Outline of Consolidated Financial Results
for the Second Quarter ended
September 30, 2013
October 29, 2013

Hitachi, Ltd.

© Hitachi, Ltd. 2013. All rights reserved.

Contents
1. Outline of Consolidated Financial Results for
the Second Quarter ended September 30, 2013
2. Outlook for Fiscal 2013
3. Toward Achieving “2015 Mid-term Management Plan”© Hitachi, Ltd. 2013. All rights reserved.

2

1. Outline of Consolidated Financial Results for
the Second Quarter ended September 30, 2013

© Hitachi, Ltd. 2013. All rights reserved.

3

1-1. Highlights of Fiscal 2013 1st Half Financial Results

Increased 3% YoY, rose 2% compared to previous forecast*1
Revenues

Operating income

EBIT(Earnings before interest and taxes)*2

Net income attributable to
Hitachi, Ltd. stockholders
Total Hitachi, Ltd. stockholders’equity ratio Higher in the Social Infrastructure & Industrial Systems, Information &Telecommunication Systems and Digital Media & Consumer Products segments, etc.

Increased 9.8 billion yen YoY, rose 28.4 billion yen compared toprevious forecast*1
 Increased in the High Functional Materials & Components, Construction
Machinery and Information & Telecommunication Systems segments, etc.

Increased 17.9 billion yen YoY, rose 22.0 billion yen compared toprevious forecast*1
 Resulted from improved equity in net earnings of affiliated companies andforeign exchange gains, etc.

Increased 2.6 billion yen YoY, rose 17.7 billion yen compared toprevious forecast*1
 Profitable for 16 consecutive quarters

Up 1.0 of a point from March 31, 2013

(Manufacturing, Services and Others)Core free cash flows*3(Manufacturing, Services and Others)

Increased 17.9 billion yen YoY*1 Previous forecast announced on July 30, 2013
*2 Defined income before income taxes less interest income plus interest charges.
*3 Operating cash flow plus collection of investments in leases less cash outflows for the purchase of property, plant and equipment, intangible assets, software, and theassets to be leased.
© Hitachi, Ltd. 2013. All rights reserved.

4

1-2. Consolidated Statements of Operations

Billions of yen
Fiscal 2012/1H

Fiscal 2013/1H

Year over year

Previous forecast*comparison

4,355.5

4,470.6+115.1[103%]+70.6[102%]

Operating income

163.6

173.4

+9.8

+28.4

EBIT

124.0

142.0

+17.9

+22.0

Net other income (deductions)(47.3)(37.9)

+9.4

(7.9)

Income before income taxes

116.2

135.5

+19.2

+20.5

Income taxes(50.7)(66.1)(15.4)(1.1)

Net income

65.5

69.3

+3.8

+19.3

Net income attributable tononcontrolling interests(35.3)(36.5)

(1.2)

(1.5)

Net income attributable to
Hitachi, Ltd. stockholders

30.1

32.7

+2.6

+17.7

Revenues* Previous forecast announced on July 30, 2013

© Hitachi, Ltd. 2013. All rights reserved.

51-3. Major Factors for Change in Operating Income (Year over year)

Billions of yen

Operating income
Lower sales prices:(52.0)

163.6

Benefits of Hitachi Smart
Transformation Project: +43.0

Cost reduction, etc.:
+89.8

+9.8

Lower capacity
utilization: (62.0)

173.4

Effect of foreignexchange movements:+44.0
Impact of higher
raw materials
prices: (10.0)

Fiscal 2012/1H

Fiscal 2013/1H© Hitachi, Ltd. 2013. All rights reserved.

6

1-4.

Major Factors for Change in Net Income Attributable to
Hitachi, Ltd. Stockholders

Operating income

Net income attributable to Hitachi, Ltd. stockholders

Billions of yen

Equity in net earnings ofaffiliated companies, gain
(loss) on securities, etc.: (5.8)

173.4

Structural reform
expenses: (12.9)(140.7)
Fine; Hitachi Automotive Systems:(19.0)

Income taxes: (66.1)

32.7
OperatingincomeNet income attributable to
Hitachi, Ltd. stockholders

Net income attributable tononcontrolling interests:(36.5)

Fiscal 2013/1H© Hitachi, Ltd. 2013. All rights reserved.

7

1-5.

Major Factors for Change in Net Income Attributable to
Hitachi, Ltd. Stockholders (Year over Year)Net income attributable to
Hitachi, Ltd. stockholders

Billions of yen
Increased operating
income: +9.8

32.7
30.1

+2.6
Income taxes: (15.4)

Fine; Hitachi Automotive Systems:(19.0)

Fiscal 2012/1H

Fiscal 2013/1H

Improved effect of foreignexchange movements, equity
in net earnings of affiliatedcompanies, etc.: +28.4

Net income
attributable
to noncontrollinginterests: (1.2)© Hitachi, Ltd. 2013. All rights reserved.

8

1-6. Revenues by Market

Billions of yen
Fiscal 2012/1H

Ratio

Fiscal 2013/1H

Ratio

Year over yearJapan

2,551.7

59%

2,413.0

54%

95%

Outside Japan

1,803.8

41%

2,057.6

46%

114%

846.5

19%

994.0

22%

117%

China

387.1

9%

494.3

11%

128%

North America

387.2

9%

443.4

10%

114%

Europe

310.2

7%

355.4

8%

115%

Other Areas

259.7

6%

264.6

6%

102%

4,355.5100%

4,470.6

100%

103%

Asia

Total

© Hitachi, Ltd. 2013. All rights reserved.

91-7. Summary of Consolidated Balance Sheets

Billions of yen
As of March 31, 2013
(A)
Total assets

As of September 30, 2013
(B)(B) - (A)9,809.2

10,467.2+658.03,859.1

3,942.8+83.6

6,629.9

7,069.3+439.42,370.0

2,792.3+422.2

Total Hitachi, Ltd. stockholders’ equity

2,082.5

2,250.2+167.7

Noncontrolling interests

1,096.7

1,147.6+50.8

Total Hitachi, Ltd. stockholders’equity ratio

21.2%

21.5%

0.3 points increase

0.75 times

0.82 times

0.07 points increase

Trade receivables and Inventories
Total liabilities
Interest-bearing debt

D/E ratio(Including noncontrolling interests)© Hitachi, Ltd. 2013. All rights reserved.

10

1-8.

Summary of Consolidated Balance Sheetsby Manufacturing, Services and Others and Financial Services

 Summary of Consolidated Balance Sheets (Manufacturing, Services and Others)*
As of March 31, 2013 (A)Total assets

Billions of yen

As of September 30, 2013 (B)(B) - (A)8,324.4

8,649.8+325.4

3,444.7

3,399.0(45.6)

5,414.7

5,536.2+121.5

1,368.8

1,495.1+126.2

1,932.3

2,090.0+157.6

Noncontrolling interests

977.3

1,023.5+46.2

Total Hitachi, Ltd. stockholders’ equity ratio

23.2%

24.2%

1.0 points increase

D/E ratio (Including noncontrolling interests)

0.47 times

0.48 times

0.01 points increase

Trade receivables and Inventories
Total liabilities
Interest-bearing debt
Total Hitachi, Ltd. stockholders’ equity

 Summary of Consolidated Balance Sheets (Financial Services)*
As of March 31, 2013 (A)Billions of yen
As of September 30, 2013 (B)(B) - (A)

1,960.9

2,275.5+314.6

642.3

745.8

+103.5

1,680.2

1,979.4+299.2

1,224.9

1,530.6+305.7

Total Hitachi, Ltd. stockholders’ equity

161.1

171.3

+10.2

Noncontrolling interests

119.6

124.7

+5.1

Total Hitachi, Ltd. stockholders’ equity ratio

8.2%

7.5%

0.7 points decrease

D/E ratio (Including noncontrolling interests)

4.36 times

5.17 times

0.81 points increase

Total assets
Trade receivables and Inventories
Total liabilities
Interest-bearing debt

* Figures here represent unaudited information prepared by the Company© Hitachi, Ltd. 2013. All rights reserved.

111-9. Summary of Consolidated Statements of Cash Flows Summary of Consolidated Statements of Cash Flows

Billions of yen

Fiscal 2012/1H

Fiscal 2013/1H

Year over year

Cash flows from operating activities

263.1

203.1

(59.9)Cash flows from investing activities(220.8)(245.5)(24.6)

Free cash flows

42.2(42.3)(84.6)

Core free cash flows

3.2(98.3)(101.6)

 Summary of Consolidated Statements of Cash Flows (Manufacturing, Services and Others)*
Fiscal 2012/1H

Fiscal 2013/1H

Billions of yen
Year over year

Cash flows from operating activities

228.4

238.0

+9.6

Cash flows from investing activities(158.7)(208.3)(49.5)

Free cash flows

+69.7

29.7

(39.9)

Core free cash flows(11.4)

6.4+17.9

 Summary of Consolidated Statements of Cash Flows (Financial Services)*
Fiscal 2012/1H

Billions of yen

Fiscal 2013/1H

Year over year

Cash flows from operating activities

41.2(21.8)(63.0)Cash flows from investing activities(39.3)(53.0)(13.6)

Free cash flows

1.8(74.8)(76.7)

Core free cash flows

26.5(99.6)(126.2)* Figures here represent unaudited information prepared by the Company© Hitachi, Ltd. 2013. All rights reserved.

12

1-10. Consolidated Capital Expenditure, Depreciation and R&D Expenditure Consolidated Capital Expenditure (Completion basis, including Leasing Assets)
Fiscal 2012/1H

Billions of yen

Fiscal 2013/1H

Year over year

Manufacturing, Services and Others

198.0

198.0

100%

Financial Services

169.8

224.8

132%

364.6

417.3

114%

Total** Total figures exclude inter-segment transactions.

 Consolidated Depreciation

Billions of yen
Fiscal 2012/1HManufacturing, Services and Others
Financial Services
Total

Fiscal 2013/1H

Year over year

115.0

129.0

112%

28.5

32.5

114%

143.6

161.6

113%

 Consolidated R&D ExpenditureBillions of yen
Fiscal 2012/1H

Total

Fiscal 2013/1H

165.7

Year over year

175.1

106%

© Hitachi, Ltd. 2013. All rights reserved.

13

1-11. Revenues, Operating Income and EBIT by Business Group (1)*1

Billions of yen
Fiscal 2012/1H

Power Systems

Construction Machinery

Previous forecast*2
comparison

1,556.3

105%

101%

Operating income

20.5

12.3

(8.1)

+10.3

EBIT

18.3

14.7

(3.6)

+10.7

1,110.7

1,172.0

106%

103%

Operating income

38.7

39.6

+0.8

+0.6

EBIT

34.2

37.2

+2.9

+2.2

Revenues

413.4

376.3

91%

102%

Operating income

7.4

2.1

(5.2)

+7.1

EBIT

5.9

3.4

(2.4)

+11.4

Revenues

370.6

358.0

97%

94%

Operating income

22.8

29.4

+6.6

+1.4

EBIT

29.8

26.6

(3.1)

(1.3)

Revenues

Information & Telecommunication
Systems

Year over year

1,484.7

Revenues

Infrastructure Systems

Fiscal 2013/1H*1 Figures here represent unaudited information prepared by the Company*2 Previous forecast announced on July 30, 2013

© Hitachi, Ltd. 2013. All rights reserved.

14

1-12. Revenues, Operating Income and EBIT by Business Group (2)*1

Billions of yen
Fiscal 2012/1H

High Functional Materials &Components

Automotive Systems

Financial Services

Year over year

Previous forecast*2
comparison

Revenues

748.4

739.4

99%

103%

Operating income

40.0

51.6

+11.6

+4.6

EBIT

38.6

52.3

+13.6

+7.3

Revenues

401.8

426.7

106%

107%

Operating income

19.2

20.8

+1.5

+2.8

EBIT

18.2

2.0

(16.2)(15.9)

Revenues

179.6

163.6

91%

102%

Operating income

13.7

16.0

+2.3

+1.0

EBIT

15.5

17.4

+1.8

+2.4

4,355.5

4,470.6

103%

102%

Operating income

163.6

173.4

+9.8

+28.4

EBIT

124.0

142.0

+17.9

+22.0

Revenues

Total

Fiscal 2013/1H*1 Figures here represent unaudited information prepared by the Company*2 Previous forecast announced on July 30, 2013

© Hitachi, Ltd. 2013. All rights reserved.

15

1-13. Revenues, Operating Income and EBIT by Business Segment (1)Billions of yen
Fiscal 2012/1H

Information & Telecommunication
Systems

Power Systems

Electronic Systems & Equipment

Construction Machinery

High Functional Materials &Components

Year over year

Previous forecast*comparison

Revenues

832.9

884.7

106%

104%

Operating income

27.2

31.3

+4.1

+3.3

EBIT

22.4

28.9

+6.5

+4.9

Revenues

413.4

376.3

91%

102%

Operating income

7.4

2.1

(5.2)

+7.1

EBIT

5.9

3.4

(2.4)

+11.4

545.3

597.3

110%

100%

Operating income

3.1

2.6

(0.5)

+4.6

EBIT

3.2

6.3

+3.1

+5.3

Revenues

510.5

499.8

98%

102%

Operating income

19.7

10.6

(9.1)

+3.6

EBIT

17.1

9.3

(7.8)

+3.3

Revenues

370.6

358.0

97%

94%

Operating income

22.8

29.4

+6.6

+1.4

EBIT

29.8

26.6

(3.1)

(1.3)

Revenues

674.3

669.5

99%

103%

Operating income

38.1

49.2

+11.0

+3.2

EBIT

37.5

49.2

+11.6

+5.2

Revenues

Social Infrastructure & Industrial
Systems

Fiscal 2013/1H* Previous forecast announced on July 30, 2013
© Hitachi, Ltd. 2013. All rights reserved.

16

1-14. Revenues, Operating Income and EBIT by Business Segment (2)Billions of yen
Fiscal 2012/1H

Automotive Systems

Digital Media & Consumer Products

Others(Logistics and Other services)*2

Financial Services

Previous forecast*1
comparison

401.8

426.7

106%

107%

Operating income

19.2

20.8

+1.5

+2.8

EBIT

18.2

2.0

(16.2)(15.9)

Revenues

428.7

459.1

107%

102%

Operating income

(2.4)

(0.8)

+1.5

+2.1

EBIT

(2.0)

(1.0)

+0.9

+1.9

Revenues

556.6

574.9

103%

106%

Operating income

20.8

18.5

(2.2)

+1.5

EBIT

21.4

22.5

+1.0

+5.5

Revenues

179.6

163.6

91%

102%

Operating income

13.7

16.0

+2.3

+1.0

EBIT

15.5

17.4

+1.8

+2.4

(558.7)(539.8)--Operating income

(6.5)

(6.6)

(0.1)

(2.6)

EBIT

(45.3)(22.9)

+22.3

(0.9)

4,355.5

4,470.6

103%

102%

Operating income

163.6

173.4

+9.8

+28.4

EBIT

124.0

142.0

+17.9

+22.0

Revenues

Total

Year over year

Revenues

Revenues

Corporate items & Eliminations

Fiscal 2013/1H*1 Previous forecast announced on July 30, 2013
*2 On April 1, 2013, the former “Others” was renamed “Others (Logistics and Other services).”© Hitachi, Ltd. 2013. All rights reserved.

17

About Business Group

Business Group

Segment and Subsidiary

Infrastructure Systems Group

Social Infrastructure & Industrial Systems Segment,
Electronic Systems & Equipment Segment,
Digital Media & Consumer Products Segment

Information & Telecommunication Systems Group

Information & Telecommunication Systems Segment,
Hitachi Transport System

Power Systems GroupPower Systems Segment

Construction Machinery Group

Construction Machinery Segment

High Functional Materials & Components GroupHigh Functional Materials & Components Segment,
Hitachi Maxell

Automotive Systems Group

Automotive Systems Segment

Financial Services

Financial Services Segment

Some businesses are not included in the table above.

© Hitachi, Ltd. 2013. All rights reserved.

18

2. Outlook for Fiscal 2013

© Hitachi, Ltd. 2013. All rights reserved.

192-1. Outlook for Fiscal 2013 (1) Business Environment Japan: Moderate economic recovery underpinned by correction of the strong yen
and pick-up in exports

 U.S.

: Concerns about the impact of the debt ceiling problem

 Europe: Persistent government finance and employment problems

 China, India and Brazil :Economic growth is expected to slow

 Summary of the Fiscal 2013 Forecast[Projections for the second half of fiscal 2013 assume an exchange rate of 95 yen to the U.S.dollar and 125 yen to the euro.]Billions of yen

Fiscal 2013 (Forecast)*

Year over year

Previous forecast
comparison

9,041.0

9,200.0+158.9[102%]±0.0[100%]

Operating income

422.0

500.0

+77.9

±0.0

EBIT

358.0

440.0

+81.9

±0.0

Net income attributable to
Hitachi, Ltd. stockholders

175.3

210.0

+34.6

±0.0

Fiscal 2012
Revenues* There have been no revisions from forecasts announced on July 30, 2013

© Hitachi, Ltd. 2013. All rights reserved.

20

2-2. Outlook for Fiscal 2013 (2)[Projections for the second half of fiscal 2013 assume an exchange rate of 95 yen to the U.S.dollar and 125 yen to the euro.]Billions of yen

Fiscal 2013 (Forecast)Year over year

Previous forecast*comparison

9,041.0

9,200.0+158.9[102%]±0.0[100%]

Operating income

422.0

500.0

+77.9

±0.0

EBIT

358.0

440.0

+81.9

±0.0

Net other income (deductions)(77.4)(75.0)+2.4±0.0

Income before income taxes

344.5

425.0

+80.4

±0.0

Income taxes(106.8)(120.0)(13.1)±0.0

Net income

237.7

305.0

+67.2

±0.0

Net income attributable tononcontrolling interests(62.3)(95.0)(32.6)±0.0

Net income attributable to
Hitachi, Ltd. stockholders

175.3

210.0

+34.6

±0.0

Fiscal 2012
Revenues* Previous forecast announced on July 30, 2013

© Hitachi, Ltd. 2013. All rights reserved.

21

2-3. Major Factors of Net Income Attributable to Hitachi, Ltd. Stockholders

Fiscal 2012

Fiscal 2013 (Forecast)Billions of yen

422.0

Billions of yen

500.0

Net other income(deductions)(77.4)Net otherincome (deductions)(75.0)

Income taxes(106.8)

Income taxes(120.0)175.3

Net income attributable tononcontrolling interests(95.0)Net income attributable tononcontrolling interests(62.3)

OperatingincomeNet income
attributable to
Hitachi, Ltd.
stockholders

210.0

OperatingincomeNet income
attributable to
Hitachi, Ltd.
stockholders© Hitachi, Ltd. 2013. All rights reserved.

22

2-4.

Outlook for Fiscal 2013:
Revenues, Operating income and EBIT by Business Group (1)*1

Billions of yen
Fiscal 2012

Power Systems

Construction Machinery

Previous forecast*2
comparison

3,390.0

108%

103%

Operating income

84.2

111.0

+26.7

(2.0)

EBIT

94.9

107.0

+12.0

+3.0

2,338.4

2,460.0

105%

102%

Operating income

126.2

143.0

+16.7

(3.0)

EBIT

125.5

132.0

+6.4

(4.0)

Revenues

904.6

750.0

83%

100%

Operating income

29.9

15.0

(14.9)

±0.0

EBIT

30.0

14.0

(16.0)±0.0

Revenues

756.0

800.0

106%

100%

Operating income

54.6

82.0

+27.3

±0.0

EBIT

58.1

78.0

+19.8

±0.0

Revenues

Information & Telecommunication
Systems

Year over year

3,146.6

Revenues

Infrastructure Systems

Fiscal 2013
(Forecast)*1 Figures here represent unaudited information prepared by the Company*2 Previous forecast announced on July 30, 2013

© Hitachi, Ltd. 2013. All rights reserved.

23

2-5.

Outlook for Fiscal 2013:
Revenues, Operating income and EBIT by Business Group (2)*1

Billions of yen
Fiscal 2012

Automotive Systems

Financial Services

Previous forecast*2
comparison

1,490.0

101%

102%

Operating income

61.4

105.0

+43.5

+15.0

EBIT

52.6

103.0

+50.3

+15.0

Revenues

806.8

840.0

104%

102%

Operating income

35.4

42.0

+6.5

+1.0

EBIT

36.4

23.0

(13.4)(18.0)

Revenues

340.2

320.0

94%

97%

Operating income

29.2

31.0

+1.7

+1.0

EBIT

29.4

33.0

+3.5

+3.0

9,041.0

9,200.0

102%

100%

Operating income

422.0

500.0

+77.9

±0.0

EBIT

358.0

440.0

+81.9

±0.0

Revenues

Total

Year over year

1,475.9

Revenues

High Functional Materials &Components

Fiscal 2013
(Forecast)*1 Figures here represent unaudited information prepared by the Company*2 Previous forecast announced on July 30, 2013

© Hitachi, Ltd. 2013. All rights reserved.

24

2-6.

Outlook for Fiscal 2013:
Revenues, Operating income and EBIT by Business Segment (1)Billions of yen
Fiscal 2012

Power Systems

104%

102%

Operating income

104.6

120.0

+15.3

±0.0

EBIT

104.2

110.0

+5.7

±0.0

Revenues

904.6

750.0

83%

100%

Operating income

29.9

15.0

(14.9)

±0.0

EBIT

30.0

14.0

(16.0)±0.0

1,313.8

1,430.0

109%

104%

Operating income

60.2

61.0

+0.7

(5.0)

EBIT

63.3

62.0

(1.3)

(1.0)

1,014.3

1,110.0

109%

102%

Operating income

29.3

50.0

+20.6

+3.0

EBIT

32.4

48.0

+15.5

+4.0

Revenues

756.0

800.0

106%

100%

Operating income

54.6

82.0

+27.3

±0.0

EBIT

58.1

78.0

+19.8

±0.0

1,336.4

1,340.0

100%

102%

Operating income

58.4

98.0

+39.5

+14.0

EBIT

50.7

95.0

+44.2

+12.0

Revenues

Electronic Systems & Equipment

Construction Machinery

Revenues

High Functional Materials &Components* Previous forecast announced on July 30, 2013

Previous forecast*comparison

1,860.0

Revenues

Social Infrastructure & Industrial
Systems

Year over year

1,786.5

Revenues

Information & Telecommunication
Systems

Fiscal 2013
(Forecast)© Hitachi, Ltd. 2013. All rights reserved.

25

2-7.

Outlook for Fiscal 2013:
Revenues, Operating income and EBIT by Business Segment (2)Billions of yen
Fiscal 2012

Automotive Systems

Digital Media & Consumer Products

Financial Services

840.0

104%

102%

Operating income

35.4

42.0

+6.5

+1.0

EBIT

36.4

23.0

(13.4)(18.0)

Revenues

818.5

850.0

104%

104%

Operating income

(5.3)

0.0

+5.3

±0.0

EBIT

(0.9)

(3.0)

(2.0)

±0.0

1,111.0

1,180.0

106%

103%

Operating income

40.1

45.0

+4.8

±0.0

EBIT

33.5

45.0

+11.4

+2.0

Revenues

340.2

320.0

94%

97%

Operating income

29.2

31.0

+1.7

+1.0

EBIT

29.4

33.0

+3.5

+3.0

(1,147.5)(1,280.0)--

Operating income(14.7)(44.0)(29.2)(14.0)

EBIT(79.3)(65.0)

+14.3

(2.0)

9,041.0

9,200.0

102%

100%

Operating income

422.0

500.0

+77.9

±0.0

EBIT

358.0

440.0

+81.9

±0.0

Revenues

Total

Previous forecast*1
comparison

806.8

Revenues

Corporate items & Eliminations

Year over year

Revenues

Revenues

Others(Logistics and Other services)*2

Fiscal 2013
(Forecast)*1 Previous forecast announced on July 30, 2013
*2 On April 1, 2013, the former “Others” was renamed “Others (Logistics and Other services).”© Hitachi, Ltd. 2013. All rights reserved.

26

3. Toward Achieving “2015 Mid-term Management Plan”© Hitachi, Ltd. 2013. All rights reserved.

27

3-1. Hitachi Smart Transformation Project Progress and Outlook

Promote transformation of business processes and Group structure
to achieve the goals of the 2015 Mid-term Management Plan
 Promote global SCM reforms

Production
Costs• Completed SCM reforms at 3 business entities. Plan to expand application to another 9 business
entities in fiscal 2013.
• Completed building a shared PSI*1 system for mass production-type businesses (Started trial
operation in September) Expanded application of modular design• Established dedicated team, providing consultation to each business entity

DirectMaterials
Costs

 Expand centralized purchasing globally(Targeting a 34% centralized purchasing ratio in fiscal 2013)
 Lower materials expenses by utilizing global corporate procurement bases• Improve global procurement ratio• Shorten development lead time by collaborating with Hitachi China Materials Technology
Innovation Center Strengthen skills of employees at global corporate procurement bases• Running a basic training program for national staff(Started e-Learning program in English and Chinese in September)

IndirectCosts

 Promote headquarters reforms: Redefined the roles and functions of headquarters tofocus on strategy formulation and implementation
 Promote global logistics reforms by leveraging Hitachi Transport System’s expertise• Established a project team to build an efficient global logistics framework (October) Step up global development of shared services and BPO*2*1 PSI：Production Sales Inventory*2 BPO：Business Process Outsourcing© Hitachi, Ltd. 2013. All rights reserved.

28

3-2. Steady Progress with 2015 Mid-term Management Plan (1)1. Global Expansion of the Social Innovation Business• Selected by UK’s Department for Transport to provide an additional 270 rail carriages for the Intercity
Express Programme (July)• Started Proof of Concept projects to improve healthcare services with the National Health Service
England (Greater Manchester) (October)• Agreed to establish a joint venture for manufacturing transformers in Taichung, Taiwan (scheduled tocommence production in April 2015)

2. Strengthening Global Management System and Financial Base
• Initiated headquarters reforms to promote global Hitachi Group growth (October)• Established the Healthcare Business Strategy Division (October)• Restructure elevator and escalator business in Japan to strengthen and expand this business (scheduled
for April 2014)
・The Urban Planning and Development Systems Company will focus on global corporate functions and development
oversight functions.
・Plan to transfer the design, manufacturing and sales divisions related to elevator and escalator business in Japan to
Hitachi Building Systems to provide one-stop solutions.

• S&P raised its credit rating of Hitachi to A- (August)© Hitachi, Ltd. 2013. All rights reserved.

29

3-3. Steady Progress with 2015 Mid-term Management Plan (2)3. Group Structural Reforms• Integrate the thermal power generation systems business with Mitsubishi Heavy Industries to strengthen
global competitiveness and expand business (plan to establish a new company in January 2014)• Plan to consolidate company that mainly operates TEPCO’s administrative systems (in March 2014),
and expand IT services in the social infrastructure field• Transfer all Hitachi Via Mechanics’ shares to The Longreach Group (scheduled for November)

4. Promote Solution Provision by Leveraging Financial Services• Create a global factoring scheme to achieve stable material procurement and improve cash flows
・Established a new company in October to promote the scheme in China. The scheme is already in place in Japan,
the U.S. and Thailand.

• Fuse products and financial services to expand the Social Innovation Business・Expand wind and solar power generation services businesses (Currently implementing 6 projects)
・Won order for providing solutions to support energy cost reductions in North America
・Expand orders of products for emerging markets using leasing, trade finance, etc.

• Strengthen financial advisory functions for expanding orders in the Social Innovation Business© Hitachi, Ltd. 2013. All rights reserved.

30

Cautionary Statement

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

© Hitachi, Ltd. 2013. All rights reserved.

31