Outline of Consolidated Financial Results for the Second
Quarter ended September 30, 2009
October 29, 2009

Hitachi, Ltd.

Outline of Consolidated Financial Results for the Second Quarter ended
September 30, 2009
October 29, 2009

Contents1.

2.
3.

Outline of Consolidated Financial
Results for the Second Quarter ended
September 30
30, 2009
Outlook for Fiscal 2009
Overview by Industry Segment

Copyright © 2009, Hitachi, Ltd., All rights reserved.

2

Outline of Consolidated Financial Results for the Second Quarter ended
September 30, 2009
October 29, 2009

Contents1.

2.
3.

Outline of Consolidated Financial
Results for the Second Quarter ended
September 30
30, 2009
Outlook for Fiscal 2009
Overview by Industry Segment

Copyright © 2009, Hitachi, Ltd., All rights reserved.

3

1-1. Consolidated Statements of Operations
Billions of Yen
Fiscal 2008/ 1H

Fiscal 2009/ 1HYear-over-yearyDifference frominitial forecast(＊)

5,310.5

4,124.9[78%]((1,185.5),)

Operating income (loss)

197.0(24.7)(221.8)85.2

Net other deductions(58.9)(85.3)(26.4)

24.6

Income (loss) before
income taxes

138.1(110.1)(248.2)

109.8

Income taxes

73 8
73.8

28 7
28.7

(45 1)(45.1)

18 7
18.7

Net income (loss)

64.2(138.8)(203.1)

91.1

Nett iincome (lN(loss)) attributable
tt ib t bl
to noncontrolling interests

50.0

(5.6)

(55.7)

14.3

Net income (loss)
attributable
tt ib t bl tot Hitachi,
Hit hi Ltd
Ltd.

14.1

(133.2)(147.4)

76.7

Revenues[101%]
24.9(*) Initial forecast announced on May 12, 2009
Copyright © 2009, Hitachi, Ltd., All rights reserved.

4

1-2. Major Factors for Change in Operating Income (Loss)(Year-over-Year)■ Operating income(loss)
Operating income(loss)

197.0

Billions of Yen

150
Lower capacity
Utili tiUtilization:(420 0) 100(420.0)
50
0
-50
-100

FY08/1Q FY08/2Q FY08/3Q FY08/4Q FY09/1Q FY09/2Q(24.7)
Cost reductions:
151 3
151.3

Fi
l 2009Fiscall 2008 Fiscal
Fi
1H
1H

Lower sales
prices: (120.0)

Fixed cost
reductions: 200.0

Effect of forex
movements: (33.0)
Copyright © 2009, Hitachi, Ltd., All rights reserved.

5

Major Factors for Change in Operating Loss

1-3. (From Forecast to Results)

Billions of Yen

Operating loss
Fiscal 2009/1H
Forecast
Results

Effect of forex
movements: 5.0(24.7)

Cost reductions: 30.3
30 3・ Materials cost reduction
・ Improved product mix(110.0)Lower sales
prices: (15.0)

Fixed cost
reductions: 65.0

Copyright © 2009, Hitachi, Ltd., All rights reserved.

6

Major Factors for Change in Net Income(Loss) Attributable to1-4. Hitachi, Ltd. (Year-over-year)
Billions of Yen

Net income(loss) attributable
to Hitachi, Ltd.

14.1
Lower operating
income: (221.8)
Net equity in losses of affiliatedcompanies: (42.5)(42 5)(133.2)

Decreasing of net loss
attributable to noncontrollinginterests: 37.0
Decreasing ofincome taxes: 45.1

Fi
l 2009Fiscall 2008 Fiscal
Fi
1H
1H

Decreasing of structuralreform-related expenses: 34.9

Copyright © 2009, Hitachi, Ltd., All rights reserved.

7

Major Factors for Change in Net Loss Attributable to1-5. Hitachi, Ltd. (From Forecast to Results)
Billions of Yen

Net loss attributable
to Hitachi, Ltd.
Fiscal 2009/1H
Forecast
Results

Decreasing of fixed
asset loss, etc: 14.3
Net equity
q y in income ofaffiliated companies: 10.3

(133.2)

Increasing ofincome taxes: (18.7)

Improved operating
income: 85.2
Increasing of net income attributable
to noncontrolling interests: (14.3)(210.0)

Copyright © 2009, Hitachi, Ltd., All rights reserved.

8

1-6. Revenues by Market
Billions of Yen
Fiscal 2008/ 1H

Ratio

Fiscal 2009/ 1H

Ratio

Yearover year
over-year

FY092Q/
FY091QJapan

3,008.257%

2,420.3

59%

80% 120%

Outside Japanp2,302.3,

43%

1,704.5
,

41%

74%

115%

Asia

1,075.2

20%

782.8

19%

73%

119%

North America

484.2

9%

353.9

9%

73% 105%

Europe

508.2

10%

379.8

9%

75%

Other Areas

234 5
234.5

4%

187 9
187.9

4%

80% 124%

Total

5,310.5 100%

4,124.9 100%78% 118%

112%

Ratio of overseas revenues 41%

Copyright © 2009, Hitachi, Ltd., All rights reserved.

91-7. Consolidated Balance Sheets
Billions of Yen
Change fromMarch 31, 2009

As of March 31, 2009

As of September 30,
2009

Total assets

9,403.7

8,835.1(568.5)

Total liabilities

7,224.3

6,761.8(462.5)Interest-bearing debt

2,820.1

2,557.7(262.3)

Total Hitachi, Ltd. stockholders’ equity

1,049.9

962.0(87.9)

Noncontrolling interests

1,129.4

1,111.2(18.1)

11.2%

10.9%

(0.2 points)

Total Hitachi, Ltd. stockholders’ equity ratio

D/E ratioti(Including noncontrolling interests)

1.29 times

1.23 times 0.06 improvement

Total assets: Decreasing by reduction of fixed cost and materials cost
cost, structural reforms of unprofitablebusinesses and ongoing efforts to reduce assets by improving asset efficiency.
Total Hitachi, Ltd. Stockholders’ equity: Decreasing by the amortization of pension obligations and otherfactors contributing to mitigatiing the net loss attributable to Hitachi, Ltd.
D/E ratio: Improved by the reduction of interest bearing debt.
Copyright © 2009, Hitachi, Ltd., All rights reserved. 10

1-8. Consolidated Statements of Cash Flows
Billions of Yen

Fiscal 2008/ 1H

Fiscal 2009/ 1H

Cash flows
from operating activities

246.9

332.5

85.6

Cash flows
from investing activities(242.7)(255.8)(13.1)

4.1

76.6

72.5

(66.9)(265.5)(198.6)

Free cash flows
Cash flows
from financing activities

Year-over-year

Cash flows from operating activities: Increasing by quickly collecting accounts receivable and reducing
inventories.
Cash flows from investing activities: Increasing by a decrease in the securitization of investments inleases and subscription to an allotment of shares to shareholders to increase capital by Renesas
Technology Corp.,
Corp despite the stricter selection of investments
investments.
Free cash flows: Improved 72.5 billions of yen year over year.
Copyright © 2009, Hitachi, Ltd., All rights reserved. 11

1-9. Revenues by Industry Segment
Billions of Yen
Fiscal 2008/ 1H

Fiscal 2009/ 1HYear-over-yearyDifference fromi iti l fforecastt
initial1,281.7

1,036.7

81%

99%(*)

641 1
641.1

420 3
420.3

66%

98%

1,693.8

1,435.5

85%

104%(*)

Digitalg
Media & Consumer
Products

695 5
695.5

519 3
519.3

75%

100%

High Functional Materials &Components

921.1

578.8

63%

100%

Logistics Services & Others
Logistics,

574 9
574.9

454 9
454.9

79%

99%

Financial Services

189.9

235.0

124%

147%

Eliminations & Corporate items(687.9)(555.9)-Total

5,310.5

4,124.978%

Information & Telecommunication
Systems

Electronic Devices
Power & Industrial Systems

101%(*) Except the impact of product transfer between the industry segments
Information & Telecommunication Systems : 103%, Power & Industrial Systems: 100%
Copyright © 2009, Hitachi, Ltd., All rights reserved. 12

1-10. Operating Income(Loss) by Industry Segment
Billions of Yen
Year-over-yearyDifference fromi iti l fforecastt
initialFiscal 2008/ 1H

Fiscal 2009/ 1H

Information & Telecommunication
Systems

72.1

27.0

(45.1)

13.0

Electronic Devices

28 5
28.5

(3 8)
(3.8)

(32 3)(32.3)

61
6.1

Power & Industrial Systems

63.5(22.6)(86.2)

40.3

Digitalg
Media & Consumer
Products(26 6)(26.6)

(9 1)
(9.1)

17 4
17.4

78
7.8

High Functional Materials &Components

68.9

6.4

(62.5)

7.4

Logistics Services & Others
Logistics,

11 6
11.6

35
3.5

(8 1)
(8.1)

15
1.5

Financial Services

7.4

3.5

(3.9)

(1.4)

Eliminations & Corporate items(28.5)(29.5)

-

-

Total

197.0

(24.7)(221.8)85.2

Copyright © 2009, Hitachi, Ltd., All rights reserved. 13

Operating Income(Loss) by Industry Segment

1-11. (Quarterly basis)

Billions of Yen
Fiscal 2008/ 3Q

Fiscal 2008/ 4Q

Fiscal 2009/ 1Q

Fiscal 2009/ 2Q

38 3
38.3

66 0
66.0

32
3.2

23 8
23.8

4.0

(5.2)

(7.1)

3.3

Power & Industrial Systems(25 4)(25.4)(13 7)(13.7)(16 8)(16.8)

(5 8)
(5.8)

Digital Media & Consumer
Products(16.1)(62.7)(13.4)

4.2

High Functional Materials &Components

(0 5)
(0.5)

(40 5)(40.5)

(2 5)
(2.5)

89
8.9

Logistics, Services & Others

4.6

6.7

2.5

0.9

Financial Services

2.1

0.5

2.3

1.1

Eliminations & Corporate items(21.6)(6.3)(18.7)(10.8)

Total(14.5)(55.4)(50.5)

25.8

Net loss attributable to
Hitachi, Ltd.

(371.0)(430.4)(82.6)(50.5)

Information & Telecommunication
Systems

Electronic Devices

Copyright © 2009, Hitachi, Ltd., All rights reserved. 14

1-12. Progress With Structural Reforms (1)Measures
Reduce fixed costs- Reductions in first half of fiscal 2009: approx. 200 billion yen- Fiscal 2009 projection: approx. 260 billion yen(Revision from approx. 200 billion yen target announced on January 30, 2009)

Reduce procurement costs- Reductions in first half of fiscal 2009: approx. 130 billion yen- Fiscal 2009 target:
g approx.
pp
300 billion yeny(In line with January 30, 2009 announcement)

Introduce in-house company system (October 1, 2009)- Turn Hitachi, Ltd. business groups into in-house companies with the aim of clarifying
responsibilities and authority, as well as speeding up decision-making

Convert 5 Group subsidiaries into wholly owned subsidiaries (From February 2010)(Hitachi Information Systems, Inc., Hitachi Software Engineering Co., Ltd., Hitachi Systems & Services, Ltd.,
Hitachi Plant Technologies, Ltd. and Hitachi Maxell, Ltd.)- Terminated tender offers period on October 8Strengthen the balance sheet- Strengthen deferred tax assets by making valuation allowances
Fiscal 2008 valuation allowances: 617.9 billion yen
Copyright © 2009, Hitachi, Ltd., All rights reserved. 15

1-13. Progress With Structural Reforms (2)MeasuresFlat-panel TV business- Rightsizing approximately 4,000
4 000 jobs
- Procuring plasma display panels from Panasonic (Since April 2009)- Ceased in-house flat-panel TV production in the Czech Republic, Mexico and China- Sale of Hitachi Plasma Display’s Miyazaki Works to Showa Shell Solar(Agreement in principle on Sept
Sept. 7
7, planned sale at the end of December 2009)- Already agreed in principle to sell plasma display panel production facilities(*)Fiscal 2009 restructuring expenses: Approx. 33 billion yen
Beneficial impact on operating
income: Approx. 90 billion yen (Fiscal 2008 (105.5) billion yen
Fiscal 2009 (15.0) billion yen (forecast))

Automotive systems-related business- Rightsizing approximately 6,800 jobs
- Integration of overlapping businesses and inefficient bases(*)Fiscal 2009 restructuring
g expenses:pApprox.
pp
16 billion yyen
Beneficial impactpon operatingpgincome: Approx. 20 billion yen (Fiscal 2008 (66.0) billion yen → Fiscal 2009 (45.0) billion yen (forecast))

Integration of mobile terminal business- Basic agreement reached on September 14 to integrate Casio Hitachi Mobile Communications Co.,Ltd andLtd.
d NEC Corp.’sC’ mobilebil terminalt
i l business;b i
integrationi t
ti plannedld forf April
A il 2010.
2010

Business integration of Renesas Technology Corp. and NEC Electronics Corp.
- Definitive agreement reached on September 16; integration planned for April 2010

Sale of Hitachi’s shareholding in Hitachi Displays, Ltd. to Canon Inc.
- Basic agreement signed in March 2008(*) Including restructuring costs in operating income

Copyright © 2009, Hitachi, Ltd., All rights reserved. 16

1-14. Social Innovation Business
Overview
Coordination of information, power and industrial system businesses- Developing eco
eco-friendly
friendly data centers using cutting
cutting-edge
edge “green”
green IT
Began services at third data center in Yokohama on July 21
Overseas business- Project
P j t tto replace
l
old
ld hi
high
h speedd ttrain
i iin UK (M(Manufacturing
f t i off maximum1,400
i
1 400 railway
ilcars
and maintenance service)
Selected as preferred bidder on February 12, 2009, currently in negotiations forconcluding
g order agreementg- Won order for two steam turbine generators for Egypt’s first super-critical thermal
power plant- Won order for drive systems and crossings for straddle-type monorail cars for thethird line of the Chongqing Metro
Metro, China- U.S.-based Hitachi Consulting Corporation acquired U.K. consulting firm EdenbrookLtd. to bolster global service solutions business

Incubation and strengthening of new businesses- Established Renewable Energy & Smart Grid Division and Battery Systems Divisionon April 1, 2009 to strengthen new energy-related and battery businesses, respectively- Ramped
p up
ppproduction capacitypy of lithium-ion batteries for automobiles
Completed new production line and began shipping samples in September,creating a 340,000 cell/month production system
Copyright © 2009, Hitachi, Ltd., All rights reserved. 17

Outline of Consolidated Financial Results for the Second Quarter ended
September 30, 2009
October 29, 2009

Contents1.

2.
3.

Outline of Consolidated Financial
Results for the Second Quarter ended
September 30
30, 2009
Outlook for Fiscal 2009
Overview by Industry Segment

Copyright © 2009, Hitachi, Ltd., All rights reserved. 18

2-1. Outlook for Fiscal 2009
Billions of Yen
Difference fromi iti l fforecastt
initialFiscal 2008

Fiscal 2009

10,000.38,700.0[87%]((1.300.3)
300 3)[98%]((200.0)00 0)Operating income

127.1

80.0

(47.1)

50.0

Net other deductions(417.0)(170.0)

247.0

30.0

Loss before income taxes(289.8)(90.0)

199.8

80.0

Income taxes

505.2

130.0

(375.2)40.0

Net loss(795.1)(220.0)

575.1

40.0

Net income (loss) attributable
to noncontrolling interests

(7 7)
(7.7)

10 0
10.0

17 7
17.7

00
0.0

Net loss attributable to
Hitachi, Ltd.

(787.3)(230.0)

557.3

40.0

Revenues

Year-over-yearYearover year

Copyright © 2009, Hitachi, Ltd., All rights reserved. 19

2-2. Reasons for Net Loss Attributable to Hitachi, Ltd. and Response
Reasons
OperatingOti losses
l
in
i the
th Digital
Di it l Media
M di & Consumer
C
Products segment and automotive systems businessBusiness structure reform expenses in the Digital Media& Consumer Products segment and automotive systems
business

Equity in losses of semiconductor-relatedcompany, etc.
Equity in losses of mobile terminal company andothersWrite-off of deferred tax assets
Net loss attributable to noncontrollinginterests

Other business earnings, etc.
Net loss attributable to Hitachi, Ltd. infifiscall 2009Fiscal 2009
Loss

Main Countermeasures(Billions of Yen)

(60.0)((47.0))(85.0)

Accelerate structuralreforms
Strengthen business throughintegration with NEC Electronics Corp.
Integration with NEC Corp.’s mobile
terminal businessConversion of 5 listed Group
companies into wholly owned,(73.0) consolidated tax calculation
subsidiaries

35.0

Strengthen Social Innovation Business
Reduce fixed costs and procurement costs(230.0)
Copyright © 2009, Hitachi, Ltd., All rights reserved. 20

2-3. Outlook for Fiscal 2009 Revenues by Industry Segment
Billions of Yen

Fiscal 2008

Fiscal 2009

Year-over-yearYearover year

Difference fromi iti l fforecastt
initialInformation & Telecommunication
Systems

2,594.4

2,250.0

87%

96%(*)

Electronic Devices

1 151 01,151.0

890 0
890.0

77%

93%

Power & Industrial Systems

3,310.5

3,080.0

93%

102%(*)

Digitalg
Media & Consumer
Products

1 261 5
1,261.5

1 060 01,060.084%

97%High Functional Materials &Components

1,556.8

1,240.080%

100%

L i ti
Logistics,
S
Servicesi& OthOthers

1 089 91,089.9

910 0
910.0

83%

95%

412.0

400.0

97%

125%

Eliminations & Corporate items(1,376.0)(1,130.0)

-

Total

10,000.38,700.0

87%

Financial Services

98%(*) Except the impact of product transfer between the industry segments
Information & Telecommunication Systems: 99%, Power & Industrial Systems: 100%
Copyright © 2009, Hitachi, Ltd., All rights reserved. 21

2-4. Outlook for Fiscal 2009 Operating Income (Loss) by Industry Segment
Billions of Yen
Difference fromi iti l fforecastt
initialFiscal 2008

Fiscal 2009

176.6

102.0

(74.6)

25.0

Electronic Devices

27 3
27.3

(4 0)
(4.0)

(31 3)(31.3)

(5 0)
(5.0)

Power & Industrial Systems

24.2

28.0

3.7

23.0

Digitalg
Media & Consumer
Products(105 5)(105.5)(15 0)(15.0)

90 5
90.5

(2 0)
(2.0)

High Functional Materials &Components

27.7

38.0

10.2

11.0

L i ti
Logistics,
S
Servicesi& OthOthers

23 0
23.0

90
9.0

(14 0)(14.0)

(7 0)
(7.0)

Financial Services

10.2

10.0

(0.2)

(4.0)

Eliminations & Corporate items(56.5)(88.0)

-

-

Total

127.1

80.0

(47.1)

50.0

Information & Telecommunication
Systems

Year-over-yearYearover year

Copyright © 2009, Hitachi, Ltd., All rights reserved. 22

Outline of Consolidated Financial Results for the Second Quarter ended
September 30, 2009
October 29, 2009

Contents1.

2.
3.

Outline of Consolidated Financial
Results for the Second Quarter ended
September 30
30, 2009
Outlook for Fiscal 2009
Overview by Industry Segment

Copyright © 2009, Hitachi, Ltd., All rights reserved. 23

3-1. Information & Telecommunication Systems
Operating income (loss)

Revenues
Figures in brackets are year over year, billion of yen
1,500

1,000

Figures in brackets are year over year, billion of yen

1,213.3[92%]100570.3[86%]5075.0[72%]

1,036.7[81%]Software/Services

Software/Services

27.0[37%]37.2[54%]

Hardware38.8[84%]37.8[106%]

FY09/1Q2Q

FY09/3Q4Q

529 7[87%]529.7[87%]5000Hardware506.9[76%]643.1[99%]0(11.8)-50
FY08/1Q2Q

FY08/3Q4Q

Results Overview

FY09/1Q2Q

FY09/3Q4Q
forecast•Figures in brackets are comparisonswith initial forecast

FY09/1Q2Q
・Lower revenues and lower operating income due tosluggish economy, forex impact, etc.
・Hardware fell into the red due to the loss from HDD operations

FY09/3Q4Q ((Forecast))
・Rapid recovery in HDD operations (Return to profitability in 3Q)・Although IT investment projected to be weak, it will Improvecompare with 1Q2Q

FY09 (Forecast)
Revenues: 2,250.0 billion yen [96%]Operating income: 102.0 billion yen [132%]

FY08/1Q2Q

Main Initiatives

FY08/3Q4Q

forecast

・Strengthen
Strengthen network business- Integrated Hitachi Communication Technologies, Ltd.(July 2009)
・Strengthen operations for SMB- Merger of Hitachi Electronics Services Co., Ltd.
and Hitachi HBM Co., Ltd. (October 2009). etc.
・Strengthen and expand global business centered on strong products- Grow revenues in the U
U.S.
S and Europe
Europe, expand strategic
products in emerging regions
・Expand service business for cloud computing- Commenced services at eco-friendly data center(third data center) in Yokohama- Expanding business PaaS/SaaS service lineup・Strengthen HDD operations- Acquire external HDD operations- Acquire substrate facility- Continue cost-cutting initiatives
Copyright © 2009, Hitachi, Ltd., All rights reserved. 24

3-2. Electronic Devices
Operating income (loss)

Revenues
Figures in brackets are year over year, billion of yen

Figures in brackets are year over year, billion of yen
30

600
420.3[66%]469.6[92%]
20

400
10
200

0
(3.8)[ - ](0.1)[ - ]-100
FY08/1Q2Q

FY08/3Q4Q

Results Overview

FY09/1Q2Q

FY09/3Q4Q
forecast•Figures in brackets are comparisonswith initial forecast

FY09/1Q2Q
・Lower revenues and an operating loss due to the impact of
the economic recession
・Hitachi High-Technologies Corporation’s performance was sluggish
due to constrained investment in semiconductor-related production
equipment in particular・LCD
LCD displays
displa s returned
ret rned to profitability
profitabilit in 2Q
FY09/3Q4Q (Forecast)・Moderate recovery in semiconductor-related production equipment
・Improvement of Hitachi High-Technologies Corporation’s
clinical diagnostic equipment from initial forecast
・Firm
Firm sales of medical equipment at Hitachi Medical Corp
・Segment aims to almost break even

FY08/1Q2Q

Main Initiatives

FY08/3Q4Q

FY09/1Q2Q

FY09/3Q4Q
forecast

Hitachi Displays, Ltd.
・Expand sales of high-definition and touch-panel displays
・Sell part of Hitachi, Ltd.’s shareholding to Canon (Under negotiation)
Hitachi High-Technologies Corporation
Reduce fixed costs to compensate for lower demand for・Reducesemiconductor-related production equipment
・Maintain earnings from clinical diagnostic equipment in the U.S. andEuropean markets, increase share in Japan and other Asian markets
Hitachi Medical Corporation
・ExpandEd overseas sales
l off new MRI andd otherth kkey productsd t・Step up development of next-generation medical systems

FY09 (Forecast)
Revenues: 890.0 billion yen [93%] Operating loss: (4.0) billion yen [ - ]Copyright © 2009, Hitachi, Ltd., All rights reserved. 25

3-3. Power & Industrial Systems
Operating income (loss)

Revenues
Figures in brackets are year over year, billion of yen

Figures in brackets are year over year, billion of yen

1,644.4[102%]
50 6[ - ]50.6[

1 435 5[85%]1,435.5[85%]

1,500

50

1,000
0
500
(22.6)[ - ]
0

-50
50
FY08/1Q2Q

FY08/3Q4Q

Results Overview

FY09/1Q2Q

FY09/3Q4Q forecast•Figures in brackets are comparisonswith initial forecast

FY09/1Q2Q
・Lower revenues and operating loss due to large drops in automotive systems,
construction
t ti machineryhiandd iindustrial
d t i l machinery.
hi・Higher revenues and higher earnings in power systems businesses
FY09/3Q4Q(Forecast)
・Recovery in revenues to last year’s level, continue reducing fixed costs
・Significant improvement in operating income, return to profitability- Progress of structural reforms in the automotive systems businesses- Improve profitability of large power system and other projects
by strengthening project management- Improve profitability in construction machinery businesses through reductions
in fixed costs and procurement costs, and completion of inventory adjustments
FY09 (Forecast)
Revenues: 3,080.0 billion yen [102%]
Operating income: 28.0 billion yen [560%]

FY08/1Q2Q

Main Initiatives

FY08/3Q4Q

FY09/1Q2Q

FY09/3Q4Q
forecast・Make Hitachi Plant Technologies, Ltd. a wholly owned subsidiary- Strengthen solutions capabilities in water recycling, air-conditioning,
power systemstandd industrial
i d t i l systemst・Strengthen coordination of information, power and industrial system businesses- Establishment of Information Control Systems Company (in-house company)(October, 2009)
・Corporate split of automotive systems business (July, 2009)- Continue with business structure reforms (workforce adjustment, base integration)
・Strengthen ability to cope with overseas market expansion- Power systems: coal-fired thermal power systems(Europe, North America, South Africa);
nuclear power generation (strengthen GE alliance, secure orders in the U.S., etc.)- Railway systems: strengthen U.K. maintenance and service business,
expand Chinese business, win large orders for next year (U.K., etc.)
Expand propulsion and signal system business (China, etc.)- Urban planning and development systems: strengthen production system
in China for elevators and escalators, bolster maintenance business base in China- Forge stronger ties with trading and engineering companies
・Refine technologies to reduce environmental burdens (CCS, etc.)
Copyright © 2009, Hitachi, Ltd., All rights reserved. 26

3-4. Digital Media & Consumer Products
Operating income (loss)

Revenues
Figures in brackets are year over year, billion of yen

Figures in brackets are year over year, billion of yen
0600

519.3[75%]540.6[96%]

(9.1)

-20

(5.8)

400
-40
200

-60
-80

0
FY08/1Q2Q

FY08/3Q4Q

FY09/1Q2Q

FY09/3Q4Q
forecast

Results Overview•Figures in brackets are comparisonswith initial forecast

FY09/1Q2Q
・Sharp drop in revenues due to reduction of overseas flat-panel
TV business and lower revenues in overseas air-conditioning business・Much smaller operating loss, with return to profitability in 2Q, due tobenefits of flat-panel business structure reforms and eco-points system in Japan
FY09/3Q4Q（(Forecast)・Lower revenues due to the reduction of overseas flat-panel TV business
・Strong performance in home appliances, optical storage, LCD projectors,
and at Hitachi Maxell, Ltd.
・Significant improvement in operating income due to the benefits offlat-panelpTV business structure reforms, return to p
profitability
y excludinggbusiness structure reform-related expenses
FY09(Forecast)
Revenues: 1,060.0 billion yen [97%] Operating loss: (15.0) billion yen [ - ]FY08/1Q2Q

Main Initiatives

FY08/3Q4Q

FY09/1Q2Q

FY09/3Q4Q
forecast

・Corporate split of digital media-related business (July, 2009)
・Structural reform of flat-panel TV business- Reduce business size, adjust workforce and fixed costs
・Make mobile terminal joint venture a non-equity-method company(April, 2010)
・Reform
R f
consumer productsdbbusinessi
iin JJapan- Realign sales bases, consolidate sales staff- Improve efficiency of logistics and services operations
・Strengthen global operations of strong products- LCD projectors, optical disk drives, air-conditioners
・Differentiate
Diff
ti t products
d t b
by using
i energy-saving
i ttechnologies
h l i(home appliances, products for all-electrified homes)
・Strengthen cooperation within the Hitachi Group in thelithium-ion battery field (Hitachi Maxell)
Copyright © 2009, Hitachi, Ltd., All rights reserved. 27

3-5.

High Functional Materials & Components /Logistics, Services & Others / Financial Services
Figures in brackets are year over year
year, billion of yen

Operating income (loss)

RevenuesHighg Functional Materials & Components
p
1,000
578.8[63%]661.1[104%]

100

500

0

0

-100
100
FY08/1Q2Q

FY08/3Q4Q

FY09/1Q2Q

6.4[9%]
FY08/1Q2Q

FY09/3Q4Q

FY08/3Q4Q

FY09/1Q2Q

31.5
31.5

FY09/3Q4Q
forecast

forecast

Logistics, Services & Others
800

454.9[79%]455.0[88%]

15
10

400

3.5[30%]5

05.4[48%]0
FY08/1Q2Q

FY08/3Q4Q

FY09/1Q2Q

FY09/3Q4Q

FY08/1Q2Q

FY08/3Q4Q

FY09/1Q2Q

forecast

FY09/3Q4Q
forecast

Financial Services
235.0[124%]300

8

6.4[237%]

164.9[74%]200

3.5[47%]4100
0
FY08/1Q2Q

FY08/3Q4Q

FY09/1Q2Q

FY09/3Q4Q
forecast

0
FY08/1Q2Q

FY08/3Q4Q

FY09/1Q2Q

FY09/3Q4Q
forecast

Copyright © 2009, Hitachi, Ltd., All rights reserved. 28

Cautionary Statement
Certain statements found in this document may constitute "forward-looking
forward looking statements
statements" as defined in the U.S.
U S Private Securities Litigation Reform Act of 1995.
1995
Such "forward-looking statements" reflect management's current views with respect to certain future events and financial performance and include any statementthat does not directly relate to any historical or current fact. Words such as "anticipate," "believe," "expect," "estimate," "forecast," "intend," "plan," "project" andsimilar 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 "forwardlooking statements" and from historical trends. Certain "forward-looking statements" are based upon current assumptions of future events which may not prove tobe accurate. Undue reliance should not be p
placed on "forward-looking
g statements,", as such statements speakp
onlyy as of the date of this document.
Factors that could cause actual results to differ materially from those projected or implied in any “forward-looking statement” and from historical trends include, but
are not limited to:- economic conditions including consumer spending and plant and equipment investments in Hitachi's major markets, particularly Japan, Asia, the United Statesand Europe, as well as levels of demand in the major industrial sectors which Hitachi serves, including, without limitation, the information, electronics,
automotive, construction and financial sectors;- fluctuations in product demand and industry capacity, particularly in the Information & Telecommunication Systems segment, Electronic Devices segment andDigital Media & Consumer Products segment;- increased commoditization of information technology products and digital media related products and intensifying price competition for such products,
particularly in the Information & Telecommunication Systems segment, Electronic Devices segment and Digital Media & Consumer Products segment;- uncertainty as to Hitachi’s ability to continue to develop and market products that incorporate new technology on a timely and cost-effective basis and toachieve market acceptancepfor such p
products;;- rapid technological innovation, particularly in the Information & Telecommunication Systems segment, Electronic Devices segment and Digital Media &Consumer Products segment;- exchange rate fluctuation for the yen and other currencies in which Hitachi makes significant sales or in which Hitachi’s assets and liabilities are denominated,particularly against the U.S. dollar and the euro;- fluctuations in the price of raw materials including, without limitation, petroleum and other materials, such as copper, steel, aluminum and synthetic resins;- uncertaintyt i t as tot Hitachi’s
Hit hi’ ability
bilit tot implementi lt measures tot reducedth potential
thet ti l negative
ti impactit off fluctuations
fl t tii productind t demand,dd exchangehratet fluctuation
fl t tiand/or in the price of raw materials;- general socio-economic and political conditions and the regulatory and trade environment of Hitachi’s major markets, particularly Japan, Asia, the UnitedStates and Europe, including, without limitation, direct or indirect restrictions by other nations on imports, or differences in commercial and business customs
including, without limitation, contract terms and conditions and labor relations;- uncertainty as to Hitachi’s access to, or ability to protect, certain intellectual property rights, particularly those related to electronics and data processing
technologies;- uncertainty as to the outcome of litigation, regulatory investigations and other legal proceedings of which the Company, its subsidiaries or its equity method
affiliates have become or may become parties;- the possibility of incurring expenses resulting from any defects in products or services of Hitachi;- uncertainty as to the success of restructuring efforts to improve management efficiency and to strengthen competitiveness;- uncertainty as to the success of alliances upon which Hitachi depends,
depends some of which Hitachi may not control,
control with other corporations in the design anddevelopment of certain key products;- uncertainty as to Hitachi’s ability to access, or access on favorable terms, liquidity or long-term financing; and- uncertainty as to general market price levels for equity securities in Japan, declines in which may require Hitachi to write down equity securities it holds.
The factors listed above are not all-inclusive and are in addition to other factors contained in Hitachi’s periodic filings with the U.S. Securities and Exchange
Copyright © 2009, Hitachi, Ltd., All rights reserved. 29
Commission and in other materials published by Hitachi.

Copyright © 2009, Hitachi, Ltd., All rights reserved. 30