen on Other intangible assets and PP&E that were recognized as a result of
this acquisition.
Assuming that such acquisition occurred as of April 1, 2020, the results of operations of the Company for the six months ended
September 30, 2020 (pro forma information not subject to quarterly review) are as follows:
Millions of yen
3,982,536
368,540
229,781

Revenues
EBIT
Net income

Hitachi ABB Power Grid's historical financial information has been adjusted from U.S. GAAP to IFRS to generate pro forma
information. EBIT and Net income include depreciation and amortization of 45,547 million yen on Other intangible assets andPP&E that were recognized as a result of this acquisition.
(c) Additional acquisition of shares of Hitachi High-Tech Corporation (Hitachi High-Tech)
On January 31, 2020, the Company decided to conduct a tender offer to acquire all issued shares of Hitachi High-Tech, aconsolidated subsidiary of the Company in the Smart Life segment, to establish the measurement and analysis platform tostrengthen Lumada. The Company commenced the tender offer on February 17, 2020, and the tender offer was completed on
April 6, 2020.
Furthermore, the Company conducted a series of procedures to make Hitachi High-Tech a wholly-owned subsidiary of theCompany. As a result, the Company’s ownership ratio of shares of Hitachi High-Tech increased to 100% on May 20, 2020.
The total consideration paid was 531,084 million yen, and the Company recognized decreases in capital surplus of 321,627
million yen and non-controlling interest of 209,457 million yen, respectively, for the six months ended September 30, 2020.
(d) Sale of all shares of Hitachi Chemical Company, Ltd. (Hitachi Chemical)
On December 18, 2019, the Company signed a tender offer agreement with Showa Denko K.K. (Showa Denko) and HC
Holdings K.K. (HC Holdings), a wholly-owned subsidiary of Showa Denko, under which the Company agrees to tender all
shares of common stock in Hitachi Chemical held by the Company, in response to a tender offer to be carried out by HC
Holdings for the shares of common stock of Hitachi Chemical, a consolidated subsidiary of the Company in the Hitachi
Chemical segment. HC Holdings commenced the tender offer on March 24, 2020, and the tender offer was completed on April
20, 2020. The consideration received by the Company was 495,145 million yen.
As a result, the Company’s ownership ratio of shares of Hitachi Chemical decreased from 51.4% to 0%, and Hitachi Chemical
was deconsolidated. A gain on the sale of shares of Hitachi Chemical in the amount of 278,839 million yen was recognized in
Other income in the condensed quarterly consolidated statement of profit or loss. Furthermore, non-controlling interest in
Hitachi Chemical decreased 220,402 million yen in Changes in non-controlling interests in the condensed quarterly
consolidated statement of changes in equity as a result of its deconsolidation.
On October 1, 2020, Hitachi Chemical changed its name to Showa Denko Materials Co., Ltd.
The following are the material Business Acquisitions and Divestitures other than the above.
(a) Sale of Diagnostic Imaging-related Business
On December 18, 2019, the Company signed an agreement with FUJIFILM Corporation (Fujifilm) regarding the transfer of the
Diagnostic Imaging-related Business included in the Company, the Company’s subsidiaries and associates in the Smart Lifesegment to Fujifilm.
The Company plans to transfer all shares of common stock of a new company established by the Company to Fujifilm after the
Diagnostic Imaging-related Business is succeeded to the new company from the Company through an absorption-typecompany split. The consideration is expected to be approximately 179 billion yen.
Assuming the transaction is settled, it is expected that the Company’s ownership ratio of shares of the new company will
decrease from 100% to 0%, and the new company will be deconsolidated. An expected gain on the sale of shares of the newcompany in the amount of approximately 111 billion yen will be recognized in Other income in the consolidated statement of
profit or loss.

F-13

Notes to Condensed Quarterly Consolidated Financial Statements
September 30, 2020(b) Reorganization of automotive systems business
On October 30, 2019, the Company and Hitachi Automotive Systems, Ltd. (HiAMS), a consolidated subsidiary of theCompany in the Smart Life segment, signed an agreement with Honda Motor Co., Ltd. (Honda), and Keihin Corporation,
Showa Corporation, and Nissin Kogyo Co., Ltd. (together, “the Associates of Honda”), to integrate management of HiAMS
and the Associates of Honda, in order to strengthen development and distribution of global and competitive solutions in the
CASE area.
HiAMS and the Associates of Honda plan to conduct an absorption-type merger in which HiAMS will be the surviving
company (the Integrated Company) and each of the Associates of Honda will be the disappearing companies after they become
wholly-owned subsidiaries of Honda through tender offers to be conducted by Honda for the common shares of the Associatesof Honda. The consideration will be the common shares of the Integrated Company. After the merger, the Company’sownership ratio of shares of the Integrated Company will become 66.6% and the Integrated Company will become aconsolidated subsidiary of the Company. The effects of this transaction on the Company’s consolidated financial statements are
currently being evaluated.

F-14

Notes to Condensed Quarterly Consolidated Financial Statements
September 30, 2020
(6) Trade Receivables and Contract Assets
The components of trade receivables and contract assets are as follows:
Millions of yen
September 30, 2020
Accounts receivable

March 31, 2020

1,538,319

1,684,225

Contract assets

636,012429,117

Others123,226

146,863

Total

2,297,557

2,260,205

Trade receivables and contract assets are stated as net of the allowance for doubtful receivables.
Others include notes receivable and electronically recorded monetary claims.
(7) Fair Value of Financial Instruments(a) Fair Value Measurements
The following methods and assumptions are used to measure the fair value of financial assets and liabilities.
Cash and cash equivalents, Trade receivables, Short-term loans receivable, Other accounts receivable, Short-term debt,
Other accounts payable and Trade payables
The carrying amount approximates the fair value because of the short maturity of these instruments.
Investments in securities and other financial assets
The fair value of lease receivables is based on the present value of lease payments receivable calculated for each group of years
to maturity using discount rates that reflect the time to maturity and credit risk.
Investment securities with quoted market prices are estimated using the quoted share prices. In the absence of an active market
for investment securities, quoted prices for similar investment securities, quoted prices associated with transactions that are notdistressed 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 such investments. 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 rateapplicable 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 ininactive 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 mainly uses the income approach or the market approach to corroborate
relevant information provided by financial institutions and other available information.
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 themarket 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 that are 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-15

Notes to Condensed Quarterly Consolidated Financial Statements
September 30, 2020(b) Financial Instruments Measured at Amortized Cost
The carrying amounts and estimated fair values of the financial instruments measured at amortized cost as of September 30 andMarch 31, 2020 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.
Millions of yen
September 30, 2020
Carrying amounts

March 31, 2020

Estimated
fair values

Carrying amounts

Estimated
fair values

AssetsInvestments in securities and otherfinancial assets
Lease receivables

82,42083,831

83,55384,834

Debt securities

73,311

73,31373,04873,051Long-term loans receivable

26,39628,901

26,642

28,576

Bonds

355,343

357,154385,293

386,082Long-term borrowings

569,272

572,420

637,648

640,929

Liabilities
Long-term debt [1][1] Long-term debt is included in Current portion of long-term debt and Long-term debt in the condensed quarterly consolidated
statement of financial position.
(c) Financial Instruments Measured at Fair Value
Financial instruments measured at fair value on a recurring basis after the initial recognition are classified into three levels of thefair 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 input that is significant with thelowest level in the fair value measurement as a whole.
Transfers between levels are deemed at the beginning of each quarter period.

F-16

Notes to Condensed Quarterly Consolidated Financial Statements
September 30, 2020
The following tables present the assets and liabilities that are measured at fair value on a recurring basis as of September 30 andMarch 31, 2020.
September 30, 2020
Class of financial instruments

Millions of yen
Level 1

Level 2

Level 3

Total

FVTPL financial assets:
Investments in securities and otherfinancial assets
Equity securities
Debt securities

-

-

4,125

4,125

11,433

4,851

7,545

23,829-19,83683

19,919151,825-

106,978

258,803

163,258

24,687

118,731306,676-

25,349-25,349-25,349-25,349Derivatives
FVTOCI financial assets:
Investments in securities and otherfinancial assets
Equity securities
Total financial assets at fair value
FVTPL financial liabilities:
Other financial liabilities
Derivatives
Total financial liabilities at fair value
March 31, 2020
Class of financial instruments

Millions of yen
Level 1

Level 2

Level 3

Total

FVTPL financial assets:
Investments in securities and otherfinancial assets
Equity securities
Debt securities
Derivatives

-

-

4,001

4,001

8,638

4,550

8,617

21,805-44,4096,147

50,556

135,452-

108,884

244,336

144,090

48,959127,649

320,698-

24,021-

24,021-

24,021-

24,021FVTOCI financial assets:
Investments in securities and otherfinancial assets
Equity securities
Total financial assets at fair value
FVTPL financial liabilities:
Other financial liabilities
Derivatives
Total financial liabilities at fair value

F-17

Notes to Condensed Quarterly Consolidated Financial Statements
September 30, 2020
The following tables present the changes in Level 3 instruments measured on a recurring basis for the six months ended
September 30, 2020 and 2019.
September 30, 2020
Level 3 financial assets

Millions of yen
Equitysecurities

Debt
securities

Derivatives

Total

Balance at beginning of period

112,885

8,617

6,147

127,649

Gain (loss) in profit or loss [1]Gain in OCI [2]

(175)
1,171

45
-

(3)
-

(133)
1,171

Purchases
Sales and redemption

1,794(1,113)313(776)(6,061)

2,107(7,950)Acquisitions and divestitures
Other(3,591)
132

(656)
2

-

(4,247)
134

Balance at end of period

111,103

7,545

83

118,731

(188)

45

(3)

(146)

Unrealized gain (loss) relating tofinancial assets held at end of period [3]September 30, 2019
Level 3 financial assets

Millions of yen
Equitysecurities

Debt
securities

Derivatives

Total

Balance at beginning of period

105,077

9,344

7,059

121,480

Gain (loss) in profit or loss [1]Gain in OCI [2]

(19)
883

3
-

(196)
-

(212)
883

Purchases
Sales and redemption

1,996(1,090)

372
(892)

-

2,368
(1,982)Acquisitions and divestitures
Other

(45)
(3,416)

(26)

-

(45)
(3,442)

Balance at end of period

103,386

8,801

6,863

119,050

(19)

25

(196)

(190)

Unrealized gain (loss) relating tofinancial assets held at end of period [3][1] Gain (loss) in profit or loss related to FVTPL financial assets is included in Financial income and Financial expenses in thecondensed quarterly consolidated statement of profit or loss.
[2] Gain in OCI related to FVTOCI financial assets is included in Net changes in financial assets measured at fair value throughOCI in the condensed quarterly consolidated statement of comprehensive income.
[3] Unrealized gain (loss) relating to FVTPL financial assets held at the end of period is included in Financial income andFinancial expenses in the condensed quarterly consolidated statement of profit or loss.
Fair values are measured by the finance departments in accordance with the Company’s policies and procedures. Valuation
models are determined so that they reflect each financial instrument’s nature, characteristics and risks most appropriately. The
finance departments continually examine changes in important inputs that could affect the fair value. In case the fair value of afinancial instrument was significantly impaired, administrators review and approve the impairment loss.
(d) OtherIn the Company and subsidiaries, put options on shares of subsidiaries of non-controlling interests are recognized as financial
liabilities at the present value of the exercise price. The Company derecognizes non-controlling interests and recognizes thedifference between the present value and non-controlling interests as capital surplus.
Put options on non-controlling interests of Hitachi ABB Power Grids Ltd are measured at the present value of the exercise priceand the carrying amount of the put options was 243,023 million yen as of September 30, 2020 included in Other non-current
liabilities in the condensed quarterly consolidated statement of financial position.

F-18

Notes to Condensed Quarterly Consolidated Financial Statements
September 30, 2020
(8) Dividends
Dividends paid on the Company’s common stock for the six months ended September 30, 2020 are as follows:

Decision
The Board of Directors
on May 13, 2020

Cash dividends(millions of yen)
48,311

Appropriation
from
Retained earnings

Cash dividends
per share (yen)50.0

Record date

Effective date

March 31, 2020

June 8, 2020

Dividends on the Company's common stock whose record date falls in the six months ended September 30, 2020 and the effective
date falls in the next period are as follows:

Decision
The Board of Directors
on October 28, 2020

Cash dividends

Appropriation

Cash dividends(millions of yen)fromper share (yen)48,342Retained earnings

Record date

Effective date

50.0 September 30, 2020 November 30, 2020

Dividends paid on the Company’s common stock for the six months ended September 30, 2019 are as follows:

Decision
The Board of Directors
on May 10, 2019

Cash dividends(millions of yen)
48,280Appropriation
from
Retained earnings

Cash dividends
per share (yen)50.0

Record date

Effective date

March 31, 2019

May 31, 2019

Dividends on the Company's common stock whose record date falls in the six months ended September 30, 2019 and the effective
date falls in the next period are as follows:

Decision
The Board of Directors
on October 30, 2019

Cash dividends

Appropriation

Cash dividends(millions of yen)fromper share (yen)43,481Retained earnings

F-19

Record date

Effective date

45.0 September 30, 2019 November 29, 2019

Notes to Condensed Quarterly Consolidated Financial Statements
September 30, 2020
(9) Revenues(a) Disaggregation of revenue
The Company derives revenues primarily from contracts with customers. The following table shows the disaggregation ofrevenue attributable to each reportable segment and geographic area.
Effective from April 1, 2020, the Company reclassified its reportable segments. Accordingly, figures for the six months ended
September 30, 2019 have been restated on the basis of the reclassification. Details of the reclassification are described in note 4.
(Millions of yen)
September 30, 2020
Overseas
Revenues
Subtotal

Total
Revenues

17,983247,949

947,494

67,18943,717

259,875

398,82945,017

7,257

6,392

93,494

362,500

221,839

24,771

110,754

19,868377,232

538,724444,940

230,677

124,91491,496

38,830485,917930,857

Hitachi Construction Machinery

91,071

79,56947,64843,914

98,700269,831360,902

Hitachi Metals

159,750

72,32287,28015,766

5,713

181,081

340,831

-

-

-

-

-

-

-

Others

175,953

23,326

3,961

3,627

1,807

32,721

208,674

Subtotal

2,140,711

834,148474,837

406,105

233,010

1,948,100

4,088,811

Corporate items and Eliminations(307,059)(16,713)(2,059)(1,772)(1,151)(21,695)(328,754)

Total

1,833,652

817,435

472,778

404,333

231,859

1,926,405

3,760,057

North
America

Other
Areas

Japan

Asia

IT

699,545

83,16880,696

66,102

Energy138,954

88,41960,550Industry

269,006

34,828

Mobility

161,492

Smart Life

Hitachi Chemical

Europe(Millions of yen)
September 30, 2019
Overseas
Revenues
Subtotal

Total
Revenues

18,549274,486995,246

2,017

1,850

20,052

161,623

25,101

5,398

11,17585,301

366,711

181,583

19,635

147,651

20,013368,882

529,954544,830

219,053

169,677

85,03036,747

510,507

1,055,337

Hitachi Construction Machinery

99,924

108,534

92,13773,807106,157

380,635

480,559

Hitachi Metals

207,673

85,708130,40922,524

10,574249,215456,888

Hitachi Chemical

115,415

137,004

24,11030,8939,206

201,213

316,628

Others

195,327

26,645

8,637

2,584

3,108

40,974

236,301

Subtotal

2,467,982

902,263

567,854443,769

217,379

2,131,265

4,599,247

Corporate items and Eliminations(342,040)(25,774)(4,782)(2,892)(2,432)(35,880)(377,920)

Total

2,125,942

876,489

563,072

440,877

214,947

2,095,385

4,221,327

North
America

Japan

Asia

IT

720,760

87,447

94,62573,865

Energy141,571

12,662

3,523

Industry

281,410

43,627

Mobility

161,072

Smart Life

F-20

Europe

Other
Areas

Notes to Condensed Quarterly Consolidated Financial Statements
September 30, 2020
The IT segment consists of Front Business and Services & Platforms, for which revenue amounted to 653,931 million yen and
372,025 million yen for the six months ended September 30, 2020 and 668,377 million yen and 402,599 million yen for the six
months ended September 30, 2019, respectively (including intersegment transactions). Front Business is operated mainly inJapan, and Services & Platforms is operated mainly in Japan, North America and Europe.
Effective from April 1, 2020, the IT segment changed its scope of business field. Figures for the six months ended September
30, 2019 have been restated on the basis of the reclassification.
(b) Information about satisfaction of performance obligations
The following is information about satisfaction of performance obligations related to major goods and services of eachreportable segment.
(IT)
Front Business primarily provides goods and services such as system integration, consulting and cloud services. These longterm projects provide goods and services according to customers’ specifications over a specified period of time, and revenue
is recognized mainly based on the pattern of the cost accrual (the progress of the project mostly based on the cost incurred
relative to the estimated total cost) or the passage of time as performance obligations are satisfied over time.
Many of the contracts require payments based on milestones, and in some cases, payments are made before performanceobligations are satisfied.
Services & Platforms primarily sells control systems, software and IT products. Revenue is recognized when control over the
goods is transferred to customers as performance obligations are satisfied at the point in time upon the completion or upondelivery of the goods. The Company’s general terms and conditions apply, and there are no significant transactions in which
payment terms include deferred payments, etc.
(Energy, Industry and Mobility)
The Energy segment includes revenue from businesses such as energy solutions, which are operated mainly in Japan, Asia,
Europe, and North America. The Industry segment includes revenue from businesses such as industry & distribution systems,
which are operated mainly in Japan. The Mobility segment includes revenue from building systems and railway systems
businesses. The building systems business is operated mainly in China and the railway systems business is operated mainly inEurope.
Long-term projects related to contracts such as construction in these segments involve manufacturing and providing goods
based on customers’ specifications over a specified period of time. As performance obligations are satisfied over time,revenue is recognized mainly based on the pattern of the cost accrual (the progress of the project mostly based on the cost
incurred relative to the estimated total cost). In addition, these segments provide certain services promised in the contracts
such as maintenance throughout the duration of the contract, and recognize revenue over time based on the passage of time.
Many of the contracts require payments based on milestones, and, in some cases, payments are made before performanceobligations are satisfied.
Further, in the sale of industrial equipment, etc. included in the Industry segment, and in the sale of elevators, etc. included in
the Mobility segment, revenue is recognized when control over the goods is transferred to customers as performanceobligations are satisfied at the point in time upon the completion or upon delivery of the goods. The Company’s generalterms and conditions apply, and there are no significant transactions in which payment terms include deferred payments, etc.
(Other)In the Smart Life, Hitachi Construction Machinery, and Hitachi Metals segments, performance obligations are generally
satisfied at a point in time upon completion or upon delivery of the goods, and revenue is recognized when control overgoods is transferred to customers. The Company’s general terms and conditions apply, and there are no significant
transactions in which payment terms include deferred payments, etc.
These segments provide certain services promised in the contracts such as maintenance throughout the duration of thecontract, and they recognize revenue over time based on the passage of time. The Company’s general terms and conditions
apply, and there are no significant transactions in which payment terms include deferred payments, etc.

F-21

Notes to Condensed Quarterly Consolidated Financial Statements
September 30, 2020(10) Other Income and Expenses
The main components of other income and expenses for the six months ended September 30, 2020 and 2019 are as follows:
Millions of yen
2020
Net gain (loss) on sales and disposals of fixed assets

2019
(814)

(1,038)

Impairment losses(41,605)(69,669)

Net gain (loss) on business reorganization and others

282,424

28,086

Special termination benefits(2,499)(5,052)

Impairment losses are mainly recognized on property, plant and equipment, investment properties, goodwill and other intangible
assets. Net gain (loss) on business reorganization and others include gains and losses related to obtaining and losing control ofinvestees and gains and losses related to obtaining and losing significant influence over investees.
Restructuring charges (structural reform expenses) included in other expenses for the six months ended September 30, 2020 and2019 were 44,104 million yen and 74,832 million yen, respectively. Restructuring charges (structural reform expenses) mainly
include impairment losses and special termination benefits.
Impairment losses for the six months ended September 30, 2020 include 24,589 million yen in the Hitachi Metals segment, mainly
consisting of 15,657 million yen in impairment losses due to the lower than expected future revenue projected for the magnetic
materials business, representing impairment losses on property, plant and equipment of 10,356 million yen and on intangible assetsof 5,301 million yen. The recoverable amount was determined on the basis of value in use, which was measured at 74,875 million
yen as of September 30, 2020, the date on which impairment losses were recognized. The value in use was discounted at 10.1%(before tax), which was derived from the weighted average cost of capital.
Impairment losses for the six months ended September 30, 2019 mainly include 61,431 million yen due to the lower than expected
future revenue projected for the magnetic materials business in the Hitachi Metals segment consisting of impairment losses onproperty, plant and equipment of 22,479 million yen and on intangible assets of 38,952 million yen. The recoverable amount wasdetermined on the basis of value in use, which was measured at 106,313 million yen as of September 30, 2019, the date on which
impairment losses were recognized. The value in use was discounted at 9.6% (before tax), which was derived from the weighted
average cost of capital.
(11) Financial Income and Expenses
The main components of financial income and expenses for the six months ended September 30, 2020 and 2019 are as follows:
Millions of yen
2020

2019

Dividends received

2,091

3,699

Exchange gain (loss)(3,633)

1,209

Dividends received for the six months ended September 30, 2020 and 2019 are from FVTOCI financial assets.

F-22

Notes to Condensed Quarterly Consolidated Financial Statements
September 30, 2020(12) Discontinued Operations
In the Energy segment, the Company classified the part of thermal power generation systems business which was not transferredto Mitsubishi Hitachi Power Systems, Ltd. (currently Mitsubishi Power, Ltd.) for business 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 the condensed quarterly consolidated statement of profit or loss since the projects were completed in
the year ended March 31, 2015.
Profit or loss and cash flows from the discontinued operations for the six months ended September 30, 2020 and 2019 are as
follows:
Millions of yen
2020

2019

Profit or loss from discontinued operations
Revenues
Cost of sales and expenses
Loss from discontinued operations, before income taxes
Income taxes
Loss from discontinued operations

7

20

(693)

(817)

(686)

(797)

-

1

(686)

(796)
Millions of yen

2020

2019

Cash flows from discontinued operations
Cash flows from operating activities(611)(1,805)

Cash flows from investing activities--

Cash flows from financing activities

736

1,851

F-23

Notes to Condensed Quarterly Consolidated Financial Statements
September 30, 2020(13) Earnings Per Share (EPS) Information
The calculations of basic and diluted EPS attributable to Hitachi, Ltd. stockholders for the six months ended September 30, 2020
and 2019 are as follows:
Six months ended September 30
Number of shares
2020
Weighted average number of shares on which basic EPS is calculated

2019

965,926,306

965,694,756

Stock options

680,140

876,160

Restricted stock469,809319,930

8,544-

967,084,799

966,890,846

Effect of dilutive securities

Restricted stock units
Number of shares on which diluted EPS is calculated

Millions of yen
2020

2019

Net income from continuing operations,
attributable to Hitachi, Ltd. stockholders
Basic251,441

Effect of dilutive securities
Diluted

190,089--

251,441

190,089

(686)

(796)

-

-

(686)

(796)

250,755

189,293--

250,755

189,293

Net loss from discontinued operations,
attributable to Hitachi, Ltd. stockholders
Basic
Effect of dilutive securities
Diluted
Net income attributable to Hitachi, Ltd. stockholders
Basic
Effect of dilutive securities
Diluted

Yen
2020

2019

EPS from continuing operations,
attributable to Hitachi, Ltd. stockholders
Basic260.31

196.84

Diluted

260.00196.60Basic(0.71)(0.82)

Diluted(0.71)(0.82)

Basic

259.60

196.02

Diluted259.29195.77

EPS from discontinued operations,
attributable to Hitachi, Ltd. stockholders

EPS attributable to Hitachi, Ltd. stockholders

F-24Notes to Condensed Quarterly Consolidated Financial Statements
September 30, 2020
The calculations of basic and diluted EPS attributable to Hitachi, Ltd. stockholders for the three months ended September 30,
2020 and 2019 are as follows:
Three months ended September 30
Number of shares
2020
Weighted average number of shares on which basic EPS is calculated

2019

965,946,906

965,701,551

Stock options

680,140

876,160

Restricted stock

453,873

310,871

Effect of dilutive securities

Restricted stock units
Number of shares on which diluted EPS is calculated

7,474

-

967,088,393

966,888,582
Millions of yen

2020

2019

Net income from continuing operations,
attributable to Hitachi, Ltd. stockholders
Basic27,853

Effect of dilutive securities
Diluted69,377--

27,853

69,377

(349)

(387)

-

-

(349)

(387)

27,504

68,990--27,504

68,990Net loss from discontinued operations,
attributable to Hitachi, Ltd. stockholders
Basic
Effect of dilutive securities
Diluted
Net income attributable to Hitachi, Ltd. stockholders
Basic
Effect of dilutive securities
Diluted

Yen
2020

2019

EPS from continuing operations,
attributable to Hitachi, Ltd. stockholders
Basic

28.83

71.84

Diluted

28.80

71.75

Basic

(0.36)(0.40)

Diluted(0.36)(0.40)

Basic

28.47

71.44

Diluted

28.44

71.35

EPS from discontinued operations,
attributable to Hitachi, Ltd. stockholders

EPS attributable to Hitachi, Ltd. stockholders

F-25

Notes to Condensed Quarterly Consolidated Financial Statements
September 30, 2020(14) Contingencies
Litigation
In November 2017, a subsidiary in Japan received a complaint that was filed against three companies, namely a construction
company of a condominium complex, the subsidiary and a secondary subcontractor, by a contractee in Japan seeking
approximately 45.9 billion yen in compensation for expenses allegedly incurred arising from concerns over partial
deficiencies of piling work during the construction phases of the condominium complex, which the subsidiary contracted as
the primary subcontractor. In July 2018, the compensation claim against these three companies was amended toapproximately 51.0 billion yen by the contractee.
In relation to the aforementioned lawsuit, in April 2018, the subsidiary in Japan received a complaint that was filed against
the subsidiary and the secondary subcontractor, by the construction company of the condominium complex seeking
approximately 49.6 billion yen in compensation for expenses allegedly incurred arising from the aforementioned lawsuit. In
July 2018, the compensation claim against these two companies was amended to approximately 54.8 billion yen by theconstruction company of the condominium complex. Although the subsidiary in Japan will address these claims and explain
its position, there can be no assurance that it will not be held liable for any amounts claimed.
In December 2017, a subsidiary in Europe received a complaint filed by a customer in Europe seeking compensation forconsequential losses of 263 million euro (32,662 million yen) and interest allegedly incurred by performance defects of apower plant. As of September 30, 2020, the amount of compensation claimed by the customer was changed to 270 million
euro (33,530 million yen). Although the subsidiary in Europe will vigorously defend itself against this lawsuit, there can be
no assurance that it will not be held liable for any amounts claimed.
The Company and its subsidiaries execute a number of business reorganizations, including mergers, acquisitions anddivestitures. Contracts for these reorganizations include clauses for transaction price adjustments subsequent to thereorganizations. There is a possibility products or services provided by the Company and its subsidiaries contain defects. As
the result of price adjustments, or in compensation for defects in products or services etc. there is a possibility that theCompany 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 theseproceedings. 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 and claims which have arisen in
the ordinary course of business and have not been finally adjudicated. These actions when ultimately concluded anddetermined will not, in the opinion of management, have a material adverse effect on the condensed quarterly consolidated
financial statements of the Company and subsidiaries.
(15) Approval of Condensed Quarterly Consolidated Financial Statements
The condensed quarterly consolidated financial statements were approved on November 12, 2020 by Toshiaki Higashihara,
President and CEO of the Company.

F-26

[Cover][Document Filed][Applicable Law]

Confirmation Letter
Article 24-4-8, Paragraph 1 of the Financial Instruments and Exchange Act of Japan[Filed with][Filing Date]

Director, Kanto Local Finance Bureau
November 11, 2020

[Company Name][Company Name in English]

Kabushiki Kaisha Hitachi Seisakusho
Hitachi, Ltd.

[Title and Name of Representative][Name and title of CFO]

Toshiaki Higashihara, President & CEO
Yoshihiko Kawamura, Senior Vice President and Executive Officer[Address of Head Office][Place Where Available for Public Inspection]

6-6, Marunouchi 1-chome, Chiyoda-ku, Tokyo
Tokyo Stock Exchange, Inc.
(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. Yoshihiko Kawamura, Senior Vice President and Executive Officer,
confirmed that statements contained in the Quarterly Report for the second quarter of the 152nd fiscal year (from July 1, 2020 to
September 30, 2020) were adequate under the Financial Instruments and Exchange Act.
2. Special Notes
None.

A-2